Senate
27 March 1969

26^th Parliament · 2^nd Session

EDUCATION
- Petitions
MINISTERIAL ARRANGEMENTS
QUESTION
- WORKERS COMPENSATION
QUESTION
- DAIRYING
QUESTION
- ELECTORAL
QUESTION
- TELEVISION ADVERTISING
QUESTION
- ABORIGINALS
QUESTION
- WORKERS COMPENSATION
QUESTION
- EARTHQUAKE DAMAGE
QUESTION
- SOCIAL SERVICES
QUESTION
- HEALTH
QUESTION
- RIGHT TO PROTEST
QUESTION
- HEALTH INSURANCE
QUESTION
- WATER CONSERVATION
QUESTION
- SENATE SELECT COMMITTEES
QUESTION
- DRUGS
QUESTION
- ELECTORAL
QUESTION
- TELEVISION
QUESTION
- NATIONAL SERVICE
QUESTION
- NATIONAL SERVICE
QUESTION
- VIETNAM
QUESTION
- NATIONAL SERVICE ACT
QUESTION
- PUBLIC SERVICE
QUESTION
- VIETNAM
QUESTION
- NATIONAL SERVICE
QUESTION
- NATIONAL SERVICE
QUESTION
- NATIONAL SERVICE
QUESTION
- AUSTRALIAN LABOR PARTY
QUESTION
- AIR NAVIGATION CHARGES
QUESTION
- VIETNAM
QUESTION
- NATIONAL SERVICE
QUESTION
- PUBLIC SERVICE
PERSONAL EXPLANATION
QUESTION
- OVERSEAS INVESTMENT IN AUSTRALIA
QUESTION
- TAXATION
QUESTION
- LEGAL AID
QUESTION
- INTERNAL SATELLITE COMMUNICATIONS SYSTEM
QUESTION
- SUPERANNUATION
QUESTION
- COMMONWEALTH PROPERTY
QUESTION
- COMMONWEALTH REPORTING BRANCH
QUESTION
- CIVIL AVIATION
QUESTION
- COMPANIES
QUESTION
- AVIATION
QUESTION
- PUBLIC SERVICE
QUESTION
- PUBLIC SERVICE
QUESTION
- COAL
QUESTION
- NATIONAL SERVICE
QUESTION
- ARMY
QUESTION
- PAPUA AND NEW GUINEA
QUESTION
- NATIONAL SERVICE
QUESTION
- UNITED NATIONS DISARMAMENT CONFERENCE
QUESTION
- COINS
QUESTION
- BANKING
QUESTION
- STAMPS
SPECIAL ADJOURNMENT
IMMIGRATION
- Ministerial Statement
UNIVERSITIES (FINANCIAL ASSISTANCE) BILL 1969
- Second Reading
CONCILIATION AND ARBITRATION BILL (No. 2) 1969
- Second Reading
EXCISE TARIFF BILL 1969
- Second Reading
SPIRITS BILL 1969
- Second Reading
CURRENCY BILL 1969
- Second Reading
LOAN (SUPPLEMENTARY BORROWING) BILL 1969
- Second Reading
CUSTOMS TARIFF BILL 1969
- Second Reading
ADJOURNMENT
- Petitions

The PRESIDENT (Senator the Hon. Sir Alister McMullin) took the chair at 1 1 a.m., and read prayers.

page 669

EDUCATION

Petitions

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

-reliant, independent individuals and where they can learn to function as members of a democratic community; that proper preparation for school and thorough guidance there by qualified teachers are crucial to a proper education for Australia’s children; that the present rate of teaching training is far below the requirement determined by the Martin report which shows that 75% additional teachers in government school’s will be required by 1975 compared with those in service in 1963; that, to obtain maximum benefit from the education system, preschool facilities should be available to all children; that insufficient Slate or Federal assistance has been made available to meet these requirements; that adequate finance to meet these requirements can only be provided by the Commonwealth Government; and that there is an urgent need for a national inquiry into all aspects of Australian education. The petitioners pray that the Senate and the House of Representatives in Parliament assembled will give earnest consideration, during Human Rights Year, to this most vital matter.

Petition received and read.

Senator BUTTFIELD presented a petition from 6,864 citizens of South Australia showing that there is a crisis in education in Australia; that a transformation of the classroom situation is necessary, where children will have reasonable freedom to develop as self-reliant, independent individual’s and where they can learn to function as members of a democratic community; that proper preparation for school and thorough guidance there by qualified teachers are crucial to a proper education for Australia’s children: that the present rate of teaching training is far below the requirement determined by the Martin report which shows that 75% additional teachers in government schools will be required by 1975 compared with those in service in 1963; that to obtain maximum benefit from the education system, pre-school facilities should be available to all children; that insufficient State or Federal assistance has been made available to meet these requirements; that adequate finance to meet these requirements can only by provided by the Commonwealth Government; that there is an urgent need for a national inquiry into all aspects of Australian education. The petitioners pray that the Senate and the House of Representatives in Parliament assembled will give earnest consideration, during Human Rights Year, to this most vital matter.

Petition received.

page 669

MINISTERIAL ARRANGEMENTS

Senator ANDERSON:
Minister for Supply · New South Wales · LP

– by leave - Mr President, 1 wish to inform the Senate of the forthcoming visits overseas by Ministers: As honourable senators are aware, the Prime Minister will be leaving on Saturday, 29th March, on a visit to the United States for discussions with President Nixon and to Canada for talks with Mr Trudeau. The Deputy Prime Minister and Minister for Trade and Industry will be Acting Prime Minister during the Prime Minister’s absence.

The Attorney-General will be journeying to New Zealand to attend the New Zealand Law Society Centennial Conference from 8th to 12th April. The Minister for Immigration will act as Attorney-General during this period.

The Minister for the Army will leave Australia tomorrow, Friday, 28th March. He will spend Easter with Australian troops in Vietnam and will also visit the troops in Malaysia and Singapore. The Minister for Health will act as Minister for the Army during the absence of the Minister for the Army.

page 669

QUESTION

WORKERS COMPENSATION

Senator POYSER:
VICTORIA

– My question is directed to the Minister representing the Treasurer. Has the Minister’s attention been drawn to a Press report which stated that a Canberra worker, injured in a fall in the Australian Capital Territory, lost his case for workers compensation because his employer’s insurance covered employees working in New South Wales only? Did Mr Justice Fox state that legislation should be introduced to cover employers’ insurance policies to prevent a similar event happening again? Will the Government, as a matter of urgency, introduce the necessary legislation to ensure that this glaring anomaly is removed?

Senator ANDERSON:
LP

– 1 shall refer the matter to the Treasurer. 1 am not clear whether legislative correction is required. However, I will refer the matter to the Treasurer without delay.

page 670

QUESTION

DAIRYING

Senator LILLICO:
TASMANIA

– 1 direct a question to the Minister representing the Minister for Primary Industry. Is it correct that, under the scheme to amalgamate or suspend some of the smaller dairy farms in Australia, all financial responsibility devolves upon the Commonwealth Government, and the States act in a partial administrative capacity only? If this is so. why is it so difficult to make arrangements with the States as to the operation of the scheme? fs it correct that only two Premiers have replied to the Commonwealth’s overtures and that they have raised queries? What are those queries? What are the main handicaps, so far as arrangements with the States are concerned, which seem to be preventing the scheme from getting off the ground? ls the Minister aware of the great interest in this matter amongst farmers at least in my own State of Tasmania?

Senator McKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

page 671

QUESTION

WORKERS COMPENSATION

Senator BISHOP:
SOUTH AUSTRALIA

– My question follows the question asked by Senator Poyser in connection with the very unfortunate compensation claim by Mr Busico, a Canberra worker who has failed to secure workers compensation because it has been found that the employer was not insured within the Australian Capital Territory. Will the Minister representing the Minister for Labour and National Service and the AttorneyGeneral take up this matter with those Departments to see to what extent assistance can be given to this worker to negotiate an amount of compensation and also to consider whether the appropriate ordinance of the Australian Capital Territory does not impose on employers the same obligation to insure within the Territory as the State workers compensation legislation makes compulsory? In the States employers are forced to insure and must accept a claim.

Senator WRIGHT:
LP

– This question relates to the published judgment of Mr Justice Fox interpreting the policy of insurance of this unfortunate man’s employer to be applicable only to claims in New South Wales as distinct from the Australian Capital Territory. As my Leader has said, an examination will be undertaken as to the sufficiency of the Australian Capital Territory ordinance to require compulsory insurance against common law liability on the part of employers. I should not think it would be the function of the Attorney-General’s Department or the Department of Labour and National Service to negotiate in a mailer which is pending in the court, but that matter can be considered if I am in error in that view.

page 671

QUESTION

EARTHQUAKE DAMAGE

Senator DRAKE-BROCKMAN:

– Is the

Minister representing the Prime Minister aware that earthquake damage in Australia was practically unheard of before 14th October 1968? Is he aware that very few businessmen, property owners or householders were insured against such damage before this date? In view of this, does not the case for Commonwealth financial assistance for the victims of the Meckering disaster differ greatly from those previously presented by the States for drought, fire or flood relief? Will the Commonwealth now consider, in conjunction with the State Government, a re-examination of the method of granting relief in view of the desperate financial plight of many of the farmers in this area?

Senator ANDERSON:
LP

– lt is true, as the honourable senator has said, that Australia is a very stable country geologically and that there have been very few earthquakes of the kind that occurred at Meckering. In 1954 an earthquake was experienced in Adelaide but generally we are free from them. The honourable senator has asked me questions previously about this matter and, having taken advice, I can only give him in reply the substance of what T said on behalf of the Government then. I have been advised that insurance can be taken out to cover earthquake damage but. there is no record available to the Commonwealth

Government of the number of businessmen and land holders who have availed themselves of that cover.

I should like to repeat what I. said to the honourable senator on 20th March, namely, that the Commonwealth Government while providing relief to those affected by natural disaster does not wish to place itself in the position of being a free insurer, and that the assistance it provides is not available therefore for the general restoration of private assets. I think we all can recognise the situation that is inherent in that statement. If the Commonwealth were to accept responsibility for earthquake damage right across the board it immediately would produce a situation in which no-one would need to insure in the normal way to cover such an eventuality.

page 672

QUESTION

SOCIAL SERVICES

Senator McMANUS:
VICTORIA

– 1 address my question to the Minister representing the Treasurer. In view of govermental promises to consider the claims of a wide variety of business, industrial and social interests for relief or aid in the forthcoming Budget will the Government give attention to the claims of the group which has been forgotten for the past 30 years - those senior citizens on small fixed incomes and pensions who, as the means test now operates, are penalised more and more for the spirit of independence which led them to seek to provide for their old age from their own resources?

Senator ANDERSON:
LP

– As is known and as has been stated here quite frequently, at Budget time questions of taxation concessions, pensioner benefits and variations of the means test are examined. That practice has been followed through the years, not only by this Government but also by every preceding government. This Government has moved consistently in the field of pensions to give more comfort, more advantage and increased pensions in an attempt to meet rises in the cost of living. This Government has a record of taking action in relation to the means test. Everyone realises that this is not a field in which the Government can say: ‘Very well, we will press a button and abolish the means test’. That is just not a practical proposition. However the Government does and will consider these matters again at Budget time in accordance with its past practice.

page 672

QUESTION

HEALTH

Senator FITZGERALD:
NEW SOUTH WALES

– Has the attention of the Minister representing the Minister for Health been drawn to the excellent series of articles on how to detect cancer, directed principally to women, which have been published in the Sydney daily Press? If not. will she endeavour to see them and have them examined and analysed thoroughly by the Department of Health with a view to the publication of the articles in a booklet which can be made available to the public in a further attempt to defeat the scourge of cancer which is dreaded by everyone?

Senator Dame ANNABELLE RANKIN:

– 1 know that I speak not only for my colleague the Minister for Health but also for everybody in this chamber when I say that we are all concerned at this scourge, this dread disease. I have read a number of articles in a variety of publications concerning the early detection of it.

Senator Fitzgerald:

– I referred to the Daily Mirror’ articles.

Senator Dame ANNABELLE RANKIN:

– I have read some of those, but I have read a number of others also. 1 know that this is one of the matters in which the cancer associations and funds throughout the States are playing an important part by endeavouring to inform people that early detection can mean cure of the disease and to show people how to detect this terrible illness. As I understood the honourable senator’s question, he asked whether the Minister for Health would have these article’! compiled in book form. 1 will place that matter before the Minister.

– If the honourable senator believes that, he finds himself in an extraordinary position. What he is saying is that if a law does not suit, one can break it. I do not subscribe to that and the Government parties do not subscribe to that. I repeat that the right to protest is never under challenge provided that people protest within the framework of the law.

page 673

QUESTION

HEALTH INSURANCE

Senator MURPHY:
NEW SOUTH WALES

– My question is directed to Senator Dame Ivy Wedgwood, in her capacity as Chairman of the Senate Select Committee on Medical and Hospital Costs. I ask the honourable senator whether she is-

The PRESIDENT:

– Order! lt is not the practice to permit this sort of question.

Senator MURPHY:

– I am asking the question in accordance with standing order 98, on a public matter connected with the business on the notice paper of which the honourable senator may have charge. Perhaps the question should be heard and then a decision made on whether it is in order.

Senator McKELLAR:
NEW SOUTH WALES · CP

– Mr President, I raise a point of order. If we are to allow this sort of question, the next thing will be that we will have questions directed to all the individuals in the chamber. I strongly protest.

Senator MURPHY:

– If you will hear the question, Mr President, you will then have an opportunity to rule on it. The question that I am directing to Senator Dame Ivy Wedgwood relates to the Nimmo report on health insurance. I ask Senator Dame Ivy Wedgwood, in her capacity as Chairman of the Senate Select Committee on Medical and Hospital Costs, whether she is confident that without any further reference or instruction from the Senate the Select Committee feels able to take into account the Nimmo report in arriving at its recommendations. If there is any doubt on the matter, will the honourable senator consult with the members of the Select Committee and, if the matter is not clear, will the Committee approach the Senate for any further instruction or direction on that matter?

Senator Cormack:

– I rise to order. I claim that notwithstanding standing order 98. which is relied upon by the Leader of the Opposition in directing a question to Senator Wedgwood, the question is out of order because Senator Wedgwood is not entitled to answer it until she has consulted her committee. Therefore she is placed, as any other senator would be placed in these circumstances, in a situation in which it is impossible to answer and therefore she should be absolved from attempting to answer.

Senator Cotton:

– Could I add to that?

The PRESIDENT:

– Yes, I will hear you.

Senator Cotton:

– Standing order 99 provides:

The following rules shall apply to Questions: -

Questions shall not ask -

for an expression of opinion;

Questions shall not refer to -

proceedings in Committee not reported to the Senate.

Senator Murphy:

– I would ask that the point of order be overruled. This question deals with a public matter and apart from anything else it is a commonsense question. The exclusion under Standing Orders of questions which might be directed to a private member on other than public affairs is a commonsense provision. Question time in the Senate is not to be used for asking private members about private matters and so forth, and we all understand this. But this is a matter of a public affair and it is a commonsense question. If the Chairman of the Committee is not able to tell us what we want to know it is provided in the question that she may say that she needs to consult the members of her Committee.

This is an important matter. A public inquiry has been conducted. A senate select committee has been set up and here, in a clear way. the Chairman is being asked whether the matter is quite clear to herself; if it is not. will she refer to members of the Committee: and will she let us know if there is any difficulty about the matter because we would not want her to proceed if there were any difficulty. I submit to you, Mr President, that this is well within the scope of standing order 98.

Senator Anderson:

– In relation to the standing order that has been cited, I suggest that there have been circumstances in this place during the last 10 years, to my knowledge, in which the Chair has ruled, notwithstanding a standing order, that it is not appropriate to direct questions in the manner in which the Leader of the Opposition is directing a question. I would suggest that a precedent has been established in relation to the matter in this place, Mr President, and 1 would invite you to follow the precedent that has already been set.

Senator Greenwood:

– 1 rise to support the point of order made by Senator Cormack and Senator Cotton, not only for the reasons that they have expressed but also for the reason that standing order 308 has application. It reads:

The evidence taken by any Select Committee of the Senate and documents presented to such Committee, which have not been reported to the Senate, shall not be disclosed or published by any member of such Committee, or by any other person.

Senator Murphy states that he is not asking for an opinion and, if he were asking for an opinion, his question would be precluded by standing order 99. However, he is asking about matters which are relevant to matters discussed in the Committee and must be so. and therefore the question must be, in my submission to you, Sir, ruled out of order.

Senator Cohen:

– I support the point of view put by the Leader of the Opposition on this matter and I submit to you, Mr President, that neither of the standing orders relied on by Senator Cotton or Senator Greenwood has any application. Standing order 308 - the point taken by Senator Greenwood - deals with the disclosure of evidence taken by a select committee and clearly Senator Murphy’s question does not refer to evidence, lt relates to an important document which has been made public and which covers much of the ground of the inquiry set up by the Senate. Senator Dame Ivy Wedgwood has the honour to be Chairman of the Senate Select Committee on Medical and Hospital Costs. 1 submit that under standing order- 98 the question can bc directed to the honourable senator as it deals with business on the notice paper. The report of the Senate Select Committee is on the notice paper and, so far as the Senate is concerned, the honourable senator, as Chairman, is in charge of that business. So far as Senator Cotton’s- point is concerned, I submit that standing order 99 does not apply because Senator Murphy’s question does not refer to proceedings in a committee not reported to the Senate. Senator Murphy’s question does nol deal with the proceedings of or evidence before the Select Committee. It simply asks of the honourable senator as Chairman of the Select Committee: ‘Have you looked at the Committee’s terms of reference in relation to the Nimmo report, which has now been made public? Does the Committee need any further reference from the Senate to enable it to be fully seized of the contents of that report? If it does, will you indicate that to the Senate and the Senate will see what can be done?’

Senator Marriott:

– Is the honourable senator answering the question?

Senator Cohen:

– No. I am simply indicating the ground covered by Senator Murphy’s question. I submit that the question is a proper one.

Senator Withers:

– I wish to speak in support of the point of order, f think that Senator Murphy must show that Senator Dame Ivy Wedgwood has ‘charge’, because that is operative word of standing order 98. The chairman of a Senate select committee is not appointed by the Senate but by the members of that committee. The chairman is merely primus inter pares. For the life of me 1 cannot see why the chairman should be the person in charge. If a matter stands on the business paper in the name of one person it is fairly obvious that that person, and that person alone, must have charge of the matter. But where a number of senators comprising a committee choose their own chairman and have the right at any time to change the chairman. I cannot see how that chairman is in charge. Therefore, I believe that the point of order should be upheld.

The PRESIDENT:

– Standing order 98 has never been interpreted in the way in which Senator Murphy desires it to be interpreted to permit him to ask a question of the chairman of a Senate select committee. I uphold the point of order.

page 675

QUESTION

WATER CONSERVATION

Senator RIDLEY:
SOUTH AUSTRALIA

– -My question is directed to the Minister representing the Minister for National Development. It arises out of apparently conflicting answers he has given on three occasions - on 25th February and twice yesterday - concerning investigations being carried out into the salinity problem of the River Murray. I ask: Will the Minister advise me when, where and by whom the three previously mentioned investigations of means to combat salinity in the River Murray were carried out?

Senator SCOTT:
Minister for Customs and Excise · WESTERN AUSTRALIA · LP

– I understand that two investigations were carried out by the Victorian Government into salinity on the River Murray. I understand that an amount of $3. 6m was made available by the Commonwealth Government following an election promise that $50m would be made available to the States for water conservation.

Senator Ridley:

– That means that the Minister’s answer of 25th February was wrong.

Senator SCOTT:

– I regret that I do not remember the terms of the question in February. I will have a look at it and advise the honourable senator.

page 675

QUESTION

SENATE SELECT COMMITTEES

Senator WOOD:
QUEENSLAND

Senator Cant:

– Or taxation.

Senator ANDERSON:

– Yes, or taxation, or walking on the right hand side instead of the left. But the law is the law and we all must obey it. We still have the right to protest and object but we must do this within the law.

VIETNAM

page 681

QUESTION

NATIONAL SERVICE

Senator POKE:
TASMANIA

– 1 direct a question to the Minister representing the Minister for Labour and National Service. Is it not a fact that a person who was a member of the Citizen Military Forces and was young enough to register under the National Service Act could be discharged as unsatisfactory to the Citizen Military Forces and then become subject to all of the provisions of the National Service Act and be compelled to serve in Vietnam?

