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Senate
17 June 1970

27^th Parliament · 2^nd Session

NOTICE OF MOTION
QUESTION
- SENATE STANDING COMMITTEES
QUESTION
- MELBOURNE AIRPORT
QUESTION
- NATIONAL PARKS
QUESTION
- LEADER OF THE OPPOSITION IN THE HOUSE OF REPRESENTATIVES
QUESTION
- NATIONAL SERVICE
QUESTION
- MEAT SHIPMENTS
QUESTION
- DIVISION OF NATIONAL MAPPING
QUESTION
- MELBOURNE TAXI CABS
QUESTION
- NATIONAL SERVICE
QUESTION
- EGGS
QUESTION
- EXPO 70
QUESTION
- TELEPHONE DIRECTORY
QUESTION
- NATIONAL SERVICE
QUESTION
- COMALCO INDUSTRIES LTD
QUESTION
- POSTAL DEPARTMENT
QUESTION
- IMMIGRATION
QUESTION
- VIETNAM
QUESTION
- COMMONWEALTH OFFICE BLOCK, ADELAIDE
QUESTION
- VIETNAM
QUESTION
- BAN ON MERINO RAMS
QUESTION
- TOUR CORNERS’ PROGRAMME
QUESTION
- FLINDERS ISLAND SHIPPING SERVICE
QUESTION
- MOLOTOV COCKTAILS
QUESTION
- COMALCO ADVERTISING
QUESTION
- ROYAL AUSTRALIAN AIR FORCE
QUESTION
- ABORTION
QUESTION
- NATIONAL HEALTH SCHEME
QUESTION
- CONSCRIPTION
QUESTION
- ROYAL AUSTRALIAN AIR FORCE
QUESTION
- ROYAL AUSTRALIAN AIR FORCE
QUESTION
- VIETNAM
DEATH OF EX-SENATOR DONALD GRANT
CONCILIATION AND ARBITRATION BILL 1970
- Second Reading
MARGINAL DAIRY FARMS AGREEMENT BILL 1970
- Second Reading
- Third Reading
SUSPENSION OF STANDING ORDERS
DAIRYING INDUSTRY LEVY BILL 1970
- Second Readings
DEFENCE BILL 1970
- Second Reading
- Third Reading
DEFENCE FORCES RETIREMENT BENEFITS BILL 1970
WHEAT INDUSTRY STABILISATION BILL 1970
- Second Reading
- Third Reading
LOAN BILL 1970
- Second Reading
LOAN (DEFENCE) BILL 1970
- Second Reading
COMMONWEALTH EMPLOYEES COMPENSATION BILL 1970
- Second Reading
- Third Reading
QUESTION
- DIVISION OF NATIONAL MAPPING
SEAMEN’S COMPENSATION BILL 1970
- Second Reading
CUSTOMS TARIFF BILL 1970
- Second Reading
- Third Reading
SNOWY MOUNTAINS ENGINEERING CORPORATION BILL 1970
- Second Reading
ADJOURNMENT
SNOWY MOUNTAINS ENGINEERING CORPORATION BILL 1970
- Second Reading
ADJOURNMENT
- Representation of New South Wales
- Thursday, 18 June 1970

The DEPUTY PRESIDENT (Senator Bull) took the chair at 10 a.m., and read prayers.

page 2501

NOTICE OF MOTION

Senator FITZGERALD:
New South Wales

– I give notice that tomorrow I will move:

Thai a select committee of the Senate be appointed lo inquire into and report upon all aspects associated with the provision of assistance to mentally and physically handicapped persons;
that the select committee consist of eight senators, four to be appointed by the Leader of the Government in the Senate, three to be appointed by the Leader of the Opposition in the Senate and one to be appointed by the Leader of the Australian Democratic Labor Party, such appointments to be made as soon as practicable;
that the committee elect as chairman one of the members appointed by the Leader of the Government in the Senate; that the chairman of the committee may, from time to time, appoint another member of the committee to be the deputy-chairma’n of the committee, and that the member so appointed act as chairman of the committee at any time when the chairman is not present at a meeting of the committee; that in the event of an equality of voting the chairman, or the deputy-chairman when acting as chairman, have a casting vote;
that the presence of three members of the committee shall be necessary to constitute a meeting of the committee for the exercise of its powers;
that the select committee have power to sit during any adjournment or recess of the Parliament and notwithstanding any prorogation;
that the select committee have power to send for persons, papers and records, to move from place to place, to sit in open court or in private, and to have leave to report from time to time its proceedings and the evidence taken and such interim recommendations as it may deem fit;
that the Senate authorise the publication of all documents which may be laid before the select committee and of all evidence which may be given before it except such particular documents or evidence as the committee determines should1 not be published;
that the committee report to the Senate as soon as possible; and
that the foregoing provisions of this resolution, so far as they are inconsistent with the Standing Orders, have effect notwithstanding anything contained in the Standing Orders.

page 2501

QUESTION

SENATE STANDING COMMITTEES

Senator MURPHY:
NEW SOUTH WALES

– May I remind you, Mr Deputy President, of the decision of the Senate of last Thursday night that standing committees shall be provided with all necessary staff, facilities and resources and be empowered to appoint persons with specialist knowledge for the purposes of the committees. I ask, Mr Deputy President, whether you will consult with the Leader of the Government in the Senate and whoever else is appropriate in order to ensure that the appropriate staff, resources and facilities might be provided and the necessary recommendations made so that budgetary allocation may be made in order that the the will of the Senate in this regard may be carried out.

The DEPUTY PRESIDENT- I will refer this question to the President for his consideration. I have had discussions with various people since a similar question was asked last week. I understand that they will be able to provide facilities for the Parliament as a whole. I cannot refer to the committees. I will see that the matter is referred to the President and I have no doubt that a report will be made when the Parliament assembles again in August.

page 2501

Senator RAE:
TASMANIA

– I address my question to the Minister representing the AttorneyGeneral. By way of brief preface I refer to the various newspaper reports and commentaries relating to the recent United Stales decision in regard to conscientious objection to national service. I ask: Will Hie Minister indicate whether it is necessary to alter the Australian National Service Act to provide for conscientious objection to be based on a belief other than a belief of a religious nature?

Senator WRIGHT:
Minister for Works · TASMANIA · LP

– Our National Service Act has, since its inception, provided specifically that for the purpose of the section dealing with conscientious objection, a conscientious belief is a concientious belief whether the ground of the belief is or is not of a religious character and whether the belief is or is not part of the doctrines of religion. So in regard to Australian law there is nothing novel in any proposition that conscientious belief need not be based upon a doctrine of religion.

MELBOURNE TAXI CABS

Hackney Cab Act and regulations which compels all Melbourne taxi drivers to display a photograph of themselves in the back of taxi cabs?

Senator WRIGHT:
LP

– I feel that I should refer that question to the Lord Mayor of Melbourne.

page 2503

QUESTION

NATIONAL SERVICE

Senator CAVANAGH:
SOUTH AUSTRALIA

– I desire to ask a question of the Minister, representing the Attorney-General. I ask: Will the AttorneyGeneral investigate whether Mr D. A. Trathen, headmaster of Newington College, breached the Crimes Act when he publicly asked 20-year-olds, in loyalty to God rather than to Caesar, to defy the National Service Act?

Senator WRIGHT:
LP

– I feel bound also to refer this question to the Attorney-General for his consideration and reply at the earliest opportunity.

Fill AIRCRAFT

TELEPHONE DIRECTORY

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– Has the Minister representing the Postmaster-General seen a full page advertisement inserted in at least 1 metropolitan daily newspaper directing the attention of the public to the issue of a new telephone directory which is styled: This is the new do-it-yourself ‘phone book’, and urging members of the public to ‘Dial for Directory Assistance only if your “doityourself” ‘phone book really docs not have the number? Will the Minister agree that such an advertisement is completely unnecessary, could be regarded as a slur on the intelligence of the average Australian and indeed could well be regarded as advertising the possible deficiencies of the directory? Will the Minister agree that expenditure on advertisements of this nature by the Postmaster-General’s Department is unwarranted and a scandalous waste of public money? Will she ascertain for me the expenditure involved in the publication of the advertisement?

Senator Dame ANNABELLE RANKIN:

– I had not seen the advertisement until the honourable senator showed it to mo across the chamber just now. J. cannot agree with him on the points that he has raised. 1 think that the Department is endeavouring to ensure that the people of Australia have the best possible directory, and anything that can make it easier to use or more effective is commendable. I have been asked whether I will get the information regarding the cost of the advertisement. I will endeavour to do so.

page 2504

QUESTION

NATIONAL SERVICE

Senator PROWSE:
WESTERN AUSTRALIA

– My question to the Leader of the Government in the Senate relates to that asked earlier about the attitude of the headmaster of Newington

College to Australia’s laws concerning national service. Is it true that the headmaster concerned is prepared to approve the actions of a student who defies any rule of the college that he may find distasteful?

Senator Sir KENNETH ANDERSONI would not want to make a judgment on the processes of reasoning which have emerged from the statement made by the principal of the school concerned. His conflicts seem to me to be a matter of conscience for him to resolve. In view of the fact that the Minister representing the AttorneyGeneral has taken the previous question on notice I think we should await a reply on that level before making any further comment.

page 2505

QUESTION

COMALCO INDUSTRIES LTD

Senator GEORGES:
QUEENSLAND

– Is the Minister representing the Attorney-General aware that Comalco Industries Ltd, in offering preferential shares to public servants, parliamentarians and Ministers of the Crown, has breached the criminal code in Queensland and Western Australia? I ask whether there is within the criminal code of the Commonwealth a provision similar to that in the Queensland code which states:

Any person who - (1) In order to influence a member of cither House of Parliament in his vote, opinion, judgment or action, upon any question or matter arising in the House of which he is a member or in any committee thereof, or in any joint Committee of both Houses, or in order to induce him to abse’nt himself from the House or from any such Committee, gives, confers, or procures, or promises or offers to give or confer, or to procure or attempt to procure, any property or benefit of any kind to, upon, or for, such member, or to, upon, or for, any other person: … is guilty of a crime, and is liable to imprisonment with hard labour for seven years.

If there is such a provision in the criminal code of the Commonwealth what action does the Government intend to take against Comalco?

Senator WRIGHT:
LP

Senator DRAKE-BROCKMAN:
CP

– As I said in the Senate last Friday in answer to a question from the Leader of the Opposition, from my examination of this file there was no ill-treatment of this Aircraftman.

Senator Murphy:

– You were asked about the investigations that you have made.

Senator DRAKE-BROCKMAN:

– I am answering this question. 1 have indicated to the honourable member for Bunks that if he likes to put in writing the time, place and type of ill-treatment that he believes has gone on then I am willing to investigate the matter further. In regard to the independent medical check-up, I indicated to the Leader of the Opposition last week that I would approach the Army - the Aircraftman is in hospital at Ingleburn camp - for a medical report on him. This I have done. The Army has even called in a specialist psychiatrist to examine the lad and he has advised that there is no psychiatric condition. I am awaiting a report on the further examination of the lad. Until I receive that I do not think that I should consider an independent medical check up. In regard to the legality of the action taken by the Officer Commanding, L believe from my examination of Air Force Orders and Regulations that the officer acted quite rightly. In regard to the question of approaching the Judge Advocate-General, 1 do not believe that the matter comes under his jurisdiction. 1 believe that it comes under the jurisdiction of the Attorney-General. I have asked my legal advisers to approach the AttorneyGeneral’s Department to examine whether the Commanding Officer acted within his legal rights.

page 2509

QUESTION

ROYAL AUSTRALIAN AIR FORCE

Senator MURPHY:

– Was the Minister for Air serious when he asked that the honourable member for Banks now put in writing his suggestion that ill-treatment al’ a member of the Services be investigated? Has the Minister not even bothered to read the detailed statement made in the House of Representatives on 11th June last in which the honourable member set out these matters, which also was referred to in the Senate last week? If the Minister has read the statement, what has he done to investigate the specific allegations made by the honourable member in that speech?

Senator DRAKE-BROCKMAN:
CP

– J have read the statement. 1 have investigated the matters so thoroughly that I noticed that the honourable member for Banks referred to a Mirage aircraft crash. I have checked and found that there was no Mirage or Sabre crash in the time that the Aircraftman was in the Air Force at Williamstown. There was a Winjeel crash but that took place some miles from the airfield. I have examined the matter of ill-treatment raised and, as I said earlier, I have found no evidence of such treatment.

Senator Murphy:

– Did the Minister say that he had looked at his files?

Senator DRAKE-BROCKMAN:

– What else could I look at, other than to ask the honourable member for Banks to put it in writing?

page 2509

QUESTION

VIETNAM

Can the Minister representing the Minister (or External Affairs inform the Senate of the number of Vietnamese civilians who have been killed or injured as a result of American intervention in Vietnam’/

I said J would seek whatever information was available on the number of civilian casualties in Vietnam. The Minister for External Affairs has supplied the following answer:

In the circumstances of the war in Vietnam it is nol possible to provide even approximate statistics on civilian casualties. North Vietnamese and Vietcong forces have been carrying out a concerted policy of terrorism and murder of civilian officials and their families, particularly in rural areas, since the late 1950s. More recently, in their offensives the Communists have shown no regard for the protection of civilian life, and in fact murdered in cold blood over 3,00(1 civilians in Hue alone during the Tet offensive of 1968. lt is one of the sad facts of war that civilian casualties d’o occur. Because of the particular nature of the war in Vietnam civilian casualties have also resulted from South Vietnamese, United Stales ami other Allied actions. Except for isolated, unfortunate incidents, however, which the Australian Government in no way condones, every effort has been made by Allied forces lo avoid endangering civilians, lo the point of risking their own lives by warning the civilian population - which has often included communist agents or sympathisers - in advance of impending military operations in particular areas. The Government regrets all loss of civilian life, and strongly wishes, as it has repeatedly stated, that the other side would agree lo a negotiated and peaceful settlement of thu conflict.

page 2509

DEATH OF EX-SENATOR DONALD GRANT

I ask for leave to make a statement in relation to the death of a former senator.

The DEPUTY PRESIDENT- Is leave granted? There being no objection, leave is granted.

I understand that Mr Donald MacLennan Grant, who was a senator for some years, passed away on 11th June. I think it is fitting that we should recognise the service that he gave to the people of the Commonwealth during his period of public life. The late Donald Grant was a colourful person in many ways and will be remembered by those who served in public life at the same time. As a young man he had quite a chequered career in politics, having served in local government as well as in the national Parliament.

Mr Grant was a member of the Legislative Council in New South Wales from 1931 to 1934. Upon reconstruction of that Council he was elected for a further term of 6 years from 1934 to 1940, but did not seek re-election at the end of that term. He was elected as a senator for New South Wales at the general elections in 1943, 1949 and 1951, and at the Senate election in 1953. Senator Grant had the honour to represent Australia at various overseas conferences. He attended the Peace Conference at Paris in 1946 as an Australian representative. In September of the same year he was a member of the Australian delegation which went to the 29th Session of the International Labour Conference held at Montreal. In addition, he was a member of the Australian delegation to the Commonwealth Parliamentary Association Conference held at Nairobi in Kenya in August 1954. It will be seen that Donald Grant served his country in a number of spheres. 1 am sure that all honourable senators acknowledge the service that Mr Grant gave to the community and would wish to join with me in expressing deepest sympathy to his family on this occasion.

Senator MURPHY:

- Mr Deputy President, I ask for leave to speak on the same matter.

The DEPUTY PRESIDENT- Is leave granted? There being no objection, leave is granted.

Senator MURPHY:

– When the late Donald Grant retired from this chamber in 1959, more than 10 years ago, he stepped down from an active role as one of the Labor Party’s most militant members. He was famous for demonstrating the courage of his convictions. In 1916, at the age of 25, he was sentenced to 15 years gaol for a fiery outburst in the Sydney Domain. Referring to the imprisonment of an official of the Wobblies - the Industrial Workers of the World - Donald Grant said:

For every day that Tom Barker is in gaol it will cost the capitalists £10,000.

Senator O’Byrne:

– He got 15 years for that.

Senator MURPHY:

– He was given 15 years gaol for that statement. He was a member of the Industrial Workers of the World at the time and he served 4 years of the sentence imposed on him for arson, conspiracy to prevent justice and incitement to sedition. As I recall it - I have not the exact details with me - some statement concerning this was set out by Jack Lang in I Remember’. He suggested therein that by an unusual arrangement between New South Wales and Tasmania, a royal commission was held which was able, in effect, to suggest that those involved were improperly convicted. To save face all round, Donald Grant and others were released.

Later Donald Grant became prominent in the Labor Party, gaining a position on the Sydney City Council. Then he was elected to the New South Wales Legislative Council in 1931 and, after the reconstruction of the Council, was elected for 6 years in 1934. He did not seek re-election at the end of that term. The late Senator Grant was elected to the Senate in the 1943 general elections, taking his place in 1944. He was re-elected in 1949, 1951 and 1953. He was the Australian representative at the Paris Peace Conference in 1946 and a member of the Australian delegation to the 29th Session of the International Labor Conference in Montreal in September 1946. In 1954 he went to Nairobi as a member of the Australian delegation to the Commonwealth Parliamentary Association conference.

Even though Donald Grant left the Industrial Workers of the World in 1923 because he believed that the Labor Party offered the only chance for successful action, he lost none of his fiery outlook. He was just as strong in his beliefs as when he left goal in 1920 and he attended the reception for him and 12 others who went to gaol for the same cause. The reception was held in the Sydney Town Hall under a huge sign - ‘Welcome to the Martyrs’. Born in Inverness, Scotland, Donald Grant was a powerful orator and there are still people in this chamber who will remember his rich brogue. He was one of the links with the Labor movement during World War 1 and he retained to the end his passion for the Labor cause. During his latter years in this chamber he showed his courage by turning up for a vital division in a wheel chair.

The late Senator Grant made a significant contribution to this Parliament and to the Labor movement, both industrially and politically. 1 did not have the privilege to work beside him in this place, but his death is a great loss to the Labor Party and to the supporters of the causes for which he stood. I am sure they will mourn the passing of this notable fighter for social progress and justice. 1 concur with the Leader of the Government in the Senate in expressing sympathy to the family of the late Senator.

Senator McMANUS:
Victoria

– I desire to join in the expressions of regret at the passing of Senator Donald Grant. He was a member of this chamber when I first entered it. He was an interesting figure because of his very colourful career. He was imprisoned for doing the kind of thing which nowadays earns a man the reputation of a hero and numerous appearances on television and radio. He was a very forceful character. He never pulled any punches in what he had to say. 1 can remember his forceful remarks lo me when he described the circumstances in which he lost his selection. However, this is not the place to deal with those circumstances other than to say that he was one of the old timers that the Labor Party produced. We will not look upon their like again because circumstances have changed, but he was undoubtedly a great fighter for what he believed in, and I regret his passing.

Senator FITZGERALD:
New South Wales

– I am pleased that Senator Sir Kenneth Anderson has raised this matter to enable us to pay tribute to our former colleague, the late Senator Donald Grant. Donald Grant’s career in the Labor movement was unparalleled. 1 want to pay my personal tribute to him because, as one who has conducted many election campaigns on behalf of Labor candidates in various areas of New South Wales, I always appreciated his co-operation and the excellent and powerful speeches that he made in every Federal, State or municipal election campaign in which he was engaged. As has been said: he was actively engaged in the anti-conscription campaign in 1916. As a man of high principle, a pacifist, he was prepared to suffer for his principles. As Senator Murphy pointed out, he was gaoled for 1 5 years for the utterance of 1 5 words. He served approximately 4 years and was exonerated by a royal commission headed by Mr Justice Ewing.

Senator O’Byrne:

– From Tasmania.

Senator FITZGERALD:

– Yes, as Senator O’Byrne points out, he was from Tasmania. In 1916, the Labor movement opposed conscription. In that period, the movement was supported by John Curtin and Ben Chifley, both of whom who later became Prime Minister. At that time Archbishop Mannix played an important role in the opposition that the Labor movement offered to conscription in World War I. Donald Grant was one of the greatest orators the Labor movement has produced. He was accepted as the greatest orator at addressing large groups. Crowds of over 10,000 were addressed by him in the Sydney Domain and at other places during those stormy periods. Amplifiers and like technical equipment were not known in those days.

In World War U. when Fascism and Nazism threatened the world and when Australia was faced with the threat of invasion, Donald Grant stood steadfast with John Curtin and the Labor Government in those dark days, despite the many disputes within the Party on the militia issue and other problems that the Government had to face. Our late esteemed colleague was an alderman of the Sydney City Council for 131 years. He was a member of the Legislative Council of New South Wales for 10 years. The late Senator Grant was a member of this Senate for 16 years. As was pointed out by other speakers, he represented Australia at various conferences. He was an Australian representative at the Paris Peace Conference of 1946. He was a member of the Australian delegation at the Montreal International Labor Conference. He was at the Commonwealth Parliamentary Association Conference at Nairobi in 1954. At all times his contributions were of the highest order. They are spoken of today by the delegates who attended the conferences. I endorse the sentiments expressd by honourable senators who have spoken, and particularly those of the Labor movement, for we mourn the death of this great Labor fighter. My deepest sympathy is extended to his dear wife and relatives in their very sad bereavement.

Senator KENNELLY:
Victoria

Senator Gair:

– I did not even know that you were in the Labor Party in those days.

Senator KENNELLY:

– You did not know because you were stuck up in the State of Queensland. If you want that out, I do not mind. Being in the Labor Party for more than 50 years has given me a memory which might not be exact in all particulars but which is not bad.

I do not intend to go any further in taking the time of the Senate. I realise that this is not a Bill dealing with the dairy industry, the debate on which can go on for years and years - or at least for hours and hours - although everyone is supporting it. All I want to say is that I join with other senators in remembering a man to whom I may have been opposed at certain times in his political life but who was prepared to stand up and be counted in support of the things that he thought were right. I hope that if he has relatives still living they will have the satisfaction of knowing that some members of the Senate remember Donald in the years of long ago.

page 2512

CONCILIATION AND ARBITRATION BILL 1970

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 Bill changes the sanctions provisions of the Act, otherwise called the ‘penal clauses’. These provisions have been the subject of controversy over a long period of time. They have more recently been the subject of long and searching discussions between the Minister for Labour and National Service (Mr Snedden) and the Attorney-General (Mr Hughes) and representatives of the Australian Council of Trade Unions and the National Employers Policy Committee. The Bill now before the Senate results from the Government’s own decision. However, in coming to that decision the Government has had the benefit of the representations made to it by the ACTU and the NEPC. When reference is made to the ‘penal clauses’ of the Act it is usually in relation to sections 109, 109a and 111. These sections have been used principally in relation to industrial stoppages. They have involved the Commonwealth Industrial Court’s injunction-making power and its power to punish for contempt. The Bill will deal with an industrial stoppage as a breach of an award but before the prosecution may proceed it will be necessary for the parties to have taken advantage of the conciliation or, if necessary, arbitration, of a presidential member of the Commonwealth Conciliation and A rb i ra tion Commission. The Bill gives expression to the Government’s long-held policy that sanctions are an essential feature of the system of conciliation and arbitration in this country. Nevertheless, it also gives expression to the Government’s policy that the sanctions provisions of the Act should be used as a last resort. There is particular emphasis in the Bill on the settling of disputes by the processes of conciliation and arbitration before sanctions can be invoked.

The Bill provides that - (a) the jurisdiction of the Industrial Court to issue orders for compliance with awards or enjoining a breach of an award will be repealed; it terminates any orders made by the Court under section 109 that may still be in force when the Bill becomes law; (b) only presidential members of the Commission may insert enforcement clauses, otherwise generally known as ‘bans clauses’, in awards of the Commonwealth Conciliation and Arbitration Commission; (c) in the event of a dispute which may involve a breach or an impending breach of an award notice of that dispute may be given to the Registrar; (d) thereupon a presidential member of the Commission is required to inquire into the matter and take such steps as he thinks appropriate for prompt settlement of the dispute; (e) no party can institute proceedings in the Industrial Court for a penalty for a breach of the award unless and until the presidential member of the Commission gives a certificate that the conduct alleged as a breach of the award has been before him in proceedings for settlement: Where this is the case the presidential member is required to give the certificate unless he is satisfied that (i) the giving of it would be undesirable, having regard to the terms on which the settlement of the matters concerned has been effected; or (ii) the giving of it would be likely to prevent a settlement of those matters; (f) if these conditions precedent are complied with, then and only then may any of the disputing parlies invoke the jurisdiction of the Court to apply penalties; and those penalties are expressed as amendments of section 1 19 in substitution for the injunction and contempt procedures of sections 1 09 and 111. Under the amended section, only the Commonwealth Industrial Court has jurisdiction to impose penalties for a breach of an award provision prohibiting industrial action by either an employer or a union. In light of the repeal of the Industrial Court’s powers under section 109 in relation to breaches of awards the Bill repeals section 109a of the Act.

In framing the legislation, account was taken of ACTU submissions that penalties imposed by the Industrial Court under seclion 111 could be accentuated because, on occasions, the Court imposed fines for each day on which contempt was found lo have been committed; unions could be fined up to $1,000 a day. The Bill ameliorates this by providing that where there is a provision in an award that a breach of that award constitutes a separate breach on each day on which the breach continues, the maximum penalty that the Court can impose will be $500 for each separate breach. The maximum penalty that the Court can impose where there is no such provision in the award will be $1,000. These provisions would apply in respect of all types of breaches whether they be committed by a union or by an employer. The Bill also provides that where 2 or more breaches have been committed by a defendant: arising out of a course of conduct by the defendant they shall be treated as constituting a single breach, except in cases where the second or subsequent breach is committed after the Court has imposed a penalty in respect of the earlier breach, or the award is one in which the Commission has specifically provided that separate breaches shall be considered to have been committed daily.

Moreover, regard was had to the ACTU submissions that the processes of sections 109 and III brought about an added burden in the form of the costs awarded by the Court. The Government is not prepared to eliminate completely the awarding of costs. However, it will amend the Conciliation and Arbitration Regulations to apply to proceedings under section 119, as amended, the provisions of the regulations that in certain proceedings under sections 109 and 111 costs cannot be awarded in respect of more than 1 counsel or in respect of Her Majesty’s counsel unless the Court holds that the nature of the proceedings is such as to warrant the appearance of more than 1 counsel or of Her Majesty’s counsel. In connection with the question of costs, it is relevant to remind oneself that clause 17 of the Bill will permit employees of organisations to appear before the Industrial Court. Thus, an employee organisation, for example, will be able to appear by one of its own employees, if it is so minded, and will not need to employ counsel. Other amendments made by the Bill that only need to be referred to briefly are that the appeal and reference provisions of the Act will apply to proceedings before a presidential member when he is dealing with matters to which clause 6 of the Bill refers.

The new sanctions process that I have outlined will apply in respect of the Flight Crew Officers Industrial Tribunal and the Coal Industry Tribunal except that the rok of a presidential member will be exercised by those persons who constitute those tribunals. Employees of organisations will also be permitted to appear before the Conciliation and Arbitration Commission and the Flight Crew Officers Industrial Tribunal.

As I have already mentioned, the Bill will retain industrial sanctions but not without prior use being made of negotiation, conciliation and, where necessary, arbitration, to resolve industrial issues between management and labour. The Bill represents a genuine effort to bring the sanctions process more into line with current needs. The intervention of the Industrial Court is deferred until arbitral and conciliation processes have been employed. There is a subsidiary provision in the Bill giving statutory authority for the payment of fees and expenses to the Flight Crew Officers Industrial Tribunal consequent upon the Senate’s recent decision to disallow regulations providing retrospectively for such fees and expenses. I commend the Bill to the Senate.

Debate (on motion by Senator Bishop) adjourned.

page 2514

MARGINAL DAIRY FARMS AGREEMENT BILL 1970

Second Reading

Debate resumed from 16 June (vide page 2496), on motion by Senator Drake.Brockman

That the Bill be now read a second time.

Senator DRAKE-BROCKMAN:
Minister for Air · Western Australia · CP

– in reply - The Senate was debating this Bill when it adjourned last night. I want to thank honourable senators who contributed to the debate for their support for this measure. The Bill is supported by the dairy industry and the State governments have indicated that they are in favour of the principle of reconstruction of marginal dairy farms. I believe that the Press and the public generally have also reacted favourably to it.

Most honourable senators who spoke last night referred to conditions within the dairy industry. I agree with a great deal of what was said because I believe there is a crisis in the industry. The Government has acted to rectify the position by introducing this reconstruction scheme. However I point out to honourable senators that the problems besetting the dairy industry are not applicable to this country alone. The current situation in the Common Market countries is that they have a butter surplus of 300,000 tons. As Senator Webster said, the Australian industry, for the first time, will be in the unique position of having a butter surplus, namely, about 5,000 tons.

Senator Webster:

– Is it a fact that there are no other surpluses of dairy products?

Senator DRAKE-BROCKMAN:

– I understand that that is the position. However if action is not taken there will be a butter surplus, perhaps next year, of something like 20,000 tons. Therefore honourable senators will realise the necessity of taking action. The other problem facing the dairy industry is the cost price squeeze. This problem is facing all primary industries and, indeed, other exporting industries. The position facing the dairy farmer is illustrated by the fact that a recent survey disclosed that 34.000 Australian dairy farmers are earning a net income of $2,000 or less a year. This situation has to be dealt with very quickly.

I do not want to refer to everything said in the course of the second reading debate. The Bill empowers the Commonwealth to make agreements with the States for the purpose of operating a dairy reconstruction scheme in accordance with specific requirements. The agreement referred to in the BUI sets out the operational guide line for the Commonwealth and the States and for the States and the producer. Thus the legislation can be regarded as the base and the agreement can be regarded as the superstructure. Within this framework the State governments have been given maximum flexibility to deal with individual cases to finality. I think Senator Webster referred to this matter in his speech last night. As this scheme breaks new ground, the legislation may need to be amended from time to time and provision has been made for this eventuality. Parliament will be kept informed of any variation in the agreement.

Senator Wilkinson yesterday discussed with me a matter relating to, I think, clause 6 of the Bill. I think I should answer him at this stage by saying that cognisance will be taken of the point he raised when considering the agreements with other States. The agreements are being framed so as to provide commendable flexibility except in respect of those matters specified as essentials in the Bill now before the Senate. The Government also has given an assurance to Western Australia that any such improvements will be applicable to that State. Since the Bill was introduced in the Parliament the Tasmanian Government has announced that it is prepared to negotiate an. agreement along similar lines to that applicable to Western Australia. Other State governments, including the Victorian Government, are considering their position. The Commonwealth Government is optimistic that before long the scheme will be operating throughout Australia.

This Bill is important also because it presages similar schemes for other rural industries. Already the Government has received requests for the extension of the principle of the scheme to the wheat and wool industries and to various fruit growing industries. Indeed, it has been suggested that it should be extended to all rural industries. As I mentioned during the second reading debate, these requests will be considered once the Government has had a chance to see how the dairy scheme works in practice. I referred earlier to the widespread support for the Government’s proposals. This support has been given because the scheme is recognised as having beneficial economic and social implications, lt will make the dairy industry stronger and better able to withstand the intense competition in overseas markets and yet give a fair return to the dairy farmers. Most important of all, it will improve the welfare of those connected with this great industry.

That is all I want to say in general about the second reading debate but 1 want to refer to some of the points raised by honourable senators. I will deal first with the point raised yesterday by Senator Wilkinson about the general financing of the scheme. I have received information about this matter. I want to make it clear that the States will not supply any of the capital for this scheme. The Commonwealth is providing all the capital - $25m - for the next 4 years. 1 will explain briefly how the Commonwealth will make payments to the States for the operation of the agreements. In clause 10 of the Bill - clause 21 of the Agreement with Western Australia - there is provision for a State to obtain an advance from the Commonwealth for the purposes of the scheme. The Commonwealth will supply the funds so that the State Government will not be obliged to draw upon ils own consolidated revenue. The State will use the money so advanced for the purpose of acquiring marginal farms. Then, under clause 6 of the Bill - clause 17 of the Agreement with Western Australia - the State will be reimbursed by the Commonwealth for amounts paid to outgoing farmers for their land and improvements. In effect, the State will operate on an imprest system using Commonwealth money. I want to assure honourable senators that the States are not required in any way to match the substantial sum that the Commonwealth is willing to make available for the reconstruction of marginal farms. The States are being asked to assist the Commonwealth by making available the skill and knowledge possessed by State instrumentalities so that the scheme can operate smoothly and well for the benefit of the dairy industry.

Senator Wilkinson referred also to the provision of additional capital for the acquisition of more land for development purposes. According to the information provided to mc, the built-up dairy farmer will be in a position to compete on equal terms with other farmers for a share of the development finance available from the normal sources of such funds. It would create an inequitable position vis-a-vis commercial dairy farmers if participants in the scheme were to be given special concessions in this matter. Then Senator Wilkinson went on to make reference to the provision of vocational retraining for farmers leaving the industry. An explanation of the position is that there is sound justification for providing this facility for young men whose careers have been interrupted by the need to undertake service in the defence forces. It is by no means clear that such an additional benefit should be offered to men who are changing civilian employment. However, the Minister for Primary Industry has undertaken to look into this question as experience accrues in the operation of the marginal dairy farms reconstruction scheme. I think Senator Prowse was the next honourable senator who made a contribution to the debate and he asked about the man who volunteers to participate in the scheme. The value that a man who volunteers to participate in the scheme will receive for his farm will be one based on the fair market value of the dairy land in his district. I think Senator Prowse also asked who would say what a farm was worth in the event of one man wanting more for the improvements than the other. As for the risk that a continuation of rising costs will require the setting of higher limits for marginal farms, the Agreement makes provision in clause 5 that the present level of 12,000 lb of butter fat can be amended to such other level as may from time to time be agreed by the State and Commonwealth Ministers.

Senator Prowse:

– That will not make any difference.

Senator DRAKE-BROCKMAN:

– I will explain this further when I am replying to Senator McManus because he spoke about strengthening family farming. There is a restraint written into the Agreement against what Senator McManus described as the big boys’. This scheme will not encourage those who enter rural industries just for tax advantages. It will help bona fide dairy farmers to maintain family farming. To explain this, in Western Australia under the scheme at the present time a farm with a production of under 12,000 lb of butterfat is considered marginal but a farm with a minimum production of over 15,000 lb of butterfat is considered to be a viable farm.

The maximum figure for participation in this scheme would concern a man who owns a property and is considering whether he should buy the property next door. If his property and the one next door that he is considering buying have a total production of over 30,000 lb of butterfat then the farmer is not able to participate in the scheme. So this keeps the big boys, as Senator McManus calls them, out of the scheme.

Senator Webster made the point that the principles underlying the dairy reconstruction scheme should be applied to all industries. I have just said that the Government has had a number of requests from other industries to introduce schemes for those industries and the Government is considering this matter at the present time. Senator Webster also asked: What is an economic unit? As I explained to Senator McManus, in the Western Australian scheme an economic unit is a farm with a production of over 15,000 lb of butterfat, but in regard to Victoria this is a matter which will have to be considered by the State Government and the Commonwealth. It is for the Victorian Government to say what it believes to be an economic unit. If we take the amount of 15,000 lb of butterfat, as used in Western Australia, we find that because the production figure per cow is lower in that State the farmer would have to milk 82 cows, but because of Victoria’s very much belter production figure per cow this figure is cut down considerably.

Senator Webster:

– Victoria’s production is higher even than New Zealand’s.

Senator DRAKE-BROCKMAN:

– That may be so. I am not arguing about that. The point I want to make is that the question of what is a marginal farm or an uneconomic farm in Victoria is for the State Government to suggest and to discuss with the Commonwealth. Senator O’Byrne asked why the S25m is not being divided amongst the States, with so much being given to each State. As the scheme is voluntary it is most difficult for the Commonwealth or a State to predict the rate at which farmers will come forward to offer their land. Money will be made available as needed by the States over the 4 years up to the maximum of $25m. The 4-year period will be a common one for all States. A decision has been made that the money will not be divided up beforehand. I think that answers most of the queries that have been addressed to me.

Question resolved in the affirmative.

Bill read a second time.

In Committee

Clauses 1 to 5 - by leave - taken to gether, and agreed to.

Clause 6 (Payments by Commonwealth).

