27th Parliament · 2nd Session
The Senate met at 10 a.m.
The Clerk - Honourable senators, I have to announce that the President of the Senate, Senator the Honourable Sir Alister McMullin, is unable to attend the sitting of the Senate this day. In accordance with standing order 29 the Chairman of Committees, Senator Bull, will take the chair as Deputy President.
The Usher of the Black Rod - Honourable senators, the Deputy President.
Honourable senators - Hear, Hear!
The DEPUTY PRESIDENT (Senator Bull) took the chair, and read prayers.
– My question is directed to the Leader of the Government in the Senate. I am sure that the Minister is aware of the displeasure in the United States of America resulting from trade and commerce initiatives taken by Australian industries without prior consultation with or approval of United States authorities. May it be expected that this situation could arise whenever Australia acts to assert its own independent judgment in such matters, implying as it does a subservience to an outside influence? Can it be expected that an atmosphere might eventually be created in which the Government of this country could take such further assertive initiatives as would lead to a total disengagement in Vietnam and recognition of continental China?
– The honourable senator has referred to a matter which obviously, it seems to me, is related to a Press release associated with the sale of machinery by Australia to Cuba. Then he linked this matter to other matters. The sale of harvesters to Cuba was a normal commercial transaction. The Australian Government applies controls to exports of strategic materials to Cuba, but sugar harvesting machines do not have any strategic significance. In response to some inter-government inquiries, the Australian Government made it abundantly clear that this was a normal commercial transaction, and as such I suggest that that is where the matter should remain.
– I am not arguing with that.
Senator Sir KENNETH ANDERSONI know.
– Has the Minister for Air seen a report that the United States Navy is interested in and may purchase the vertical and short takeoff and landing aircraft, the Harrier jet, which it is claimed can do all that helicopters can do and more? Can the Minister say whether Australia may buy any of these aircraft as an alternative to some of the proposed purchases of helicopters?
– I have seen the article to which the honourable senator referred and I can tell him that the Royal Australian Air Force has no plans at present to purchase this aircraft. Of course, we would have to carry out an evaluation against the strategic requirements of the Australian defence force when the need arose to replace an existing aircraft in the RAAF inventory. But I would not think that the Harrier is an aircraft that could replace the helicopter in the various roles that it plays.
– I preface my question, which is directed to the Minister for Civil Aviation, by reminding the Minister that on two occasions recently the question of parallel landing and take-off times by Australia’s 2 commercial airlines has been the subject of questions in this Senate. Will the Minister now inform the Parliament whether there is likely to be any change as a result of discussions with the airlines, or is the present inconvenient system of parallel timetables likely to be a permanent arrangement?
– I thought I indicated - and if I did not I would say to the honourable senator that I am sorry - in an answer to a previous question on this matter that I had had talks with the Australian National Airlines Commission and expected to have talks with Ansett Transport Industries Ltd. I have not yet had the latter talks because of my involvement here in a continuous session. However, those talks will be taking place, after which I would hope to see some improvement in relation to this matter, but I cannot promise it.
– My question is directed to the Minister for Health. Has the Minister seen, or had his attention drawn, to statements in the Press that many people are requesting information on where to find doctors who are charging the common fee? I ask the Minister this question, which the Press has also posed: Will the Minister or his Department, which should have the facts, publish either in the Press or by way of a display of notices in post offices or government buildings, a list of doctors who are charging the common fee?
– I welcome the honourable senator’s inquiry as I will welcome any inquiries which will have the result of concentrating the attention of the public and of the doctors upon the desirability of charging the common fee. I am not able to say which doctors charge the common fee. I am also unable to say which doctors do not charge the common fee. And I am unable to say what proportion of doctors in a particular part of a State charge the common fee. All I can say is that the general observance of the common fee is good, as the figures available to my Department indicate that roughly between 75 per cent and 80 per cent of general practitioners charge the common fee. I shall give consideration to the honourable senator’s question as to whether it would be feasible to publish a list of the doctors who charge the common fee. I think that the important and major considerations are, firstly, that the doctors themselves observe the common fee, and secondly, that the patients make it their business to ask a doctor what fee he charges. I hope in that way that there will be a higher degree of observance of the common fee.
– I direct my question to the Minister for Heath. I ask: What would be the reaction of the Minister if J, as a rank and file member of a hospital and medical benefits fund, sought to sit at his left side in a smoke filled room when he confers with Mr Turner and other feudal barons who operate the major medical and hospital benefits funds and determine frequent contribution increases? As a trade unionist I can attend national wage case hearings besides hearing detailed reports from my trade union secretary. What action does the Minister intend to take to enable fund contributors to have the same rights and privileges as trade unionists, so that they can find out how and why these big funds are disgorging their reserves?
– I cannot speak with authority on what the honourable senator would be able to do if he found himself in the circumstances he has postulated. I am quite sure, however, that he would be able to make himself heard. I feel that I cannot add anything useful in regard to the other aspect of the honourabe senator’s question because, after all, there are many funds throughout Australia and they have in varying degrees opportunities for contributor participation and for the expression of contributor opinion.
– I ask a question of the Minister for Civil Aviation. Did the Department of Civil Aviation receive a letter from the United States State Department on 26th March concerning the operations of Qantas and United States air carriers? Did the Department of Foreign Affairs receive a diplomatic note from the United States State Department on the same subject? Will the Minister consider tabling both documents for scrutiny by the Senate?
– I cannot see any necessity for that to be done. I think the situation is quite clear. Yesterday I was able to issue a detailed statement about the whole position. I could summarise it if the honourable senator would like me to do so briefly. I do not need to repeat the statement. Late in 1969 we received applications from Unitied States carriers to increase their frequencies from 9 Boeing 707 flights to the equivalent of 22 Boeing 707 flights. That involved a suggested increase by them in flights across the Pacific of 140 per cent. We recognised that this would have a most depressing effect on the whole industry, both theirs and ours, and we involved ourselves in long and serious discussions on the question. The net result of those discussions was that we agreed at government to government level that we could go no further than a 45 per cent increase.
During those discussions the United States representatives claimed that there would be a tremendous growth in business and that the granting of extra frequencies would produce this increased growth. We said we did not think this was so. We said we thought the growth would in fact be less than they thought and closer to our figure. The facts have been that the actual growth has been very close to our calculation and below what it was before. Qantas as an Austraiian carrier depends to the extent of 27 per cent of its total business on Pacific services while each of the American carriers, depend on those services for only 3 per cent of their total business. The American Government and not the Australian Government decided to introduce a second carrier. We have not refused applications by Pan American World Airways and American Airlines. All we have said is that we are studying the applications in the light of the business offering - and doing it very carefully indeed. We are doing our best to see that the capacity on the Pacific routes bears some relation to the amount of business offering because we feel that there is not much point in having imported into Australia profitless airline expansion.
– To pursue the question I asked of the Minister for Civil Aviation, perhaps I could put the second part of it to the Minister representing the Minister for Foreign Affairs because Senator Cotton did not advert to it. Did the Department of Foreign Affairs receive a diplomatic note from the United States Department on the subject I just asked Senator Cotton about?
– I regret I do not have the information to enable me to say whether that is so. I shall inquire and let the honourable senator know as soon as possible.
– I direct my question to the Minister representing the Minister for Defence. Will the Government immediately take the people of Australia into its confidence by announcing when all
Australian troops are to be removed from Vietnam?
– There was an announcement made not so long ago in relation to the withdrawal of a battalion of Australian troops from Vietnam. There was also within the last few days a reference to the withdrawal of a helicopter group. I think that is the current situation and at this time I have nothing further to add. The question could be placed on notice for reference to the Minister for Defence but that is a matter for decision by Senator Milliner.
– I wish to ask a question of the Leader of the Government in the Senate supplementary to that asked by Senator Milliner asking that an announcement be made of the time when Australian troops will be withdrawn from Vietnam. Can we get an assurance in the name of safety for our servicemen in Vietnam that no information shall be published as to the time and date of withdrawal of our troops? To do this would surely be giving valuable information to the enemy.
Senator Sir KENNETH ANDERSONIt is axiomatic that the Government will not make any announcement until the appropriate time. The question asked by Senator Marriott points up the very reason for this but under certain circumstances announcements have been made as to a future withdrawal. I agree with Senator Marriott that these should not be spelt out with the sort of precision which would be of any advantage to our enemies.
– My question is addressed to the Minister representing the Minister for the Interior. On 2 occasions in the past I have made inquires of the Minister for the Interior through the Minister in this chamber to obtain details of the circumstances relating to the use of hire and drive cars as licensed hire cars in Canberra. As this matter could be resolved in 5 minutes by a telephone call, will the Minister excerise his undoubted talent in the field of public relations and seek this information for me?
– I thank the honourable senator for his compliment. He exaggerates very much my capacity in this direction. I shall certainly make a telephone call about this matter. In fact, this would not be the first telephone call on the subject.
– My question is directed to the Minister for Health and is supplementary to the question asked by my colleague Senator Mulvihill a few moments ago regarding the excessive profit being made by hospital and medical benefits funds. Can the Minister inform the Parliament whether he is prepared to examine the balance sheets of the various hospital and medical benefits organisations, with particular reference to the profit sections, before allowing any of the funds to increase members contributions?
– The honourable senator will be aware that when the amendments to the National Health Act v/ere passed last year very comprehensive power was given to the Minister for Health to supervise the operations of these funds and to approve the rates of contribution. The honourable senator ignores the fact that most of these funds, if not all of them, are non-profit earning bodies and it is not a question of profit as against contributors’ rates. As far as I am concerned the Government will concern itself to ensure that the rates which are charged are reasonable having regard to the reserves and the anticipated expenditure of the funds.
– Would the Minister for Health agree that nuclear medicine is one of the most important areas of modern medical practice, particularly in respect to up to date methods of diagnosis and surgery? Is it a fact that many of the necessary radioactive isotopes in this field are unavailable in Australia? Is this because there is no cyclotron in any State or Commonwealth Territory to manufacture these short lived radioactive substances? Is it a fact that such a machine can be purchased for less than $500,000? If these are facts, will the Minister look into the possibility of the Commonwealth Government taking urgent steps to have such a machine installed in the Australian National University so that these valuable substances can be made available to State hospital units as well as to the people in the Australian Capital Territory?
– I am unaware of the facts which have been referred to by Senator Buttfield but that does not mean that I doubt what she has said because her interest in these matters is well known to me. J shall undertake an inquiry as to the matters she has raised and I shall let her know the result. I think it should be borne in mind, however, that the provision of the type of apparatus to which she has referred is one of the constant demands of hospitals these days and is one of the reasons why the cost of running hospitals has been increasing enormously. Nevertheless, I shall endeavour to obtain as much information for the honourable senator as is possible.
Senator DOUGLAS MCCLELLANDHas the Leader of the Government in the Senate seen a report that unemployment for this month is expected to be the highest for some time in the western employment area of New South Wales; that since March drought relief has been stopped at Cobar and Bourke resulting in loss of work for over 200 men and that 19 women have been retrenched at the Dubbo telephone exchange? Will the Minister request the Prime Minister to discuss this matter as one of urgency with the New South Wales Premier with a view to seeing whether additional grants to local government authorities can be made available to provide employment in the outlying areas of New South Wales? As the Minister well knows, such areas are facing very seriously depressed economic conditions.
I have not seen the statement to which the honourable senator refers. I do not challenge the veracity of his recording of the statement that was made. As is known, through the agencies of the Minister for Labour and National Service, a periodical employment report is put out and the Government examines it. Quite clearly it would be the responsibility of the State Government in the first instance to look at any specialised area where there is a disadvantageous movement. If the State Government believes that some special assistance should be given there, it would have an obligation to make representations to the Commonwealth. In terms of making some extra provision, particularly through the local government authorities, the chain of command would be from the State Government back to the Commonwealth, at Premier to Prime Minister level, in the first instance. That is the way the procedures work. I shall refer the question to the Minister for Labour and National Service, but clearly the responsibility for any consideration of special assistance in that area would in the first instance be in the hands of the State Government.
– Has the attention of the Minister for Health been drawn to the statement of the Medical Director of the National Heart Foundation, South Australian Division, Dr Clifford C. Jungfer, reported in yesterday’s ‘Advertiser’ in Adelaide that there was no scientific proof that milk caused heart disease? Is it not a fact that the controversy over diet is currently obscuring the facts about risk factors in coronary hean disease, as stated by Dr R. Reader, the Director of the National Heart Foundation of Australia? In the process of unfounded criticism being voiced, is the dairy industry not being unfairly and unjustly maligned?
– I have not seen the report to which the honourable senator referred but I am aware of the controversy which surrounds the issue involved in the statement that has been made. I am not prepared to assert authoritatively that there is a connection of the character which has been referred to by the honourable senator. All one can say is that there is a difference of medical opinion as to whether such a connection exists.
– I ask the Minister for Health to clarify further his distinction between the profits and the reserves of hospital and medical benefits funds. With the comment on excessive reserves contained in the Nimmo Committee’s report behind him, why can we, as rank and file members, not know all the inner details of the funds? Why will they not disgorge their reserves? What percentage would the
Minister direct them to keep as a minimum?
– 1 shall look into the particular matters which the honourable senator raised as to the distinction between profits and reserves. But I repeat an earlier answer that I gave to Senator Keeffe in that respect. As to the appropriate proportion of reserves which should be maintained, the Government has adhered to the recommendation of the Nimmo Committee that 3 months reserves would represent a fair level. I shall take note of what the honourable senator has asked and let him have any further information that comes as a result of my inquiries.
– My question is directed to the Minister for Civil Aviation. On 6th April of this year I asked the Minister the following question:
Have secret neogitiations taken place between the Department of Civil Aviation or any other Commonwealth department and a company known as the Tullamarine Syndicate or any other company tor the purchase of land near the Tullamarine Airport? If so, was the purchase price of this land approximately $2.6m plus 100 acres of land situated in Milleara Road, Avondale Heights, which at present is occupied by the Army? Does the total price, including the 100 acres of land, reach the figure of approximately $3m? Was the land near the Tullamarine Airport purchased for $300,000 8 years ago, when it was zoned as rural land? Has this land been bought and sold on a number of occasions since its original purchase? Were the companies that bought and sold this land interlocking companies? If so, will the Minister initiate a full scale inquiry into the deals, which will cost the Commonwealth $3m for land which was purchased originally 8 years ago for a tenth of that amount?
The Minister indicated then, amongst other things, that he would give me a detailed answer to these questions. Is he in a position at this stage to do so?
– I cannot answer the honourable senator’s questions out of my head now. I thought the answers had been given. I shall look into the matter when I leave the chamber this morning.
– I ask the
Minister representing the Minister for Repatriation whether there is any truth in the claim made by an official of the Returned Services League at yesterday’s
RSL symposium at Dubbo that the Federal Government is betraying national servicemen returning from Vietnam. The official said that when the national servicemen are discharged the Government merely sloughs them off as a snake sheds its skin. He said that there is a lack of consideration for Vietnam ex-servicemen in business and agricultural loans, vocational training, pensions, repatriation and war service homes. In view of these serious allegations will the Minister investigate these charges and rectify any matters where justice is denied to Vietnam ex-servicemen?
– I think it is fair to say that if anyone wants to make allegations of that sort he should bring before the Minister for Repatriation or his Department particular instances. Until someone does something of this sort I believe no action can be taken.
– I address my question to the Minister for Works. Some 3 weeks ago I addressed questions to the Minister in his capacity as Minister representing the Minister for Labour and National Service and as Minister representing the Minister for Education and Science, concerning, firstly, safety provisions for ships entering Australia from overseas ports and the report of an accident that occurred at Newstead wharf on the previous day and, secondly, concerning the reimbursement of salary and wage increases for non-academic staff at the University of Queensland. Can the Minister give me an indication as to whether those answers are now available?
– I wish to inform the honourable senator that as recently as yesterday I have been in touch with the Department of Labour and National Service to ascertain whether or not the information concerning the accident at Newstead and the safety provisions for machinery on the wharf is yet to hand. I regret to say that the Department has not been able to formulate a complete answer yet. It can be expected within the next few days. With regard to the application for a decision on nonacademic university salaries, which I believe was the subject matter of the reference to Professor Zelman Cowen, I was in error in stating a few days ago that I believed that the matter had been decided. That answer was only partially correct. The subject matter is still under discussion between this Government and the State governments and when a decision is made it will be announced.
– I ask the Minister for Civil Aviation whether he can say what is proposed for aerodrome development in north western Tasmania to meet the fast approaching requirements for facilities in that area to cater for jet services. Will not further delays add quite considerably to the eventual cost of development of these facilities?
– I think the honourable senator is quite well aware of my interest in the development of aerodrome facilities in Tasmania and indeed in northwest Tasmania. We have come to an arrangement for a consultation between the Commonwealth Government and the Tasmanian Government to look into all these aspects of development of aerodromes and the problems associated with them. I cannot give the honourable senator any further information other than to say that work between the 2 governments is proceeding with a view to making sure that the development in the area is both logical and orderly having regard to the time problem and the best use of resources. There are some problems in relation to alternative sites, as the honourable senator well knows.
– I am indebted to the honourable senator for the remark which she has made, and I confirm what she has said. When the National Health Act was introduced last year rates of contribution were fixed in the light of the fact that it had been reported by not only the Senate’s own committee on hospital and medical costs, which was presided over by Senator Dame Ivy Wedgwood, but also the Nimmo Committee that excessive funds were held. The rates were fixed in order to run down those funds, and in most States there has been a running down of funds. The fact that there has been this run down is one of the reasons for the projected increase in contribution rates which was announced by me last Friday. On the other hand, in the States of South Australia and Tasmania it appears that generally there is still sufficient money held by the funds in their reserves to enable the recent increase in general practitioners’ fees and other factors to be taken into account for the next 2 years with either no increase or only a very slight increase of rates. But certainly the Government acted upon what was reported by the 2 Committees to which I have referred and fixed contribution rates last year so that these reserves would run down.
– My question is directed to the Minister representing the Minister for the Army. Is the Minister aware that arrangements were completed several years ago for the construction of a hospital in the vicinity of Laverack Army Barracks at Townsville? Is the Minister also aware that sick and injured Service personnel are still being treated in improvised hospital accommodation at the old Townsville Quarantine Station? I now ask the Minister: Has construction of the hospital been indefinitely delayed because of the severe economic crisis being experienced in this country, or has the land reserved for the hospital been put into cold storage for sale to land developers at a later date.
– I shall refer this question to the Minister for his comments. Rather than ask the honourable senator to put the question on notice, I shall write to him at a later date with the information.
– My question is directed to the Minister for Civil Aviation and I refer to the statement made by him yesterday in connection with charter services. Can his statement of yesterday be taken to indicate that Qantas Airways Ltd has rejected the idea of the establishment of a subsidiary charter service and will maintain its attitude on operating charter services based on international agreements for groups having reasonable affinity? If this is so, will the cheaper charter fares now available to parents of migrants to Australia be continued or are they likely to be based on this new proposition? Has the Minister yet determined whether the retrenchments which were to take place in Qantas have now been temporarily stayed?
– The concession fares for parents, as I understand it, will remain. That matter of 6 months’ notice being given by Qantas to a lot of its employees is still current. It is a matter for Qantas, the employer, to arrange these things with its employees. As is well known, I have taken an interest in this matter to try to help as much as I possibly can. It is still a matter for Qantas to decide and it is proceeding with discussions with its employees along those lines. As to the statement I made yesterday about charter flying and arrangements with Qantas, the honourable senator should take from that statement what it says. As I understand the situation, Qantas has an open mind and is determined to retain the maximum interest in and share of the charter business, and has worked accordingly.
– My question is directed partly to Senator Cotton, who represents the Minister for the Interior, and to an equal degree to Senator Wright as Minister for Works. By way of preface I refer to a letter I received recently in reply from the Postmaster-General indicating that he still adheres to the idea of the erection of a television tower on Black Mountain, in Canberra. I ask Senator Cotton: When will the Minister for the Interior declare himself on this vital issue? I ask Senator Wright: Is it true that a work force from his Department has been used in a Trojan horse role for surveys on Black Mountain?
– On behalf of the Siamese twins sitting together on this seat I would like to say that the only information
I have on the matter is the communication from the Minister for the Interior that the National Capital Development Commission and officials of the Postal Department are continuing joint discussions on the design of a television tower, and the discussions include the question of the inclusion of public facilities. It would be premature to comment at this stage in the light of those discussions.
My question is directed to the Minister representing the Minister for Education and Science. I ask: Has the Minister seen a statement attributed to the New South Wales President of the Returned Services League that national servicemen who have been conscripted by the Government to fight in Vietnam and who, upon their return to Australia, have sought entry to a university are finding difficulty in gaining admission? Will the Minister undertake to raise this matter with the universities to see Whether national servicemen are finding difficulty in gaining admission to a university, and if so, will he take steps to ensure that these young men are given every assistance to re-establish themselves in civilian life?
– That statement came to my notice this morning. I can assure the honourable senator that it caused me real anxiety. The matter has been noted for immediate attention in the sense of the honourable senator’s question.
– My question is directed to the Minister representing the Minister for Foreign Affairs. I refer to difficulties which are experienced by Canberra citizens in obtaining visas from the American Embassy and the representations which have been made by a number of community groups, including tourist agencies in Canberra, to the American Embassy. Will the Minister ask the Minister for Foreign Affairs to make representations to the American Embassy to see whether it is possible for visas to be supplied in Canberra? At the present they are supplied in Sydney, a practice which occasions delays of up to a fortnight because of the correspondence and paper work involved.
– I shall certainly be pleased to have the matter examined. If inconvenience is being caused, I have no doubt that we will endeavour to facilitate the issue of visas in Sydney.
– My question is directed to the Minister for Civil Aviation. I remind him that in a reply to a question addressed to him a few days ago he stated that $15m would have to be expended on Townsville Airport before Boeing 747 jumbo jets could land there. As a nondepartmental estimate discloses that approximately only $lm is required for an instrument landing system, and not more than $5m for other facilities, I ask: How will the balance of $9m be expended?
– No, I cannot give that information. I think the honourable senator will appreciate that as my Department employs about 9,000 people and serves the whole of Australia and the Territories, it is unikely that from day to day I will be able to give detailed answers on the ramifications of technical operations and cost calculations in such a wide field. I will seek an answer from the Department and let the honourabe senator have it.
– Has the Minister for Civil Aviation seen Press statements that the United State of America will cancel certain flights by Qantas Airways Ltd? Is this true? If so, what action is the Government taking to protect the nation’s airline Qantas?
– Over the months that I have been Minister for Civil Aviation a lot of questions have been asked about the Government’s interest in Qantas and what it seeks to do to protect Qantas. It ought to be perfectly clear to everybody that we have a very strong interest in protecting the Australian people’s flag carrier. The suggestion that comes out of the American Press has been that what America will be asking Australia to do is to have Qantas submit frequency patterns for approval. This does not cause us any particular distress. We ourselves require international carriers to do that in Australia. So that is the answer to that part of the question. I have yet to encounter any suggestion that America might restrict our flights, but I make the comment in passing that at the present time we are flying 11 frequencies involving passengers across the Pacific and 2 American airline carriers are flying 13 frequencies. So any restriction that is being talked of would perhaps more appropriately be imposed by Australia.
(Question No. 823)
asked the Minister representing the
Attorney-General, upon notice:
For the years ended 31 December 1969 and 31 December 1970-
how many appeals were heard by the High Court of Australia in respect of the State of New South Wales;
how many of such appeals were from decisions of the Court of Appeal of the Supreme Court of New South Wales, and how many of those were upheld; and
how many of such appeals were from decisions of a single Justice, and how many of those were upheld.
– The AttorneyGeneral has provided the fallowings answers to the honourable senator’s question:
The number of those appeals which were allowed wasas follows:
The number of those appeals which were allowed was as follows:
and one judgment still outstanding.
(Question No. 881)
asked the Minister for
Health, upon notice:
– The answer to the honourable senator’s question is as follows:
(Question No. 1145)
asked the Minister representing the Minister for Shipping and Transport, upon notice:
– The Minister for Shipping and Transport has provided the following in answer to the honourable Senator’s question:
The Bureau of Transport Economics is also commencing work on a number of general matters relating to transport. Among these are matters relating to transport costs and the adequacy of information and statistics in respect of transport.
Work has also commenced in developing operations research techniques for use in studies concerned with optimising the scheduling of ships, trains or road vehicles.
– Yesterday Senator Bishop asked me the following question:
Were the terms relating to the leasing of the 24 Phantom aircraft fixed in relation to the amount of work which might fall to Australian industry? If the terms relating to the use of the F111 aircraft have yet to be negotiated, will the Minister see to what extent the servicing and overhaul specifications and the work which has now apparently been sent to the United States of America might be let out to Australian manufacturers?
The answer to the question is as follows:
The terms relating to maintenance of the Phantom aircraft while on lease to us from the United States Air Force are embodied in the lease document and provide that the Royal Australian Air Force shall operate and maintain the leased property to USAF standards while it is under RAAF control, including modifications, periodic overhauls, technical order compliance, and any other actions that would be taken by the RAAF if the aircraft were owned by the RAAF and maintained to standards equivalent to those applied by the USAF. In other words normal maintenance of the aircraft is undertaken in Australia within the RAAF.
Regarding the F1UC, arrangements have already been made for repair and overhaul of certain equipment here in Australia when the aircraft is delivered. The rework of spares which is currently being undertaken in the USA on our behalf is without doubt the most economical arrangement for Australia. By returning these spares, we avail ourselves of the production line in the United States and are included in the total rework programme for the whole fleet of Fill aircraft. If the work was undertaken here, it would involve purchase of highly specialist tooling at very great cost for a relatively small number of separate parts.