Senator WRIGHT:
LP

– I regret that I did not sufficiently understand the question to be able to give a useful answer. I ask the honourable senator to put the question on the notice paper so that I can consider it more carefully than T have been able to do on hearing it.

page 681

QUESTION

PUBLIC SERVICE

Senator MCCLELLAND:
NEW SOUTH WALES

– Has the Minister representing the Attorney-General seen a report that a recently resigned officer of the Crown Solicitor’s office has stated that his office desk and personal locker were publicly searched in front of his former work colleagues by officers of the Commonwealth Police; that he was denied a copy of the record of his interrogation after specifically requesting one, and that as a result of the withdrawal of approval to him for a day’s leave he was then instructed to report at 15-minute intervals to the principal legal officer of the Department? Does the Minister condone this type of treatment of a Commonwealth public servant? If these are the latest standards of administration of justice existing in the Commonwealth department responsible for the administration of justice, what hope has an ordinary citizen of defending his own civil liberties and those of his fellow Australian citizens in these days of growing police state activity within the Commonwealth Public Service?

Senator WRIGHT:
LP

– 1 have seen a reference to the statement made by Mr Sime as the honourable senator has stated it. Mr Sime is a qualified barrister who was employed by the Attorney-General’s Department at a salary of approximately $4,750 a year and at the same time was entitled to and enjoying financial assistance to enable him to take university studies. With those qualifications Mr Sime would have an outstanding knowledge that it was completely voluntary for him to have any interview with Commonwealth Police. If he did not wish to be interviewed he would know full well that he was entitled to decline. Mr Sime would also know that immediately the administrative decision of the Secretary of the Department was challenged under appeal he would be entitled to and would receive a full verbatim record of the evidence that the Department proposed to use on the hearing of the appeal. In those circumstances, the procedures which apply being long standing provisions of the Public Service Act, it beggars my understanding to hear anybody suggest that justice is lacked in any respect.

page 681

PERSONAL EXPLANATION

Senator MCKELLAR:
CP

– Last night, in replying to a matter raised by Senator Keeffe during the debate on the motion that the Senate do now adjourn, I said that I thought there were about 9 million cattle in Australia today. That figure is incorrect. There are 19.2 million cattle in Australia.

page 681

QUESTION

OVERSEAS INVESTMENT IN AUSTRALIA

(Question No. 568)

Senator COHEN:

– by leave - asked the Minister representing the Treasurer, upon notice:

How many companies (a) wholly owned, (b) 75% owned, (c) 50% owned and (d) 25% owned by people and interests outside Australia are registered in Australia?
In each of the above categories, what is the total amount of capital involved?
In respect of each overseas country involved, what is the total amount of such shareholding in Australian companies?

Senator ANDERSON:
LP

– The Treasurer has provided the following answer to the honourable senator’s questions:

The Commonwealth Statistician has supplied the following information:

At 30th June 1967 there were 332 Australian branches of companies incorporated overseas, which had net liabilities to the overseas head office, or a net profit or loss for the year ended 30th June 1967, in excess of $10,000, or which maintained a branch register of shares, debentures or unsecured notes. At the same point of time there were 1801 Australian subsidiaries of overseas companies. In these statistics an Australian subsidiary is a company in which there is direct investment from overseas, i.e. a company in which 25% or more of the ordinary shares - or voting stock - is held by one company or a group of companies incorporated in one overseas country, or 50% or more of the ordinary shares - or voting stock - is held by individuals or companies in one overseas country. The

degree of direct overseas equity in these subsidiaries is as follows:

The ratio of direct overseas holdings of ordinary shares to total holdings of ordinary shares.
1. The book value of net liabilities to head office of Australian branches at 30th June 1967 was $880m. For the capital structure of Australian subsidiaries see table (a). The statistics in tables (a) and (c) are based on paid up values and make no allowance for reserves of Australian subsidiaries of overseas companies.
2. See tables (b) and (c).

page 683

QUESTION

TAXATION

(Question No. 835)

Senator MULVIHILL:
NEW SOUTH WALES

asked the Minister representing the Treasurer, upon notice:

Does the Treasurer maintain a standing committee to consider from time to time the field of income tax deductions?
If so, does the committee have under review the submissions of the New South Wales Branch of the Shop Assistants Union, which seek income tax deductions for those of its members employed in large retail stores who are required by their employers to wear black dresses, which are unsuitable for wear outside their ambit of employment?

Senator ANDERSON:
LP

– The Treasurer has provided the following answer to the honourable senator’s question: 1 and2. The operation of the income tax law, including deductions of various types which are allowed to taxpayers, are matters which are brought before Cabinet and Cabinet committees for consideration from time to time. It is also the practice to have requests received during the year for new or extended taxation concessions considered during the preparation of the annual Budget. Accordingly, I have arranged for the submissions by the New South Wales Branch of the Shop Assistants Union, to which the honourable senator refers, to be listed for consideration during the preparation of the 1969-70 Budget.

page 683

QUESTION

LEGAL AID

(Question No. 841)

Senator RAE:

asked the Minister representing the Attorney-General, upon notice:

What progress has been made towards the introduction of a national or Commonwealtn participating legal aid scheme?
When is any such scheme likely to be introduced and what form will it follow?

Senator WRIGHT:
LP

– The AttorneyGeneral has provided the following answer to the honourable senator’s question: l and 2. I refer the honourable senator to an answer which I provided to Senator Murphy on this subject on 5th November 1968 - see Senate Hansard for 1968 at page 1630.

page 683

QUESTION

INTERNAL SATELLITE COMMUNICATIONS SYSTEM

(Question No. 945)

Senator DAVIDSON:
through Senator Cotton

asked the Minister representing the Postmaster-General, upon notice:

Has the Postmaster-General seen the statement by the Chairman of Australian Telecommunications Development Association, Sir Samuel Jones, giving his view that Australia could have an internal satellite system within 2. years and, further, that a satellite stationed above the equator would be able to relay telephone calls and television and radio programmes to any point in Australia?
Can the Postmaster-General say whether this statement represents a possibility of developing an internal satellite communications system within this period and, further, in view of the recent announcements concerning television development, is any research being undertaken?

Senator Dame ANNABELLE RANKIN:

– The Postmaster-General has provided the following answer to the honourable senator’s question:

Yes.
It would not be possible to establish an internal satellite communications system within 2 years. If direct broadcasting of television programmes to home receivers is required, it is unlikely that it will be technically feasible before the 1980s. A recent meeting sponsored by the United NationsPeaceful Uses of Outer Space Committee studied the technical aspects of direct television broadcasting from satellites and concluded that a system allowing reception of satellite broadcast programmes by standard domestic television receivers might not be possible until 1985. A system allowing reception of such programmes by specially upgraded receivers suitable for community viewing may be possible by 1975.

A domestic satellite communications system providing long distance telephone circuits and relaying television programmes for retransmission by local regional transmitters is possible with current technology. However, economic studies carried out by Post Office experts show that such a system would be more costly than the use of microwave radio relay systems and coaxial cables. Nevertheless, rapid progress is being made in the technology of satellite communications and it is expected that costs will reduce. The Post Office has a number of experts engaged on studies in its own research laboratories and in association with the United States National Aeronautics and Space Administration.

page 684

QUESTION

SUPERANNUATION

(Question No. 955)

Senator TOOHEY:
SOUTH AUSTRALIA

asked the Minister representing the Treasurer, upon notice:

I refer to a statement made in the Senate last year by the Minister representing the Treasurer concerning changes in the Commonwealth superannuation scheme. As members of the Public Service who will retire before this legislation is passed may lose some of the benefits proposed, will the Treasurer do all possible to expedite the passage of the legislation?

Senator ANDERSON:
LP

– The Treasurer has provided the following answer to the honourable senator’s question:

A Bill to amend the Superannuation Act 1922- 1968 to effect the changes in the Commonwealth superannuation scheme that I announced on 21st

November 1968 isin the course of drafting and is expected to be introduced later in this session. Every endeavour will be made by the Government to expedite the passage of the Bill, bearing in mind other urgent business that may need to be transacted.

page 684

QUESTION

COMMONWEALTH PROPERTY

(Question No. 968)

Senator MULVIHILL:

asked the Minister representing the Minister for Civil Aviation, upon notice:

Does the Department of Civil Aviation own any land adjacent to the Coolong area in the vicinity of Oberon, New South Wales?

Senator SCOTT:
LP

– The Minister for Civil Aviation has provided the following answer to the honourable senator’s question:

The Department of Civil Aviation currently lease* about 18 acres of land at Bindook from the Water. Board for an aircraft navigational aid, known as a visual omni range. This aid is used by aircraft on final approach to Sydney Airport. The site is about 10 miles from Coolong and 40 miles from Oberon.

page 684

QUESTION

COMMONWEALTH REPORTING BRANCH

(Question No. 969)

Senator McCLELLAND:

asked the Minis ter representing the Attorney-General, upon notice:

What is the establishment basis for permanent reporters in the Commonwealth Reporting Branch in each of the Melbourne, Sydney and Adelaide offices?
What is the actual number of permanent reporters employed in each of these offices?
How many permanent reporters have been appointed to each of these offices over the last 3 years?
How many permanent reporters have resigned from each of these offices over the last 3 years?

Senator WRIGHT:
LP

– The AttorneyGeneral has provided the following answers to the honourable senator’s question:

The Public Service Board has recently approved the appointment of two reporters in Melbourne and three reporters in Sydney. These appointees have not yet commenced duty.

page 685

QUESTION

CIVIL AVIATION

(Question No. 1007)

Senator ORMONDE:

asked the Minister representing the Minister for Civil Aviation, upon notice:

Is the Minister, aware that the people of Dubbo are concerned at the Government’s failure to reach an agreement with the Dubbo Municipal Council with regard to the ownership of the airport and plans for making it worthy of the City of Dubbo?
Will the Minister give generous consideration to the claims from the Dubbo Council for special financial aid because of the high cost likely to be involved in reconstructing the airport amenities?

Senator SCOTT:
LP

– The Minister for Civil Aviation has provided the following answer to the honourable senator’s question:

The Senator will no doubt be aware that I have visited Dubbo and discussed the question of the ownership of the airport with the mayor and members of his Council.
In consideration of the claims made by the Dubbo Council, I believe we have made as generous an offer as is possible within the scope of the local ownership plan. The honourable senator will appreciate that the local ownership plan operates throughout the whole of Australia.

page 685

QUESTION

COMPANIES

(Question No. 1015)

Senator GEORGES:
QUEENSLAND

asked the Minister representing the Attorney-General, upon notice:

Is the Minister aware of the activities of a firm called Slater and Walker Securities Ltd?
Is this the firm that was responsible for the break-up of Thomas Brown Pty Ltd?
Is this the firm that has now taken over Drug Mouses of Australia Ltd?
Is this the firm that now threatens the firm of Paterson Reid and Bruce?
Has the Attorney-General any powers to prevent the dismembering of established Australian firms? If so, will he intervene to protect the interests of many Australian employees concerned?

Senator WRIGHT:
LP

– The AttorneyGeneral has provided the following answer to the honourable senator’s question: 1 to 4. Slater Walker Securities (Australia) Limited is a company which is incorporated in New South Wales and carries on business in that State and elsewhere in Australia. It is registered as a foreign company in the Australian Capital Territory. I am informed that, according to Press reports, it is connected with a United Kingdom company which, either directly or through an associated company, acquired control of Thomas Brown and Sons Limited. However, there are no records in relation to this take-over held by the Registrar of Companies in the Australian Capital Territory. 1 understand also that the Slater Walker group of companies has acquired a controlling interest in Drug Houses of Australia Limited.

The records of the Registrar of Companies in the Australian Capital Territory do not disclose any take-over offer in respect of Paterson Reid and Bruce, and I have no personal knowledge of such an offer.

There are provisions in the uniform Companies Acts which govern the making of takeover offers in respect of companies. These provisions do not, however, confer power on the AttorneyGeneral to intervene to prevent takeovers. The takeover provisions of the Acts have recently been considered by the Company- Law Advisory Committee constituted by Mr Justice Eggleston, Mr J. M. Rodd and Mr P. C. E. Cox, and a report of that Committee, making a number of recommendations for amendment, was considered by .the Standing Committee of Attorneys-General on .7th March. The Standing Committee agreed to adopt the report in principle, and asked that a draft Bill be prepared as soon as possible with a view to its consideration at the next meeting of the Standing Committee. In the meantime, Ministers are referring the report to their respective Governments. The report is at present being printed, and is expected to be available shortly.

page 685

QUESTION

AVIATION

(Question No. 1020)

Senator BULL:
NEW SOUTH WALES

asked the Minister representing the Minister for Civil Aviation, upon notice:

In view of the fact that the New South Wales Government has expressed its intention to develop Botany Bay as a major shipping port and the Bay’s close proximity to Sydney Airport, which will aggravate road congestion in the area, will the Government give early consideration to establishing a new airport of international standards in New South Wales west of the Blue Mountains or in some other suitable area?

Senator SCOTT:
LP

– The Minister for Civil Aviation has provided the following answer to the honourable senator’s question.

The question of the need for a second airport for Sydney and the type of airport required is to be considered by an . inter-departmental committee recently formed by the Government, lt is intended that this committee will have its first meeting before the end of March but I do not expect to have an early decision as the study is likely to be a lengthy one. There is no doubt that in their deliberations the committee will give full weight to the proposal by the State to develop Botany Bay as a major shipping port.

page 686

QUESTION

PUBLIC SERVICE

(Question No. 1044)

Senator MULVIHILL:

asked the Minister representing the Attorney-General, upon notice:

Were staff in the Attorney-General’s Department in Sydney questioned on 6th March 1969 concerning any contact they may have had with Japanese Embassy or trade officials?
How many staff were so questioned?
How many staff members refused to answer?
Were staff cautioned prior to being questioned?
To whom were the results of the questioning passed?
Does the Government intend to interrogate staff in this manner in the future?

Senator WRIGHT:
LP

– The AttorneyGeneral has provided the following answer to the honourable senator’s question: 1 to 6. On the Senate notice paper for 6tl March 1969 there appeared a question by Senator Cant (Question No. 934, Hansard, page 347) in the following terms:

Is it a fact that during the past 10 days there have been conferences between the Ambassador for Japan and officers of the AttorneyGeneral’s Department?
Were the conferences in any way connected with the alleged’ activities of the Australian Security Intelligence Organisation within the Japanese Embassy?’

The Secretary of my Department caused only such inquiries to be made as had to be made to enable me to answer this question.

page 686

QUESTION

PUBLIC SERVICE

(Question No. 1045)

Senator MULVIHILL:

asked the Minister representing the Attorney-General, upon notice:

Did the Attorney-General direct police officers, in the persons of Superintendent Davies and Inspector Devinney, to interview former Attorney-General’s Department Officer Sime regarding alleged breaches of Public Service regulations? If so, was not this a departure from normal procedures?
Why was not such interrogation conducted by departmental officers?
Is it normal procedure for Mr Hook, Secretary of the Attorney-General’s Department, to refuse to give Mr Sime a’ copy of the record of the interview?
ls it normal procedure to be denied a hearing and a chance to examine the evidence upon which Mr Hook felt compelled to both charge and convict Mr Sime?

Senator WRIGHT:
LP

– The AttorneyGeneral has provided the following answer to the honourable senator’s question: 1 and 2. I did not direct any action to be taken by the Commonwealth Police in this matter. The Secretary of my Department directed inquiries to be made by the Commonwealth Police. I am satisfied that he acted properly in so doing. 3 and 4. I am informed by the Secretary of my Department that he carried out the procedure provided by and under the Public Service Act. Mr Sime had a right of appeal under the Public Service Act both against the finding by Mr Hook that the charge had been sustained and against the action taken by Mr Hook as the result of that . finding. Mr Sime was informed of his right of appeal and of the provisions of the Public Service Regulations under which, if he had appealed, a copy of all documents intended to be used by the Department at the appeal would have been supplied to him at least 7 days before the date fixed for hearing of the appeal.

page 686

QUESTION

COAL

(Question No. 849)

Senator ORMONDE:

asked the Minister representing the Minister for the Army, upon notice:

Arising out of the conferences held between Federal and State authorities on the question of the future ownership and development of the Holsworthy military area, is it a fact that the Commonwealth has decided to maintain the area as a military and strategic reserve?
Was this decision taken wilh the knowledge that the whole of the Holsworthy area covers valuable seams of coking coal?
Has the Government considered providing access to these coal seams when necessary?

Senator McKELLAR:
NEW SOUTH WALES · CP

– The Minister for the Army has provided the following answer to the honourable senator’s questions:

The great bulk of the Holsworthy area will be maintained for military purposes. The Commonwealth has indicated its willingness to make available some of its present holdings to the State. Discussions continue with the State.
Yes. With Commonwealth co-operation, the New South Wales State authorities have carried out test drilling in the area. Seams were discovered at a depth of from 2,000 to 3,000 feet and form part of a major seam extending generally from Newcastle to Port Kembla.
The State Minister involved in the negotiations between the Commonwealth and the State has been told that the Commonwealth has no objection to the coal under the Holsworthy land being mined provided that any surface works are not on Army lands except by agreement with the Army.

page 687

QUESTION

NATIONAL SERVICE

(Question No. 895)

Senator DEVITT:

asked the Minister representing the Minister for the Army, upon notice:

Does the Department of the Army normally pursue a policy of presumption of guilt of a national serviceman charged with an offence before he is proved innocent?
If not, what authority has the Army, real or assumed, to stop the pay and allowances of the wife and family of a serviceman charged with a simple offence, the blame for which may be attributable to the Service and not the serviceman?
What remedies lie with the serviceman to redress injury arising from this unfair and seemingly unjust practice?

Senator McKELLAR:
CP

– The Minister for the Army has provided the following answer to the honourable senator’s question:

No, the Department of the Army does not pursue a policy of presumption of guilt of any soldier charged with an offence.
Allotments payable to the wife of a soldier are part of a soldier’s pay and allowances. As in the case of a civilian, pay and allowances are discontinued if a soldier is absent from duty without prior authority. When the soldier returns to his unit his pay and allowances are restored from the date of his return. This process must clearly be distinguished from the question of an offence which has to be determined by the due process of military law. Pay and allowances can be forfeited if the soldier is convicted of an offence. If, for instance, in the case of absence without leave it is proved that such absence was deliberate, the Court or the Commanding Officer may include forfeiture of pay for the relevant period as part of the verdict. However, if it is established that the absence was involuntary and of a nature for which leave can be approved, the pay and allowances are restored from the date they were discontinued.
If a soldier considers he has been unfairly or unjustly treated he may complain, in succession, to his commanding officer, his formation commander, the General Officer Commanding and, finally, the Military Board. Applications for such redress are considered in the first instance by the commanding officer and, if not granted, are the subject of legal opinion before submission to the next highest authority. The proceedings of any application for redress made to the Military Board are made available to the Minister for the Army.

page 687

QUESTION

ARMY

(Question No. 1010)

Senator MILLINER:
QUEENSLAND

asked the Minister representing the Minister for the Army, upon notice:

Is it the practice to withhold from members of the armed Services any part of their wages less than an even dollar, crediting such amounts to the member?
Is there any procedure in any Army camp whereby members of the armed Services are required to raise a specific financial amount to meet recreational facilities for the camp, and is there any case in which an individual may have declined to contribute voluntarily but then a regular weekly sum of money has been deducted from his wage entitlements?

Senator McKELLAR:
CP

– The Minister for the Army has provided the following answer to the honourable senator’s question -

Cash payments to soldiers are made to the nearest dollar at credit each fortnight and, when applicable, residue amounts of less than one dollar accumulate for a fortnight as a credit in the soldier’s paybook. This practice has operated for more than 20 years and facilitates payments by eliminating small coinage and thus reducing unit administrative effort which can be quite significant in large units.
Normal recreational facilities in barracks are provided either by the Commonwealth or from amenities funds; for example, regimental funds, area or command amenities fund or Army central amenities funds. Members do not contribute directly to these funds. In most units or areas, various clubs and societies are organised to promote recreational or cultural pursuits and these organisations may be subsidised by amenities funds although they usually rely on subscriptions. Current instructions preclude the making of any such deduction from a soldier’s pay.

No instance of such a compulsory deduction has come to the Minister’s attention but if the honourable senator has a specific case in. mind, the Minister for the Army would be pleased to investigate it if the case is brought to his notice.

page 687

QUESTION

PAPUA AND NEW GUINEA

(Question No. 883)

Senator GAIR:

asked the Minister representing the Minister for the Army, upon notice:

Does the Government agree with the comments of Brigadier R. T. Eldridge, as reported in the newspapers on 26th February 1969, that without an army, the Territory of Papua-New Guinea would be ‘a lamb among wolves’?
Is it correct that, in the 1964 Defence Review, it was anticipated that the Pacific Islands Regiment would have a total strength of 3,500 by June 1968 and that the actual strength by that date was considerably less than the planned 3,500?
Do not the hard facts indicate that the Territory, at this slow rate of army growth, is unlikely to be able to produce an army and that it could very well become ‘a lamb among wolves’?