Senator WILKINSON:
Western Australia

– I wish to draw attention to clause 6 in the terms 1 have already mentioned. 1 have accepted the reply of the Minister regarding his interpretation of this clause. It does seem to me that the drafting could have been a little more careful. Let us take clause 6 in conjunction with clause 4 which states:

The Commonwealth may make with any State an agreement providing for the making of payments by the Commonwealth to the State for the purpose of a marginal dairy farms reconstruction scheme . . .

If we take them together we can reach the conclusion that clause 6 is offering money to the States on a$1 for $1 basis. It seems to me - and I am not a draftsman - that it would have been preferable if in clause 6 we had referred to a refund of the amounts that would be paid to the States. I do not intend to propose an amendment; I am merely suggesting that a little more care might be exercised in drafting clauses such as this. To my mind, this is an ambiguous clause. Having said that, the Minister can be assured that I accept his explanation. However, in any future discussion or appeal about what this clause means it is the Act itself which will be considered and not the Minister’s second reading speech or the Minister’s reply. Therefore the wording of the Act should be without doubt and it is for this reason I bring the matter forward. As the Minister has said, in other agreements to be made with the States this matter may be taken into consideration and may be rectified. I merely draw the attention of the Committee to this point.

Senator DRAKE-BROCKMAN:
Minister for Air · Western Australia · CP

– I would like to reply briefly. I thank Senator Wilkinson for bringing this matter forward. I realise the force of what he has said but, as he well realises, an amendment would have held up the Bill at this stage. I will point out what he has said to the Minister for Primary Industry (Mr Anthony) and will draw the attention of the legal advisers to it. While we cannot amend the Bill we can perhaps amend the agreement with Western Australia.

Senator WILKINSON:
Western Australia

– I omitted to say that I am in substantial agreement with what the Minister says. We find that clause 10, as he has already pointed out, does provide that advances can be made. So, if that is read in conjunction with clause 6 that would correct the position. But I was reading clause 6 in conjunction with clause 4, which seems to put the position the other way around.

Clause agreed to.

Remainder of Bill - by leave - taken as a whole, and agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator DrakeBrockman) read a third time.

page 2517

SUSPENSION OF STANDING ORDERS

Motion (by Senator Drake-Brockman) - by leave - agreed to:

That so much of standing orders be suspended as would enable 6 Bills relating to the dairying industry listed as Orders of the Day Nos 2 to 7 on the notice paper to be dealt with together at each stage.

page 2517

DAIRYING INDUSTRY LEVY BILL 1970

Second Readings

Debate resumed from 5th June (vide pages 2107, 2108 and 2109) on motions by Senator Drake-Brockman:

That the Bills be now read a second time.

Senator WILKINSON:
Western Australia

– 1 think it is quite wise that we should lake all these Bills together. The first Bill, the Dairying Industry Levy Bill, is the main Bill and the other 5 are subsidiary machinery measures which put teeth into the first Bill. I do not propose to say very much at this stage because the dairy industry equalisation scheme has been in operation for many years. The scheme was introduced in 1.934 and has had considerable success in its operation. We are reaching the point where, with a large amount of butter and cheese produced in Australia, there is a considerable imbalance between the home market, and the export market. This means that the scheme, which has always been a voluntary one up to the present, does provide some of the producers with an opportunity to get out of their voluntary connection with it. Because of th s I think the Government has been wise in introducing the Dairying Industry Levy Bill. All producers, without exception, will have to pay the levy, which will be distributed so that the industry W il remain on a firm basis. This, of course, does not get over the difficulty of finding markets. The Opposition supports this Bill.

I think we ought to look quickly at what the other Bills do so that we do not just accept them as being merely machinery measures. The Dairying Industry Levy Bill, as I have said, imposes a levy. The Da:rying Industry Levy Collection Bill gives the power for the collection of this levy, lt is necessary to set up a trust account to receive the moneys and also to disburse the moneys. This function is covered by the Dairying Industry Equalisation Bil. lt is proposed that a referendum should be held among producers to determine their attitude to the imposition of the levy and to the continuation of the equalisation scheme. The power to hold this referendum, as and when determined by the Minister, is contained in the Dairying Industry Equalisation Legislation Referendum Bill.

Then of course the Dairying Industry Act, which is the principal Act which controls the dairying industry, requires amendment. This amendment, to cover the payment of a stabilisation bounty on all butter and cheese, which is produced in Australia, is pro, ded for in the Dairying Industry Bill. The Processed Milk Products

Bounty Bill, which is the last of the 6 Bills thai we are considering in this multiple discussion, is purely a machinery one. I think there are about 3 or 4 words only in the principal Act which have to be amended to bring this legislation into line with the proposals of the Dairying Industry Levy Bill.

The Opposition is not opposing this series of 6 Bills. We believe that the legislation which was introduced by a Labor government in 1934 has proved itself over the years. The arrangement is very satisfactory to the producers, and the Labor Party wants to see it continued. Anything that gives the stability that is provided for in these Bills is only to be commended. Therefore, the Opposition has much pleasure in supporting the Bills.

Senator WEBSTER:
Victoria

– The 6 Bills before the Senate are machinery measures to support an equalisation plan for the dairy industry. One Bill - the Processed Milk Products Bounty Bill - is expressed in some 6 lines of writing. This indicates why these Bills can be considered together. The Bills are designed to give statutory support for the dairy industry equalisation plan and the proposals seek to endorse the proposals of the Australian Dairy Industry Council and Federal and State dairy organisations. One comment I make is that the Bills before us resolve some of the points that were mentioned last night regarding efficiency within the industry. I have felt quite excited at times when people have spoken about the supposed inefficiency of the dairy industry. I have felt that these comments have been very unjust. I do not doubt that some producers could be more efficient, but if one compares the dairy industry with that of overseas countries one finds that wc in Australia can be particularly proud of this industry as we are of many of our other industries.

I refer the Senate to an article, which [ think is being published at the present time, by Bill Craven, whom some people may know, in collaboration with Mr T. Phillips and Mr G. Wilson, both of whom have an interest in the dairy industry. The article to which I refer the Senate is headed ‘What Does Dairy Industry “Efficiency” Really Mean?’ This question has been discussed previously in the Senate. The writers of this article state:

The ultimate ‘efficiency’ is really the ability of the dairy farmer to astutely combine all these factors so that the greatest income can be earned for the lowest cost or labour input in a given set of circumstances.

In the article they refer to production per cow, production per acre, production per unit of labour and production per unit of capital employed. These are important matters. With the concurrence of honourable senators I incorporate in Hansard 2 schedules, one of which indicates the prices received by dairy farmers in a number of countries in 1968-69 while the other indicates the representative butter prices in certain countries.

I believe that those 2 schedules demonstrate the efficiency within the dairy industry, so far as cost to the community is concerned. The dairy industry, as do other primary industries at the present time, faces a number of problems. 1 believe that the industry must organise itself into a more effective force to deal with complex marketing problems. It is necessary to find new and acceptable products which may enhance sales and returns to the industry, both at home and overseas. Products, such as the milk biscuit, may add new interest to sales overseas. This is essential if we are to dispose of our milk at the present time. Surplus whole milk eventually finds it way into the manufacture of butter. As was mentioned by the Minister for Air (Senator Drake-Brockman) when he was replying to the second reading debate on the Marginal Dairy Farms Agreements Bill, butter is the only product of the dairy industry which is over-supplied at the present time. The establishment of milk plants in other countries has proved an important development and indeed a very ingenious way in which to dispose of some of butter’s by-products.

I believe it may be necessary to find a basis for a quota system for traditional dairy farmers as problems in other primary industries might encourage new producers to enter dairying. Efficiency in output and handling must be constantly in mind and, as I have said, the average Australian dairy farmer and his industry can be proud of the achievements to date. But the policies of other larger and stronger nations than we cannot be foreseen in the future. Should other countries act to produce surpluses of dairy products, the problem which faces dairying but which in truth to this stage has not arisen will inevitably present insurmountable difficulties for . this industry throughout the world, and without the continuing support of one’s home government, then this industry certainly faces great problems. I believe that it is nationally important to ensure that a sound and stable dairy industry is maintained in Australia. I believe that the industry must immediately be concerned with this question and must seek to adjust its output. These adjustments should just not give in to the demands that people within our community and overseas express, that Australia should lose her valuable overseas markets just because in these years foreign governments can adjust their economic policies to price the Australian product off world markets.

Price is not the only factor. Quality, finish, the service that can be supplied and the terms of payment for our exports which can be made available and in which this Government must take a greater interest are important factors which require critical evaluation. Renewed efforts are required into research for new and acceptable products. I would advocate that financial aid in this area, particularly for research, might be found from federal resources. 1 believe that the imports from countries which prohibit Australian produce on their markets should be completely eliminated from our Australian market. A new aggressiveness must be fostered by the industry in retail packaging and selling. The States from which overproduction is coming, which are Victoria and Tasmania, must adjust or other producers and indeed other State governments might react to the disadvantage of those over-producing Stales. 1 believe that the Federal Government must indicate its willingness to continue its support of the industry by assuring an acceptable level of underwriting of equalisation of returns. I believe that the industry may be assured that the Federal Government will do this. In these 6 Bills before us, the Federal Government endorses its support of the dairy industry. I am delighted to hear that honourable senators opposite also support these measures.

Senator McMANUS:
Victoria

– Very briefly, the Australian Democratic Labor Party supports all these measures because they are necessary for the welfare of the dairying industry. Further, I was delighted to hear the assurance from the Minister for Air (Senator Drake-Brockman) a few minutes ago, that the Government is concerned to retain a family farm interest in the dairying industry.

Question resolved in the affirmative.

Bills read a second time together, and passed through their remaining stages without amendment or debate.

page 2520

DEFENCE BILL 1970

Second Reading

Debate resumed from 10 June (vide page 2213). on motion by Senator Sir Kenneth Anderson:

That the Bill be now read a second time.

Senator CAVANAGH:
South Australia

– This Bill causes the Opposition some considerable concern. The purpose of the Bill is to permit Parliament to decide the salaries of the Chairman of the Chiefs of Staff Committee, the Chief of the Naval Staff, the Chief of the General Staff and the Chief of the Air Star]’, and to provide for each Chief of Staff an allowance of SI, 000 per annum. The amendment which provides that Parliament shall decide the salaries of these Chiefs of Staff is to operate from a date to be proclaimed. The clause which provides for the payment of the allowance is to operate from 16th April of this year, which was the date on which the Senate disallowed a regulation which provided for the payment of such allowances.

When this measure was first introduced into the House of Representatives clause 4 was not included in the Bill. The Australian Labor Party, meeting as a Caucus, decided its attitude on the Bill as it stood at that stage. The Bill then provided that the salaries and annual allowances paid to the Chiefs of Staff shall be such as the Parliament decides from time to lime. Of course, nobody could oppose the Bill in those terms. But when this measure was debated in the House of Representatives the Minister for Customs and Excise (Mr Chipp) moved an amendment to clause 2 of the Bill and sought the insertion of clause 4. I do not thinkthat the amendment to clause 2 of the Bill is relevant to this discussion. The Deputy Leader of the Opposition (Mr Barnard) in the other place, who was handling the Bill on behalf of the Labor Party, protested about the fact that he had seen the proposed amendments only 4 or 5 minutes earlier. The Minister for Customs and Excise apologised to the Deputy Leader of the Opposition, who then said that, although he had not had time to consult his Party about the proposed amendments as he had only just been notified of them, he was prepared at that stage of support the Bill in its entirety as it was the desire of the Government to expedite the business before the House of Representatives and rise until the Budget session.

Since then the Labor Party has had an opportunity to look at and discuss the Bill. While it adheres to its previous decision that clauses 1. 2 and 3 of the Bill meet with its approval there is some doubt as to whether clause 4 meets with the approval of the Labor Party. Clause 4 provides for the payment of an allowance to Chiefs of Staff in the Services. It would appear that the allowance is in effect an increase in the salaries paid to Chiefs of Staff, but this additional amount will be tax free. The Regulations and Ordinances Committee has reported on the payment of such an allowance. It is an innovation and the question is whether it should be provided by way of regulation or by Act of Parliament so that it would receive the considertion of the Parliament.

A tax free allowance was granted to parliamentarians as the result of a report which was submitted to the Parliament by the Richardson Committee following evidence which was taken by it. The Richardson Committee reported that politicians had to incur certain expenditure in order to retain their positions in the Parliament and to carry out their duties. As a result of the report of the Richardson Committee parliamentarians were granted an allowance to meet the expenditure they incur which people in other occupations would not normally incur. As this allowance could not be regarded as being income in the proper sense of the term it was not subject to taxation. Variations have been made in the allowance of parliamentarians ever since the adoption of the recommendation of the Richardson Committee. These variations have been in accordance with variations in the cost of living and other factors.

In 1968 a similar allowance was granted to permanent heads of departments of state and certain statutory officers. In introducing the measure on 27th November 1968 the Minister for Supply (Senator Sir Kenneth Anderson) gave the reasons why such allowances should be paid to these people. His reasons are recorded at page 2445 of Volume 39 of the Senate Hansard. In giving the reasons for extending the payment of a tax free allowance to permanent heads of departments of state and certain statutory offices the Minister for Supply said:

The annual allowances are for the expenses of office in which these senior officials are necessarily involved but which, by their nature, cannot be met by direct reimbursement. Similar allowances are paid to senior officers in the New South Wales Public Service and in related government employment and, of course, in many positions in private enterprise. In reaching its decision, the Government has taken account of the constantly increasing demands placed upon the permanent heads of the departments of state and statutory office holders and their very heavy responsibilities in the affairs of our country. I commend the Bill to the Senate.

Although it may have been, when looked at in retrospect, a weak argument, nevertheless there was some justification at the time for the paying of such an allowance for the expenses of office of these senior officers. It appeared at that time that an additional amount should not be included in their salaries to meet the expenses of office. Similar allowances were also paid in the New South Wales Public Service and certain sections of private industry. Now there is to be an extension of this tax free allowance to another section of the Public Service without any explanation whether the persons concerned actually incur expenditure other than their normal living expenses, or whether they incur expenditure by virtue of their office, in which case it should not be part of their taxable income. No explanation has been given of the reason for the extension of this provision to another section of the Commonwealth Public Service. The second reading speech of the Minister for Supply merely states that, because this allowance was extended in 1968 to certain sections of the Commonwealth Public Service, it should be extended to other sections in 1970. It is possible that it will be extended to another section in 1971. What concerns me is this: When does the working man receive any of this tax free income? He is denied even the cost of his fares to and from work as a taxation deduction. Surely some justification must be established if an allowance is to be granted.

I have been informed that although most heads of departments receive such an allowance the heads of departments of the Parliament will not. I have had occasion to attend Senate select committee inquiries at Parliament House when the Parliament has been in recess. I know that on many occasions overseas visitors - perhaps someone from the Commonwealth Parliamentary Association or the Inter-Parliamentary Union - are in Canberra and have to be entertained by the Clerk of the Senate or the Clerk of the House of Representatives. No allowance is paid to this section of the community which actually incurs an expense of office. The Opposition is not opposed to granting an allowance if the expenditure is necessary to fulfil the functions of a position. The Opposition also agrees that this allowance should noi be taxed. 1 notice that the salaries and allowances of certain officers of the defence forces shall come into operation on a date to be fixed by proclamation. In other words, salaries and allowances will continue to be paid in accordance with the regulations which are in existence and will be included in the next appropriation Bills. Therefore, when we make an appropriation for a department from year to year we make provision for the salaries and allowances of the officers of that department without inquiring as to why such allowances are being paid. At one time when the Parliament was debating the appropriation Bills a detailed list of the salaries and allowances paid to Chiefs of Staff and so on was provided, but this seems to have been cut out in the last 2 years. Therefore, 1 move:

At end of motion add -

**, but the Senate is of the opinion that there should be a full review of the scheme of annual allowances for the expenses of office and that for this purpose there should be laid on the Table of the Senate, before consideration of the Appropriation Bil] 1970-71, a comparative statement setting out the annual allowances for expenses of office paid to -

Senators and Members who are office bearers of Parliament;

First Division officers of the Public Service;

First Division officers of the Parliamentary Service;

Heads of statutory corporations;

Members of judicial, arbitration and other tribunals; and

any other person - such statement to include reasons for the differential in the rates of allowances for the expenses of office”.

If my amendment is accepted it will mean that the Senate will be able to ensure at all times that the expenditure incurred is necessary and that the payment of an allowance to a senior official to carry out the duties of his office is justified. I believe that copies of the amendment have been circulated.

The ACTING DEPUTY PRESIDENT (Senator Laucke) - Order! Is the amendment seconded?

Senator Murphy:

– I second the amendment.

Senator CAVANAGH:

– I now turn to the other question. No justification, such as a claim that expenditure is incurred by the Chiefs of Staff, has been advanced for payment of the allowance. There is some doubt about our ability to support clause 4 of the Bill which was inserted in the other place and which relates to payment of the allowance. We are concerned also that the payment is to be made on and from 16th April 1970. This arises possibly out of the attitude that the Senate has adopted over recent weeks in relation to the importance of the legislature. We believe that the Parliament, not Ministers or heads of departments, should rule.

Regulations 112 and 113 were published in the Commonwealth ‘Gazette’ on 31st July 1969, and regulation 1.17 was published in the Commonwealth ‘Gazette’ on 8th August 1969. In accordance wilh the Acts Interpretation Act, a regulation has effect from the date of gazettal and remains in effect until it is disallowed by the Parliament. Members of Parliament have 15 sifting days in which to submit a motion for disallowance of a regulation. The Regulations and Ordinances Committee submitted a report on those regulations to the Senate and a motion for disallowance was moved. That motion for disallowance was carried by the Senate on 16th April 1970 and thereafter the regulations had no effect. In its 27th report the Senate Standing Committee on Regulations and Ordinances pointed out that it had always accepted the responsibility of ensuring that regulations complied with the relevant Act. The Committee was concerned about the regulation making power in the statute. The regulations concerned were the Military Financial Regulations, the Naval Financial Regulations and the Air Force Financial Regulations. In the main they are in accord with section 124 of the Defence Act which provides:

The Governor-General may make regulations, not inconsistent with this Act, prescribing ali matters which by this Act are required or permitted lo be prescribed, or which are necessary or convenient to be prescribed, for securing the discipline and good government of the Defence Force, or for carrying out or giving effect to this Act, and in particular prescribing matters providing for and in relation to . . .

The fixing of the rates of pay of members of the Defence Force who are paid for their services.

In accordance with that regulation making power the Governor-General has always fixed by regulation the rates of pay of members of the Defence forces, but for the first time he has fixed, in these regulations, an allowance of $1,000 a year. In the opinion of the Regulations and Ordinances Committee - this was the opinion of the Committee’s legal adviser and of legal members of the Committee who adopted their legal adviser’s opinion - it was very doubtful whether the Governor-General had power under the regulation to fix an allowance. The Committee submitted a report recommending the disallowance of the regulations on the grounds that:

It is doubtful if they are properly authorised under the regulation-making power of the Statutes and therefore if they are in accordance with their relevant Statutes; and
Apart from any previous regulations which may have been issued1 under the regulationmaking power of the Statute, the provision of this annual allowance is not an administrative detail but an important innovation more appropriate to substantive legislation.

The Regulations and Ordinances Committee sought disallowance of the regulations for 2 reasons; firstly, that it was doubtful whether the Governor-General had power to make the regulations and, secondly, if the Governor-General did have that power the payment of the annual allowance in question was an innovation more appropriate to be dealt with by Parliament than by regulation. The Senate agreed to the motion for disallowance and in doing so upheld the Committee’s decision. Whether it can be said that the Senate upheld the Committee’s decision because it believed that this was not a legal exercise of power, or because it believed that this was a matter more appropriate to be dealt with by the Parliament, one does not know. One does know, however, that Senator Wood submitted the report of the Regulations and Ordinances Committee and, for the reasons set out by the Committee in its report, moved the motion for disallowance. One can only interpret the Senate’s majority vote on the motion as an indication that it upheld the Committee’s point of view, namely, that it was very doubtful whether there was power for the Governor-General to make the alteration in question and, if there was such power, the alteration should have been made by the Parliament and not by regulation.

In his second reading speech the Minister said that the Government’s legal advisers were firmly of the opinion that power did exist for the Governor-General to mate such a regulation. So we have 2 sets of legal opinion, and a decision must be made by someone. 1 hold the opinion that the Senate in adopting the motion proposed on behalf of the Regulations and Ordinances Committee said in effect:’We believe that there must be some doubt about the power of the Governor-General to make the regulation’. Therefore, unless someone takes the question to the High Court of Australia for decision, the will of the Senate must prevail. If the Senate’s interpretation is correct - that is, that it was not within the power of the Governor-General to make the regulation - all payments made to 16th April were illegal payments or payments made without justification; they were never authorised payments. If we agree that an allowance of $1,000 a year should be paid to the Chiefs of Staff, surely we should validate the payment as from the date on which the Government decided to pay it, which was about the end of July or possibly in August last year. The allowance was paid for 10 months until the Senate disallowed the regulation for reasons which questioned its legality. If we uphold the Senate’s view we should make clause 4 of the Bill which relates to payment of this allowance retroactive to the date of publication of the regulation. That would then place beyond any doubt that it was a legal payment.

The Senate disallowed the regulations, and in doing so it accepted the report of the Regulations and Ordinances Committee that there was some doubt about the legality of paying these allowances under the regulations. We recognised that the regulations did not exist after 16th April. Now we have before us a Bill which will authorise the payment of these allowances as from 16th April. The Government is saying that it does not accept the Senate’s decision to disallow the regulations. This Bill is a rejection of the Senate’s decision on this question. It is usurping the power of the Senate.

The Minister had legal advice which was contrary to what the Senate decided, but nevertheless the Senate, which is a higher authority, decided something. By the wording of the Bill the Government says that it accepts the Senate’s decision to disallow the regulations. It says it is prepared to pay the allowances from the time when the regulations were disallowed but is not prepared to accept that there might have been an illegal payment before that, which could have been the Senate’s opinion. The Government says: ‘We will override the Senate’s decision. We are a superior authority to the Senate and we will take no notice of its decision.’ As a senator, 1 take exception, as I think most senators would take exception, to this attitude of the Government. If we decide on the payment of the $1,000 we should decide very forcibly that in order to validate the payment it should be dated back to the time when the Government agreed to pay it. I therefore ask the Senate to consider the points I have raised. Whether and when we should pay it are perhaps questions to be decided in the Committee stage.

In moving my amendment I point to the ramifications. We could be making handouts to certain heads of departments with no knowledge of whether the allowance is a suitable reimbursement for the outofpocket expenses they incur in fulfilling their functions. Before we make any future appropriations for allowances we should know what the allowances are for. whether they are to cover expenses incurred and whether any increase should be given in the salary and not in the allowance.

Senator McMANUS:
Victoria

– The Democratic Labor Party supports the Bill. Wc believe that no doubt there are very good reasons for it. However, while this Bill deals with only a small matter in regard to allowances my Party is very concerned about the whole question of salaries and allowances which at the present time are paid to members of our armed forces. This is not the time to go into a discussion which would be of such a wide character as that, but in a few words I want to say that we are gravely concerned at the discontent in the armed forces with salaries and conditions. Improvements commensurate with the improvements in salaries and conditions of other members of the community have not been made in the salaries and conditions of members of the armed forces.

– It is a matter for some debate and judgment. I do not suggest that this Bill is the vehicle for it. I think it would be accepted universally that in certain fields of endeavour and at certain levels allowances are paid. These allowances are paid for a variety of reasons. They represent extra curricula payments which people at certain levels of engagement are required to meet in their employment. Whilst this amendment does not deny the second reading passage of the Bill, I say that it is inappropriate to the Bill. 1 think it would be more practicable to bring down a resolution which could be debated in the Senate. The debate could cover the substance of the points made but it would not be linked to the Bill, which deals with the situation relating to the heads of 3 Services who were subject to the disallowance of the regulation. I would not think the Senate ought to be debating it in that context at all. I suggest the Senate has its rights and privileges to introduce a motion for consideration of a certain aspect of allowances, obviously having regard to First Division officers of the parliamentary service because, significantly, they are the only ones not in the category the honourable senator has mentioned. Other forms of the House could be used. That would be the more appropriate time to do it. For that reason I resist the amendment.

Senator MURPHY:
New South WalesLeader of the Opposition

– I support the amendment. The Leader of the Government in the Senate (Senator Sir Kenneth Anderson) has suggested that only officers in category (c), which relates to First Division officers of the Public Service, were not given an annual allowance for expenses of office. I do not know whether that is right or not. I do not know what happens in regard to the heads of statutory corporations. I do not know what happens in regard to the various tribunals.

Senator McManus:

– We should know.

Senator MURPHY:

– Yes, we should know. I think this practice has gone on for too long. Whatever the rights or wrongs, we should know. We should be able to see, examine and compare. Some of the things I do know about seem to me to be extraordinary. I could never understand and I cannot understand now, for instance, why the Deputy Leader of the Opposition in the Senate - I do not select him or that office especially because I am sure there are other anomalies - should be paid an allowance less than that proposed under this Bill to be given to various generals. I cannot understand why he is given less than the heads of departments. As everybody knows in the present Deputy Leader and his predecessor, the late Senator Cohen, we have had two of the most hospitable and generous people ever to sit in this Parliament. It is enough simply to refer to that to show the kind of anomaly that exists. I think it is time that we knew what is happening. 1 was astonished to learn that the Legislative Research Service of the Library could not find for me the salaries and annual allowances of heads of various corporations and so forth. The answer was simply that they could not be found. The various bodies are not in the estimates, lt is just not good enough when you go to the great human computer and put in a question to be told that the information just cannot be found. Various senators and members have started to ask questions about these matters. We are taking the first convenient step. Senator Cavanagh has put forward a proposal so that we will get the information. Presumably it will be supplied to us when we come back on the next occasion. I think it is time that all this secrecy was swept away. lt is amazing how these things can go on year after year. Those who are responsible ultimately for the just disposition of the public moneys do not really know whether they are doing justice. Here is an endeavour to get us the information which will enable us to do that justice. I suppose if one looked far enough one would be able to dig out the allowances which are set forth in regulations and there may be other ways of finding some of them, but it is certainly time that they were assembled together in a convenient form and made available to us.

I commend Senator Cavanagh’s proposal to the Senate, f think we should set out to see that there is proper relativity in salaries and allowances throughout this community in the area for which we are responsible. From the facts of which I am aware, I am satisfied that there is not such a proper relativity, and I think we should enter upon the task of ensuring that it is achieved. 1 do not know what reasons the Government will come up with except to say that the present situation has always existed. That is no just reason for some of the differentials.

Senator GREENWOOD:
Victoria

– I rise on the discussion of this amendment which has been moved to express very shortly . 2 views. I share the concern which Senator Murphy has expressed that allowances arc paid and the Senate is not aware of the persons to whom these- allowances are paid or of the amount of those allowances. It is feared - 1 suppose there is basis for the fear - that the relativity in the allowances is something which ought to be scrutinised because some anomalies would ‘ be revealed. This is part and parcel of an inquiry, as I see it, which the Senate has continued from the discussion when the Parliamentary Counsel Bill was before the Senate. Concern was then expressed that salaries - and high salaries - were paid simply as the Governor-General determines. The view which has subsequently been expressed by the Senate is that in other areas where salaries are similarly paid these determinations should be open to public scrutiny and amendments have been made to achieve that end. As I said, this appears to be involved in what Senator Murphy has said today in support of Senator Cavanagh’s amendment, but sharing that concern does not lead me to feel that amendment is the appropriate way to achieve the desired end.

I did not understand the Leader of the Government (Senator Sir Kenneth Anderson) to be saying that there should not be this inquiry or that the information should not be available. I understand him to say that that is not the vehicle by which this inquiry should be undertaken. He said - I think this was borne out by something Senator Murphy subsequently said - that invidious comparisons would be made between the allowances being paid under this Bill and allowances of other officers. If there is an appropriate case for an inquiry, and I believe there is, then I feel it should be instituted after the initial facts have been ascertained and in the light of appropriate reforms or remedies which those facts reveal.

Senator Branson:

– Does the amendment ask for an inquiry?

Senator GREENWOOD:

– It does not ask for an inquiry. It simply expresses the opinion that there should be a full review of the scheme of annual allowances, and it goes on then to ask that there should be laid on the table of the Senate ‘a comparative statement setting out the annual allowances for expenses of office paid to’ about 6 groups of people. My thought is that all this information could be easily and better obtained by a question on notice. When the information is obtained and is available in Hansard, there will be the opportunity for a consideration of the material and the moving of any substantive motion which might flow therefrom. I certainly feel that that is a more sensible way of approaching this problem than to go ahead with the amendment which has been moved by Senator Cavanagh. As I said, it is an expression of opinion. It wants certain allowances to be tabled. It does not say for what purpose, and necessarily there would have to be some substantive motion at a later stage. I repeat that if the information is collected in the ordinary way, it will then be open to any senator to move a substantive motion.

The other point to which I wish to refer is the point raised by Senator Cavanagh as to whether or not the Senate is correct in permitting the position to continue whereby in an area of some legal doubt moneys have been paid as allowances to the chiefs of staff in a period prior to 16th April this year. The 16th April is, as I understand it, the date when this Bill was initially introduced into the House of Representatives in order to overcome the effects of the Senate’s disallowance of the chiefs of staff regulations. I am of the view that there is a considerable doubt as to whether these regulations are made in accordance with the statute. I appreciate that that was one of the reasons why the Senate Regulations and Ordinances Committee recommended a disallowance of these regulations. It was also one of the facts relied upon when the debate took place in this Senate and the regulations were disallowed. I do feel we can take too far this point of whether or not the moneys have been validly paid under a regulation.

The initial inquiry into these regulations took place because they were regulations which automatically came before the Senate Regulations and Ordinances Committee. That Committee saw that there were 2 points involved and each of these points was within the charter laid down for that Committee. The first one was that it was a substantial matter which was more appropriate for parliamentary enactment than for regulation. The case in that instance was particularly strong because there had been the salaries act of late 1 968 which granted these allowances to a host of senior public servants where previously they had not been paid. In that case why should some persons be paid it by regulation and not by Act? That point commended itself strongly to the Committee.

The other point was that it was doubtful whether the regulation was in accordance with the regulation making power conferred by the statute. The Committee had its own legal advice from its eminent legal adviser that it was not in accordance with the statute, and other lawyers would be inclined to agree with that view. But nevertheless the view has been expressed by the Government’s legal advisers, and I certainly see real scope for argument on this issue, that the regulations are within power. I feel one can take these fine legal points too far. I think that the Regulations and Ordinances Committee was quite right in bringing the matter before the Senate and I concurred in the vote of the Senate disallowing the regulations. But if questions of whether regulations are or are not within power are to be the standards of judgment in the passing of legislation, it is imposing on the Senate standards which at subsequent times would become impossible of management. As I see the position, the Regulations and Ordinances Committee’s obligation was met when, the regulations having been disallowed, a Bill was introduced into this Parliament. The Bill having been introduced I should have thought it was then a question of whether it was good or bad policy. I would regret it if the Senate acceded to the points made by Senator Cavanagh, although I appreciate the basis on which they were made. I think they elevated to too high a degree principles which may be appropriate for the Regulations and Ordinances Committee to consider but which should not, unless there are quite exceptional circumstances, which do not appear here, govern the Senate’s determination in a matter of this character.

Question put:

That the words proposed to be added (Senator Cavanagh’s amendment) be added.

The Senate divided. (The Deputy President - Senator Bull)

AYES: 26

NOES: 20

Majority .. .. 6

AYES

NOES

Question so resolved in the affirmative.

Original question, as amended, agreed to.

Bill read a second time.

In Committee

The Bill.

Senator CAVANAGH:
South Australia

– I want to raise some questions on clause 4 of this Bill. We discussed them in the second reading debate and I think it was advisable to do so then. However, it is not the intention of the Opposition to move for amendment of the Bill at this stage because we believe that the Government will act upon the opinion of the Senate which has just been expressed by acceptance of the amendment to the second reading. We shall leave the question of whether the payment of the SI, 000 allowance is a rightful payment until such time as we ascertain from the Appropriation Bil! the purpose for which the allowance is to be paid. After an examination of that matter we will come to a determination.

During the second reading debate I stated that this is a Bill to pay $1,000 a year without any particulars having been given. In the 1968 legislation covering payments to salaried officers, and in the legislation covering salaries and allowances for politicians consequent on the Richardson report, reasons were given for the expenditure, lt was indicated that certain expenses were involved in carrying out the duties of the offices concerned. Despite the fact that i raised the question at the second reading stage, on this occasion no account has been given of expenditure associated with the office which should not be taken into account with salary. The Minister, in reply, did not state that there was any such expenditure. The fact that there is can be verified only by the Government’s acceding to the Senate’s request and making that information available.

The Senate having agreed to the payment of an allowance of $1,000, the question arises as to the dale of operation of this legislation for the payment of that allowance. There seems to be some confusion about this. Possibly I did not express myself fully or clearly enough. There was no suggestion that the Government should act on the recommendations of the Regulations and Ordinances Committee. The report of that Committee was not binding on anyone, but once the Parliament accepted the report of the Regulations and Ordinances Committee it became u decision of one of the highest authorities in the land. Although we have conflicting legal opinions on the matter, one of the highest authorities in the land decided to accept a report which cast doubt on ‘one opinion. The Government should have accepted that opinion. This case will possibly never go to the High Court for its determination as to which legal opinion is correct.

The Government does not act upon the advice of its legal advisers if a court decision is given which is contrary to (he opinion of its legal advisers. A legal adviser can maintain that the court, particularly a lower court, is wrong. Then appeals can be instituted. Generally, if a judgment is contrary to the advice given, people say: ‘We do not accept that advice’. What we are considering is not a judgment of a court but a judgment of an authority which has the right to make such judgments under the Standing Orders of our Parliament. The Senate made that judgment and one would think that the Government would have accepted it. The Regulations and Ordinances Committee met its obligation and was satisfied because the Senate upheld its recommendations. The matter now involves the prestige of the Senate. In accordance with the report submitted the Senate decided to disallow the regulations. That report expressed some doubt as to the legality of the regulations. Having adopted the report, the Senate has some responsibility in the matter. Unless at some time in the future the AuditorGeneral or someone else questions the validity of the payment it will go on as it is and no one will be deprived of it. The important thing is that the Minister in upholding this legal opinion has cast doubts on the decision of the Senate. It must be remembered that even the Government’s legal advisers can be wrong. We had a Bill before the House, I believe, to validate payments that had been made since 1961, apparently without any authority.

Senator Greenwood:

– The honourable senator cannot really be putting forward the proposition that the Government should ignore the advice of its legal advisers in legal areas.

Senator CAVANAGH:

– No, I am not putting that. I am saying that the Government’s action on the advice it accepts must change in accordance with that judgment. The judgment could well show that the Government’s legal advisers were wrong. If there are 2 legal opinions on a question there must be some arbitration or adjudication. I submit that the Senate has the power to make that decision unless it is decided in a higher court. The Senate has done that. I think that the Government should accept the Senate’s decision as opposed to that of its legal advisers.

Sitting suspended from 1 to 2.1S p.m.

Senator CAVANAGH:

– I wish to make only 1 further point and it relates to a query raised by Senator Greenwood. He asked whether I expect the Government not to take notice of its legal advisers. Of course, there may come a time when a higher authority makes a decision and the Government will then be expected to accept the decision of the higher authority. No-one has argued against that proposition. In this instance there is doubt about the legal position and it is only assumption to claim that the Senate made its decision on the legality of the question. That was only 1 of the factors involved. I claim that the Senate made its decision on the Committee’s report, which cast doubt upon the legality .of the regulation and offered the view that the matter went beyond the power of the Governor-General.

I will illustrate my point in this way: Let us suppose that the Regulations and Ordinances Committee reported that regulations should be disallowed because in its opinion it was beyond the powers of the Act to make the regulations, purely on the basis of legality. Let us also suppose that this view was contradicted by the legal advisers to the Government and the Senate endorsed the Committee’s opinion. What should be the position then? Surely in a case like that the Minister should accept the Senate’s opinion rather than take notice of the Government’s legal advisers.