– Senator Devitt recently asked me for an explanation of the meaning of the term ‘poly-unsaturated fats’. I wish to inform the honourable senator and others who may be interested that the term refers typically to derivatives from vegetable oils. The term ‘saturated fats’ refers to derivatives from animals. For the benefit of honourable senators who may wish for comprehensive definitions of what medical people mean when they refer to fats as ‘poly-unsaturated’ and ‘saturated’ I offer the following:
Fats consist of atoms of carbon, oxygen and hydrogen linked together by bonds to form a molecule in a specific pattern. In a molecule of a saturated fat carbon atoms are linked to carbon atoms by never more than one bond. In a molecule of unsaturated fat at least one or more of the carbontocarbon linkages have 2 bonds. In a molecule of a polyunsaturated fat, two or more of the carbon-to-carbon linkages have 2 bonds known as a double bond. The presence of these double bonds gives the fat special properties. One of the special properties is the fact that when some of the saturated fat in a person’s diet is replaced by polyunsaturated fat, there is usually a fall in the level of serum cholesterol. Fats provide us with a convenient and concentrated source of energy. They include solid fats such as lard, butter, margarine as well as edible oils which are pressed from plant products such as coconuts, soya beans, olives, peanuts and seeds such as safflower, corn, cottonseed, sesame, etc. They- include, also, emulsified fat which is present in milk and cheese.
In our bodies fats may be conveniently divided into those which vary in amount and are the fuel store of the body which can be expended, and those which are constant and form the essential structure of the cells. Our body has a considerable capacity to manufacture saturated fats from carbohydrates such as sugar and starch - and to store these in our fat depots, but it has a very limited capacity, if any to manufacture polyunsaturated fats. Since these are essential to the structure of cells, we require each day very small quantities of polyunsaturated fats. However, these quantities are present in all ordinary diets and disease due to deficiency of these essential fats is unkown. Although many types of foods contain the small quantities of polyunsaturated fats essential to healthy life, these are present in large amounts in many vegetable oils. Two exceptions are coconut oil and olive oil. These do not contain large amounts of polyunsaturated fats although they contain quite significant amounts.
I am informed by my Department, because a statistical association between the level of serum cholesterol and the existence of coronary heart disease has been observed in a number of studies, it has been suggested that a high serum cholesterol level may cause this disease. However, it could be that the high level of serum cholesterol may be coincidental or perhaps even represent a protective reaction to some other causitive factor.
– by leave - I wish to make some preliminary remarks before I make the generality of the statement which the Senate has been kind enough to allow me to make. I must say this in explanation: The Senate Select Committee on Securities and Exchange sought to produce an interim report prior to 30th June, but there were technical problems involved in this. Therefore, the Committee felt that it was proper that a general statement reporting the activiies of this Committee be made to the Senate before it ended its autumn session. As I read the statement I shall make some interpolations which I hope honourable senators will make in the copies which are now being distrbuted to them. The full statement will appear in the daily Hansard.
The Senate Select Committee on Securities and Exchange, established by resolution of the Senate on 19th March 1970, feels that it is in duty bound to report to the Senate before the retirement of present senators on the progress made by the Committee. Since its first meeting on 21st April 1970, it has met on 58 occasions, 18 of which have been private executive meetings of the Committee. Evidence has been taken at 40 meetings held in Canberra, Perth, Sydney and Melbourne. Seventy witnesses have given evidence amounting to over 6,000 pages, of which about 1,600 have been ‘in camera’. It has been our deliberate policy to draw witnesses from most sides of the financial and commercial sectors of Australia, including representatives of the various regulatory bodies. I am glad to say that we have been most successful with this policy. In particular we have had willing co-operation from stock exchanges, stockbrokers, company registrars, unit trusts, mutual funds, financial journalists, company secretaries, accountants, directors of public companies, geologists, engineers, life officers, shareholders and the universities.
Hundreds of letters and submissions have been received from private individuals and professional bodies throughout Australia. Furthermore, leading overseas financial organisations and individuals have approached us to seek an opportunity to express their views on the matters we are investigating. For many months now one of our consistent problems has been how to attend to these submissions and inquiries, and especially ot decide which matters should be given priority. Our resources of time, people and money are understandably limited. But there can be no better indication of the interest in the Commit tee’s inquiries and the seriousness with which Australians and overseas investors rate the matters being looked at than the high and rising level of inquiries which we receive each day. I need not remind you, Mr Deputy President, that the terms of reference under which this Committee was set up have charged us to work in an area of our community that is crucial to the future growth of the Australian economy, for it is through the securities market in the wider sense that the financial savings of Australians and overseas investors are marshalled and then allocated both to growing companies and to government.
Australia is one of the few countries in the world which possess securities markets where public companies can raise a substantial part of the long term financial resources they require for capital formation. These resources are gathered from thousands of individuals here and overseas either directly or indirectly through many financial institutions. In this process the stock exchange play an important role; it follows that much of our attention has been focussed on their operations. In particular, it is the stock exchange which have the public responsibility of running an ordinary share market in Australia. In view of the serious failures in recent months in the various Australian securities markets, the view has been expressed to us that our Committee could, in the short term, conceivably precipitate further harm which might outweigh the long term benefits which we hope will follow from our work. That is not our view. And the evidence that Australia still has, fundamentally, strongly based securities markets is being demonstrated by the continuing high level of capital inflow and the high level of capital expenditure by public companies financed in particular from capital raisings. The flow of financial savings through our various institutions continues to expand. Stock exchange turnover is well down, but our view is that turnover in these markets in recent years has been well above trend.
The foregoing facts encourage us to pursue with vigour our inquiries in the hope that the abuses and malpractices which are now well known to us and which have led to grave distortion of the financial system, with privileges to few and losses to many, will be brought under more effective control in the future. We continue to find major weaknesses in the present regulatory system - in the concepts of what the various regulatory bodies are trying to do; in the powers of these various bodies; in their reporting and policing functions, and in the provision of adequate information to the investor rather than to the insider. But although there is a side of the Australian security markets which is particularly depressing I should like to say that the Committee is encouraged by the evidence, slowly mounting, that a public debate is beginning in Australia on the nature and extent of the abuses within the security markets. We are particularly pleased that the debate should be concentrated more and more on just what would be a desirable regulatory system.
The Committee of which I am Chairman is, I know, currently thinking out its own position on this matter. I would like to stress that the Committee is looking to the years ahead; it is important to begin a discussion of this regulatory problem from some assumption on what kind of securities markets Australia should be striving for in the coming decade. Our studies show clearly that regulatory systems can have a major impact on many aspects of the functioning of securities markets. They can influence the nature and extent of abuses and malpractices; but they can also influence the fundamental structure and organisation of these markets. Both influences must be considered.
If there is one theme that constantly recurs in our investigations, Mr Deputy President, it is that one must not look at one aspect of the securities market in isolation from the rest of the market; we are dealing with one large, integrated market for securities, in many respects a market becoming increasingly linked to overseas capital markets, and within that system Stock Exchanges in Australia, e.g., are but one part of a much wider picture. In thinking of an efficient regulatory system one must understand the implications of these trends. In order that the public understanding on these matters may be a better informed one, we are pressing ahead in the coming 4 weeks with a further series of hearings. Following those, the Committee’s present intention is to prepare as speedily as reasonably possible a report on its findings with recommendations to present that report, together with the public evidence, to the Senate during the Budget session of Parliament.
Finally, Mr Deputy President, I wish to extend our thanks to honourable senators who gave permission for this Committee to continue sitting at an urgent stage of its inquiry earlier this year, and to assure the retiring members of the Senate that we will carry through to conclusion the important task with which we have been charged under our terms of reference.
Reference to Standing Committee on Social Environment
– I move:
I do not propose to extrapolate at any length on this matter. There is probably no publication which is resorted to more frequently than a telephone directory. We are all familiar with problems with telephone directories. These are not major problems but they create an irritating situation and cause personal frustration. I do not have to go into details to indicate the complaints which so often have been directed against the information pages of the telephone directory. The directory contains a mass of rather indigestible material of a telegraphic and telephonic nature and much postal information. Some of this information seems to be quite irrelevant to a telephone directory. It seems that the directory is used merely as a vehicle for much postal information.
We have seen, in the publication and presentation of annual reports of public companies and government departments, new forms of presentation, with more modern layouts and better methods whereby the information contained can be assessed and assimilated. Colour designations, colour differentials and things of that nature are employed. I see no reason why some expert assistance should not be availed of, and modern means of presentation used, in the the compilation of the information pages in the telephone directory. 1 do not think that there is much more to say. This is a problem of which we are all conscious. There is no-one who has not, at times, been irritated and frustrated when having to resort to the information pages in the directory. A committee of this nature, having departmental officers before it and perhaps being able to call in aid the technical advice of publication and printing experts, may well be able to come up with some format which will be much more functional, which will show a proper dissection of information by the use of colour and more modern presentation techniques, and generally will soothe the shattered nerves of members of the Australian nation who have resort to the telephone directory.
The DEPUTY PRESIDENT (Senator Bull) - Is the motion seconded?
(11.1) - I formally second the motion. The Government does not resist the reference of this matter to the Standing Committee on Social Environment. I have conferred with the Leader of the Opposition (Senator Murphy) and have expressed the view that the Publications Committee would be a better vehicle for such a reference. I do not challenge the substance of the motion. Most honourable senators are aware of the difficulties that can be encountered when one is seeking information from the telephone directory. Mostly we are in a hurry to get the information quickly and undoubtedly we get frustrated with the format. This is almost the universal experience. I believe that it is all right for this matter to be referred for investigation. Perhaps subsequently I can talk with Senator Condon Byrne and discuss means whereby it may be possible to have a cross-reference to the Publications Committee.
I am agreeing to the motion on the understanding that this will be a short reference to the Standing Committee on Social Environment. I think the reference could be disposed of very quickly. We are now in the dying hours of this session and the Senate will return in August when a new Committee, and probably a new Chairman, will be appointed; so I should not like to be agreeing to any long term reference. This should be a quick reference and perhaps some form of co-operation can be achieved with the Publications Committee. So I do not resist the motion.
– The Opposition also supports this motion but 1 suggest, as did Senator Sir Kenneth Anderson, that the Publications Committee is probably the better vehicle to deal with it. Although the Standing Orders may suggest that a topic such as this should only be looked at together with a similar committee of the House of Representatives, the Senate could provide that the Standing Committee on Social Environment could examine it notwithstanding the Standing Orders. So that problem could be met. The substance of the motion may seem to be a small matter but it is not. I suppose more time is lost in Australia by people trying to find in the telephone directory elementary information which should be easily available than is lost in all the industrial stoppages and strikes. I have no doubt about this whatever. Yesterday morning, I tried to locate the number to ring to find out the time and it was necessary for me to turn through a lot of other information before I found, on page 19, information which one would think should be near the front of the telephone directory. If honourable senators think that no efforts have been made to correct this situation, they are wrong. 1 well remember when I was a member of the Joint Select Committee on Parliamentary and Government Publications which was set up in desperation to try to do something about the inefficiency in the publication and distribution of all Government publications. High public servants kept saying that there was nothing wrong with anything despite the fact that the Treasurer had moved, and had received the unanimous support of the House of Representatives and the Senate, for the setting up of such a committee to deal with this state of inefficiency. Nevertheless, I think, very little has been done to cure some of the worst faults.
This topic of the telephone directory was raised before that committee on one occasion in Melbourne. Some representatives of the printing industry - employers - happened to be finishing their evidence when representatives of the PostmasterGeneral’s Department who were responsible for the printing arrived. I asked for a copy of the telephone directory and then asked the expert on printing from the printing industry whether he had ever see a worse or more inefficient compilation. I said to him: ‘If anyone set out deliberately to produce confusion could you imagine, anything worse than the telephone directory?’ He said no. He agreed with every complaint which had been made about it including the size of the print used and the layout. Since then there may have been a little change but an enormous number of different types of print are used and all experts agree that this is the way to produce confusion. That evidence was given in about 1963. The matter was brought to the notice of those responsible but I do not think there has been very much improvement.
– I think it has got worse.
– The honourable senator may be like some other people who think those responsible keep reducing the size of the print. Such observations may be due to other things, such as the passage of time causing a change in the person concerned. Sometimes that is the explanation for complaints about the size of print. Einstein’s law of relativity ought to be applied. The status and condition of the observer have an effect on the observations which are made. Senator Byrne is right to raise the matter because this is an annoyance. The daily affairs of life ought to be conducted without unnecessary inefficiency. The telephone directory goes into practically every person’s home. It is used constantly and complaints have been made. The complaints have been demonstrated and the people who have the responsibility and are paid to attend to these things apparently just will not correct them. I do not see why we should tolerate a continuance of this state of affairs, especially after attention was drawn to it some years ago in a unanimous opinion expressed by a joint select committee of this House. I hope that something to cure the problem might come out of referring this matter to the Committee. But in the light of past experience I do not know what can be done to cure what is apparently an in-built obstinacy and determination to produce in the handling of the telephone directory as much difficulty as possible for the public of Australia. I wish Senator Byrne well and I wish the Committee well in trying to do something about a matter which might be regarded as being within the area of the insoluble.
– 1 remember Senator Buttfield’s raising this matter some years ago. She suggested that it should be referred to a woman. I remember agreeing with her at the time and saying that even a woman could do better than those who produce the present telephone directory. Honourable senators will notice that I looked around before saying that to see that there was no woman present in the Senate. However I hope this does not become a mountain out of a molehill. This matter is within the realms of the Postmaster-General’s Department. If I were Postmaster-General I would put out an order using a word which I think is used by sub-editors today: ‘Un-yuk this immediately’. The Senate should be very careful about the way in which it handles its own business. I think it is nearly time that the Senate started to un-yuk some of its own Standing Orders. For example, I wish somebody would un-yuk standing order 57.
I think the Senate is making a mountain out of a molehill out of this proposal. I think the Postmaster-General’s Department could carry out this function.
Question resolved in the affirmative.
Motion (by Senator Devitt) agreed to:
That Business of the Senate, Notices of Motion Nos 5 and 8 standing in the name of Senator Wood, be postponed until Thursday, 20th May.
– by leave - The notices of motion referred to in the motion of Senator Devitt relate to the disallowance of certain ordinances. Certain specific provisions are laid down as to the handling of these matters. I would like to know what will be the effect of this motion if the Senate is not sitting next Thursday. There may be consequences which are not obvious.
– It is all right. That would automatically take it into the next session. Fourteen days are allowed anyway.
– Are the Norfolk Island ordinances involved? I am concerned about them because of the provisions of the Acts Interpretation Act as to when they should be dealt with. This matter may not be as simple as it appears. May I suggest that some consideration be given to this matter during the course of the day?
– That is fair enough.
Debate resumed from 12th May (vide page 1807), on motion by Senator Wright:
That the Bill be now read a second time.
Upon which Senator Poyser had moved by way of amendment:
At end of motion add - but the Senate, whilst welcoming the advances provided in the Bill, is of opinion that the Commonwealth should establish an appropriate instrumentality to bring about co-operation and co-ordination with the States and local authorities to:
ensure that planning authorities are established or developed;
ensure that all lands vested in the States or Commonwealth will be retained and that private rights to such lands is limited to leasehold;
identify a number of appropriate sites for new cities and co-operate in their development;
assist in slum prevention and renewal; and
assist appropriate bodies to carry out comprehensive urban improvement and development’.
– Last night my colleague, Senator Poyser, in his usual lucid fashion, spearheaded an amendment which indicates the feelings of the Opposition on this Bill. The 2-page document that is this Bill does not seem to look beyond the actual handout of cash to the States. The Opposition takes the view that the urban problems of today, of which housing is only one facet, cannot be dealt with in this piecemeal fashion. Senator Poyser dealt intimately with the effect of inflation on home purchases and so on. His remarks were related mainly to the position in the State of Victoria, but the same position applies in my own State of New South Wales.
The argument has been advanced by the Opposition that a Commonwealth urban affairs organisation should be created. 1 believe that a lot of the skirmishing that goes on at Premiers Conferences is due to the fact that after the Commonwealth makes certain grants supplementary problems arise which seem to dilute the effect of the actual cash grants, resulting in excessive wrangling. To illustrate why we cannot sectionalise and say that a certain amount of money is for housing and that is all there is to it, I refer to the proposed steelworks complex at Jervis Bay. The Shoalhaven Shire Council is grappling with a lot of slick land operators. If the steelworks is installed there, and I certainly hope it is not, this rural area will have the same problem of being compounded with housing stresses. It was on that basis that the Opposition moved an amendment containing 5 clauses. We feel that just as man does not live by bread alone urban problems wil not be solved solely by dealing with the question of housing.
An illustration of what can happen by concentrating solely on housing development can be seen in the Commonwealth Division of Chifley, which covers an area in outer metropolitan Sydney. I have toured this area many times with its very diligent member for the House of Representatives, Mr John Armitage, and what I have seen is amazing. It is all very well to say that housing is purely a State problem, but it is not. Look at the overall planning in the electorate of Chifley. No recreational centres or facilities of this nature have been provided. The State authorities say that with the money the Commonwealth gives them their prime responsibility is to erect as many houses as possible and they leave it at that. I believe that the Commonwealth can play a much more vital role in many of the areas assoicated with housing. To illustrate the point I am making, I should like to include in the record a list which shows some of the matters under the administration of various departments in the United States of America. With the concurrence of honourable senators I incorporate in Hansard an extract from a publication produced by the United States Department of the Interior called ‘Assistance for Outdoor Recreation’.
P.L. 88-20 and other Authorities
Section 4 (f) of Public Law 89-670
Multiple-purpose Reservoir Projects
Administration on Aging Assistance
Model Neighbourhoods in Demonstration Cities
Federal-aid Airport Programme
It will be seen from this extract that, for instance, the Department of Housing and Urban Development has a host of special programmes such as federal housing administration mortgage insurance programmes, neighbourhood facilities grants and open space land programmes. These are the sorts of things which I am suggesting to Senator Wright we should be considering. We find that the bricks and mortar complexes in outer Sydney and outer Melbourne are associated with the development of distributor roads and freeways. There is a fantastic inflationary trend in the price of land. In less than 5 years we will have a lot of the problems that the big cities in the United States are grappling with now.
I notice that Senator Davidson is sitting in the chamber. I am reminded of the Citizenship Convention before last when everyone was saying what a good job we had done with migration. Then a Scottish migrant, a civil engineer, painted a picture of what Sydney and Melbourne would be like in 5 years time. So much of what he said has come about. I know that Senator Davidson recalls that gentleman’s contribution. The point I make is that Commonwealth Ministers and State Ministers were present at that Convention but nobody did very much more about it. I take the United States example by way of comparison again. The Mayor of New York. Mayor Lindsay, is in the invidious situation of having to use the limited revenue of the New York City Council to buy back many high rise blocks in the city of New York for what he calls pocket handkerchief parks. We have the same situation in Sydney. If one very efficient Lord Mayor, Harry Jensen, had had his way, possibly the Sydney City Council would have razed to the ground the old Queen Victoria Building and would have established a massive city square on that site. I pay a tribute to my sister State, Senator Poyser’s State of Victoria, because I know that Melbourne gave a big lead to Sydney in the width of its streets. But even Melbourne, with its advanced planning in that regard, finds that its outer suburbs have problems.
We all detest crime but if crime can be related to a lack of juvenile facilities we can extend this argument and say that the lack of recreational facilities in the new suburbs could also have a bearing on crime. We of the Opposition believe that a grant for housing should not cover merely the construction of houses. There has to be a greater degree of co-ordination. Money should be available also for slum prevention or urban renewal and other kindred programmes. Much can be done to make a new society. It is true that we do not have a real racial problem as does the United States and even Britain. In certain parts of outer London there is an exodus of people from the old decaying suburbs. These people are probably prepared to pay a higher rent and they are moving out of these suburbs. Consequently the local authorities have a lower revenue and a bigger problem to deal with. These are the situations that apply in many parts of New York and in certain parts of London. We should try to avoid these problems here. Despite all the discourse that has gone on about electoral reform, one of the problems is that in the inner city electorates of Sydney and Melbourne we have this same problem. In Sydney a large number of transitory citizens are living in small tenements in the inner city area. In Pyrmont and other inner suburbs there are rows and rows of semi-detached homes. We are getting a new type of landlord and all kinds of problems are being created. But when somebody finally decides to do something about it he finds that the Commonwealth as a whole does not play a major role in modern transportation. We find that the Commonwealth grants do not meet the problem fully.
We argue about family limitation in Asia. Nations are giving aid to the underdeveloped countries of Asia, but with the rising birthrate in those countries the money they give does not continue to have the same effect. I apply that analogy to the big cities. I believe that if instead of earmarking X million dollars for housing the Commonwealth through a minister for urban affairs played a major role in collaborating with the various State authorities and on the other attendant urban developments we would have a far better society. I think I can usually read Senator Wright’s mind and determine what his reaction to what I am saying will be. I know that he will say that we are dealing with housing and that I am bringing in a lot of highfalutin ideas about other things. I remind
Senator Wright of how I think I converted him on another matter. I remember how with my colleague Senator Douglas McClelland I blazed a trail about his Department playing a role in beach erosion. For a while he was a bit wishy-washy about it. Later on - I do not know whether it was because of Senator Douglas McClelland’s eloquence or my own - he suddenly came good about an area in the Barton and St George electorates, with which Senator Douglas McClelland will be very familiar.
At that stage Senator Wright felt that that was as far as he need go. Then I pursued the matter of beach erosion on the south coast of New South Wales, and to his credit Senator Wright wrote to the Premier of New South Wales, Mr Robin Askin. To my amazement, later on a letter came back indicating that the Premier of New South Wales and a Socialist senator from Sydney both agreed that the Commonwealth should play a wider role in the matter. I am really pleased with that letter and I believe that we have established a beachhead with Senator Wright and that bigger and better things have to be done on a Commonwealth basis. It is for that reason that I commend to Senator Wright the list that was produced by the United States Department of the Interior. It shows that so much can be done. It may be said: Look what the State Government of New South Wales proposes to do with the Rocks development’. It is all very well to apply the domino theory to foreign affairs and to say that certain things done at one point will have repercussions all along the line. But by this spasmodic development of the Rocks area, prestige office blocks will be built and the proletariat of Pyrmont will be shoved out somewhere else. They may go out to Mount Druitt.
The State Housing Ministers come to Canberra asking for money, and the Commonwealth has to be virtually the disburser of funds, but I think the Commonwealth Government has every right to play a much more vigorous role in curbing some of this extravagance that goes on. When I look at Senator Webster, who is a representative of the Country Party, I feel that sometimes we of the Socialist Opposition ought to have the Country Party with us as allies, particularly when the construction of expressways is receiving a high pri ority. I know that in Sydney the Warringah expressway is going out on to the beach fronts. When we look at the western and outer western suburbs of Sydney where there is a real lack of amenities we find that our priorities are all fouled up. I can see Senator Webster nodding his head and 1 know that he will agree with me that the Commonwealth should be able to play a much more effective role in regard to urban priorities. I think this is the message which my colleague Senator Poyser put very effectively last night and it is the message that I wish to convey to Senator Wright.
As I said earlier man does not live by bread alone. We will not solve urban problems solely by the number of dwellings that we build. There are all the attendant problems of better amenities and the control of some of the by-products of a modern and largely private enterprise economy. Because some big developer can get some slick public relations man who can show convincingly that if the Commonwealth or the State does not do something Armageddon is coming, we end up with expensive roads or highways that lead to nowhere while between them there is a no-man’s-land where the average person lives and has to battle to get better amenities.
Senator Little has more than a passing knowledge of metropolitan Melbourne. I am sure that he was captivated by the remarks of Senator Poyser in relation to urban problems. I say with respect that by the adoption of the Opposition’s amendment I think we could be blazing the trail so as to get a better integration of Commonwealth and State activities in our efforts to solve these massive urban problems. We have read what Frank Moynihan, a United States authority on urban problems, has said about these matters and they will certainly be compounded here. The adoption of the amendment moved by the Opposition would ultimately mean that at future Conferences the Prime Minister of the day would be able to say that we are not dealing with the problem on a sectional basis but are trying to make a better Australia which can be achieved in terms of cities only by long range planning and a higher type of urban planning development.
– This Bill merely makes possible the continuation of the current Commonwealth-State Housing Agreement during an emergency period because time itself has prevented the negotiation of the completely new agreement which is now due. In addressing remarks to the Bill rather than to the amendment, there is little that one can say about it. It is a Bill of absolute necessity because without it the Agreement would come to an end at 30th June this year at a time when the Parliament will be in recess. One factor that could be spoken about to some advantage is the rate of interest being charged upon these loans to the States. The Minister for Works (Senator Wright) who represents the Minister for Housing (Mr Kevin Cairns) in this place reiterated in the second reading speech that the Commonwealth is again offering the advantage of an interest rate at below 1 per cent below the long term bond rate. I put it quite seriously to the Minister - and because there is nothing that can be done to change this legislation I have not rechecked my facts and I am depending on my memory - that this has been the attitude from the beginning of these types of agreements when the long term bond rate of interest was much lower, indeed somewhere about half, the present rate.