Senator McKELLAR:
CP

– The Minister for the Army has provided the following answer to the honourable senator’s question:

This was a generalisation which would be applicable to most countries in the world today. 1 and 3. The 1964 Defence Review referred to a build up of the Pacific Islands Regiment to three battalions, which, together with supporting units, provided for a total Pacific Islander strength of approximately 3,600 by the end of 1968. Whilst it is true that the Pacific Islander strength has not reached the target foreshadowed in the 1964 review, there has been a steady growth in the strength and efficiency of the force in Papua and New Guinea since that date. The defence of Papua and New Guinea is not of course, vested solely in the force in the area but is part of the overall defensive arrangements for Australia and its territories. Like all elements included in the defence programme, the future role and composition of the force in Papua and New Guinea is currently under review by the Government in the formation of ils new 5-year programme.

page 688

QUESTION

NATIONAL SERVICE

(Question No. 973)

Senator MCCLELLAND:

asked the Minister representing the Minister for the Army, upon notice:

Are national service trainees given a medical examination by Army doctors upon their induction in lo the Australian Regular Army?
1. How many national service trainees in each call-up have been discharged medically unlit as a result of such medical examination?

Senator MCKELLAR:

– The Minister for the Army has provided the following answer to the honourable senator’s question:

National servicemen are not called up for enlistment until they have been found, on examination by a medical board conducted under arrangements made by the Department of Labour and National Service, lo meet the prescribed Army standards. On reporting, they are given a medical check to ascertain whether they have developed any illness or disability since that examination.
Approximately 32,000 men have been called up for national service and, of these, 563 have been discharged as a result of this medical check on reporting. Details for each intake are:

page 688

QUESTION

UNITED NATIONS DISARMAMENT CONFERENCE

Senator ANDERSON:
LP

– by leave- On 19th March, Senator Cohen asked me, as Leader of the Government in the Senate, the following question without notice:

I address a question to the Leader of the Government in the Senate as Minister representing the Prime Minister. Has the attention of the Minister been drawn lo reports of a statement sent by the President of the United States of America to the United Nations Disarmament Conference yesterday listing United States priorities for the current session of the Conference? Mr Nixon, amongst other things, called for an international agreement banning the emplacement of nuclear or other weapons of mass destruction on the seabed and for the exploration of any proposals or ideas which would contribute to an effective control of chemical and biological weapons. In view of the great importance of both these questions to Australia, will the Government respond quickly and affirmatively to the message sent to the Conference by the President of the United States of America?

In the course of my reply, I said that I would seek information and reply as quickly as I could to the submissions of the honourable senator. I have ascertained from the Minister for External Affairs that the President of the United States, in a message to mark the opening on 18th March of the current session of the Eighteen Nation Committee on Disarmament (ENDC) in Geneva, instructed the United States’ delegation ‘to indicate that the United States is interested in working out an international agreement that would prohibit the emplacement or fixing of nuclear weapons or other weapons of mass destruction on the seabed’.

President Nixon also said in his message that the United States supports the conclusion of a comprehensive test ban, adequately verified; that the delegation will continue to press for an agreement to cut off the production of fissionable material for weapons purposes and to transfer such materials to peaceful purposes; that, while awaiting the United Nations Secretary-General’s study on the effects of chemical and biological warfare, the delegation should join other delegations in exploring any proposals or ideas that could contribute to sound and effective arms control relating to these weapons; that, regarding more extensive measures of disarmament, the delegation should be guided by the understanding that actual reduction of armaments, and not merely limiting their growth or spread, remains the goal of the United States; and that the

United States hopes that the international political situation will evolve in a way that would permit talks between it and the Soviet Union on the limitation of strategic arms to begin in the near future.

The chairman of the Council of Ministers of the Union of Soviet Socialist Republics, Mr Kosygin, said in a message to the ENDC that his government deemed it important to find without delay ways of reaching agreement primarily on the non-use of nuclear weapons. He said that it was of the greatest importance ‘to agree that the seabed and the ocean floor shall not be used for military purposes but shall remain a sphere for man’s peaceful activities’. Mr Kosygin also said that solutions must be found for several other problems of disarmament.

The Russian delegation submitted to the ENDC a draft treaty aimed at prohibiting the use for military purposes of the seabed and the ocean floor and the sub-soil thereof. Australia is not a member of the ENDC, but the Government has always followed with the greatest interest and attention the deliberations of that body. It will continue to do this during the current session of the Committee. The question of the peaceful uses of the seabed has been discussed in the General Assembly of the United Nations and in committees concerned with the seabed and ocean floor. The Australian representatives in these discussions have supported the principle that the seabed and ocean floor beyond the limits of national jurisdiction should be used exclusively for peaceful purposes, although this would not in our view preclude defence purposes consistent with international law and the United Nations Charter. Australian representatives have also indicated on various occasions Australia’s desire to see international measures developed further to contribute to an effective control of chemical and biological weapons.

page 689

QUESTION

COINS

Senator ANDERSON:
LP

– by leave- On 27th February a question without notice was directed to me by Senator Branson relating to the currency of the present circular 50c coin. Although approximately 36 million of these coins were issued they are now very seldom seen in circulation. There is no intention of withdrawing these coins, and they will continue to be legal render alongside the proposed new 12- sided50c coin.

page 689

QUESTION

BANKING

Senator ANDERSON:
LP

– by leave - On 5th March 1969, Senator Cotton asked in a question without notice whether I would inquire from the Treasurer whether the policy of seeking to raise capital for the Australian Resources Development Bank within Australia only is to be changed in order to encourage investment in the Bank from overseas as well. The Treasurer has now provided the following reply:

The Australian Resources Development Bank Limited was established with the aim of marshalling finance both local and overseas to assist Australian enterprises engaged in large scale development projects in Australia. To this end, one of the particular objectives of the Resources Bank is to borrow or raise fixed interest funds overseas on the most favourable terms possible. It is understood that the Resources Bank is actively working on plans to borrow overseas.

page 689

QUESTION

STAMPS

The Postmaster-General has now furnished the following information in reply:

Twenty new Australian stamps were issued in 1968. The stamp design costs were approximately $8,000 and the additional printing cost of the stamps distributed was about $110,000. Information is not available on sales of individual Australian stamps at the Post Office’s special philatelic sales points but the total value of all such sales in 1968 was $645,000.

page 689

SPECIAL ADJOURNMENT

Motion (by Senator Anderson) agreed to:

That the Senate, at its rising, adjourn till Tuesday, 15 April, at 3 p.m.

page 689

IMMIGRATION

Ministerial Statement

As our primary production becomes more scientific, as our industrial base broadens and as our manufacturing processes become more highly developed the demand for people with specialised knowledge and training, scientific and executive skills will accelerate. As our community grows we will need more professionally qualified people to attend to our health, to teach in our schools and universities and to maintain our standards as an advanced community. This demand must be satisfied in the national interest.

The vastness of our natural1 wealth, the pace of our development, while still retaining economic and political stability and the tenor of our way of life, are attracting the attention throughout the world of people with vigour, initiative and ability. If we are to take advantage of the opportunity of incorporating them into our community we must make it possible for those whose qualifications measure up to our standards to practise their professions in this country.

It is true that among the 2 million settlers who have come here since the war there have been many whose professional qualifications have been recognised. They are making an important contribution to Australia. Others, however, for reasons not related to their personal competence have been unable to practise their professions. We have regarded their qualifications with hesitation or indifference. For others who have not yet come here but would like to do so there are obstacles so difficult to negotiate that they are tantamount to prohibition. It is in our interest that this potential be opened up.

There is throughout the Australian community a growing realisation of a serious problem in the recognition of overseas professional qualifications that must be tackled unemotionally and with the welfare of Australia as the main consideration. This is not a matter of dispute between professional people and others. That a problem exists is just as clearly recognised within the professions as it is outside them. All those who have been close to the question find common ground in their desire to see it examined outside the influence of politics or sectional interests. They- wish to see the preservation of Australian standards but they also wish to avoid wasteful failure to recognise qualifications equal to our own.

Analysis of the problem led to the conclusion that one of the main obstacles to be overcome was the absence of authentic information on which the authorities responsible for recognition could base their judgments. With such important issues at stake as the health and safety of our community and the standards of professional performance generally; the responsible authorities have proceeded with understandable caution. The doubts - and the rejections - have been many because there has not been a readily accessible source of authentic information about the comparability of overseas qualifications to our own Australian standards or to those of British countries with which we are familiar.

After studying and discussing the problem over a period of 12 months State and Commonwealth Ministers for Immigration agreed on 12th February to establish a committee of eminent men charged with the responsibility of examining qualifications obtained in overseas countries and comparing them with Australian standards. This committee will not have executive functions but will act as an authoritative source of information for those with whom the power of decision will continue. The Committee will not decide individual cases of professional men and women. It will direct and supervise the collection of information using methods it deems appropriate., through existing departments and authorities, through professional panels or otherwise in its own judgment. It will work closely with existing registration authorities. A cardinal feature of its operation will bc its concern to maintain professional standards in Australia. At the same time it is hoped that through its work people whom we need will be given the opportunity to use their professional knowledge and skill1 to Australia’s advantage.

The committee’s task will be long and complex, but it will be of great importance. The ultimate result may be that a person wishing to come to Australia to practise his profession will be- able to know before leaving his present home and position that upon arrival1 here he will be able to continue in his profession. Without this knowledge he will find little incentive to make the major decision to migrate. The committee’s terms of reference will be:

To seek out, assemble and collate information relevant to the recognition of overseas professional qualifications.
To make evaluations, on its own authority, of the comparability of professional qualifications obtained in overseas countries to the standards required in Australia.
To supply information on these matters to government statutory bodies, professional associations and other responsible inquirers.
For the purpose of 1. and 2., to establish as necessary expert panels whose task would be to undertake detailed investigations and assessment in specific professional areas; to co-ordinate the work of these panels.
To undertake, or to authorise, such first hand investigations as may be necessary for the proper discharge of its task. lt was agreed by all States that the committee should comprise people whose personal standing and ability command universal respect. I am now happy to announce that the members of the committee will be Dr D. M. Hyers, Vice-Chancellor of La Trobe University, Chairman; Mr G. W. E. Barraclough, Chairman of Unilever Australia Pty Ltd; Professor E. G. Saint, Dean of the Faculty of Medicine, University of Queensland; and Mr D. R. Zeidler, Executive Director of Imperial Chemical Industries of Australia and New Zealand. They will all be well known to honourable senators as men who by their personal ability have reached outstanding positions and are making a distinctive contribution in their various fields of activity. Among them they cover a wide range of k’nowledge and competence and they have the capacity to make judgments on information that will be furnished to them by the experts who will assist them in their work. I believe that the joint action that has been taken by the Commonwealth and the States to establish this committee is a most important step forward. It will clear the way for ‘ Australia to attract people with ability and professional competence in a world increasingly competitive for human skills.

page 691

UNIVERSITIES (FINANCIAL ASSISTANCE) BILL 1969

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Wright) read a first time.

Second Reading

Senator WRIGHT:
Minister for Works · Tasmania · LP

– I move:

The purpose of this Bill is to make a small machinery amendment to the Universities (Financial Assistance) Act 1966-68. The Act provides for the Commonwealth to make payments to the States of recurrent grants in respect of universities based on contributions paid by the States iti each calendar year. Because of the difficulty of ensuring that all payments in respect of a year are in fact made within that calendar year, the Act also provides for the Minister to exercise his discretion in the event of a State payment in respect of a year not being made until after the expiration of that year. However, in the case of recurrent grants payable by the Commonwealth to the States in respect of teaching hospitals associated with universities, the Act does not at present make provision for an exercise of discretion in respect of late payments and this has led to some difficulties in practice. This Bill provides for the inclusion in the Act of a suitable power of discretion for- the Minister. I commend the Bill to the Senate.

Senator COHEN:
Victoria

- Mr Deputy President, rather than taking the course of moving that the debate be adjourned 1. wish to indicate to the Senate that the Opposition does not oppose this Bill. It is a machinery matter and deals with an extremely important aspect of university work and of the work of the teaching hospitals. This Bill aims to correct an anomalous situation. Hitherto there has not been a discretion for the Minister to make the Commonwealth grant where the State grant has been paid outside the year in which the particular work was done. There does not seem to be any question of principle involved. It is a proper amendment: and the Opposition supports the Bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages, without amendment or debate.

page 692

CONCILIATION AND ARBITRATION BILL (No. 2) 1969

Bill received from the House of Representatives.

Standing Orders suspended.

Bill (on motion by Senator Wright) read a first time.

Second Reading

Senator WRIGHT:
Minister for Works · Tasmania · LP

– I move:

That the Bill be now read a second time.

This is a very short Bill to amend section 98 of the Conciliation and Arbitration Act. The Act at present provides that the Commonwealth Industrial Court consists of a chief judge and not more than six other judges. At present there are actually five judges of the Court, in addition to the chief judge; six positions are authorised by the Act, one position is vacant. The Government considers that another two judges should be appointed, in the interests of strengthening the Commonwealth Industrial Court itself and assisting with the work of the Territory Supreme Courts, which draw increasingly heavily on the pool of judges provided by the Commonwealth Industrial Court. Also, these appointments are proposed in anticipation of the establishment of the Commonwealth Superior Court, which will make it necessary to have a larger number of Commonwealth judges than hold appointments at present. The amendment to be effected by the Bill will enable the additional appointments to be made. I commend the Bill to the Senate.

Debate (on motion by Senator O’Byrne) adjourned.

page 692

EXCISE TARIFF BILL 1969

Second Reading

Debate resumed from 26 March (vide page 665), on motion by Senator Scott:

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

- Mr Deputy President, the Excise Tariff Bill and the Spirits Bill relate to the maximum strength at which brandy may be distilled and provide for an increase from 40% overproof to 45% overproof. For the purpose of the record and for brevity I ask for leave to debate both Bills concurrently.

The DEPUTY PRESIDENT (Senator Drake- Br ockman) - Is it the wish of the Senate that these two Bills be discussed together? There being no objection I will permit that course to be followed.

Senator O’BYRNE:

– The two Bills are machinery measures. The Excise Tariff Bill allows pure Australian standard brandy, Australian blended brandy and apple brandy to be manufactured at a rate of 45% overproof as against the current rate of 40% overproof. The existing duties are reimposed under the amended items in the schedule to clause 4 of the Bill. There are no revenue implications as the rate of duty on brandy is not affected. The Bills relate to the production side of the industry only. When excise duty is calculated, the strength of the brandy, not the volume, is used as a yardstick. Excise duty is assessed prior to delivery from customs control to go on the market. It is interesting to note that the current rate of 40% overproof was set in 1918. During the early stages of development of the industry that was considered a reasonable figure for brandy. There has been a considerable amount of competition from imported brandies, whose strength is 45% overproof. The Bills allow Australian brandy to be manufactured at that rate of 45% overproof.

The Minister for Customs and Excise (Senator Scott), in his second reading speech, said that in regard to whisky and rum, the legislation has for many years permitted a maximum distillation strength of 45% overproof. The Bills will bring the overproof level for brandy up to that for whisky and for mm. A consequential amendment of the Spirits Act is provided for. Section 3 of the Act contains definitions of the terms ‘pure Australian standard brandy’ and ‘Australian blended brandy’. The amendments proposed by the Spirits Bill will allow brandy distilled at a strength of up to 45% overproof, which otherwise complies with the terms of. the definitions, to be described as ‘pure Australian standard brandy’ or Australian blended brandy’ as the case may be. I understand that to acquire these classifications the brandy has to remain in the wood at the place of distillation or at a suitable storage area and when it becomes a certain number of years old it is classified as a ‘pure Australian standard brandy’. At present all sections of the industry have achieved very high standards and there is a rising demand for our wine throughout Australia and overseas. Any legislation which allows the fullest development of an industry should be encouraged. We on this side of the chamber have no objection to the Excise Tariff Bill or to the Spirits Bill which increase the overproof level of brandy to 45%. We hope that the Bills will receive a speedy passage through the Senate.

Senator BYRNE:
Queensland

– The Democratic Labor Party has no objection to the passage of these two Bills, which are being debated together. The opportunity arises, in a small compass, to make some minor observations on the development of the Australian wine industry. Without wanting to unduly delay the Senate, I think it is important to observe that one of the phenomenal things in Australia’s recent history is the expansion of the wine industry consequent upon a developing taste in the Australian community and perhaps the development of a greater sophistication. This has been due to many things, including the higher standard of living and the introduction of new cultures from overseas, which have increased interest in the knowledge of wine. We must not regard the consumption of wine as purely a social amenity. The production of and the commerce m wine have very great financial and economic implications. At present, with the increasing demand in Australia, we think in terms of satisfying the Australian market. It could well be that overseas markets will require more of our wine. This requirement will develop gradually.

Overseas there has been some general criticism of the standard of our export wine. I do not purport to be an expert in this field but it would be a tragedy if, at a time when we may be commencing to intrude into world markets, we should commence with an unpalatable reputation - if I might use what I might call a half pun to express myself. If we are endeavouring to establish a wine export trade, initially we should endeavour to establish it at the highest level. In more recent times I have not heard the earlier complaints and the rather derisive comments that accompanied the first incursions of Australian wine into the international wine consumers* markets. Obviously there has been a determined and perhaps successful attempt to raise the standard of our export wine. We can expect that, as Australia becomes more knowledgeable on the consumption of wine and develops a palate for wine, we will become more discriminatory in the selection and rejection of wine. We can gradually develop the industry itself - that is the cultivation and the processing of the vine - into one of our very great industries. Bills such as these are steps along the path towards bringing our wine production to the international level and establishing an international acceptance and an international rationalisation of our wine industry, and this is very good. These Bills are merely further steps - and there have been many in recent years - towards consolidating the industry. We look for many more as time goes by.

I take this opportunity of expressing the very great concern which must be felt by the nation about the present stresses within the industry. There is, we know, some difficulty in the industry. There are some disputes and various sections of the industry’ have some differences of opinion about the regulatory form of the industry. These differences are not stimulated necessarily by self-interest. but to a large extent they are generated bv a desire to have the industry stabilised as effectively as possible in its own interests and particularly in the interests of the growers. Recently in South Australia there was concern about the effect on viticulture of increasing water salinity in the irrigation areas. Vines have a particular susceptibility to the deleterious effects of salinity. This is a very important and rather disturbing feature of the industry. I think it will have to receive the earliest possible technical attention at the highest level if the industry is to be conserved and is to develop. 1 come from a State that produces only limited quantities of wine grapes. The industry is not a major one in the State; it is comparatively minor. But I realise that the industry has a tremendous contribution to make to the Australian economy. Those States which are concerned particularly with this industry can always expect the enthusiastic support of Queensland at least and, I think, of the other States. The Democratic Labor Party supports these Bills.

Sitting suspended from 12.45 to 2.15 p.m.

Senator SCOTT:
Western AustraliaMinister for Customs and Excise · LP

– in reply - Prior to the suspension of the sitting we heard Senator O’Byrne on behalf of the Australian Labor Party and Senator Byrne on behalf of the Democratic Labor Party. Both said that they did not oppose the Excise Tariff Bill or the Spirits Bill which are now before the Senate. The purpose of the Excise Tariff Bill is to give effect to a request by the producers of brandy in Australia to increase the spirit content from 40% overproof to 45% overproof. The first reason stated by the producers for the increase was that it would enable the standardisation of a maximum distillation strength for rum, whisky and brandy. The effect of this would be that rum, whisky and brandy made in Australia and in other parts of the world, but particularly in Australia, would be of a standard strength, namely 45% overproof. The second reason stated by the producers was that it would enable the Australian distiller to produce a more neutral type of brandy which appeared to be in line with current taste trends, both overseas and in Australia. The third reason was that with a greater concentration of the more highly distilled spirits, a greater proof gallonage could be stored in a given area. This would result in economies in storage, particularly in view of the 2-year maturation requirement for brandy. The Commonwealth Government has agreed to the producers’ request and by this legislation proposes to implement it.