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

[2.17] - I have nothing to add to the explanation 1 gave before the suspension of the sitting. However, I would like to comment shortly on the final contribution by Senator Cavanagh. He gave an illustration in which he suggested that the Regulations and Ordinances Committee might recommend disallowance for the reasons he stated. 1 put to him that the other House could easily say that in its judgment it was a valid regulation. After all, the Parliament is not the final arbiter as to legality. Parliament can be the ultimate arbiter in determining whether to accept a regulation. I would say that that is a fact of life.

Senator Cavanagh referred to the prestige of the Senate. I would think that the prestige of the Senate is upheld by the fact that the point at issue is now being introduced in an Act of Parliament. An expression of opinion by a committee of the Senate is not a legal opinion. I repeat what I said before we adjourned for lunch: The legal advisers to the Crown believed that it was a valid regulation. It remained a regulation until the Senate disallowed it. The disallowance was an act of reality and that is why we now have this measure. I think it is taking a tremendously broad view to suggest that, because a committee of either House expresses the view that a provision is not within the framework of the legal requirements of the regulations, that is complete and absolute. That is not the point at issue. The point is that the Senate disallowed a regulation and an Act of Parliament is to be put in its place.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Sir Kenneth Anderson) read a third time.

page 2531

DEFENCE FORCES RETIREMENT BENEFITS BILL 1970

Second Rending

Debate resumed from 10 .lune (vide page 2214), on motion by Senator Sir Kenneth Anderson:

Thai the Bill be now read a second lime.

Senator DEVITT (Tasmania) [2.20J- This is a machinery measure, the intention of which is to bring the provisions of the Defence Forces Retirement Benefits Act into line with an amendment made in June 1959, if my memory is correct, to the Commonwealth Superannuation Act. Since the inception of the 2 schemes - the defence forces retirement benefits scheme and Commonwealth superannuation - it has been part of the system to keep their provisions in sympathy. The Opposition supports the Bill. However, it affords to the Senate an apportunity to discuss the defence forces retirement benefits scheme and to make some observations about it. I hope in the course of my remarks to point out the need for action to bring about a substantial change and a radical improvement in the scheme. 1 believe that since its inception in 1948 it has been demonstrated to have a number of shortcomings and to have given rise on many occasions to misgivings, doubts and very deep concern on the part of contributors to the scheme and its beneficiaries as to its efficacy and merit when weighed against similar schemes in other walks of life.

I welcome the opportunity on behalf of the Opposition to make some comments pertaining to this aspect of the measure. The scheme in its initial stages was designed to draw together the threads of the preexisting pension schemes in the 3 branches of the armed Services. I suppose it is apparent to honourable senators that in a scheme of this kind, particularly since it was the first of its type to be undertaken in the Australian Services, there would be many complexities and problems which would initially be hidden from view through a lack of understanding of how the scheme would operate. These have become apparent with the passage of time.

The scheme fails into 2 quite distinct parts - the scheme as it existed in its first 10 years of operation to 1959, and the scheme as it has existed since 1959. People who have studied the working of the scheme since 1959 have said that it is quite a good one and that generally speaking, with some exceptions which I will deal with shortly, it has served the purpose for which it was designed. But a great problem arises with the provisions of the scheme which have applied both before and after 1959. Perhaps 1 could indicate them to the Senate in no better way than to say that the scheme embraces in its provisions and ramifications between 200 and 220 pages of detail. Honourable senators will readily understand that an ordinary soldier, sailor or airman, or any person without very solid legal knowledge and experience in the interpretation of measures of this kind, would have and in fact does have a great deal of dificulty in interpreting the provisions of the scheme.

A number of people who have studied the scheme have said that this has given rise to very serious misgivings on the part of contributors as to its efficacy and the benefits it confers. 1 recall reading in the Canberra Times’ within the last few days quite a lengthy observation by a contributor to the scheme. In the course of the article he pointed out that, based on a period of 30 years contributions, the scheme would return only a fraction of what would have been returned to him if he had undertaken another pension scheme or some sort of assurance policy based on the same level of contributions over the same period.

I think all honourable senators will agree that a scheme of this type deals with many levels and ranks of the Services. First there are the 3 branches of the armed services and then there are the officers, non-commissioned officers and other ranks. The scheme has to deal with the various levels in the service, various fields of activity, various levels of contribution, various lengths of contribution lo the scheme and all the other things which make up the compound of the scheme. All the complexities and difficulties which could arise were not envisaged and could not have been envisaged when the scheme began, that is, during the operation of the Defence Forces Retirement Benefits Fund scheme in the period up to 1959.

I suppose it is not to be wondered that when an actuarial survey was made in 1964 it was found that the scheme had been quite substantially over-subscribed. In fact, I think this became apparent in 1959. When the actuarial survey was made and it was discovered that the scheme was substantially over-subscribed it was decided that there should be refunds to the participants in the scheme up to that stage. I understand that even now the amount over.contributed is being refunded. Honourable senators can imagine, because of the number of people in the armed Services, the complex, difficult and long drawn out task which was entailed. However, an attempt is being made to correct the situation.

I suggest to the Senate that any scheme which is based upon a partitioned or 2 part arrangement of this kind must carry within itself the seeds of its own destruction, or at least have sufficient complexities to make it extremely difficult to operate successfully. One of the things that we must set out to do in a scheme of this nature which deals with so many people from such a broad range of occupations is, if possible, to make the scheme understandable to those who participate in it. I believe that we have all been concerned to note the resignations of various ranks from the armed Services over recent times. Resignations and departures from the Services have been taking place at an alarming rate. It behoves us as a Parliament to endeavour to ascertain the reasons for this situation. I do not lay the total blame for this at the door of the inadequacy of the pension scheme, but I suggest that it is one element in the present dissatisfaction with Service life. If we have any sense of responsibility in this matter and any desire to correct the situation it behoves us if possible to undertake an examination of the scheme in an endeavour to remedy the problems and difficulties which have arisen.

We have seen from time to time some quite unusual things that have happened in this scheme. I had brought to my notice recently a case concerning a friend and former school mate who rose to a quite distinguished rank in a branch of the armed Services. He is to retire at the age of 50 next year and he has told me that notwithstanding the level of contributions that he has made to the scheme, because of the erosion of the value of money and the inadequate level of the pension which will come to him on his retirement, he will have to engage in other employment. In saying that I remind honourable senators that he is retiring at the age of 50, an age at which in the normal course of events he could expect to have another 15 years’ working life. He has been working at a skilled level in his particular branch of the Service. I do not propose to mention his branch of service. It does not help my argument to do so. His opportunities for employment after retirement from the Services are extremely limited. He is very worried about this situation.

He joined the Services at the age of 17 years and has served for 33 years. He served with some distinction during the war and was very lucky to come through as he did. This highly skilled person is to retire next year and will have to undertake civilian employment. This introduces an argument which could be advanced at another level, that it is rather stupid to lose people of his qualifications. But he will have to provide for his wife and himself for another 15 years by engaging in some sort of other employment. For this 15 years he will be receiving the benefit to which he is entitled from the scheme, but that will not be sufficient to keep him. Because of the erosion of money value his pension will diminish in value as time goes on and will not be enough to support himself and his wife because the scheme does not keep pace with the general rises in the cost of living.

Another case, the details of which were put into my hand earlier in the day, concerns a former officer who for some reason left the Services. He wrote a letter saying:

During the current debate on the above Bill I request you and your colleagues to make every effort:

to have section 53a of the Principal Act repealed;

I have not had an opportunity, because of the shortness of time, to look at the provisions of this section, but I believe that he spells them out later in the letter, which will enable us to understand what he means. The letter continues:

to have section S3 of the Principal Act amended so that reclassification to a lower degree of incapacity is not possible; and

to have section 83 of the Principal Act amended so that any dispute under the Act shall be first determined by the Repatriation Board.

In support of this proposition this former officer goes on to state: 1 am personally affected by these sections and I believe they are unfair to all disability pensioners under the Act. In particular, as a recently retired class B disability DFRB Act pensioner in employment at a remuneration of $6527 which is greater than two-thirds of my rate of pay immediately before retirement -

Obviously one of the provisions of the scheme is that an income of two-thirds of the previous rate of pay shall be liable to affect the pension. The letter continues: (namely $7037, two-thirds of which is $4691), 1 am liable at any time to receive no pension, have no entitlement to get back a lump sum of my contributions and have no right of appeal to an independent tribunal wilh specialised knowledge of service caused disabilities.

This is the sort of thing that exists in the scheme at present. I believe that there is a common desire to correct these anomalies and that it is high time that we did correct them. The Defence Forces Retirement Benefit Fund Board about 2 years ago reported to the Minister on a survey of the scheme that had been undertaken. One of the observations by the Board appears at page 3154 of Hansard for the House of Representatives of 9th June. The Board stated:

Having regard to the detailed information nowavailable as a consequence of this quinquennial investigation -

This was a reference to the survey of the scheme: it would be reasonable to suggest there is scope for examining the possibility of evolving a simplified scheme, based on the adoption of a uniform scale of salary contributions, for ail contributors.

As I said at the outset, the scheme is to bring into line with the Commonwealth Superannuation Fund scheme the provisions of the Defence Forces Retirement Benefits Act. If I may refer quickly to the introduction to the Minister’s second reading speech when the Bill was introduced in this place, he said:

The purpose of this Bill is to bring the formula that determines the category entitlements of more senior members contributing under the Defence Forces Retirement Benefits Act into line with the corresponding formula in the Superannuation Act.

Between 1963 and 1969 the formulae in the 2 Acts were comparable, producing maximum pension entitlements tapering down from 70% of salary or pay for the lower paid members of each scheme to approximately 50% of salary or pay for members at the highest level. With effect from 4th June 1969 the formula in the Superannuation Act was varied to produce a pension entitlement for staff at the highest level of approximately 60% of salary, if all available units were taken up on a contributory basis.

The reference to 4th June 1969 is to the period in history to which I was referring earlier. The Minister continued:

The change now to be made to the formula in the Defence Forces Retirement Benefits Act will have a similar effect. The change is to operate from 4th June 1969, the date from which the Superannuation Act formula was varied.

In his second reading speech the Minister spelt out the various details which go to make up the measure we have before us at the moment. For instance, 1 of the provisions is that only the entitlements of officer members will be affected by this proposed change. They will be examined in conjunction with the quinquennial investigation of the Defence Forces Retirement Benefits Fund as at 30th June 1969 to see whether there is a need to vary the rates because of the change in entitlement levels. One of the bones of contention expressed by members of the Services is the level of contributions that they are required to pay. I understand that this measure proposes a reduction from 22i% to 20% of salary, but I am sure that all honourable senators have been aware for some time that the contributors, the beneficiaries, under this scheme have been unhappy about the high level of contribution and the relatively low product of their contribution in terms of retirement benefit due to them at the end of their Service life. By some means or other we have to plug the gaps.

Earlier today Senator McManus referred to the problem of retaining highly skilled and trained personnel with years of experience in the armed Services. I believe that this is 1 area in which we can make life in the Services more attractive. An examination of the scheme must be a serious exercise. Firstly we must determine what has to be done to make Service life comparable with civilian life by providing the necessary family safeguards, salaries and entitlements of members of the Services to benefits upon their retirement. The scheme was reorganised substantially in 1959 with quite considerable benefits and since then it has operated reasonably well. The scheme, in itself a 2 part system, can never work adequately, and there will always be problems associated with a scheme that operates on this basis. In the other place, the Treasurer (Mr Bury), who was the Minister in charge of the Bill, did respond to a suggestion from the Labor Party spokesman on the Bill by indicating that he was amenable to an investigation of the scheme taking place.

I would strongly suggest to the Senate that the amendment which I propose to move shortly to give effect to the wish for the setting up of a committee to examine this scheme in all its detail ought to be adopted. Information upon which can be based a justification for an examination of the scheme is available and has been known, lt has surprised me that 2 years have elapsed since this information became available, particularly having regard to the degree of discontent which has been expressed from time to time. In fact, as I said, as recently as 2 days ago there were statements in the public Press from members of the Services about the workings of this scheme. There has to be some sort of common basis of contributions so that contributors, and members going into the scheme, know what they are up for and know what benefits will be conferred by the scheme. Any scheme which works on a basis where nobody can understand or interpret it is doomed or must necessarily create much unhappiness and ill feeling.

At the moment the Fund stands at SI 08m. It is interesting to note that in the initial stages of the scheme, up to 1959, the Fund was substantially over-subscribed, if that is the right term. A situation arose in the post-1959 period in which there was a deficiency of S3. 6m in the Fund. I can understand that there would be some difficulty in carrying out actuarial surveys, but it seems odd that in 1970 we should only now be returning to the contributor members their proportions of the overcontributions in years gone by. Since there is common ground upon which we approach this measure, and since there is no disagreement with its provisions, I content myself by saying that I believe it would be the wish of the Treasurer, who initiated this Bill, and it might be a wish expressed by the Minister handling the measure here, that there ought to be some proper inquiry set up. The Treasurer did comment that such an inquiry could be set up but he could not anticipate what the Senate would wish to do about it. He said it would be up to the Senate to give some expression of its point of view on the matter.

Senator DEVITT:

– This is something that comes later. The problems inherent in the present scheme are important and must be solved. We cannot pass them off by asking: Where are we to get senators?” I think we can get them. 1 do not imagine that an inquiry of this kind would occupy much time, because the Defence Forces Retirement Benefits Board already has conducted a survey of the problems and it would have ready at hand the sort of observations and recommendations which could help a committee of inquiry to iron out the problems in the scheme. In fact I think the Board has already reported to the Treasurer that it knows what the problem is, and I have a pretty shrewd idea what must be done to resolve the problems and get the Fund on a proper footing. I should not imagine that an inquiry would take a great deal of time. In any case it is an exercise which the Senate might undertake. In fact it was suggested that it should be a joint select committee of the 2 Houses of the Parliament.

The scheme involves many thousands of people in a particularly important and significant area of human endeavour and responsibility. In the light of the concern which I hope we have for our defence system such an inquiry should rank high in importance as a responsibility of the Parliament. 1 earnestly suggest that if some difficulty arises as to the availability of honourable senators because of the decision we took a few days ago and which will not be implemented for some time, it might be a wortwhile exercise to set up this committee of inquiry which will do much to dampen down the worries and concern of members of the defence forces. It may enable the re-establishment of the scheme to give effect to the need to provide members of the Services with a pension scheme comparable with that which would be available in civilian life. Because of the system under which the Services function, the higher the rank a person attains the earlier he retires and therefore the greater the problem that he faces when he walks out of the branch of the Services in which he was engaged. I believe that if we are to show a proper degree of concern for these people we will turn our attention to these matters at the earliest opportunity and resolve them.

I have heard quite high ranking members of the armed forces say that they could quite speedily provide at least an outline of a very worthwhile defence forces retirement benefits scheme. Returning to the question that Senator Marriott asked, I do not anticipate any great problem about staffing the committee. I commend the Bill and the Government for introducing it. I earnestly hope that all sides of the Senate will agree to the passage of the measure so that we can give effect to what I took to be the implied wish of the Minister and certainly to give effect to the wishes of the Australian Labor Party in this matter. I now propose to move the amendment, the terms of which I have intimated to the chamber. The motion is:

That the Bill be now read a second time.

As an amendment, at the end of the motion, I move the addition of the following words: but the Senate is of opinion that a joint select committee of senators and1 members of the House of Representatives should be appointed to investigate and report on the Defence Forces Retirement Benefits Fund.

The ACTING DEPUTY PRESIDENT (Senator Laucke) - Order! Is the amendment seconded?

Senator Willesee:

– I second the motion and reserve my right to speak.

Senator McMANUS:
Victoria

– The Democratic Labor Party supports the Bill. I think we are indebted to Senator Devitt for the very interesting survey that ho gave of the present situation, the indication which he gave of the feelings of members of the armed Services and the proposal which he put for a form of inquiry into what should be a proper defence forces retirement benefits measure. Nobody could possibly consider that the present system is satisfactory. The amount of dissatisfaction that exists in the armed forces and the number of resignations and retirements which occur - following which those concerned, who have perhaps been muzzled while they were members of the armed forces, give expression to their belief that the present system does not give justice-

Senator Marriott:

– Do they retire because of or for the retirement benefit allowance?

Senator McMANUS:

– At the moment I do not want to discuss why they retire or whether they retire because of some provision or other. I think that quite a number are resigning because they are dissatisfied with the arrangements.

Senator Marriott:

– Not because of retirement benefit allowances?

Senator McMANUS:

– They are entirely dissatisfied with the present situation of remuneration and with the defence forces retirement benefits that are available to those in the Services. It is essential that people employed in the armed forces have satisfactory remuneration and satisfactory retirement benefits, if the Government hopes to recruit people to the Services, because it will not be an inducement to the type of person whom the Government wants in the armed forces if intending recruits are told by those who have been through the mill that they are entering a form of service in which they will be inadequately remunerated and that they will not get satisfactory retiring benefits when they leave that service. While the present situation exists there is a barrier to the recruitment of capable people in sufficient numbers to take their places in our armed forces. We want people to serve in the armed forces and to be satisfied that they are not at a disadvantage compared with people who serve the community in other avenues.

I was interviewed by a couple of members of the armed forces only last weekend. There is abundant evidence that members of the armed forces are entirely dissatisfied with their positions as against comparable positions in outside employment or in the Public Service. How, in those circumstances, does the Government intend to recruit people to the armed Services? How does it intend to retain them? How does it intend to induce them to make a career of the armed forces when this situation exists? Senator Devitt put an impressive argument about the high cost of their contributions and the entirely inadequate benefits that they receive. Within the last couple of weeks

I have seen some Press statements by people who have been in the armed forces and who have pointed out what they paid in and what they goi back. Some of the statements were almost unbelievable. I just could not believe that the receipts of people who served for years in the armed forces could be so contemptible and so miserable. Yet when I put the facts before the people from the armed Service who saw me at the weekend, they said: ‘No. That is true’.

In those circumstances 1 think we have no alternative but to support a form of inquiry into the whole situation. 1 do not know that I am terribly keen on the inquiry being conducted by members of Parliament because I do not think that many of us would be qualified to make a determination on a matter such as this. I would think it would be more a matter for experts. I do not suggest that they should come from inside the Public Service. In order to ensure a feeling of complete impartiality I would prefer the inquiry to be conducted by an expert, as chairman, from outside government employment, who would be assisted by other members. I am not particularly wedded to one way or another, but I would prefer the inquiry to be conducted in the manner in which I suggest. However, if the only way in which we can get speedy action is for the suggestion put by Senator Devitt to be implemented I would be inclined to support it. 1 propose to wait and hear what the Minister for Supply (Senator Sir Kenneth Anderson) has to say. If the Government has a satisfactory proposition prepared I may be impressed by that. But if the Minister says that he likes the idea put by Senator Devitt but that he has no definite proposition to put as to how it should be implemented, my feeling would be to support Senator Devitt’s amendment. It would not delay the Bill. It is an expression of opinion and it could be interpreted by the Government as an expression of opinion that an inquiry should be held. 1 would still be open to persuasion on the form of the inquiry.

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

[3.53] - As the amendment was seconded, I shall not be closing the debate. When this Bill was discussed in another place the Treasurer (Mr Bury) indicated that he was prepared to consider the proposal to appoint a joint select committee. He pointed out in the other place that at the time he spoke there was not the capacity in terms of time to be more precise than that. Therefore, by way of reply to Senator McManus and to help his thinking on the matter, 1 say that the Government would not resist the amendment moved by Senator Devitt, which would be on all fours with the proposal accepted by the Treasurer in the other place. Therefore, no division will be necessary. That amendment will be accepted. I thank the Senate for the expected passage of the legislation. The purpose of the Bill is to bring the formula that determines the category entitlements of more senior members contributing under the Defence Forces Retirement Benefits Act into line with the corresponding formula in the Superannuation Act.

Senator Devit, built his connibution to the debate, lo a degree, on the problems inherent in the Act. He mentioned some cases and talked about particular cases. 1 think he set about to demonstrate some deep seated lack of knowledge in many fields of the Services in relation to the implications of the DFRB legislation. I am able to tell him thai an explanatory booklet has been compiled and is only awaiting the passage of this legislation before printing can be completed and an up to date booklet issued throughout the defence forces. That will be a help in regard to the type of problem that he mentioned in the debate. He also made reference to contributions as percentages of entitlements. Servicemen who contribute for their full entitlements under this legislation contribute, on average, for 20% of the pension benefits. This figure was formerly 22i%, but it was reduced in January 1969 in the light of the results of the first quinquennial investigation.

There is only one other matter to which I wish to refer. Reference was made to section 53a and invalidity pensions being suspended under that section. I want to make it clear that section 53a was inserted in the Defence Forces Retirement Benefits Act in 1959 on the basis of the Allison Committee’s recommendation that invalidity benefits should have regard not only to the medical condition of the ex-serviceman but also to his earning capacity and earnings. A decision to suspend pension does not sever a pensioner’s connection with the Defence Forces Retirement Benefits Fund; nor does it affect a contingent liability of the Fund in respect of the benefit entitlement of a deceased pensioner’s dependants. The pensioner’s case is kept under notice by the Defence Forces Retirements Benefits Board and is reviewed periodically for the purposes of section 53a.

When the pensioner is informed that his pension has been suspended under section 53a, he is also advised to notify the Board - stating the facts - of any substantial reduction in his civil remuneration. In the event of this occurring, the Board conducts a further review of his case as soon as practicable. I would add that a similar invalidity pension suspension rule exists in the superannuation scheme for Commonwealth public servants. That is interesting. As honourable senators know, there is inherent in this legislation an attempt to bring the 2 schemes together. I thank the Senate for the passage of this legislation.

Amendment agreed to.

Original question, as amended, agreed to.

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

page 2537

WHEAT INDUSTRY STABILISATION BILL 1970

Second Reading

Debate resumed from 10 June (vide page 2215), on motion by Senator Drake.Brockman

That the Bill be now read a second time.

Senator CANT:
Western Australia

– The purpose of the Bill now before the Senate is to amend the Wheat Industry Stabilisation Act 1968 in 2 ways. Firstly, it makes provision for quotas. Secondly, it will allow wheat to be sold internally at less than the home consumption price provided that it is not for human consumption. These 2 amendments are of very great importance to wheat producers and wool producers. They merit the earnest consideration of the Senate. These 2 rural industries are the backbone of our export earnings. Their earnings of foreign exchange provide the necessary amounts of money to allow capital imports for secondary industries.

It is common for members of the Australian Country Party to claim all the credit for the recent prosperity of the rural industries, whereas in fact the advances were made as the result of good seasons following severe droughts. In December 1968 the Treasurer of the day was putting it about that there was an 8% increase in the gross national product. In fact, it was an 8% increase in the gross national product in a drought year. So, it was not a normal year that was taken for the purposes of comparison. After taking all the credit for nature’s bounty, in 1968-69 the Government became alarmed because a record wheat crop of 540 million bushels was delivered. The Government became further alarmed in 1969-70 when it looked as though there would be a further large crop.

It is no good the Minister for Primary Industry (Mr Anthony) saying that he warned the industry about these things in March 1969, because without any preparations the Government instituted a system of quotas. I want no-one to be under any illusion as to where quotas originated. They originated right here in this Parliament, lt is no good the Government saying to the outside world that it was the States that imposed the quotas. The fact is that the Government provided sufficient money for the first advance payment of SI. 10 a bushel on a total wheat crop of 357 million bushels, and the States had to regulate the supplies within that national quota. So, the blame for quotas falls fairly in the laps of members of the Commonwealth Government and in particular in the laps of members of the Country Party.

One of the most damaging aspects of the quota system was that the individual quotas were not made known until almost the end of the growing season. They were part of the reason for the early election last year. The Government did not want the quotas issued before the election took place. There is no question that, had the quotas come out the day before the election instead of being sent out on the day of the election and being received by the farmers on the Monday following the election, the Australian Labor Party would have won 2 more seats in Western Australia and the Coutry Party would have been eliminated in that State. But that is the way things were managed. The quotas were held back in order that the farmers would not know what their fate was until after the election.

I turn lo the 1969-70 crop. Prospects were for a crop of 450 million bushels. Again, the Government was thrown into panic. Despite the fact that quotas were fixed, they were not fixed in time. The growers planted the same amount of acreage as they had planted in other years. The Government saw facing it a crop of some 450 million bushels. It had nowhere to store it. This again threw the Government into panic. So much of this wheat was over-quota wheat that it was doubtful whether the Australian Wheat Board would take delivery of it. In this instance, it would be necessary for the farmers themselves to provide their own storage facilities. The Government did make some moves to create more storage. The programme established by the Government was for a storage of an extra 170 million bushels. But. of course, fortune favours the brave. Droughts occurred in both Western Australia and Queensland and, in New South Wales, severe frosts were experienced just at flowering time. These factors let the Government off the hook considerably even though they were to the detriment of the growers.

The difficulty with the quota system as instituted by the various governments, with perhaps the exception of the Government of New South Wales, is that the quotas established are across the board quotas. That is to say, the quotas apply equally to the small grower and the large grower. They are not graduated quotas so that the burden falls most heavily on those who are producing wheat as a business and not as a livelihood. The small grower - the traditional wheat grower - was placed in a position where he did not have a cut in his business production but he did not have a cut in his standard of living. In most cases, he suffered a 20% cut in his quota. This meant, for the small farmer, a 20% cut in his standard of living.

The wheat growers became desperate in this situation. They became so desperate that, for the first time that I can remember - or for the first time that I can remember being recorded - farmers were on the march. In Victoria 10,000 farmers marched through the streets of Melbourne. In Western Australia, approximately 3,500 farmers marched through the streets of Perth. In Perth, the march was organised by the wife of a farmer. The march was organised for farmers’ wives despite the fact that many farmers joined in it.

Senator Devitt:

– In many cases, the farmer’s wife does a sight more work than does the farmer.

Senator CANT:

– We will talk about that later senator. The reason why this march was organised by the wife of a farmer was that insufficient income was available on farms and the husbands of the wives who took part in that march were out working in order to supplement the farm income. They were unable to knock off and take part in this organised demonstration to expose their position to the people of Australia.

Senator Drake-Brockman:

– Which march is the honourable senator referring to?

Sena:or CANT - I refer to the march in Perth, the march organised by Mrs Row.

Senator Prowse:

– It was not a march concerned with wheat. Is not the honourable senator speaking to a Bill dealing with wheat?

Senator CANT:

– If Senator Prowse would wake up now and again instead of being asleep all the time he would know what is going on in the Senate. That was the position with respect to the farmers. Still the Government did nothing to relieve their position.

The quotas for the 1969-70 season are again across the board quotas. Because this represents a further reduction in the total quota, the small farmer will be hit hardest again. Garatti will still have his quota of a quarter of a million bushels but the small farmer will have his quota cut down again. How can the grower who is producing only a living from his farm continue to live on that farm when his rate of production is being reduced continually? The only answer is for that farmer to leave his farm. Is that what the Government wants? There is complete silence from the Government side. The Government neither admits nor denies that this is what it wants.

Again, 1 ask: ls the Government wedded to the policy of ‘get big or get out’? Is that the policy of the Government? I heard it said this morning during the discussion of legislation related to a dairying equalisation scheme that that scheme was designed to buy out the uneconomic small grower and that this should be done in all other rural industries. So, here we go: The Government does believe in the policy of get big or get out’. These remarks apply particularly to members of the Country Party. The Country Party is the highest paid lobbying body in Australia. It is paid by Australian taxpayers to lobby on behalf of rural industries. What are members of the Country Party doing for rural industries? They have forgotten about rural industries now that those industries are in difficulties.

The results of the recent Victorian election expose the disaffection that exists between the Country Party and rural voters. More especially is this so when we consider that country electorates are loaded in favour of the Country Party vote. Members of the Country Party have forgotten all about country people. But they are still being paid for lobbying. I suppose they are lobbying now on behalf of mineral industries to see whether there is any dough amongst them. This is what the policy of the Government means - get big or get out. That is the policy which is fostered by the Government. No room will exist in the wheat industry for the small grower. In the past, the small grower has been the backbone of the industry. Now he is not wanted. Why has the Country Party walked out on those who have supported it over these many years?

In Western Australia farmers are faced with other problems. For the past 12 years, Western Australia has been governed by a Liberal Party and Country Party coalition. For the past 10 years, that Government has boasted of a policy of bringing 1 million acres of land into production each year. What is to happen to the farmers who are on this new land and who are working on these quotas? I refer to the farmer who has sunk some $20,000 of his own money and who has accumulated debts to stock firms of another $20,000. Now he faces a cut in quota. His new quota will not allow him to expand his farm so that he will be able to pay his debts. He will walk off his farm. He will not walk off that farm, as he walked onto it, with $20,000 in the bank. He will walk off with a loss of $20,000 and a debt of $20,000 around his neck. That is the result of the policy that is subscribed to by the Liberal Party and Country Party coalition in Western Australia. So, not only do members of the Country Party walk out on farmers in the Commonwealth Parliament but also they walk out on farmers in the State parliaments.

It is well known to anyone who visits farmers on new land holdings that they are in desperate straits and that they are walking off their farms every day. Even if they enjoy a good season, they have no hope of recovery because the across the board quotas which have been instituted will not allow them to produce sufficient to recover their losses. These are the farms in marginal areas. Western Australia is a wonderful State which seldom has bad seasons. Last year was the first bad season for about 25 years. Nevertheless these farmers are in marginal areas and if there is any difficulty with the seasons they are the first to suffer, if one puts together drought conditions, quota restrictions and the cost price squeeze the picture reveals almost an impossible position for the small grower. If restrictions are necessary - I believe they are in view of the present state of the industry which the Government has allowed to develop-

Senator Prowse:

– You are supporting quotas?

Senator CANT:

– 1 am not supporting quotas at all. I believe that there must be restrictions on production because the Government has allowed the big people to move in - the big people who have moved from stock to wheat in order to get a guaranteed price. These big people are given the same cut in quota as the small grower receives. Because the big man has been allowed to develop, the small man has had to have his quota cut. As I have said here before, there should be no quotas on production of 10,000 bushels or less. Let the big grower who produces more than 10,000 bushels carry the burden. The Government does not think about the small grower. All it thinks about is the big grower and of course the superphosphate firms. These are the people that the Government wants to protect. It is essential to have a quota system because the Government has allowed the present situation to develop but surely the quotas could be rationalised so that the burdens fall least heavily on those least able to bear them. Statistics of wheat production show that there was a big expansion of the industry following the 1965-67 drought in New South Wales. In that period the pastoralists who had lost their sheep turned to a cash crop. They will remain in the wheat industry because of the high amount of capital they expended in the purchase of machinery for the production of wheat. They will remain in the wheat industry so long as the price of wool is as low as it is at the present time.

The Government proposes to allow the selling of wheat internally at $1.45 per bushel. At the Committee stage I will move an amendment along different lines. Over quota wheat presents 2 problems. First, it takes up storage space which is expensive and in short supply. If the wheat is to be kept in storage for any length of time the costs increase. The object should be to clear this wheat as soon as possible but because of the policy of this Government the wheat cannot be sold in Australia at less than $1.71 a bushel, although 1 understand that the Wheat Board has allowed certain sales. In defiance of the Act the Board has permitted sales to be made at $1.45 per bushel and the Government allows this to go on. This legislation will have no retrospective effect. What does the Government do? It passes legislation and then allows the Wheat Board to breach the law. There should not be a restriction on the disposal of over quota wheat. At least it should earn something for its producers.

The Board is the body best able to judge whether the storage space should be cleared and whether the price offered for the wheat is economic in the circumstances. We have lo look at all the circumstances and not only those of the wheat industry. The silos are full of wheat, yet the paddocks surrounding them are littered with dying sheep and cattle. The farmers do not have the money to buy the wheat for their stock. We have had the spectacle in Western Australia of bins full of wheat being broken into by farmers who could not afford to pay the price set by the Wheat Board and by this Government under its legislation. Their stock is starving.

Senator Little:

– You would think they could afford to pay $1.48 a bushel, would you not?

Senator CANT:

– No I would not. I will move an amendment that will reduce the price. Farmers cannot be blamed . for taking this sort of action. Are they to stand by and see their life’s work fall apart and their stock dying when there are bins full of wheat in the surrounding paddocks? Any man with red blood in him would be trying to get the wheat out of the bins the best way he could, lo making a judgment on the price of over quota wheat the Board has to consider whether it should fix a price that will enable the grower to clear his storages and just to cover his costs for the year, or whether it should allow stock to starve. Ail factors should be taken into consideration. The value of the sheep that will starve and the value of the loss of wool production should be considered. Whether wool is worth producing at this stage is another matter but the Board should assess its value. This requires the judgment of experienced men. The Board consists of experienced rural producers and it is the body best able to make a judgment.

Another matter 1 wish to refer to is the impossible position of the International Grains Arrangement. The Arrangement purports to create a world stabilisation scheme for wheat. But how can it produce such a scheme when some of the biggest growers in the world are not a party to it? How can the scheme be successful when the price agreed on under the Arrangement is too high? This only encourages other countries to under sell the arranged price. And this has happened. The parties to the Arrangement were forced to cut the arranged price in order to compete with outside exporters, lt is all very well for the Minister to say that the integrity of the International Grains Arrangement has been retained. But how can it be retained when the United States of America and Canada are selling wheat at 10c a bushel below the arranged price? Australia used every trick it could think of, particularly in regard to freights, so that it could sell wheat at below the arranged price. Although the Minister for Trade and Industry (Mr McEwen) denied that Australia was selling wheat below the agreed price he finally admitted that it was so. The end result was that he had to advise the people of Australia that the Wool Board would cease its activities on the international market in order that Canada and the United States could retain their traditional markets. What I want to know is: What are traditional markets? In the world of free enterprise you find markets where you can get them. In order to satisfy those people that the Government had deceived over our marketing scheme, it agreed to withdraw our activity on the international markets. All of these conditions are reflected back to the farmers and, under the policy adopted by the Government, are reflected overheavily on the small growers.

I do not want to speak for too long although I could speak for a long time about this Bill. In view of the present circumstances of the sittings of the Senate 1 propose to wind up by moving:

Al end of motion add - but the Senate is of opinion that the Bill should’ provide for a one-price scheme for home consumption and export wheal, being a price which will return to the grower $1.48 f.o.r. per bushel which is equivalent to a guaranteed price of $1.5 li f.o.b. per bushel for exports up to a maximum of 200 million bushels from the crop of any season, to apply from the commencement of the current stabilisation scheme’.

The ACTING DEPUTY PRESIDENT (Senator Laucke) - ls the amendment seconded?

Senator Devitt:

– I second the amendment.

Senator LITTLE:
Victoria

– The Australian Democratic Labor Party has examined the Wheat Industry Stabilisation Bill. We realise that it brings into line decisions which the Commonwealth has made in association with the State governments. We regret that such legislation is necessary. However, it is inevitable if anything is to be done to try to stabilise a situation that has got completely out of hand. The major sufferers are the people engaged in wheat production which is one of the basic primary industries in Australia. We cannot accept all that the Minister for Primary Industry (Mr Anthony) said in his second reading speech, which was incorporated in the Senate Hansard report, when introducing this Bill. He made statements based less upon logic than, perhaps, a vivid imagination. The Minister said:

The build-up of stocks and the prospect of further large supplies at a time when world trade in wheat had suffered a serious decline from the record level of 1965-66 meant that the industry was confronted wilh storage and marketing problems such as had never before been encountered.

That statement is true. But whilst such problems had never before been encountered let us not run away with the idea that they had not been predicted. They had been predicted. 1 deplore the suggestion that people might seek to make political capital out of a crisis in such a basic primary industry as the wheat industry and forget about the interests of the people concerned. We of the Democratic Labor Party have reached the stage of having to say to the Government: ‘We are sorry, but we told you so’. In 1966, in record years of wheat production, we predicted that the present situation would develop. We did not have a crystal ball into which we gazed, in a world of make-believe, in order to come to certain conclusions to enable us to give the advice w.e offered not only to the Government but to the industry and Australia at large. We had only what everybody else had - the facts about what was occurring in the industry and in the international market.