If you take 1 per cent from a 4 per cent rate of interest you reduce it by 25 per cent. If you take 1 per cent from 7 per cent you will reduce it by only about 14 per cent, which is a considerable difference in the advantage which is being offered to the States. If one pursues further this line of argument one wonders why we have today a long term bond rate of interest of 7 per cent in this country. It is 7 per cent because we have an economy that is managed by the Commonwealth Government, and should be managed by the Commonwealth Government. The Government has - unquestionably acting on Treasury advice or even pressure - allowed the long term bond rate of interest to expand gradually until it has reached this state of usury where it is now at 7 per cent. Nobody has ever given us a valid reason why this is so except for the sop that it will control inflation. The fact that it has consistently failed to control inflation does not seem to worry anybody at all. People accept as fact the statement that by extending the rate of interest the borrower, who never borrows money unless he has some compulsion within him that makes him require the money or unless he has to have it, will by some mysterious process be discouraged from borrowing and the lender will not be encouraged to lend money because of the higher rate of interest. Every word that has ever been written on economics completely refutes this idea. Of course, that is not so. So true is that, that today there is a tremendous depression even in the valuation of industrial shares. Who wants to produce goods the production of which would help us curb inflation by meeting the amount of currency and credit circulation in the community when, as a result of investing their capital in the production of goods they would be very lucky to get a return of 7 per cent or 8 per cent on their money over a period of years, they can sit back and invest their money in the money lending market! They will have no risks with the purchase of machinery; no risks of industrial strike or anything at all in the production of goods. I refute this argument that higher interest rates will encourage the production of goods to meet the amount of money and credit that is circulating in the community and so help defeat inflation.
I wish now to refer to John Maynard Keynes’ classic book “The General Theory of Employment Interest and Money’. In a chapter entitled ‘The Theory of Prices’ he said:
There is evidence that for a period of almost 150 years the long-run typical rate of interest in the leading financial centres was about 5 per cent, and the gilt-edged rate between 3 and 3J per cent.
That was in a period of the economic history of the industrial revolution over 150 years when banking institutions and financiers ran the economies of countries because they virtually controlled the issuance of credit and indeed by virtue of the fact that they were, like people who have shares today, able to corner the market and they had the monetary resources at their beck and call. They were always too discreet to allow the gilt-edged rate to go beyond 3 to 3i per cent over that period of 150 years and the general rate beyond 5 per cent.
We have now reached the stage of economic development after monetary collapses and after a depression such as we had in the 1930s when mankind has realised he must have a central governing authority and not a laissez-faire system by which any financier can control the economy, but it shall be a government responsibility. This is now generally accepted throughout the world and devious means are adopted by various governments, through the control of banking and everything else, to introduce effective policies. But what has this meant in Australia? It has meant that a standard rate of interest that has existed in a general sense for 150 years has now gone by the board and we are paying much higher rates of interest. I was entranced with the argument - which is a correct argument - of Senator Poyser in relation to prices when he referred to the cost of housing. None of the increases in the prices of the material components which go to make up a house is as expensive to the person who builds the house as the increases that have taken place in the rates of interest, because he pays only once for the 100 per cent increase for the cost of a tap, the timber or the bricks, but he goes on paying the higher interest for 20 years.
– Or longer.
– Or longer. If you equate what he has actually paid in increased prices at the conclusion of the purchase of the house the interest rate increase will, because it has been allowed to go up 1 per cent, far exceed any increases which have taken place in the cost of building materials. I appreciate, as Senator Poyser said, that no matter how sincere one may be about the interests of the people - and he wants the interest rate for housing to be 4 per cent - one can never reduce the rate of interest on money available for one project when an excessive rate is current in the community over the rest of the field of finance and borrowed money because if the rate for housing is 4 per cent and the other general rate existing in the community is 8 per cent there would not be any money available for housing. It is as simple as that. The lenders would not lend money for housing; and who could blame them?
Unless we tackle the whole problem of high interest rates in the interests of the nation it is futile to try to tackle them at the level of housing alone because one cannot achieve what one is setting out to achieve. But I suggest to the Government that in spite of these arguments covering the general range it must surely accept the validity of the argument that if 1 per cent below the standard long term bond rate were applicable when the rates of interest were much lower, at least today it should accept the responsibility for the situation that it has created by gradually increasing interest rates to solve the problems of the Federal Treasury. This, of course, is the key that unlocks the door to the CommonwealthState disputation over financial relations. The States have found themselves in their present situation largely because they have been unable to maintain the interest repayments as a result of gradually increasing rates of interest which absorb more than the share of the allocation made by the Commonwealth that they can afford to allocate for interest repayments and still maintain a reasonable development programme.
Whilst the Commonwealth was reaching a, stage where it was, as the lender to the States, increasing its revenue because the rates of interest were going up the Slates were being improverished by the same set of circumstances, It did not do anybody any good. My argument is proved conclusively by the fact that the Commonwealth was recently forced to wipe off a colossal sum involving millions and millions of dollars because it recognised that the States could not pay their debts. But the Commonwealth has done nothing to alter the system and is in fact now allowing the States almost to become paupers like the inhabitants of the old paupers prisons in England in that they cannot possibly pay the interest rates that are current on the money that has to be borrowed to run a State and yet retain liquidity as far as their finances are concerned.
– lt is worse so far as local government is concerned.
– That is true. Whatever the local authorities are paying in increased wages and in increased costs of cement and asphalt, this is nothing compared to the increases in their interest bill in the last 10 to 15 years. That is what is crippling them because they have to borrow increasing sums of money because of increased prices and pay higher interest rates for it.
That brings us then to the amendment to this simple Bill that has been moved by the Opposition. I was interested in this amendment when it was moved by Senator Poyser and I was hoping that I would hear him explain how the propositions set out therein would do something to alleviate the very real problems of increased land prices and everything else to which he adverted in his speech. But I cannot see anything in the amendment that will do anything to alleviate the problems I just mentioned. To reiterate the general problems of urban development and housing and to imagine that an expression of opinion by the Senate will mean something is done about it, especially when that opinion is impracticable of administration at this time to begin with, is, I think, unrealistic.
I believe that some of the fields of activity suggested for the new instrumentality, if it were set up, are not appropriate for the Commonwealth, nor are they ever likely to be and I do not know whether it would be wise if they were ever thought to be appropriate. As we are a States’ House charged with the responsibility of protecting the rights of the States, I do not think it is for the Senate to suggest that the Commonwealth should intrude into areas which are quite clearly not under its jurisdiction having regard to present circumstances. The amendment states:
One might almost smile at the idea of an appropriate instrumentality bringing about co-operation and co-ordination with the States. While the fundamentals of the disagreements which I have already outlined exist, particularly with the States becoming still more mendicant every day, the idea that some instrumentality set up to control housing could achieve that aim is unrealistic. But what is the instrumentality that is suggested here? Is it a small or large one? Is it not rather putting the cart before the horse if we set up an instrumentality to do certain things when we have no knowledge of whether the States will cooperate?
The instrumentality itself can do very little until that co-operation is achieved. Indeed, the Minister himself could do more, first of all, to initiate co-ordination and co-operation by suggesting such an instrumentality rather than actually establishing it. One could envisage, of course, a very extensive department which, because of the range of problems that it would have to deal with, would certainly need a large staff of highly technical experts. It would certainly need this if it were to intrude into the fields which are suggested. This is so because in paragraph (a) it states: ensure that planning authorities are established or developed;
I think it is generally conceded that most States today have already established planning authorities and whether they are to be developed still further is obviously the responsibility of the States. I think they are doing the maximum that can be expected of them in this direction with the funds that are available to them at the present time.
Paragraph (b) suggests that the instrumentality will ensure that all lands vested in the States or the Commonwealth will be retained and that private rights to such land are limited to leasehold. We may have some jurisdiction in that regard in the Australian Capital Territory and the other Territories but we have no right to interfere with the States control of Crown land and tell them what they should do with it. I am amazed that this suggestion should come from the Labor Party because there are so many people in the community today who suggest that land should be returned to the Aboriginals. Many Labor Party supporters have played a leading role in the general campaign that is going on to see that this happens. I cannot see that if an instrumentality were set up to achieve this almost impossible suggestion that we ensure that all lands vested in the States or the Commonwealth will be retained. The Aboriginals would have no hope at all of having returned to them the land which they currently claim as their own. I merely cite that as an illustration of the very wide application of such a sweeping proposition as this. Many of us know and appreciate the success of the leasehold system in Canberra, its beginnings and some of the difficulties encountered with the effluxion of time and the changing of price levels.
The total abolition of any further rights of private ownership of property in this country under any circumstances is not a matter upon which I would suggest the Senate make a decision in a small Bill that is merely an emergency measure to continue housing grants for the States. If we accept the amendment, according to paragraph (c) we are to identify a number of appropriate sites for new cities and cooperate in their development. I do not know whether this paragraph refers to satellite cities for the purpose of urban housing development or to completely new cities. I suppose new cities could be set up for the purposes for which Canberra was set up. One may make an educated guess that there will be a need for some great mineral centre to become a city and pick a better site for it than it might have if allowed to grow of its own volition. But invariably the sites of the cities of the world in the past, and I believe in the future, have been selected by people who decide to live in a certain area in sufficient numbers to develop a place into a city. For a government instrumentality to plan cities in all sorts of places where there may never develop a need for them would absorb, in my view, the time of a great labour force of technical experts. I do not feel that this would achieve what I believe to be the sincere wish of the mover of the amendment.
Paragraph (d) of the amendment has puzzled the Australian Democratic Labor Party completely. It is clear to us how this appropriate instrumentality could assist in slum prevention but we thing this amendment must have been hastily worded, because we know that it could not have had been the intention of the mover that the instrumentality should assist in slum renewal at the same time as it assists in slum prevention. The wording conflicts. I know that Senator Poyser does not stand for slum renewal. I think he means the renewal of the areas which were once slums. But the proposition we are asked to carry does not state that. It states:
The Democratic Labor Party could not support a proposition to renew any slums. We hope that with the effluction of time we can get rid of some of the slum areas which we have and prevent too many new slum areas being created by unwise housing developments. Paragraph (e) states:
That is an excellent principle, but again I question whether this is something in which the Commonwealth should properly be engaged. If it were to do the job properly it would need to be in touch and to work in co-operation with every local government body throughout the Commonwealth. The staff required to set up a body which would be capable of doing that sort of job properly would be immense. It would not be possible for the States to act on a more local basis unless one envisaged the complete disappearance of the States as we know them today. I want to make clear that the Democratic Labor Party does not support the centralisation of power in the Commonwealth. We think that those who are best suited to act as intermediaries between the bodies which are responsible for urban improvement and development, such as local councils, and the proposed instrumentality are rightly the State governments under whose legislation local government operates. It is the State government’s first responsibility to take action to assist local governments in any way.
I and my Party feel that if the Commonwealth were to assist, that should be done by paying more attention to the pressing problems of this country, particularly the problem of inflation. I question some of the ready made remedies which have failed persistently over a period of years to control inflation in any way. Those remedies have merely increased costs and prices and particularly interest rates. I believe that it would be better if money were spent in setting up an instrumentality which could find the basic reasons for the problems and if the proposed instrumentality could not solve any of the problems, at least it could explain to those who are questioning the methods which have been taken to control inflation and the cost of housing why those methods have been adopted. Further, it could make the housing grants to the States go as far as they should. If that were done, we perhaps would be more in agreement with this Bill than we are now. But as I said at the outset, this Bill is absolutely necessary, otherwise the Commonwealth housing assistance to the States would finish in 30th of June while Parliament is in recess. We feel that this is a simple measure which should be carried as it is, but we express our criticism of the interest rates which are involved. We propose to persist in expressing that criticism on every economic measure which the Government brings forward until the Government is prepared to give us better arguments on why Australian interest rates are the highest in the world, thus attracting a flood of overseas currency and capital which are only aggravating the inflationary position and doing nothing to control it.
– I support the amendment moved by Senator Poyser. Before outlining my reasons in that direction I express disappointment that the Commonwealth and State Housing Agreement has not been reconsidered as a whole. The Government has been lax in this direction. I recall that 12 months ago members of the Australian Labor Party asked questions of the then Minister for Housing on when negotiations were to take place for the renewal of the Agreement. There can be no excuse that the Government was not aware of the fact that a renewal was necessary and that the terms of the existing Agreement should be reconsidered. Therefore, I believe that the Government has been lax in this direction. We now have before us a document which will continue the existing situation with some financial improvements. Obviously we welcome the financial improvements but I do not know that they go far enough. With all the sophistication of our present day legislation and matters of that nature I do not know whether we have improved in the field of housing.
I go back some years - perhaps 1 might be criticised for speaking of the past - to a Queensland scheme for workers dwellings. It has been superceded by another scheme. In those days young couples were encouraged to save to build a home. They went out of their way to buy a piece of land at a reasonable price and that was accepted as a deposit on the home. If the land was valued at $2,000 and their home was to cost $5,000, the $2,000 would be regarded as a deposit. I do not know whether that scheme is not better than the one we have today. It is almost impossible for young people to gather sufficient money to build a home under the present scheme, or under any other scheme if it comes to that. Tremendous difficulties are imposed on them, and there are side issues as well. In Queensland if one goes to the State Housing Commission one is asked to pay 7* per cent interest. Surely this is out of all proportion to what young people should be asked to pay in interest to provide themselves with a home?
– That is on the gilt edged security of a home.
– That is right, it is on the gilt edged security of a home. They are asked to pay 7* per cent interest to start with and they are allowed to borrow from the Commission only $8,000. At the present time I am reliably informed by master builders, homes in Queensland cost $1,300 a square. In those circumstances if a prospective home owner builds a home of reasonable proportions - say of 10 squares - then he has to pay $13,000. He has received $8,000 from the Commission at li per cent interest, but where does he obtain the additional $5,000? He has to take out a second mortgage at 8 per cent or 9 per cent interest. These are the facts of life. It is useless our talking about young people being encouraged to build their own homes. Under these circumstances they are discouraged. If they are fortunate enough to be able to obtain a loan through a bank, on the first $8,000 or $9,000-1 am not sure which - they have to pay 6* per cent interest. Surely that is high enough, but it is almost 1 per cent less than they would get from the Department of Housing. So there is that difference to start with. Notwithstanding the fact that young people can get this money from the Commonwealth Government, unless their parents are able to assist them to make up the difference between what they can get from the bank and the actual cost of the home, they still have to take out a second mortgage. This is crippling for young people and it is most discouraging.
I wonder whether we realise the side effects of this situation. Today young people find it almost a sheer impossibility to meet their financial commitments with a single wage coming into the home. That is why the vast majority of young married women go to work - not because they want to go to work. It is true that some of them want to work, particularly if they have a profession. I am not decrying any married woman who wants to go to work. I make that perfectly clear. But in the vast majority of cases the young married woman must go to work to try to meet financial commitments. Married couples have to pay their ordinary interest and then have to meet their second mortgage interest. That in itself is a problem. But then they have to furnish their homes. As a rule they buy their furniture on hire purchase. I think that this is becoming a real social problem in Australia. I wonder whether the effect of it is that our cost of living is being gauged by the dual wage coming into the home.
These are important social issues and perhaps they should not be raised in the debate on a housing Bill. Nevertheless, they are the facts of life. It does not matter what any departmental officer says: it does not matter what the Minister says; it does not matter what anybody says; the facts of life are that young married couples are finding it increasingly difficult to get financial assistance to build their homes. In Australia we have a proud record of home ownership, and that should continue. It is the basis of family life. Those of us who have had the experience of being able to buy a home of a reasonable standard appreciate the fact that the younger people today should be in that self same position. But quite frankly they are not. I believe it is unfortunate that that is the situation.
I now refer to the young fellows who come out of the Army after 2 years service. On a conservative estimate, a tradesman would have forfeited $2,000 to $3,000 in the 2-year period he spent in the Army. He did not join the Army of his own choice but was required to do so. When he comes out of the Army he has to try to make up the amount which, had he been in regular employment, he may have been able to save towards his home. No consideration is given to him. The Opposition has tried unsuccessfully - the Government and the Australian Democratic Labor Party voted against it - to see that these young people are given war service home entitlements. The Government, for its reasons, and the Democratic Labor Party, because it wanted to stick with the Gov ernment, voted against that proposition. I believe that it was a sound proposition and it should have been accepted by the Government. It would have made more money available through the War Service Homes Division to this section of the community for their homes.
Criticism has been made of the Opposition’s amendment in relation to the words appropriate instrumentality’. If the Commonwealth Government is not going to give the lead in this direction, who is going to do it? Are honourable senators and the people of Australia satisfied with the lead that is being given by the respective State governments today? With respect, I would say that we should not be satisfied. The States claim that they have not the financial resources to tackle these problems. I have discussed quite openly with members of the Government in Queensland the question of new cities in Queensland. They agree that something of this nature should be planned but they have no money to put into these areas. They want to do something of this nature. If my friends in the Australian Country Party say that that, is wrong they are arguing against their own proposition of decentralisation.
Great play is made of the fact that the big cities of Australia are producing pollution and are becoming smog ridden. What do we do? Would it not be better for us to plan more cities such as Canberra? The States cannot do this unless there is some active co-operation from the Commonwealth in giving the leadership in this direction. The Commonwealth can assist the States, by cooperation and organisation, to implement these programmes, but the States cannot do it alone because of their lack of financial resources. The local authorities in a great number of places in Queensland are becoming financially embarrassed because of the effects of the prolonged drought. They are in a difficult position. T put the proposition to the Leader of the Government in the Senate (Senator Sir Kenneth Anderson) the other day that the Prime Minister (Mr McMahon) and the Cabinet should convene a meeting of representatives of local authorities so that they can find out precisely what financial difficulties they are experiencing.
If these things are done - they can be done only by the Commonwealth - we will see some progress in that direction. But if we are just going to make carping criticism of the proposals that are put up, nothing will be achieved. I believe that the amendment has great merit. Honourable senators may criticise a word or two if they like. The Democratic Labor Party knows that the intention is to get rid of slums and rebuild, not slums, but homes fit for Australian people to live in. Senator Poyser should be congratulated on the way in which he introduced the amendment and highlighted the defects in the housing situation in Australia today. I ask honourable senators to support the amendment and give a lead in what should be done in this field for the advancement of Australia.
– 1 have listened to the debate on this Bill with considerable interest. It concerns a subject which is very close to the interests of individual Australians. I am grateful for the suggestions that have been made by the various speakers. There are one or two things that I fee] should be said in reply. The first one is that, to put into perspective the contribution that the Commonwealth is making in this respect, I would like to give the Senate the figures of the amounts that have been allocated to the States over the last 5 years out of Commonwealth moneys under the Commonwealth and State Housing Agreement. In 1965 the alocation was $102m. Tn this present year it is $142m and in the intervening years it has risen at a fairly regular rate.
Some remarks were made by Senator Poyser about the nature of the Bill and the occasion for it.
As honourable senators know, the Bill is simply a Bill of limited purpose - to enable the present Agreement to be operative after 30th June to authorise advances to the States in the early months on the next financial year pending the conclusion of negotiations between the States and the Commonwealth for a new agreement. The need for the Bill and these negotiations arises from the Government’s concern that new arrangements between the Commonwealth and the States should be entered into deliberately and after careful thought. This consideration on the Commonwealth side is nearing finality and the Minister for Housing (Mr Kevin Cairns) has said that he expects shortly to be able to discuss the prospective measures with the States. Some of the matters that have been mentioned by speakers in this debate illustrate the type of subject that has emerged over the last year and which is appropriate for careful consideration by the Commonwealth Government and the State governments. Those subjects include the level of economic rentals and the importance of a proper flow of housing assistance to families of low or moderate means. These are being thought about in the development of the proposals for the next 5-year term.
The amendment which Senator Poyser has moved indicates the new thinking that is taking place on the development of Commonwealth assisted housing. He referred to planned urban development, identification of new cities and other matters. Senator Mulvihill referred to garden areas and parklands. But I want to indicate by way of comment upon that advocacy that we should not think all the time that i* is the future that causes trouble. The neglect of areas which nobody would consider to be sweet influences on the environment indicate that in our housing we have to be more careful not merely in the fancy elements of environment but in the fundamental values of living. Although the general responsibility for housing rests with the States the Commonwealth Government has taken a significant role in helping the States to meet their responsibilities. This is separate from the Commonwealth’s responsibility to maintain an economic climate which is favourable to the proper flow of private finance for home building and purchase. That is a very important matter. But the main contribution that the Commonwealth makes is through the Housing Agreement which is designed to make both rental and purchase housing available to families of low and moderate means.
Senator Poyser has the temerity to suggest in his amendment that all the land developed under this Housing Agreement in future should be retained by the States and let out on a leasehold basis. That contradicts the endeavour of the last 20 years to such a degree that I want to give him the relevant figures. Under the Commonwealth and State Housing Agreement a total of 133,000 homes, in round figures, have been erected between 1956 and 1970, and of this total 64,000 or practically 50 per cent have been sold to purchasers. The actual percentage is 47.9 per cent. In my own State, Tasmania, the latest figures show that 74.5 per cent of occupants preferred to purchase the houses. The State with the lowest percentage of purchases is South Australia, for which the figure is 28.3 per cent. In New South Wales the percentage is 50.5; in Victoria, 53.1 per cent; Queensland, 53 per cent; South Australia, 28.3 per cent; Western Australia, 36.3 per cent; and Tasmania, 74.5 per cent. So it is quite obvious that any suggestion of releasing this land on a leasehold basis and having the occupants of the houses as permanent tenants of State houses defies the experience of the last 14 or 15 years.
To put the assistance that comes from the Commonwealth and State Housing Agreement into perspective, during the currency of the present Agreement over the last 5 years the Commonwealth will have advanced almost $644m to the States for housing purposes and of this amount it is expected that almost $426m will have been used by State housing authorities, together with supplementary advances from the Commonwealth for the housing of servicemen, to construct a total of 54,400 dwellings. The remaining $21 8m has gone through the home builders account and, together with moneys accruing from earlier advances, will have assisted in the provision of 39,600 houses. So the houses that have been built over the last 5 years with these Commonwealth moneys total practically 95,000. But that is only part of the consideration, and this is very relevant when we come to consider interest rates. At the same time as those 95,000 houses have been built under this Agreement, 563,700 houses have been built by private enterprise and the interest that has to be paid to finance that new programme is a much more important factor than the interest component of the 95,000 houses built under this Agreement.
The Commonwealth has provided assistance in a number of special areas in addition to assistance under the Housing Agreement. These areas comprise aged persons homes and dwellings for aged pensioners, homes for Aboriginals and, as a special measure under the war service homes scheme, homes for ex-servicemen with active war service. In the current financial year it is expected that some $14m will be spent on aged persons homes, nearly $6m on pensioner dwellings, $4.8m on Aboriginal housing and more than $60m on war service homes. The total expenditure of the Commonwealth on housing during this year will be about $288m, which represents an increase of no less than $25m over last year’s expenditure.
Through the Homes Savings Grant Scheme on which some $ 15m is being spent this year the Government, as the Senate knows, is encouraging young people to save, and helping them to bridge the gap with a tax free gift of up to $500 and, through the Housing Loans Insurance Corporation, the Government is making a further attack on the deposit gap - I say this in response to the remarks made by Senator Little and Senator Milliner - by helping young people to borrow an insured first mortgage loan without the necessity for the high interest rates on a specific second mortgage loan. It may be of interest for honourable senators to note that under the Homes Savings Grant Scheme the Commonwealth has to date contributed to young people building their homes loans no less than $88m.
I have figures here which I think honourable senators would like to have for reference showing the total number of houses being built under this agreement. I shall give them for the last 5 years. In 1966 18,391 houses were built under this agreement; in 1967 the figure was 18,942; in 1968 it was 19,022; in 1969 the figure was reduced to 17,030; and to 30th June 1970 18,339 houses had been built. Those figures, together with the amount of money available, should be some reassurance that the programme of house building in Australia is being maintained fairly much to the satisfaction of the requirements of the people.
Senator Poyser referred to the cost of land. I noticed that I was misreported when I answered a question asked by Senator Fitzgerald the day before yesterday. I was reported as saying that 1 was satisfied that there was no cornering of land in Sydney when the honourable senator brought that matter to my attention. What I said was that I was not satisfied that there was no cornering of land in Sydney and that the matter would be a matter of immediate inquiry. It is, of course, a matter of responsibility for the State Government but the price of land is a matter of immediate concern to the Minister for Housing whom I represent in this chamber. He is giving the matter important study. But it has to be recognised that when one talks about the cost of land today one is talking about an improved subdivision with guttering, roads, water, sewerage and those other amenities which make it readily available for house building. Every time wages and transport costs are increased and so on, they all add to the cost of improving that subdivisional land. We live in a system whereby costs have to be provided for one way or another, and that is the position in relation to the environment also. In the past land was cheap because sewerage was neglected, and we are suffering today from that neglect. If we are to have parks and gardens in plenty which are carved out of the land and built up to a standard of beauty and acceptance, and if we are to have sewerage provided, there will have to be a new column in the expenses account for environmental expenditure. The whole point is that all of these things have to be paid for and the distribution of the payment is one of the preoccupations of government.
I was very interested to listen to Senator Little’s contribution with regard to interest rates. I have mentioned the extent to which private owners in the last five years have built houses. They have built 560,000 houses compared with 95,000 houses built under the Government housing agreement. Those figures show how important is the control on the general rate of interest. Notwithstanding that, I have not listened with dull and unreceptive ears to Senator Little’s submission. I am not endeavouring to comment upon its responsibility because it is a matter for the Treasury. All I say to Senator Little is that his remarks will be specifically brought to the attention of the Treasurer (Mr Snedden). I thank the Senate for the consideration that it has given to the Bill.
That the words proposed to be added (Senator Poyser’s amendment) be added.
The Senate divided. (The Deputy President - Senator Bull)
Majority .. . . 5
Question so resolved in the negative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from 4 May (vide page 1327), on motion by Senator Cotton:
That the Bill now be read a second time.