– The honourable senator suggests that this quantity would almost fill the Chowilla Dam. Recently I had the opportunity to travel through the Barossa Valley and to visit areas on the River Murray adjacent to the site of the Chowilla Dam. We were given the opportunity to look’ at various wineries throughout the area. All wineries were conscious of their responsibility to produce a wine which was suitable for the table and also for export. The wineries in those areas are really to be congratulated. Senator Byrne said that he had travelled through those areas recently and had been told that the wine grape growers were concerned with problems associated with the salinity of the River Murray. I think it can now be said that following the recommendations of the River Murray Commission, the three States and the Commonwealth have agreed on a proposition that the first storage dam to provide additional water for those areas will be built at Dartmouth. It is interesting to note that this will result in reduced salinity, particularly in times of drought in those areas. According to the technicians who have made checks of the water, the construction of the Dartmouth Dam will reduce salinity in time of drought to no more than 260 parts per million. That is a reduction of about 50% on what it was during the peak of the last drought. I have covered most of the points raised and I thank Senator O’Byrne and Senator Byrne for intimating that the Australian Labor Party and the Australian Democratic Labor Party respectively are not opposing the Bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without requests or debate.

page 695

SPIRITS BILL 1969

Second Reading

Consideration resumed from 6 March (vide page 351), on motion by Senator Scott:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 695

CURRENCY BILL 1969

Second Reading

Debate resumed from 6 March (vide page 352), on motion by Senator Anderson: That the Bill bc now read a second time.

Senator WILKINSON:
Western Australia

– This Bill, which seeks to amend the Currency Act 1965, is a very straightforward uncomplicated piece of legislation which covers less than one page. Its purpose is to give to the people of Australia a coin to replace the 50c coin which was withdrawn because of problems associated with its use. Although its was larger and slightly heavier than the other coins, it was confused with the 20c coin. This Bill, when passed, will allow the weight of the coin to be varied, and that means that in the future we will be able to vary its size. lt will be seen from the Schedule to the Bill that the new coins will be manufactured from copper and nickel alloy instead of four-fifths fine silver and one-fifth other metal from which the previous 50c coins were manufactured. I believe, and obviously the Government believes otherwise it would not have introduced the Bill, that this new coin will be of considerable benefit to the people of Australia. We will have a coin similar in size to the 20c coin, and although it wilt have features to distinguish it from that coin it will be 2i times greater in value.

The Opposition has no objection to the measure. We feel that this is a progressive step in our currency. There have been suggestions that we should introduce a 50c bill instead of a 50c coin but that probably would cause objection in places which would deal mostly with the notes. I refer to the banks. A 50c coin is a very easy way out of the situation and one which I am sure will meet with the approval of the people generally. I have much pleasure on behalf of the Opposition in supporting the Bill.

Senator BYRNE:
Queensland

– On behalf of the Australian Democratic Labor Party I indicate that we support the bill but I should like to make one or two observations. There was widespread discussion when decimal currency was introduced and the new coinage was struck, and a great deal of attention was given to designs on the new coins. Personally I was disappointed at the designs that did emerge. I liked their concept of depicting Australian flora and fauna. That was very good and highly desirable.

However, I am concerned, as I was then, about the type of metal on which coins, other than the 50c piece which was composed of four-fifths fine silver, are impressed. The design was not properly etched and it is almost impossible to discover at a quick glance what the design represents. Except by the closest scrutiny one cannot identify the image that the coins want to project - the image of Australian flora and fauna. It should be readily and easily visible. I express this disappointment that the present coinage does not achieve this purpose. Therefore I hope that when the new coin is designed it will be etched in such a manner that whatever may be the inscription on it, it will be obvious to those who are fortunate enough to have some of the coins , in their possession what particular aspect of Austraiian life it is intended to project. 1 do not know that our coinage compares very favourably with many coins overseas. I do think that the 50c coin, as first struck in the more precious metal of fine silver, was beautifully etched and was a coin of prestige. I do not think that we have at present any coin of prestige. 1 believe that the general standard of coins falls far below the level that we should attempt to achieve. I do not see that necessarily we are committed to the present design or to the present system of engraving, processing or etching, and I suggest to those responsible that they make an attempt to achieve greater clarity of design and etching than is now present.

The proposal to introduce a 50c coin is very good. This has been mentioned to me by the manager of a totalisator who said that the gradual .withdrawal from circulation, and the subsequent absence, of the 50c coin was quite .a. disability in the management and control of the totalisator on the race courses. That may seem to be a minor matter and I mention it only as an illustration that a coin of suitable currency value makes for easier handling and speed in commercial transactions. No doubt the step which now has been taken has been in response to a general demand for the coin. I am sure it will make commercial exchange must more easy in the future.

We support the Bill. I commend to the attention of those responsible for the Australian currency the one or two matters that I have raised.

Senator SCOTT:
Western Australia · LP

– in reply - I note that neither the Opposition nor the Australian Democratic Labor Party is opposing the Bill. I note also Senator Byrne’s comments. I point out that the new coin which will be 12-sided will have the Commonwealth coat of arms on the back. We hope that it will meet with his approval. I also inform the Senate that, as was stated in the second reading speech, the other 50c coin that was produced- contained a substantial amount of silver, and the rise in the value of silver made- the coin worth more than 50c. This new coin will be made of copper and nickel. I hope that it will meet with the approval of Senator Byrne and members of the Australian Labor Party.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 697

LOAN (SUPPLEMENTARY BORROWING) BILL 1969

Second Reading

Debate resumed from 6th March (vide page 353). on motion by Senator Anderson:

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

– This Bill makes provision for the appropriation of the proceeds of Commonwealth borrowings to supplement provisions already contained in the two 1968 Loan (Housing) Acts. The reason given for this additional appropriation is so that the Commonwealth can borrow money abroad to meet any commitments that may arise between now and the end of this financial year. It is expected that loan raisings within the Commonwealth will exceed the amount of the appropriations that have been provided for in the Loan (Housing) Acts. The Minister for Supply (Senator Anderson), who represents the Treasurer (Mr McMahon), in the course of his second reading speech, drew attention to the fact that in the period since 1950-51 overseas loans have provided the equivalent of more than $ 1,050m for borrowing programmes approved by the Australian Loan Council for State works and housing.

This raises the matter of the very important and critical situation that exists in the States. The Commonwealth has been able to farm out the responsibility for the raising of loans for works and housing, although in reality it should be a Commonwealth responsibility. The great increase in population that has taken place since 1950-51, as a result of Commonwealth policy on immigration and other methods of developing Australia, has caused great . expenses in the States in the building of houses and, in local government circles, in the development of suburbs, the paving of streets, the provision of guttering, the laying of water mains and the supply of electricity and other facilities. All of this puts a tremendous burden on the other tiers of government - local and State. When we look at the statistics we can see the transfer of Commonwealth responsibility to the States.

The Premiers have been meeting recently. They are in a quandary in determining how they can handle this problem. Before long every State government will be budgeting for a deficit. A completely new approach to the financing of Commonwealth and State activities will have to be established and implemented. The Minister said in his second reading speech: in each year from 1951-52, except in 1962-63 and 1963-64, Commonwealth borrowings in Australia and overseas have fallen short of the full amount of the approved programmes. The Commonwealth has found from its own resources$2,187m to meet the shortfall in these programmes and has as well financed over $5,400m of Commonwealth capital expenditure from revenue.

The position is that, in addition to financing over$5,400m of Commonwealth capital expenditure from revenue, a large amount of money has been made available to the States in the form of interest bearing loans. The Commonwealth virtually has become the moneylender to the States.

Senator Greenwood:

– That is what Sir Henry Bolte says.

Senator O’BYRNE:

Senator Rae:

– It is not the same tax.

Senator O’BYRNE:

– The honourable senator is splitting straws. The same type of tax is to be imposed on the residents of Tasmania. It is an addition to the ordinary income tax and the indirect taxes that they pay. In principle, it is the same as the taxes imposed in Victoria and New South Wales. I am reminded of the statements that are made when a drought occurs in Tasmania. When there is a drought in Victoria it is said to be caused by God, but when there is a drought in Tasmania it is said that Eric Reece and the Labor Government caused it.

The matter of borrowing overseas is a subject of tremendous importance to the Senate and to the people of Australia’. The Opposition realises that provision has to be made to finance our commitments, but I think that the matter should be widely ventilated. The Opposition supports the Bill, but it believes that much more attention must be paid to the incidence of taxation imposed on the residents of the States as a result of the Federal Government’s policy of farming out responsibility to the States.

Senator BYRNE:
Queensland

– The Australian Democratic Labor Party supports this Bill1. I wish to make some general observations which stem from the principle which is implicit in the Bill. In his second reading speech the Minister for Supply (Senator Anderson) said that this is a technical measure and that it is not necessary for the Bill to be passed by the Parliament to enable these moneys to be raised. But apparently it is necessary for the Bill to be passed by the Parliament to enable the moneys to be appropriated to a domestic purpose. These moneys have been raised internationally. This, 1 conceive, is the reason for the legislation. As this is a Bill to obtain further capital resources for Australia through the public sector of loan raising, it is not inappropriate for me to make some comments on the general question of the import of capital resources into Australia and more particularly into the private sector.

Within 48 hours, the Prime Minister (Mr Gorton) will be travelling overseas for very serious consultations with the President of the United States. It is generally conceded that the important areas of discussion will be international relations, defence and matters of that character. But let us not lose sight of the fact that one of the equally important areas of discussion undoubtedly will be the economic relations between Australia and the United States. The control of the export and import of capital resources is a matter that we can expect to loom with some significance in these discussions. Over the past few months it has been very disturbing to note that in many areas’ of policy there has been indecision and delay on the part of the Government. One matter which has caused concern to not only supporters of the Democratic Labor Party but also commercial and financial investment circles is the indecision and the vacillation on alterations in policy in relation to the control of capital! investment from outside and within the resources of Australia in the private sector, lt would be very unfortunate for the Prime Minister to embark upon his impending discussions with the President of the United States in an atmosphere lacking clarity as to the policy of the Government in this particular sector of its administration.

I do not think anybody should be too specific about this matter at this stage, but a review of the recent history of variations in policy and statements made by Government spokesmen on this matter, and the continued absence of any firm declaration of investment policy and control of capital imports, give cause for some concern that there may be imprecision in Government thinking which would accompany the Prime Minister to his consultations and might preclude the presentation of a firm and decisive policy before the American Administration.

As honourable senators are aware, there has been a traditional method of control of foreign capital investment in this country. Australia has always been regarded as quite a safe area of investment, as has been mentioned already in this debate. If the capital inflow has been increased considerably in recent years when compared with the inflow of many years past, it is because the investment opportunities in Australia were not so apparent and probably not so great in the past. But with the gradual development of our national resources and the unfolding of our national potential, Australia has really been presented to the investment world as an investment market of tremendous opportunities which we can expect the world to seize, and which it is seizing.

Last but not least, this will be apparent in the great investing country, the United States of America, which has vast resources of capital including capital for investment overseas. Australia faces its .position of attractiveness for investment capital with a traditional policy, but there have been variations in that policy, and variations in actions and pronouncements. Guidelines were laid down in 1965 fairly clearly. They were not under Government control, but apparently controlled by or through the Reserve Bank which dealt primarily with investment by foreign companies. These guidelines were substantially followed and remained undisturbed until, in more recent times, there have been declarations by the Prime Minister and by the Treasurer (Mr McMahon) which have given considerable concern to industry and overseas investors.

In magazines such as the journal of the Associated Chambers of Commerce of Australia expert, opinion has been given on the generally unsatisfactory climate of opinion as to Australia’s policy on overseas investment. This is not only of concern to Australia and Australian industry. Not only would it be an impediment to Austraiian development, but. it would also be of concern to potential overseas investors who would discover a departure from the traditional modes of investment attraction when they detected a move into a climate in which there had not been ‘ definitive pronouncements on Government policy. The journal of the Associated Chambers of Commerce has some comments to make on this subject in its February 1969 issue. It comments particularly on a statement by the Treasurer on the Australia Club speech by Mr Gorton in London in which he dissociated himself from Australia’s traditional stand on overseas investment. The journal refers to Mr McMahon’s subsequent speech in the Parliament in which, it is said, he must have had in mind Australia’s traditional investment policy attitude and therefore must have been virtually interpreting the Prime Minister’s comment made in London. The Journal states, in reference to the Prime Minister’s statement:

This statement becomes highly significant in the light of the Treasurer’s remarks during the debate on overseas investment, in . Parliament this month. Mr McMahon indicated (apparently for the first time publicly), that under the existing guidelines new corporations, wholly overseas owned, cannot obtain Australian savings to permit them to invest in Australia. Moreover it is understood that this condition has been part of the guidelines since they were laid- down in 196S.

The Prime Minister would certainly have been aware of this and it can only be assumed, therefore, that he was directing his attention to overseas companies which have been established in Australia over a long period. Understandably, this has caused serious concern in business especially as exemption had previously been given to ‘old’ companies under the original guidelines. This has led many overseas companies which have been long established m Australia to question whether the ground rules on which their original investments were made were to be changed in mid course.

Obviously such uncertainties can only be removed by a full statement of the manner in which the guidelines are presently being adminitered and any proposed alteration concerning the treatment of established overseas companies should be explained in the fullest detail.

As I have said, the guidelines were laid down in 1965 by the Reserve Bank, possibly subject to examination by the Federal Treasury.

Senator Dittmer:

– They have not stopped overseas corporations borrowing in Australia.

Senator BYRNE:

– I think that is correct, but it is this uncertainty which is concerning overseas investors and Australia, and should concern this Parliament at this critical time when the Prime Minister is about to conduct discussions with the American Administration. Because of the situation there has been contemporary comment in the Press as late as this morning by financial writers, (referring to the situation which faces the Prime Minister at present. I shall quote from an article by the Financial Editor in today’s issue of the ‘Australian’. He points out that this is of concern not only in Australia, but also in the very country which the Prime Minister is to visit. The article Quotes extensively from the magazine ‘Fortune’, a prestige magazine with expertise In this field, and experts writing for it.

Senator Wheeldon:

– lt is a Luce publication.

Senator BYRNE:

– It is highly regarded and its comments can be considered as embracing a high level of technical and financial opinion in the United States. The article in the ‘Australian’ states:

That there is real concern in America about Mr Gorton’s future policies on companies investment here is reflected in the latest issue of the respected businessman’s magazine, Fortune.

As Fortune sees it, Mr Gorton’s ‘economic nationalism’ speeches of the past 6 months have sent a lingering chill through the business community.’ Because of this and uncertainties as to what his future policies will be, it says Mr Gorton will need all the soothing words of his lexicon to bring investor confidence back to its previous high level.’

I do not wish at this stage to rock the boat particularly or to jeopardise any conversations - not that what I have said would do that - between this country and the United States of America. However, it is of great concern that American investment opinion is already disturbed and would witness the forthcoming conversations as occurring in an atmosphere of considerable uncertainty. Unfortunately, there have been some elements of considerable vacillation in this matter which is allied ultimately, and not by any tenuous connection, with Australia’s investment policy. The Australian Democratic Labor Party has had occasion severely to criticise the Government and the Prime Minister on the absence of a defence policy, and finally on the announcement of an inadequate defence policy. We say that this is necessarily tied to the economic position of Australia, because where we put our defence in Asia, naturally our interests follow and our economic interests become to some extent identified in the region.

Therefore the presence of American capital in this country can have repercussions in respect of our commercial relationships with Asian countries. There is a connection between these things and vacillation in one field would unfortunately find its reflection in vacillation in the allied field of finance economics. That is why American opinion is also rather concerned that the same vacillation which witnessed the projection of Fortress Australia and its subsequent retraction should also find expression in Australia’s investment policy. The article continued:

The magazine adds that although the Prime Minister has periodically sought to reverse the nationalistic stance - brought on by heavy foreign ownership of Australia’s biggest enterprises - the international investment community has clearly revealed a severe case of jitters and foreign investors are wondering what the outcome of Australia’s flirt with nationalism will be.

Mr Gorton has certainly a very tight itinerary for his US visit and does not appear to have accepted a speaking engagement at any of the businessmen’s dinners usually a feature of such visits.

However, if the concern reported by Fortune is accurately measured, he should certainly be asked about his policy at some stage during his US visit.

And obviously, it is in his interest and Australia’s that Mr Gorton gives as clear an account as possible of the Government’s intentions and expectations relating to foreign investment.

This article also refers to the apparently contradictory statements, or statements at variance with or not complementary to, other remarks made by the Treasurer. The article stated:

The Treasurer, Mr McMahon, also when speaking to the Finance Conference made it clear that the Government was not contemplating formal restrictions on foreign investment.

I think we should at least indicate that there is an awareness in this country at this time - an awareness expressed by such contributions as I am making today on the eve of the Prime Minister’s departure - that this matter of investment policy should command high priority in the. discussions in the United States and that it would be only with reluctance that Australia would depart from its traditional policies in relation to foreign investment. If Australia is to depart from those policies then it will be done only on proof that Australian interests are being sacrificed and that Australian ownership of its own natural resources is being denied in a measure which warrants this action rather than lose the benefits of foreign capital coming here. After all, Australia is a young country. Like young people we lack investment and capital resources. That is one of the tragedies of the young.

Senator Dittmer:

– About 90% of Australian investment money is found by people here in Australia.

Senator BYRNE:

– That is right. That is a tradition that goes back to the financing of the war. That was the first time that we attempted to live within our own resources. It is one of the disabilities under which a young country like Australia suffers. We are not in a position to take a strong independent stand and say that all foreign capital will be kept out of this country. That would be a national tragedy. It would be a denial of national prudence. It should never be the policy. We have to try to discover a balance between Australia’s capital requirements and the entitlement of the Australian nation to ultimate control of its own resources. That is where the balance must be found.

I think Senator O’Byrne. spoke in another context of great mining companies occupying leases on which they were sitting and were not developing. He described that as a policy that was indefensible. If a nation did the same thing it also could be charged with having a policy that was indefensible. If great natural resources were discovered here and, because of the location, we were unable to develop them ourselves and declined to invite capital to assist us to develop them, then that would be an indefensible policy. But, always, we must find a reconciliation between national development and the preservation of national equity and interest. Of the many areas of government administration where uncertainty has intruded, unfortunately, and where delay has been its handmaid, this is one where obviously there has been maximum uncertainty. This cannot be allowed to go unresolved any longer. I want to refer now to a comment, again in the ‘Australian’, which was made by Mr Sam Lipski in a review of the prospective visit of the Prime Minister to the United States and of the matters likely to be discussed. He refered particularly to this matter and said:

American attitudes on foreign investment is another example. Most time on this will be spent in discussions with the Secretary for. the Treasury, Mr David Kennedy.

I conclude by expressing the hope that if there has been vacillation in the past which has disturbed the Australian business and investing community and which, has grievously disturbed the potential source of the greatest inflow of capital into Australia, the United States market, then surely the time for vacillation has passed. In spite of the variations in statements made within the Ministry, surely at this time a common policy will have been resolved, though not announced.

I hope that the people we send to Washington on this occasion, particularly the Prime Minister, will have a clear and decided view of the attitude of Australia, especially on the question of United States investment. I hope that if these talks result, apart from anything else, in agreeable policies which will continue to attract American investment, they will at the same time take cognisance of the right of the Australian people to substantial ownership and development of their own resources. If that is so then I think the economic alliance with the United States, on a person to person and business to business level, will do a great deal more to cement the traditional relationship between these two countries than, perhaps, the government to government relationship, lt is with that expression that I look forward to hearing the results of the deliberations when the Prime Minister returns to Australia and presents his report to this Parliament. The Democratic Labor Party supports the Bill.

Senator SCOTT:
Minister for Customs and Excise · Western Australia · LP

remind the honourable senator that this Bill is designed to give authority to the Australian Government to borrow from overseas an amount up to SI 50m at the best rates of interest available to the Government. The Bill really has nothing to do with overseas investment in Australia. It may have very little to do with iron ore in Australia.

Senator Byrne:

– It is a question of procuring capital in volume from overseas.

Senator SCOTT:

– We have never altered our policy in relation to borrowing capital overseas. That has been going on since the Liberal Party and Country Party became the Government in 1949. The Bill is designed to allow the Government to borrow from overseas the amount of SI 50m at the best rates of interest available. The money will go into the Loan Consolidation and Investment Reserve. It will then be available not only for Commonwealth works but also for State works. The States will be able to borrow from the Commonwealth at current bond rales of interest. This is what the Bill is designed to do. I will read what was said by the Minister assisting the Treasurer (Mr Swartz) some time ago. He said:

This Bill will provide legislative authority to appropriate loan funds up to a maximum of $150m to enable the proceeds of any further overseas loans to be credited to the Loan Consolidation and Investment Reserve, in which they would then be available for investment in the special loan to be raised later iti the year to complete the financing of the States’ share of the 1968-69 works and housing programme approved by the Loan Council. The effect will be to make available to the States the proceeds of overseas loans at Australian rates of interest. The concurrence of all State Premiers has been obtained to this course.