The Democratic Labor Party warned the Government in 1966. It adopted a Federal conference decision that it was necessary at that stage to begin building extra storages for surplus wheat and lo make provision for the things dealt with in this Bill. We suggested at least that in case of drought provision be made for grain to be sold at practical prices to farmers with starving stock. We suggested this course as a means of saving the country from the repercussion of droughts which could occur and, indeed, which did occur. We suggested that this would absorb some of the grain surplus which we predicted would result from the mad development of the industry which was taking place at that time and which was out of ail reason when consideration was given to the problems of future world markets.

I agree with what Senator Cant said about the march held by people engaged in rural industry. I recall that in Melbourne 10,000 people marched to a place which they had wisely selected as a forum. They did not disrupt the life of the city of Melbourne, as happened in the case of another march. The rural marchers reached a place where they could hold a peaceable discussion without causing economic loss to the country. At that place they were addressed by representatives of all the political parties. The marchers who went there had no fixed political thoughts, lt was recognised by the Press, by radio commentators and, far more importantly, by the 10,000 farmers involved, that the only politician who spoke sense to them was Senator Frank McManus of the Democratic Labor Party. He was the only speaker to receive the plaudits of the Press, the radio news reporters and the farmers themselves. Senator McManus did not endeavour to make political capital out of the situation although the Democratic Labor Party had predicted the situation that would develop and perhaps was in a more favourable position to make political capital than any other parry.

The farmers know their problem. They know that it is an unfortunate problem which has developed to such a stage that extreme measures are necessary to alleviate it, let alone solve it. This Bill endeavours to do that. I want to dispute what the Minister said in another section of his second reading speech. He said:

Industry leaders were not slow to see that these problems would be compounded unless some positive remedial action were taken without delay.

I beg to differ. The industry leaders, particularly the Australian Wheat Board, were slow to read the message evident in developments in the wheat industry. They spent their time abusing the Democratic Labor Party for the predictions it was making and for saying that we were afraid of the consequences of the policy of expansion in which they were indulging. Part of today’s problem is due to the fact that industry leaders were slow to read the international message as to what was taking place in the wheat industry. I do not say that they deliberately got the wheat growers, big or small, into this position, as could perhaps be construed from the remarks of Senator Cant. No-one in Australia would set out deliberately to create the situation that has developed in this industry.

The Democratic Labor Party could not possibly accept the amendment Senator Cant moved. It seeks to establish certain things but he gave us no technical data or other information to substantiate his case for the prices he suggests. The Senate could not come to that decision or express an opinion that the prices set out in his amendment should be adopted. We do not know what will happen in the future on the local or the international market. No-one can predict the requirements. Senator Cant must make out a better case than mere criticism of the Government, however much such criticism may be warranted. He must present a case for fixing at this time the prices he suggests. We do not know what will happen on the international market at some future time. We do not know what will happen when we sell part of the tremendous stock of surplus wheat that we now have - that is if we do sell it. Senator Cant’s amendment would impose an unnecessary restraint on the people now charged with the responsibility of getting the best out of whatever may be offered on the world market or the home market in the future for the benefit of those most concerned with the result. For that reason and without, much more specific and conclusive evidence we cannot accept the amendment. No evidence at all has been presented to indicate that these fixed prices would be the prices at which we could sell the wheat, to begin with, or that they would bring some measure of alleviation to the problems of the wheat growers if it were possible - of course nobody, can say whether it is possible - to obtain, particularly on the international market, the prices that are set out in the amendment. I repeat that for those reasons alone we feel that the amendment should be rejected.

We would hope that bringing the Commonwealth into line with the States on these propositions that are put forward will alleviate the pressures that exist at the moment. We commend the idea which we advocated 3 or 4 years ago that restraints on the sale of this grain, particularly in times of drought when there is a need to obtain feed for stock, should be removed. Senator Cant gave a very emotional description of cattle and sheep around the silos that were stacked with wheat endeavouring to graze on the dust and dirt which was all that remained as a result of the drought. But can he tell us that the prices suggested in his amendment, as opposed to the Government’s proposition that the Wheat Board should have some rights to make a decision on this, are prices which the growers of the stock would be able to afford to pay in the circumstances?

Senator Cant:

– Senator-

Senator LITTLE:

– I know that Senator Cant is trying to tell me that this is for the normal home consumption wheat upon which he has set the figure of 51.48. But 1 believe that the Board must have a complete realisation of the requirements, whatever may be the cost to the nation at large of enabling stock to be fed in times of drought when we have tremendous surpluses of grain. I believe that we could have solved the problems of many of the people in both Victoria and Queensland in the last 2 years if there had been a more realistic approach to the problem of feeding stock that were then dying or being sold at prices that were a dead loss to the growers themselves.

This problem is one that transcends politics. None of us should be trying to score off others politically. Whatever has happened in the past has happened, unfortunately. This country and the people in primary industries are faced with problems of such magnitude that all of us will have to get together, irrespective of political advantage, to retrieve something from the situation and to help the people who are bearing the brunt of a burden which has been contributed to perhaps by national mistakes and by the general world situation in respect of which none of us in this Parliament can point the finger at anybody else and hold him responsible. It is in that spirit that we feel that this legislation should be approached. We feel that this measure - in itself is not a matter of great consequence inasmuch as it merely brings the Commonwealth into line with decisions that have already been reached on a State level in an endeavour in some small way to provide some minor solution to the tremendous problem that exists for people in this industry. For those reasons we will support the Bill.

Senator WILKINSON:
Western Australia

– 1 want to take only a few moments on this Bill in order, first, to straighten out some misconceptions about the amendment that has been moved by the Opposition, and secondly, to deal with one or two other matters in passing. I think we should remember that this Bill is limited in what it can do for the wheat industry. It is not a Bill to rehabilitate, reconstruct or re-organise the industry. It deals only with the wheat stabilisation scheme. Therefore it is limited in what it can do in approaching the problems that are facing the wheat industry. What the Opposition is endeavouring to do in putting forward this amendment is to re-allocate the money which is available for the industry. We have contended since the inception of the wheat stabilisation scheme that a one-price scheme is the ideal and that this is something which should be continued. lt was with this in mind that last year 1 moved an amendment which is rather similar to the one that we have now moved. I moved that amendment so that the amount of money which was available for the stabilisation scheme could be distributed over the whole of the wheat which was available up to the amount of 260 million bushels, 200 million bushels being for overseas markets and 60 million bushels for the home market. This is why Si. 48 is taken as the equalised price, lt is the guaranteed return to the grower. This is the important difference.

We cannot take into account all the other facets of the industry and try to rectify them at the same time. When J was speaking to the legislation 12 months ago I expressed the opinion that with the 2- price scheme we would have an increase in the price of bread. Immediately there were cries from the Government that this would not happen because the real increase in the cost of a loaf of bread would be about .02c. I contended that the increase would be of the order of lc a loaf but would probably be 2c because one cannot split up a cent for half a loaf of bread. This is actually what happened. Within I month of the legislation being passed the price of bread was increased by 2c. Because of the higher home consumption price there is an opportunity for blackmarketing of wheat across the State borders. It is well known that this has been going on this year.

There is another very serious matter about which we can do nothing under this Bill because it is outside its scope, and which was mentioned by Senator Little and Senator Cant. It is that we ought to be able to provide wheat for stock at reasonable prices - not at the home consumption price and probably not even at the export price. It was the idea of the Labor Party that we should have a No. 2 pool for excess wheat above the 260 million bushels and that this should be available for stock, for national emergencies and for disasters anywhere in the world. We could try to get what we could for it but at least we would be helping industries and people where there was a need. I think that this was a very important idea and it probably could have been written into the Bill, although there may be some doubt about that.

The final thing I want to point out is that I was very concerned about the inarches that were held by farmers in both Victoria and Western Australia. I took part in the Western Australian march. I received petitions from the farmers, and presented them in the Senate. This was the association that I as a member of the Opposition had with the problems and difficulties of the farmers in my own State. Senator Cant also had a number of petitions handed to him, and they were presented in the other place and also in the Western Australian Parliament. The Labor Party has shown a consistent concern for the wheat industry and we have endeavoured at all times to try to keep it on an even keel. This is demonstrated by the fact that it was we who introduced the wheat stabilisation scheme, which was recognised to be of considerable value by this Government and which has been continued up to the present time. It is only in the last two years, with the 2-price scheme, that a lot of difficulties have been disturbing the industry.

I have given those few facts because I believe that the amendment we have put forward is a perfectly reasonable one. The experience of the past 12 months has shown that the proposal in our previous amendment was the correct thing to do at the time the wheat stabilisation scheme was before the House last year. I hope that en this occasion we will have the support of honourable senators on both sides of the Senate and from the corner parties to enable the amendment moved by Senator Cant to be carried so that we can have a 1 price scheme again. Such a scheme will be to the benefit of the people of Australia and will not be detrimental to the v/heat growers of Australia.

Senator DRAKE-BROCKMAN:
Minister for Air · Western Australia · CP

– I thank honourable senators for their contributions to this Bill. I would like to remind the Senate that the Bill provides for necessary legislative action on the part of the Commonwealth to complement legislation already enacted by the States in respect of the implementation of a quota scheme for wheat deliveries and, the giving of discretionary authority to the Australian Wheat Board to sell wheat in Australia for other than human consumption purposes at reduced prices. If this legislation is not passed or if it is amended we will lose the faith of the States because, as I have said, the States have already passed legislation incorporating the provisions of this Bill.

Senator Cant referred to the wheat industry as a whole and made some statements particularly about the Party that I represent. He blamed my Party for a lot of the problems of the wheat industry. Of course, when the honourable senator spoke on the Wheat Industry Stabilisation Bill in 1968, not having the hindsight that he now has, he made no mention of the problems that he raises today. Senator Cant also referred to the part the Australian Country Party has played in this matter. He has indicated to the Senate that the Country Party is the nigger in the woodpile in the wheat surplus problem. I do not see any Country Party in Canada or in the United States of America but apparently the effect of the wheat problem has spread to those 2 areas. Canada, for instance, by 31st July of this year expects to have a wheat surplus of about 950 million bushels of which 500 million bushels will be held on the farms. When we turn to the acreage situation we see that Canada hopes to reduce its wheat growing acreage this year from 24 million acres to between 7 million and 12 million acres to overcome the problem of the wheat surplus.

– Well, according to the information that I have before me there would have to be an increase of 33c a bushel in the cost of wheat to cause an increase of lc in the cost of the ingredients in a 2 lb loaf of bread. So there would have to be a substantial increase in the price of wheat before there was an increase of lc in the price of the ingredients of a 2 lb loaf of bread. For those reasons the Government does not support the amendment. I believe that we should now put the amendment to the vote.

Question put:

Thai the words proposed to be added (Senator Cant’s amendment) bc added.

The Senate divided. (The Deputy President - Senator Bull)

AYES: 0

NOES: 24

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Original question resolved in the affirma tive.

Bill read a second time.

In Committee

The Bill.

Senator CANT:
Western Australia

-I refer to clause 8 which reads in part:

After section 27 of the Principal Act the following section is inserted: - “27a. - (1.) Notwithstanding the last preceding section, the Board may, in a Territory, sell wheat for use in Australia otherwise than in the manufacture of substances for human consumption at such prices as the Board determines, being prices less than the prices that would be applicable under that section, but no such sale shall be made at a price less than the minimum price applicable in accordance with this section. “(2.) The minimum price in respect of a wholesale sale of bulk wheat of fair average quality free on rails at a port of export is the price per bushel for such a sale that corresponds with a free on board price equal to the guaranteed price of wheat of the season that was current at the beginning of the year in which the sale is made. “(3.) The minimum price in respect of a sale other than a sale referred to in the last preceding sub-section is a price per bushel ascertained by adding to or deducting from the minimum price per bushel referred to in that sub-section an amount that makes a proper allowance for the quality of the wheat, the conditions of sale and the place of delivery.

I move: in proposed section 27a -

leave out all words after “determines” in sub-section (1.); and
leave out sub-sections (2.) and (3.).

The TEMPORARY CHAIRMAN (Senator Sir Magnus Cormack:
VICTORIA

– Senator, do you mind if we deal with the amendments separately?

Senator CANT:

– One is complementary to the other.

The TEMPORARY CHAIRMAN:

– Very well.

Senator CANT:

– The purpose of the amendment is to allow the Australian Wheat Board to sell wheat for stock feed purposes at the price that it determines. The purpose of the Government’s proposed new section 27a is to allow the Australian Wheat Board to sell wheat for stock feed purposes at the export price of wheat. We submit that the export price is too high a price for people who have starving sheep and cattle - mainly sheep - to pay for wheat which is to be used for stock feed purposes. We believe that the Australian Wheat Board is the expert body which is most able to judge at what price wheat should be sold for this purpose. Admittedly, in order to prevent black marketing in this wheat, it would have to be denatured so that it could not be used for human consumption. The Australian Wheat Board would be best able to determine an economic price for the wheat used for stock feed purposes.

The economic price could be determined having regard to the expected volume of the next crop. In this way the wheat bins could be cleared so that the next crop could be taken in. The Wheat Board would have to take this and other factors into consideration when determining an economic price. The Board would have to recognise the position of the growers. A grower may have X bushels of wheat for which he has not received anything. If the adoption of my proposal were to result in growers getting something for their wheat, even if it was not the economic price, it would give some money to the farmer, and enable him to put in a crop for the next year. The Board would have to look at the drought conditions which exist in various parts of Australia. Wheat could be moved to drought areas anywhere in Australia. The Wheat Board would have to have a look at the value of the stock which could be saved if access were available to this wheat as stock feed.

The loss in wool production if sheep in drought areas were allowed to die and the economics of keeping the wool producer in business by allowing him to keep at least his breeding stock intact would also have to be taken into consideration. These are matters which, among several others, the Austraiian Wheat Board would have to take into consideration in determining the price at which it would allow wheat to be sold as stock feed.

The Australian Labor Party believes that the fixing of the price for stock feed at an amount which is equal to the export price precludes a farmer who is experiencing difficulties because of drought conditions from purchasing it. Honourable senators would be aware that during drought periods money also dries up quickly. The stock firms which are prepared to lend money during flush seasons are not prepared to lend money on the same basis or in the same amounts during drought conditions. This is particularly so when there are production restrictions. Of course, banks are the most conservative of the money lenders. They tighten up their lending very quickly. As a result, finance to purchase stock feed is not very easy for a farmer to obtain during drought conditions.

The whole economic position of Australia’s two main rural industries, the wheat and wool industries, must be considered overall in order to determine what is an economic price, lt is not necessary, as I have said before, that it should be an economic price to the grower. He may be losing a few cents on the sale of his wheat when the cost of production is taken into consideration, but the judgment must be made whether it is economical to retain the wheat in storage without being able to sell it while stock is starving. Judgment must also be made as to the value of th. stock saved and the value of giving some cash to the farmer who produces the wheat.

I believe that the Australian Wheat Board is an expert body which should be able to make these judgments. Having done so, it should have discretion in regard to the sale of the wheat. It should be able to sell the wheat at what it determines to be an economic price in the context of the circumstances pertaining at the time. The Minister for Air (Senator Drake-Brockman) said that the Bill would allow the Board discretion to sell wheat at a reduced price and. of course, it does, by proposed new section 27a. But the Board’s discretion does not permit the Board to sell wheat below the export price, that is. the price agreed upon under the International Grains Arrangement. So that while it can bc said that the Australian Wheat Board can in its discretion allow wheat to be sold at a reduced price, its discretion is limited to a maximum and minimum price.

Senator Prowse:

– The honourable senator is suggesting that the wheat farmer should subsidise the sheep farmer.

Senator CANT:

– In many cases they will be subsidising themselves. The honourable senator is well aware that there were thousands of growers in Western Australia last year who had wheat in bins on which only the first advance payment had been made and they were unable to get their wheat out of the wheat silos to feed their starving sheep. Senator Prowse would be aware that a great number of farmers in Australia are mixed farmers, growing both wool and wheat, who, whilst their wheat, has been only partially paid for, are unable to get that wheat to feed their own stock. These conditions are facing farmers at present. Senator Prowse comes from a farming community. He knows the conditions of mixed farming and he knows that there are farmers who have wheat in bins and silos and who have, at the same time, starving stock. The Australian Labor Party believes that the Board should be allowed to determine an economic price in the context of the circumstances I have outlined and other circumstances in order that a farmer may subsidise himself by using his own wheat. Senator Prowse disagrees with what I am saying. I do not believe that he has any consideration whatsoever for the farmers. He would like to see the wheat locked up in bins and the sheep starving. That is his attitude towards the matter. The Labor Party believes that the wheat should be made available at a price which has been determined by the Wheat Board to be an economic one. A minimum price should not be set. The minimum price should not be the export price. The bins should be cleared, the stock should be saved and the farmers should be given some money in order that they can carry on their businesses. I hope the Committee will support the amendment I have proposed.

The TEMPORARY CHAIRMAN (Senator Sir Magnus Cormack:

– Is the amendment seconded?

Senator Wilkinson:

– I second the amendment.

Senator DRAKE-BROCKMAN:
Minister for Air · Western Australia · CP

– I appreciate Senator Cant’s interest in this matter, but I am afraid that the Government is unable to accept his amendment. I wish to reply to a few of Senator Cant’s comments. The Australian Wheat Board does make wheat available as stock feed within certain limits.

Senator Cant:

– Only the limitsI have outlined.

Senator DRAKE-BROCKMAN:

– Yes. I remind the honourabie senator that the States have price fixing powers. The Commonwealth’s powers in regard to price fixing apply only in respect of domestic prices in its Territories. The honourable senator will recall that the Australian Agricultural Council met last year -I think it was in September - and discussed the question of making wheat available through the Wheat Board at a lower rate for stock feed. The honourable senator will recall that the Council came to a decision in regard to this matter and the State Ministers for Agriculture had to go back to their respective States and put to their respective Cabinets the question whether they would agree to this proposal. They have agreed and have introduced legislation in their own States which incorporates the provisions outlined in the Bill The Commonwealth Government cannot do anything at this stage. However, I would like to remind the honourable senator of the point which Senator Prowse made. While readily understanding Senator Cant’s interest in providing stock feed to sheep in drought stricken areas, I point out that if his proposal were adopted it would mean that the wheat industry would be subsidising the graziers. I understand that some wheat growers are also graziers. Senator Cant referred to Western Australia. Last year Western Australian growers were able to get wheal out of the bin - perhaps not as quickly as he would wish but action was taken to enable the graziers to get it.

Has the honourable senator thought of this aspect? By lowering the stock feed price of wheat we come up against the objections of the growers of barley and oats because they look to the domestic consumption of barley and oats, particularly in the way of grain for the feeding of stock, as an outlet for their surplus production. There would be a great outcry from those producers if the price were lowered. For those reasons the Government cannot support the amendments.

The TEMPORARY CHAIRMAN (Senator Sir Magnus Cormack:

– Order! Is it thewill of the Committee that the amendments proposed by Senator Cant be taken together? There being no objection, that course will be followed.

Question put:

That the amendments (Senator Cant’s) be agreed to.

The Committee divided. (The Temporary Chairman - Senator Sir Magnus Cormack)

AYES: 22

NOES: 24

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Clause agreed to.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator DrakeBrockman) read a third time.

page 2549

LOAN BILL 1970

Second Reading

Debate resumed from 12 June (vide page 2412), on motion by Senator Sir Kenneth Anderson:

That the Bill be now read a second time.

Senator DEVITT:
Tasmania

– The Australian Labor Party supports the Loan Bill 1970. The reasons for this Bill were spelt out in simple and acceptable terms in the second reading speech of the Minister for Supply (Senator Sir Kenneth Anderson). The situation, as I understand it, is that the Government made estimations of revenue and expenditure in its preparation of the Budget papers and proceeded upon the expectation that certain amounts would be available from loan raisings overseas and within Australia. It must be understood that estimates arc, after all, estimates; they are not precise and completely accurate determinations of the funds that will be raised by the various means available to the Government through revenue and loan raisings. They cannot be sufficiently precise to enable an exact determination of the position of the Commonwealth at the end of the financial year.

The Government, whilst budgeting for a deficit this financial year of $30m, made its budgeting sufficiently flexible as to be able to finance that deficit should loan raisings exceed the expected figure. I refer to loan raisings from outside Australia and from within Australia; in other words, the net loan raisings. However the situation, for a number of reasons, has now resolved itself and it is fairly clear that there will be a shortfall of receipts over expenditure of approximately $30m for the year’s transactions. This is after all a machinery measure. Approval has been given for the total loan raisings for the year. The proposal is to provide funds for expenditure on defence services which have already been authorised by the Parliament in the Appropriation Acts. The expenditure is to be charged to the Loan Fund instead of to the Consolidated Revenue Fund. I do not think much more can be said on this matter except to indicate that the Australian Labor Party does not oppose the measure.

Senator BYRNE:
Queensland

– The Democratic Labor Party similarly supports this measure. This Bill and the Loan (Defence) Bill may be dealt with in the light of the same considerations. Perhaps there is a lesson to be learned from the necessity for the presentation and the passage of the Bills. These 2 Bills reflect the prevailing economic climate in Australia.

Senator Devitt:

– We are dealing with only the Loan Bill 1970.

Senator BYRNE:

– This could go to both Bills. Loan raisings have been disappointing. They have not reached expectations. Of course this is one of the consequences of the monetary policy that is being imposed by the Government as a counter-inflationary measure. It may open up the ground for some criticism as to whether there has been adequate fiscal control of the economy as against reliance on monetary control to try to stem inflation and stabilise the situation. However, whatever mistakes may have been made there and whether it is desirable that one resorts to both avenues to a greater degree or to one or the other, the fact remains that the Budget estimates of loan raisings were not realised. Therefore it has been necessary to rely upon other measures to raise moneys in the manner projected by this Bill in order to meet the situation that will develop in the financing of the deficit, which will now be greater than was expected.

The whole matter highlights the difficulties of modern systems of finance, how sensitive the whole system is, how interference in one area, like pressure applied, goes equally in all directions and creates situations which have consequences which must be handled at a later stage of the economic operation. Nevertheless we now must face the necessity for some provision in view of the nonrealisation of Budget expectations. The method resorted to here finds approval, as it would in any orthodox approach to handling an economic situation to meet a situation that may develop. For those reasons the Democratic Labor Party supports the Bill.

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

[4.30] - in reply - I thank the Senate for the speedy passage of the Bill.

I Question resolved in the affirmative.

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

page 2550

LOAN (DEFENCE) BILL 1970

Second Reading

Debate resumed from 12 June (vide page 2416), on motion by Senator Sir Kenneth Anderson:

Thai the Bill be now read a second time.

Senator DEVITT:
Tasmania

– The approach of the Australian Labor Party to this measure is very much different from our approach to the Loan Bill which we have just passed. I would like to spell out the basis for the Labor Party’s opposition to this measure. Firstly, the legislation proposes the borrowing of some $US100m from the Export-Import Bank of the United States of America for the purchase of defence equipment. It might promote a better understanding of our position if I state what I believe to be the 2 principal areas of responsibility of Parliament. Firstly, it has a responsibility to make the laws. Secondly, it has a responsibility to give the closest possible scrutiny to the expenditure of public funds. There are of course other ancillary areas of responsibility but these are the 2 dominant areas of responsibility of Parliament.

In the matter of the making of the laws it must be remembered that in the lower House a Bill is presented and passes through 3 readings. It is then sent, under our bicameral system, to the upper House - in this instance the Senate - where again it is submitted to the scrutiny of the Parliament through 3 readings. Ultimately it is passed and becomes law or, at the will of the Senate, it is rejected, or various other things can happen to it, as we know. This is the situation with substantive legislation. A somewhat similar situation exists in relation to subordinate legislation, which in its turn in the form of regulations or ordinances is passed to a committee of the Senate for examination and goes through the refining and distilling processes that are available in that area of responsibility. In due course of time a judgment is formed on the merits. But the bases of judgment that apply and the legislation are again subjected to the closest possible scrutiny.

In the making of the laws, either the substantive legislation or the subordinate legislation, I believe that ample safeguards are provided. In relation to the other aspects of the responsibility of Parliament - that is, in the judgment of the merits of the vote of funds for particular purposes which the Constitution allows - I suggest there is not the same opportunity available to the Parliament for the judgment of the merit of the issue. Because of this very fact I believe a much heavier responsibility devolves upon individual members of Parliament to ensure that the expenditure of public funds is in the best interests of the country and conforms to proper practices. The piece of legislation now before the Senate seems to me to be synonymous with the present trend of the Government to have somewhat less regard for the institution of Parliament than it ought to have. So that one cannot say that that is a wide, sweeping statement which has no justification let me refer to one or two passages in the legislation which the Minister for Supply (Senator Sir Kenneth

Anderson) commented upon in his second reading speech. The Minister said:

This Bill seeks parliamentary approval to borrowings by the Commonwealth of up to-

That is the first area of imprecision - $US 10Om for the purchase of general defence equipment-

The type is not specified - in the United States.

In the presentation of a piece of legislation before a Parliament which involves the expenditure of some SI 00m one would expect some sort of precision in the terminology used to express the Government’s purpose in introducing the legislation. But the legislation is quite wide and imprecise in its nature and terms. I defy anybody in the chamber to tell me what it specifically means. I pass on to a further expression in the Minister’s second reading speech. He said: . . and the Government wishes to make provision under the present Bill for further borrowings to finance orders placed from the beginning of this year for additional purchases of defence equipment . . .

Does that mean the purchase of additional defence equipment or the additional purchase of defence equipment which has already been partly purchased? One could not say. I cannot say. I would like to know. I hope that the Minister, in his reply, will give some indication to the Senate of what is meant precisely by the expression. I suppose it is a matter of some consolation to the Senate to know that in this expenditure of up to SI 00m Australia is not involved in making any payments towards the Fill aircraft because, remarkable as it may seem, and despite the extraordinary extravagance of voting about $257m so far for this aircraft Australia still has - and I repeat, remarkably - $75m in kitty which was passed as an expenditure by vote of the Senate some time in 1968. The Loan (Defence) Act of 1968 provided for the borrowing by the Commonwealth of a further $US75m to assist in financing the purchase of the Fill aircraft. I pause to indicate that what I am saying now surely gives some point to the proposition that the Senate has some right to know what we are expending money on.

I do not want to labour the point beyond saying that this is one of the greatest farces in which the Parliament has ever been engaged. Since 1963 we have spent $257m and we have $75 m in kitty. This must be a great consolation to the electors of Australia. We are now putting the aircraft under wraps in the United States and it will be there until 1973 or 1974 when one hopes that all the problems associated with it have been ironed out. This is part of the defence equipment, as the Minister said recently, to round out the defence set-up. We do not have this aircraft and we do not look like having a rounded-out defence set-up until 1973. But suffice to say that we are not involved in this expenditure of $10Om with anything to do with the Fill aircraft because we have $75m in kitty at the moment for that aircraft. What interest will we pay on this loan of up to $100m? What is the term of the loan? I have read the second reading speech and I can see no reference whatever to the interest rate. I am conscious of the fact that the interest on some of our borrowings abroad has been as high as 9%. This is an extraordinarily high level of interest to pay. In any case, it is a fundamental basis of borrowing that one borrows on a redemption period on the basis of the life which the assets create. How can we know what the redemption period ought to be in this case under this sloppy, slap-dash, ill-expressed piece of legislation. All we can learn from this legislation is that it is expected that the Export-Import Bank of the United States will provide the loan funds to be raised under this legislation. I sincerely hope the Minister can give the Senate something a little better than that when he replies. In his second reading speech he said:

We are at present negotiating with the Bank for this purpose. . . .

We cannot be sure that it will be possible to borrow this money from the ExportImport Bank of the United States. Negotiations are, or were at the time of the presentation of this statement, proceeding. In his second reading speech the Minister goes on to say:

. and the Bill has been drafted to provide authority for the Commonwealth to accept the usual provisions of Export-Import Bank loan agreements.

Senator Devitt:

– Why use revenue?

Senator Sir KENNETH ANDERSON:

– I will come to the revenue aspect in a moment. The funds borrowed will cover all the services - the Departments of Air, Navy and Army. Indeed it will cover the Department of Supply to a degree in the sense that we as a department are involved in procurement for the services. It is not appropriate to detail the basket of the items. It is across the board expenditure. The honourable senator asked whether the money was for this and whether it was for that. The answer is yes, because the expenditure will relate to the various aspects of the services. It will be part of the expenditure on the defence programme as postulated in the statement of the Minister for Defence (Mr Malcolm Fraser) some time ago. The precise details cannot be spelt out in this legislation, but the money is clearly for defence purposes. It is not for the purchase of the F111 aircraft. It will be spent largely by the Department of Air and the Department of the Navy, to some extent by the Department of the Army, and to a very modest extent by the Department of Supply. I cannot give the honourable senator the details. They are not available to me. At the point of purchase, of course, some of them would be classified, as he would appreciate. There is no significance in that. We do not want to be making announcements in advance of what we will secure.

The honourable senator asked: ‘Why not use revenue?’ This is an argument which has vast ramifications. It extends far beyond the field of defence, into the field of the total loan programme for the Commonwealth and States. It is unreal to imagine that we can live out of revenue. It just cannot be done. When loans are used at least some contribution is made by posterity to the defence of Australia. I think it is a fair proposition that it would be quite wrong to expect the people of 1970 to be completely responsible for a defence purchasing programme that may extend over a 5-year period or a 10-year period. Senator Devitt and I have both been in local government in our time, and we have heard the classic argument that was put forward a long time ago about carrying on a municipality by relying only upon revenue. The municipality which relied on revenue for its existence was always a very backward municipality. It denied its people comforts and advantages in their time because revenue was insufficient for its needs. The same situation applies in relation to defence. Because Australia is a huge country and our defence requirements are very heavy indeed, we could never properly defend this country if we had to rely solely upon revenue income. We have an obligation to our heritage to make ourselves defensively strong. I say with great respect we can never do that if we hope to pay for our defence out of revenue alone.

Senator Gair:

– We built our railway system by that method.

Senator Sir KENNETH ANDERSONThat is right. Both defence and national development need a forward looking programme. I think the obvious thing to do now is to put the question to a decision. I hope that the example of what happened in the other place will be followed and no division will be called for.

Question put:

That the Bill be now read a second time.

The Senate divided. (The Deputy President - Senator Bull)

AYES: 24

NOES: 22

Majority . . . . 2

AYES

NOES

Question so resolved in the affirmative.

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

page 2554

COMMONWEALTH EMPLOYEES COMPENSATION BILL 1970

Second Reading

Debate resumed from 12 June (vide page 2416), on motion by Senator Sir Kenneth Anderson:

That the Bill be now read a second time.

Senator BISHOP:
South Australia

– The purpose of this Bill is to increase the rates payable under the Commonwealth Employees Compensation Act 1930-1969 and it must be related to the decision of the Government when it brought down the socalled new code in March and at the same time brought down amendments to the Commonwealth Employees Compensation Act. The Opposition is very concerned about the low standards of compensation which are provided under the Commonwealth Employees Compensation Act. We are also very concerned about the great delays that have occurred in bringing down an improved Act. In 1964 the then Prime Minister, Mr Harold Holt, promised to bring down a model compensation Bill. In 1967 the then Treasurer stated that the new Bill was almost ready to present to Parliament at the end of the year. In June 1968 the Treasurer announced the terms of the comprehensive Bill which largely represents the new code introduced in March this year, lt was then argued by the Government that the Parliament was unable to proceed with the new code.

Let me say firstly that the new code incorporated some novel features and some increase in the rates but it generally sustained the same sort of principles of the old code, lt was less generous than the compensation Acts of all the States. As can be seen from the times at which improvements to the legislation were announced, great advances have been made by the States almost annually. On most occasions compensation Acts have been improved over a 2-year period. When these Bills were introduced the trade unions - and I refer to the Australian Council of Trade Unions, the Council of Commonwealth Public Service Associations and the Australian Council of Salaried and Professional Associations - took the time to analyse the code and they very shortly came down with very strong criticism of what it contained. The Minister decided that the easy way to deal with the legislation was to bring down new rales. The new rates which have been brought down have not been greatly increased. They certainly do not go ahead of the pattern of all the States. They are greater than in some States and less than in others. If there was to be a partial recognition in the Commonwealth Employees Compensation Bill of the improvements that are necessary one would have thought that the Government would introduce some new and improved provisions which would be better than those obtaining in most of the States. The Government has not done this. What we have now is a partial improvement of the rates. The Bill provides some improvements but they are generally not as good as they might have been.

The Government promised that it would bring in a new code. The Opposition has argued, and in recent years the Government has largely accepted, that what ought to be done is that the Commonwealth should bring down a model code for all the States and provide a basis of compensation to clear up a lot of the litigation that takes place and to provide a pattern for people in industry. Nearly 400,000 workers are employed by the Commonwealth. If one takes into consideration families of the great number of those workers who are married one finds that a lot of people are dependent upon compensation. I do not want to discuss the old code in great detail, but some important measures ought to be considered. It would be a very sensible thing if at this stage the Government decided to consolidate the Commonwealth Employees Compensation Act and the Seamen’s Compensation Act. A number of amendments to both Acts have been passed over the years; they are very antiquated in a lot of respects.

Whilst we do not oppose this’ Bill we put it to the Government that it should not have relied, as it is purposed to have done, on letters from the Australian Council of Trade Unions, the Council of Commonwealth Public Service Organisations, the Australian Council of Salaried and Professional Associations and other unions. It should have consulted them and there should have been conferences between the bodies concerned. The members of those organisations represent the bulk of Commonwealth employees. A lot of the arguments which will again be canvassed when Parliament meets for the August session and a lot of work in drafting the Bill could have been saved. I want to commend the honourable member for Hindmarsh (Mr Clyde Cameron) who is the shadow Minister for Labour for his work on a model Bill. Because of the urgency of drafting a model compensation Bill, which we thought would have been done by the Government, he had to get to work as soon as this Bill was presented to the Parliament and compose a model Bill, copies of which have now been sent to most members. The Government has undertaken to consider this proposal in the next session.

As Senator Murphy has reminded me more than once, the Seamen’s Compensation Bill and the Commonwealth Employees’ Compensation Bill are shocking pieces of legislation. He is confident that if any group of lawyers, including Government lawyers, sat down as a special committee such as one of the committees we are now proposing to set up they would soon modify and improve the Bill and bring down a measure much better than the one which is presented to the Parliament. The proposed code is certainly not much better than that which exists at the present time. In the time from now until the Parliament meets again the Government ought to call into conference the people I have mentioned. They are very dissatisfied with the Bill. As one would recognise from looking at the Bill, which makes very complicated prescriptions, it is obviously necessary to consult lawyers and specialists in workers’ compensation, which is what the Australian Council of Trade Unions and the Commonwealth Council of Public Service Organisations have done to a large extern. But their work is not finished. If the Bill was ready, as we have been told by the Minister, towards the end of last year, copies could easily have been sent to members of the Opposition and to the parties concerned and they could have considered possible amendments. At the present time the only promise we have is that when the Parliament resumes the Government will not shut its mind to suggestions. lt would have been better to have held such discussions between November of last year and March of this year when spokesmen for the bodies representing employees could have put their points of view to the Government. Even at this late stage it would be better for the Government to engage in direct consultations with the people who are suggesting modifications. Most of the statements of the Commonwealth Public Service organisations have been placed in the boxes of all members of Parliament. I do not want to deal with them except to say that there is a practical way of solving the issue, and it is not yet too late to do it. As honourable senators have no doubt read in the daily Press, the Australian Council of Trade Unions and the Commonwealth Council of Public Service Organisations have publicised strong criticism of the code and the proposed increased rates. They have also publicly complained about the procedure followed by the Government. The Government should realise what I am saying and do what I have suggested, that is, to engage in direct consultations before the August session. The Government should take note of the proposal carried by the Australian Council of Trade Unions. I have a communication from the Secretary of the Australian Council of Trade Unions dated 30th April 1970, which reads:

The ACTU affiliated unions with members affected by the Commonwealth Workers’ Compensation Acts, met in Sydney on 23rd April 1970, and the decision of the unions is as follows:

This meeting of unions representing a great proportion of workers and dependants affected by the Commonwealth Compensation Acts expresses its strongest opposition lo the pernicious proposals in the Bills for new Commonwealth Acts as submitted by the Commonwealth Government and we urge the ACTU Officers to call on the Federal Parliamentary Labor Committee to co-ordinate wilh the ACTU to secure trade union objectives for adequate workers compensation.