– I do not propose to deal in detail with the second reading speech of the Minister for Civil Aviation (Senator Cotton) on this Bill. Later in my speech I will propose an amendment to add to the motion for the second reading of the Bill some words relating to the compelling need for the Commonwealth to vest control of existing Aboriginal reserves in the Northern Territory in a public trust composed of Aboriginals. On several occasions in the last couple of years the Australian Labor Party has moved motions of this nature, varying only in their terms. The injustice suffered by Aboriginals has been highlighted by the recent judgment of Mr Justice Blackburn in the Gove Peninsula case. The learned judge found for the mining company involved and the Commonwealth Government, and not for the Yirrkala tribe. A parallel situation occurred, not in relation to mining but in relation to pastoral rights, involving the
Gurindji tribe at Wave Hill in the Northern Territory.
I wish to make a number of submissions to support the amendment I shall move. First I wish to refer to statements made by Sir Garfield Bar wick and Prince Philip in their opening speeches at the Duke of Edinburgh’s Third Commonwealth Study Conference held in 1968. Sir Garfield Barwick said:
We have no racial minorities within our boundaries to cause us those unending and so far insoluble conditions so acutely suffered by some countries at this time.
At the same function Prince Philip said:
There is in fact a racial minority in Australia.
I suggest that Prince Philip’s statement is completely correct. The injustice or otherwise of the land rights claimed by Aboriginals has come into prominence only in comparatively recent years. For 201 years this country has been progressively taking away from the indigenes of Australia all the things to which they have been entitled for thousands of years. A brief history of some of the attitudes adopted in the past should be useful in this debate and for that purpose I turn to the book Turning Land into Hope’ by Frank G. Engel. I respectfully submit that some of the meetings and transactions referred to by the author, although they took place many years ago, largely apply in 1971. Mr Engel wrote:
On a summer’s day in London, August 31, 1831, a meeting was held at the chambers of William Tooke, Esq., in 39 Bedford Row. Colonel Torrens M.P. was in the chair and the purpose of the meeting was to consider a proposal to His Majesty’s Government for founding a colony on the southern coastof Australia. This was the beginning of the South Australian Company and was the first step taken by white men towards the settlement of that part of Australia, for the proposal was approved by them for submission to Viscount Goderich, His Majesty’s Principal Secretary of State for the Colonial Department.
I do not propose to deal with the inroads made into tribal lands in all States, but I will refer to a few of them to justify the argument I am putting. In Victoria on 26th August 1835 Governor Bourke repudiated a treaty which John Batman had signed on 6th June with 8 Aboriginal chiefs for the purchase of 100,000 acres of land in the vicinity of Port Philip Bay. He declared that only the Crown had the power to make treaties or contracts for the possession of land. Significantly, however, the Crown did not use that power. It acted on the simpler basis of taking possession, so that probably the only formal and careful negotiation with Aboriginals in regard to land was set aside. Historically, 2 forms of land ownership or land occupation have been practised by indigenes in this country. One is outright tribal ownership of an area, not vested in an individual’s name. It is conceded that it is a tribal possession.
The second form is that by which tribes are able to use land. In this respect the area of Blue Mud Bay and other places in Arnhem Land were temporarily loaned to people of other nationalities, including Europeans who have come into the area from time to time. But this is not to say that the tribes ever gave away their rights to the land. In respect of Western Australia Mr Engel’s book states:
It was further provided that, “when the gross revenue of the colony shall exceed £500,000 in any financial year, an amount equal to 1 per cent on such gross revenue shall, for the purposes of this section be substituted for the sum of £5,000 in and for the financial year ensuing’.
Immediately preceding that extract, in the same paragraph, the author wrote:
In Western Australia the Imperial Government insisted, in the words of the Secretary of State for Colonies, Sir Henry Holland, ‘that some measure should be necessary for placing the Aboriginal inhabitants of the colony under the care of a body independent of the Parliament of the day.’ Therefore when the Western Australian Constitution Act was passed on 25th July 1890 it contained the provision that £5,000 should be paid out of the Consolidated Revenue Fund to the Aboriginal Protection Board for ‘the welfare of the Aboriginal natives, and expended in providing them with food and clothing when they would otherwise be destitute, in providing the education of Aboriginal children (including half castes) and in assisting generally to promote the preservation and well-being of the Aboriginals.’
Section 70 of the Act made it plain that the concern was for ‘the preservation and well being of the Aborigines’. There was no mention of land rights or the purchase of those rights, nor of compensation for the loss of land. After taking possession of Western Australian land, the British Government, in the years 1829 to 1888, gave away or sold large tracts of it to individuals and colonising companies.
The people who were responsible for the government of this country at that time assessed planned values on the basis of the number of kangaroos that might have been around, whether the soil was fertile or whether there was sufficient water supply available. As an afterthought they also said: ‘We saw some natives, too.’ But of course the natives were placed in a position of something less than human. I think that a friend of mine described this fairly adequately recently when he said that we have beautiful scenery in Australia and that it is a nice country for tourists to visit. He said that we have reasonable accommodation establishments in which it is nice for people, particularly overseas tourists, to stay. He said that we also have Aboriginals and that they are handy for amateur photographers.
Professor Berndt, who is one of the experts in the field of Aboriginal studies and who has written and researched extensively into problems facing Aboriginals, has said that ‘in Aboriginal Australia generally, land was traditionally inalienable.’ He said that groups had one of two relationships to it, and that is what I referred to a moment ago. There are either landowning groups or land-occupying groups. Professor Berndt said in one of his publications:
If the establishment of the Arnhem Land Reserve, in 1931, made any impression at all on the minds of the local people it meant the reinforcement of their own position, the validation of their concession of the area, and protection from exploitation.
In 1963 the Gove dispute, that is, the protest about the action of the Federal Government in excising a large part of the reserve for mining, and the subsequent investigation and report of the Select Committee, made it clear that the people have an hereditary right to land. It established also their right to be consulted before any authority is given to another group, such as a mining company, to use the land. When this involves, as it did in 1963, the excision from the reserve of part of the Aboriginals’ land, they should be compensated for the loss of this part of their land. In spite of the Select Committee and the public agitation, all that the people seem to have received is the preservation of sacred sites, and double mining royalties. In fact, they have not been compensated for surrendering or being deprived of their ownership rights.
I think that briefly sums up the position. The fact that these people have been paid double the normal amount of royalties means very little to the average member of the tribes in this area. There will be no compensation and, in fact, many of the sacred lands in these mining areas and in other mining areas throughout Australia have been destroyed by the exploiters. One then cannot wonder why the Federal Council for the Advancement of Aboriginals and Torres Strait Islanders sent this message to the United Nations:
The Federal Executive of the Federal Council for Advancement of Aboriginals and Torres Strait Islanders invites the General Assembly of the United Nations to appoint a delegation to visit Australia and examine the incidence and the charges of racism and racial discrimination in many forms practised against the indigenous peoples of Australia. 1 submit that the Commonwealth Government would be adopting a wise course if it were to agree to the amendment which I have moved to the motion. An exposition of the facts which would undoubtedly follow a visit by a mission from the United Nations would mean a disgrace for Australia. The Australian Labor Party has long contended - and it continues to maintain this view - that all Aboriginal land should be vested in a public trust or trusts composed of Aboriginals or Islanders as appropriate. The Labor Party’s constitution in that regard continues:
That exclusive corporate land rights be granted to Aboriginal communites which retain a strong tribal structure or demonstrate a potential for corporate action in regard to land at present reserved for the use of Aborigines, or where traditional occupancy according to tribal custom can be established from anthropological or other evidence. No Aboriginal lands shall be alienated except with the approval both of the trust and of Parliament. Aboriginal land rights shall carry with them full rights to minerals in those lands.
The Australian Labor Party also requires that the Commonwealth of Australia should ratify International Labour Organisation Conventions No. 107 - the Indigenous and Tribal Population Convention 1957 - and No. Ill - the Discrimination, Employment and Occupation Convention 1958 - and that these Conventions should apply to all indigenous peoples under Australian authority. They should apply not only to the indigenous people of Australia but also to those who come under our control as a result of our having the trusteeship of the Territory of Papua New Guinea, and to those Australian citizens who live in the Territory of Papua New Guinea.
So, without unduly holding up the Senate, I submit that the case which has been made out ought to be supported by honourable senators opposite. It is time for every Australian to stand up and be counted on this national issue which concerns the rights of indigenous Australians to their own tribal land. I now formally move:
At end of motion add: , but the Senate is of opinion that there is a compelling need for the Commonwealth to vest control of existing aboriginal reserves in the Northern Territory in a public trust or trusts composed of aborigines on terms that no such lands be alienated without approval of the Federal Parliament’.
On other occasions, particularly during the Budget session of this Parliament, the Labor Party will be moving other motions which will support a fairly large number of people in the Australian community both in relation to land rights and in relation to the questions of health, welfare and job opportunities. I submit that what is contained in the amendment which I have moved is capable of implementation. It is the type of amendment which ought to receive the support of all members of this Parliament. It will certainly receive the support of every Aboriginal and Islander in Australia.
The DEPUTY PRESIDENT (Senator Bull) - Is the amendment seconded?
– I second the amendment.
– I rise to indicate briefly the Government’s view, which is: First of all, there is a rather tenuous connection between the amendment and the Supply Bill (No. 2). But one could, I suppose, be broadminded enough to say that the debate on this issue could proceed under Division 855, subdivision 5, item 06 - Development of the township of Nhulunbuy by Nabalco Pty Ltd - contribution. However, it is a pretty thin line of connection. Nonetheless, I have listened with great interest to Senator Keeffe. While I admire his personal views - and he is entitled to express them; we all have views on these matters - I am unable to accept the amendment that he has proposed.
That the words proposed to be added (Senator Keeffe’s amendment) be added.
The Senate divided. (The Deputy President - Senator Bull)
Majority . . 4
Question so resolved in the negative.
Original question resolved in the affirmative.
Bill read a second time.
– I should indicate that this Bill is a convenient vehicle for raising matters which otherwise would be dealt with by special notices of motion. A matter has been raised already by the amendment moved to the motion for the second reading of the Bill, on which the Senate has just voted. It is intended to raise other matters at certain stages of the progress of this Bill. We are now in the Committee stages. While we do not intend to raise any matters in the Committee stage, at subsequent stages of the Bill we propose to raise certain matters. The Bill is being treated as a vehicle for raising matters similar to the one raised a few moments ago in relation to Aboriginal land rights. We propose to raise another matter shortly. I thought that honourable senators should be made aware of this.
– Will this be done at the third reading stage?
– Yes - and on the motion for the adoption of the report of the Committee.
Bill agreed to.
Bill reported without amendment.
Adoption of Report
Motion (by Senator Cotton) proposed:
That the report of the Committee be adopted.
– As the Leader of the Opposition in the Senate (Senator Murphy) has indicated, the Opposition considers that this occasion should be taken to move an amendment to the motion. I move:
At end of motion add - but the Senate expresses its concern at the Government’s mishandling of the F1ll purchase and its failure to develop and maintain an effective Australian aircraft industry’.
– I rise to order. I do so really for clarification. This is Supply Bill (No. 2). That is quite clear. We are being asked to consider matters relating to the F1ll aircraft which comes under the Department of Defence. I can find no reference in Supply Bill (No. 2) which has any connection with this matter. I suggest that the Bill contains no clause under which we could deal with this matter as we might normally do. Standing order 139 states that every amendment must be relevant to the question which is being put. Therefore I seek clarification as to whether this amendment can proceed.
– On the point of order, I think we could justify the amendment.
– Do you see my point?
– I see the point. I think we could justify the amendment by connecting it with the Bill. We are concerned with not only what is in the Bill but also what is left out of the Bill. In debating this Bill we could say that there should be provision for various works and so forth in connection with the F1ll, that are not there, or that moneys that have been expended in some ways ought not to have been expended. I think we can link up the amendment with the Bill. The Minister has made his point.
I think it is important that these matters be raised. Perhaps I would suggest to the Minister, through you, Mr Deputy President, so that we may proceed with some regularity and so that we can avoid having a lengthy discussion and argument about this - I think that would be consonant with what is being endeavoured to be achieved on both sides of the chamber - that we could move this amendment by moving to suspend so much of the Standing Order as would prevent the amendment being moved. That would be one way of overcoming the problem of deciding whether the amendment is in order. Alternatively we could move the amendment by leave and we need not worry about whether leave is necessary. Does that suggestion commend itself to the Minister? If we are to have a debate as to whether the proposition can be put, there will be a very lengthy argument. I would think that it would be in accordance with what both sides are attempting to achieve if we suspended so much of the Standing Orders as would prevent this amendment being moved now and other amendments being moved at any other stage of the Bill.
– I can understand Senator Murphy’s view. To some extent I have a fair deal of sympathy and understanding for it. Strictly interpreting the Standing Orders, this was a proper matter to raise under Supply Bill (No. 1), under the consideration for the Department of Air. Supply Bill (No. 2) has no reference to the Department of Defence or to the Department of Air. Therefore, in accordance with standing order 139 the amendment would not be relevant and, I would imagine, would be ruled out of order. But I would want to adopt the spirit of what we are trying to do. Therefore, I think we should extend a little latitude for this matter to be discussed briefly in order that we can proceed. I would accommodate myself to that suggestion.
– I suggest that Senator Bishop ask for leave, whether it is necessary or not. If he is given leave, he can proceed with the amendment.
– That is fair enough. If Senator Bishop asks for leave, we will grant it.
The DEPUTY PRESIDENT (Senator Bull) - Order! I am informed that had
Senator Bishop wished to do this under the Supply Bill (No. 1) he would have been in order; but he is not in order in doing it under this Bill. So, to that extent I uphold the point of order raised by Senator Cotton.
– I ask for leave to move the amendment.
The DEPUTY PRESIDENT- Is leave granted? There being no objection, leave is granted.
-I move the following amendment:
At end of motion add: but the Senate expresses its concern at the Government’s mishandling of the F1ll purchase and its failure to develop and maintain an effective Australian aircraft industry’.
There are 2 main issues in this argument, namely, the 2 matters mentioned in the amendment. One is the position in relation to the F111 purchase, which was a political gimmick in 1963 when the then Prime Minister, Sir Robert Menzies, in order to win an election decided that Australia needed new aircraft. We were committed to a programme which has not yet been accomplished, which has cost us more than $300m and about which at this stage we cannot obtain very satisfactory answers. Reports from Ministers and replies to our questions indicate that the aircraft is not yet available for operation in Australia. We have the spectacle of continuing crashes of this aircraft. In fact, there have been 18 crashes in the United States. These crashes are almost as significant as those of the Starfighter in Germany. That aircraft was imposed on the Federal Republic of Germany.
– How many crashes have there been?
– There have been 18 to date. It is argued - this may or may not be so - that the Australian Government has to maintain its options at this time. That point has been canvassed recently. It is argued that after all these years we still should not be very worried about whether we take the F111. We know from the debates that took place in the Parliament at the time of the purchase that the position taken by the Opposition was that the Government was not critical enough about the purchase; that it should have made an investigation of every available aircraft that could fit the Australian scene. A former Minister for Defence, Sir Allen Fairhall, and the Government maintained that we were buying more than an aircraft; we were buying a weapons system and it would fly soon. For example, the 1967 Defence Report, following references to the matter in the Parliament, stated at page 40:
The F111C project is on schedule and delivery of the 24 aircraft will be made in the latter half of 1968. Two instructor crews and the officerincharge of the F111C mission simulator are already in the USA undergoing training. The remainder of the F111C crews will proceed to the USA for conversion training from March 1968 onwards and will ferry the aircraft to Australia after acceptance from the manufacturer.
The history of the F111 is a scandalous one. Senator Wriedt will go into the arguments more deeply. There is no doubt that the Government has mishandled the matter. It has fitted too neatly into the defence concepts established by the United States. This is happening all too frequently. The Government should have made a more selective investigation.
We know that from time to time the Minister for Air (Senator Drake-Brockman), in response to questions, gives us reports. But it is evident that he and his specialist groups that travel to and from the United States have been very careful and are not satisfied. In 1971 there is every possibility that we will have to rely for a longer time than was expected on the Phantoms that we now have under lease. We are up for the cost of this project. We have paid $300m for the F111s. As everybody knows, we are already involved in an expenditure of $34m in relation to the Phantoms. We are not getting a cracker out of this expenditure -
Sitting suspended from 1 to 2.15 p.m.
– I seek leave to continue my remarks at a later hour.
Leave granted; debate adjourned.
– I present the report of the Privileges Committee relating to articles which appeared in the ‘Sunday Review’ and ‘Sunday Australian’ on 2nd May 1971.
Ordered that the report be printed.
Motion (by Senator Sir Kenneth Anderson) agreed to:
That consideration of the report be made an order of the day for a later hour this day.
– Before the suspension of the sitting I was referring to our commitments with the United States of America to purchase the F111 aircraft and our arrangements to lease Phantom aircraft. I had mentioned that Australian industry was not given an opportunity to manufacture any substantial part of these aircraft. Apart altogether from the mishandling by the Government of these aircraft projects, the Opposition is of the opinion, as it has expressed in the Parliament and outside the Parliament, that the acceptance by the Government of the F111 was a political gimmick adopted in 1963 in the face of a pending election. Over the years we have been told that the F111 aircraft would be available and that in addition to being the most advanced aircraft available they would be a weapons system. We have now found that we are not much nearer to the stage when the aircraft might be accepted.
In the United States 18 F111 aircraft have crashed and this has occasioned our specialists to give definite consideration to whether the order should be cancelled, as a result of which Australia would stand to lose a great deal of money. In the meantime we have had to meet the additional expense of leasing 24 Phantoms under arrangements which do not allow any work to fall to the Australian aircraft industry. As recently as this morning the Minister for Air (Senator Drake-Brockman) made it clear that no substantial work would fall to the Australian industry. The leasing arrangements made by the Government did not allow us to use bargaining tactics of the kind that we should use with the Americans. I put it to the Government and to the Senate that we are too soft in dealing with these matters. In matters of trade it is well known that the Americans are hard bargainers who make sure that they get their complete quota. Examples can be seen in the resentment by the Americans of the arrangement which has been made by Massey-Ferguson (Australia) Ltd to sell sugar cutting machinery to Cuba and the arrangements which have been made by the Minister for Civil Aviation (Senator Cotton) in respect of the passage through Australia of American airlines.
It is obvious that all along the line the Americans put pressure on Australia and other countries and take a very hard line in relation to trade. Generally we accept propositions too readily when we should be bargaining more keenly. Having accepted the F111s we should have insisted on, and even now that our bargaining position is so much better we should ensure, . a better deal for the Australian aircraft industry. Other countries which enter into similar deals with the Americans make sure that a large part of the work goes to their own industry. In the United Kingdom this has been done for the aircraft industry. It seems to us that in relation to aircraft acquired from the United States . we are merely tagging along, that we are a bit too timid and that we should insist on better deals. No work involved in the production of these aircraft flows to the Australian industry as should be the case.
Everybody knows that the Australian aircraft industry is facing a crisis. A potential has been built up for our aircraft industry since the last World War. I refer, of course, to the Government Aircraft Factories and the Commonwealth Aircraft Corporation. Those establishments have proved their capacity by producing fairly sophisticated aircraft, but they have been unable to maintain production. In recent years problems in the industry have been so grave that it has needed support from the Commonwealth. But what do we hear from the Commonwealth about the problems affecting the industry? Repeatedly in this place we hear statements, which I accept as honest statements, from the Minister for Supply (Senator Sir Kenneth Anderson). I do not suggest that the Minister is not concerned about the aircraft industry, but it is evident that the Commonwealth authorities who should be ensuring that our aircraft industry is operating to full capacity are not insisting enough about maintaining competence in the industry or about attracting the offset orders that should be available. It has been pointed out in earlier debates that we are importing into Australia defence and civil aircraft to the value of millions of dolars, but that very small orders are sifting through to the Commonweath Aircraft Corporation or to the Government Aircraft Factories.
I have referred in this place to the retrenchments which took place in March of this year from the Commonwealth Aircraft Corporation and the more recent sackings which have occurred, but the best answer that the Minister for Supply has been able to give has been that he has talked to the Minister for Defence (Mr Gorton) to see to what extent additional work ‘can be given to these factories. All that We have been able to get so far is an order for $4m. ‘ arising from the Boeing aircraft used by the domestic airlines and an indication that we are in the market for additional orders to the value of $4m. However, since the completion of the orders for the Mirage and Macchi aircraft general production has fallen off. The Government Aircraft Factories and, more particularly, the Commonwealth Aircraft Corporation are facing a complete downturn in production. They have been forced to accept orders from all sorts of industries, including the motor vehicle and light engineering - industries, in order to keep their skilled workers in employment. It is quite wrong that they should have to take on this kind of work, and it is a disaster when we consider the competence that has been built up in this industry over the years.
Honourable senators will be aware that from 1940 through to 1943 our aircraft industry was able to produce about 200 Boomerang aircraft and later continued with the production of fairly up-to-date aircraft. But the continuity of production was not maintained, whereas it should have been maintained, by Government sponsorship if necessary. Obviously the real responsibility for this situation falls upon the Commonwealth Government. When we ask about retrenchments from the industry and the loss to the industry of skilled workers the Minister replies that the industry is facing a drop in the workload and that this is characteristic of the private aircraft manufacturers also, including Hawker de Havilland Australia Pty Ltd in Sydney. He says that it is characteristic of the fact that the industry is not receiving sufficient orders. We have been talking about this matter for a long time and in June of last year we raised it as a matter of urgency. On that occasion the Senate carried a resolution which put to the Government a proposition that not enough was being done to develop and maintain our aircraft production capabilities. The evidence is available from cold hard facts. Quite apart from the opinions held by members of the Opposition and people engaged in the industry, leaders- in the industry will state quite clearly that in their view the Government has failed. I know that the Government and the Minister could say: ‘Well, we have sent special teams to the United States of America to see to what extent we could get offset orders’, but the fact is. that the results of those investigations .have- not been sufficient. When we consider, the magnitude of the expenditure, totalling about $500m, on importing aircraft from the United States of America, we realise that Australia is getting only small bundles of orders to a total value of $4m or SSm. It must be understood’ that if something is not done to increase the .capacity of the Australian aircraft industry,: the industry will decline; and if it declines Australia’s defences will be failing.
Briefly, the attitude of members of the Opposition, is that we think it is a worthwhile exercise at this stage of the Senate’s sittings, even in a week when the House of Representatives is not meeting, to draw attention again to the problem that is facing Australia. We think that the Government not only should clearly state the extent of its commitments in relation to the Fill but also should tell us that in respect of the Phantom order it is pressing the American Government - that is, if it has to continue to extend the lease of those aircraft - for some offset work for the Commonwealth Aircraft Corporation which is now sacking a further 140 skilled men. Australia should be using the same strength that the Americans use when they are making a bargain. Of course, we recently discussed this aspect when we debated the legislation which affected Qantas Airways Ltd.
It is essential to realise that if, at this stage, we do not give some strength and support to the Australian aircraft industry,
Australia will be dependent for all time on other countries for aircraft for defence purposes and, in time of war of course, these aircraft may not be able to be delivered. To sum up my contribution, which has been brief because of the stage of the debate, I refer to an article which was published by the Australian Industries Development Association in its September bulletin. This sums up not only the Association’s point, of view but also my point of view. The article said:
The statements by Senator Anderson and Mr Barnard highlight the dilemma of trying to support what there is of an Australian aircraft industry with bits and ‘ pieces of defence work, leftovers from importing, and any commercial work that people do not choose to place elsewhere.
Despite occasional strong Ministerial statements, Government policy towards the industry seems to be one of scratching around for some defence work to keep the industry going. It certainly does hot start with the positive intention that there will be a thriving and successful industry and that we will turn elsewhere only when the Australian industry genuinely, and for good reasons, cannot fill the bill.
The issue should not be sidetracked by the old gag of asking whether Australia is to launch into building Phantoms, Fill’s and 747’s. The question of patently uneconomic projects cannot be entertained. However, our aircraft requirements outside of such highly sophisticated areas provides an ample base for a thriving industry.
What is the Government doing in concert with its advisers? It has recently set up several advisory components in the reorganisation of the Department of Defence. It has every opportunity to confer with the Minister for Defence (Mr Gorton) and his advisers and with the Department of Air and its advisers on the Fill. I should like to know what plans the Government has to revive the Australian aircraft industry.
– I support the remarks of Senator Bishop, but I wish to refer more specifically to the Fill aircraft contract with the United States of America. It is common knowledge, as Senator Bishop said, that the original agreement to enter into the purchase of the Fill aircraft in 1963 was a political stunt prior to the 1963 Federal election when the Government was desperately thrashing around for an issue on which to save itself. It is tragic that the Government should have picked an issue which could jeopardise the defence of this country. When the original agreement was entered into, a document dated 19th October 1963 was circulated in the Parlia ment which gave details of the text of the memorandum of understanding between the United States Secretary of Defence and the then Australian Minister for Defence. In the second paragraph of that circular it was stated:
It is estimated that the first F111A aircraft will be available to the Australian armed forces, if they so desire, as early as the latter part of 1967 and that the first RF111A aircraft will be available by November 1969.
The RF111A is the reconnaissance version of the Fill aircraft. This was the position in 1963, 8 years ago. Since then we have had a whole series of statements, apologies, platitudes and attempted explanations about why this aircraft has not been made available before now. There is other evidence to suggest that throughout these years, the Government had ample warning that something was drastically wrong with the production and performance of this aircraft.