This surely means that what I have said is correct and divorces the matter completely from overseas borrowing. However, both previous speakers spoke about overseas borrowing.

Senator Byrne:

– About the availability of capital rather than overseas borrowing.

Senator SCOTT:

– Very well, the availability of overseas capital. I mentioned the word ‘borrowing’. 1 am advised that, the inflow of overseas capital at the moment is running a little better than it was 12 months ago. Therefore we have no reason to bc distressed. Senator Byrne was very anxious to ensure that the Government did nothing to preclude overseas investment in Australia because he believes - as 1 do and as every right thinking person does - that it is absolutely essential for Australian development that overseas capital be invested. I think the Prime Minister (Mr Gorton) and the Treasurer (Mr McMahon) have made this quite plain in various speeches delivered over the last few months. They have said that not only do we want overseas capital but also we would like equity capital. If it is to be invested in new projects we would like those companies investing in Australian development to give Australia an equity in such developmental projects. We would encourage Australian debenture capital being made available if an overseas company invested large amounts of capital in a project and allowed Australian participation. That is all we are saying at the moment.

- Senator Byrne and I may not be fit people to judge this. All1 I can say is that the American investor, together with the other overseas investors, is making available capital at a greater rate this year than the previous year. That is what I am advised. That is all 1 can say on the subject. With regard to the Commonwealth taking over refinancing of housing from the Slates, as indicated in the second reading speech, the proceeds of overseas loans with their higher rates of interest have been taken over by the Commonwealth. In turn the Commonwealth has found funds for the States at local bond rates for their share of the Loan Council programmes. In addition, under the Commonwealth and State Housing Agreement the Commonwealth makes advances to the States at a rate of interest 1% below the Austraiian bond rate. I thank honourable senators for the thoughtful speeches that they have presented. 1 am pleased to hear that they will support the Bill.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 705

CUSTOMS TARIFF BILL 1969

Second Reading

Debate resumed from 18th March (vide page 398), on morion by Senator Scott:

Thai the Bil! be now read a second time.

Senator O’BYRNE:
Tasmania

– The Bill is designed to amend the Customs Tariff 1966-1968. ft contains retrospective provisions in that it includes changes which were introduced into Parliament as Tariff Proposals last year, lt includes changes that were introduced under Tariff Proposals Nos 1 to 4. On 1.0th September 1968 the Tariff Board made a report on wrapping machines and on earth moving, excavating and materials handling machinery and equipment. The recommendations were implemented on 11th September 1968. On 19th September 1968 the Tariff Board reports on citric and tartaric acids, etc.. and on cutlery, forks, spoons,- etc., and Special Advisory Authority reports on polytetrafluoroethylene tape and on woven shirts and parts therefor of cotton and man-made fibre mixtures were presented to Parliament. The recommendations were implemented on 20th September 1968. On 6th November 1958 we saw presented Tariff Board reports on mushrooms, chrome chemicals, penicillins and streptomycin, medical or surgical dressings and static transformers. The change in duty on these items became effective from 7th November 1968. On 27th November 1968 the Tariff Board presented its report on rubberised textile fabrics and there were also minor amendments of departmental origin which came into effect on 28th November 1968. In all there were 1 0 reports of the Tariff Board and 2 reports by the Special Advisory Authority. It is of great interest that the reports of the Special Advisory Authority met with resistance from the Department of Trade and Industry. This has more or less brought to a head the clash on overall Government policy that has developed between the Tariff Board and the Commonwealth Department of Trade and Industry.

In its recommendation for the phasing out of the present by-law assistance accorded to local production of peanut ofl, the Tariff Board has proposed the progressive elimination, commencing on 1st January J 970, of the present by-law concession which permits producers of peanut 011 to import duty-free 3 gallons of oil for each gallon produced from local peanuts. Honourable senators will recall the controversy that raged about the production of domestic table margarine. All sorts of fictitious arguments were introduced in an endeavour to counter a very wide campaign of advertising for table margarine. Various oils were the subject matter of the case made against the margarine manufacturers. lt is interesting also that the Department of Trade and Industry, with its strong influence from the Country Party, which would represent the butter producers, the competitors of the margarine manufacturers, was able to bend the long standing policy whereby the Tariff Board made recommendations after a very careful consideration of submissions from the industry, and brought about a change of Government policy. However, I suppose it is the prerogative of government to change its policy in this way, but on this issue and arising from the subject matter in this legislation this important departure from policy has taken place.

In other circumstances it is perhaps a matter that could develop into a probe into the activities of the Department of Trade and Industry which ostensibly is under the control of a Minister who gets his support from the Country Party and from country interests. Yet in this instance we see the Tariff Board’s recommendation being almost reversed to conform with the express policy of that Party. Many interesting observations could be made on the principles involved in this piece of legislation. In his second reading speech the Minister for the Interior (Mr Nixon) said:

The Government decided that it would require information on the peanut industry not provided by the Board’s report, including the results of an examination of the overall costs of peanut growers, before dealing with this recommendation.

I would be repeating what 1 said earlier this afternoon if I were to remind the Senate that the Government knows full well that a detailed examination of the overall costs associated with the growing of peanuts would relate also to such things as linseed oil, safflower oil, cotton seed oil, maize oil, soya bean oil, rape seed oil and some other oils of minor importance. These oils have a growing influence on the economy of this country but also are of importance in the manufacture of products such as margarine. The Government claims that the Department of Trade and Industry and the Department of Primary Industry will make a survey of the peanut industry and that the Government will re-examine the matter l’ater this year. This is rather interesting. We have the Tariff Board and the Special Advisory Authority which are composed of independent experienced men with background knowledge. Although the Minister for Trade and Industry (Mr McEwen), in his campaign to take charge of: practically everything, including the Treasury, has found an opportunity for criticising the Tariff Board, the fact remains that these people have been appointed to make these investigations on behalf of the people of Australia. Yet their recommendations have been sidestepped, as has been evidenced particularly by the remarks of the Minister for the Interior: the Departments of Trade and Industry and Primary Industry will make a survey of the peanut industry and the Government will reexamine the matter later this year.

An examination of the overall costs of any primary industry today would be a most interesting exercise. One would need to start from a particular point and be able to equate everything to that point. There is nothing stable about the costs of production. Each day we see an announcement that there will be an increase in freights, that there are proposed increases in the price of fuel, that the cost of motor vehicles will increase by another $100, and not so long ago Senator Scott announced that the competition from Japanese motor vehicles was so great that their price would be lifted by $200 or §300 to make them competitive with the Australian product. All these factors have their impact throughout the whole of our economy. Yet the Minister claims that the Department of Trade and Industry will make an examination of the overall costs incurred by growers in the production of peanuts for oil. That is one aspect of the legislation which is of interest.

The third schedule, which covers a further list of commodities which, as from 1st January, were added to schedule A of the New Zealand-Australia Free Trade Agreement, would be of interest to Senator Lillico. The decision to include these commodities finalised the second of the regular reviews provided for in the Agreement for the purposes of broadening its trade coverage. Much discussion has taken place in this chamber and throughout Victoria and Tasmania relating to the incidence and influence of the New Zealand-Australia Free Trade Agreement. Although a regular review was promised, it is evident that a number of commodities have not been included in the items which will’ be reviewed. Despite statements by the Minister that peas and beans grown in Tasmania and Victoria will not be jeopardised as a result of the agreement between Australia and New Zealand, so far I have not been able to find any definite statement to allay the fears that the local growers will suffer.

In the Fourth Schedule to the Bill the Government has accepted the Tariff Board’s recommendations relating to X-ray apparatus and accessories, hot water bags and string musical instruments, together with a report of the Special Advisory Authority on bisphenol A. The matter of hot water bags has been canvassed fairly widely in another place. Temporary duties were imposed in November 1967 on the recommendation of the Special Advisory Authority. The Tariff Board recommended protective duties of 45% general tariff and 35% preferential. Although they are above the existing duties, generally they are less than the existing duties plus the temporary duties.

Evidently a British producer has been supplying bulk quantities of hot water bags to chain stores. Factors such as the devaluation of sterling and the decline in the demand for hot water bags have had an effect. It is easy to understand that this commodity is practically a thing of the past. If people who have the electricity supply connected to their home want warmth in bed they certainly will invest in an electric blanket. Someone has said that the electric blanket is the most magnificent invention since woman. I believe that is true.

Senator Gair:

– Do you reckon that it is a substitute?

Senator O’BYRNE:

– No fear, no. The point is that an electric blanket can be turned off, wrapped up and put in the cupboard. Reverting to my original statement that there is a decline in the use of hot water bags-

Senator Gair:

– What about the people who cannot afford to buy an electric blanket?

Senator O’BYRNE:

– The cost of electric blankets apparently is falling as a result of mass production and is reaching the stage where it is not greatly different from the cost of a hot water bag. The hot water bags with which I had contact either had the habit of leaking and wetting the bed or, if you allowed too much steam to enter them, they exploded. There was always something going wrong. I never had much success with them in my bachelor days but I have never had much occasion to use them since then. That brings me to the subject of the mass production of many commodities for supply to chain stores, and the consequent displacement of many people who are engaged in a small way in producing them. They cannot compete with the mass producers and as they lose their traditional market they go out of production. This means that the chain stores are able to demand pretty heavy discounts and impose severe conditions on their sole supplier. That is not a matter which can be overcome in a competitive economy but it is a matter which is putting out of business many of the smaller people who were able to make a living producing commodities of this kind by hand or in small quantities, but of quality. They now are being displaced by the mass producers who supply in bulk to the chain stores which receive all the benefits of big turnover and high density outlets.

The final Schedule covers an extension of the Australian system of tariff preferences for certain goods from developing countries. This was introduced in 1966 after the agreement of the contracting parties to the General Agreement on Tariffs and Trade had been obtained. That matter was debated widely at the time.

The Bill and its Schedules meet with the approval of the Opposition. We feel that for the proper administration of the Department we should give legislative approval to many of the recommendations that have been made. This legislation confirms and approves the action that already has been instituted in regard to the matters covered by the Bill.

Senator BULL:
New South Wales

– I have been amazed since coming into the Senate that we have not had more debates on tariffs. Tariffs are of such great importance to Australia that it seems extraordinary to me that we do not have debates on them more often. The only debate of any consequence that I remember taking place in the Senate was connected with the chemicals legislation which came before the Senate about 2 years ago. That was a fairly lengthy and, I believe, a very good debate. It will be noted that on the notice paper is mention of the Tariff Board’s report which was tabled in the Senate, I think last October. It is still at the bottom of the list. A report of such importance and of such special significance should have been before the Senate long ago.

The Government’s economic policy is determined largely by certain actions it takes from time to time. I do not want to go into them particularly but I shall refer only to the control of credit and the statutory reserve deposits which the Government uses - rightly so - to counter inflation and to stimulate the economy when it considers such action to be necessary. Taxation is another means which can be used to achieve those purposes. The Government’s first duty in its monetary policy is to meet the requirements of the country. Then, although this is outside the jurisdiction of the Government, we must keep in mind the very important effect of decisions of the Commonwealth Conciliation and Arbitration Commision on our economy.

The next aspect that we must look to is the Government’s policy of protection. I emphasise that I do not want to exaggerate the importance of tariffs to Australia but they are a factor of great significance. As I have said, I regard the nation’s policy of protection as of paramount importance. It is of special significance to Australia. On the one hand, we are a country not yet fully developed with, I believe - I am sure honourable senators will agree with me - a great potential. Because of the demand on our financial resources there is, as has been mentioned today in another debate, an inflow of capital from overseas. On the other hand, we must remember that we are a country with a small population that is very largely dependent on its exports, the major export being wool. Of course our wool has to meet competition throughout the world and the industry has no chance of passing on the costs which are added to the cost of production, be it tariff or anything else. That is why I believe that our costs must be watched continually.

Returning to my statement about the need for more debates on tariffs in the Senate, it must be remembered that the Tariff Board reports are tabled months ahead of the debate. Some of the reports with which we are dealing now were tabled, I think, last September. They became effective from the date of tabling. Therefore, when we debate them here the only means that we would have of altering them would be by disallowing the new rates of protection; but if we did that we would cause chaotic conditions in industry which, I am sure, would result in some industries, at any rate those to which the report referred, lacking confidence.

For these very reasons I consider that there must be the heaviest obligation on the Government to see that Tariff Board procedures, as distinct from rates that may be set, are the best possible. I believe that members of the Tariff Board, as members of an advisory body, must have a status and receive salaries commensurate with the work they have to undertake. The very best men available must be attracted to these positions. They must be men whose decisions and recommendations not only will carry weight with the Government but also will create confidence in our industries, be they secondary or primary.

I also believe that we must have a sufficient number of members on the Board. A couple of weeks ago 1 asked a question about this matter. I believe that the Board is inadequately equipped, as regards its membership, because of the great number of cases that are now coming before it and also because tariff matters are becoming mora involved and more difficult to consider. It goes without saying that the Board must be adequately staffed. I have no reason to believe that it is not adequately staffed at the present time. These requirements having been met, I believe that the Board is in a strong position to review existing duties frequently and competently. Some of them have not been reviewed or considered for up to 30 years.

Let me come back to the proposals now before the Senate. I think it must be agreed that, although they are many, most of them are not of any great significance to the economy, to the workforce or even to the industries concerned. I hope that I am not speaking against those industries in any way when I say that. I wish to refer especially to one matter; that is, the Ansell Rubber Co. Pty Ltd application for increased duties on hot water bags. As Senator O’Byrne mentioned, the rates have been increased from 35% to 45% general rate and 25% to 35% preferential rate. Honourable senators will note that those were the rates recommended by the Board and that the Government approved them. But the Government goes out of its way to reject that part of the report of the Board in which it suggests possible future action. On page 7 of its report, under the heading ‘Conclusions’, the Board deals with the problems of the industry, particularly the problems resulting from imports by chain stores. It goes on to say:

Ansell ‘s high price disadvantages on . sales to chain stores, which form a significant part of the Australian market, coupled with its access to important materials at world prices, raise serious doubts as to whether the manufacture of bags in Australia continues to be economic. However, although demand has declined and the local industry’s competitive position has deteriorated, the Board is not yet convinced that protection should be withdrawn.

Near the end of the section headed ‘Conclusions’, the Board says:

Should Ansell’s overhead costs be such that bag production does not prove worthwhile for the company, the Board suggests that the duties be removed as there would appear to be no opportunities for local economic production by other manufacturers.

Honourable senators will see that quite definitely the Board had difficulty in arriving at a decision and wondered whether the duties that have been given should be given. To me, this has special significance. I believe that this was one of the first reports made after the Board announced its future classification procedures. One might ask: Why did the Government appear to rebuff the Board on this occasion? I refer now to the second reading speech made by the Minister for the Interior (Mr Nixon), who introduced this Bill in another place on behalf of the Minister for Customs and Excise (Senator Scott). I do not see why the second reading speech made in this chamber should be different from that made in another place. Dealing with the recommendation of the Board, the Minister for the Interior said:

The Government has not accepted the Board’s suggestion that the recommended duties be removed should the costs of the local industry be such that it could not continue hot water bag production. The Government’s view was that in that event it should be open to the industry to make a further approach seeking a higher level of protection.

Why did the Minister make any reference at all to that part of the report? To me, it seems to be a warning to the Board that the Government does not approve of its classification principles. The Minister’s statement seems to be tantamount to the Government saying to the Board: ‘Come again, and we will give the matter further consideration’. From a reading of this report, it appears that the production of hot water bags is of little significance and is only a small part of the activities of the Ansell Rubber Co. Pty Ltd. As Senator O’Byrne mentioned, this would appear to be a declining industry and one with a low throughput potential. Of course, should the company come before the Board again, as it is entitled to do, any decision regarding tariffs must be the decision of the Government. That is as it should be. But I ask this question: Why does the Government seem to go out of its way to make reference to that part of the Board’s report?

I have said many a time in this chamber that I strongly support the Tariff Board’s proposal to classify industries as low, medium and high protection industries. I believe that in future the Governvent must be more discriminating and selective and must grant protection to low and medium cost industries, particularly those with a high throughput potential. It would appear that, particularly lately, most industries and organisations have approved the Board’s guidelines for future recommendations. A few years ago only a section of primary industry was organised to present its case to the Tariff Board. But now primary industries not only are becoming organised but also are coming closer together in the realisation that tariffs are a factor in the cost of production and that primary producers must become more interested in this question. They support the Board’s report.

In regard to secondary industries, we know that the Associated Chambers of Manufactures of Australia has recently approved these classification principles; but it must be mentioned that up to this stage the Australian Industries Development Association has not given them its full support. The arguments of those who are opposed to these classification principles seem to revolve around in interpretation of paragraph 44 of the annual report of the Tariff Board. If there were any question about a 50% upper limit being the maximum, I believe it was dispelled by Mr Rattigan in February in an address to, I think, the Associated Chambers of Manufactures of Australia, in Canberra. The report in the ‘Age’ read:

Mr Rattigan made it clear that the principles stated in the Board’s annual reports of 1966-67 and 1967-68 “remained fundamental to its activities’. But he stressed that this approach did not involve adopting a 50% effective rate as an arbitrary unit of tariff protection, and adopting an arbitrary arithmetical cut-off point.

So whereas this policy might be spelled out in the Board’s reports in relation to the 50% level, Mr Rattigan has given this clarification, which appears most interesting at the present time. I consider that this classification principle, in effect, means that the Board will keep the high levels of protection constantly under review, and this is as it should be. I am not against any industry that can justify its present level of protection but justification is required and some review is long overdue. Surely at a time such as the present, when we are overdependent, I believe, on the inflow of overseas capital, we must keep this in mind. At a time when there is a great need to export more, particularly from our primary industries, to meet the gap between exports and the imports that are necessary for defence and development, we must pay special attention to costs of production in all fields. The Government must demand efficient and economic industries, both primary and secondary, and in my opinion should not be giving further subsidies or tariff protection to industries which do not measure up to these require’ments. Competition in industry is the key to efficiency. I believe that where there is no competition there is usually slackness in production. Whereas a few years ago we were getting along on an increase of about 2% to 2i% in costs annually, much of which could be met by increased productivity, at present our costs are rising by about 4%. I think I saw the other day figures indicating that in the 6 months to the end of December the rise was 4% and it was considered that by the end of June the level would be retained at about 4% per annum.

As I said before, I believe that tariffs are a factor in increased costs of production. At the present time we are dealing with a Customs Bill. I emphasised previously, as I do now, that tariffs are not the only factor. As I have been interested in the affairs of the wool industry for a number of years, I know of the controversy that is going on at the present time about the cost of protection. It has been claimed and calculated that direct costs attributable to protection are less than lc per lb of wool. In Government circles it is claimed that most of this is balanced by what we get in the way of subsidies for promotion and research, and I do not disagree with that. I have no doubt that those figures are correct. But those who sponsor this argument conveniently forget, or do not enlarge upon, the indirect costs to the industry, which are substantial. The Vernon Committee in its report to the Government a few years ago stated that indirect costs to the industry are difficult to assess - which

I admit - but are somewhere about 25% to 30%. As one who gave evidence before the Vernon Committee, I should like to refer to what the Australian Woolgrowers and Graziers Council presented at that time on the question of the indirect costs of protection. The Council stated:

It is the total effect of protection on the Australian cost level which concerns the grazing industry, not the increase in price of the few imported goods and materials used directly in the industry. The cost of protection in the grazing industry flows not from high material costs directly attributable to a tariff duty but from the generally higher cost level made possible by the tariff! as a whole.

I support that concept. This aspect is often overlooked when people talk about the direct and indirect cost of the tariff to the wool industry. It can be claimed rightly that tariffs in recent years have served this nation particularly well. We have had full employment. I think it is true to say that the greatest rise in protection took place in the early 1930s when there was a need to create employment. It allowed industries to become well established. Without question the protection policy has assisted our immigration policy in bringing in large numbers of migrants from overseas to build our secondary industries and give us a bigger population. It has had the effect of attracting investment from overseas. We must admit that if we are to show growth it must be in all directions and the capital must be well spent over the whole of the Commonwealth and in all fields.