We reject the specious attempt by the Government to deny or nullify inherent rights for the protection of workers by compensatory provisions when unable to perform ordinary duties. also the Government’s miserable approach for provision of compensation payments. We urge that the ACTU Executive set up a composite committee based on the ACTU Congress decisions to review the whole of the compensation area and the social aspects affecting me loss of workers earning power. Further, that a joint campaign in conjunction with the CCPSO and ACSPA including pamphlets and publicity be initiated . .

The Federal Secretary of the Council of Commonwealth Public Service Organisations, in a letter dated 16th April 1970, said:

Upon close examination the Bill, in its present form, in a number of respects manifestly fails to accord lo Commonwealth employees the level of benefits and standards of equity which prevail, and should prevail, in the Australian community. The enclosed analysis sets out in detail the grounds upon which my Council has reached thai conclusion. 1 shall not read the whole letter, lt goes on to express the concern of those people. At ne present time they are conferring with the Labor Party and the Australian Council of Trade Unions. In the parliamentary recess the Government should suggest to those people for consideration the sort of amendments which might be proposed.

If one compares the old and new codes one would expect he 1 payments to dependants on the death of an employee to be extremely good. In the Bill the Government proposes to make the amount payable on death $12,000. In South Australia that has been the amount for some years. The South Australian Government has promised to introduce new legislation to improve the Workmen’s Compensation Act. I am advised that many other States are going to do the same thing. Under the present increase in the Commonwealth Employees’ Compensation Act the amount received by a dependent wife for the incapacity of her husband has been increased from S6.80 to S7.70. In Queensland for a long time the amount has been S8.05. In South Australia the amount is S9. For a dependent child it is proposed to increase the amount from $2.50 to $2.80. In Queensland the amount for a dependent child has been $2.55 for a long time. In South Australia, when a Labor Government was returned to office a few years ago, the amount was increased to S3.50.

The measure before us proposes to leave the allowance for funeral expenses at SI 20. In New South Wales for a long time the amount for funeral expenses has been $250; in Victoria it has been the reasonable cost of a funeral: in South Australia for some years it has been $200; in Western Australia it is SI 63; and in Tasmania it is the reasonable cost of burial. The proposed weekly rate of compensation in the First Schedule for an employee without dependants - which would be the basis for the payment allowed for a married man - is to be increased to S3 1.80. A wife is to receive $7.70 and the amount for a dependent child will be increased to $2.80, making a total of $42.30 for a man, wife and I child. In the quarter ended December 1969 the average weekly earnings for the 6 capital cities amounted to $77.50. The proposal by the Commonwealth is thus extremely low. A worker may be incapacitated for 10 weeks as a result of an accident at work. He could lose as much as $30 a week over a period of 10 weeks - and that would not be an unusually long lime - making a total loss of S300. In that time he would have to meet his usual commitments. lt is not unusual for people to take sick leave in cases where the compensation payments are low. The Australian Council of Trade Unions has said for many years - and in one or two States the principle has been applied - that a man who is injured at work should receive what he was earning before the accident. Action to establish that principle in all States should be taken very quickly. A conspectus has been issued by the Department of Labour and National Service containing details formerly published by the Department of Works. It contains a simple table from which any group of officers could draw up a Bill which would give fairly important increases to Commonwealth employees without any delays. We are just not satisfied that over the years the Commonwealth Employees Compensation Act has been dealt with properly. Its provisions apply, of course, not only to public servants but also to seamen and, perhaps most important of all. to national servicemen. Members of the Regular Army will be subject to the Act and consequently something should be done about its provisions.

One of the most important provisions of this measure is its effect on members of the defence forces. This very bad provision has remained in the Act over the years. I refer particularly to paragraph (1a.) (b) (ii) of the First Schedule, which states: the Commissioner shall lake into account any payment, allowance or benefit (except child endowment under Part VI. of the Social Services Consolidation Act 1947-1948, any pension or allowance in respect of a child dependent upon the earnings of the employee, any payment other than a pension under the Superannuation Aci 1922- 1948 or the Defence Forces Retirements Benefits Act 1948. deferred pay payable to the employee, any payment under section seventy-four of the Commonwealth Public Service Act 1922-1948 or under section eight of the Commonwealth Employees’ Furlough Act 1943-1944) which the employee receives from the Commonwealth during the period of his incapacity and shall reduce the amount of the weekly payment otherwise payable under sub-paragraph (b) or sub-paragraph (c) of paragraph (I.) of this Schedule to such amount (if any) as he thinks just and proper;

That provision relates to an employee who is totally or partially incapacitated for work as a result of injury. In recent years 1 addressed a question on this subject to the Minister for Supply (Senator Sir Kenneth Anderson), who represents the Treasurer (Mr Bury) in this chamber. I asked:

Would a Commonwealth employee totally or permanently incapacitated for work by injury be subject, under the First Schedule of the Commonwealth Employees’ Compensation Act, to a reduction in the amount of compensation or injury payment on account of an entitlement to superannuation or extended leave benefits.
ls the Treasurer aware that in similar State legislation no such provision applies and that State employees would be entitled to compensation payments in addition to superannuation and/or leave benefits.
Have any claims arising from the HMAS Voyager’ mishap been adjusted to take into account superannuation, deferred pay, or extended leave payments under the provisions of the Act.
Does the Government propose to review this Act.

I asked that question some months after the HMAS ‘Voyager’ mishap. The answer I received stated:

Under the provisions of paragraph (1 A) (b) (ii) of the First Schedule of the Commonwealth Employees’ Compensation Act the consolidated revenue portion of pensions grunted under the Superannuation Act and the Defence Forces Retirement Benefits Act are taken into account in determining weekly compensation payments Any benefits due by way of extended leave or furlough are independent of. and nol affected by, compensation provisions.
Yes; in the legislation of some States superannuation type benefits are excluded from adjustment. However. State Compensation legislation differs from that of the Commonwealth in a number of respects and varies front State to State. Overall Commonwealth provisions arc nol regarded as being less appropriate than those of the Slates.
No. As indicated in (1) above extended leave benefits are not affected by compensation provisions. Likewise deferred pay is independent of compensation benefits. Should any case arise of the termination of the engagement of a survivor of the Voyager tragedy on medical grounds attributable to that event, and the serviceman concerned is in consequence granted a Defence Forces Retirement Benefits Fund pension, paragraph (IA) (b) (ii) of the First Schedule of the Commonwealth Employees’ Compensation Act would be applicable.
1. have outlined the important points which the Opposition contends should have been examined quickly. The Government has had every opportunity to do so. The Government was not able to say or did not want to say to the Opposition that it would confer with the people concerned, and we ask that that action be taken now.

One of the basic faults of this legislation which is supposed to reform the present Act is in the definition of personal injury by accident, arising out of or in the course of employment. The principal Act has been amended but the proposed new code retains the old prescription which has been discarded in New South Wales, Victoria, Queensland and South Australia because it is most antiquated, lt is time that it was altered. If the general benefits of the new code are not to be advanced this should not bc called a new code and the provision ought to be altered. In view of the urgency attached to this measure I wish to say that whilst we do not oppose it we are greatly critical of the delays which have occurred in instituting the reforms promised by the Government. We are not now opposing the measure because, in the dying stages of this session, it would be unfair to some people to deny them the small increases contained in the proposed legislation. While we will not vote against the legislation we are putting to the Government - and I am quite sure thai it is aware of this situation - that the matter is most urgent. I trust that the comments 1 have made about conferences with the unions who represent about 400,000 employees will take place soon and that the Government will not rely only upon representations made to it in the form of letters. It should hold a conference with the unions to consider the sorts of problems which will arise. If that is not done, when we come back next session we will be discussing, as the Government promised an opportunity to discuss, a model Bill which will be presented to the Parliament at that time and although the Bill will be much clearer in establishing a code, unless the Government code is greatly improved a very long debate will be necessary. The Government has an opportunity to present important measures of reform. In the light of the comments that I have made on behalf of the trade union movement I suggest that it is most urgent that the Government introduce those reforms.

Senator LITTLE:
Victoria

– This Bill must pass through the Senate tonight because of the circumstances outlined by Senator Bishop, but the reasons why it should be passed tonight are also the reasons why this Parliament should have brought before it a Bill which covers the whole ramification of workers compensation throughout the Commonwealth. This will enable the people employed by the Commonwealth to have that to which they are entitled or at least will enable them to receive more of their entitlement than they are now getting. Although we must pass this Bill tonight in order to ensure that seme people will not be denied the benefits contained in it, let us not forget that many other people will be denied eligibility for workers compensation in circumstances which would be provided for by a properly amended new Act which would enable the provisions to match those applicable in many instances in the States.

I sometimes wonder whether, unless we deal with this question of workers compensation on a national basis through the establishment of a national fund, we will ever know the truth as to what amount of compensation can be paid from the premiums contributed by employers to cover the costs of workers compensation. The premiums increase every lime an increased wage is granted, but in recent years - particularly in the last 15 years - there has been much research in an attempt to reduce the accident rate in industry. This research has proved to be very effective and the accident rate has been reduced although numerically the number of accidents might have increased. That can be explained by the increased work force which brings with it increased premiums for the insurance companies. If the accident rate is reduced and the premiums continue at the same rate, it seems to me to be a logical proposition that there should be at least grounds for a reduction in the premiums or a great expansion of benefits. However, we do not see this pattern developing.

If we were to investigate the whole situation of workers’ compensation throughout the Commonwealth we might be surprised at the profits made by insurance companies which are able to force employers to contribute for workers’ compensation for their employees in retailing and industrial enterprises. As one engaged in the retail trade I am able to cast my mind back over the last 10 years and to recall the premiums that I have paid for this purpose. Of all my employees, one lad received a guinea to pay for a tetanus injection after he had been bitten by a dog while on the job and another lad received the cost of an X-ray after he had fallen from a push bike. There has been no claim by any of my 4 senior administrative staff. Throughout suburban shopping centres claims on workers’ compensation have been very low, and in view of the amount flowing to insurance companies in premiums there would have to be many accidents in industry to reduce the profits made by the insurance companies to a point at which there was a reasonable balance between premiums received and compensation paid. We are told that these things are worked out actuarily and that in some areas of employment premiums are less than in other areas. But I doubt whether the community at large is receiving in compensation anything like a fair proportion of the premiums that are being paid to insurance companies. However, the Bill must be passed because it will afford benefits to some people in industry who otherwise would be denied the benefits.

I do not want to enter upon a general dissertation on a Bill which was promised but which has not been brought down in this place. Immediately the terms of the proposed legislation became known we in the Democratic Labor Party were submerged with protests from people who were interested in workers’ compensation. My Party is affiliated with a union which has many members employed by the Commonwealth.

Senator Mulvihill:

– What union is that?

Senator LITTLE:

– The Federated Clerks Union of Australia. The union was enraged at some of the provisions which it was suggested would be contained in the allegedly improved Act. 1 suggest that there is only one good feature ot it. Although the Government’s proposals will not benefit someone who is injured between now and the time when the next legislation is passed, the Government has at least seen fit to delay the introduction of the other measure to enable further investigation. 1 would say to those who are interested in the passing of good Commonwealth workers’ compensation legislation that although we have had representations at a personal level from trade unions, some of which are affiliated with my Party and some of which are not, we have heard nothing from the official trade union movement throughout Australia, in view of the situation that exists in ‘his chamber we would like it to be known that we would prefer to hear officially from the trade union movement so that we may know its views before considering further amendments to the Act.

There is little to be gained at this stage by digressing into a discussion of the legislation which has been delayed because none of us knows what form the legislation will take when it is presented to the Parliam mt. 1 hope this will be done immediately the next session begins. We want it to be known that as a political party we consider this to be a matter of great urgency to which the Government should give the highest of priorities when receiving representations and making investigations prior to bringing down legislation to deal with compensation for employees in the Commonwealth service. I could repeat many of the criticisms indulged in by Senator Bishop and be repetitive in that respect, but I do not propose to do that.

I believe that the Commonwealth should lead the States in this field. I suggest that the Government should give serious consideration to this point because the level of workers’ compensation is a measuring stick by which we may gauge the progress ot our community and our economy. Before the introduction of workers’ compensation people who were injured in the course of their employment received no income with the result that there was a lass of markets, a stultification of industry and a stagnation of an earning capacity on which to pay taxes. The disruption of the economy which ensued has to a large extent been alleviated by the introduction of reasonable workers’ compensation provisions. But when I realise the amount that is paid in premiums and the amount that is paid out in benefits - under this Bill the benefit is to be increased to $12,000 - 1 have in mind also the amounts paid by insurance companies when a breadwinner or wage earner is killed in a motor car accident.. Yet I doubt that the amounts paid in premiums for Motor car insurance would be greater than the amounts paid as premiums for workers’ compensation. I do know that many insurance companies have vacated the motor car accident field, and 1 suggest that it is significant that I am not aware of any insurance company wanting to vacate the workers’ compensation field.

I believe that insurance companies have a considerable margin between premiums received and benefits paid under the Commonwealth and State workers compensation legislation. 1 hold the view, which perhaps has no relation to this Bill, that a national workers compensation fund which received premiums throughout the whole of the Commonwealth and distributed the whole of that amount in benefits to people who were injured or killed in the course of their employment would enable the benefits which are now provided by legislation such as this Bill to be doubled without additional premiums being required.

Senator MURPHY:
New South WalesLeader of the Opposition

– I think that anyone who considers the provisions of the enactment which we are proposing to amend slightly by the Bill now before the Senate should be extremely concerned at the social injustices which can arise in this country and which can continue without anything being done about them. My colleagues in the Senate, and also Senator Little, in their descriptions of the Bill, have referred to its general unfairness, but I want to point to something which goes deeper than the amount of weekly compensation, namely, the way in which the compensation is determined. There used to be legislation under which there was an upper limit to the compensation, but in arriving at the compensation, having regard to thatlimit, 2 questions were asked: What were the average weekly earnings of the worker before the accident, and what were his average weekly earnings after the accident? I am describing briefly the nature of the provisions.

Senator Little:

– This was where the worker was permanently incapacitated?

Senator MURPHY:

– That is right. The difference between those earnings would be calculated and it could be said that because of the injury he had suffered a specific loss and compensation would be determined on that basis subject to the upper limit. If honourable senators examined the principal Act they would think that this was what was being done for the workers in this instance because in the First Schedule one provision reads: (1.) The amount of compensation under this Act shall be -

where the seaman is incapacitated for work by the injury - a weekly payment during his incapacity-

Senator CAVANAGH:

– I was not being critical of Senator Little’s statement. I think he was correct. I do not want the Senate to get the impression that the matter is a minor one. I think there is a question that we should look into. We should study what the insurance companies are making out of workers compensation. It is noticeable that insurance companies will take up workers compensation business but are reluctant to engage in third party insurance, where the claims may be greater. I think the Government should be condemned for its attitude to workers compensation.

Not last session but in 1964 the then Treasurer first promised a completely new Commonwealth workers compensation Act. I think that in every session since then the Treasurer has promised a new Bill in the next session. Last session Senator Bishop, I think rightly, criticised the Bill that was introduced then as not meeting the requirements of anyone. The Bill was withdrawn but not for the reasons which the Minister stated at the stage of withdrawal. He said that even the Opposition was not ready to debate it and that those whom it affected wanted more time for consideration. In fact, the Opposition had its Bill prepared and ready to present to Parliament as amending legislation. The organised workers who would have been affected by new compensation legislation had sent their views to the Labor Party and the Industrial Committee of the Labor Party had expressed its views on the Bill.

It seems that the workers are considered last by the Government - both in regard to the legislation and in regard to the amounts paid. Since 1964 we have been seeking amendments to the Act. On each occasion that the Commonwealth Act gets a long way behind the State Acts, legislation to increase the amounts payable is introduced in the dying stages of a session. The increase does not take the amounts payable above what is payable under the State Acts. On many occasions the increase does not bring the amounts payable up to what is payable under the State Acts. And always, because of the shortness of the debate, we are forced simply to agree to the Bill. I have always advocated a new attitude towards workers compensation and that governments should prescribe workers compensation to the maximum which society is prepared to permit. I think society would recognise as a just payment an amount much in excess of what is provided in this legislation.

Speaking on this subject on 1st and 2nd November 1967, again in the dying stages of a session, when a Bill to increase the amounts payable was introduced, I traced the history of workers compensation from the Industrial Revolution in England to that time. I stated how public pressure forced governments into acceptance of workers compensation legislation. I traced the legislation from the time when we had none - when we relied on common law - until 1946 when the British Act, the National Insurance Injuries Act, was introduced. It gave a weekly payment somewhat similar to that provided under the social services legislation in England. In that history I referred to the first workers compensation Act which provided for payment of compensation without proof of negligence. It came into operation in Great Britain in 1880. It had some limitations. There were limitations as to whom it applied and also limitations on the payment that could be claimed. The maximum that could be claimed was the equivalent of 3 years earnings of the worker.

– Are you not reflecting upon the coroners in what you are saying?

Senator CAVANAGH:

– I do not think it is a reflection on the coroners. 1 am saying that the Government gives less consideration to members of the work force than to any other section of the community. We debated in this chamber last week the other Act of Parliament under which proof of negligence is not required. That Act relates to the death of a person in an aircraft accident. Because workers are not people who ride in aircraft in great numbers, under that Act we limit the liability to $30,000 without proof of negligence. But the liability in respect of a man working at an aerodrome in the aircraft industry is limited to $12,000. If a man who can afford a plane trip is killed, why should his estate have a claim for $30,000 without proof of negligence when the estate of a man who works in a factory does not have such a claim? These are questions that have to be answered. Why is the Government taking such a poor view of the employee? Why is the legislation that affects him the last to come before the Parliament? Why did it take 6 years for a new Act to be brought before the Commonwealth Parliament only to be withdrawn immediately it was introduced?

Under the Bill the payment in incapacity cases is $31.80 a week. According to the Year Book’ for 1967-68 the average weekly earnings in Australia were §64.30. If we multiply that figure by 156, representing 3 years each of 52 weeks, we arrive at an amount of $10,030. The limit on a claim in respect of death is $12,000. So where have we improved on the standard of 3 years earnings that was provided under the British Act 90 years ago?

The figure I just used was the average weekly earnings in Australia. But the weekly earnings of a metal tradesman today are around the $70 mark. If we multiply that by 156 we arrive at an amount of $10,920. So the tradesman today receives only about $1,000 more than his counterpart in Great Britain received 90 years ago. We are not prepared to bring today’s payment up to what was won by struggle in Great Britain in the early days of the Industrial Revolution. We have gone back badly. A single man who is injured and has total and permanent incapacity receives $31.80 a week. On the basis of the average weekly earnings of $64.30, he receives less than half pay.

Sitting suspended from 6 to 8 p.m.

Senator CAVANAGH:

– Mr Deputy President, when the sitting was suspended, I was dealing with the most neglected section of our community, that is, the dependants of dead and injured workmen. Because of the time factor which is forced on us on every occasion we discuss legislation concerning Commonwealth employees compensation, I must content myself now with a few comparisons to illustrate how injured workmen, their dependants and the dependants of dead workmen are neglected in the field of compensation as compared with payments made by society to persons injured in other fields.

In cases where negligence is proved at common law, it is commonplace these days to see an award of some $100,000 to the dependants of a dead breadwinner. If we study such an award we see that it is designed to permit perhaps $15,000 for the purchase of a modern home and some $85,000 to be invested at a modest rate of interest. Let us say that the rate of interest is 6%. This would provide the widow with $100 per week with which to support herself and her children. This would allow her to continue to enjoy the standard of living to which she had fashioned her life in society at the time when her husband actively worked.

What is the position of the dependants of the unfortunate employee who sacrifices his life in service to the nation if they are unable to establish negligence on the part of the employer? Despite the fact that negligence may have occurred, the dependants may be unable to establish it. The dependants of a deceased Commonwealth employee under this legislation are to receive a miserly $12,000 which is insufficient even to provide a widow with a home. So, a widow in such circumstances is expected to try to educate her children on $12,000. Possibly, that amount is considered to be enough to make a widow sufficiently attractive so that she may sell herself to another bidder who will maintain her and be her meal ticket for the rest of her life.

Under the Commonwealth Employees Compensation Act the widow of a Commonwealth employee receives $2.50 per week for the purpose of bringing up each child. Under this Bill that amount will be increased to $2.80 per week. So, the standard of living for each child will be increased by 30c per week. This means that between 1967 and this year, 1970, we have increased the allowance for each child by 30c per week. The child of a deceased Commonwealth worker cannot be brought up to enjoy the standard of living and the standard of education that is provided to the child of the man who saves his money and who continues in his employment. It is one of the shames of our society that, because a man has sacrificed his life in industry, his child is treated as an inferior being in the way in which it is educated and brought up.

In a judgment in the Adelaide Supreme Court on 24th December 1968, Mr Justice Hogarth awarded $44,717 in damages to a man whose leg was amputated above the knee as the result of injuries sustained in a car accident. About that time I was called upon by some people I knew to try to convince a man who had been injured in an industrial accident - he could prove negligence against his employer - that he should accept $40,000 as suitable compensation for the loss of a leg above the knee. At that stage the man was fit to resume work. He considered that $40,000 was not sufficient compensation. We convinced him finally that instead of going to court to obtain an award he should accept the compensation offered. It was indicated that $40,000 was approximately the compensation that he would receive at civil law for the loss of a leg above the knee.

Upon the payment of this compensation the man was required to repay from that amount the workers compensation payments that he had received as well as the payments in respect of his medical expenses, leaving an amount of §22,000 allocated as general damages. Under the legislation now being considered, if this man had been unable to prove negligence in respect of the loss of a leg above the knee, he would have been awarded $9,000. So the gap between the payment received by a person able to prove negligence and a person unable to prove negligence in relation to identical injury is $13,000.

This must be glaring evidence of the anomalies and the injustices that are to be found in the Commonwealth Employees Compensation Act. As I have said, the position of the worker is neglected in any consideration of the compensation he should receive. The pain, suffering and loss of any person is as great whether negligence can or cannot be proved. Why is it that these differences exist? The system of compensation is based on loss of earning capacity and on other matters. No scientific basis is applied to the assessment of entitlement to compensation. A musician or a typist who loses a hand has his or her earning capacity affected much more seriously than does the bank messenger who suffers the loss of a hand. Conversely, a bank messenger who loses a foot faces more difficulties than does a musician or a typist who loses a foot. Yet the same compensation is received by each person who suffers such a loss. The dependants of a man who dies at age 25 as the result of an industrial accident obtain the same benefit as do the dependants of a man who dies at age 65 as the result of an industrial accident. Surely the life expectancy of each of those men is different. Surely also the problems of rearing children must be different in respect of each man.

According to the figures provided by the Minister for Labour and National Service (Mr Snedden) more than 400 persons die each year in Australia as the result of industrial accidents. The wives and children of those persons are not catered for suitably. The wife possibly is provided with sufficient money to make herself attractive to another bidder. But, if she is unsuccessful in that respect, she is left with $ 12,000. She may expend all that money on the purchase of a home and then become the recipient of a social services benefit for the rest of her life. This treatment is not good »no,.ir’,i to those persons in our work force who are of the greatest benefit to Australia. The wealth of our community is derived from the labour activities of those in this work force. Yet, the Government will not recognise the worth of these people. Wc support this legislation which will increase the compensation payable by a measly pittance. What we should see introduced is a new Bill along the lines of the type of legislation about which Senator Bishop spoke in which the need for justice for this section of the community is recognised.

Senator MILLINER:
Queensland

– Dramatic changes have occurred in numerous industries since the fifties. In the field of the professions, dramatic changes have occurred also. In the field of medicine heart transplants and kidney transplants have taken place. Many attempts have been made to arrest the dreaded disease cancer. Progress is being made in that direction. In the field of science, astronauts are travelling to the moon. In industry generally, computers are used widely. Everything is changing. We hope that these changes will be to the advantage of mankind generally. It always appears to me that, in matters such as workers compensation, no change is envisaged. In this regard, we seem to run along in the same pattern. This has been evident in the workers compensation field over many years. We increase the amounts of compensation and we patch up the scheme here and there, but we never seem to get to what I believe is the real problem in workers compensation. That is an attempt to provide the worker with his full weekly wage whilst he is on compensation.

[8.2] - in reply - I thank honourable senators for the speedy conclusion of the second reading debate on this Bill. I think it is understood that this Bill is analogous to the Seamen’s Compensation Bill and that the second reading debate on this Bill will cover both Bills. The general field of workers’ compensation has been fairly widely covered in the debate. Some of the remarks have been historical and some contentious but generally speaking the debate has covered the broad aspect and has been informative although it has not been directed particularly to the Bill. I accept that the Senate has indicated that it will pass this Bill. Indeed, Senator Bishop, who led for the Opposition indicated that this was so.

There were a number of matters referred to which I think need to be brought out. Senator Bishop referred to the need for conferences to be held. He pointed out that the original Bill was introduced in the other place but that the Government decided not to go ahead with it because of representations that were made about its contents. That decision was referred to in my second reading speech. The Government decided to bring in this short Bill now before us in order to make the benefits contained in it available and leave time for consideration of the far broader, more complex and very legal matters on which views had been expressed, and continue to be expressed, not only at governmental level but in the trade union movement and the Commonwealth Public Service. Senator Bishop spoke of the need to have conferences rather than have the Government tell organisations all about the legislation afterwards. I think that is a fair interpretation of what he put to the Senate.

Senator Bishop:

– Yes.

Senator Sir KENNETH ANDERSON:

I can inform him and the Senate that conferences are imminent - I will not make any firmer statement than that - with the trade union movement on the type of problems to which he referred and which were the cause of the decision to introduce a consolidated Bill at a later stage. Senator Cavanagh said that the reasons given in the other place for the introduction of this Bill were not the true reasons. He said that the Opposition was ready to deal with the legislation and therefore the true reasons were not given for delaying the principal Bill. I. want to read to the Senate what was said by the honourable member for Hindmarsh (Mr Clyde Cameron) in the debate on the Seamen’s Compensation Bill in the other place. 1 understand - 1 am prepared lo be corrected if wrong - that he is the shadow Minister for Labour. A cognate debate on this Bill and the Seamen’s Compensation Bill was held in the other place. The honourable member for Hindmarsh said, in part:

The Opposition has completed in draft form a full answer to the Governments Bill for a new Act. and copies of the Opposition’s proposal in that form are already in the hands of interested organisations, including the Secretary of the Australian Council of Trade Unions. Replies have been received from the Council of Commonwealth Public Service Organisations. We- 1 emphasise this po,n - await a reply from the Secretary of the ACTU. Because this has not yet come lo hand we have had to bold over until the Budget session our reply to the Bill. For those treasons the Opposition will not delay the passage of this Bill by lengthy debate, by moving amendments or by calling for divisions.

Honourable senators can see from that statement by the shadow Minister for Labour in the other place that not only the Government but the Opposition as well felt the need and justification for deferring the larger Bill. Having established thai point, I want to refer to a series of figures mentioned by Senator Cavanagh. They were very difficult to follow but I am not suggesting thai there was anything wrong with them. 1 understood him to say at the outse: of his comments that the new proposals in this Bill would still leave persons in receipt of Commonwealth compensation worse off in many instances than they are under State compensation legislation. Therefore I propose to cite figures which will help in my argument.

I obtained some figures showing a comparison of weekly payments under State compensation legislation and the rates proposed under this Bill. In the case of the Commonwealth the rate payable to a man is shown to bc S3 1.80 a week. That is the figure which has been quoted to honourable senators, and it is the highest figure. In New South Wales the figure is $26; in Victoria, $20; in Queensland, §29.30; in South Australia, $27: and in Tasmania, §29.80. The figure in Tasmania is the closest to that of the Commonwealth. In the case of a man with a wife the Commonwealth figure is shown to be S39.50. The figures for the States vary from as low as $26 in

Victoria to $37.90 in Queensland. The figure for Tasmania is $37. The Queensland figure is the closest to that of the Commonwealth. In the case of a man with a wife and I child, which I think is a fair basis on which to ascertain whether the Commonwealth payment is in excess of that in the Stales-

Senator Bishop:

– That does not give the proper picture.

Sena or Sir KENNETH ANDERSON-

I am responding to an argument put to me. The honourable senator must appreciate that 1 am making no higher claim for these figures than to use them in rebuttal of the argument put. In the case of a man with a wife and I child the Commonwealth figure is $42.30. The Tasmanian figure is $40.80 and for the other Slates it is as low as $28.50.

Senator Cavanagh:

– The Commonwealth is a neck ahead.

Senator Sir KENNETH ANDERSON:

–

I would bc perfectly happy to have these figures incorporated in Hansard if they would help the honourable senator in studying the argument I am advancing. The Leader of the Opposition (Senator Murphy) intervened in the debate to put a legal argument about when the compensation payment was due from a certain dale. He pointed out that there could be conflict of opinion as to the amount of compensation to be paid to an employee because of escalation or de-escalation of his wages. The honourable senator asked whether I would acknowledge the point of view he look. I said by way of interjection that I understood that this point was covered in the deferred legislation which is to be brought in during the Budget session. I am now informed that the general point raised by him is covered at least in part in the new proposals for further amendment of the Commonwealth Employees’ Compensation Act. However that Bill might not do precisely what Senator Murphy thinks should be done. The Bill has been deferred by common consent in order to look into all these matters. Accordingly, this point will be given further scrutiny.

I do not think I need go further into the second reading debate. I have covered the main points raised and I recognise that the Senate is supporting this Bill. I appreciate that there were a number of general matters in the field of workers compensation mentioned to which I could respond but I do not think they are relevant to this Bill. A question was raised in relation to negligence. I had the momentary thought that negligence could reflect both ways. In any event, an employee not only has a claim for negligence but, as I understand it, there is a common law right against an employer or his agent where it is considered there could have been negligence on the employer’s side. I thank the Senate for the passage of the Bill to this point and hope that it will have a speedy passage through the Committee stage.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator BISHOP:
South Australia

– I just want to make 2 quick points. I appreciate what the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) said about consultation with the unions. He will remember that I referred earlier also to the time when the Bill was prepared. We were told it was available in November last.

The TEMPORARY CHAIRMAN (Senator Sir Magnus Cormack:

– Order! We are in Committee and the honourable senator must address himself to the relevant clause.

Senator Sir Kenneth Anderson:

– It is all right, Mr Temporary Chairman.

The TEMPORARY CHAIRMAN:

– If it is good enough for the Leader of the Government, it is all right with me.

Senator BISHOP:

– I refer to clause 4. I draw attention to Table F in the conspectus issued by the Department of Labour and National Service, lt will be noted that in New South Wales and Queensland the total weekly payment for total incapacity is a sum equal to the average weekly earnings. In Tasmania the combined total maximum is 75% of the average weekly earnings if the average weekly earnings are over $57.90. Under the Commonwealth legislation the total amount payable for a man with a wife and, 2 children is $45.10. That is the only point I wish to make.

Senator MURPHY:
New South WalesLeader of the Opposition

– There was a point that I raised in the debate on the second reading but I was referring more to the Seamen’s Compensation Act.

Senator Sir Kenneth Anderson:

– 1 answered it.

Senator MURPHY:

– Yes, I heard the answer that the Minister gave. I said that I thought that the proposal that was coming forward did not quite meet the point that I was making. As I understand it, when we come to a substantive amendment of the present Act there will be a proposal that overtime be not taken into account in assessing the earnings either before or after an injury. May I make the suggestion, so it will go in the record, that this would not necessarily do justice. In fact, it may well produce an injustice because commonly one expects that in these cases there will be a reduction in the earning capacity and that there is then a reduction in the capacity to work long hours. Very frequently a person who is able to earn overtime before an injury is unable to earn overtime after it. That may be a real measure of his incapacity and of his economic loss. Simply to deduct overtime earnings from the preinjury earnings as well as the post-injury earnings may well do a very great injustice and I think would almost always result in an assessment which is not fair. So I ask that further consideration be given to this matter because it becomes a very real problem in the practical application of these statutes.

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

[8.35] - I can only promise, as I did before, that the points made by the Leader of the Opposition (Senator Murphy) will naturally be looked at when this legislation is subsequently examined for future presentation to the Parliament.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

Bill (on motion by Senator Sir Kenneth Anderson) read a third time.

page 2570

QUESTION

DIVISION OF NATIONAL MAPPING

Senator WRIGHT:
Minister for Works · Tasmania · LP

– by leave -I refer to Senator Murphy’s question in the matter of the photographing of staff members of the Division of National Mapping. The Department of National Development, of which the Division is a part has providedthe following information on the circumstances in this matter.

At a meeting of supervisors in the Canberra office of the Division it was decided that group photographs be taken of each Section, the photographs to be compiled into an album along with the names of each staff member, as an aid to personal recognition and better and more friendly staff relationship. About 10 sections involving approximately 120 staff members have been photographed by the departmental photographer. The decision to take these photographs was that of the Department of National Development. The Australian Security Intelligence Organisation had no connection with or knowledge of it.

On 8th June, an Acting Drafting Assistant, Grade 2, protested that she did not want to be photographed, but her supervisor, rather unwisely, told her that she must. My advice is that she was upset at the decision but was not crying and she was not advised that she would be dismissed if she refused to be photographed. The photograph was taken in a conference room in the basement of the building where her Section is housed in a group of approximately 10 or 12 people. The officer complained in a letter to the Secretary of the Department on 10th June that she objected to her photograph being taken and asked if the negative and any prints of her group photograph could be destroyed in her presence. The film was developed and the negative handed to her on the afternoon of 12th June. No prints were made. She destroyed it herself in the presence of a representative of a staff association, her supervisor, a personal woman friend, and a senior officer of the Division. She expressed herself to be satisfied and that the matter was closed as far as she was concerned. There was no objection from any other officer. The Attorney-General has informed me he has made inquiries into the matter and the fact is that the Australian Security

Intelligence Organisation was never concerned in the matter, never authorised the proposal and had no knowledge of the occurrence.

page 2570

SEAMEN’S COMPENSATION BILL 1970

Second Reading

Consideration resumed from 12th June (vide page 2417), on motion by Senator Cotton:

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 2570

CUSTOMS TARIFF BILL 1970

Second Reading

Debate resumed from 12th June (vide page 2421), on motion by Senator Cotton:

That the Bill be now read a second time.

Senator O’BYRNE:
Tasmania

The Customs Tariff Bill covers a wide range of items in which changes have been made. This measure validates those changes. The changes were made over a period of several months last year and earlier this year. To the extent that this Bill validates these changes we on this side of the chamber have no opposition to it. There is a section of this legislation about which we are critical. I refer to the Thirteenth Schedule, which is one of the 14 schedules that comprise this Bill. The amendments that are proposed by the legislation follow recommendations contained in reports of the Tariff Board and Special Advisory Authority. As 1 have said, the Tariff Board has recommended alterations in a number of items. The First Schedule deals with floor and wall coverings, gloves and mittens and secateurs. The Second Schedule deals with the admission of new commodities agreed to by the Australian and New Zealand Governments. The Third Schedule deals with cherries preserved in sugar, crystallised or glazed cherries. In the Fourth Schedule the tariff is removed from urea imported for use as fertiliser. The Fifth Schedule implements the report of the Tariff Board on slitting machines and also on wooden articles and cutlery forks and spoons. The Sixth Schedule implements a report on metal working machine tools. This is a Special Advisory Authority’s recommendation which deals with general purpose lathes.

The Seventh Schedule implements Tariff Board reports on such diversified things as almonds, compressed gas cylinders, flexible metal tubing, piping and transmission shafts, taxi meters, time switches, movements and parts and the like. We in the broad support these recommendations of the Tariff Board. But in the Thirteenth Schedule the Board has recommended a substantial reduction in the tariffs of a very important industry. I will refer to this in depth in a few moments. The policy of the Government relating to tariffs has presented a great challenge to the whole economy of this country. The Tariff Board has examined the position as it exists on evidence placed before it.