A further statement was made on 25th October 1966 by Secretary Hicks of the United States Government when the Australian Government was attempting to alter the arrangements which had been entered into. The report of that statement said:
Finally, Secretary Hicks emphasised that, apart from the inherent validity of Australia’s expectations as to credit and interest rate equality, the Australian Government would find it difficult to gain public acceptance of any changes in such expectations - the Government already having weathered the criticisms evoked by the threatened high balances of the initial plan . . .
It is apparent that as far back as 1966 the Australian Government was obviously concerned as to the impact on the Australian electorate of the arrangements that the Government had entered into.
– How long ago was that?
– lt was in 1966, 5 years ago. At the same time there is also evidence of a wide disparity between the estimates of the United States authorities and our own Australian advisers as to the comparative costs involved. According to the same report the cost of the 24 aircraft estimated by the United States Air Force as at April 1967 was $237.7m. The estimate by our Department of Air authorities was $294.6m. It is interesting to examine the breakdown of those figures and to find that the Americans made no provision for contingencies but the Australian authorities did - for an amount of $12.8m.
These are only brief examples of the sort of situation that the Australian Government must have known was developing in those years and about which very little was done. There was an attempt to rescue the position when the then Minister for Defence went to America in May 1970. I will say something about this in a moment: But it was apparent then that we were being strung along on the Fill. We were being told that this was the greatest aircraft in the world and that it would be when it flew; but notwithstanding the fact that at that stage it was expected to be in Australia in 1967 we now look forward to the fact that, if ever we do see it, it will not be before 1974, according to a recent statement by the Minister for Defence (Mr Gorton), as Senator Bishop has said, we have been too soft on the whole deal. In the report which Mr Malcolm Fraser tabled in the Parliament on 12th May 1970, he referred to the arrangement of financial responsibility and said:
I reminded the United States Government of our acute dissatisfaction in Australia with the project, and said that Australia did not consider that our order of 24 aircraft created a joint project in any real sense; that, on the contrary, this was essentially a United States project . . .
The reason for that statement was that when he got to America he found that the American attitude was that if this aircraft was cancelled we would not get a cracker back. Later Mr Malcolm Fraser conceded that, from the very inception of the contract, it was never intended that we would. He said:
We need to have regard to the fact that the Original Memorandum of Understanding and the associated Technical Arrangement, tabled in this House, did not give us a right to get a single dollar back if the aircraft did not meet our requirements.
That is the sort of arrangement we entered into. I suppose it is to Mr Malcolm Fraser’s credit that he was able to negotiate a change to some degree whereby if we did cancel the order for the aircraft we would lose only about $150m.
– Chicken feed.
– Yes, chicken feed. Only yesterday we were debating questions of increased social service payments and education grants and we found that this Government could not find the sort of money needed to give the poorer people and the pensioners of Australia a better deal. There was no problem in finding hundreds of millions of dollars to throw away on an aeroplane that does not even fly. Mr Malcolm Fraser said that in regard to this highly technical area he did not learn anything in the United States of America - and now I quote him - ‘which, to my mind, casts doubt on the expert advice given to me . . .’. He then referred to his departmental officers. Mr Malcolm Fraser went on to say:
There are differing views between advisers of the- RAAF and the USAF concerning the interpretation of testing techniques and there are differing views, perhaps, on how easy it will be to come to final and definitive decisions concerning any Fill.
That includes the FI 1 IF. He added:
Not just F111Cs; concerning any Fill aircraft So there’s not going to be any simple answer for the problems.
I have deliberately quoted official Government statements in making these few points. It would not be difficult, of course, to quote many authorities around the world who share similar views about the Fill. Despite the fact that the United Kingdom Government years ago cancelled its contract and that the United States Navy also cancelled its contract, the Australian Government has not had the courage to face up to the fact that eventually it will have to decide to do the same thing or, alternatively, if we ever get the aircraft, find ourselves involved more and more deeply in further expenditure on the aircraft and probably the supply of tankers as well.
The whole Fill fiasco . was conceived in expediency. It has progressed in an atmosphere of increasing doubt and uncertainty. The Australian people are entitled to a decision on this matter. The longer it goes on the harder it will be to make that decision and the greater will be the loss to our defence capability and the greater will be the Government’s eventual embarrassment.
– We of the Democratic Labor Party have looked at the amendment proposed by the Australian Labor Party and find ourselves in agreement with it. It expresses concern which we have expressed before. Our concern is not about the Fill aircraft itself.
We do not consider ourselves sufficiently expert technically to hold an opinion about that aircraft and there seems to be controversy in the circles where expertise exists. As for the method of purchase, it is true, as Senator Wriedt said, that this was wrong right from the beginning. Indeed, the original contract never was carried out. Under the original contract Australia was to get an alternative aircraft to use for a period. The Government decided that those aircraft were completely impractical for Australia to have or to use. This was decided about 6 months after the contract was signed. That portion of the contract was considered, at the time of signing, to be one of the most important ingredients, but it was cancelled without further ado in the early days of the development of the Fill.
As the amendment says, I think the Senate should express its concern at the Government’s mishandling of the Fill purchase. It was a bad contract which should not have been signed. Whatever steps have been taken to clean up the contract and, in the interests of Australian defence, to get Australia on a better footing with what should be a friendly nation, have been made very tardily.
Turning now to the question of the development and effective maintenance of the Australian aircraft industry, we have warned the Government repeatedly not only that this industry is running down but also that skilled personnel are being dispersed. Early this year Senator McManus and I went to the Commonwealth Aircraft Corporation factory and made a private investigation. We were told, as early as January and February this year, that it would be forced to retrench staff if the Government did not confirm orders that it had more or less assured the Corporation it would be getting. Whether or not those orders have now been confirmed, I do not know; but I do know that skilled personnel are being dismissed from the industry. These people have special techniques and skills in aeronautical engineering but they are being dispersed in the community. Most of them will have no difficulty in obtaining employment elsewhere but they will be reluctant to return to an industry from which they were once retrenched. They will not have sufficient confidence in the industry to give their services to it again. If there is one thing that Australia particularly needs from a defence point of view it is a viable and effective aircraft industry. We believe that the Senate should add this expression to the motion and we propose to support the amendment.
– The debate on the Bill before the Senate is being used by the Opposition as a vehicle to express its concern over what it calls the Government’s mishandling of the Fill. That is the purport of the motion moved by the Opposition. I want first to reply to a statement made by Senator Bishop about the 18 serious crashes by Fill aircraft. Only yesterday I had the opportunity to compare the first 90,000 flying hours of various types of aircraft. Upon looking through that paper I found that the Fill, despite those 18 crashes, was far better in the first 90,000 flying hours than any of the F100 series of aircraft operating in many parts of the world at the present time. Opposition members have seen fit to say that the Government has mishandled this situation and that the Government should not have gone into this purchase in the first place. It is all very well to have hindsight but I point out to honourable senators opposite that they are not criticising the Government but in fact are criticising the expertise and technical knowledge of the men in the Royal Australian Air Force and the Department of Air. These are the men who, with Government representatives, went to Europe and America to evaluate aircraft and they made the decision that the Fill was the-
– Your Government made the decision.
- Senator Bishop may say what he likes but really he is criticising the expertise and knowledge of the men of the RAAF. Each and every one of the Opposition senators has a wonderful background of expert technical knowledge to do this! For a long time now many people have criticised this purchase and asked whether there was a need for a strike aircraft in the Australian defence force. That point has been argued backwards and forwards. Many people who are against having a strike aircraft in our defence force immediately set out to criticise the Fill. Really they should have been criticising other facets. On the other hand there is a group in this country who, while accepting that there should be a strike aircraft in our defence force, say that the Fill is not the aircraft we need. Therefore we have those 2 groups of people who are. dead against this aircraft. Since the decision to purchase it was made they have given it no chance at all. The RAAF has built up valuable expertise in the field of strike aircraft.
– They do not accept the Fill.
– The honourable senator has been informed by people other than those from whom I get my information. It is necessary for the Air Force to have modern strike aircraft to maintain this’ situation.’ Of the aircraft available in the world at present that fit into this category the Fill is the one that would serve our purpose best. No other aircraft can equal its ability to carry a heavy weapon load over such a wide radius of action nor can any other aircraft penetrate, the most sophisticated enemy defences under any weather conditions. These are the criteria that the Air Force has laid down for a strike aircraft. There is no other aircraft that can better meet these criteria than the Fill.
I will admit, as honourable senators have pointed out from time to time in questions to me, that there have been some technical difficulties. Honourable senators will recall that last year the then Minister for Defence, together with officers of my Department, went to the United States of America and spoke with the Minister for Defence in that country, Mr Laird, before coming back here with what is now called the Fraser-Laird minute. Agreement was reached between them that following certain static and fatigue tests that were to be carried out-
– The Americans said: We do not want it. We will flog it to Australia’.
– Apparently honourable senators opposite do not want to listen to me. It seems that some honourable senators opposite are treating this matter as purely a political canter. It will be recalled that it was agreed at that time that these tests were to be completed so Australia could make a decision at the end of this year. I have’ said that the timing of some of these teste has slipped. I have also said that I want to know whether it has slipped far enough to prevent us from making a decision at the end of the year or how soon we can make one in the new year. If the aircraft is ultimately proven and the performance criteria that we have laid down, which have been agreed to between the 2 governments, are met we will take delivery of this aircraft because it is the aircraft which best serves our purposes. The chief technical officer of the Department of Air has gone to the United States of America to determine exactly What is the situation at the present time in regard to these technical fatigue tests. Until we know that I do not think we are in a position-
– He is. not ; the. first person to have gone over to. report along these lines,, is he?
– On this particular line, yes. We. have technical and project officers in the United States on the site all the time, giving us advice and keeping us in touch with the project position. I want to remind honourable senators that, as has been said time and again, this aircraft is a generation ahead of any other strike aircraft currently in operation in the world. There may be some technical difficulties with it, but why should we not wait a few months extra to get something that is going to take us through to the late 1980s? Does the Australian Labor Party suggest that we should, cancel the order for these aircraft now and accept something that will be out of date in the next 2 years? This is what it is saying. The Government does not accept the view that this action should be taken. It believes that if these technical difficulties can be overcome, and overcome within a reasonable time, we will have ,an aircraft that will meet the requirements of the Royal Australian Air Force.
I turn now to the criticism of the position of the aircraft industry in Australia. It has been said that the Air Force has not been giving this industry enough work.
– The Government.
– Well , the Government has not. It is the firm policy of my Department that wherever possible orders for Air Force hardware will be placed with the domestic industry. That is not something which has just happened; it has been the policy for a considerable number of years. Let me remind the Senate that the Government - which is what Senator Bishop wants me to refer to - and the RAAF support the Australian industry because its industrial capacity is seen to be of direct significance.
– If they are supporting the factories why are they running down and why are people being put off?
– Let me finish my statement first. It might be said that the industry is the fourth arm of the defence forces, following the 3 Services. The development of our natural resources and the strengthening of our industrial complex adds te our overall defence capabilities. Without aa efficient domestic industry there would be no capacity to develop sophisticated weapons and equipment nor is it likely that skilled experts would be available to assist in the maintenance of this equipment. Moreover, by undertaking the manufacture of highly advanced equipment, new and vital techniques and know-how are introduced which, before long, spread their beneficial influences into the industry at large. I think we would be in agreement on that aspect. This by-product or spin-off more than compensates for some delay or some extra cost in awarding contracts to the domestic industry. Let me hasten to add that Australia has no monopoly on this policy. Many smaller nations seek to keep up with modern technology by manufacturing their own defence equipment wherever possible. In this way they gain an added bonus in the new skills and techniques that filter through to their other industrial projects. It goes even further than that these days. Australia now seeks from the . United States of America offset orders and sub-contracts for Australian industry as a means of easing the foreign exchange burden on defence equipment.
I think it can be said quite categorically in justice to the RAAF that it has played a part in fostering the aviation industry in Australia. I say that because of the experi ence which has been gained over the years. In fact, in the last 30 years it has been the principal supporter of the industry. Of some 1,000 aircraft bought by the RAAF in the post-war years more than 800 were manufactured in Australia. I will name a few of them. The Winjeels, Sabres, Canberras, Mirages and Macchis have been leading aircraft in the RAAF inventory. On top of that there were the Lincolns and Mustangs, which have been phased out. The only aircraft bought overseas for the RAAF have been in small lots. In answer to a question that Senator Bishop asked me this morning I said that it is a very costly thing to try to build aircraft in small lots. It would have been grossly wasteful to attempt to manufacture certain aircraft in small lots. Aircraft in this category include the Neptune, Hercules, Caribou, Meteor, Orion and, of course, the Fill. Senator Bishop said that the Government is spending only small amounts on small lots in the aircraft industry. Let me give to the Senate a few figures relating to recent expenditure by the RAAF in the local aircraft industry. An amount of $39.2m has been spent on Macchi aircraft and $91m has been expended on Mirage aircraft.
– They are finished.
– No, they are not. Last year expenditure on repair and overhaul work was $llm and the amount expended on the manufacture of spare parts for the RAAF was $19m. On top of that there is a prototype Project N, an aircraft which may be used for both military and civil purposes.
– How many aircraft.
– I cannot tell the honourable senator that at the present time because this is a matter which is still being examined but it is a matter for the future and examination is continuing all the time. Therefore I believe that is grossly unfair to say that the Government is doing nothing about this. The amounts of expenditure to which I have referred are not small amounts. They relate to expenditure on repair work and the manufacture of spare parts. This expenditure keeps coming up year after year. I believe that the Opposition is talking nonsense when it says that the Government has mishandled the Fill project and that it is not doing anything for the aircraft industry. For those reasons the Government cannot support the amendment moved by the Opposition.
– - The Australian Democratic Labor Party has the opportunity for one of its supporters to speak a second time in this debate, which is in a limited field because of the direction the debate has taken in terms of the speech of the Minister for Air (Senator Drake-Brockman). The terms of the amendment moved on behalf of the Australian Labor Party are very specific in relation to the first part of it. I shall deal only with the first part. It states: . but the Senate expresses its concern at the Government’s mishandling of the Fill purchase . . .
The attitude of the DLP has always been that we have never attempted to dogmatise on the technical competence or efficiency of the Fill aircraft. At no stage have we done so. I know that my friends of the Opposition have always criticised the competence and efficiency of the Fill and they have criticised the whole contract on that basis. We have always confined our criticism to the terms of purchase and to the absence of adequate accounting controls which has made necessary renegotiation or talks to part renegotiate the contract. I draw the attention of the Senate to a motion moved by the Leader of the Opposition (Senator Murphy) on 17th September 1968. That motion reads:
That there be laid on the Table of the Senate all documents (or copies thereof) which constituted the original arrangements made by the Australian Government for the purchase of Fill aircraft and all subsequent variations in the arrangements (with the exception of any specification or reference which would prejudice military security).
To that resolution the DLP through myself moved this amendment: and that on such tabling if it then appears to the Senate the documentation is of such volume or complexity that detailed examination is necessary for complete evaluation, the documents be referred by the Senate to the Joint Committee of Public Accounts for examination and subsequent report to the Senate and that the Committee be directed to advise whether at all stages of the committal of public moneys adequate provision was made for the protection of the Consolidated Revenue Fund.’
In speaking to the motion I said:
The amendment to which I am addressing myself, proposed by the Democratic Labor Party, has a similar purpose. An investigation is contemplated not to discover whether the Fill is a particularly good aircraft or suitable for the purpose for which it is sought. That is not the purpose of the contemplated investigation, except perhaps in an indirect way as it might be reflected in the financial aspects of the whole project. We want to know what we think the Public Accounts Committee is particularly designed to discover; that is, the degree of adequacy or inadequacy of the financial control exercised in a matter which requires an enormous appropriation of the Consolidated Revenue. In such a case there should have been continuous Treasury and departmental scrutiny of the appropriations as they mounted from day to day and year to year, and from variation to variation. There may have been this type of financial scrutiny. lt may have been continuous and efficient, but we do not know that. The object of the exercise is to put into the hands of a competent investigatory body the material which would enable it to discover and report to the Senate whether such control has been exercised competently and continuously. ‘
That has always been the attitude of the Democratic Labor Party. Insofar as the amendment moved by the Australian Labor Party confines itself to the Government’s mishandling of the Fill purchase the DLP supports that part of the amendment, and also we support the second part. It is not that we are standing here criticising the competence or the efficiency of the Fill as a technical exposition or anything of that nature. We have been concerned all along at what appears to be a certain looseness in the accounting control in the whole of this enormous purchase which has now gone on from year to year.
– How do you know that?
– We want this matter referred to the Public Accounts Committee with all the documents to see whether there has been that type of lack of control and if so whether it can be avoided in the future. It is for that reason and not because we join in the criticism of the technical competence of the aircraft that we support this part of the amendment. We feel that there has been an absence of adequate financial control - at least there is a prima facie presumption of this - which requires complete investigation. That is what we sought, but unfortunately it has not taken place. I merely want to put on record that we are not criticising the Fill as a military aircraft, nor are we criticising its tactical suitability for the purpose for which it is designed. Our attitude is based purely on that part of the motion which purports to criticise the mode of arrangement followed in the purchase of the aircraft. That is why the DLP supports the amendment moved by the Australian Labor Party.
That the words proposed to be added (Senator Bishop’s amendment) be added.
The Senate divided. (The Deputy President - Senator Bull)
Majority . . . . 4
Question so resolved in the affirmative.
Original question, as amended, resolved in the affirmative.
Bill (on motion by Senator Cotton) read a third time.
Debate resumed from 4 May (vide page 1339) on motion by Senator Cotton:
That the Bill be now read a second time.
– I ask for leave to discuss the provisions of the Customs Tariff Bill and the Customs Tariff Validation Bill together.
The DEPUTY PRESIDENT (Senator Bull) - There being no objection, I will allow that course to be followed.
– The tariff proposals in the Customs Tariff Validation Bill, which will give validity until 30th June 1971 - which is only the end of next month - to the collection of duties, were introduced in the Parliament between April and May of this year. The Tariff Board in its report recommended duty collection and tariff changes on such items as pins, hairpins, curling grips, refractory products, mining and metallurgical machinery with respect to diamond drilling machines only, and pulp under the New Zealand-Australia Free Trade Agreement. These items will come up again for validation after the end of this financial year.
The Minister for Customs and Excise (Mr Chipp) gave in his second reading speech an assurance that tariff alterations will be introduced by gazette to operate after 30th June and that these will in time come before the Senate for further validation. The other Bill, the Customs Tariff Bill, has a much wider range. It deals with 23 or 24 reports from the Tariff Board and the Special Advisory Authority. It is the intention of the Australian Labor Party to oppose this measure because it feels that the importance of the Tariff Board is being underestimated as a part of the machinery of the economy and that the Board is not able to fulfil its growing importance because of factors which I will proceed to outline.
The whole idea of tariff making is part and parcel of the story of Australia’s economic development, going back to the great arguments that raged between the free traders and those in favour of protection.
– By whom did you say it was being underestimated?
– It is being underestimated by the Government as a part of the machinery of the economy. It is the Opposition’s view that the Tariff Board should have sufficient staff and sufficient researchers and that its activities should be upgraded so that it can supply a continuous source of detailed information to the Parliament on the whole field of protected industries in Australia.
– There should be a trade union representative on the Board.
– As Senator Douglas McClelland has just reminded me, there should be a trade union representative on the Tariff Board. I understand that there is a vacancy at the present time, After all, over the years the trade unions have produced some of the finest brains in the Commonwealth, having a background knowledge of the needs, the hopes and the aspirations of the ordinary working men and the salaried people of this country. That sort of experience would be of great advantage to the Tariff Board.
– In what way?
– I hope that this recommendation will be considered very carefully by the Government when it is appointing the next member of the Tariff Board. Senator Webster has asked: ‘In what way?’ I would think that a member of the trade union movement would be of advantage as a member of the Tariff Board. I am just putting the simple fact that at the present time, the members of the Tariff Board are very capable, well selected men with a vast range of interests and activities. But I do not think any of them have been closely associated with the trade union movement or the work force. The selection in the past has been for the purpose of bringing in representatives of various sectors of the economy and the financial system so that the Board can have the benefit of the full range of the backgrounds and individual knowledge of members of the Board.
I believe the picture would be completed by having this very important section of the community, the trade union movement, represented directly on the Board. While I am on this aspect of the debate I would like to pay a tribute to the hard working, dedicated members of the Board. We have every reason to be thankful for the work they have done. In my view they have had to work under adverse conditions. They have had references made to them and have dealt with these references to the very best of their ability. But all the time there is a backlog and often in their reports we can see that it has been a tradition of the Board to confine a lot of its information under the heading of confiden tial. I believe that when any organisation or individual, whether in primary industry, importing or any other field, makes a call on the taxpayers’ money in the form of grant, subsidy, duty or in any other form, details of their whole business activities should be available to the members of the Parliament who represent the taxpayer.
The Opposition feels the Tariff Board will have to give much more detailed information to the Parliament on the reasons why companies claim increases in their tariff protection and ‘ also more detailed information on the reasons why the Board finds that protection needs to be decreased. ‘ There are so many important parts of this whole tariff problem that we have to take into consideration the whole of the impact the work of the Tariff Board has on the economy. It is within the Board’s power to have a first hand evaluation of an industry, but there does not seem to be any method of carrying on from that point to determine the impact on the economy further down the line. I think all political parties in this country, particularly the Australian Labor Party, are very conscious of the need for decentralisation. After all, there has been a move over the past 20 or more years from the country to the urban areas and we are finding that there is an accumulation of tremendous numbers of people in the city, areas while the hinterland areas of this country are being denuded of population. Of course, we know the plight of the rural industries. We have available all the technology and equipment that has been developed for agriculture and primary industrial work. We know of the labour saving devices and of the other factors that have tended to decrease the amount of labour employed in rural areas.
Nevertheless, in every respect I think that government policy should be directed as strongly as possible towards decentralisation. This is an area in which I believe the Tariff Board has to be quite strong in order to achieve its objective. It should look for opportunities to encourage industries by the imposition of tariff protection, if necessary, on the condition that the industries carry out the policy of decentralisation. It should encourage industries to use the resources that might be available in country areas rather than use the less favourable conditions that obtain in the city areas. On the other hand I believe the life blood of any country is trade. Here again the Tariff Board can play a very important part in giving advice to the Government and to the Parliament. This is the point of demarcation I want to make. The Tariff Board makes its report to the Parliament but very often it is a belated report and often is not in sufficient detail. It has knowledge of what is happening in industry and seeks Government encouragement for industries which not only are likely to be viable and economically developed to supply the local market but which also would be potential exporters of our products. The Board itself would need to have knowledge of the various trade agreements that we have made over the years. It would need to understand the politics and economics of trading with friendly countries, taking advantage of factors in those countries for the benefit of Australia.
Information on the rapidly changing pressures that are on the economy should be available to the Tariff Board through researchers and economic advisers. It is in this respect that the Board’s structure needs a lot more attention. Instead of it being more or less a sideline of the economy I believe it should be an important linchpin in the economy and in the evaluation of the ever changing factors. References have been made in another place to the delay in handling submissions for examination by the Board. Of the 52 references made to the Board up to 3 1st March, 39 still had not been examined. This indicates that although the Board already has the power to delegate its authority to a single member inquiry which may accelerate the examination of references, nevertheless this important part of the machinery of our economy has been underestimated. I have mentioned the matter of a single member board and I commend this move because I believe it will be of great advantage. A very important matter to which we need to give attention and of which the Tariff Board should be aware is advance information so that proper consideration can be given to the phasing out of protection for certain industries.
It has been stated on this side of the chamber continuously and consistently over the years that we believe in a policy of full employment. The employment of our human resources to their fullest capacity, and to the limit of the capabilities of each person, is essential in a properly organised society and all the activities of the Government should be directed towards giving people the fullest opportunities for expression and development. But when industries are becoming redundant or are being phased out it is a very great responsibility of government to provide the facilities for re-training and re-directing people into gainful and suitable employment. Recommendations along this line should come from; amongst others, the Tariff Board in its reports to the Government. The annual reports of the Tariff Board are comprehen1sive and outline the activities of the Board.
There are 2 references with which I should like to deal in perhaps a little more detail. Both relate ;to industries in Tasmania. We are very, grateful indeed to know that the Board has given close consideration, to these, industries ;and has recommended added protection. I refer to the Tariff Board report on calcium carbide. This report was -brought - down on 2nd April 1970. It has taken a considerable time for the report to be discussed in the Parliament. It relates to a; very important part of an industry in Tasmania. I refer to the manufacture of ^calcium carbide. The manufacture of calcium ..carbide was undertaken originally in 1919 by a private company at Electrona in Tasmania but that company fell on hard times and the industry was taken over by ,the Tasmanian Government and was operated then by the Hydro Electric Department. Subsequently the Australian Commonwealth Carbide Company was formed. The carbide industry has given employment to a number of people in the Lune River district and the Electrona area of Tasmania. At the time this report was presented, the company operated 3 furnaces with individual capacities of 4,800, 4,000 and 5,400 tons per annum. There are recommendations in this report that the company should be guaranteed a production of 10,000 tons per annum. I believe that as a consequence of this, one of the furnaces has been closed down.
There were 190 people engaged in the production and sale of, calcium carbide at the time of the inquiry. The company provided employment for. most of the work force in the area around Electona, which is about 17 miles from Hobart. About 90 per cent of the company’s work force lives ir. and around the townships of Electrona and Snug, where the company owns about 50 houses. Honourable senators will probably recall that the township of Snug where these employees lived was completely wiped out in the disastrous bushfires a few years back. We are pleased with the recommendation of the Board. The company is the sole Australian producer of carbide. It plays a very important part in decentralisation. The Board recommended that there be a 40 per cent preferential and general rate of duty in accordance with international commitments. So we in Tasmania have reason to be very satisfied with that report of the Tariff Board.