Today, as I see it, we have a different situation. We have full employment. There is no doubt about this. It is a tremendous credit to this Government that over the past 10 or 15 years there has hardly been a period when we have had any substantial unemployment. I acknowledge that the tariff policy has helped in this regard. But now these industries are established and I think we have reached a stage where we have to make a new assessment of our position. It must be remembered that these industries, having been established, have their own momentum of growth, and this is important. Tariff policies are first instituted to start this movement. The industries having become established and moving under thenown momentum, the protection that they receive must be very closely looked at. If this is not done, other industries - particularly primary industries - could suffer as a result. I consider that the primary objective of tariff making must be to encourage the effective use of resources. That is why I believe that the Board’s realistic proposal to classify industries so that it can ascertain what levels of protection are justified is a major step forward. In my opinion it is in distinct contrast to what one might describe as the hit and miss method which has been adopted until now. As I said earlier, a different situation now prevails. We find that the exporting countries - many with over production in various fields and with great distribution problems - are scrambling for the markets of the world. Therefore, Australia must ensure that her cost structure does not rise faster than those of her competitors. If it does, Australia could be left behind. I come now to the question of review. Honourable senators are no doubt aware that the Board has power to review tariffs.

Senator Ormonde:

– But how often does it happen?

Senator BULL:

– It has not happened very often but I hope that it will happen more often in the future. The relevant section of the Tariff Board Act is section 17, which 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 IS of this Act.

As section 15 is fairly lengthy, I will not weary the Senate by reading it. My interpretation of section 17 is that the Board may on its own initiative inquire into and report on the general effect and working of a customs tariff.

Senator Ormonde:

– And the rate of profit?

Senator BULL:

– I should think that that would be part of the Board’s inquiry. Having made an inquiry the Board reports to the Government. I believe that the Board must examine many of the tariffs which have not been reviewed for a number of years. In my opinion it must pay particular attention to the volume, which I consider is of tremendous significance at the present time. I shall quote some figures that I think illustrate this point. These figures appear in an article entitled ‘Australia’s high-cost motor industry economics’ in the ‘Financial Review’ of 28th March 1968. The article, which was written by Dr Garry Pursell, refers to the unit cost of production of motor vehicles. I will give a few examples of the position of the motor car industry in the United States of America. For 1,000 units per annum, which is a very small throughput, the index unit cost is 196 and for 100,000 units per annum it is 100. When the figure gets up to 400,000, which is about Australia’s consumption, it is reduced to 86. The article states:

What do these figures mean for total production cost at varying scales?

Referring to production of a single base model by a ‘fully integrated’ firm (i.e. a firm performing the four basic operations for itself), Maxcy and Sibertson–

Who did the research work - write: ‘Something like a 40% reduction in costs can be expected as production increases from 1,000 to 50,000 units per annum. Doubling volume to 100,000 units should lower costs by 15%, while a further doubling to 200,000 should achieve another 10% in savings.

The jump to 400,000 yields an additional 5% and expansion beyond this point results in progressively smaller savings for each additional 100,000, the gains tapering off at levels of about 1 million.’

The article states that according to other sources these estimates on the basis of volume are conservative. With the concurrence of the Senate. I incorporate the table in Hansard.

I believe that the question of volume is becoming more important in all spheres. It is becoming important on the land. Unfortunately, whether we like it or not, the small farmer is having extreme difficulty making his farm an economic unit because, as he does not have the volume, his costs are high. The same position applies to all manufacturing organisations and industries. Therefore, I think that the Board and the Government must look very closely at the throughput aspect. I have quoted figures not as an attack, if one might call it such, on the Government’s policy of protection of the motor vehicle industry in Australia but to demonstrate the importance of throughput or volume.

I conclude by saying that I am tremendously encouraged not only by the new procedures that the Board proposes to adopt in the future but also by the general acceptance of the necessity for these new procedures and the fact that there is general recognition that tariff policies in Australia, as elsewhere, are of great importance to the economy. I believe that the Senate, as a House of Review and a House which should be giving consideration to levels of protection and so on, should take a far more active part in discussing and even determining Australia’s tariff protection policy.

Senator SIM:
Western Australia

– Like my colleague, Senator Bull, I regret that in the past the Senate has not had more opportunity to debate tariff policy, particularly the annual report of the Tariff Board, which I believe is of great significance. There is no doubt that tariff policy has a significant effect on the economy of Australia and on Australia’s development. Because of this, it has always been a wonder to me that more of our academics and universities have not paid attention to our tariff policies. To my knowledge there have been very few papers on the subject by academics. The only one I can recall was written by Dr Corden, formerly of the Australian National University.

Senator Mulvihill:

– What about Professor Arndt?

Senator SIM:

– I said that Dr Corden was the only one I could recall. I acknowledge that Professor Arndt also produced some papers. Apart from those two, I know of no others. To appreciate fully the Government’s tariff policy and the controversial report of the Board one has to understand something of the history of tariff making in Australia. My reading leads me to believe that from Federation until 1921 tariff making was the sole prerogative of the government of the day. During the First World War it became necessary, for other than economic reasons, to develop industries and high levels of protection were given to those industries without any regard to economic criteria. In 1921 the Tariff Board was established as an advisory body to make recommendations to the Government. The depression followed in the 1930s and the question of tariff making was taken away from the Tariff Board at the time when currency was devalued and unemployment was a major issue. To meet this problem the Government encouraged the establishment of industry and granted high levels of protection to meet the needs of the day.

Senator Ormonde:

– Was that a Labor Government?

Senator SIM:

– 1 am not concerned with which government it was. I am just stating the facts, without criticism. I am trying to trace the history so that we can understand the present situation. After a short period World War II intervened and again the Government had very good reasons to establish industries without regard to economic criteria. So that over a substantial period, from Federation to the present time, the Tariff Board was not the major influence on tariff making in Australia. We found ourselves with a number of industries that had been established without proper economic evaluation. What is known as the existence principle’ became established and import licensing added further to that principle. Since these industries existed, the political consequences of discontinuing protection outweighed the economic considerations. I feel that this policy became established as the Tariff Board’s main tariff making principle because the pressures to protect existing investment and employment became the paramount consideration. Over a long period the policy of tariff making was not in the main concerned with genuine economic criteria. Had economic criteria prevailed industrialisation in Australia may well have proceeded differently.

Sweden and Switzerland are countries with small populations similar to our own, although conditions there are not entirely the same as in Australia. They achieved rapid industrialisation without the benefits of a high level of protection. I believe that research should be done within our universities to ascertain what the position would have been in Australia had similar policies been followed here. One of the most striking examples of the subordination of economic principles occurred in the chemical industry inquiry, to which Senator Bull referred. From memory, one of the references to the Board was the protection of existing investment and employment in the chemical and related industries. It was a subordination of economic principles to protect investment and employment. This was the main criterion upon which the Board had to act.

I believe it is an economic fact that high cost industries guarded by a high level of protection can inhibit national growth.

This has all led to the present controversy which, admittedly, has somewhat died down and to the reluctant acceptance by the Associated Chambers of Manufactures of Australia of the classification principles as laid down by the Tariff Board. As I have pointed out, a large number of industries have been established with high level protection in Australia, without any reference to the Tariff Board. They were established through tariff making principles that are now regarded as obsolete, due to changing conditions. In a divided report in 1966-67 the Tariff Board referred to the need for change. An organised campaign against the Tariff Board was begun by interested parties. I regret to say that there was an attempt to denigrate the Tariff Board. After publication of the Tariff Board’s latest report, the campaign reached considerable heights. I am bound to say that I regarded the campaign as both clumsy and puerile. Attempts were made to influence members of Parliament to attack the Tariff Board and to bring pressure to bear upon the Government to disown it. To the Government’s credit, it refused to bow down to these pressures and the Prime Minister made it clear that he wished the Tariff Board to give the Government the best possible advice and to adopt whatever methods it wished to ensure that that advice would be the best that the Government could obtain. He also made it clear - and no one has ever quarrelled with this - that the final responsibility rested upon the Government to accept, modify or reject Tariff Board recommendations. I will not go through all the examples of attacks on the Tariff Board, but in many cases there was misrepresentation of the Board’s intentions.

It is notable that in recent times there has been in Parliament a lack of interest in tariff matters, but there has been outside Parliament a serious question of tariff policy. I have in mind people such as Sir Leslie Melville, a former Chairman of the Tariff Board, Dr Corden, and I may also say to placate my friend Senator Mulvihill, Professor Arndt. I have in mind also Dr Coombs, Governor of the Reserve Bank: Sir John Crawford, significantly enough a former Secretary of the Department of Trade and Industry; the Vernon Committee; and perhaps above all, Mr Rattigan, the present Chairman of the Tariff Board, who I believe should be commended for his courage in pursuing his views against very strong opposition. Most of these authorities, and Sir Leslie Melville in particular, pointed out that over-protection or high levels of protection created a diversion of scarce capital resources in Australia. There is no doubt that there is a scarcity of capital resources. Sir Leslie made a pointed comment in an address to the Australian and New Zealand Association for the Advancement of Science in January 1967. After dealing with various aspects of tariff policy he said:

However our tariff policy is diverting our scarce resources of capital into high cost industries some of which make little contribution to the national income.

I believe we should ponder those words. In a country with scarce resources of capital and labour, surely these things must be used to our best advantage. They must be used to develop Australia in the most economic way. We simply cannot afford to sustain uneconomic and high cost secondary industries any more than we can do this in the case of primary industries. I agree with Senator Bull when he says that it matters little whether they are primary or secondary industries. They must meet the criterion of being economic and efficient. Many of these industries were established long ago without a proper economic criterion. The Vernon Committee of Economic Inquiry challenged this ‘existence’ principle in its report. I have quoted the report before but I think it is worth quoting again. In dealing with this question the Committee stated at paragraph 14.29:

Requests for higher duties sometimes come from high-cost firms in Australia which cannot compete either with imports or with lower-cost Australian competitors.

At paragraph 14.31 the Committee said:

The Committee does not propose to adopt a doctrinaire attitude to this problem. It recognises that circumstances which at first justify protection for an industry may vary when conditions overseas change. However, the general principle is clear - permanent special protection for an industry which has ceased to be economic and efficient should not be regarded as a matter of right. The

Tariff Board cannot be expected to shelter industries indefinitely from changes in technology and the market.

To that statement I again say, as I have before, ‘Hear! Hear!’ One of the problems of high-cost industry and high-level protection is that tariffs tend to reinforce themselves right through to the end product. Then the industries in turn demand increased protection because of the increased cost of their raw materials. The Tariff Board dealt with this matter in its last report and said that it was going to pay due regard to the end user. In considering recommendations for increased protection, or in its review of existing protection, it intends to follow these tariffs right through to the end to see what effect they have on the end user. In other words, we are reinforcing, from one level to another, high levels of protection.

I do not want to speak for too long on this subject but all this leads me to the question of the effect upon the cost structure in Australia, not only of our rural industries but of those secondary industries which are attempting to gain export markets. I want to quote Sir John Crawford because he made some comments in support of the Tariff Board’s recommendations in its last report. I think that anything that Sir John Crawford says, as a noted economist, is worth considering. After dealing with the general principles of tariffs he said:

But tariff protection has had costs, borne by all industries and of critical importance to the export industries and import competing industries which are not able to pass these costs on.

Further on he said:

We now have major capital-intensive secondary industries which need a large market for economies of scale. These need to be highly rational in their production structure and high tariffs alone will neither ensure this nor encourage them to enter export. Again, other secondary industries are already competitive in exports (steel is an example), but if such industries are to remain competitive they, like- wool, cannot afford unnecessary costs resulting from the protection of less efficient industries.

He went on to support the Tariff Board by saying: … the Board is fully justified in making a tougher examination of applications for levels of protection which are high relative to the general cost disability level.

This means that we have the support of none other than Sir John Crawford for the general approach being adopted by the Tariff Board. I think Senator Bull has referred in the past to the little concern shown by rural industries for tariff policy. When costs were high they were not greatly interested in it. It is only when we become the victims of the cost price squeeze that primary industries show a real interest in and concern for the effect that tariffs have upon their cost structure. There is little doubt - and the Committee of Economic Inquiry referred to this point - that tariffs have a substantial effect on the cost structure of Australia’s economy.

I do not want it to be thought that tariffs are the sole reason for increased rural costs because that would be quite wrong. However, they do contribute directly to rising rural costs and the cost structure generally by increasing the price of most of the goods and services used in rural production and, indirectly, by increasing living costs and the demands for wage increases which invariably extend to farm labour costs. It also seems likely that the policy according tariffs on a basis of need has allowed protected industries to accede more readily to wage demands than they would have if they had not virtually been guaranteed protection against damaging foreign competition when their costs rose. We have not only the direct costs of tariffs - which perhaps are not great’ although they are not inconsiderable - but the indirect effect goes right through Australia’s economic structure. I believe that the Tariff Board, in view of those facts, deserves the support of everybody interested in the economic development of Australia for its intention to classify industry and to review protection of many industries which have not been reviewed for 30’ years or more in order to see whether they still’ require protection, to see whether they meet the economic criteria and to see whether they are efficient. This is, of course, a direct challenge to the existing principle which has been applied for so long.

I regret that there has been a denigration of the quality of Tariff Board members. I believe that Senator Bull referred to this. If we are to obtain the best quality possible in the membership of the Board then we must not denigrate the membership. I think there are already two vacancies on the Board and it seems there is some difficulty in filling them. Denigration does not assist. I also’ join with Senator Bull’ in wanting to- ensure that the Board always has the resources it requires in order to carry out its ever-increasing load of work and to enable it to conduct and review the classifications with the greatest possible speed. I can think of nothing better to finish my speech than a quotation once again from Sir Leslie Melville because I think it sums up the situation. Certainly I give it complete support. I do not believe that the section of manufacturers who have been so bitterly hostile to the Tariff Board are acting in their own long term interests. It is all very well to seek to protect selfish interests, but surely the development of the Australian economy is of prime importance. At the conclusion of the address to which I have referred Sir Leslie said:

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.

That plea by Sir Leslie Melville, supported by many other authorities whom I have quoted, was that we should bend our efforts to the development of low cost industries which can make a great contribution to our national growth, that we should divert resources away from the establishment of high cost industries which create problems throughout the economy and that we should make the best possible use of the scarce resources of both capital and labour which we have, available. I give my strongest support to the Tariff Board, and to the policy which has been outlined by the Government in relation to tariff making in Australia.

Senator KENNELLY:
Victoria

– I do not intend to delay the Senate long. I was interested to hear Senator Sim give some of the history of tariff in this country. In the early days tariff, like arbitration, made or unmade governments overnight. In those days there was a Party that advocated free trade and protection. That Party was the forerunner of the present Government Parties. That is where the Government Parties sprang from. They have changed their policies- and their names often.

Senator Greenwood:

– It is not for that reason; the Department’s decisions are the best that I know of. I wanted a chemical that would get rid of aquatic weeds, a matter in which I am interested. The first time I imported the chemical there was no problem, and there was no problem on the second occasion either. I made further inquiries about the chemical and found that the chemical, diquat, was manufactured also by Imperial Chemical Industries of Australia and New Zealand Ltd. When I called for tenders for the chemical I was informed that, because diquat is made also in Great Britain, I would be required to :pay customs duty because of the United Kingdom-Australia Trade Agreement. Yet ICI admitted in- correspondence, which has been read by officers of the Department of Customs and Excise, that its product would not do the job. I did not mind if I had to pay. duty on a- product that was manufactured in the United States, if it did the job. Then I received a letter from ICI to the effect that it had not had enough -experience with the chemical and so could not tender but the company wanted me to allow it to put the chemical into the Albert Park Lake so that it could see whether the -chemical was any good. I’ was required to pay duty. I do not want to be hard of my friends but that was the greatest bushranging act I have known.

I will not say any more except that this is a most important matter: It means work for the great mass of the people of this nation. One point is that both parties, thank God, now believe that we have full employment. Senator Bull said that he was delighted that this Government had given our people full employment. I agree with him. But he did not say that the late Mr Chifley’s Government laid down that there was full employment in this country. I would not expect the honourable senator to say it but he would expect me to say it. I like to correct those things and’ put them in perspective.

I hope that he will be able to introduce in this country a policy of protection which will protect the manufacturer who has to be protected because, as I have said, if he is not protected he goes out and our fellows lose their jobs. I am also concerned about the price aspect. I wish the Tariff Board success in its work. I hope that it does not in future charge me any more duty than I am required to pay. I can see by looking at the three departmental officers present that they would not do it again.

Senator WEBSTER:
Victoria

– I wish to speak to the Customs Tariff Bill because I have spoken on this subject on a number of occasions in the past. The interest of the whole of Australia these days is centred, I believe, on costs incurred by industries with which they are connected. Indeed costs represent a particularly important aspect in secondary industry and in primary industry and we, as a country, should pursue policies which will ensure that the end product which the producer either puts on the local market or offers for sale overseas is at the keenest possible price. I believe that all Australians - that includes parliamentarians - should support indigenous Australian industries. We must be selfish in many areas to protect ourselves first because anyone who has had experience in business knows that competition from other sources often is not completely fair.

The discussion in the Senate this afternoon has had relation to the Tariff Board. The Tariff Board is an organisation which we hope will present to the Government a line of thinking which will enable the Government to establish a policy in relation to various industries and the protection which should be afforded them. By no means am I satisfied with the general structure of protection in the Australian economy or with the fact that in all instances we are protecting only those industries which are efficient and economic. It is very difficult to pinpoint when an industry is not efficient or economic. An industry which finds itself in that position will very soon be out of business. I noted with interest that in a debate on the Tariff Board Bill in July 1921 Mr Massey Greene, who was Minister for Trade and Customs at that time, said:

It seems highly desirable- . . . that there should’ be a special body created, whose duty would be to study- from- day- to- day; and from month to month, and from year to year, not only the operation of Tariff, but also the development of industries in Australia … It will be the duty of the proposed Tariff Board … not only to study the effect of the actual duties we impose, but also to investigate in that broader and wider field the possibilities of future development in both primary and secondary industries. ]f we applied Mr Massey Greene’s words to today’s situation I think we would find that the Australian Government, the Australian people and the Tariff Board had not, to an extent, carried out the desire that the Minister expressed at that time. 1 do not think that we have a body which is studying the position from day to day. We certainly have not a body which is studying the position from month to month. Perhaps we have a body which is capable of studying the position from year to year. To indicate that situation 1 shall refer at a later stage to a case in which 1 have some interest.

In 1921 the Minister referred not only to the operation of tariff, which is a very important matter, but also to the development of industries in Australia. When I have spoken on this matter on other occasions I have perhaps been criticised as a Country Party man because I have supported a policy of protection to enable efficient and economic secondary industries in Australia lo grow. I firmly believe that it is imperative for Australia to encourage population. Pausing at that point for a moment, 1 believe that we, as a country, should be surveying the . subject of population and should be studying the effects of our policy that Australia’s population must increase and increase and increase. I suggest that we should be thinking of placing a limit on our total population, but certainly not before we have doubled our present population. So there is no immediate problem in that regard. .1 agree with the comment of some people who have gone overseas and have seen the density of populations in great cities that that type of society is not an admirable one. 1 wish to see industry in Australia protected to the extent that it is able to put goods on our market at a- price which will enable our people to purchase them. In criticising the Australian tariff system we are really criticising most unfairly our country, our Tariff Board and our industries. Australia really is one of the least protected countries in the world. T believe that we are the only country in the world which

1 1343/69-3- 1291

Senator Ormonde:

– The General Motors Corporation, for instance.

Senator WEBSTER:

– It is good and right that in a first cl’ass country we should seek lo produce such things as motor cars, radios, refrigerators, agricultural machinery, fertilisers, chemicals, textiles and household utensils. In looking at the proposition that we have grown from a market that was based totally on imports to one that has a degree of local production, I challenge any honourable senator to say that there has been a tendency for the cost of goods with a content of tocal production to rise on the Australian market. Tn a previous debate 1 pointed out that immediately imported chemicals came into competition with the local product, irrespective of the reason, there was a drop in the price.

We need to be alive to the fact that, if there is no Australian production, the industry in other countries, which is dominated by big business and cartels that are able to pull the strings and determine prices throughout the world, will dominate our market and wilt sec that there is a supported price under which we cannot buy. Whether the industry selling to Australia happens to be an industry in America, an American subsidiary on the Continent or even an Australian industry which is controlled by the overseas industry, if there is no genuine competition in Australia there will be a higher Australian price than there would be if we had in Australia a variety of genuinely competitive industries in the line concerned.