I would like to refer to the Tariff Board’s report on man-made fibres and yarn, which is the item that we wish the Government to review. It is the Opposition’s intention to move in the Committee stage that the whole of the Thirteenth Schedule be omitted. The report of the Tariff Board on man-made fibres and yarns, dated 18th December 1969, contains a table which shows that for the year 1967-68 there was an estimated Australian demand for 105 million lb of cellulosic - acetate and viscose - and non-cellulosic material. The Board pointed out that the Australian supply is produced by 2 companies which have a combined capacity of 63 million lb per annum. Therefore, at the time of this report there was a considerable leeway to be made up before the Australian industry could meet local demand. The capacity here was in the hands of 2 main companies. The first company was Courtaulds (Aust.) Ltd, which is controlled by a British company. It has been producing acetate continuous filament apparel yarn since 1953 and also high tenacity yarn and tyre cord fabric since 1954. This company supplies most of the Australian demand for these products but does not produce viscose apparel yarn or cellulosic staple fibres. The second company is Fibremakers Ltd, which is a wholly owned subsidiary of Imperial Chemical Industries of Australia and New Zealand Limited which is controlled by Imperial Chemical Industries. This company has been producing nylon 66 since 1958 and polyester since 1964. Its range of production of both fibres includes staple fibre, tow and continuous filament yarn for apparel and industrial purposes. The local industry has been supplying a high proportion of the growing market for nylon and polyester fibres and yarns.

The conditions of supply from overseas is a matter of great importance because world demand and supply of man-made fibres has changed dramatically over the period from 1958 to 1968 which is covered by this Tariff Board report. The report brings into very sharp relief the problem that the wool industry has in presenting Australian natural fibres and competing with the great and growing demand and supply of synthetic fibres. Table 4 of the Tariff Board’s report on man-made fibres and yarns, which is contained on page 9, shows that in 1958 the production of manmade fibres was 5,938 million lb. This was 19.4% of all fibres. The total amount of man-made fibres increased in 1968 to 16,066 million lb, which was 35.9% of the total of textile fibres. The table also shows that the total amount of other fibres, which is made up of our wool, cotton and other natural fibres, could increase only from 24,594 million lb in 1958 to 28,665 million lb in 1968. World production of man-made fibres has increased from 5,000 million lb to 16,000 million lb, while production of natural fibres has increased from 24,000 million lb to 28,000 million lb. Those figures indicate the enormous increase in the production of synthetic fibres.

The man-made fibre industry put forward quite a strong case to the Tariff Board. The producers referred to their cost disadvantages compared with overseas competitors and the factors contributing to them. They said that generally Australian costs of labour, installations, power and services are higher than those of overseas competitors. They said that the smaller size of the Australian market in comparison with domestic markets in the principal sources of competition also tends to result in higher unit overhead costs for Australian manufacturers. Reference is made in the report to the economic worth and efficiency of the industry and to the measures that have been taken by one firm, Fibremakers Ltd, to improve productivity. This was given as evidence of improvement in efficiency since the previous inquiry. Fibremakers claimed that the efficiency of its operations compared more than favourably with that of its parent company and with Austraiian manufacturing industry generally.

The Board had requested information on the economic worth of the industry. Both Courtaulds (Aust.) Ltd and Fibremakers gave evidence relating to the cost and benefits of protection. They said that the importance of the Australian synthetic fibre industry was shown by the fact that it produces essential raw materials used in the manufacture of textiles for apparel and in domestic, defence and industrial applications: it employs about 3,000 persons and pays almost $10m annually in salaries and wages; it uses fixed assets, that is. land buildings, plant and machinery valued in 1967 at $30m and working capital amounting to $20m: its total value of output was approaching $45m in 1967; its value of production, that is, value added in the process of manufacture per employee is exceptionally high in comparison with other sectors of manufacturing industry - in the case of one manufacturer it exceeded $10,000 per employee; it is an important part of the Australian industrial complex as it is an outlet for many other sectors of Australian industry - Fibremakers alone purchased $6m of local goods and services; and it provides benefits to using industries by way of technical and commercial assistance. lt can be seen now that the synthetic fibre industry is of great and growing importance to Australia, lt can be classified as one of the test cases to be used in determining the whole of our tariff policy. During the course of his remarks in another place, the honourable member for ‘..alor (Dr J. F. Cairns) referred to the importance of the industry and outlined the Opposition’s attitude to it. He said that the Australian Labor Party stood for a number of principles in this matter. He continued:

The first is that we wit] guarantee protection to Australian industries that are efficient and economic. The second is that we do nol consider that protection can be solved by abstract theories of free trade or protection that often assume conditions of competition thai do not and never have existed in real life. Next, we believe that a correct decision can be made about protection only if we know the facts. We do not know the facts now, as the Tariff Board is noi equipped to ascertain them.

During the course of a debate that ranged over a very wide field in another place the point was stressed that although the Tariff

Board had done a magnificent job over the years, it has not available to it the physical capacity to examine all the factors associated with the effect of tariffs and duties on imports in the balancing up of our economy. The facilities of computerisation and automation should be made available to the Tariff Board when it is involved in an inquiry. In that way it coul’d work out closer to reality the degrees of protection or increases or decreases in tariff that should be imposed.

I should like to refer to the definition of an economic and efficient industry which is contained in the report of the Committee of Economic inquiry - commonly referred to as the Vernon Committee. At page 372, paragraph 14.1.1, it is stated:

The term “efficient’, when used in the context of the Tariff, normally refers lo technical efficiency. lt cannot be distinguished clearly from questions of economic efficiency, although there ure significant differences between the two concepts. An uneconomic industry may be as efficient in a technical sense as an economic one. The latter may enjoy marker opportunities and economies of scale nol available to the former. Frequently, technical efficiency is judged in terms of maximising output in relation to a given input (output per man-hour would be an example) . . .

That definition introduces a new concept of differentiating between economic efficiency and technical efficiency, lt is not the Tariff Board’s purpose or responsibility lo dictate economic policy to any government. Its job is to make recommendations to government. But traditionally the Tariff Board has marshalled all the information that has been available from the various industries and it has made certain recommendations on that basis. It is the Opposition’s view that this approach has to be improved and that the complexities of tariff have to be examined in greater depth.

The Vernon Committee’s report referred to the role of the tariff in Australian economic growth. I think that the Senate should take note of the importance that has been attached to this section of the report relating to the tariff. Amongst other things it states:

We gave some attention to particular aspects of tariff-making: The complexity of the Tariff Schedule, the scope for anticipatory duties, the nature of existing international obligations and, nut least important, the problems created by the attitude, somewhat too prevalent, that once an industry exists it should receive all the protection it needs. We suggest thai the Board should feel free to recommend that structural adjustments be undertaken when an industry has ceased to be, or shows no promise of becoming, economic and efficient. We strongly suggested that references to the Board should be more frequently in terms which enable it to examine entire industries. We believe that a more rational tariff structure can be evolved in this way because it affords the Board and the industry an opportunity to devise a system more conducive to economic and efficient growth.

This recommendation suggests a completely new approach to the activities of the Tariff Board and its traditional practice of recommending to the Government the imposition of or a reduction in tariffs. 1 have taken particular notice of the remarks which were made in the other place by the honourable member for Lalor, who said that without effective tariffs we would have little secondary industry in this country. Similarly, without effective subsidies we would have many thousand fewer farmers in Australia. As a matter of fact, there would be very few people in Australia. Australia’s tariff policy over the years has been a matter of great concern. 1 recall the great battles which were fought between advocates of free trade and of protectionism. Australia is relatively distant from the larger countries of Europe in which industrial development occurred so much earlier and more quickly. These countries have the capacity to produce in large quantities. We have had to provide for the future by protecting our infant industries. We are now reaching the stage where a review has to be made of the level of protection given. In Australia an industrial structure has been built up which is changing continuously.

Honourable senators on this side of the House believe that the tariff reductions proposed in the Thirteenth Schedule are below the recommendations which were made as a bench mark. The reductions are from 10% to 20%. This is a low tariff. It is a threat to an industry which, as I have previously pointed out, employs a considerable number of people and in which a large amount of capital is involved. This industry is a most important segment in our economy. The Opposition opposes the Thirteenth Schedule because a technically developed industry which has grown up under the protection of tariffs and which has taken its place in the economy should not be disturbed to the extent that it will be as a result of this Thirteenth Schedule.

The comments which have been made regarding the splendid and conscientious work which has been done by the members of the Tariff Board over the years should impress people in this Parliament with the need for the imposition of tariff charges on imports in order to sustain our industry and level of employment. Australian industries which are efficient and economic must be guaranteed protection. The Opposition does not believe that the protection should be given on the basis of abstract theory, but that it should be worked out in such a way that it does not give undue advantage to Australian industries insofar as prices are concerned but gives every opportunity for Australian industries to expand. An inquiry has not been conducted in width and depth into Australian industries generally which are protected by tariffs. Our tariff policy has been a patchwork one in that, individual industries have had to make application to have their cases reviewed by the Tariff Board. ( believe that a complete review should be made of the incidence of tariffs throughout the whole of our manufacturing and other secondary industries.

The Australian Labor Party will continue to support tariff making and also a widening of the field of reference of that activity. The Labor Party will assist the Tariff Board and equip it in such a way that it will be able to obtain the fullest possible knowledge of the facts which are necessary in the conducting of such a review. I formally give notice that in the Committee stage the Opposition proposes to request the House of Representatives to omit the Thirteenth Schedule from the Bill. If this move is unsuccessful the Opposition intends to vote against the Bill.

Senator SIM:
Western Australia

– There was a time when Senator O’Byrne, Senator Bull and 1 would have agreed on tariff policy. There was also a time when the honourable member for Lalor (Dr .1. F. Cairns) and I would have agreed on tariff policy, lt is probably the only thing on which I would ever have agreed with him. But it appears as if somebody has influenced them to change their opinions and they have done a complete turnabout. I regret to hear Senator O’Byrne say tonight that the Opposition is going to oppose the Thirteenth Schedule to the Bill, which deals wilh man-made fibres, because 1 can well recall many of the speeches which Senator O’Byrne has made in this chamber on tariffs in which he has expressed his strong support for the principles of tariff making which were laid down by the Tariff Board in its annual reports of 1966-67 and 1967-68. I do not know what has happened, but it would appear that the Australian Labor Party is turning back towards protectionism as a policy.

Senator Webster:

– It has always been protective.

Senator SIM:

– I heard an honourable senator whisper that the Labor Party has always been protective, but there have been some doubts about its policy. I can well recall the honourable member for Lalor expressing in the other place full support for the Tariff Board’s attitude. It is not a question of protectionism versus free trade, although some people think it is and that the only issue is black or white. This is a matter of adopting a sensible approach to tariff making in this modern age.

Because of the time factor I do not intend to deal tonight at length with this question of tariff making in Australia. I regret that it seems to be the custom for tariff proposals to be brought into the Senate at the end of a session. It is a long time since we have had a real opportunity to discuss tariff making in Australia at some length and in some detail. I would welcome a debate on this subject at any time. I have spoken at considerable length on this subject in the past. My views are wall known to honourable senators. Therefore, I shall speak very briefly tonight. I wish to congratulate the Tariff Board on its excellent report on manmade fibres. I will strongly oppose the amendment which the Opposition proposes to move for the omitting of the Thirteenth Schedule to the Bill

Ever since the Tariff Board announced a new approach to tariff making in Australia many sections of industry have squealed even before they have been hit. They have read into the Board’s report all sorts of dire results to them. If we study the history of tariff making in Australia we will see that the plain fact is that a great number of our industries grew up in times of economic stress without reference to the Tariff Board.

There were long periods in our history during the First World War, during the economic depression and during the Second World War when industries were granted high levels of protection because of the needs of the time. Many of those industries have grown and still receive the high levels of protection that were granted to them in those days. Because of pressures and for other reasons, the Tariff Board has not had the opportunity to review the levels of protection granted those industries. What has become, known as the existence principle - the principle that because an industry exists it must be protected at all costs - has grown into the tariff making policy in Australia. Today the Tariff Board is starting to rethink that policy and that has caused some heartburnings in industry.

This is a fascinating subject and one which I would welcome the opportunity to develop, but I will not do so tonight. However, let me say that in Australia today we face a situation in which tariffs represent a substantial cost to the Australian community. They represent a substantial cost to our unprotected primary industries. When I speak of unprotected primary industries I have in mind particularly our great wool industry and our meat industry. There is no denying that tariffs represent a substantial cost. They are, in effect, a tax on imports that the community must bear. No-one quarrels with reasonable protection for Australian industry, because we must have industry. The criterion ‘economic and efficient’ has always been difficult to define in precise terms. The Tariff Board in its 1967-68 report indicated clearly that it was trying to develop criteria by which it could define in more precise terms the phrase ‘economic and efficient’.

If the need exists to rationalise and restructure our primary industries because of changed economic conditions - I think many of us agree that that must be done; indeed we passed a Bill only yesterday relating to the dairying industry which, in effect, is an attempt to restructure the industry - surely the same principle applies to our manufacturing industries. This country no longer can afford uneconomic use of its scant resources, whether primary industry or manufacturing industry be concerned. We must be prepared to change to meet the economic conditions which exist today and which are likely to exist in the future. It is unchallengeable, I believe, that high protection has led to fragmentation in a large number of Australian industries. This has meant many plants competing for a small domestic market. There come to mind immediately the chemical industry, the motor car industry - at one stage we had 5 manufacturers competing for a small Australian market but now there are only 4, one. having gone by the board - and the small engine industry which was the subject of a Tariff Board report several years ago in which the Tariff Board was somewhat critical of the fragmentation of the industry. lt is an economic fact of life that high protection imposes a correspondingly higher cost on Australian industry than does a lower degree of protection. Therefore the Tariff Board announced its policy of reviewing areas of high protection to see whether the industries concerned still require the high level of protection which was granted to them, in some cases many years ago, and whether they can exist efficiently with a lower level of protection which will impose a correspondingly lower cost on the Australian community. The Board also will exam ne those industries which are receiving a higher level of protection to see whether they are making a contribution lo the development and growth of. Australia. That is a sound policy particularly when we realise - I believe we all must acknowledge - the tremendous pressures upon the labour market, especially the skilled labour market, and upon the scarce economic resources that are available to us to develop this country.

We are indebted to people of the calibre of Sir Leslie Melville, a former Chairman of the Tariff Board, who in 1967 directed critical attention to this aspect of tariff making in Austral a: to the Vernon Committee, which 1 believe in its comments on tariff policy produced the best parts of its report; to Mr Kanigan, the present Chairman of the Tariff Board, who with great courage has outlined what he believes to be the correct policy of tar fT making in Australia; and to Sir Alan Westerman, Secretary of the Department of Trade and Industry. I should like to quote a statement made by Sir Alan Westerman in a speech to the Australian Chemical Industry Council last year, because it is true that Australian industry must look increasingly to exports and therefore must be competitive on the world markets if Australia is to get the throughput necessary to keep costs within reasonable levels. Sir Alan Westerman said:

The alternative to making the world our market for secondary industries is ossified, stultified secondary industry based on products with smaller domestic opportunities and hence relying upon higher and higher tariff barriers with a decreasing rate of development and meriting the description uneconomic and inefficient.

I do nol believe that anyone in this place would disagree with those remarks. They put in a nutshell the attitude that I and my colleague Senator Bull, as well as Mr Kelly, Mr Street and Mr Maisey in another place, have adopted for many years in putting forward our views on tariff policy. f wish to conclude by making only a brief reference to this Thirteenth Schedule, which Senator O’Byrne has announced the Labor Party will oppose. This relates lo the Tariff Board’s report on man-made fibres, which produced from the textile industry a perhaps understandable reaction, because this industry has enjoyed for a long time a substantial level of protection. I think wc all recall the full page advertisements which appeared in the daily Press protesting against this decision of the Tariff Board. Many of us received correspondence from this industry suggesting that we should oppose the Tariff Board’s recommendations which were accepted by the Government. These advertisements were, at best misleading. Although it is true that the textile industry employs some 150.000 people, employment is not the criterion by which we should determine tariff policy. These Tariff Board recommendations affect, 1 understand, only about 2.5% of the textile work force, so about 97.5% arc noi affected by the recommendations we are discussing tonight.

Senator Webster:

– How can the honourable senator suggest that?

Senator SIM:

– These arc the figures I have been given. Unless someone can prove that they are wrong I will accept them.

Senator Webster:

– Where did the honourable senator get them from?

Senator SIM:

– I have them, and if Senator Webster wants to dispute them he may. Many sections of the textile industry depend upon low priced imports to carry on their section of the industry. The main organisation concerned with these recommendations was Fibremakers Ltd, which is a subsidiary of Imperial Chemical Industries, an international company. Last night I heard my friend and colleague Senator Webster discussing the margarine industry and complaining that the overseas companies producing margarine were undermining the butter industry in Australia. I suggest that the same principle might apply here. ICI is an overseas company. If that principle can be applied to the margarine industry, let us apply it to other industries.

As I understand it, Fibremakers buys its raw material from its parent company at prices above those for which it could buy from other sources. Therefore I find myself without great sympathy for this industry. If it is not able to compete with other industries we must consider whether it is an industry worth saving. I say this quite deliberately because w.; have to apply the same criteria to secondary industry as we apply to primary industry today. We should not apply one rule for one industry and another rule for another industry. If an industry cannot compete on reasonable terms with due regard to our cost structure we must question, as the Tariff Board questions, whether it is an industry worth saving in view of the effect it is having on the cost structure of the Australian community. We have heard a great deal about employment.

Senator Webster:

– What a lot of rubbish.

Senator SIM:

– I will not argue with Senator Webster. I would be delighted, if we had more time, to enter into a debate with him on this whole matter. But, as I said, I intend to speak very briefly and to close on this subject. I stand by my speech, and I will be happy to debate with Senator Webster before any group of farmers anywhere in Australia tariff policy, including the protection of the textile industry. I conclude by saying that one of the great myths that have been built up in Australia is the myth that high protection is necessary to sustain a high level of employment. I say this is a myth because we have had in Australia a higher level of employment in manufacturing industries than exists in the United States of America. It is a truth that as countries deveop the proportion of the population engaged in secondary industry falls. The great employment agencies are the tertiary industries, not the manufacturing industries. Not so many years ago some 35% or 36% of the Australian work force was engaged in manufacturing industries. Today the figure is down to about 25%. Of this 25% no more than 15%, according to the Vernon Committee of Economic Inquiry, are engaged in protected industries. So manufacturing industries are not, as we have been led to believe, the biggest employers of labour, and they do not absorb the whole of our immigration intake. It is the great tertiary industries which, as we develop further, become the main employers.

Senator Webster:

– Such as what industries?

Senator SIM:

– Does Senator Webster not know what tertiary industries are? He should do his homework. I refer to transport industries, insurance companies and all those other industries apart from manufacturing industries.

Senator Byrne:

– Service industries.

Senator SIM:

– Yes. They are referred to as tertiary or service industries. They are the great employers of labour and they will become increasingly so as time goes by. I regret that I have dealt with this subject only very briefly, but it is because the time is late and we are ending the session that I have done so. I support fully the Tariff Board report. I congratulate the Tariff Board on its report and on the attitudes that it is adopting, which I believe are in the best interests of Australia.

Senator BYRNE:
Queensland

– It is indeed unfortunate that the implications of a matter of such consequence should come before the Senate in the dying hours of this session and in association with this measure because undoubtedly this Bill is being used, and quite properly used, as a vehicle for the discussion of matters of very great import to the whole structure of the Australian economy. As other honourable senators have suggested, this might well be a topic that would occupy on a particular motion th; attention of the Senate, with adequate study being allowed in advance and the presentation of considered ideas. 1 particularly regret from the point of view of the Minister for Civil Aviation (Senator Cotton) that this debate is taking place in these circumstances, because I know that this is a matter of considerable interest to him and one which in other circumstances might have prompted a most valuable contribution from him in the debate. I would therefore hope, along with other senators, that some opportunity might be given at some future date to discuss this matter.

In the modern Australian economy, and perhaps in most modern economies, ‘here are substantial disciplines of one character or another. The major disciplines which are exercised in the Australian economy have stemmed from about five principal sources. There is first of all the discipline over monetary policy which is exercised by and through the Reserve Bank of Australia. There is the discipline over the capital investments by way of loans exercised by the Loan Council. There is the wage policy as enunciated in the judgments, deliberations and pronounciations of the arbitration systems. Commonwealth and Stale, and in the declaration of a national wage. There is the great fiscal control exercised through the annual federal Budget. Last but not least is the operation of the Tariff Board.

In this modern Australian economy the Tariff Board must be prepared to assume its proper place and accept its proper responsibility as one of the great contributing economic disciplines in our society. For years the Tariff Board has been occupied with consideration of applications and the variation of a tariff here or there or its application here and its removal there. But in more latter years and in more recent reports by the Tariff Board it has become evident that the Tariff Board is now seeing itself in its true perspective as one of the contributing disciplines in the Australian economy. I think it is a development we should all welcome because, after all, it is quite proper that if this role is to be played by the Tariff Board in a proper manner it must publicly acknowledge the principles on which it feels disposed to operate and the part which it thinks it can most valuably play in the development and organisation of the Austraiian economy. Whether the principles enunciated by it in more recent times are correct, and whether Senator Sim’s or Senator Webster’s proposition finds general acceptance, the Tariff Board does enunciate certain general principles and it is a question of how they should be applied in the Australian scene today.

While a body such as the Tariff Board operates in a condition of semiindependence it is not totally independent of government control. A common misconception existed that the Reserve Bank of Australia was operating in a sense as a determinant of monetary policy independently and free of government control. But the recent intervention of the Government in relation to the fixation of interest rates showed quite definitely and clearly - perhaps not for the first time - ‘that that is not so. I am not criticising or passing judgment on it: I am merely stating it as a fact. The Commonwealth Conciliation and Arbitration Commission, however, is virtually completely unlimited in its deliberations and its approach to the matters which are its very high responsibility. Being of a judicial character governments have the opportunity and the right to present cases before it and to present their point of view on national wage fixation and other matters. Beyond that they are not in a position to control the deliberations of the Commission and certainly not its final conclusions and its judgments and pronouncements.

The Australian Loan Council is a body with which to negotiate on the economic estimate propounded by the Commonwealth Government as to the availability and the capacity of the loan market. The annual Budget, of coins;, is an instrument of direct Commonwealth control. But the Tariff Board is not completely independent. lt can make recommendations and, in the main, those recommendations are adopted by the Government. That does not always have to be the case, and it is not necessarily so.

The significance of the Tariff Board becomes increasingly great as one witnesses the development of Australian society - that is, the economic society and the social order - and as we see the need to use the term used by other honourable senators - one of the modern terms - namely the restructuring of Australian industries both primary and secondary in the light of the new Australia which is about us. Unfortunately we are inclined to use the old weapons to handle new situations. So often we fight modern wars with the weapons of the previous war. lt is quite possible that in an approach to the new Australia we are still not clear what form it will take. We are not taking adequate steps quickly enough to orient Australia in the direction in which there will be the greatest reward and most value for this nation.

The Australian Democratic Labor Party has given notice of motion in relation to rural industries. After some debate this notice of motion rests on the notice paper. It is a proposition for a royal commission to examine the whole structure of the rural industries. The notice of motion was countered by 2 amendments. The Australian Labor Party’s amendment stated that the matter should be left to the Australian Agricultural Council. The Government moved an amendment in which it suggested that there should be industry submissions as to the restructuring of individual industries. It was precisely for the reasons to which I am adverting in the course of this debate that we did not project such an approach to this problem of the rural industries any more than we would project a similar approach to the problem of secondary industries. We do not see the problem of the rural industries as a problem of industry A, B and C. The DLP believes there is a necessity to restructure these industries according to varying market capacity, varying consumer demand according to costs and prices, population distribution and redistribution, attractions or lack of attractions on the land, urbanisation, transport, and matters of that character. In other words, there has to be a complete review of the whole structure of our rural industries.

Senator Dame Ivy Wedgwood:

– This is independent of any pressure whatever, is it?

Senator BYRNE:

– Exactly. It would be independent of any pressure. It would be something not from industry itself but an independent body that would call evidence and produce the most authoritative submissions available. It would reach objective conclusions. My Party has moved that motion because the participation in the restructuring of industry and the operations of the Tariff Board could be of prime importance. Undoubtedly many of the problems in the rural industries stem from the tariff situation. Whether the tariff is too high or too low is a matter for disputation. Whether it is affecting our capacity to export at economic prices and at competitive prices with an adequate return to Australia is a matter for disputation. Undoubtedly a matter such as the operation of the tariffs in Australia is a matter essentially to be discussed in any proper, constructive and modern approach to the rural industries. I only instance that; it is not my intention to speak unduly long at this stage. But I do think this chamber would be deprived of a magnificent opportunity to discuss one of the most important matters facing Australia - that is, a complete redetermination of the form the Australian nation is going to take at the productive level in industries, primary and secondary, in the light of the mining boom, in the light of the new reliance of this country on mineral exports for overseas credits and things of that character - if we were to confine discussion to occasions such as this in the dying hours of the session and on a Bill which is merely specific in its character. I would welcome an intimation from the Minister for Civil Aviation who in this chamber represents the Minister for Customs and Excise (Mr Chipp) that at an appropriate time in the Senate - and sometimes the Senate does have opportunity before legislation comes through from another place - a motion might be put down in which honourable senators of all political shades and from various walks of life might intimate their concept of the function and role of the Tariff Board in the modern Australia and whether, in the restructuring of the Australian economy, consideration should be given to this and, if so, what part it should play. I commend that suggestion to the Minister. The Australian Democratic Labor Party supports the Bill.

Senator COTTON:
New South WalesMinister for Civil Aviation · LP

– in reply - I will be a little out of sequence in commenting on the various remarks made by my colleagues. I will try, very briefly, to make some comments that will hang together. To some extent Senator Sim and Senator Byrne were on the same ground and, therefore, I would like to comment on their speeches first rather than later. The timing of tariff proposals is dictated to quite an extent by the limited validity of Tariff Board reports. Tariff proposals are Iimited to 6 months. This, of itself, does provide an opportunity for at least 2 debates a year. Senator Byrne and, to some extent, Senator Sim made a general comment about the importance of this issue and the need for a consequential debate on this issue. This is a point well taken by me because 1 have been known to have said this on an earlier occasion. I shall bring the point to the notice of (he Minister for Customs and Excise (Mr Chipp). Honourable senators will recall that from time to time Tariff Board reports are tabled in this chamber and these provide an opportunity for debate. As a rule they are fairly well noted ahead on the notice paper. Equally the Tariff Board’s annual report is put down in this chamber and that is an event which provides opportunity for debate.

Senator Sim:

– The Senate has not had a chance to debate it.

Senator COTTON:

– I appreciate what Senator Sim is saying, but sometimes by force of circumstances we do not have the time that we might like to have for that purpose. I say to Senator Byrne that I must res st the opportunity that he offers mc to take part in this debate because, as he says, it is a fascinating subject. One would like to be involved substantially in the policy issues which this subject undoubtedly does and can raise.

Briefly, the significance of the Tariff Board is very clear. I think, to every honourable senator. The work that it does is of very great value indeed. The Board is changing in its attitude to some extent and it properly ought to change as this country changes. The Board really to a very great extent holds up the Australian employment capacity in the manufacturing sector. But in the process of doing so it also holds up living standards because this is an interdependent economy. We cannot really do without any section of it. It all moves together. lt meshes together, and without all the cogs turning the whole machine does not function.

Some comments were made by Senator O’Byrne about the Vernon Committee, and 1 think it is approrpiate to mention that the general approach of the Vernon Committee was that there was an average cost disability in Australia of the order of 30% to 35% when set against the competitive countries that we had to live with in the manufacturing scene. This was a disability that came about for a couple of reasons. It came about because we did not have industries of scale and we did not have the marketing and the manufacturing advantage of size. To some extent it came about because of the Australian wage structure. But in very few cases could it be truly said that the Australian industries were totally inefficient. That can be said of some groups of industries but it cannot be said ad lib across the board. There are some notable examples in this country of industries which have had tariff support, having grown strong and the support as such having been able to be withdrawn.

In response to Senator O’Byrne, who led for the Opposition, I think I could make one or two comments which might be helpful to him. Firstly, 1 understand from what he said that the Opposition will in the Committee stage be making a request that the Thirteenth Schedule be deleted. I must indicate to him that the Government is not prepared to agree to that request. We could not agree. He raised a number of worries that he has in connection with this matter, and I think the best thing I can do tonight is to be as. brief as possible. I should say to the Senate at large that the Government has accepted this Tariff Board report. My colleague, the Minister for Trade and Industry (Mr McEwen), answered criticisms last week about these reports and about the Government accepting them. He said quite simply that if there is a problem flowing out of any of this, and he doubted very much that there would be, and if anybody found himself in economic peril he could apply lo the Minister for reference to the Special Advisory Authority. We all know that this has been done in the past and we all know that it can be done again. Those of us who have had something to do with the tariff operations outside this Parliament on what I might call the receiving end know that reference to the Special Advisory Authority is a quick and effective operation if anybody in distress wishes to avail himself of it.

Senator O’Byrne made a point that the Thirteenth Schedule represents reductions. I am advised that the majority of the changes are increases on the previous nontemporary duties, lt is only when the temporary duties are looked at that the reductions are more numerous. The temporary duties have now lapsed but the overall situation is one that is, if anything, slightly better in the light of what we have had in the past. Senator Sim made a comment about manufacturing and its employment capacity. I am advised the work force in manufacturing industries contributes 28% to the gross national product. It is true that the tertiary sector is a larger employer as a percentage of the total employment field. Indeed it will always be so in an economy that is advancing as this economy is advancing.But I think one could confine oneself to the observation that we are living in an interdependent developing economy. I do not really think that any one sector of this economy can afford to do without the other. What is expected and hoped for in this country is that we will use our strength acquired through earlier years to do the things that ought to be done for the benefit of the Australian people as a whole. The broad aim of the whole of the Australian people is to have a design to promote growth, prosperity, well-being, full employment, which makes maximum use of resources and achieves the highest possible living standards consistent with security and safety. It is that which governments seek to achieve. The Tariff Board has been in the past and will be in the future an essential ingredient of such a process of achievement. So having said those words, I suggest to honourable senators that at the Committee stage there is no purpose in my involving myself in repetition. At the point that Senator O’Byrne mentions that the Opposition requests that the 13th Schedule be deleted, I will not be agreeing to that on behalf of the Government.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator O’BYRNE:
Tasmania

– Having outlined the Opposition’s case during the course of the second reading debate against the retention of Schedule 13 and in view of the fact that there is a time element in the debate tonight, I formally move:

That the House of Representatives be requested to leave out Schedule 13.

Question put:

That the House of Representatives be requested to leave outthe Thirteenth Schedule.

The Committee divided. (The Temporary Chairman - Senator Sir Magnus Cormack)

AYES: 22

NOES: 24

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Bill reported without requests; report adopted.

Third Reading

Bill (on motion by Senator Cotton) read a third time.

page 2580

SNOWY MOUNTAINS ENGINEERING CORPORATION BILL 1970

Second Reading

Debate resumed from 12 June (vide page 2424), on motion by Senator Cotton:

That the Bill be now read a second time.

Senator WILLESEE:
Western Australia

– The Bill that we are about to discuss is a Bill for an Act to establish a Snowy Mountains Engineering Corporation and for purposes connected therewith. I emphasise the word ‘establish’, because this is to be a completely new corporation. The term Snowy Mountains’, incorporated in the name of the Snowy Mountains Hydroelectric Authority, has become very famous in Australia over the last 20 years. The Authority is phasing out with the completion of the Snowy Mountains scheme. The new Corporation to be set up will do more general work and on a very much more limited scale. I intend to stick pretty closely to the objections of the Australian Labor Party and briefly to outline the powers of the new Corporation. It would be very easy to deal with the original scheme, because it has now grown to be a very great and efficient organisation. It has had a stormy history politically. I think that it has been adequately debated before the Australian public and that there would not be any great point in my continuing it in the dying stages of this session.

I think it is fair to say that the Government has been reluctant over a period of time to introduce this Bill. It has suffered a lot of criticism and there have been a lot of pressures. The Australian Labor Party has had a lot to say about it. Prominent engineers who have been associated with the Snowy Mountains scheme have criticised the fact that the Authority has been allowed to run down as far as it has. We support the Bill, but we intend to move amendments to it because we feel that the new Corporation will be hamstrung in many ways. I suppose the great success of the Snowy Mountains scheme stems from the boldness that was displayed. It was undertaken with technical knowledge some of which had been gained prior to the turn of the century. People had been brought from overseas by the New South Wales Government in the early 1930s. It was finally the boldness of one man, the late Ben Chifley, who stood up and said: ‘Here is the finance for it,’ that led to the work being commenced. A lot of people have received credit for it. Mr Nelson Lemmon was the Minister in charge at the time. I have always thought it was boldness which enabled the Snowy Mountains scheme to develop. But that boldness is lacking in the scheme before us today. The success of the Snowy Mountains hydro-electric scheme stems from the fact that it was placed under the administration of a very great man in Sir William Hudson who moved in with government backing but with all the courage and imagination of a great engineer. In no time he had brought people together from all over the world; he spread his tentacles all over the world picking up contracts and doing all those things that were necessary to bring the scheme to fruition.

I have circulated a paper which shows not only the clauses we support but also the clauses we intend to oppose hoping that by so doing honourable senators will learn the gravamen of our objection. It could be summed up in a sentence by saying that it seems to us that the Government set out to establish what ought to be in the best interests of private industry - which is what the Liberal Party talks about - that is, competition with other engineering firms and other firms doing this sort of work in Australia. But then the Government hedges the Corporation around with so many restrictions that we feel that if any government or Minister was not very anxious to do something about the proposal it, or he, could easily stultify it. Clause 17 shows what work has to be done. I will not read it out now because I will be dealing with it a little later. I would like to quote clauses 24 and 30 to indicate what is expected of this Corporation. Clause 24, the side note of which is ‘Financial policy of Corporation’, states:

In the exercise of its functions the Corporation shall pursue a policy directed towards securing, in each financial year, revenue sufficient -

to meet the expenditure of the Corporation properly chargeable to revenue of that year;

to enable the Corporation to make provision for income tax; and

to permit the payment to the Commonwealth of a reasonable return on the capital of the Corporation.

In other words, it is set up in a completely financially viable way to pay its share of income tax as other private organisations in Australia would have to do and to make a return on capital as we presume certain other organisations would have to make a return on capital payable to either their partnerships or their public companies. Clause 30 refers to the transfer of reserve for future or contingent liabilities. It states:

Where, in a financial year, the revenue of the Corporation is more than sufficient -

to meet the expenditure of the Corporation properly chargeable to revenue of that year;

to enable the Corporation to make provision for income tax; and

to make payments to the Commonwealth in accordance with section 26 of this Art. the Corporation shall transfer the amount of the surplus to a reserve for future or contingent liabilities.

That is what it is expected to do, but one should look at the other side of the picture. This will be dealt with in detail in the Committee stage but I shall briefly summarise the restrictions placed on the Corporation, which come under about 7 headings. A consultative committee will be formed to advise the Minister for National Development whether the Corporation should undertake certain engineering works. Nor only will the Corporation be looking at its own responsibilities and going ahead or advising the Minister that it will go ahead, but we find that there is a barrier put between the Corporation and the Minister. I shall deal with the composition of the consultative committee in a moment or two. I shall point out that it is made up of private enterprise - - that is, the people we would expect the Corporation to be competing with.

The second restriction placed on the Corporation concerns the type of engineering work that it can perform. It is restricted to construction outside Australia. It is necessary for the Corporation to obtain ministerial approval for any work proposed to be undertaken by it. Private consultant engineers may engage the Corporation as a consultant for work done in Australia if the Corporation is to operate for a private firm. The Public Service Board has control over the terms and conditions of employment of staff by the Corporation. This would obviously place it at a disadvantage when trying to engage highly qualified technologists or engineers, the type of people who are in such short supply today. The Minister has control over the number of staff to be employed by the Corporation. I suggest that this is a restriction which ought not to be placed on an organisation which is expected to go out and compete in what we can see is a very competitive field.