The other industry to which I wish to refer is another Tasmanian industry. It is referred to in the Tariff Board report on alginic acid and its derivatives. The only Australian producer of alginates is Alginates (Australia), a division of Marrickville Holdings Limited. The company commenced production in 1967. I understand that this commodity is derived from a seaweed. The industry is located at Orford on the east coast of Tasmania. It is ideally situated because of its proximity to suitable commercial beds of seaweed of the variety required - macrocystis pyrifera. The seaweed is harvested by the company and treated to obtain initially alginic acid. This acid is then further treated to obtain sodium alginate and subsequently other salts. I understand that this is one of the substances used in the making of instant potatoes, instant coffee, instant tea and the like. Of course, there is a growing demand for this type of product. I believe that it is an industry which will prosper. As I mentioned before, it is a decentralised industry suitable to Tasmanian conditions because it can exploit some of our offshore resources in the form of seaweed. The local demand is likely to grow. The Tariff Board has recommended a 30 per cent preferential rate of duty.
I have mentioned those 2 Tasmanian industries more or less on the parochial level to show my appreciation of the protection which is being offered to them. Overall, I feel that I should remind the Government that the Tariff Board is too inhibited and circumscribed to allow it to fulfil its proper function. For that reason, we of the Australian Labor Party have decided to oppose this measure for the purpose of highlighting the need for a complete reassessment and re-evaluation of the activities of the Tariff Board so that it can become an even more valuable contributor to the information needed for the administration of the very fluid economy which we have in this country at the present time. We oppose the measure.
– I take it from the comments of Senator O’Byrne that the Opposition intends to vote against both the Customs Tariff Bill and the Customs Tariff Validation Bill.
– No, not the Customs Tariff Validation Bill; just the Customs Tariff Bill.
– The Opposition will be voting against the Customs Tariff Bill 1971?
– Yes, and we will be supporting the Customs Tariff Validation Bill.
– It is interesting to note that whilst Senator O’Byrne has been speaking of the benefit conveyed in the Customs Tariff Bill by its support of 2 very important industries in Tasmania, the Australian Labor Party sees wisdom in voting against this measure. That is surprising. However, the actions of the Opposition are surprising in many instances, and it is not unique that it should take this action. It is certainly not for the good of the industries which I imagine Senator O’Byrne should bc anxious to support in this place. By its action the Opposition is again trying to pull a political stunt in order to get its point of view across.
Whilst Senator O’Byrne has sought to have these 2 Bills debated together, I wish to confine my remarks to the Customs Tariff Bill. This is a most comprehensive Bill. If the Senate were to debate this Bill fully undoubtedly it would take several days. At the present time customs tariff is a most interesting public matter. Protection of our Australian local industries is of considerable interest to those involved in manufacture in Australia. The overall economic development of Australia is of great importance to the labouring sector of the community, the manufacturing sector, the distribution and servicing sector and to the rural producers. Australia must progress. We must see that sufficient protection is given to our local industries so that they are not harmed by imports from low cost oversea suppliers. The point of interest at the present time is the tariff pronouncements that have been made over the past few years in the annual Tariff Board reports and within the last few weeks the Government has made a declaration of its policy in relation to those Tariff Board reports and, perhaps one could say, the adoption by the Government of many of the proposals put forward by the Board over the past few years.
Those matters would require a great deal of debate, and I feel that as today is the last day or so of the Senate’s sitting it will not be possible for the Senate to give those statements and reports full consideration. However, I have grave doubts about the level of wisdom which has prompted the Government to make the declarations that it has made in relation to current Tariff Board proposals. I agree with the proposition that industries which have not been reviewed for many years should certainly have the Board’s attention. There is little evidence that the Tariff Board’s suggestion - a suggestion which apparently has now been adopted by the Government - that all those industries which have had over 50 per cent protection on the Australian market from overseas imports should be looked at first in the great list of industries which need review. I realise that it may be many years before the Tariff Board has an opportunity to review industries receiving greater than 50 per cent protection. I believe that the Board should investigate the areas of industry which may have a greater influence on our economy, and not necessarily select an industry simply because it appears to have what some consider is a high protective rate.
I imagine that Senator O’Byrne was criticising the Government when he said that it under-estimates the Tariff Board as a machine in the economy. That claim is certainly disproved by the actions of the Government in past months. I believe that the Government has given every support to the Tariff Board. It has allowed the Board to be entirely independent in its actions and has granted it great support in respect to the appointment of staff to its establish ment. I am sure that such an important body as the Tariff Board would acknowledge the elevation given it by the adoption of so many of its recommendations. However, I again express my doubts that, in the recent pronouncement on the future worth and reports of the Board, it is wise thinking which brings to light the present actions of the Government
Senator O’Byrne’s remarks about the Government under estimating the importance of the Board are disproved by the increase in numbers on the Board’s staff over the years. In 1963, 93 people were employed by the Tariff Board; in 1968, 103; in 1969, 124; and in 1970, 147. In April 1971 the establishment was 181 personnel. The staff of the Tariff Board rose from 93 in 1967 to 147 in 1970. I certainly believe that the Government and the Public Service Board have recognised the importance of the Tariff Board. I am supported in my view by’ the fact that in 1965-66 the Tariff Board issued and signed 23 reports; in 1966-67, 37 reports; in 1967-68, 32 reports; in 1968-69, 34 reports; arid in 1969-70, 32 reports. I think the facts as to the measure of accomplishment of the Board need to be evaluated in the light of what the public is hoping for in the projected reviews of many industries. It may be possible to demonstrate that savings to the community may be gained from a lower level of protection being granted to some industries, there being greater competition being created within the Australian economy. But it would be many years before a body could review all industries and issue sufficient reports to the Government for some effect to be noted in lower prices in this community.
I wish to refer to a report of the Tariff Board which is appropriate to the comments I have made. In the few minutes available to. me I wish to discuss the Board’s report on the cherry industry. Be it from the point of view of primary producers or the point of view of interests which are anxious to see our imports increase, this report offers great opportunities for study. Before the Tariff Board’s investigation, the cherry industry was in the high protection area, some parts of it being afforded 65 per cent protection. The Tariff Board recommended in its report that all duties should be withdrawn.
– That is not in respect of fresh cherries.
– No, but fresh cherries have had the benefit of the high protection available to its product when manufactured. I appreciate that Senator Little has been very interested in the cherry industry lately. He has shown a great deal of interest in this subject with Victorian cherry producers and is alert, as I am, to the problems facing these producers at the present time.
– How can you properly divide the industry into two, so that there is ari industry for glace cherries or processed cherries and another industry for fresh cherries? It is absurd.
– We have often heard the comment ‘absurd’ from the Minister, but I know that he has a great interest in the smalt producers in Tasmania and throughout Australia. However, let me finish as I may not have as much time to speak as the Minister. I am dealing with an important industry. There are many areas of consequence in the cherry industry, including growers, canners, processors and the buying public. I wish to quote from the Tariff Board’s report on cherries. It runs to quite a number of pages. But in one paragraph the Board stated:
In the light of the high duties, especially in effective rate terms, needed to protect Australian drained cherry producers and the limited effect that the removal of protection would have on cherry growers and briners, the Board will recommend that the duties on drained cherries be reduced to minimum levels. Because of the lack of any significant disadvantages, duties on brined cherries may also be reduced to minimum levels, and in this connecton the Board notes that there is no evidence of any commercial British interest in the Australian market. The nature of fresh cherries precludes their import and as the present duties on them are negligible the Board considers that no change is warranted.
To sum up, the Bill with which we are dealing reflects the Government’s proposition that the Board’s report should be accepted. Indeed, the Senate will also be accepting this report if this Bill is passed. Undoubtedly, the Tariff Board’s report was based on a very wide area of evidence. As a body, it was called to sum up the evidence it received. In logic - I give the Board credit for what it must do and has done - a decision has been handed down that protection should be removed from this industry. The Government was placed in a position of great difficulty when it received this report. I have great sympathy for it. If the Government were to disagree with the Board’s report, and the Senate were to reject this Bill, as is being advocated by Senator O’Byrne, great harm would be done to the cherry industry. We would revert to a situation where, whilst the Government had taken the advice of the Special Advisory Authority and had granted quite substantial protection to this industry, that substantial protection would be lost. Rejection of the Board’s report would leave the industry without any support or protection whatsoever.
A grave problem is confronting the Government. The Victorian Cherry Association, in a submission which it sent to me, summed up the Tariff Board’s report this way.
The recent Tariff Board report on cherries recommends complete abolition of duties on cherries.
This would be disastrous for cherry growers in Victoria (and to a greater or less degree for growers in S.A. and N.S.W.)
It would almost certainly put out of business the only grower-owned co-operative brinery of cherries in Victoria - with consequent heavy losses to growers, both as shareholders and as growers.
Then the Association made the point which I have made. It said:
It would jeopardise the usage of approximately 2,000 tons of Australian sugar per year.
We find, in the words of the Victorian Cherry Association, that the implementation of the Tariff Board’s report on an industry which supposedly is protected to a high extent will not only mean the elimination of the cherry industry but will also have an effect on the usage of 2,000 tons of Australian sugar. The Board itself has referred to this unusual situation. At page 12 of its report it stated:
Sugar is the other important element of direct materials cost for drained cherry manufacturers, and the Australian processors use about 2,000 tons per annum. French exporters, at the time of the inquiry, purchased their sugar requirements at less than $100 per ton whereas Australian manufactures paid the local price of more than $200 per ton.
– Ha, ha!
– I thank Senator Prowse. He is quite right when he says: Ha, ha!’ The report continued:
In addition, the evidence indicates that Australian processors use over 40 per cent more sugar per unit of drained cherry output than do their
French counterparts, so that the cost of sugar per unit of drained cherry output in Australia is more than 3 times that of processors in France.
What a great effect will flow from the cherry industry to a variety of industries as a result of the adoption of the Tariff Board’s report. 1 am sure that those honourable senators who come from Queensland will be alerted to the problems which we will face by adopting the report without assurances from the Minister. It may result in 2,000 tons of Australian sugar not being used.
The submission of the cherry industry is quite interesting. The cherry industry, as a primary producing industry, is adopting the same attitude as has been adopted by many other primary producers who are making comments at the present time about the great effect which lower tariffs will have on the community. But I believe that this thought is something which is a little nebulous and quite impossible to prove. I should imagine that it is an emotional issue other than to cherry growers who may recognise the impediment to such thought. The Victorian Cherry. Association states:
At the outset, we admit that there is, in Australia, some case for reduction, or even abolition, of import duties. One strong point in such a case is that many import duties increase costs to primary producers and make it harder for them to survive.
I have just given an instance where it is harder for the local manufacturer to survive, because he has to purchase materials from another primary industry, than it would be if he were able to obtain his materials from overseas. The Victorian Cherry Association went on to say:
The argument follows that the tariff reductions will be in the interests of primary producers.
Then it underlines this comment:
The present Tariff Board recommendation will have exactly the opposite effect on us.
I make the point that the belief that it would be a good thing to look at every industry which is receiving more than 50 per cent protection, is open to question.
The Victorian Cherry Association then went on to pull the Tariff Board’s report to pieces. Among other things, it made the point that the Tariff Board’s recommendations seemed to it to indicate a wish to reduce duties irrespective of the situation existing. It went on to amplify this point by saying:
In effect the Board recommends dropping duty on brined cherries because Australian brineries can compete with imports successfully. They then advocate dropping protection for drained and glace cherries because they cannot compete with imports.
I agree with the Association’s submission that there does appear to be an inconsistency in the attitude being adopted. The Board undoubtedly evaluated the evidence that had been given, but in short it was given evidence from one. area which could not be accepted. The Silvan Fruit Processors Ltd, which is a company in my State pf Victoria, made, this comment:
From the general tone of , the report and in its conclusion ‘that the local fruit could be brined and sold at competitive prices’ with imports’ (even though evidence was submitted to the. contrary) it would ‘ appear that the Board . has . not even remotely considered the ever-present possibility that fruit salad packs or ‘ other packs - can be dropped overnight. Obviously, the expansive talk of the ex-manager of. SPC. (a company now .in serious financial difficulties) .has convinced the Board that all briners had to do was run along to SPC and their worries would ‘ be over.
That was the core of the problem. Before the Board’s report was tabled it was obvious that cherry producers and cherry growers would not be able to get rid of their produce in a manner . acceptable to them.
The Tariff Board’s report on the cherry industry creates great difficulties for us. At one particular stage it would have been my view that the report should be rejected, but for the reasons I .have given it would be impossible to do that now. I believe that the Government immediately recognised the problem which implementation of the Tariff Board’s report would create for this industry. Indeed; it must have been a quite unique situation for the Government to have received a report from the Tariff Board and then within a few weeks, having recognised that there would arise a situation opposite to that, which the Board believed would arise from the adoption of its report, called for another report by the Special Advisory Authority. That report has to be returned to the Government within 30 days. So there is some hope that protection will again . be afforded to the cherry industry.
The Vice-President of the Cherry Association stated that the defeat of this Bill in the Senate would mean that the position would revert to that which applied before the first hearing by the Special Advisory Authority. But that is an unsatisfactory position. The defeat of this Bill is not the answer to this question. The Vice-President of the Cherry Association pointed out that the most satisfactory position would be for the Senate to accept the recommendation of. the Special Advisory Authority on the second hearing, assuming that it was equal to the recommendation following the first hearing.
There is only one thing for the Senate to do, and that is to accept this report on the cherry industry. But I believe that the Minister should indicate to the Senate that the Government has faith in the cherry industry and that it wishes to see this type of industry retained. It can be said that the Government has already demonstrated its interest by immediately instituting an inquiry by the Special Advisory Authority. That Authority will return its report to the Government by 22nd May. If that report contains recommendations which will have a beneficial effect on the industry, then the Government certainly should see that the recommendations are implemented immediately. I think that the Minister must be called upon to make the comment that if the report of the Special Advisory Authority is unsatisfactory the Government will give an assurance that it will investigate very carefully the plight of the cherry industry and all the circumstances surrounding the evidence which was given to the Tariff Board and upon which the Board made the decision to recommend the abolition of protection to this industry. Before the Bill is passed, the Minister should give an assurance that the Government will protect the growers, the canners and the processors m this industry. It is with some regret that I find that the Customs Tariff Bill has to be passed by the Senate. A most peculiar set of circumstances has arisen. Those circumstances have pinpointed that in this instance the Tariff Board, while evaluating the evidence given to it, proved very quickly that that evidence could not be taken as truthful. The report should have been rejected by the Government immediately it came to hand.
– The Democratic Labor Party will not oppose the Bill. Indeed, it will vote for it. There are a couple of areas in which we are concerned. I propose to deal with one. My colleague, Senator Little, will deal with the other. The matter, with which we are concerned and with which I propose to deal relates to the granting of customs export licences for the export of liquefied petroleum gas. The effect of the granting of such licences is that the gas is sold overseas at about half the price that the Australian consumer is paying for it. I direct the attention of , the Senate to the most unsatisfactory situation pertaining to the liquefied petroleum gas industry . in Australia. I want to. speak briefly about what happened following, the introduction of Australian crude oil to local refineries, coupled with the policy of the suppliers of Bass Strait crude oil in relation to the marketing of liquefied petroleum gas, which policy is costing our economy millions of dollars a year, principally in those areas where we can least afford it, namely, rural activities and decentralised industries.
Liquefied petroleum gas was used in a minor way in Australia until 15 years ago when it became available, commercially from refineries here. As a result a number of companies and government utilities subsequently spent tens df millions of dollars on equipment and- installations and they have built up a large market for this product in Australia. This’ has brought tremendous benefit to people both economically and socially. One of the valuable properties of this gas is its ability to-be converted to the liquid state under- reasonable pressures. This is transported in steel containers throughout this country. Its use falls into three categories. Firstly, as a replacement for coal gas. it has enabled many country gas works to convert to the use of this fuel as replacement for carbonisation of coal and undoubtedly has averted the closedown of many such country gas undertakings, particularly in New South Wales and Victoria. In western Victoria I understand, with the exception of larger towns such as Ballarat and Warrnambool, almost- every country town with a gas undertaking uses liquefied petroleum gas as a fuel. Much the same situation applies in New South Wales where many councils with gas undertakings use liquefied petroleum gas as a substitute for coal gas and, in addition, they sell liquefied petroleum gas in cylinders to consumers. In Canberra, thousands of homes use liquefied petroleum gas, particularly for winter heating.
A second large area of utilisation is for industrial use, particularly in those locations where natural gas is not available, for liquefied petroleum gas is much cleaner than town gas and is preferred by many industries. Further, decentralised industries use this gas as a fuel and were it not available the industries may well have had to locate in capital cities where town gas is available. The third and most important area of use is in the country areas where town gas is not available and even more so where electricity is not available to country housewives who have to rely on the use of liquefied petroleum gas for cooking, water heating, space heating and, in warmer parts of the country, for refrigeration. Before liquefied petroleum gas was available the country housewife used wood, coke or kerosene as fuel. Liquefied petroleum gas has made a tremendous impact on the standard of living. Most country hospital schools and homes cook with liquefied petroleum gas. Likewise, many people whose daily task necessitates living under difficult conditions - people such as railway fettlers, road builders and fishermen - have had their living standards tremendously improved by use of this gas. Its use in caravans, boats and camping is well known. Sales growth and acceptance of this product can readily be appreciated by studying figures provided by the Department of National Development.
I believe that I have amply indicated the valuable properties of this gas and the part it plays in the Australian economy, but what is the position today? Liquefied petroleum gas is obtained from natural gas as prepared for distribution from crude oil refineries. Huge quantities of liquefied petroleum gas extracted from our Bass Strait natural gas are being sold overseas for export and are not available for the Australian market. Also the maximum amount of liquefied petroleum gas is being extracted from Australian crude oil by the suppliers of the product before being delivered to refineries. This together with liquefied petroleum gas extracted from natural gas is sold for export at very low prices - about $15 to $17 a ton f.o.b. - or less than half the usual Australian exrefinery price. On the other hand, the fact that Australian crude oil now contains substantially less liquefied petroleum gas means that production of liquefied petroleum gas from Australian refineries, particularly in New South Wales and Queensland, has been reduced, particularly in respect to propane. This in turn has led to higher prices. It is known that in the Sydney area as well as in Canberra liquefied petroleum gas prices have risen in the last few months.
The normal price for liquefied petroleum gas from Australian refineries is $32 to $40 a ton and the ridiculous situation now pertaining is that Australian industry and domestic consumers, particularly those in country areas, are paying a far higher price for this product while large quantities are being exported to ..places such as Argentina at about half the price or less than half the price at. which the product is made available to Australian distributors. Let us consider the effect pf this. If the Australian market absorbs a quarter of a million tons a year then I suggest that the present policy is placing on Australian industry and domestic consumers a surcharge of close to $5m a year. This surcharge is hitting those consumers who can least afford it; that is, those in decentralised industries and the rural community.
In Australia last winter we had a situation in which gas was rationed in many country areas and cities, and after requests by State authorities the Esso company and the Broken Hill Pty Co. Ltd agreed to release some gas from Westernport and alleviate gas rationing in Victorian country towns and the city of Brisbane. I submit that we should not be in a situation in which this lew cost, high grade fuel is made available to the Australian community only in an emergency, whereas our Japanese and Argentinian friends are purchasing huge quantities at bedrock prices. It is particularly galling when Argentina is an active competitor of our farmers in the European Common Market and Japan is the most active competitor of our secondary industries in the South East Asian market. We give these people the benefit of bur natural gas at bargain basement prices which, in turn, enables them to reduce costs and to give our rural and secondary industries stronger competition.
We have a natural resource on the ocean shelf of Australia. This resource should be of benefit to Australia. However, in fact, since its discovery the price has not been reduced but has risen while huge quantities have been sold overseas at low prices. Whilst city dwellers in Victoria may have obtained benefits from natural gas discovered in Bass Strait, those benefits have not flowed on to country consumers of gas in Victoria or elsewhere. So, we urge the Government to ensure that this valuable product does not come to be exported overseas at low prices while we in Australia are forced to pay much more as a result of an arrangement by which oil companies maintain an ex-refinery price in Australia about. twice the export. price and Esso-BHP co-operate by denying this natural resource to. Australia.
– Perhaps I can be allowed the liberty extended to Senator Kane just to state that the distributors in Victoria have to purchase liquefied petroleum gas from the refineries at $35 a ton whilst the Broken Hill Pty Co. Ltd and the Esso company sell it to Japan at $14.50 a ton. That is the complete story. The Japanese can buy our oil resources at less than half the price at which we can buy them.
We are dealing with some reports from the Tariff Board. As one who belongs to a political party that believes in the protection of industry, I do not want to be overcritical of the Board; but I want to attract the attention of the Senate to the 19th March 1971 issue of the bulletin ‘Overseas Trading’. At page 1 12 it can be found that at 9th March 1971 there were 61 references before the Tariff Board. These are references that have not been dealt with by the Board. They date back to 1965. I do not place all the blame for this long delay on the Board. I place the blame for it on the Australian Government. I believe that the Government does not provide the Board with sufficient facilities, both physical and economic, to enable it to carry out the job we want it to carry out for us. In my opinion, it does an excellent job insofar as it has the facilities to do so.
– I think you will agree that recently there have been some statements which indicate that at last the Board is to be provided with more facilities. I might add that I do not disagree with what you are saying.
– The Board has been given permission to engage an extra 15 expert staff, but up to this time it has not been able to recruit that extra staff. My information from the Board is that it expects to be able to recruit all 15 experts by the end of November. Perhaps the Board is able to say better that I am whether that increase will provide sufficient staff to enable it to do the job we want it to do.
We are very proud of the fact that our secondary industries are expanding; that we are becoming a. large manufacturing nation, and exporter pf manufactured goods. In manufacturing. we are in competition with countries that are not operating at the. same standard pf living as we are. Those industries require protection at least until. they get on their feet. In many cases they will continue, to require protection. But that is not to say that we should be allowing references to the Tariff Board to be delayed for periods up to 6 years. That is quite wrong. There, have been some improvements. When I asked questions of the representatives of the Tariff Board during the consideration of the Estimates last year, I was told that the delay period with respect to references averaged 2 years. This year, when the Additional Estimates were being considered, I .was advised that the delay period had been reduced to 14.4 months, or near enough to 15 months. But the delay period will, .fluctuate according to the . size of the references with which the Board has to deal. If it receives a reference that will take 4 to 5 months to inquire into, the Board will be able to deal with a lesser number of references in that year. So, we cannot put an actual figure on the extent of the delay, but we can see the delay in respect of particular references. My complaint is about the delay in respect of particular references.
There is another matter that I want to bring to the notice of the Senate. In the course of my questioning of the representatives of the Tariff Board during consideration of this year’s Additional Estimates, Mr Robertson, representing the Board, gave an explanation of some of the reasons for the delay. As reported at pages 158 and 159 of the Estimates Committees Hansard of 22nd April 1971, he said:
One of the difficulties which faces the Tariff Board is the delay in obtaining key information from witnesses. I do not know how widely this problem is known but a survey was conducted within the Board of 74 references on which it had made inquiries. This was included in the annual report for the year 30th June 1969. The Board found that the average delay in the submission of key evidence beyond the scheduled time which the Board had laid down was from 10 to 11 weeks in every case, and in some cases the delays ranged as long as 12 months. This is a real handicap to the Board in expediting its work. Unfortunately it is a problem which has been there for some time and which I feel is accentuated in particular cases where emergency duties operate. This seems to reduce . the sense of urgency on the part of some witnesses to forward their evidence so that the Board can examine it. -
What that means is thai, when an industry makes an application for tariff protection and the appropriate Minister then makes a reference to the Tariff Board to ascertain whether protection should be given, the industry is not in a position to provide the evidence required by the Board to enable it to settle the matter. This seems to me to be a disgrace. I suggest that measures should be devised by the Government and applied by regulation or introduced by the Tariff Board which should give a direction, that evidence must be supplied to the Board upon request within a reasonable time, depending upon the type of evidence that the Board requires. If .evidence is not supplied within the time laid down by the Board punitive action should be taken against those who have been required to supply the evidence. The Board would not be unreasonable in applying a measure such as this and it would not impose undue hardship on industry in requiring it to provide evidence. There would always be an opportunity for an industry to inform the Board that it was unable to furnish the details required within the time laid down and that it required a further 3 weeks or a month perhaps. I do not think the Board would be unreasonable if an application of that nature were made to it.
When there is a delay of up to 12 months in providing evidence required by the Board it becomes a disgrace and an imposition on the people of Australia who eventually have to pay the higher, tariffs. The tariffs become part of the prices for goods which people have to pay. There should not be delays of this nature. In the passage which I read to the Senate, Mr Robertson referred particularly to indus tries which have sought protection through the Special Advisory Authority. In most cases their applications have been granted. In an emergency the Special Advisory Authority will give protection. How can he do otherwise when he has 30 days only in which to examine an industry and present a report to the Government? If honourable senators look at the reports from the Special Advisory Authority they will find that usually the recommendation is for protection.
– Pretty meagre, too.
– They are still recommendations for protection and place a further imposition on the people who buy the goods. The price increases whether or not the added protection is meagre and people have to pay that increased price. When the time comes for the Tariff Board -to conduct a full inquiry we find that the industry delays presenting evidence which would enable the Board to examine the situation and say whether the industry needed support. I am one who agrees with support for industry, especially when the industry has a high labour factor. I would go so far as to support an uneconomic industry if it had a high ratio of employment.
– There should be more points than just that single one.