There has been some discussion of whether the cost incidence of tariffs on certain Australian primary industries is a severe burden. As I go around the electors in my State, I note that one of the great problems of the farmers today is to find something on which they can justly lay the blame for the rising costs in their industry. I believe that today there is no section of primary industry that is not in some trouble because of the ever increasing cost burden and the fact that primary producers are unable to raise the prices at the other end. This is a tremendous problem. lt is put to me that the economic or credit policy of this Government may be to blame. I challenge that because 1 cannot find sound reasons for saying that the credit policy of the Government is to blame. I am most anxious to determine the meaning of the word that 1 see printed in rural newspapers and to get that meaning into my mind. But I cannot find any foundation for the statements as to what the credit policy of the Government is doing in relation to increases in the costs of primary industry. I believe that the Government, with a very strong Country Party element in it, has brought about, a great improvement in credit policy as regards primary industry. If a burden has been placed on primary industry, it has been alleviated to a marked degree by a credit policy directed at assisting primary industry, which this Government has introduced.

Senator Georges:

– Hire purchase.

Senator WEBSTER:

– It is not the credit policy of this Government that encourages the use of hire purchase. A person may say that he has been forced into hire purchase transactions. But in respect of the industries of which I am speaking - the primary industries - the Government has made available to a respected borrower several levels of banking from which he can obtain financial assistance, and not at an interest rate of 10%, 12% or 14%, as charged by some sections of the finance industry. If any primary producer happens to read Hansard and says: T know that 1 have not been able to receive the credit that I desire from the institutions set up by the Government’, provided that he has a sound case for the development or support of his property, he should contact his local member of the House of Representatives or one of his State senators. I for one would be most anxious to take up his case.

– The’ honourable senator refers to the pea and bean industry. The growers in Tasmania have had a very rough run. They are perhaps, in an even worse position than the potato growers. I believe that I have given an indication of a primary industry which should not be denied adequate tariff protection simply because of a theory that tariffs are a problem. I have not given an Asian country as an example, although I did on the last occasion that I spoke on a tariff measure in the Senate. On that occasion I produced goods which had been imported from a country which pays approximately 8c an hour for labour. Do we want that kind of competition, putting our men and women out of work and our industries out of business? Do we want to be the subject of scorn in Asian countries? Do we want to be regarded as a country where goods can be dumped? We must protect our industries, secondary and primary. We must have an authority which looks at an industry and says, if it is inefficient or uneconomical, that the protection should be reduced. 1 plead with the Government to revert to the system which was suggested in 1921. I repeat the words of Mr MasseyGreene. He said:

It seems highly desirable . . . that there should be a special body created whose duty would be to study from day to day, and month to month, and year to year, not only the operation of the tariff but also the development of industries in Australia … It will be the duty of the proposed Tariff Board … to not only study the effect of the actual duties-

Which is something that most speakers spend a great deal of time on - but also to investigate in that broader and wider field the possibilities of future development in both primary and secondary industries.

I support the remarks of Mr MasseyGreene, who was formerly Minister for Trade and Customs.

Senator LILLICO:
Tasmania

– Relative to the industry about which Senator Webster has spoken, the potato industry, let me say that not so long ago I read a report in the Press to the effect that processed potatoes from Canada and the United States of America were being dumped on the Australian market. 1 spoke to the director of a potato processing firm in Tasmania, who told me that the industry was under constant threat because of imports from the United States and Canada. There has been a lot of heartburning because of the adverse trade balance between Australia and New Zealand. I point out that our trade balances with Canada and the United States of America are just as adverse as New Zealand’s is with us. I have always gone along with the idea that one cannot expect to trade all around . the world and break even wilh every country; there must be some adverse trade balances. In view of our adverse trade balances with Canada and the United States, if it is true that there are substantial importations of processed potatoes from those countries, surely the essence of the proposition is to have a speedy and prompt investigation by some tariff authority. It is disappointing to me to hear Senator Webster say that there has been such a long delay - several months - since the Minister for Trade and Industry (Mr McEwen) first referred the industry’s problem to the Tariff Board. This is an important matter. In my view it should be dealt with promptly and finality reached.

Senator Webster also said that it was necessary to have competition in the Australian market. I take it he means competition from overseas or at least the threat of competition. For that reason I believe that the Tariff Board has one of the most important and difficult functions of government to perform. It is a difficult proposition to ensure that industries are not protected to the extent that the efficiency that is so necessary to meet competition is not present.

Sitting suspended from 5.45 to 8 p.m.

Senator LILLICO:

– I will say no more about the potato question. 1 have here a publication entitled ‘The Tariff Debate’, which contains a number of articles by people who have had experience in these matters. The introduction slates:

The papers which are reprinted here, have made significant contributions to the tariff debate: a debate which has long since ceased to be about whether there ought to be protection-

I agree entirely with that, lt goes on: and which is now centred on the questions of what the .degree of protection ought to be, and how can it be applied efficiently and equitably.

I have pointed out previously that that seems to be the crux of the argument. That is what makes the Tariff Board’s duty so important and difficult in striking a balance between efficiency and inefficiency. I call to mind an instance that occurred in 1960 to illustrate what can happen when an industry is over protected. An industry that operates not far from where I live was working under the benefits of import licensing, or the quota system, or whatever honourable senators may like to call it. Irrespective of what happened, it was sure of a considerable percentage of the Australian market. I do not think there is any doubt whatever that that brought about a condition of lethargy and a don’t-care attitude. I believe that the efficiency of the product itself in some cases went very considerably downhill.

Senator Webster:

– What line of business is this?

Senator LILLICO:

– I am talking about the paper pulp industry. The abandonment of import licensing at about that time caused a considerable stocktaking and a great readjustment of production methods. I believe that went on all over Australia. 1 have heard very reliable reports of an industry on the mainland - as we say in Tasmania - which put off one-third of its staff and increased production as a result. I have given that only as an instance of what can happen when an industry is over protected.

The Tariff Board occupies a very important position in the Australian economy. Some honourable senators referred in this debate to primary production. It is true that the state of primary industry in Australia is not as good as it might be. Ii has been left behind. The Tariff Board, as it must, has adjudicated upon increases in cost of production largely brought about by decisions of the Commonwealth Conciliation and Arbitration Commission. It has been, perforce, compelled to grant increases in tariffs which, 1 suppose, have nol affected producers very much. Probably it has conferred a benefit on wage earners, but the process has eroded at least part of the income of primary producers.

The picture of primary production the world over is rather grim. I was surprised io read that Western Europe, one of the most densely populated areas in the world, because of excessive subsidisation under the auspices of the European Economic Community, has been compelled to destroy some of its products to get rid of them. In addition, Western Europe has been placing its surplus production on world markets at prices with which this country cannot hope lo compete. It is the old story of the primary producer being costed out of his export markets because of inflationary pressures.

There has been some talk of inflation in this chamber today. In the publication The Tariff Debate’ there is a reference to the basic wage inquiry of 1949-50. lt states:

On one occasion, not so long ago, in the basic wage inquiry of 1949-50, one judge, in supporting an award which advocates had opposed as in its nature inflationary, took the opportunity of saying, ‘I shall be concerned with the fact that an increase in the basic wage which will inevitably permeate the whole wage structure will increase prices and so add its modicum of inflationary pressure-

I remind honourable senators that these are the words of a judge of the Arbitration Commission - but inflation and ils control are matters for the Government.’

Now this last remark was quite wrong, lt is a common error to suppose that the Commonwealth Parliament has complete power-

And so on. The writer goes on to indicate that the Commonwealth Parliament can influence the position, but as to direct power of control, it has nothing of the sort. This afternoon I heard Senator O’Byrne and another honourable senator say that price control should have been imposed originally to rectify the position.

Senator O’Byrne:

– Every sensible country has it.

Senator LILLICO:

– I believe that Senator O’Byrne said this afternoon that had price control been introduced at the outset, the inflationary pressures which have worked upon this country for many years would have been curtailed and suppressed. Price control is as old as Diocletian, and that is about 2,000 years. Many experts have claimed that down through the centuries every time price control has operated it has aggravated the very thing it has set out to curb, ft is certain that price control operated by the Commonwealth Government, assuming that the Arbitration Commission and the Tariff Board would have behaved in much the same way as they have done, would only have served to invite increases in the prices of commodities, and nothing else.

Senator O’Byrne:

– Like the hospital and medical benefits s.heme.

Senator LILLICO:

– I am talking about the increased prices that everybody in this community must pay for bis requirements. Price control certainly could not have solved the problem, because when it is imposed it deals with an effect. It does not get down to the root cause of the trouble. The trouble can be remedied by keen competitive and efficient production. I was interested to read this statement about that firm which is anathema to a lot of honourable senators on the other side of the chamber, Broken Hill Pty Co. Ltd. It is looked upon by them as one of the arch examples of capitalism in this country. I read that at the commencement of the First World War the company’s annual production was about 50,000 tons. By 1918 production had been built up to about 250,000 tons. Today it is 6.3 million tons. In addition to our own requirements, in 1966-67 we exported $117m worth of steel and associated products. It is claimed with much justification that our steel is the best in the world. That is an indication of what can be done by efficient production.

But what I rose to do, Mr President, more than anything else, was to point out that this Bill enlarges the range of commodities affected by the New ZealandAustralia Free Trade Agreement. I want to make my position plain in regard to that Agreement. I am one of those people who believe that for 50 years, because of the operation of this self-same tariff policy which perhaps compels the primary producers to pay more than they otherwise would for their requirements, primary industry has been the section of the community that has not enjoyed any direct benefit from the tariff policy. On the other hand, it has caused the primary producer to pay more for his requirements. Because it has had that effect it is beyond doubt that the Australian primary producer has subsidised the building up of the Australian local market. I have heard it said all my life that the justification for the imposition of the tariff policy in this Commonwealth ls that it has provided the primary producer with an excellent local market. Under no circumstances would I put part of that local market on the auction block and barter it away to anybody.

Tt is true, Mr President, that a lot of questions were asked in this place relative to the effect of the New Zealand-Australia Free Trade Agreement upon the canning pea and bean industry, and upon other industries in this country, but particularly upon the pea and bean industry in Tasmania. It is not flogging a dead horse to repeat that the position is dangerous. It is true that the effect of the Agreement has passed away for the time being because of seasonal conditions in New Zealand. I think we could say that the crops in New Zealand have been a failure because I have heard it said that New Zealand will not produce enough peas to meet its own requirements.

But that is only a passing phase. I say that after the 5-year period has elapsed and the tariff of these two commodities, and others, has been wiped out altogether, Austrafia will not have a chance in life of competing with the imported article from New Zealand. If we can take any notice of reports of addresses delivered by people in that country in a position to know, the potential is so considerable that the New Zealand producers could, if they chose, and in spite of the panel composed of Australian and New Zealand representatives which has been set up, make things extremely difficult for Australia.

I believe it is a fact that at the moment the freight charge from New Zealand to Sydney is about the same as that from Tasmania to Sydney. It is claimed that with the advent of the roll-on roll-off ferry service between New Zealand and Sydney the position will become more favourable to the New Zealand product. It is true in the case of blue peas that at this moment the New Zealand product can be bought on the Sydney market at $1 a bushel - which is a mighty lot; I have grown peas in my time at $1 a bushel - lower than the price of the Australian product at the moment. When the position reaches its culmination and when the tariff protection afforded to Australia has gone I believe that our situation will be grim.

There is no honourable senator in this chamber who has a kinder feeling towards the Dominion of New Zealand than I have. But I stand fast on this point: The Australian producer, provided that he can fulfil his requirements efficiently, is entitled to predominance on his local market. I do not think there should be any doubt about that. I. have been to New Zealand often and have heard the balance of trade spoken about. 1 have noted a lot of heartburning in New Zealand about the adverse balance of trade between Australia and New Zealand. But, goodness me, that goes on all over the world. I said this afternoon that Australia has just as great an adverse balance of trade with Canada and with the United States. Japan has an adverse balance of trade with Australia which is nearly as great. If the government of a country expects to balance its trade relations with every other country it is indulging in a pipe dream. The fact of the matter is that New

Zealand has purchased its manufactured products from Australia because it suited her to do so. If she had not purchased them here she would have got them from tha United States, from Japan, from the United Kingdom or from somewhere else.

Senator Devitt:

– And at a higher price.

Senator LILLICO:

– Yes, and probably would have paid a higher price for them. So the balance of trade between Australia and New Zealand is just a fact of life and nothing else. It has been brought about because we have a potential in Australia for the production of manufactured goods and that potential has been developed. 1 would like to point out that in that part of the country from which I come peas and beans represent just about the only profitable cash crops that are left. I would be very sorry, and so would a lot of other people engaged in the production of these crops, if anything untoward happened to those industries. However, Mr Acting Deputy President, because this Bill does not provide for any further inroads into the Australian primary producers’ local market, so far as I can see, I will support it.

Senator SCOTT:
Western AustraliaMinister for Customs and Excise · LP

– in reply - Mr Acting Deputy President, we have listened with a great deal of interest this afternoon and tonight to the debate on the Customs Tariff Bill. The contributions made by honourable senators are of great interest to the Government and to Australia. Senator Sim and other speakers traced the history of tariff policy in Australia from its inception up to the present. I think all agreed that Australia’s tariff policy should be directed towards developing secondary industries. The intention is to develop secondary industries. Because of our wide open spaces and because of our small population it is necessary, if we are to become a great nation, that industries, particularly in their early stages, should have protection. This has been the policy of governments down through the ages: If an Australian industry can supply the Australian people with Australian made goods, that industry should be protected. The Government has carried out and is carrying out this policy.

– I ask the honourable senator, who is interjecting, to listen for one moment. If we had an efficient, viable motor vehicle industry and if it was competing with an efficient, viable industry from an outside country that enjoyed onefifth of our standard of living, or whose workers earned one-fifth of the wages earned by our workers, that, country would be able to swamp the Australian market with motor vehicles at a cheaper price than that at which we could manufacture them. That is all I say about the motor vehicle industry.

The PRESIDENT:

– Order! The Minister’s time has expired.

Question resolved in the affirmative.

Bill read a second time.

In Committee

Clause 1 (Short title and citation).

Senator ORMONDE:
New South Wales

– During the very interesting debate on this Bill this afternoon and this evening

I was impressed by the case put up by Government speakers. It is only Government speakers who are divided on this issue. They have a problem that we solved long ago by being a fully protectionist party. We on this side of the chamber do not have to speak in support of a policy that everybody knows we support. But the Government is moving into an area of great disputation in which the Country Party, which was once anti-tariffs, is now fully pro-tariffs. Moreover, it wants protection for both rural and manufacturing industries now. Of course, I am in favour of that and the Labor Party has always been in favour of it.

The question that I want to ask is whether there are any examples of the erosion of tariffs in addition to the two that I propose to mention. I have been asked by the trade unions to raise this matter. At the present time Sydney shoe retailers get together the upper, the sole and the other material for a shoe-

Senator LAWRIE:
QUEENSLAND · CP; NCP from May 1975

– Mr Temporary Chairman, I raise a point of order. On what clause is the honourable senator speaking”?

The TEMPORARY CHAIRMAN (Senator Laught:
SOUTH AUSTRALIA

– - Senator Ormonde, your remarks are not apposite to the clause before the Committee, the side heading of which is ‘Short title and citation’. I suggest that you relate your remarks to clause 1, or make them under another clause.

Senator ORMONDE:

– This is the only clause under which I can make my remarks. I am talking about policy, which is covered by the title of the Bill. I am giving two instances in which the tariff legislation is being breached with the consent of the Government. There is a question on the notice paper about this matter, but it has not been answered yet. Shoes are being sold in Sydney for $4 a pair. All of the material is got together in Sydney. The name of the firm concerned is branded on the shoe which is then exported to Asia-

The TEMPORARY CHAIRMAN:

–

– No; 1 cannot rule in the honourable senator’s favour.

Clause agreed to.

Clause 2 agreed to.

Clause 3 (Amendments having effect from 28th November 1968).

Senator KENNELLY:
Victoria

- Mr Temporary Chairman, does this clause deal with the First Schedule to this Bill? There are a number of schedules.

The TEMPORARY CHAIRMAN:

– This clause deals with the First Schedule.

Senator KENNELLY:

– Will you tell me when 1 may deal with the Third Schedule?

The TEMPORARY CHAIRMAN:

– The answer to the honourable senator’s question is that clause 5 (2.) states: ‘The Principal Act, as amended in accordance with the preceding sections of this Act, is further amended as set out in the Third Schedule to this Act’. Clause agreed to.

Clause 4 (Amendments having effect from 23rd December 1968).

–

You have been invited to specify to the Committee the line in the Schedule upon which you desire to address the Committee.

Senator ORMONDE:

– It is No. 6 in the

–

No. The clause before the Committee is clause 4. Will honourable senators apply their minds to that?

Senator RIDLEY:
South Australia

– My query is in respect of the date on which this legislation comes into effect. The Minister in his second reading speech allied the whole of these tariff proposals to the policy of the Government in respect of full employment. To support his argument he used the same statistics as he has used some twenty times in the past. He cited a figure in relation to unemployment in one quarter of the year 1949. Senator Scott knows that he is telling a half truth every time he cites that particular figure, because at that time Australia was going through a period of what was described by the employers as over full employment’. But there happened to be a coal strike and the employers made application to the Commonwealth Conciliation and Arbitration Court and succeeded in having written into all federal awards a stand-down provision which enabled them to stand clown their employees without notice - not to put them out of employment. The employees were entitled, after being stood down for a week, to apply for unemployment benefit. These conditions were responsible in that one quarter for an unemployment figure of 5.6%. I reiterate that these workers were not unemployed in the sense that they had lost their employment. Every one of those employees who remained with his employer became entitled to long service leave calculated from a period prior to the stand down. I want to make only that one point. If support for the whole of these tariffs is based on an argument that they are required to bring about full employment. I say that the argument is false.

Clause agreed to.

Clause 5 (Amendments having effect from 1st January 1969).

Senator BISHOP:
South Australia

– I refer to sub-clause (2.) and to items appearing in the Third Schedule, setting out the rates applicable to aircraft engines, carburettors, valves, fuel injectors and so on. I should like the Minister to tell me what the Government has done about ensuring that the Australian aircraft industry is given some assistance on the basis of his statement during his second reading speech that the Government believes in protection for Australian industry. To my knowledge a number of light aircraft manufacturers have applied for protection to the Tariff Board and directly to the Government. One that comes to my mind is Transavia Corporation Pty Ltd, which has produced a crop dusting aircraft which can be manufactured on mass production lines. The design is so fine that it is easily made. So far as I am aware, the Government has refused to give any assistance to the manufacture of this aircraft. I ask the Minister: Having regard to the policies of his Department, what has been done to encourage manufacture by the Government aircraft factories and the Commonwealth Aircraft Corporation of aircraft which could be made in Australia? lt has been announced by the Minister for Defence (Mr Fairhall) and the Minister for Supply (Senator Anderson) that certain aircraft can be made and are being made, or that their manufacture is contemplated. Having regard to the fact that orders have been placed overseas for the Army and other Services for small aircraft which could be made in Australia, to what extent arc the tariff measures that we are discussing tonight to be used to give assistance in the general pattern of protection about which the Minister talked? 1 am concerned about this industry which has obviously not had protection, because over the last 4 months hundreds of persons have been retrenched from the Australian aircraft industry and, so far as I know, no method has yet been found to keep them in employment, and so their skills have been lost to other industries.

Senator SIM:
Western Australia

– I should like to speak to the same clause as that to which Senator Bishop spoke. I ask the Minister: Is the Government’s policy protection for Australian industry or protection for economic and efficient industry?

Senator KENNELLY:
Victoria

– 1 refer to the second amendment to the Third Schedule. Will the Minister inform me what are tali oil fatty acids? I notice that the duty up to and including 31st December 1969 is 20%, from 1st January 1970 to 3 1st December 1970 it is to be 10% and from 1st January 1971 there is to be no duty. Can the Minister explain the reduction of 10% each year in the duty until 1st January 1971, on which date the duty will be eliminated altogether? Rather than raise any further points at this stage, I shall sit down and give the Minister an opportunity to answer my questions.