These restrictions will have 10 be discussed now or in Committee. It will probably save time in Committee if I refer to them now. In clause 16 of the Bill we find that the consultative committee, which is to be set up as a body to advise the Minister - a body on which the Minister can lean or to which he can turn for information - is to consist of 4 members appointed in relation to engineering works in Australia and elsewhere. I should like the Minister later to explain a little more clearly the term ‘in Australia and elsewhere’. Section (b) of clause 16 states that the committee shall consist of 2 members appointed in relation to engineering works outside Australia. That makes a total of 6 members of whom 4 shall be appointed in relation to engineering works in Australia and elsewhere and 2 shall be representatives of the engineering profession appointed in relation to engineering works outside Australia. The members of the consultative committee shall be appointed by the Minister and shall hold office on such terms and conditions as the Minister determines. The Minister may request the committee to advise him whether a function of the Corporation under the next succeeding section, which relates to the general function of the Corporation, should be exercised by the Corporation in respect of a particular engineering work and, if so, how that function should bc exercised by the Corporation in respect of that work, and the committee shall advise the Minister accordingly. lt seems to me that the Corporation, whenever it is going to operate, will have a fair few shackles on it. Section 17 of the Bill contains a very wide charter. It sets out the functions of the Corporation, subject to that section, as being the carrying out of investigations and the furnishing of advice in relation to water resources and the carrying out of investigations and the furnishing of advice in relation to soils, rocks or materials used in the construction of engineering works in Australia or elsewhere. The Corporation will be carrying out investigations and giving advice in relation to sites, designs or construction of engineering works in Australia or elsewhere. lt will be designing engineering works in Australia or elsewhere and will have the supervision of contracts for the construction of engineering works in Australia or elsewhere. Another of its tasks will be the construction of or performance of any work in relation to the construction of engineering works outside Australia. I emphasise that in relation to construction it has been necessary to impose the restriction that the work is to be done outside Australia, and the expression ‘in Australia or elsewhere’ is not used in that instance.

The old Snowy Mountains Authority did some amazing work. It broke a great deal of new ground. Its people performed work by sub-contract and by the use of its own laboratories and the like. The restrictions 1 have referred to appear in the proposed sub-section 3 of section 17. None of these things is to be done except with the approval of the Minister and only in accordance with any conditions to which the approval is expressed to be subject. So that if the Corporation decides that it ought to carry out a particular work, the Minister will refer the matter to his advisory body, the members of which are to be drawn from engineering works inside and outside Australia. This could act as a highly professional advisory body, but it is possible that its members could in respect of some works anticipate a clash with private companies in Australia. In those circumstances the advice they would give to the Minister might be: It is not such a good idea, after all. 1 am not sure of the attitudes that will be adopted by the senior officers of a corporation such as the one we are discussing when they have to work under such restrictions. One of the great advantages of the old scheme came through the number of young engineers who were trained in Australia and also sent overseas for 12 months to work on other irrigation sites. That training ground offered a tremendous thrill and excitement for young ambitious Australian engineers. My reading of this proposal has not led me to believe that the same thrill and excitement will be open to the young engineers who would be eligible to work for the Corporation. I sincerely hope that I am wrong in that belief. I would love to be wrong in that respect.

I feel that the Corporation will be restricted in what it ought to be doing. It certainly hits on some of the things that require attention, such as the flow of water and the transmission of electricity. There are bodies in Australia that have certainly had great experience in those fields. I do not know how many of them are left. I do not think the Corporation ought to be restricted. It could direct its attention to other projects such as railway works that require construction in Australia. I would like to see the Corporation increasing its activities, getting larger, building up its capacity and using its tremendous knowledge to develop what could be the cornerstone of great engineering works in Australia. The national development of any country like Australia is a great challenge. Our scope for development probably could be equalled by very few countries in the world. I do not wish to go into this matter very deeply now because we will be developing it at the Committee stage.

I do not think that the Minister should be saying to the Corporation, in effect: You cannot employ any engineers unless you consult me. 1 will put an upper limit on the number of people that you are to employ’. Last week we were dealing with the Australian Industry Development Corporation Bill and the argument was advanced that it was necessary to move quickly in order to obtain the people with the highly developed skills necessary to run the organisation. They are in short supply throughout the world and it was said that it was necessary to move very quickly to obtain them. That argument can be advanced with equal authority in respect of the Snowy Mountains Engineering Corporation.

The question of salaries will have to be referred to the Public Service Board. This again seems to be an unnecessary restriction that will not hinder the activities of other engineering works in Australia which will be competing with the Corporation. We would have liked to see a very much wider body created. However, we do not oppose the Bill. I suppose it could be said that for a long time we have been the people in Australia who have done the most pleading with the Government not to allow the Snowy Mountains Authority to run down but to keep the skilled staff together as the Snowy scheme drew to a close. This Bill has come in very late. It should have been introduced much earlier when the teams employed by the Authority were in a compact body. I trust that enough of those men are still available to form a nucleus of the new organisation.

Because of the restrictions in the Bill we intend to invite the Senate to amend it. Certainly we do not want to destroy the organisation; we want to see it as a very much bigger body which will develop much more quickly than we are afraid the proposed body will develop. We intend to support the Bill but, for some of the reasons that I have stated, we will oppose some of the clauses as outlined in the sheet which I have circulated to honourable senators and seek to amend other clauses. We shall invite the Senate to assist us in establishing a Snowy Mountains Engineering Corporation which will be more in keeping with the former organisation, and which we feel will bc able lo do very great work in Australia and which we feel will be able to do very great work in Australia and which is long overdue for introduction into the Australian engineering set-up.

Senator GAIR:
Leader of the Democratic Labor Party · Queensland

– 1 welcome this piece of legislation because it is evidence that at last an attempt is being made to utilise to some value the professional and technical officers associated with the Snowy Mountains Hydroelectric Authority, or at least what: is left of it. The work of those engaged under Sir William Hudson in carrying out that great project, the Snowy Mountains hydroelectric scheme, has won acclaim throughout the world. Over the last 20 years we in Australia have seen the Snowy Mountains scheme progress and we have seen the great success that has accompanied the efforts of the engineers and other professional men and the skilled and unskilled labour that have been engaged in that wonderful project. The Snowy Mountains scheme has been carried out by the Commonwealth in conjunction with and for the benefit of Victoria and New South Wales and, to a lesser extent, South Australia. We have seen a partnership with the Commonwealth taking a major part, particularly in the matter of finance.

For a long time the people of Australia, who have been so proud of this great job of work, have been concerned about and most anxious to know what is to happen to this great organisation when the Snowy Mountains scheme is completed. Already we know that many members of the professional staff engaged on the scheme have moved out because the future of the Authority has been in doubt. The scheme has been going on for 20 years and in that time about $700m has been expended, lt is estimated that another 4 years will be required and another SI 00m will be needed to complete one of the biggest projects of the scheme. The people have been anxious, ] repeat, because they have come to recognise just how efficient this organisation has been and they have held the belief that it should be maintained, sustained and operated in many other spheres of Australian development. We concede that there would probably not be another scheme as large as the Snowy Mountains hydroelectric scheme to be undertaken in Australia. However we see in an organisation like this a great opportunity to carry out properly many works, not so great in magnitude but just as important in their own way, in the States and even beyond the boundaries of Australia.

I am pleased to note that the activities of the Corporation will not be limited to Australia because, having had the opportunity of visiting South East Asian countries in recent times, I visualise many projects that could be undertaken there with advantage to those countries and which have the undeniable effect of lifting the living standards of the people there. The technological advice and know-how in providing water, irrigation, the reticulation of electric power and other engineering projects would be of immense value and assistance to the less developed countries of South Bast Asia. I look forward to seeing a lot of this work being done through the Corporation which is going to work in co-operation with the Snowy Mountains Hydro-electric Authority.

I notice from the Bill that in addition to the Corporation having a director and 2 assistant-directors - and I take it that these gentlemen will be professional men - there will be a consultative body of 6; 4 members appointed in relation to engineering work in Australia and elsewhere of whom 2 shall be representative of the engineering profession, and 2 members appointed in relation to engineering works outside Australia. lt occurred to me that if there are going to be 4 members and 2 of them could be men in the engineering profession outside Australia-

Senator Willesee:

– The Bill says that they shall be.

Senator GAIR:

– Two shall be professional men from outside Australia, but then there are to be appointed a further 2 in relation to engineering works outside Australia. It occurred to me that as this is an Australian corporation working in conjunction with the Snowy Mountains Hydroelectric Authority, the Australian representatives in this consultative body would be outnumbered by representatives from outside Australia. I agree with Senator Willesee that lbc Government must give an explanation for that. There can be no question that the setting up of the Corporation is a good move. It gives some hope for the retention of the professional staff - or at least some of them - who have been so successfully occupied for 20 years. Most of them have been there for that time. They will continue to be of service to the Commonwealth Government, to the State governments and to other people in need of their advice in designing and other works to be carried out. The functions of the Corporation will be: the carrying out of investigations, and the furnishing of advice, in relation to water resources in Australia or elsewhere; the carrying out of investigations, and the furnishing of advice, in relation to -

soils or rocks; or
1. materials used in the construction of engineering works, in Australia or elsewhere.

It will do all things associated with engineering projects and works, lt is good to know that this advice and service will be available to governmental, semi-governmental and private authorities. Whilst I applaud the introduction of this Bill, I am somewhat disturbed by the evident timidity, if I might say that, which can be read in the Bill. There is a timid approach to this new set-up of the Corporation, which seems to be restricted unduly in soma respects. It does not bear that tag of confidence. If the restrictions are observed, the Corporation will have a piecemeal and limited function. That is not advisable or desirable.

Furthermore, I think there is evidence in the Bill of over solicitude for private consulting engineers. I can read into the Bill that the Government is more than normally concerned about the competition that might be created by this Corporation with private consulting engineers. I am reasonable enough to understand that concern up to a point, but I do not think that a government corporation such as this has any need to fear that it will be the means of putting out of work consulting engineers who are in private practice. If we continued that assumption a little further, the Government would not have dental hospitals because it would fear that they would put private dentists out of practice. People in private practice have to take their chances. If the Commonwealth Government intends to set up this Corporation to make this service available to people who need it - not free of charge, because it will be a business undertaking - I do not think that we have any need to apologise to anyone for people coming to this Corporation for advice, designs or for general assistance in any undertaking that they might have.

Senator Willesee:

– The Corporation would create work, not suppress it.

Senator GAIR:

– Yes, that is true. My fears and observations in those connections have been supported by the New South Wales Branch of the Association of Professional Engineers. It expresses fears along the same lines as I have done. The Group President says in a letter that he wrote to me:

My first comment refers to the extraordinarily wide discretionary powers, regarding the acceptance of work by the Corporation, given to the Minister. In our view the proposed Act places him in very much the same situation as that of a day to day managing director and especially in section 17 (4.) (page 7) severely restricts the Corporation developing any further skills by the ordinary processes of development and technical growth.

If that is so, I do not think that is a healthy and desirable setup for the commencement of a corporation of this kind. The letter continues:

In addition to the above the Minister may call on the services of a Consultative Committee for the purpose of determining whether or not the Corporation should be allowed to be employed on a specific job - once again placing a restriction on the Corporation’s management. In this context one can readily visualise the Corporation’s officers hearing of the possibility of work in which it is interested, and which may indeed be in the national technical or trade interests that it be so interested, and proceeding to good faith to actively compete with other private enterprise corporations, and having reached a favoured position being placed in a most embarrassing situation by the Minister and/or the Consultative Committee. The effect on initiative and rapid independent action by the Corporation management in its active pursuit of business can be readily imagined.

It seems to us, especially on overseas projects, that it is essential the Corporation not only be allowed but be directed to freely compete with other large well established consulting corporations. To do this successfully in the commercial sense it is essential to have the same day to day freedom of operation as they do.

There is a further and, in our view, quite unnecessary restriction whereby within Australia no private firm may approach the Corporation for the purpose of carrying out an agreed function other than through a local private consultant (or consulting firm). We are aware that this particular restriction is due to very heavy lobbying by the local Consul tan ls Association who are quite unjustifiably afraid that the Authority in its new role will seriously interfere with the flow of work to them. In point of fact the opposite is true, and in a considerable number of cases already we have given sub-contract Sow-on to local consultants where we have needed further assistance, for example, 01 felt that they were better able due to specialisation on smaller works to carry out a job than we were. This restriction is especially severe on mining firms who may wish to employ the Authority’s expertise on such things as rock mechanics. The cost of these kind of jobs is usually small and to have to go through another consultant merely adds to this cost and reduces the efficiency of the consultation.

– Yes. Who would be better placed to examine this matter than those who are engaged by the Snowy Mountains Hydro-electric Authority? They are probably in a better position to assess and to judge the situation than engineers anywhere else because they have grown up with the organisation. They know what is going on. They know what the Authority can do. Let us hope that something can be done to allay the fears of the people who are interested in this organisation. These people are men of competence. They are willing to give service in Australia and even beyond the boundaries of this country. I believe that, in principle, the Bill is a good one. That is why I am concerned that in detail perhaps the good that it is intended to do will be destroyed by restrictions and a measure of timidity in approaching this new set-up.

Senator WEBSTER:
Victoria

- Mr Acting Deputy President, I support the general terms of this Bill. The Snowy Mountains Authority was set up originally under Australian defence powers for one purpose. That was to supply electric power. The work that has flowed from those beginnings and the construction work for which the Authority is well noted have been incidental to that original task. I believe that the success of the Authority is not doubted, but it is doubtful whether, when it delved into further work, that work has been done under constitutional authority. The Commonwealth Government has spent about $700m on the scheme up to the present time and in the next 4 years an additional sum of $10Om will be expended by the Snowy Mountains Authority. The Australian Capital Territory, New South Wales and Victoria have benefited from this expenditure.

The amendments circulated to honourable senators by Senator Willesee were circulated only while he was speaking tonight and I had some difficulty in understanding them. But 1 did listen very closely to what he had to say. The philosophy expressed by Senator Willesee perhaps indicates the difference between what is proposed under this Bill and what is the wish of the Australian Labor Party. Senator Willesee more or less declared that he and his Party would wish to see an unlimited capacity for the Snowy Mountains Engineering Corporation to accept any work throughout Australia or overseas. He said that the Corporation should have an unlimited capacity to grow, both in the use of capital and in the number of employees it engaged. He expressed the view that the Corporation should have unlimited scope in the work which it undertook. My view is contrary to his. I have made the pronunciation in this House on a number of occasions that there are within Australia private engineers, private consultants and private organisations capable of carrying out many of the duties outlined in this Bill. I agree that some sections of the Snowy Mountains Authority could well be carried on. Indeed we have heard it stated in this House and in another place that the Snowy Mountains Authority as a whole should be maintained in all its facets.

The Authority has great expertise in tunnelling work. I recall a question posed as to whether the tunnelling activity of the Authority should not be continued. The view was also expressed that it was doubtful whether tunnels were required anywhere else in Australia. Indeed, when the services of the Snowy Mountains Authority were offered by a former Commonwealth Government to the States I recall very clearly that the Premier of Victoria, Sir Henry Bolte, said that he and his State would have no need whatsoever for those services. That may be so, because that State has built up its own expertise in its own Rivers and Water Supply Commission and Public Works Department. However, the present proposition that S80m should be spent on an underground railway in

Victoria would perhaps reverse the decision of earlier years that the expertise of the Authority was not required in that State.

The main point that I wish to raise tonight is to express my support for the suggestion that there should be established in Australia as much free enterprise as can possibly be attained by private consultants throughout Australia. There has not been sufficient recognition given to the organisations which have been built in Australia. Indeed, one or two of our leading private consulting engineering bodies are of the highest quality and their offices compare in size with any in the world. I think one office in Victoria is the second or third largest private consulting organisation in the world.

Senator Gair:

– They should not have any need for fear then.

Senator WEBSTER:

– There is some need for fear when the backing of the Commonwealth comes in to establish a corporation. Senator Gair should know that I said at the outset that I support this general proposition. But clause 17 (5.) does state in fact:

The Minister shall not, for the purposes of sub-section (3.) of this section-

Sub-section (3.) in fact refers to those functions which the organisation shall carry out - give his approval in relation to the exercise by the Corporation in Australia of a function otherwise than for the purposes of, or in relation to an engineering work that is to be carried out by or for, or by or for an authority of, the Commonwealth, a State or the Administration of a Territory of the Commonwealth unless the function is to be exercised in pursuance of a contract between the Corporation and a consulting engineer.

I feel that this is a wise provision. I can see the point made by the Opposition that there may be the suggestion that there is a tendency for some private consultant’s fee to be added to the cost of a work but I think it is essential in our community that we do all possible to support private enterprise. I feel that that is probably the difference between the Opposition and the Government. I say that I completely support the terms of the Bill and 1 will oppose the amendments to be moved by the Opposition.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– The Snowy Mountains Engineering Corporation Bill which is now before the Senate in my opinion pronounces the death sentence on an organisation which has done so much not only in the development of Australia but also in countries abroad and, indeed, has captured the imagination of the whole world so far as engineering construction is concerned. I. refer, of course, to the great Snowy Mountains Hydro-electric Authority. I pay tribute at this stage to Sir William Hudson who showed not only amazing engineering enterprise but tremendous organising ability in the early days of the scheme in building up this highly successful and tremendously outstanding organisation. I also pay tribute to his successor, Mr Howard Dann, who has shown outstanding drive and energy in leading the excellent team that exists in the Authority today. These 2 gentlemen between them have built up this most efficient constructing authority which is also most efficient so (jar as budgetary estimating is concerned. When the Snowy Mountains hydro-electric scheme was first designed it was estimated that it would cost some $800m. The design since those days has been developed further and, indeed, extended. Construction techniques have changed considerably, but costs are still within the original budgetary allocation of S800m.

Everyone who comes to Australia has heard about the great Snowy Mountains Authority. Everyone who comes here wants, if at all possible, to sec the great scheme, a scheme where mighty rivers have been diverted to flow in the opposite direction, where tunnels have been cut through impassable mountains and where water has been harnessed both for power and for irrigation. It is Australia’s example of the pertinacity of man in his triumph over, and perhaps the conquering of, nature itself. The Minister for Civil Aviation (Senator Cotton) who represents in the Senate the Minister for National Development (Mr Swartz) during the course of his second reading speech said that this great scheme has received world acclaim both in concept and execution; that the scheme is unique in Australia’s history both in size and in construction time. I am amazed, bearing those things in mind that the Government has the audacity to say that there is now no justification for the complete retention of this great authority. After all, Australia is the driest continent in the world; it is the most sparsely settled continent in the world; and it is a nation crying out for development of its great potential. Yet, it is told by this Government that this new Corporation - a skeleton of the existing great Authority - will not be permitted to act as a constructing authority in its own right in Australia and her Territories although, as far as overseas work is concerned, it will be able to act as a constructing authority and supervise the construction of projects in the fullest sense of the word. The Corporation can construct abroad but it is hamstrung so far as its operations in Australia are concerned. Yet, despite the very restrictive nature of the future operations of the proposed Snowy Mountains Engineering Corporation as set out in the Bill, particularly in clause 11, it is expected, as Senator Willesee has pointed out, that the Corporation will operate as a commercial organisation in competition with private enterprise and that it will have to pay Commonwealth income taxation and at the same time be expected to have a reasonable return on its capital.

How, under these circumstances wilh the restrictions that have been placed upon the Corporation by this Bill, can any enterprise operate successfully? Clause 17 (I.) of the Bill sets out the functions and powers of the Corporation. This clause sets out that the Corporation can carry out investigations and furnish advice in relation to water resources in Australia or elsewhere; it can carry out investigations in relation to soils or rocks or materials used in the construction of engineer ng works in Australia or elsewhere; it can supervise contracts for the construction of engineering works in Australia or elsewhere; and it can construct or perform any work in relation to the construction of engineering works outside Austraia but nor within Australia. Sub-clause (3.) of clause 17 sets out that the Corporation cannot do any of these things except with the approval of the Minister and in accordance with any conditions to which the Minister’s approval is subject. Yet, despite these very severe restrictions and imitations on the Corporation’s modus operandi the new Corporation is expected to operate as a commercial organisation and is expected to pay Commonwealth income tax and make a profit.

Frankly, it is my opinion that Australia is being denied the benefit of the existing outstanding construction authority. There must be, I suggest, many construction works in Australia in which the experience and expertise of the existing Authority and the existing staff of the Authority could be used. One example which comes immediately to mind is the natural gas that has been discovered in the southern portion of Australia and which is to be piped from southern Victoria right throughout New South Wales. I suggest that the Snowy Mountains Authority, the great outstanding construct ng authority of Australia, could be the organisation which could undertake this type of work. But because of the restrictions that have been placed upon it by this legislation, it cannot even look at that kind of constructing work. Fortunately, the restrictive functions which were to be applied to the Scientific Services Division of the present Authority under the original Bill will now no longer apply as a result of an amendment to section 1 7 (5.) which was made to the Bill in another place last week.

The important factors in all of the Authority’s design and construction works have been durability and safety, coupled with the. economy of speed of construction. The engineering laboratories of the Authority at Cooma, with a staff of scientists and laboratory assistants, were established to achieve these requirements of durability and safety, having regard to economy and speed of construction. The construction materials that have been used throughout the Authority have all been subjected to laboratory testing in the Scientific Service Division. Rock bolting techniques were developed by the laboratory staff, and the extensive use of rock bolts in tunnels and underground power stations reduced costs by hundreds of thousands of dollars without diminishing the safety factor.

I note from a perusal of the publication entitled The Snowy Mountains Story’ that it is stated:

Although the special facilities of the laboratories are primarily required by the Authority for use in solving ils own wide variety of problems, they are available to other bodies when the work of the Authority permits. The laboratories are undertaking an increasing number of assignments involving investigations, tests, a’nd model studies for Government departments and for other organisations, thus using the facilities in the national interest.

The report goes on to say:

Certain sections of the laboratories are registered by the National Association of Testing Authorities ana’ are therefore called upon to undertake testing and calibration of equipment. Particular assistance has been given in the revision of standards for seal belts for motor vehicles and for general conditions of contracts for civil engineering works.

Of course, when this Bill first came before the Parliament in another place it appeared that this type of work which is performed by the Scientific Services Division of the Authority could not have been carried out unless the work had been commissioned lo be carried out by private consultant engineers. But fortunately while the Bill was before the other place the Government saw the light in this regard and at least the provision relating to work being commissioned by private consultant engineers will not apply to the new Corporation’s laboratories.

But let me refer to 1 or 2 other sections of the existing Authority to see what the future holds for them. J shall take the survey drawing office. At the moment, as L understand it, that office is doing a tremendous job of preparing maps for Australia on a new I : 100,000 scale. Surely if the Corporation is to operate effectively and efficiently it must have its own survey branch. But as 1 understand it, the Bill allows only for engineering content, and I ask rhetorically of the Minister: What engineering content is considered to be involved in mapping if mapping is unrelated lo any specific engineering project? Surely this is a restriction on the Corporation. 1 should like the Minister to tell me what the future holds for the staff of the existing Authority who at the moment are engaged in this vital work of mapping for Australia’s future development. What does the future hold under the terms of this Bill for those engaged in that sort of work when it is unrelated to any specific engineering project? The electronic data processing equipment which has been installed by the Authority could be used for many purposes which are not necessarily of an engineering nature. It has cost hundreds of thousands of dollars to install this equipment, but it may not be used all the time. What will happen to the expert staff which is required lo operate this equipment if the work in which the proposed corporation is involved is not connected with a specific engineering project. If the Corporation has to refuse work because it does not come within the restrictive nature of this legislation, although it is work which the Authority is capable of doing and is in fact doing at present, what will happen to the electronic data processing section of the Snowy Mountains Authority? Perhaps the Minister will be able to tell me also what the future holds for people engaged in this sort of activity under the provisions of the Bill.

I wish to refer to one or two of the other provisions of the Bill. As Senator Willesee has pointed out, an advisory committee is to be appointed to advise the Minister. The advisory committee will consist of 4 members in relation to engineering works carried out in Australia. Two of these members are to be representatives of the engineering profession. Insofar as works outside Australia are concerned the Minister will be advised by a committee of 6 members. No mention has been made of the qualifications of the other members of the committee, although 2 of them are to be representatives of the engineering profession. What will be the qualifications of the other 2 members of the advisory committee which is to advise the Minister on work carried out in Australia? Insofar as work performed outside Australia is concerned, the advisory committee will consist of 6 members, 2 of whom will be professional engineers or representatives of the engineering profession. What will be the qualifications of the other members of the committee? Clause 16 (4.) states:

The Minister may request the consultative committee to advise him whether a function of the Corporation under the next succeeding section should be exercised by the Corporation in respect of a particular engineering work and, if so, how that function should be exercised by the Corporation in respect of that work, and the Committee shall advise the Minister accordingly.

I believe that one could read into clause 16 (4.) a meaning that the committee could recommend the taking away from the proposed Corporation of small jobs, which may be done by other organisations and authorities. Indeed, the proposed role of the advisory committee could be to pick and choose the difficult and unprofitable work for the Corporation and skim the cream off the other work for the benefit of private enterprise.

Any person who is or has been connected with constructing authorities will confirm that the large undertakings which are performing big jobs must have small jobs, or packers, as I understand they are commonly referred to, in order to get the work load reasonably uniform and spread throughout the organisation. If they are unable to do so the project could become impossible to manage on an economic basis. In other words, if a constructing authority is to provide a continuity of work and be efficient in its organisational and administrative capacity it needs a variety of jobs, large and small, to provide a continuity of work for its highly skilled officers. It is not always possible to have a continuity of work on big jobs. In order to keep the work team going all the time it is necessary to have smaller jobs to work on in between times. It is necessary to regulate the work load.

Debate interrupted.

page 2590

ADJOURNMENT

The DEPUTY PRESIDENT (Senator Bull) - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question:

That the Senate do now adjourn.

Question resolved in the negative.

page 2590

SNOWY MOUNTAINS ENGINEERING CORPORATION BILL 1970

Second Reading

Debate resumed.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– I think that the genesis of this Bill goes back some 4 or 5 years when the Association of Professional Engineers, an organisation to which Senator Gair has referred already, realised that things were not shaping up too well for the future of the Authority. In other words, the time was approaching rapidly when the work would be completed. I understand that some time ago - 3, 4 or 5 years ago - an interdepartmental committee was set up to advise the Government on the retrenchment policy that should be implemented and the type of compensation that should be awarded to the dedicated engineers of the Snowy Mountains Hydro-electric Authority whose positions eventually would be declared redundant. I am told thai the interdepartmental committee comprises a senior officer of the Department of National Development, who was chairman of the committee, the permanent head of the Department of Works and a senior officer of the Department of the Treasury.

Senator Sir Magnus Cormack:

– Where is that report available?

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– The report is not available. Apparently a report was to be made available to Cabinet and it probably was made available to Cabinet.

Senator Sir Magnus Cormack:

– Then how do you know about it?

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– 1 have been advised by the Association of Professional Engineers that on behalf of professional engineers - dedicated men who had worked for the Authority for 20 or 25 years and who were concerned about their own future and that of their families - it tried to get before the inter-departmental committee, but the committee sat in secret and was not prepared to listen to any advice from the professional engineers. The Association then went before the Deputy PublicService Arbitrator and was able to receive for its members by way of redundancy payment a fortnight’s pay for every year of service with the Authority. 1 understand that that amount is less than what the Authority is paying to its clerical officers.

At about the same time as the interdepartmental committee was appointed and was considering the question of redundancy and retrenchment, the then Minister for National Development let it be known that the future of the Authority was being considered. No-one knows to this day whether the same committee as dealt with retrenchment considered the future of the Authority because, as I have said, the Authority was not represented on the inter-departmental committee. However, it is the commonly expressed view of professional engineers in the employ of the Authority that the retrenchment committee was the father of the Bill before us. If thai be so, we have the ridiculous situation of officers of the Department of National Development, officers of the Department of Works and officers of the Department of the Treasury making recommendations to Cabinet on the future of the Authority without the

Authority itself having been represented on the inter-departmental committee. Let me look at the question of State rights. In my opinion in the debate on this Bill a lot of poppycock has been talked about the role of the States in water development. The former Minister for National Development, the present honourable member for Farrer (Mr Fairbairn), was reported in the ‘CoomaMonaro Express’ on 10th June as having said thai the Government had introduced changes to the Snowy Mountains Authority to see that this should not become some sort of vast socialist enterprise. His reported statement went on:

The Labor Party does not seem to understand that the Snowy never constructed a major dam in its life. The Authority had only acted in a consultative capacity, had let contracts and supervised the work. The whole trouble seems to be that the Labor Party d’oes not understand that the Slates have a constitutional responsibility. In order to see there is no unfair or undue competition with private enterprise, we had to ensure that it was an organisation which could compete on just terms wilh consultants.

The present Minister for National Development in introducing the Bill said that there is no case for the Snowy Mountains Engineering Corporation to move into the field of water development and push the States out of this field. But in another breath in his second reading speech the Minister said that there was some doubt whether the Commonwealth could effectively empower the Corporation to do work in the States and that accordingly the State governments had been invited to introduce legislation matching that of the Commonwealth because it would be contrary to public interest to stop the Snowy Mountains Authority’s current activities in the States until the State parliaments had passed enabling legislation. Quite frankly, having regard to the Minister’s second reading speech and from the remarks of the honourable member for Farrer, I say that a lot of poppycock has been talked about the rights of the States and the rights of the Commonwealth in water development.

The Snowy Mountains Authority is doing a tremendous amount of work at present for the Government in New South Wales - the State I have the honour of representing in this Parliament. It is doing work on the Shoalhaven water supply scheme. Here we have an ignominious situation in which the States could well ask the Corporation to undertake constructional work for them, but under this legislation it would not be able to do such work. However it may be authorised to construct works and supervise the construction of works in the fullest sense of the term in overseas countries. It may construct abroad but not in Australia. On the one hand the Government is talking piously and so often about the need for national development, but on the other hand it is bringing in legislation which restricts, hinders and impedes the greatest constuctional authority that Australia has ever had.

Let me deal with the effect that this Bill will have on the future of the southern portion of New South Wales and in particular on the town and district of Cooma. Recently I was in Cooma and had discussions with the Mayor and some aldermen and officers of the Cooma Municipal Council. They told me of their great concern about the effect this legislation will have on the future development of their town and district. The Cooma Municipal Council in co-operation with the Cooma Chamber of Commerce, the Australian National

University and the New South Wales Department of Decentralisation and Development appointed Mr R. J. Sloan of the Australian National University to prepare a report on Cooma’s potential employment and population capacity. Mr Sloan’s report was presented in May of last year. Briefly it stated that one of the most important factors concerning Cooma’s future is the phasing out of the Snowy Mountains Authority and the formation of the Snowy Mountains Council and the Snowy Mountains Engineering Corporation in its place.

Indeed, Mr Sloan in his very voluminous report devoted an entire section of his survey to the effect that the reduction in the work of the Snowy Mountains Authority will have on Cooma. With the concurrence of honourable senators I incorporate in Hansard a table which has been prepared by Mr Sloan setting out a summary of the total officers and wage staff now employed by the Authority, the engineering consulting Corporation and the Snowy Mountains Council and how the 1969 figures compare with the phasing out period of 1975.

Assuming that the Snowy scheme is completely phased out by 1975, according to Mr Sloan Cooma will be left with about only 250 workers in the consulting Corporation and 100 workers in the Snowy Mountains Council, a total of about 350 workers. According to Mr Sloan’s report this figure is expected to remain fairly static. That figure of 350 compares with a permanent work force of over 1,200 workers employed by the Authority in Cooma between the years 1958 and 1968. But even worse, it was pointed out to me that on a conservative basis the retrenchment and subsequent vacating of Cooma of each present staff member will mean that Cooma will lose an additional 3 family members. The report goes on to state that the loss of an estimated 600 workers from 950-odd in 1969 to 350-odd in 1975 will have an accumulated effect on approximately 2,400 present residents of Cooma. This will be a very serious blow indeed to the future development of Cooma.

The mayor and the officers of the Cooma Municipal Council have pointed out that the loss of such a large number of residents will have a multiplier effect on the nonAuthority section of the community because purchasing power will fall and employment opportunities will be reduced in proportion to the fall in expenditure in the district. The Cooma Municipal Council also expressed great concern at the method of disposal of the Authority’s surplus homes in Cooma North and Cooma East. The Council asserts that a bulk disposal of these homes - that is when not expressly for sale for removal but a bulk disposal of the homes on site - will have a serious effect on the value and market potential of privately owned homes in Cooma. The Cooma Municipal Council is doing all it can to overcome the difficulties that confront it and the residents of the area as a result of the creation of what might bc called a toothless tiger corporation which will emerge from this legislation. The Municipal Council is embarking on a large and expensive campaign to attract tourists to the area, lt is trying to attract other industries to the area. Nol only should the New South Wales Government through ils Department of Decentralisation and Development be helping the Cooma Council but also the Commonwealth Government has a responsibility to assist the people in this area as a result of the death blow which will obviously be delivered to the area by the introduction and passage of this legislation. It means, in effect, the winding up of the existing Authority and the creation of the toothless tiger Corporation.

Finally, I want to say something about the rights of officers and employees of the Snowy Mountains Council, which is the organisation responsible for the operation and maintenance of the completed works of the Snowy Mountains Authority. As I understand it, the Snowy Mountains Council consists of representatives of the Commonwealth, the governments of New South Wales and Victoria and also, I understand, of the Authority. The Snowy Mountains Council has now been operating for some 10 years and I believe it has about 50 employees under its control. I note that the Minister said in his second reading speech that the Government plans to provide the Snowy Mountains Council wilh funds and staff on what he has described as a more self contained and formal basis than exists at the present time and that this will be the subject of a separate Bill.

I ask the Minister: When will this second Bill be introduced and what will be the transfer rights of officers or employees transferred from the Authority to the Snowy Mountains Council? I ask this because responsible trade union officials have spoken to me expressing concern to see that their members are fully protected in relation to both the transfer of existing rights and conditions and their rights in winning future awards. Will they become the subject of private arbitration arrangements such as exist at the present time between the Authority and the unions - His Honour Mr Justice Taylor, the former President of the New South Wales Industrial Commission, has done an outstanding job in maintaining industrial peace and harmony on the Snowy Mountains project - or will the workers who are transferred from the Authority of the Snowy Mountains Council become the subject of Public Service arbitration determinations?

The Government by this legislation is creating enormous difficulties for Government departments, officers and employees of the great Snowy Mountains Authority, the Cooma Municipal Council, the residents of the southern portion of New South Wales, particularly the residents of Cooma, the workers involved and the trade union movement generally. 1 suggest to this Government and to the Australian people that those difficulties will only and can only be overcome by the election of a Labor government which is pledged to establish in Australia and for Australia a national water resources development authority to plan and to co-ordinate the development of surface and sub-surface water resources throughout Australia on a Federal, a State and a regional level. A Labor government is also pledged to the fullest utilisation of investigation, design and construction teams of the existing Snowy Mountains Authority and State water conservation authorities. As [ have said, Australia is the driest continent in the world. Its thirst certainly will not be quenched by the conceiving of a shackled, confined and restricted corporation which will come about as a result of the passage of this legislation.

Senator COTTON (New South Wales- reply - We have been debating the Snowy Mountains Engineering Corporation Bill. I must be excused for my hesitation in recalling the title, because we have just been led along a fascinating path which had little to do with the subject under discussion. Let me comment briefly at this late stage of the evening - properly so - that the Snowy Mountains Hydro-electric Authority nas become part of Australian folk lore over 20 years and that great credit is properly due to all those who have been involved. I think everybody in Australia, without exception, is proud of its work and of those who have helped to do that work. But what are the facts surrounding the existence of this institution which has undertaken the construction of this huge group of undertakings which will be completed in 4 years. So far $700m has been spent. There is about Si 00m yet to spend and when that is done the work that the Authority was set up to do will have been completed. The work has received world acclaim and I think will continue to do so. It has supplied very cheap peak load power to New South Wales and Victoria, in many cases avoiding the capital investment of standby plants. It has supplied irrigation water free of charge. It has increased the area of irrigation very substantially. It has increased production and on a recent occasion it certainly overcame what could have been a very serious position brought about by droughts. I have several notes here and it is an open question whether one should deal with them all now or wait until the Committee stage. Perhaps I could go on.