– The charter of the Tariff Board provides for economic and efficient industries. Many industries remain inefficient because it suits them better not to keep themselves up to date with the latest machinery and techniques available to produce goods. Some of them have been getting protection since the days of the depression. In some cases the protection afforded an industry has not been examined and cannot be examined. It is only the Tariff Board which can initiate an examination through an industry making application for increased protection. That is the only way that references come before the Board.
– Will the honourable senator name one of the industries which is as inefficient as he is trying to suggest?
– The Board has named some.
– Yes, and the reports of the Board are available to honourable senators. I do not intend to delay the Senate very long, but 1 want to say a few words more. I think we must look at this subject in a proper perspective. The Government must take the initiative and see that we have a Tariff Board which is capable and which is willing and able to do the job. We want the Board to function in the most efficient manner. Until that happens we will not be able to say that we have proper protection for industry, proper protection of employment and proper protection of the people who buy the goods. I have found that in many instances the Board has recommended protection for an industry when the purpose of the protection has been to protect profits rather than to protect the industry. It will be found in many instances that shortly after an industry is given increased protection through the imposition of higher tariffs, import restrictions or by some other means, out comes a balance sheet showing increased profits for the year. In many cases we are protecting profits, but we should not be doing that. This is a matter that needs consideration.
What industry coming before the Tariff Board with an application for increased protection will say to the Board that if it receives the protection it is seeking it guarantees that it will not increase the price of the goods that it manufactures and sells? No industry does this. In very many cases it will be found that no sooner is protection given by the Tariff Board than up goes the price of the goods. There is no way to prevent this happening because the Government will not move into the area of price control. These are the things that should be looked at by the Government because it is in ways like this that the people of Australia are being exploited and industries are remaining uneconomic and inefficient. Until such time as the Government takes action in this area we will be paying higher tariffs than we should be paying for the protection of Australian industry.
I want the industries of Australia to grow; I want the industries to employ workers; I want the workers to receive reasonable wages; but I do not want to see tariff protection given merely to protect profits. I do not want tariff protection to be given to industries so that they may lock out competition in order to make greater profits. I do not want to see a situation in which industries apply to the Tariff Board for protection and, no sooner do they get protection than they increase the prices of their products, revealing that they did not require the protection in the first place. I want the Government to take some action against people who make applications to the Tariff Board and then delay for up to 12 months providing the evidence required by the Board. These are some of the complaints that I have with respect to the Tariff Board. I hope that these matters will be rectified in the near future.
– I do not’ propose to spend long on this Bill because the matter in which I am most interested has been adequately covered by Senator Webster. There are a few aspects that I propose to mention because I feel that there are some matters which are very dangerous to our economy’ and of particular concern to our cherry growing industry, quite apart from industries engaged in the glazing and crystallising of cherries. First I should like to refer to a ministerial statement on tariff policy by the Minister for Trade and Industry (Mr Anthony) from which we can get to the, crux of this matter. I presume that his statement was in response to the clamour which has been going on in country areas for the removal of tariffs in manufacturing industries because of their harmful effect on the price structure and because those engaged in primary production cannot see that their own interests are being properly protected. I do not propose to read the whole statement made by the Minister who, early in his speech, said:
The sector of the economy which benefits most from tariff protection is undoubtedly manufacturing. However, it should not be overlooked that a very wide range of primary industries also receive some measure- of tariff protection.
It is to manufacturing industry in particular, and the role of manufacturing in the Australian economy, that consideration must be given in any appraisal ; of tariff policy. Manufacturing provides’ some 28 per cent of our gross national product and 28 per cent of total employment
That is a statement of fact with which I think everybody will agree. Much later in the Minister’s statement another excellent concept of policy is set but. I am wondering whether the Government has followed the concept which is established in this statement when the Minister says, as reported at page 21.36 of Hansard:
The 2 basic principles of the tariff policy of successive Australian Governments have been, first, that the Government itself is responsible for all decisions, and, second, that before reaching its decisions, the Government seeks the advice of an independent Tariff Board. The Government reaffirms support for both of these basic principles. The independence of the Tariff Board will be preserved.
The first principle of Government responsibility for decision is just as important. The Tariff Board is an advisory body and has never been anything else. The decisions and the responsibility rests with the Government.
All honourable senators would agree with that. Later in his statement the Minister said:
Similarly, there cas be highly significant noneconomic implications which a government must take into account in considering the protection to be afforded an industry. Examples are where factories in decentralised locations provide major employment opportunities, or where an industry has defence significance.
The Government’s responsibility, moreover, is not limited to reaching a judgment as to the relative costs and benefits of providing adequate protection for an industry at a particular point in time. A judgment must be made of the likely balance of costs and benefits in the years ahead. Governments cannot make basic decisions affecting important industries without giving most careful thought to the likely results of those decisions.
– We all agree with that.
– Yes, we would all agree with every concept that is set out in the Minister’s statement. But how many of these concepts have been included in this Bill in relation to the cherry industry?
– The Government gives only lip service to those concepts.
– They were words and not action, because everything that has happened in the sequence of events gives the lie to what appears in the Minister’s statement. Whilst the precepts set out in the statement are excellent they were completely ignored by the Government. I do not mind saying to the Senate that we reached the conclusion that there was nothing more to do with this legislation than to amend it to delete from it the reference to cherries, so returning cherries to the position where the Government should have left them, irrespective of the Tariff Board’s report. It must be realised that nothing can restore the 6c duty that was recently assessed as a necessary addition to the normal tariff that had been operating since 1935 - a decision which was made by the Special Advisory Author’ity after an exhaustive inquiry into the industry and into a set of circumstances which had applied for some time - but which the Tariff Board’s report made null and void.
I am sorry that Senator Wright has left the chamber because I wanted to draw his attention to something. When I interjected when Senator Webster was speaking and referred to the exclusion of fresh cherries he said that it was ridiculous to exclude fresh cherries and include other cherries. Yet the Minister for Civil Aviation (Senator Cotton), in his second reading speech, said:
The Board recommended no change in duties on fresh cherries and removal of duties on drained, glace, crystallised and brined cherries.
Duties to the extent of 47i per cent which had existed since 1935 were wiped out by a decision of the Board. I am not criticising the Board. I agree with the Minister’s assertion that this was the responsibility of the Government. The Board knew, when it made its recommendation which was based on evidence submitted to it, that the Government could review and examine all the implications of the recommendation. The Minister for Trade and Industry, in his statement on tariff policy, said that the Government would examine recommendations before it made decisions that were likely to disrupt an industry. I submit that such an examination could not have taken place with respect to cherries because hardly had the Board’s report been laid on the table when the Government made its decision. It is obvious to anyone who has the slightest interest in this industry that the conclusions which the Board had drawn from some of the evidence submitted to it and, indeed, some of the evidence itself, would not bear serious examination. For that reason the Minister for’ Civil Aviation, in introducing legislation to validate the abolition of duties, in effect, said: ‘We have grave doubts and the matter has been referred back to the Special Advisory Authority. Last February we received a report from the Tariff Board and we rubber stamped it. We are now upset and have sent the question back to the Special Advisory Authority’. I do not know whether that was all that the Government could do if it realised it had made a mistake. I do not know whether the Government should have accepted the responsibility and restored the situation to make it possible for these industries to survive.
I advert to the statement on tariff policy which was made by the Minister for Trade and Industry, particularly as it related to manufacturing industries. It is a wrong philosophy for us to consider that in Australia a person must be producing shoes or hats to be regarded as a manufacturing industry. After all, in the manufacture of shoes the hides of beasts that are slaughtered mainly in Australia are converted to leather and, through the application- of labour, are made into shoes. Is there a great difference in transferring a fresh cherry to a glace cherry? This is a manufacturing industry which- is perhaps more closely allied to primary’ industry than other manufacturing industries, yet this is one of the manufacturing industries about which the Minister spoke in his statement on tariff policy. If the Government is wise it will do everything in its power to foster industries which are subsidiary to primary industry because they could be the salvation of our gradually deteriorating country towns. ‘
This recommendation of the Tariff Board was approved by the. Government. The Tariff Board did its job as it saw it, but the Government is charged with the responsibilities outlined by the Minister and it did. not take into consideration that the growers’ co-operative at Silvan in Victoria had just established an entirely new plant at a cost of $70,000 and had not brined a cherry before the duties, which had existed for 35 years and which it naturally assumed would continue after the plant had been completed and cherries were being processed, were removed and the whole structure of the industry was completely altered as the co-operative had envisaged it when it constructed the plant to process the growers’ cherries.
– About 2,000 tons of sugar were involved.
– Yes. The sugar requirement is endangered because the Government’s decision will affect not only cherry growers in South Australia, New South Wales and Victoria but also the Queensland sugar industry, which is an essential part of Australia’s economy. This was a bad decision. It was not a decision of the Tariff Board but of the Government which adopted a practice which the Minister for Trade and Industry said was undesirable. The Government adopted a practice whereby it says, in effect, that if the Tariff Board makes a recommendation that recommendation must immediately become law and the Government must rubber stamp it without making any further inquiries. That that practice is dangerous is clearly established by ‘the results in this particular industry.
It must be borne in mind that in this industry, as in any other industry, there are specialised problems.’ The cherries that are preserved by the’ various means of brining, glazing and draining are cherries which’ are produced through the crosspollination of dark or red cherries, which are the most popular cherries for fresh fruit consumption, and the light or white cherries. In the past dark ‘cherries had not been regarded as suitable for canning purposes but it has been found that if picked at an early stage they can be canned. It is impossible to sell light or White cherries on the fresh fruit market unless the price is so reduced that they seem attractive when compared with the dark cherries which normally go to the fresh fruit market. The Tariff Board apparently considered that the white cherries, which are a necessary adjunct to the whole cherry industry, might be disposed of partially through the fresh fruit market and partially in what are known as multi-fruit packs- a sort of fruit salad arrangement. This was to be done by the Shepparton Preserving Company which, a year ago, said it would process every pear that growers could grow. Then, as we saw here the other day, that company was so unbusinesslike that it needed a loan of some $4m to keep it afloat temporarily and, we hope, to solve ultimately the problems in which it has become involved. The potential for processing cherries into fresh fruit packs at present is practically non-existent. Yet it was on such bases as these that the evidence submitted to the Board caused the Board to make a report to the Government which resulted in this Bill being before us today for validation.
The Democratic Labor Party will vote for the validation of this Bill because there is no alternative in the interests of the cherry growers. We hope that the Special Advisory Authority to which the Government has now referred the matter will be extremely rapid in making a decision on it. We would not join with anybody in interfering with the independence of either the Tariff Board or the Special Advisory Authority. We can only wait and see what will be the outcome of the inquiry by the Special Advisory Authority. It would seem from the report that the Authority submitted only about 12 months or so ago that there is not much doubt that he will recommend that the industry again should be protected along the lines he recommended on previous occasions.
I join with Senator Webster in urging the Government and the Minister responsible to give us some reassurance that the industry will be protected. I point out to the Minister that temporary alleviation of the problem of the growers and the processors is completely inadequate. Processors of cherries want to know what the market price is likely to be, not now or in the next 3 or 6 months but in 1 or 2 years time. They want to know what permanent rate of protection they are likely to get against surplus cherries grown in other countries flooding the market here duty free. I suggest to the Minister, as did Senator Webster, that he assure the Senate that the Government will give very special attention to the requirements of and protection for this industry so that cherry growers can take immediate worthwhile steps to retrieve themselves from the unenviable situation they have been forced into since February this year when the duties were removed. I commend that action to the Government. We will support the Bill.
– I loo pin my faith on the outcome of the reference to the Special Advisory Authority for the future wellbeing of the cherry industry. In referring to that section of the Customs Tariff Bill relating to the cherry industry, I express my deep concern about its inevitable deleterious impact on the cherry growing industry unless the recommendations for the removal of duties on drained, glace, crystallised and brined cherries are so varied as to again provide the protection which the industry has enjoyed and has required for a considerable period. Adoption of this recommen dation means the removal of the present duties of 42.5c per gallon on brined cherries and 47i per cent ad valorem on drained cherries, as well as the existing temporary duty of 6c per pound on fresh cherries.
The crux of this matter is that the cherry growing industry, quite a precarious one in the horticultural sector of our rural interests, has about 85 per cent of its production sold as fresh fruit. The remainder of the crop must find a home somewhere else otherwise there is a glut of fresh fruit on the market which would have such adverse effects on the industry as possibly to’ prevent its continuance as a viable industry. Removal of this protection for the balance of production and allowing brined cherries to be imported duty free would do away with the safety valve, as it were, which controls excess production. This’ really would jeopardise the whole industry. I do not wish to go into the details of the industry because Senator Webster covered it very well. I concur with what he said about it. At this stage I feel that the Ninth Schedule of the Bill should not be accepted. It is in the best interests of the economy generally, and the’ cherry growing industry particularly, that we stress to the Minister for Trade and Industry (Mr Anthony), firstly, that every consideration be given to the great importance of retaining the cherry industry in a viable position by ensuring that it has reasonable protection, and secondly, that an opening should be left to the industry for cherries surplus to fresh fruit consumption to be used for brining, crystallising and glazing. Some varieties of cherries are not sought after so keenly as are fresh fruit but those varieties are best suited for glazing and crystallising.
I support the Bill. I look forward to receiving from the Minister the assurance requested by Senator Webster and Senator Little. I commend the Minister for Trade and Industry for referring this matter to the Special Advisory Authority in the light of what happened after acceptance of the recommendation of the Tariff Board. I want to read to the Senate a reply by the Minister for Trade and Industry to a question asked on 22nd April in another place. He was referring to the cherry industry and the problems confronting it arising from non-protection of this sector to which I have been directing my remarks. He said, inter alia:
Because of many representations from the industry and from honourable members … my Department arranged for a consultation between the growers, the briners, the canners and the processors to see whether there was a likely alternative market for these cherries in 1971. Negotiations between the briners and the processors up to this date show that the potential market is very doubtful.
This is the very point made so forcibly to me some months ago by those engaged in the industry.
– What date was that?
– The Minister said this on 22nd April.
– That was the date that this matter was referred to the Special Advisory Authority.
– That is right. It means that 30 days from that date we should have the determination of the Special Advisory Authority. In replying to this question the Minister also said:
As a result of this information I referred this matter this morning to the Special Advisory Authority for further advice.
The matter having been referred to the Authority, it is obliged to make a report to me within 30 days.
So, on the 22nd of this month, we can expect to have knowledge of the determination. Without presuming any decision which could be made, I hope that the determination will be such as to enable the cherry industry to continue as a viable industry.
– I seek leave to make my remarks at a later stage, Mr Acting Deputy President.
Leave granted; debate adjourned.
– I wish to move a motion concerning the report of the Committee of Privileges.
– Mr Deputy President, as this is such an important matter and some honourable senators are engaged in their offices could the forms of the House be used to bring them into the chamber?
Senator. Sir KENNETH ANDERSONI am in the hands of the Senate.
The DEPUTY PRESIDENT (Senator Bull) - Is it the wish of the Senate that the bells be rung? There being no objection, I order the ringing of the bells. (The bells having been rung)
Motion (by Senator Sir Kenneth Anderson) agreed to:
Motion (by Senator Branson) - by leave - agreed to:
That so much of the Standing Orders be suspended as would prevent Senator Branson moving a motion relating to the matters reported upon by the Committee of Privileges.
Motion (by Senator Branson) proposed:
That the Committee of Privileges inquire into and report upon the maner in which the ‘Sunday Review’ and the ‘Sunday Australian’ obtained and published the information upon which was based the articles which were referred to the Committee and which have been found to be a breach of privilege.
Motion (by Senator Sir Kenneth Anderson) proposed:
That the debate be now adjourned.
The DEPUTY PRESIDENT (Senator Bull)- The question is that the debate be now adjourned.
The DEPUTY PRESIDENT- Order! I will put Senator Sir Kenneth Anderson’s motion. All those of that opinion say ‘aye’; to the contrary ‘no*.
The DEPUTY PRESIDENT- The ‘ayes’ have it.
Motion (by Senator Branson) proposed:
That the adjourned debate be made an order of the day for a later hour of the day.
Motion (by Senator Sir Kenneth Anderson) proposed:
That the adjourned debate be made an order of the day for the next day of sitting.
(4.50) - In view of Senator Branson’s motion, I will have to withdraw my motion and move an amendment. I move:
The DEPUTY PRESIDENT - The question is that the amendment moved by Senator Sir Kenneth Anderson be agreed to. All those of that opinion say ‘aye’; to the contrary ‘no’.
The DEPUTY PRESIDENT-I think the ‘ayes’ have it.
– No, the ‘noes’ have it. I demand a division, Sir. There were 2 voices calling ‘no’.
The DEPUTY PRESIDENT - I will put the question again. The question is that the amendment moved by Senator Sir Kenneth Anderson be agreed to. All those of that opinion say ‘aye’; to the contrary ‘no’.
– As there were 2 voices calling ‘no’, Sir, I demand a division. If the Senate does not want to inquire into what is happening it is just too bad.
The DEPUTY PRESIDENT- Two voices are sufficient. Ring the bells.
– It will go over to the next day of sitting, senator.
– Yes, and we know what will happen to that. It will go to the bottom of the notice paper. (The bells having been rung.)
The DEPUTY PRESIDENT- With the concurrence of the Senate, I put the question that the amendment moved by Senator Sir Kenneth Anderson be agreed to.
-I thought I moved that the debate be made an order of the day for a later hour of the day.
The DEPUTY PRESIDENT - That is the motion, Senator Branson. I am putting the amendment. I appoint Senator Withers as teller for the ‘ayes’ and Senator Byrne as teller for the ‘noes’.
The Senate divided. (The Deputy President- Senator Bull)
Majority . . . . 35
Question so resolved in the affirmative.
Original question as amended resolved in the affirmative.
– Mr Deputy President, by general agreement the Customs Tariff Bill 1971 and the Customs Tariff Validation Bill 1971 are being taken together. We understand that the Australian Labor Party wishes to oppose the Customs Tariff Bill but there is no disagreement on the Customs Tariff Validation Bill. The Minister for Trade and Industry (Mr Anthony) in his second reading speech on the Customs Tariff Bill really covered all the aspects of the Bill.
Additional valued reading is the ministerial statement on tariff policy made in the House of Representatives last month by the Minister for Trade and Industry and also made in the Senate.
I would like to make one or two comments before we proceed to a vote. Senator O’Byrne made the comment that the Tariff Board consisted of very capable men but it could well stand amongst its membership someone from the trade union movement or the work force in general. Members of the Tariff Board are appointed by the Government and it is open to organisations of any kind to forward names for consideration for appointment to the Board. The trade union movement is quite capable of doing, this if it wishes to do so. Senator O’Byrne also suggested that the Parliament could stand more details being given to it. I observe the pile of information, Tariff Board reports and the detail which has already come forward in connection with this Bill and I rather shudder at the prospect of the Parliament getting much more detail to handle in an already fairly heavily detailed world. Senator O’Byrne said that the Labor Party will oppose all tariff measures until the procedures of the Tariff Board are reviewed. As I have said, the Minister for Trade and Industry has indicated a very substantial change of attitude and development of attitude m regard to the Tariff Board. That in itself should give assurance to honourable senators of the Government’s attitude towards the present situation.
Senator Webster covered very adequately the area of. tariffs generally and sought certain assurances from the Minister through me. As he and all honourable senators would understand these related substantially to the Ninth Schedule dealing with cherries. Other honourable senators have equally dealt with this subject. I can give to the Senate on behalf of the Minister for Trade and Industry only such assurances as he permits me to give and I shall make a brief comment on cherries, which has come from that Minister.
The Government accepted the Tariff Board’s report on cherries in the light of the Board’s view that there were alternative new markets for local brined cherries and that there seemed to be a reasonable possibility that the brining of cherries in
Australia could continue to be a successful operation. In accepting the report, the Government did however undertake to maintain a close watch on the marketing situation during 1971 and to reconsider the question of the protection of the cherry industry, as a matter of urgency, if alternative markets for brined cherries could not be found. The Minister for Trade and Industry asked his Department to meet with the various industry sectors - namely, the growers, briners, processors and canners - to discuss the report and future market prospects for fresh and brined cherries. These discussions and the negotiations between briners and other potential users of brined cherries raised doubts as to whether sizeable alternative outlets were available in 1971 or indeed in the immediately following years. In light of this information and the pressing need of the industry to clear stocks of brined cherries before the next harvest in November, the Minister for Trade and Industry referred brined and drained cherries to the Special Advisory Authority on 22nd April 1971. The Special Advisory Authority must report back to the Minister within 30 days of his receipt of the reference.
Honourable senators may ask why did the Government not reject the Tariff Board’s report originally and leave the duties as they were. There were two major reasons why the Government adopted the Board’s report. Firstly, the duties on drained cherries at the time of receipt of the report included a temporary duty of 6c per pound. The Government considered that the drainers, in light of their evidence before the Special Advisory Authority in 1969 and the Tariff Board in 1970, could not operate profitably without this temporary protection and therefore would discontinue purchasing brined cherries. The Tariff Board Act provides that temporary protection must lapse 3 months after the Minister receives the Tariff Board report. The temporary duty of 6c per pound would therefore have lapsed on 3rd March whether the Government accepted or rejected the report. Subsequent discussions with the drainers confirmed the Government’s belief that they would not have continued to buy local brined cherries for processing once the temporary protection had been removed.
The second reason why the Government adopted the report was that it would have been illogical and not in line with normal Government policy for the Government to have rejected the Boards judgment that an alternative market for brined cherries did exist in multi-fruit packs without first allowing the report to stand the test of time. In conclusion, the rejection of the report would not have assisted nor will it now assist the cherry growing industry. Rather the only real way in which the industry could be assisted is the way in which the Government has acted, to accept the report, test its findings and then to refer the matter to the Special Advisory Authority. The industry has accepted that the Special Advisory Authority procedures invoked by the Government present the most appropriate course for solving its problems. The report of the Special’ Advisory Authority can be acted on by the Government immediately upon its receipt and must also be tabled in the Parliament within 7 days of the resumption of Parliament. The Senate can be assured that in the light of the comments that have been made here all future reports on the industry will receive the closest scrutiny and consideration by the Government and will be conveyed, as will the whole of the Senate Hansard report, to the responsible Minister.
Senator Kane dealt with liquid petroleum gas, or LPG. His remarks were noted. They will be referred to the appropriate Minister, as will the remarks of Senator Cant. It will be appreciated, I think, that the matters raised were not within the general terms of the Bill but I thought that, in the spirit of the way we are trying to get through our work, I should accept these comments and just let them be sent on. Senator Cant said that the Tariff Board needs to be given more staff. The proposals for additional staff for the Board can be seen in the ministerial statement on tariff policy. The honourable senator also referred to discussions in Senate Estimates Committee D. I well recall the comments made and the discussion with Mr Robinson. As Senator Cant will understand, those views were communicated to the responsible Minister within a day of the Senate Committee hearing.
Senator Laucke referred to the report of the Special Advisory Authority in this mat ter, with whichI fully agree. I do not think that I can say anything more except that if I have referred to some honourable senators by name and not others, this is not meant in any way to be neglectful. It is just that the general area of debate has been fully covered. The question of the cherries has been dealt with by me. With that comment, I think we should now vote on the Bill.
That the Bill be now read a second time.
The Senate divided. (The Deputy President - Senator Bull)
Majority …… 6
Question so resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 5 May (vide page 1394), on motion by Senator Cotton:
That the Bill be now read a second time.
– It was agreed that the Customs Tariff Bill and the Customs Tariff Validation Bill be debated concurrently. Therefore the Opposition does not oppose the motion.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without requests or debate.
Debate resumed from 6 May (vide page 1467), on motion by Senator Cotton:
That the Bill be now read a second time.
– I. ask for leave to speak on the arrangement of the business.
The DEPUTY PRESIDENT (Senator Bull) - Is leave granted? There being no objection, leave is granted.
– I suggest that the Senate debate concurrently the Loan (Farmers’ Debt Adjustment) Bill 1971, the States Grants (Rural Reconstruction) Bill 1971 and notice of motion No. 4 of the Business of the Senate which reads:
That these be referred to the Standing Committee on Primary and Secondary Industry and Trade the following matter - Measures to alleviate the cost price squeeze on primary producers and to overcome the plight of the primary industries.
At the end of the debate I suggest that the votes be taken separately on the Bills and any amendments that may be moved, and that after disposal of the Bills a simple vote be taken on the notice of motion. Honourable senators would be entitled to speak on any of the 3 matters during the debate.
– I seek leave to raise a matter.
The DEPUTY PRESIDENT- Is there any objection? There being no objection, leave is granted.
– I raise one query in relation to which I ask for your ruling, Mr Deputy President.
– I rise to order. Honourable senators in this corner of the chamber are constantly disadvantaged. Conversations take place across the table in low tones which we cannot hear. Sometimes even when voices are raised we do not hear. We do not really know what the arrangements are and are constantly asking what is going on. I would ask the Minister and Senator Murphy to do their best to accommodate us in this regard. Apparently it is not easy for them with the public address system as it is.
The DEPUTY PRESIDENT- The suggestion is that orders of the day Nos 5 and 6 and notice of motion No. 4 in the name of Senator Murphy be taken together and voted on separately.
– Use your diaphragm; you know what that is.
– Do you not want to hear? If you kept quiet you could hear. I am quite willing to take the 2 Bills and notice of motion No. 4 together, but I understood that notice of motion No. 4 this morning was put on the notice paper for the next day of sitting.