Senator SCOTT:
Minister for Customs and Excise · Western Australia · LP

– Firstly, I wish to reply to Senator Bishop, who asked why the Government was not interested in supporting the manufacture of commercial light aircraft in Australia. Following that question Senator Sim asked whether it was the Government’s policy to look at the efficiency of an operation before granting tariff protection. I wish to advise both honourable senators that the Airtruck was the aircraft suggested as suitable for manufacture in Australia by the Transavia Corporation for commercial use. This matter was referred to the Tariff Board for its recommendations on whether protection should be given. In its report on single engined aeroplanes the Tariff Board recommended against assistance to local production. It calculated that a bounty of $8,000 to $9,000 per aeroplane would be needed for profitable manufacture. This level of assistance would be equivalent to a duty in excess of 50% ad valorem on comparable imports. At the Board’s inquiry the local industry had requested assistance only on agricultural aeroplanes of the type used for aerial spreading and spraying. In recommending against assistance, the Board said that when the high protective requirement was considered in conjunction with the small share of the market the local aircraft could expect to supply it was forced to conclude that, despite the undoubted quality of the aeroplane and the efficiency and ingenuity demonstrated in its manufacture, the cost of assisting local production would be considerably more than could be justified by its potential contribution to the economy. Honourable senators will recall that an earlier Tariff Board report which was tabled in the Senate in February 1967 also recommended against assisting local production of light aircraft. The earlier report, however, was based largely on various estimates and projections of future costs and sates levels.

Senator KENNELLY:
Victoria

– I listened with interest to the Minister. 1 think I understood him correctly, but if I am wrong I want him to correct me. I understood the Minister to say that the Tariff Board did not believe that it was worth while saving the light aircraft industry in Australia.

Senator Bishop:

– The Minister answered only one aspect of the matter.

Senator KENNELLY:

– 1 would not expect him to say any more because he has not received his brief yet. 1 was under the impression that a subsidiary of the company that produces Victa lawnmowers was concerned in the light aircraft manufacturing industry in Australia.

Senator Dittmer:

– The company did not do any good.

Senator KENNELLY:

– The company was in existence for some time.

Senator Wilkinson:

– lt manufactured 100 aircraft.

Senator Sim:

– What are the economics of manufacturing aircraft in Australia?

Senator KENNELLY:

– If the honourable senator will wait for a moment I will talk about the economics of manufacturing aircraft in Australia. 1 have the same thoughts as the honourable senator on money. I do not like wasting money. J never waste my own. One of my colleagues informed me that Victa manufactured 100 aircraft, lt may bc an uneconomical proposition. But there is also the defence aspect. There ire quite a lot of things in certain parts of the country that can be classed as uneconomic, but wc are spending $ 1, 000m on defence. Added to that is the expenditure of millions of dollars on roads in various parts of the country, particularly in the north. This must be considered as part of our defence expenditure. When Australia looked to be in real trouble during the last war- the Allied Works Council constructed a road from Alice

– lt may be that saving this light aircraft company would be an uneconomic venture. We would be spending money but I believe that it would be well worth doing. We certainly go out of our way to keep the Australian shipyards busy by the payment of shipbuilding subsidies, f say to my friend Senator Sim that if we explored the economics of the shipbuilding industry, there would not be a ship built in this country.

If there is anything that is of value to the defence of this country it is aircraft in the air. [ think Senator Scott would remember that in 1941 a very famous man in this country said that he would be happy to get out with the clothes he stood up in. That man is still alive and occupies the highest position in this land. It is all right when he is safe. I believe that the Government should not have accepted the advice tendered to it. I believe that even if what might be termed ‘outrageous tariff protection’ is necessary, it should be given. We are importing human hair into this country. What do we want it for? Senator Scott does not need it.

Senator Little:

– lt is used to make toupees.

Senator KENNELLY:

– What are they?

Senator Little:

– The honourable senator should ask Senator Cohen or some of his other colleagues who need them. He should not ask me.

Senator KENNELLY:

– I thank you, Mr Chairman, for the latitude you arc giving me. I am seeking information about imported human hair. I suppose it is coming from Singapore or China, f now remember a discussion about human hair that took place in my own home. I want an answer to this question: How much would it have cost the Government to afford tariff protection to the production of the Victa light aircraft? 1 believe we should know. I think this involves a stupid policy in respect of defence economy. I believe we should have kept the company going. I would like that information to be given directly by the Minister.

Senator SIM:
Western Australia

– J ask for the indulgence of the chair, because 1 am not sure of the clause to which Senator Kennelly’s remarks were related.

Iiic TEMPORARY CHAIRMAN -

Clause 5.

Senator SIM:

Senator Greenwood:

– Hear, hear!

Senator KENNELLY:

Senator SCOTT:
Western AustraliaMinister for Customs and Excise · LP

– I shall endeavour to clear up the three or four questions asked by Senator Kennelly which he regarded as being very important. He asked why people manufacturing single engine aircraft in Australia are not given tariff protection when the industry could be used for the defence of Australia. He said it would not be reasonable for anybody to claim that any aeroplane did not have a defence value, or words to that effect. I agree that an industry which manufactures aircraft could have some defence value, but when talking about a single engine aircraft as having a defence potential for Australia we must realise that it would have a maximum speed of about 150 knots whereas the F111 aircraft flies at 2.5 times the speed of sound.

When we take into account the technical advances being made in Australia and elsewhere it seems probable that in the next 20 or 30 years our aircraft will be even faster than that. Senator Bishop asked why we cannot have our own aircraft factory if we in Australia are able to build the wings for aircraft.I have replied to this question twice and I do not want to go on repeating it, but the facts are that the Tariff Board has recommended on two occasions - once in 1967 and again last year - that assistance should not be given to the industry because the number of aircraft required for Australia would not enable the industry to become viably economic and that therefore the industry would require a duty exceeding 50% of the value ofthe aircraft to make it payable. It would not be logical to proceed with an industry on this basis.

Senator Kennelly:

asked a couple of other questions whichI shall endeavour to answer to the best of my ability. The honourable senator referred to item 2 of the third schedule and asked for what purpose tall oil fatty acids were used. They are waste products from the paper-making industry and are used for road dressing, paints and soaps. He asked also why on earth we were considering the importation of human hair and he asked the purpose for which it was used. My colleague the Minister for Works (Senator Wright) has pointed out already that if we look at item 91 8C, 59. 1 7.29, we will find a reference to straining cloth of a kind commonly used in oil presses and the like, being cloth of textile fibres or of human hair. The human hair is used for the manufacture of the straining cloth. So far as we know there has been no importation of human hair for the manufacture of straining cloth.

Senator Kennelly:

– Then why is it important?

Senator SCOTT:

– I am merely telling the Committee what 1 am advised. 1 have been advised that human bair is imported for the manufacture of wigs. I do not want to suggest that there is no importation of human hair, but I have been advised that no human hair is imported for the manufacture of straining cloth of a kind commonly used in oil presses and the like.

Senator LITTLE:
Victoria

– I would have preferred to ask my questions before the Minister for Customs and Excise (Senator Scott) replied because I am interested in a subject that has been dealt with rather loosely and, 1 consider, a little wildly. 1 refer to the aircraft industry in this country, in respect of which I am nol satisfied with the answers given by the Minister. He has caused me to become even more concerned for the future of this country because of the complete hopelessness that he attaches to the establishment of an economic and proper aircraft industry in Australia. I believe that the evidence is completely against him in this regard. Australia has produced some of the most efficient fighting aircraft in the world. I refer to the Mirage fighter which, as he would know, has been produced in this country under licence. We have the knowledge and the capacity to dp the job. lt is a fact of life that if we adopt towards the aircraft industry the approach that the generation had during my youth towards a motor vehicle industry we will not get anywhere, lt was only when we were shaken out of that rut and got our shoulders to the wheel that we proved that we could produce a motor car which was not only an economic proposition but could challenge anything that was produced anywhere in the world. The aviators who flew some of the most impossible flights in the aircraft that the industry produced in its very babyhood were Australians. I agree that we did not produce the aircraft at that stage. Australia has produced a crop dusting aircraft, a specialised aircraft for a particular industry. There are not so many places in other countries where there is the demand for this type of aircraft that we have in Australia. If what my friend Senator Bishop says is right, crop dusting aircraft are now exported to New Zealand. There are very few other places in the world with land holdings of a size that require this type of aircraft. In Australia we have a specialised market for this type of aircraft.

J understand that nowhere else in the world is an aircraft manufactured to perform this particular, function. In other places the planes are produced for another purpose and are adapted. Most are manufactured as light aircraft for ordinary flying. But the one produced in Australia is manufactured specifically for crop dusting. Perhaps we might eventually do the impossible, as we have with many other products, even of a mechanical nature, by exporting them to the United States of America. I fail to see why there should be this hopeless approach to an industry in a country which has such a tremendous need and demand for helicopters and other aircraft. We should be setting out now to establish our own aircraft industry. We need it so badly for defence. Defence is not merely a matter of producing an aircraft that will fly at 100 miles per hour or at any other speed; it involves having the trained stait and technicians who understand aerodynamics and all the things that go to producing an aircraft.

We have had a team at Fisherman’s Bend producing the Mirage aircraft, but now the whole project is being sabotaged. The’ technicians are being dispersed and sent elsewhere. Their skills are lost. They are obtaining jobs in other industries because they are forced to do so. Our capacity in this field will be lost and we will become dependent on overseas people for what is basic to our defence. 1 do not accept the Government’s attitude that if an aircraft industry requires a tariff of 50% to protect it while it becomes established, that is a reason why we should not attempt to establish the industry. In the course of my occupation I sold sets of water paints in tubes to children at school. I remember that the paints which were imported from Japan cost 3s 3d. There was a relevant Australian industry. Whether it was inefficient I am not in a position to say but I know that overnight the price of the Japanese product went from 3s 3d to 9s Hd because a protective tariff was put on it. Whether that was the full tariff or what it ultimately accumulated to after it had gone through the various processes of the importer’s margin, the distributor’s margin and the retailer’s margin, as well as sales tax on the tariff, I do not know.

Senator Kennelly:

– On the lot of them.

Senator LITTLE:

– Yes, on the lot of them. So the children who were buying these little sets of paints to use in the course of their education suddenly found that the price had jumped from 3s 3d to 9s lid. If an increase in price to that section of the community was that great, I would not he worried too much about 50% on an aircraft that was used for the commercial purpose of crop dusting. The purchaser of the aircraft probably would claim depreciation for taxation purposes anyway, and in the final analysis if it was an efficient aircraft and could do the job he would not suffer any great loss.

To my mind it is well worthwhile, in the interests of the future of this country, to establish, to build and to maintain an aircraft industry, whether we produce 100 miles an hour crop dusters, helicopters or fighters. You will not plan the defence of this country in 5 years or 10 years. Senator Kennelly objected because in reply to an interjection an honourable senator mentioned that some country may have submarines in 5 years. If you are to think in terms of defence do not limit your thinking to 5 years. If you are to defend this country with the sophisticated type of equipment that is necessary to defend anything today, you must start thinking in far longer periods than periods of 5 years. It will take 10 years, perhaps 15 or 20 years, to build up the type of industries that are necessary to produce the equipment for a self-reliant defence system so that you do not have to rely on any other country in the world, as Israel was forced to rely on a French aircraft company to supply her with the weaponry necessary for the aircraft she had already bought from France. Do we want to see our nation reduced to that stage at some future date?

Who is concerned about the challenge that Senator Kennelly sees from sampans floating over the Indian Ocean in the next year of two? If you do not look 20 or 25 years ahead when thinking in terms of the defence of this country, you should stop thinking about it because you are not making a worthwhile contribution to our defence. The Government’s policy towards the aircraft industry, if it is the policy that was enunciated by the Minister tonight in such a hopeless fashion, is wrong. The Government should get together again not only with the defence committees but also with the Tariff Board and everyone else concerned and look at the matter from a wholly Australian point of view rather than from the point of view of profits and losses or anything else.

Senator SCOTT:
Western AustraliaMinister for Customs and Excise · LP

– I do not want this debate to become tangled with the matter of the defence of Australia. We must bring the debate back to sweet reasonableness. We are talking about the manufacture in Australia of single engined aircraft. The Government does not always take the advice of the Tariff Board but on these last two ocasions it has taken the advice of the Board notwithstanding searching inquiries into whether there was any other way out. I should like to read to the Senate the concluding paragraph of the Tariff Board’s report - it is a long report and I will not weary the Senate by reading all of it - on single engined aeroplanes having an empty weight not exceeding 2,500 lb. The report stated:

The Board concluded that there was little prospect, at that time, of the goods under reference being produced profitably without a level of assistance out of all proportion to the probable gains to the economy, lt recommended that assistance be not accorded their production in Australia.

That was the first report.

Senator Little:

– No wonder we had-

Senator SCOTT:

– You can go against it if you like. The Board concluded its second report in this way:

When this high protective requirement is considered in conjunction with the small share of the market the Airtruk can expect to supply the Board is forced to conclude that, despite the undoubted quality of the aeroplane and the efficiency and ingenuity demonstrated in ils manufacture, the cost of assisting the production of the Airtruk in Australia would be considerably more than could be justified by its potential contribution to the economy. The Board will therefore recommend that no assistance be accorded the production in Australia of the goods under reference.

Senator KENNELLY:
Victoria

– Again I rise to refute the Minister’s statement.

Senator Little:

– We are teaming well tonight.

Senator KENNELLY:

– A good team is worth a lot. The Minister wanted more or less to ridicule the idea of the single engined aircraft having a defence potential. He is old enough to remember the last war when one of the lend lease arrangements between the Australian government of the day and the American government of the day was that we were to feed the American troops. To feed the American troops we had to provide in all States, but particularly in Victoria on account of its climatic conditions, a huge acreage for the growing of vegetables. Plants for the dehydration of vegetables were opened at Maffra and at other country centres. We had to grow these vegetables to suit our allies - the Government’s friends. It will be remembered that our late Prime Minister, referring to the President of the United States, said: ‘All the way with LBJ’, in the hope that if we were ever in trouble again the Americans would come to help us as they did in 1941. I am hoping even more than is the present Government, because the defence programme that it has proposed for Australia, and the Prime Minister’s statements, lead me to believe that both the Government and the Opposition had better keep on hoping and make it a certainly that the Americans will come here.

These light aircraft are used for crop dusting and for other purposes, but particularly for crop dusting. Therefore they have a defence potential. The Government is betting its last §1 politically on who will come in to help us if a set of circumstances arise similar to those which arose during the last war. I am one of those who believe that if it suits the Americans to come they will come, but if it does not suit them to come they will not come, lt is wrong for the Minister to try to tell us that these planes do nol have a defence potential. Surely the Minister does not think that when a person mentions defence potential he means a plane like the Fill that we have not seen yet, or the big B47s which flew over Australian cities when the former Prime Minister, Sir Robert Menzies, sent the then Minister for Defence to buy them. He attempted to fool the people that they were the kind of planes that we were buying. The Minister does not want me to go all through that again, does he? He should not run away with the idea that for an aeroplane to have a defence potential it must be able to drop bombs or have cannon in its turrets. That is not the case. I cannot help it if he does not know that, but he should not try to tell me that this type of aeroplane has not a defence potential. 1 do not blame him, although ignorance of the law is never a defence. 1 say that he should amend that statement the next time he rises.

Let me refer again to this question of human hair. I am interested in it. The words in the Schedule are:

Straining cloth of a kind commonly used in oil presses and the like, being cloth of textile fibres or of human hair.

– The honourable senator asked about it.

Senator KENNELLY:

– But the Minister was the first one to say that human hair was imported for wig making. How would I know why it is imported?

Consideration interrupted.

The TEMPORARY CHAIRMAN (Senator Dame Ivy Wedgwood:
VICTORIA

– Orderl In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:

That the Temporary Chairman do now leave the Chair and report to the Senate.

Question resolved in the affirmative. (The Temporary Chairman having reported accordingly.)

page 744

ADJOURNMENT

Petitions

The PRESIDENT (Senator the Hon. Sir Alister McMullin) - In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:

That the Senate do now adjourn.

The PRESIDENT:

– That is the ruling.

Senator Cohen:

– This deprives me of the opportunity to put the case against the suspension which the Opposition will, of course, oppose. I seek leave, Mr President, to make a statement on the matter before the Senate.

The PRESIDENT:

– Is leave granted?

Government supporters - No!

The PRESIDENT:

– Leave is not granted.

Question put. The Senate divided. (The President - Senator Sir Alister McMullin)

AYES: 27

NOES: 20

Majority . . . . 7

In division:

AYES

NOES

Question so resolved in the affirmative. (Senator O’Byrne thereupon withdrew from the chamber.)

Original question resolved in the affirmative.

Senate adjourned at 11.1 p.m. till Tuesday, 15 April, at 3 p.m.

Cite as: Australia, Senate, Debates, 27 March 1969, viewed 22 October 2017, <http://historichansard.net/senate/1969/19690327_senate_26_s40/>.

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Senate27 March 1969

EDUCATION

Petitions

Senator DRAKE-BROCKMAN:WESTERN AUSTRALIA

MINISTERIAL ARRANGEMENTS

Senator ANDERSON:Minister for Supply · New South Wales · LP

QUESTION

WORKERS COMPENSATION

Senator POYSER:VICTORIA

Senator ANDERSON:LP

QUESTION

DAIRYING

Senator LILLICO:TASMANIA

Senator McKELLAR:Minister for Repatriation · NEW SOUTH WALES · CP

QUESTION

ELECTORAL

Senator GAIR:QUEENSLAND

Senator Dame ANNABELLE RANKIN:

QUESTION

TELEVISION ADVERTISING

Senator O’BYRNE:TASMANIA

Senator Dame ANNABELLE RANKIN:

QUESTION

ABORIGINALS

Senator WRIGHT:Minister for Works · TASMANIA · LP

QUESTION

WORKERS COMPENSATION

Senator BISHOP:SOUTH AUSTRALIA

Senator WRIGHT:LP

QUESTION

EARTHQUAKE DAMAGE

Senator DRAKE-BROCKMAN:

Senator ANDERSON:LP

QUESTION

SOCIAL SERVICES

Senator McMANUS:VICTORIA

Senator ANDERSON:LP

QUESTION

HEALTH

Senator FITZGERALD:NEW SOUTH WALES

Senator Dame ANNABELLE RANKIN:

Senator Fitzgerald:

Senator Dame ANNABELLE RANKIN:

QUESTION

RIGHT TO PROTEST

Senator DEVITT:TASMANIA

Senator ANDERSON:LP

Senator Devitt:

Senator ANDERSON:

Senator Devitt:

Senator ANDERSON:

Senator Devitt:

Senator ANDERSON:

QUESTION

HEALTH INSURANCE

Senator MURPHY:NEW SOUTH WALES

The PRESIDENT:

Senator MURPHY:

Senator McKELLAR:NEW SOUTH WALES · CP

Senator MURPHY:

Senator Cormack:

Senator Cotton:

The PRESIDENT:

Senator Cotton:

Senator Murphy:

Senator Anderson:

Senator Greenwood:

Senator Cohen:

Senator Marriott:

Senator Cohen:

Senator Withers:

The PRESIDENT:

QUESTION

WATER CONSERVATION

Senator RIDLEY:SOUTH AUSTRALIA

Senator SCOTT:Minister for Customs and Excise · WESTERN AUSTRALIA · LP

Senator Ridley:

Senator SCOTT:

QUESTION

SENATE SELECT COMMITTEES

Senate
27 March 1969

Senator DRAKE-BROCKMAN:
WESTERN AUSTRALIA

Senator ANDERSON:
Minister for Supply · New South Wales · LP

Senator POYSER:
VICTORIA

Senator ANDERSON:
LP

Senator LILLICO:
TASMANIA

Senator McKELLAR:
Minister for Repatriation · NEW SOUTH WALES · CP

Senator GAIR:
QUEENSLAND

Senator O’BYRNE:
TASMANIA

Senator WRIGHT:
Minister for Works · TASMANIA · LP

Senator BISHOP:
SOUTH AUSTRALIA

Senator WRIGHT:
LP

Senator ANDERSON:
LP

Senator McMANUS:
VICTORIA

Senator ANDERSON:
LP

Senator FITZGERALD:
NEW SOUTH WALES

Senator DEVITT:
TASMANIA

Senator ANDERSON:
LP

Senator MURPHY:
NEW SOUTH WALES

Senator McKELLAR:
NEW SOUTH WALES · CP

Senator RIDLEY:
SOUTH AUSTRALIA

Senator SCOTT:
Minister for Customs and Excise · WESTERN AUSTRALIA · LP

Senator WOOD:
QUEENSLAND

Senator ANDERSON:
LP

Senator ORMONDE:
NEW SOUTH WALES

Senator LAWRIE:
QUEENSLAND · CP; NCP from May 1975

Senator KEEFFE:
QUEENSLAND

Senator ANDERSON:
LP

Senator WRIGHT:
LP

Senator KENNELLY:
VICTORIA

Senator ANDERSON:
LP

Senator WRIGHT:
LP

Senator RAE:
TASMANIA

Senator ANDERSON:
LP

Senator WHEELDON:
WESTERN AUSTRALIA

Senator ANDERSON:
LP

Senator WRIGHT:
LP