I agree with Senator Willesee when he says it was a bold scheme. Yes, it was a bold scheme. It was a bol’d project to begin with and, as I said earlier, it was carried through in a bold fashion. It has now probably gone beyond the point where one group or one person can claim all the political credit. It is now an Australian achievement of which all Australians are proud. Clause 16, which was referred to by Senator Willesee, deal’s with the membership proposal. It provides for 4 members in Australia, 2 of whom shall be from the engineering profession and 2 from the larger users of consultants, namely, the Department of National Development and the Department of Works. In relation to works outside Australia, it provides for 1 each from the major external agencies, namely, the Department of External Affairs and the Department of Trade and Industry. The staff at the present time is 900, which is an adequate nucleus for the organisation which the Bill seeks to establish.

Senator Gair in particular referred to the work in South East Asia and I want to say how much 1 agree with him. I have seen the work of the Authority in South East Asia, both in the Prek Thnot project in Cambodia and in the Tak Lee and Mae Sod projects in Thailand. I witnessed the beginning of the Prek Thnot project in July last year and it was going forward. The Snowy has created for Australians throughout South East Asia, where it has worked, a very singular regard for the Australian character and the Australian ability. We all recognise this and we all acknowledge it. One or two comments have been made in regard to problems that are associated with some of the advisory levels. All I can give to honourable senators are the comments I have from the second reading speech in which it is said that it is not the Government’s intention to set up an organisation which will compete directly in all fields with Australian engineering consultants. We consider that most of the jobs the Snowy will undertake will be those which up to now have been done by foreign consultants or in fields not adequately served at the present time by Australian consultants.

Senator McClelland has asked a number of questions and made a number of observations most of which were quite impossible to follow. I say with respect to him that some of them contained some irrelevancies obviously designed for a special audience. But I am assured there will be plenty of opportunity for surveying. There is a great group of amendments here which if carried may well prejudice the proposal. Honourable senators will understand my position. I. am carrying this Bill in this chamber for the Minister in another place who is not in the other place at the moment. If these amendments are carried it is then up to the judgment of that Minister and the Government what they do about the proposal, and one should properly observe it may well put the proposal in hazard. It will certainly without any doubt delay it considerably. That would be a matter I would regret very much, lt would be in the hands of the Senate.

Senator Murphy:

– It is not our fault honourable members have gone home. The Leader of the Government indicated that that argument would not be used.

Senator COTTON:
LP

– Do you want me to pursue it or not? It is the Opposition’s supporters as well as the Government’s who are not here?

Senator Murphy:

– Do we not deal with it on the basis that we should do what is proper and without regard to the fact that representatives are not here?

Senator COTTON:

– -I am entitled to make the observation that I am carrying the Bill for another Minister who is not here and on that basis it will take some time if the amendments are carried. That is an observation 1 can make without Senator Murphy taking offence or having any right to take offence. Senator McClelland spoke about electronic data processing. There will still be work for the Snowy’s computer but it is equally true to say that there will be not as much work. As I said earlier, the surveying work will still exist. Surveying in mapping areas will possibly occur as the Australian mapping programmes expand and overseas work may be attracted in this field. Before we pass into the committee stage 1 would mention briefly that Cooma’s real problem is the termination of the Snowy Construction programme. The Bill represents an attempt to carry on the nucleus of skills that has been built up in the years in which that organisation did so much. We talk about carrying on the group at full strength. 1 ask: What does the group do if it does not do what the Bill proposes? The group cannot move in on the States and take over their work. The States have full groups of people now. This Corporation will pick up the peak load.

The Commonwealth Government is not going to make a proposal to set the State organisations to one side, lt is making a proposal that this group be set up to help the States when called upon. Equally, it may work for the private sector. Mining has been mentioned as one area in which it may work. The Corporation will attract, I am sure, increasing volumes of work overseas. It has been carefully designed to fill a place and utilise its skills without getting in the road of people who are already doing jobs. It seems to me that at this stage we should move into Committee. As far as I can possibly do so with the material that is made available to me, I shall deal with the various issues in the Committee stages of the debate.

Question resolved in the affirmative.

Bill read a second time.

In Committee

Clauses 1 to 15 - by leave - taken together, and agreed to.

Clause 16 (Consultative Committee).

Senator WILLESEE (Western Australia) 111.28]- The Australian Labor Party opposes this clause. I put my arguments against it during the second reading debate. 1 do not intend to repeat them here. This clause relates to the Committee which it is proposed to set up to advise the Minister, lt is a private body consisting largely of members taken from private industry. We believe that it could operate against the Corporation which could become a great engineering organisation. We believe that the advice should come from the Corporation itself. After all, we have been spending over $40m a year on a similar corporation. In I year we spent over $50m. We believe that that Corporation consists of competent and responsible people. They would not advise the Minister to undertake any jobs which they could not do. We oppose the clause because we believe it will hamstring the Corporation that is being set up.

Senator CANT (Western Australia) 1 1 1 .29] - This clause proposes to set up a consultative committee to advise the Minister, lt. contains, in sub-sect on 5, an amazing clause to the effect that where a member of the Committee disagrees with the advice the Committee proposes to furnish to the Minister on a matter, that member may furnish his separate advice to the Minister on that matter. This means that we would have a consultative committee that comes to a conclusion as to what advice should be given to the Minister, and then 1 member of that committee could go along and give the Minister completely separate advice upon which the Minister may act.

Senator Prowse:

– Have you never been concerned in a minority report?

Senator CANT:

– There is no obligation upon the Minister to accept a minority report or a majority report. A committee with a membership oE 4 or 6 is to be set up to advise the Minister. The Minister does not have to accept that advice. Anyone can stand out and the Minister could accept the advice of one person. Why is a consultative committee necessary? Why not consult just anyone at all on this matter? 1 think it is quite crazy to have such a provision in the Bill. I support the amendment that the clause should be opposed. I believe that the clause should be deleted and not proceeded with.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– In relation to clause 16(1.) I again raise with the Minister a matter I mentioned during my speech in the debate on the second reading, but to which he did not refer in his reply. So far as the consultative committee and engineering works in Australia are concerned. 4 members are to be appointed, of whom 2 shall be representatives of the engineering profession. I ask the Minister: What sort of qualifications is it intended that the other 2 members of the consultative committee will have? For instance, will they be officers of the Commonwealth Department of Works or Department of National Development? What is intended in relation to the 2 additional members who are to be appointed to the consultative committee in relation to engineering works outside Australia?

I agree with Senator Cant. I direct the attention of the Committee to clause 16 (3.), which states:

The manner in which the Consultative Committee shall conduct its business (including the manner in which it is to reach decisions) shall be as determined by the Minister in writing.

Frankly, I find that an incredible provision. I support the amendment moved by Senator Willesee.

Senator COTTON:
New South WalesMinister for Civil Aviation · LP

– I think if Senator McClelland reads Hansard in the morning he will find that I have said that the membership proposed for the consultative committee in respect of work in Australia is to be 2 from the engineering profession and 2 from the largest users of consultants, the Department of National Development and the Department of Works. If I have not already said that, I apologise to him, but I think I have said it.

In respect of works outside Australia, 2 members are to be added to those 4, making a membership of 6. The additional members are to be drawn from the major external agencies, the Department of External Affairs and the Department of Trade and Industry.

The provision to which Senator Cant objects is that which allows for a minority report. I think all honourable senators are familiar with such provisions. The Minister is responsible, of course, and it is his duty to consider minority reports and majority reports. Any assumption that he would not do so or that he would act on a minority report and not a majority report mystifies me. What honourable senators opposite arc saying, in effect, is that responsible government has come to an end.

Opposition has been offered to clause 16, the purpose of which is to provide for a committee which may be asked to furnish the Minister with advice on whether the Corporation may undertake a job. The aim of the provision is to make sure that the Corporation will fit the place that it is designed to fit. It arose as a result of a series of deputations to Mr Fairbairn, the previous Minister for National Development, asking that this matter be covered. It is so covered. The committee could act as a buffer between the Minister and pressure that might come from consulting engineers. It is a general provision which is designed to do precisely what I have said. I cannot see that there is room for suspicion about it. It is not designed to do anything wrong. This is a particularly new corporation to fit a special place. 1 imagine that in those circumstances we need some sort of device like this committee where people can say: ‘We think they should not have taken that work on as it is intruding into a field already covered. They are building an empire and putting out of work people who are already in work.’ That is the purpose of the consultative committee. Unless there are other questions on which I can get help from my advisers from the Department I do not propose to add to that.

Clause agreed to.

Clause 17. (1.) Subject to this section, the functions of the Corporation are -

the carrying out of investigations, and the furnishing of advice, in relation to water resources in Australia or elsewhere;
the carrying out of investigations, and the furnishing of advice, in relation to -
soils or rocks; or
1. materials used in the construction of engineering works, in Australia or elsewhere;
the carrying out of investigations, and the furnishing of advice, in relation to the sites, designs or construction of engineering works in Australia or elsewhere;
the designing of engineering works in Australia or elsewhere; le) the supervision of contracts for the construction of engineering works in Australia or elsewhere, that is lo say, the furnishing of advice, and the doing of other things, necessary for ensuring the proper performance by the contractors of their obligations under those contracts; and
the construction of, or the performance of any work in relation to the construction of, engineering works outside Australia. (2.) A function of the Corporation under the last preceding sub-section is exercisable -
in or in relation of a Territory - in relation to any matter; and
in any other case - in relation to any matter with respect to which the Parliament has power to make laws. (3.) The Corporation shall not, in the exercise of its functions under sub-section (1.) of this section, undertake -
the carrying out of an investigation;
the furnishing of any advice;
the designing of an engineering work;
the supervision of a contract; or
the construction of, or the performance of any work in relation to the construction of, an engineering work, except with the approval of the Minister and in accordance with any conditions to which the approval is expressed’ to be subject. (4.) The Minister shall not, for the purposes of the last preceding sub-section, give his approval in relation to the exercise by the Corporation of (his section in respect of an engineering work in Australia unless the work is -
a work for the measurement of the flow of water;
a work for the collection, storage, diversion, conveyance or supply of water;
a work for the generation, transmission or supply of electricity;
a work which, or a substantial part of which, is underground; or
a work (including a road) incidental to a work referred to in any of the preceding paragraphs of this sub-section. (S.) The Minister shall not, tor the purposes of sub-section (3.) of this section, give his approval in relation to the exercise by the Corporation in Australia of a function otherwise than for the purposes of, or in relation to an engineering work that is to be carried out by or for, or by or for an authority of, the Commonwealth, a State or the Administration of a Territory of the Common- wealth unless the function is to be exercised in pursuance of a contract between the Corporation and a consulting engineer or the work required for the purposes of the exercise of the function is to be performed wholly or mainly in laboratories of the Corporation. (6.) Notwithstanding sub-section (2.) of this seclion, it is the intention of the Parliament that the Corporation may perform a function of any of the kinds specified in sub-section (1.) of this section in pursuance of an authority conferred on the Corporation by a law of a State, but the provisions of sub-sections (3.), (4.) and (5.) of this section apply in relation to any such performance of a function by the Corporation.

Senator WILLESEE:
Western Australia

– As foreshadowed in my speech on the second reading I move:

In sub-clause (1.), paragraph (f), leave out outside Australia’, insert ‘in Australia or elsewhere’.

We do not seek any change to the remaining phraseology of the clause. As I pointed out in my speech on the second reading, the reason for this amendment is that in this clause we establish the functions and powers of the Corporation. We allow it to do all things, including the supervision of contracts for the construction of engineering works in Australia, and yet it is not proposed to allow it to perform the construction of engineering works in Australia. We believe that most of the work undertaken by the Corporation would be done by subcontractors, but we can envisage instances where small jobs would be done by the Corporation. If it is not permitted to carry out the construction of those jobs it would have to be subcontracting with all sorts of small organisations. We do not think this would be in the best interests of efficiency. I understand that most of the work on the Snowy Mountains hydroelectric scheme was performed by subcontractors, as the work was quicker, easier and cheaper when the sub-contractors moved in with their own teams. It is for those reasons that I have moved the amendment

Senator COTTON (New South WalesMinister for Civil Aviation) 111.37]- The amendment as proposed would allow the Corporation to undertake construction within Australia. It was decided that the construction function of the Corporation should be carried on only outside Australia. The view was taken that the Commonwealth Department of Works, under the administration of my colleague Senator

Wright. was the Commonwealth constructing authority and that there was ample Department of Works capacity available in the States. It was believed that the Corporation proposed for the Snowy should not be allowed to compete with Commonwealth and State Departments of Works in the field of actual construction. There is also the possibility that without thisrestruction the States might exert greater pressure on the Commonwealth for financial assistance for works which might be constructed on their behalf by the Corporation. There is not a lot more that one can add to that. That is a fairly accurate statement of the situation. The amendment would, in effect, duplicate an existing position without, in my view, adding anything of benefit.

Question put:

That the words proposedto be left out (Senator Willesee’samendment) be left out.

The Committee divided. (The Temporary Chairman - Senator Sir Magnus Cormack)

AYES: 21

NOES: 23

Majority . . . . 2

AYES

NOES

Question so resolved in the negative.

Senator WILLESEE (Western Australia)

Leave out sub-clauses (3.), (4.) and (5.).

As 1 said when speaking to the last amendment, clause 17 deals with the functions and powers of the Snowy Mountains Engineering Corporation. Sub-clause (1.) (a) to (f) sets out what the Corporation is expected to do. Its powers are very wide. As I pointed out in my speech during the debate on the second reading of the Bill it can do just about everything outside Australia and inside Australia except construction which is confined to outside Australia. Sub-clause (3 ). which I seek to delete, is the restrictive sub-clause. It states:

The Corporation shall not. in the exercise of its functions under sub-section (1.) of this section, undertake: (a)t he carrying out of an investigation; (b)the furnishing of any advice;

the designing of an engineering work:
the supervision of a contract; or
the construction of, or the performance of any work in relation to the construction of an engineering work. except with the approval of the Minister and in accordance with any conditions to which the approval is expressed to be subject.

I ask leave to continue my remarks.

The TEMPORARY CHAIRMAN (Senator Sir Magnus Cormack:

– There being no objection, leave is granted.

Senator MURPHY:
New South WalesLeader of the Opposition

– by leave -I move:

That progress be reported.

It is quite late. It is 11.45 p.m. We started at 10 a.m. We were here earlier than that. If we had finished at the normal time we would have finished at 1 1 p.m. We would all like to finish. We are endeavouring to co-operate to get through the business as expeditiously and as efficiently as possible. I think my suggestion would be helpful. I suggest that we adjourn at this stage.

Senator Cotton:

– I am agreeable to this, provided my leader is agreeable.

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

– by leave - Naturally I am trying to get myself and the Senate in a position where we may reasonably expect to conclude the sittings tomorrow afternoon. I have no desire to push anybody any longer than they think they can reasonably carry on. If the Committee thinks that it would prefer to come back in the morning, I accept that as a reasonable approach. I want to make it abundantly clear that 1 am as exhausted as anybody and probably more so than some. My only purpose is to try to help the Senate to reach a position at which we might reasonably expect to finish tomorrow afternoon. For that reason, I agree to the reporting of progress.

Question resolved in the affirmative.

Progress reported.

page 2599

ADJOURNMENT

Representation of New South Wales

Motion (by Senator Sir Kenneth Anderson) proposed:

That the Senate do now adjourn.

Senator GREENWOOD:
Victoria

– I rise fully appreciative of what was said by Senator Murphy in Committee about the desirability of the hour of sitting not being extended. As this will probably be the last occasion on which anything can be said during the debate on the motion for the adjournment of the Senate I rise to give expression to what I consider is a matter which ought to concern the Senate as an institution. Mr Deputy President, you will recall that last Friday I asked you whether you would lay on the table the correspondence which had passed between the President of the Senate and the Governor of New South Wales with respect to the filling of a casual vacancy in the representation of that State. On that same day you tabled that correspondence. The facts revealed by that correspondence are that, followingupon the death of Senator McKellar in 13th April, a letter was forwarded in the usual form to the Governor of New South Wales by the President of the Senate on 14th April. On 16th April a reply from the Governor of New South Wales indicated his acknowledgment of receipt of that letter and his indication that he would bring it to the attention of his Ministers. Nothing has occurred since 16th April. The vacancy in the representation of New South Wales still exists.

I raise this matter because, to me, it is an issue of principle affecting the composition of the Senate. I believe that in the delay that has occurred and in the circumstances in which it has occurred there is a precedent that is fraught with peril for the institution of which we are members. I believe that on a lesser level - in terms of the party division that characterises the Senate - it also raises issues that should be the concern of all parties in the Senate. It is quite clear that the Senate shall consist of representatives of the States and that there shall be an equality of representation. It is important, therefore, that each State should have its full representation. New South Wales has not. Whilst this would properly be a matter for the New South Wales representatives to raise, they have not seen fit to do so. But I believe that it is a sufficiently important matter that some short opportunity should be given to have an expression of opinion on it.

Senator Mulvihill:

– You should direct your remarks at members of the Country Party. It is their responsibility.

Senator GREENWOOD:

– I suppose that there are reasons why the delay has occurred. I am not privy to those reasons. But, whatever the reasons are, I believe that this is a matter that affects the Senate and that a situation such as has developed ought not to be allowed to develop without something being said about it in the Senate. I have indicated that, both on the question of the composition of the Senate and what should be the full complement of this body and from the viewpoint of the parties that comprise it, a precedent is being created which ought to concern us.

But let us look at the constitutional basis on which this situation has arisen. Section 15 of the Constitution specifically provides for the filling of casual vacancies. It says in its relevant part:

If the place of a senator becomes vacant before the expiration of his term of service, the Houses of Parliament of the State for which he was chosen shall, sitting and voting together, choose a person to hold the place until the expiration of the term, or until the election of a successor as hereinafter provided, whichever first happens. But if the Houses of Parliament of the State are not in session at the time when the vacancy is notified, the Governor of the State, with the advice of the Executive Council thereof, may appoint a person to hold the place until the expiration of fourteen days after the beginning of the next session of the Parliament of the State, or until the election of a successor, whichever first happens.

Senator Mulvihill:

– The key word there is may’, is it not?

Senator Sir Kenneth Anderson:

– The term in session’ is the critical point.

Senator GREENWOOD:

– The critical point, as Senator Sir Kenneth Anderson says, is the words ‘in session’, lt is very useful to refer to what the learned authors of ‘The Annotated Constitution of the Australian Commonwealth - Sir John Quick and Sir Robert Garran - had to say about this matter when they wrote this work after the Constitution was established. I believe that this is highly relevant. They said:

When a casual vacancy happens in the representation of a Stale in the Senate, ii is the duty of the President lo notify the occurrence of such vacancy to the Governor of the State interested. If the President is absent from the Commonwealth at the time il is the duly of the GovernorGeneral 10 notify the vacancy. The happening of this vacancy should, no doubt, be promptly notified by the Federal lo the Stale authorities, so as to enable the latter 10 take steps al once to fill il. Until the receipt of the statutory notification, that cannot be dune; hence a delay in the notification would delay a choice by me Stale legislature or an appointment by the State Executive lo fill the place until the election of a successor, lt is a principle of the Constitution thai the representation of States in the Senate should be maintained, as far as possible, wilh unbroken continuity, and that no State should be, for any time longer than absolutely necessary, short in ils representation and consequently deficient in ils political strength in the Council of Stales.

I refer also lo what is sa d by the Clerk of the Senate in his work ‘Australian Senate Practice’. In regard to section 15, he says:

Attention is drawn lo ibc use of the words “If the Houses of Parliament of the State are noi in session . . .’.A session does: nol mean that the Parliament is continuously sitting for the duration of the session. There are usually adjournments during each session. In parliamentary language, a session means the lime from the opening of the session hy the Governor to the prorogation or dissolution of the Parliament. Thus, a Parliament is ‘not in session’ during the period from prorogation or dissolution lo the formal opening hy the Governor.

Later, he says:

A Slate is noi bound by any time limit in the filling of a vacancy. Section 1 1 of the Constitution provides that the Senate may proceed wilh the despatch of business notwithstanding the failure of any State to provide for ils representation in the Senate.

One recognises with respect the weight which those words must carry. But I think that, if it is to bc accepted that the State is nol under any time limit or is noi under any compulsion to fill within any time at ali a vacancy which occurs in its representation in the Senate, we could conceivably have a situation arising in which, for a long period, a particular vacancy was left unfilled. The considerations which would motivate a State in doing that are sufficiently wide for me to refer to the possibility without enumerating them.

Must the position be as has arisen? I have to the best of my abilities researched the Convention debates, lt seems to me that the intention of the founders of this Constitution was much as the authors Quick and Garran have indicated, that is, ro ensure that vacancies when notified should be filled as soon as possible. I say that because in the debates which look place in Adelaide, Melbourne and Sydney, the draft which was before the Convention was a draft which provided not that the Executive Council would fill a vacancy if the Parliament was noi in session, hut it was an expression which read: ‘If the House of Parliament should bc in recess at the time the vacancy occurs . . . ‘. I appreciate that argument can be raised that ‘in recess’ is as technical an expression as the words “in session’. Bui it would appear that the words “in recess’ derived not from Westminster traditions but rather from the practice of the United Stales Constitution which has a comparable provision which says that vacancies may be filled by a governor when the legislature of a State is in recess.

– That is so. It is an interesting point to which Mr Justice Barton referred in Vardon’s case, to which T have already referred. He said:

The case of an election to the Senate is not quite analogous. It is conceivable that the Executive Government of the State for the time being might desire that no senator should be chosen to fill a particular vacancy. If they advise the Governor to abstain from taking any action to fill it and refuse to afford him the necessary administrative facilities, and he accordingly did nothing, it may be that he would have failed in his duty, but if so it is clear that the duty would be one which he owed to the State collectively. It is not easy to see how in such a case he could perform this duty without dismissing his Ministers and finding others, and that power is manifestly one the exercise of which could not be reviewed by any authority but the sovereign. The duty therefore is one of the duties which the constitutional head of the State owes to the State, and in the case of the Governor but in a slightly different sense to the sovereign, its performance must be enforced in the manner appropriate to the case of such duties.

I mentioned this because it appears to me that to talk in terms of a duty not being fulfilled in that sense is to indicate what might be a technical omission or a technical error, but nevertheless it is an error which is incapable of remedy. I sense that unless the State of New South Wales is prepared to exercise a power which it could exercise in 1 of 2 ways it should be a matter for consideration by this Senate as to what course it ought to take to ensure that these constitutional provisions are observed. The course which I would think the New South

Wales Government could lake is to treat section 15 of the Constitution in the way in which it has been treated by the Parliament of Western Australia, and that is not an unreasonable view to take. The alternative view is to ensure that the purposes of the Constitution are observed by proroguing a Parliament which is simply achieved by proclamation and a constitutional situation, if this be the interpretation which is relied upon, will then operate, lt should be noted that by a curious coincidence of events the current session of the New South Wales Parliament is a session which apparently began in August of last year ami is still continuing. This is, in the pattern of what has been happening in previous years, unusual because normally a session would finish either in March or in April. But this session has continued the sitting which began in February of this year, being part of a session which commenced last August. It has continued through and will continue through from the adjournment in March, in the case of the Lower House, and April in the case of the Upper House, until later in August. But there are. as I said, a combination of events which has denied to the representation of New South Wales for half of this session of the Parliament a full representation and that has created its own problems.

If this sort, of situation is to be tolerated and accepted what has occurred on this occasion is nothing compared to the problems which could be created in the future. It is a matter which vitally affects this Senate and I think it vitally affects the parties in this Senate. I would have thought that the appropriate time to emphasise a viewpoint is now and not on some subsequent occasion when something which is more difficult and more of a problem arises. I have raised this because I have been concerned at what appears to me to have been an undue and unnecessary delay in the appointment of a successor to the late Senator McKellar. If all else fails persuading a State government or the Houses of Parliament in a State as to what is necessary for the carrying out of this federal compact then at least the airing of these matters may achieve what otherwise and by other methods could not be achieved. If the mere airing of this does not carry its own weight then I would hope in due course that the Senate, as a Senate, without regard to Party positions would regard this as an appropriate occasion to ensure by methods which it has at its disposal that this aspect of the Constitution is preserved.

Thursday, 18 June 1970

Senator MURPHY:
New South WalesLeader of the Opposition

– 1 think the Senate is indebted to Senator Greenwood for raising this matter in the way in which he raised it on the earlier occasion, having the relevant papers brought to the Senate, and then for his exposition of the position. J entirely agree with what he has said, lt seems to me that New South Wales could have taken the course, even on the interpretation which it has undoubtedly proceeded upon under section 15 of the Constitution, of either calling together the Houses of Parliament and proceeding to the election of a senator to fill the vacancy or of proroguing the Parliament and achieving the same result, at least until the meeting of Parliament as a result of action by the Executive Council, lt is extremely disturbing that the State can be deprived of its representation in this way. There is always some little time before the vacancy is filled. I recall that on the occasion when Senator Hannaford died his place was to be filled by an election conducted by the 2 Houses of Parliament in South Australia. We took the course here of agreeing upon a notional pair for the successor to Senator Hannaford until he arrived. The reason for that was, I think, partly political. But to avoid any suggestion that there was delay for political motives I should mention that the government in South Australia at that time was a Labor Government. It was taking some little time for the Government of South Australia to comply with its procedures. I. think there was provision for notice and so on. Since it was contemplated on all hands that a Liberal would be appointed or elected as successor to Senator Hannaford it hardly seemed fair that the Commonwealth Liberal Government should be deprived of the services of a senator while the necessary steps were taken. The continuance of such deprivation might have caused friction and a collapse of the conventions which have so far applied and which are so important to us all. A similar course of action was taken in regard to Senator McKellar, at least for a reasonable time. When that reasonable time elapsed and it was apparent that no action was being taken it was thought by us not proper to continue with the arrangement that had been in force, and again I think that this was conceded on all hands to be the proper approach.

I think it is extremely dangerous that a place should be left unfilled. It is obvious that if it were to be accepted that a place could be left unfilled, it might be suggested that this was being done for improper motives. It could be suggested that a State was being deprived of its true representation so that a party political advantage could be achieved. That would be an abuse of the Constitution. So I entirely agree with what has been said. May I also say that from the expressions I hear around me this would appear to be the opinion of the whole Senate. As Senator Greenwood has suggested, this matter ought to be determined at a time when there is no political advantage to be gained from it, and we could agree that it is the concensus of this Senate that an omission to fill a place is not acceptable.

What should we do about it? There is one course which 1 could suggest, and I think we could follow this course without any lengthy debate. We could put on record by means of a formal resolution in the Senate our concern at the failure to fill the place. Another action might be - and I think again we could do this without any long debate - to refer the matter to one of the proposed new standing committees, perhaps the one that will be dealing with constitutional and legal questions. It is a matter that concerns the Senate. There is no reason for haste in regard to this matter. Perhaps we should not only indicate our concern in some resolution but also say that we expect the authorities in New South Wales responsible for taking such action either to prorogue or to call together the Parliament. This is an important matter, and the situation is fraught with the dangers that have been indicated. We should not allow it to pass because we will be establishing an extremely dangerous precedent unless we indicate that we do not want any repetition. We on this side of the Senate have nol had a chance to discuss this, but it is not a matter involving any party politics. We would all be pleased, I think, if some consideration were given by the Government and others to this situation so that we could perhaps arrive quickly at some course of action directed to ensuring that there will never be a repetition of this kind of omission.

Senator BYRNE:
Queensland

– I hope I will be pardoned for intruding one or two thoughts even at this stage in the early hours of the morning. I think the first consideration is to contemplate what was to be the function of the Senate in the structure of federalism. The Senate was created as an integral part of the federal system, substantially as a part of the compact with the States that there should be a legislative body representitng in a particular way their interests and protecting those interests. So the Senate constitutionally was primarily designed for the protection of the States, and one would think that to have always complete representation of any State would be in the interest of that Stale and would be so regarded.

But once the Senate was written into the Constitution, whether it was primarily or exclusively for the protection of the States, it was written in as an integral part of the structure of the legislative process. The Parliament of the Commonwealth is the Queen, the House of the Senate and the House of Representatives. In other words, the Senate functioning properly is an indispensable part of the operation of the Constitution and the processes of federal legislation. Therefore the States have an obligation not merely to ensure, from their point of view, their protection and that they are always adequately and totally represented, but also to play their part in the functioning of federalism. We could theoretically conceive the situation in which the States for some reason good and sufficient to themselves might refrain from electing their senators and so stultify the whole processes of federal government. There is nothing in the Constitution to prevent them from doing that, on the information that Senator Greenwood has been good enough to supply. But I take it that we would have the same obligation in this country, where we have a written Constitution, similar to thai in the Dicey Conventions of the Constitution in England, and that even if the State governments are not required by law or by their ministerial advisers to do this or that, there is nevertheless a convention that they will do it. and it is as much as anything the convention that is being violated in this instance. It is the convention that should be observed.

I agree that this is a very serious intrusion into the functioning of federal government and. at the extremity could completely frustrate it. For that reasonI think it is opportune that the Senate register its concern at the present situation and by means appropriate to it, and in a way which will be consonant with the dignity of this chamber and of the sovereign State involved, express to the State concerned or to the appropriate people in that State its opinion on the remedies that might be applied in order to ensure that this matter will be remedied as quickly as possible.I think that some such action by the Senate is appropriate and is certainly called for.

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

[12.18 a.m.] - in reply - I, too, am appreciative of Senator Greenwood’s raising this matter for discussion in the Senate, even though the hour is late. It is not easy for me to speak after 3 lawyers have applied their minds to this question, but there are a couple of things I should say. Firstly, I want to acknowledge what Senator Murphy has said, that for quite a reasonable time the Opposition did provide us with a pair for the late Senator McKellar. I think that was in the convention of the way in which this Senate works. The Government was appreciative of that. It is true thatI, as Leader of the Government in the Senate, where numbers are such a vital factor, have been acutely embarrassed, particularly in more recent times when we were dealing with the National Health Bill, which was a contentious issue and which was debated at some length in this chamber. On a number of occasions during that debate there was an equality of numbers in the voting, and if the Senate had been at its proper strength of 60 senators questions would have been determined in such a way as to avoid a message being sent to the other place and a message being returned from the other place to the Senate in regard to certain amendments to the Bill.

The current problem has arisen in New South Wales. It may be that other States take the same interpretation of section15 of the Constitution as does Western Australia. The circumstances in New South Wales at present have pointed the matters up in a most dramatic and significant way. 1 agree that the Senate should give this matter further consideration out of the atmosphere of the present situation. We should look at the matter in the context of directing it to the attention of the States because they have to make a determination on their interpretation of section15 of the Constitution. Therefore, it is a matter not only for New South Wales but also for the other States. I believe that the Senate’s point of view would be strengthened if it were to point out to the sovereign States that the Senate is a States’ House and part of its constitutional function is to look after the interests of the States.

It seems extraordinary that there should be a diversity of opinion amongst the States as to how casual vacancies should be filled in accordance with the Constitution. It would be in the interests of the States as well as of the people of Australia if there were agreement by the States as to the manner in which casual vacancies are to be filled. Reference to Quick and Garran would appear to indicate that casual vacancies should be filled without delay. I think a vacancy should be filled with expedition within the framework of the 2 provisions by a joint meeting of the 2 Houses of the State or by an Executive decision which is confirmed afterwards. If the Senate approaches this problem in the right manner and with dignity it should be able to establish a case which will be unanswerable by the States. The Senate should be able to work out a formula which will meet the intentions which the founding fathers had when they wrote the Constitution. I shall certainly have regard to bringing this matter before the Senate at an appropriate time for further consideration.

Question resolved in the affirmative.

Senate adjourned at 12.23 a.m. (Thursday)

Cite as: Australia, Senate, Debates, 17 June 1970, viewed 22 October 2017, <http://historichansard.net/senate/1970/19700617_senate_27_s44/>.

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Senate17 June 1970

NOTICE OF MOTION

Senator FITZGERALD:New South Wales

QUESTION

SENATE STANDING COMMITTEES

Senator MURPHY:NEW SOUTH WALES

QUESTION

MELBOURNE AIRPORT

Senator COTTON:Minister for Civil Aviation · NEW SOUTH WALES · LP

QUESTION

NATIONAL PARKS

Senator MULVIHILL:NEW SOUTH WALES

Senator COTTON:LP

QUESTION

LEADER OF THE OPPOSITION IN THE HOUSE OF REPRESENTATIVES

Senator McMANUS:VICTORIA

Senator Sir KENNETH ANDERSON:

QUESTION

NATIONAL SERVICE

Senator RAE:TASMANIA

Senator WRIGHT:Minister for Works · TASMANIA · LP

Senator BISHOP:SOUTH AUSTRALIA

Senator DRAKE-BROCKMAN:Minister for Air · WESTERN AUSTRALIA · CP

QUESTION

MEAT SHIPMENTS

Senator WRIEDT:TASMANIA

Senator Sir KENNETH ANDERSON:

QUESTION

DIVISION OF NATIONAL MAPPING

Senator MURPHY:

Senator WRIGHT:LP

QUESTION

MELBOURNE TAXI CABS

Senator WRIGHT:LP

QUESTION

NATIONAL SERVICE

Senator CAVANAGH:SOUTH AUSTRALIA

Senator WRIGHT:LP

Senator O’BYRNE:TASMANIA

Senator DRAKE-BROCKMAN:CP

QUESTION

EGGS

Senator DRURY:SOUTH AUSTRALIA

Senator DRAKE-BROCKMAN:CP

QUESTION

EXPO 70

Senator MARRIOTT:TASMANIA

Senator WRIGHT:LP

QUESTION

TELEPHONE DIRECTORY

Senator Douglas McClelland:NEW SOUTH WALES · ALP

Senator Dame ANNABELLE RANKIN:

QUESTION

NATIONAL SERVICE

Senator PROWSE:WESTERN AUSTRALIA

QUESTION

COMALCO INDUSTRIES LTD

Senator GEORGES:QUEENSLAND

Senator WRIGHT:LP

QUESTION

POSTAL DEPARTMENT

Senator KEEFFE:QUEENSLAND

Senator Dame ANNABELLE RANKIN:

QUESTION

IMMIGRATION

Senator MULVIHILL:

Senator Dame ANNABELLE RANKIN:

QUESTION

VIETNAM

Senator McMANUS:

QUESTION

COMMONWEALTH OFFICE BLOCK, ADELAIDE

Senator LAUCKE:SOUTH AUSTRALIA

Senator WRIGHT:LP

QUESTION

VIETNAM

Senator KEEFFE:

Senator Sir KENNETH ANDERSON:

QUESTION

BAN ON MERINO RAMS

Senate
17 June 1970

Senator FITZGERALD:
New South Wales

Senator MURPHY:
NEW SOUTH WALES

Senator COTTON:
Minister for Civil Aviation · NEW SOUTH WALES · LP

Senator MULVIHILL:
NEW SOUTH WALES

Senator COTTON:
LP

Senator McMANUS:
VICTORIA

Senator RAE:
TASMANIA

Senator WRIGHT:
Minister for Works · TASMANIA · LP

Senator BISHOP:
SOUTH AUSTRALIA

Senator DRAKE-BROCKMAN:
Minister for Air · WESTERN AUSTRALIA · CP

Senator WRIEDT:
TASMANIA

Senator WRIGHT:
LP

Senator WRIGHT:
LP

Senator CAVANAGH:
SOUTH AUSTRALIA

Senator WRIGHT:
LP

Senator O’BYRNE:
TASMANIA

Senator DRAKE-BROCKMAN:
CP

Senator DRURY:
SOUTH AUSTRALIA

Senator DRAKE-BROCKMAN:
CP

Senator MARRIOTT:
TASMANIA

Senator WRIGHT:
LP

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

Senator PROWSE:
WESTERN AUSTRALIA

Senator GEORGES:
QUEENSLAND

Senator WRIGHT:
LP

Senator KEEFFE:
QUEENSLAND

Senator LAUCKE:
SOUTH AUSTRALIA

Senator WRIGHT:
LP

Senator SIM:
WESTERN AUSTRALIA

Senator DRAKE-BROCKMAN:
CP

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

Senator COTTON:
LP

Senator WRIGHT:
LP

Senator DRAKE-BROCKMAN:
CP

Senator DRAKE-BROCKMAN:
CP

Senator DRAKE-BROCKMAN:
CP

Senator McMANUS:
Victoria

Senator FITZGERALD:
New South Wales

Senator KENNELLY:
Victoria