Suspension of Standing Orders
Motion (by Senator Murphy) - by leave - agreed to:
That so much of the Standing Orders be suspended and so much of any other order of the Senate be varied as would prevent the debate on Government Business, Orders of the Day Nos 5 and 6 and Business of the Senate Notice of Motion No. 4 being dealt with concurrently and at the end of the debate, votes being taken on each separately.
– After that momentary excitement perhaps we can get down to the business of the day now that we are taking the 3 matters together. I propose to deal with the States Grants (Rural Reconstruction) Bill and the Loan (Farmers’ Debt Adjustment) Bill. I have no doubt that other speakers will deal with notice of motion No. 4 which appears in the name of Senator Murphy. There will be no difficulty as far as orders of the day No. 5 and No. 6 are concerned and I shall first deal very quickly with the Loan (Farmers’ Debt Adjustment) Bill. The intention of this Bill is that grants that have been made available to the States in the past for farmers’ debt adjustment and which are at the present moment unused should be made available for use in the new scheme of the States Grants (Rural Reconstruction) Bill. I think this is all that is involved in this Bill. It is necessary because certain guidelines were laid down in the operation of this Bill which would have to be varied in order to make them applicable to the operation of the States Grants (Rural Reconstruction) Bill which I consider to be one of the most important Bills that we have had before us this session. It is a tragedy that it has had to wait until possibly the last day or two of the session for consideration because it is an extremely important Bill. The primary producers throughout Australia have been looking to the Government for some time to provide some way in which they can be assisted in their extremely parlous situation. I want to draw attention to a statement made by the Minister in his second reading speech. He said:
There seems no escape from the unpalatable fact that there will have to be a substantial restructuring of our rural industries.
He went on to say:
The rural reconstruction scheme provides for assistance by way of debt reconstuction, farm build-up, and rehabilitation of those obliged to leave the industry where this is necessary to alleviate conditions of personal hardship. A complementary scheme to provide retraining assistance to farmers obligated to leave the industry is being formulated by the Department of Labour and National Service and the Department of Primary Industry in consultation with State authorities. Details of this scheme will be announced as soon as practicable.
I shall go through this Bill in order to show that this is a most unfortunate way of dealing with the problem of the primary producer in Australia at the present time.
It will be seen that if this amendment which I have proposed is agreed to by the Senate, the House of Representatives will have to be recalled. It is with a full appreciation of this important fact that I am putting forward the amendment. I now wish to go through the provisions of the Bill and the Schedule in order to substantiate the reasons for proposing this amendment. It will be seen that the Bill consists of only 4 clauses. Clauses 3 and 4 are the most important from our point of view. Clause 3 states:
The execution, on behalf of the Commonwealth, of an agreement between the Commonwealth and all or any of the States substantially in accordance with the form set out in the Schedule to this Act ‘is approved.
There is a reference there to the Schedule. Clause 4 states:
The payments by the Commonwealth to a State provided for in the agreement referred to in the last preceding section may be made to that State, by way of financial assistance, on the terms and conditions contained in that agreement, out of the Consolidated Revenue Fund which is appropriated accordingly.
Those are the relevant clauses of the Bill. They provide the authority for the conditions and arrangements set out in the Schedule.
I propose’ now to turn to . the Schedule. Part I deals with the agreement being made with the various States and contains introductory remarks on the operation of the agreement, the purposes of the agreement and its interpretation. Part II deals with the administration of the scheme. We have no objection to paragraphs 4, 5 - and 6 because they are only explanatory in dealing with the rest of the Bill. When, we come down to paragraph 7 we begin to see some of the matters that we will be bringing forward in support of our amendment. At this point I want to direct the attention of the Senate to paragraph 7 because it shows how we. are going to bring the operation of the Loan (Farmers’ Debt Adjustment) Act 1935-1950 into the operation of this Bill. Paragraph 7 reads:
Where funds … are capable of being used for a form of assistance included in the Scheme -
That is the scheme which, has now been put forward - those funds shall be used by the State for that form of assistance- honourable senators should note this next phrase which I think is tremendously important - before any financial assistance is . provided by the Commonwealth under this agreement for that purpose.
Later as we go through this Schedule we shall be finding out that an amount of Si 00m is available under the scheme over a period of 4 years, but none of this money will be available to a State at any time until it has exhausted the funds which it holds under the Loan (Farmers’ Debt Adjustment) Act. This money has to be expended before there is any possibility of drawing on the fund.
If we look at paragraph 8 we find set put the rates of interest that will apply. It nas generally ‘been accepted that Commonwealth grants would be made to the States for the operation of this scheme, but later in the Schedule we find that $75m of the amount offered to the States will be repayable and will carry a rate of interest during the period of repayment. Only $25m will be in the form of a grant from the Commonwealth to the States. The States must lend the money to primary producers under 2 schemes. If the loan is for debt reconstruction the rate of interest must be not less than 4 per cent per annum. If it is for farm build-up the rate of interest must be not less than 6± per cent per annum. These rates of interest are pretty high when we realise that the money in the first place has been obtained by the Government largely from income tax, customs and excise duties and so on. But the Commonwealth is going to charge interest on the amount of money which it is making available to the various States for this scheme.
Part III of the Schedule deals with financial assistance. In this part the amount of $10Om which is being made available to the States is mentioned, and the allocations to the various States are set out in paragraph 12. We see that New South Wales will receive $32m, Victoria $22,070,000, Queensland $16m, South Australia $12m, Western Australia $14,630,000, and Tasmania $3,300,000. I want to emphasise that this amount which will be made available to the States after they have met the requirements of the previous agreement, that all funds under the Loan (Farmers’ Debt Adjustment) Act must have been exhausted, is available only over 4 years. So to take the case of Western Australia, the amount of $14,630,000 will be paid at the rate of $3,500,000 per year, of which 75 per cent has to be repaid and only 25 per cent is a gift to the State. However, the State will charge interest for the use of the money.
The situation with which we are faced in Australia is seen very dramatically in an extract from yesterday’s ‘West Australian’. In that newspaper appears a report from the Bureau of Agricultural
Economics in which it is pointed out that farm income will fall by about $140m this year. The Bureau thinks that farm income in 1970-71 will total $890m compared with $l,032m last financial year. In its quarterly review of agricultural economics the Bureau said that farm income reached a peak of $ 1,431m in 1963- 64. The number of farms involved in the case of wool producers solely is about 92,000. The fact that their income is dropping so much shows how badly off they are. Most of the wool growers on the large properties are not feeling so badly the pinch caused by the low price of wool, but the majority of growers - about 80,000 - are feeling its effects. When we take the wool growers alone in relation to the operation of this scheme, . an average of about $1,000 would be required for each producer to get him out of trouble. That would be the case if we gave this money to all of them but, of course, if we go a little further in the Schedule we find that it will not be given to all of them. At this stage I do not wish to repeat points which have been made in relation to the financial assistance set out in the Schedule. 1 want to turn to the Schedule, Rural Reconstruction, Outline of Proposals, Part 1, General Principles. It deals with the distribution of the funds that are available to the farmers who believe that they are in need. One of the tragedies of this scheme is that the people who are really in need will get no assistance at all. In Western Australia about 3,500 farmers are leaving their properties and about another 3,000 are on the verge of leaving. They are going because their properties are not viable propositions in the terms required in this Schedule to qualify for assistance. The general principle is to distribute the available resources as widely as practicable, but the overriding objective is te help to restore the economic viability of farms which have the capacity to maintain viability once it is achieved. That means that many farmers who are in difficulties will not be able successfully to apply for assistance.
There is one way in which they can receive some assistance. Paragraph (g) provides that if the Authority agrees to a property being purchased by a neighbour, and the neighbour can turn it into a viable proposition, the Authority will consider assisting the neighbour to buy that property. In that way the neighbour will enlarge his own property, but the seller would get some assistance from’ the sale of his property. That is about the only way in which a farmer so situated, so far as I can see, can get any assistance from the scheme. It is extremely difficult for such people to improve their position’ in any way, even to live. Part II relates to debt reconstruction. I am covering these points rather rapidly because of time limitations. The purpose of debt reconstruction is to help farmers who have sound prospects of achieving economic viability but are prevented from doing so’ by their current debts. They may have used up all their cash and credit resources. This provision would enable them by loans to get back on to their feet, with a reasonable prospect of success.
I want to emphasise that each type of assistance to be provided to farmers under this scheme involves a loan on which interest has to be paid as well as the repayments of the loan. There is no provision for grants or the writing off of debts. In order to receive assistance a farmer must accept the responsibility of paying off a loan, together with interest. I think we should examine the nature of the assistance that is to be provided. This is dealt with in paragraph (3) of part II, which deals with debt reconstruction. It states:
The assistance to be provided may encompass where necessary -
a rearrangement and/or a composition of debts to allow more time for payment
This is quite a reasonable provision, but again assistance is to be given by a loan to take over the composite of a farmer’s indebtedness. He still has to pay off the loan. It goes on:
That is fair enough. It then provides:
The problem of farmers is that they are not wanting money just to carry on and then to pay it back. They have no income and they require assistance without the need to pay money back at this stage. They want to see their way clear to a return to a viable condition without further indebtedness on their shoulders. The Schedule then provides:
This is a good point. I agree that it is worthwhile but it does not outweigh the other difficulties which arise - from the Schedule.. The provisions will not be of considerable benefit to the . farmers who really need assistance. I turn now ;to paragraph 4 (d), which provides: , ,
In. exceptional cases, advances, tor’ carry-on expenses and live stock may, be made ;to..a farmer who is not .yet in immediate danger of losing property or other assets but who ‘in the opinion of the Authority is likely to ‘reach that position without such assistance, such, cases being tested strictly against the remaining eligibility criteria.
Even that provision is not definite: A farmer really has to work to get any assistance under this scheme even though he may be in very serious difficulties. It is necessary to establish whether the granting of assistance to him would place him in a viable situation. Part III of the Schedule deals with farm build-up and the test of eligibility. Paragraph (3) (a) provides that the purchaser of an adjoining holding or part of an adjoining holding may receive assistance at an interest rate of not less than 6i per cent, if eligibility for assistance is established. The only ameliorating circumstance is that the scheme will allow the cost of improvements on a property that has been taken over to be wiped off. That is about the only way in which there can be real assistance from the scheme; that is, where a person receiving assistance does not have to repay a loan. Paragraph 3 (b) provides that assistance can include:
Grants at the discretion of the Authority to cover, in whole or in part, losses sustained in the disposal of assets included in the purchase price of the property, which are not useful for the build-up property.
Paragraph 4 relates to the method of operation and contains some very important provisions. It is still made very difficult for a farmer to obtain assistance, particularly one who intends to leave the industry.
Paragraph (4) (a) relates to assistance in respect of a farmer who has a neighbour who is willing to buy his property. As far as I can understand these provisoins that is about the only way that a farmer can get out of his property under this scheme. Paragraph 4 (i) states:
While any advances by the Authority in respect of a built-up property remain unpaid, the transfer of part of the built-up property will not be permitted if this would result in a property of a size too small to be economic.
We are dealing with the situation in which a primary producer will try to obtain some assistance to make his own property viable or to amalgamate his property with another property, either to make his property larger ot to make the adjoining property larger and leave his own property.
The last section in the Bill is Part IV which deals with the question of rehabilitation. I cannot understand why this section was drafted in such ridiculous terms. The important point is that where a property is taken from a person and that person is left with no property, under the scheme he will be able to obtain a loannot a gift- of $1,000. He will have to repay the loan, including interest. He will receive this loan possibly so that he can move his furniture or arrange for the sale of his goods or conduct some minor financial transaction. That is all he will be able to do with a loan of $1,000. Because of the difficulties which the introduction of the scheme will create for farmers who really need assistance, we really have to have a careful look at the position of primary industry in Australia.
The terms of the Bill are evidence of the fact that the Bill has been introduced in a hurry. It has not been adequately considered. It is for this reason that the Opposi-^ lion believes that the only way in which we can satisfactorily deal with the situation is to withdraw the Bill and have it redrafted to ensure that more adequate attention is given to the problems facing the primary producer. I know that if our amendment were carried it would mean that the introduction of the scheme would be delayed for a certain period, but it would not be for very long. I must emphasise that the introduction of the scheme will be delayed because of the unexpended funds held under the farmers’ debt adjustment scheme. If this Bill were assented to tomorrow the scheme could not come into operation until those funds were expended. So it seems reasonable that we should introduce the following amendment. I move:
Leave out all words after ‘That’, insert - the Bill be withdrawn in order that the Agreement between the Commonwealth and the States be amended to make provision for more detailed criteria on eligibility and to ensure that every bona fide producer, within an acceptable means test, is eligible to receive assistance which will enable persons:
to remain in primary production where it is considered, on technical and economic evidence available, that financial viability can be achieved within a reasonable time;
to move out of primary production where it is considered, on technical and economic evidence available, that financial viability cannot be achieved within a reasonable time;
to participate, with their ‘family, in a fully co-ordinated rehabilitation programme including technical college education or at least its equivalent.’ .
I think that this amendment indicates the main purpose of the scheme in terms clearer than those contained in the Bill. It is very important that this matter should be seriously considered on the evidence available, taking into account the limitations, which are contained in the Schedule. We ought to ensure that the scheme extends as far as I think the Government wants it to extend. There will be difficulties in the operation of the scheme. It would be of value to all concerned, including the primary producers of this country, if the Senate were to accept the amendment which I have moved.
The ACTING DEPUTY PRESIDENT (Senator Davidson) - Is the amendment seconded?
– I second the amendment.
– The Australian Democratic Labor Party will support the Bill and it will oppose and vote against the amendment moved by Senator Wilkinson on behalf of the Australian Labor Party. I give notice that at the appropriate stage I shall move the following amendment:
At the end of motion add - , but the Senate ls of the opinion that there should be constituted an expert Commission ot Inquiry into the whole structure of the Rural Economy which would examine its importance, its role and its function in the Australian economy, and in particular examine the following subjects:
Expected export demand for Australian rural products, taking into account:
the policies of the European Economic Community;
the possibility of Australian associate membership of EEC;
reciprocal trading agreements on the basis of securing constant markets for rural production by tariff concessions to consumer countries exporting secondary products to Australia (Japan in particular);
the possibility of a South East Asian Community;
Rural producers’ costs, taking into account:
the Australian tariff;
government policies and other factors tending to raise costs in Australia;
incidence of railway freights on rural producers (in comparison with urban charges);
the wage structure of the rural economy;
Financial structure required to support necessary changes and the service and finance for such purpose.
Policy, taking into account:
whether there is a case for permanent or temporary subsidies from the urban to the rural sector;
whether any aggregation or reorganisation of present rural holdings is necessary, and if so, whether it should be achieved by independent action by rural producers, or through governmentassisted schemes;
expected future rural labour force required;
rural education including re-training for any fanners facing displacement;
establishment of decentralised industrial towns which would offer employment within that region.’
A great deal of information concerning rural industries is already available in the various State agriculture departments and in the Commonwealth Bureau of Agricultural Economics. But all of this information ought to be pooled with that obtained by the committee of inquiry which we propose in order to formulate future policies. There can be no doubt about the urgency of this matter nor about our reasons for opposing the Labor Party’s amendment. I draw the attention of the Senate to some of the matters raised by the Minister for Air (Senator Drake-Brockman) in his second reading speech. He said:
The industry is. in a critical position and a particularly critical situation in the immediate short term.
I suggest to Senator Wilkinson, who moved the Labor Party’s amendment, that he should consider the effect that the carrying of the amendment would have, having regard to the critical situation in which the industry is at present. It would mean the withdrawal of this Bill and the immediate cessation of any assistance to those in the industry.
– I admitted that. You did not hear.
– I am reminding you that that is one of the reasons for our refusal to support the proposed amendment. There can be no doubt that the Australian farming community is in a state of acute and chronic crisis. Bold policies are needed. Bold policies must be devised to cope with this problem, which is a major one for the nation as a whole. The present situation is not so much a problem for the national economy as it is a social catastrophe. There are approximately 500,000 people working in agriculture and perhaps as many again dependent for their livelihood on the purchases made by agricultural producers. They are mainly people in country towns who provide the farming areas with the multitude of services that farmers require to carry on their businesses. Virtually one million Australians are in trouble.
The main problem is fairly clear. It seems that the market for most of Australian primary products is steadily collapsing. In the case of wool, to which the Minister referred in his second reading speech, its competitive position has been eroded by synthetic fibres, and high advertising expenditure plus takeovers of textile firms have switched large segments of the world’s fibre market to synthetics. Another factor is that in Europe and the United States of America lighter fibres have become more fashionable. Perhaps this is because of the introduction of central heating on a wide scale in advanced countries and because of the substitution of motor cars for public transport.
– What about the introduction of mini skirts?
– That could be one factor. There also is a lesser need for heavy clothing. What is more, by improved methods and with larger manufacturing plants scientists have been able to continue reducing the prices of synthetic fibres each year. The inevitable result has been the gradual and occasional sensational collapse in the demand for wool and in wool prices. In the case of wheat, technology is the villain again. India and Pakistan used to import large quantities of wheat each year to meet their food needs. In some years those countries imported from North America more than 4 times the total Australian production, but agricultural scientists developed new strains of wheat and rice which yielded far greater quantities of grain. After about 3 years, the so-called green revolution has go those countries close to self sufficiency in food production, and has eliminated a major market for export grains.
Sitting suspended from 6 to 8 p.m.
General Business taking precedence over Government Business after 8 p.m.
Debate resumed from 29 April (vide page 1120), on motion by Senator Murphy:
That a message be sent to the House of Representatives communicating to that House the resolution agreed to by the Senate on 16th March 1971 in connection with the second reading of the New South Wales Grant (Flood Mitigation) Bill 1971.
(8.0) - This motion relates to an addendum to the motion for the second reading of the New South Wales Grant (Flood Mitigation) Bill which was carried by the Opposition parties voting for it. The motion merely says that that resolution be conveyed to the House of Representatives by message. I do not resist it. I suggest that the question be put.
– in reply - Perhaps I should indicate what the addendum was. It was: but the Senate, whilst welcoming the proposal for the purpose of flood mitigation works in New South Wales, is of opinion that the assistance offered is inadequate and should form part of a larger scheme to deal with national disaster and that, accordingly, a joint select committee of the Parliament should be appointed to inquire into the practicability of the establishment of a national disaster organisation.
An amendment to add those words was carried by the Senate. Senator Sir Kenneth Anderson has indicated that he agrees with the proposition that a message be sent to the House of Representatives. It is merely a formal matter, and I am closing the debate on it.
– by leave - I rise merely to indicate the attitude of the Australian Democratic Labor Party. We support this motion-
– You voted for it.
– Yes. We support this motion that a message be sent to the House of Representatives. We have had a policy on this matter, namely, that a national disaster organisation should be set up, with a permanent secretariat at Canberra, to anticipate national disasters and to provide against them. For that reason, we enthusiastically support the motion moved by Senator Murphy.
Question resolved in the affirmative.
Motion (by Senator Sir Kenneth Anderson) agreed to:
That further consideration of General Business be postponed until after consideration of Government Business.
Debate resumed (vide page 1874).
– When the sitting was suspended for dinner I was outlining the Democratic Labor Party’s attitude to this Bill and to the amendment moved on behalf of the Opposition by Senator Wilkinson. I gave notice of my intention to move an amendment to the motion for the second reading of the Bill. In that amendment we will call for an inquiry by a commission of experts into the whole structure of the rural economy. The inquiry would examine the rural economy’s importance, its role and its function in the Australian economy.
– How long do you think that would take?
– Whatever time it might take, I believe that it is absolutely essential. If my friend Senator Webster will bear with me, I think I will be able to convince him in a very short space of time of the necessity for such an inquiry.
– Do you think you will convince the farmers?
– I appreciate the comment made by Senator Cavanagh. We propose an immediate means of dealing with the existing crisis. I ask Senator Cavanagh to be patient. I think he will be satisfied when he hears what I have to say. The commission of inquiry would have to be prepared to examine the role of every rural industry, present and future. It would have to examine the complex economic, social and personal implications of any restructuring of the rural sector. It would have to accept the fact of a rapidly changing national economy in its relation to a changing world economy and new and changing patterns of consumer demand throughout the world, particularly in the developing countries. That does not exhaust the area of inquiry; it merely lists some of the matters for inquiry. Obviously the investigation that we propose can be entrusted only to a body which, in terms of personnel, time, technical knowledge and administrative assistance, is equipped to carry out this immense and vital task. Need I say that we are not proposing an inquiry or a commission of inquiry consisting of parliamentarians.
Before dinner I dealt with wool and wheat. The markets for sugar and cotton also have been saturated by enlarged production overseas. The reality is that the poor countries are striving to increase their export earnings and are promoting the production of large quantities of these and other products. The truth is that the world’s farmers are in trouble because of overproduction. Man’s scientific skills ensure that he has enough to eat. Indeed, they ensure that he produces too much. The great human problem is how to keep production in line with demand and how to cope with the depressing effect of this surplus production on prices and incomes. The West Europeans, for instance, with their peasant farming in the midst of modern manufacturing industry, can afford to give lavish subsidies and provide huge tariff barriers to protect their farmers from foreign competition. To a lesser extent, the Japanese protect their farmers in the same way. In Europe the process of nurturing high cost farmers with subsidies has gone so far that an area which was once a major importer of foodstuffs is now exporting as much as it once imported. Of course, it cannot export on an economic basis because of costs; it dumps its surpluses on the world market for whatever price they will fetch, and the European taxpayers pay the bill. This is another acutely depressing factor in the consideration of the future of Australia’s rural economy which at present is heavily dependent upon markets overseas, especially for wool.
The third bearish factor is that the world demand for most agricultural produce is growing very slowly, if at all. This is because the products of agriculture are rather basic necessities and, as the standard of living rises, spending shifts to the more sophisticated products. Contrary to the illinformed chatter of so many do-gooders, most of the world’s population is now adequately fed and clothed. The truth is that when people get more money they want to spend it on housing, television sets, cars and the like. The cold reality is that the staples - wool, wheat, sugar, butter and cotton - have a very dismal future. Of course there may be temporary booms in the market. There may be a drought in a major grain producing country or there may be a plant disease.
Australia has to devise policies for the rural community based on a cold, pragmatic assessment of the likely future, where the trends are for increasing difficulties in selling and declining prices or growing surpluses. It will do no good to rant at middle men. Certainly selling methods can be improved, but this will not work miracles and affect the fundamental problems. Similarly, it is of no good blaming the textile producers who buy the wool for paying insufficient for it. With the prices for synthetics so low, they must switch to using synthetics if they are forced to pay very much more for wool. The customers will pay for wool products a certain margin over the price of synthetic goods, but woollen goods will not sell if the margin is expanded significantly. As we see it, the
Government’s policies in the past have failed, mainly because they have been directed at supporting particular rural industries. This is an economic approach.
The social approach which is needed looks not at the problems of industries which are largely insoluble but at the problems of the rural people as such. It poses these questions: What are their debts? What are their current incomes? What future do they have if they continue to produce their present products? What, if anything, could be done to make this produce a reasonable income on current trends of prices and costs? What range of alternatives is open for the family? It is for these reasons that we urge the adoption of our proposal for a commission to inquire into the whole rural economy. Earlier in the debate an honourable senator interjected and asked what would happen to the farmer meanwhile. We appreciate that not only must there be a long term approach to the problem but also that there must be a short term approach.
As we are debating the 2 Bills together I take it that I will be in order at this stage in outlining an amendment which I propose to move to the motion for the second reading of the Loan (Farmers’ Debt Adjustment) Bill. I give notice now that I intend to move an amendment to the motion for the second reading of that Bill in these terms:
At end of motion add - but the Senate is of the opinion:
that the most rapid and the most effective emergency relief to the primary producers would be achieved by the Commonwealth establishing a national rural finance corporation outside the banking system; such corporation to be financed by the Commonwealth to fund and re-finance rural debts, making provision for interest free non-redemption periods of the debts so funded;
that such corporation should bc especially structured to the cyclical nature of rural production and should provide outgoing finance by way of low interest loans over a repayment period up to 25 years;
– If that were carried it would be no more than an expression of the Senate’s opinion.
– I think the Government might do well to pay attention to such an expression of opinion.
– It never has.
– I disagree. I remind the honourable senator of the urgency motion that we moved not so long ago in relation to pensions. I think this amendment is worthy of consideration and that if the honourable senator, thinks about it he will be inclined to support our proposal. .
– We can convey this to the Prime Minister ourselves.
– It is true that we did convey to the Prime Minister the proposals contained in our urgency motions, and I am hopeful that those proposals will be effective. I am hopeful - indeed I am sure - that if the Senate supports the proposal we put forward tonight the Government will pay heed to it.
– The honourable senator has more confidence than I have in the Government.
– The Labor Party has moved thousands of resolutions.
– I know, but they have been valid ones.
– Senator Cavanagh will have plenty of time later to take my proposition to pieces. I suggest that he might leave it until then and that, if he has not a better alternative to offer, he might support this proposal. Finally, 1 should like to draw attention to the third part of the proposed amendment. I do not propose to speak on it at length as my colleagues will develop this matter later. In this part of the amendment I propose:
There is no reason for the Commonwealth to be in the field of estate duty - It ought to vacate that field forthwith.
The ACTING DEPUTY PRESIDENT (Senator Laucke) - Order! Is the amendment seconded?
– The amendment has not been moved. Senator Kane has intimated that he proposes to move an amendment to the States Grants (Rural Reconstruction) Bill after the amendment moved by the Australian Labor Party has been discharged or otherwise dealt with. He will then move an amendment to the Loan (Farmers’ Debt Adjustment) Bill when that Bill comes before the Chamber.
– For the sake of emphasis I should like to restate shortly the proposition concerning the rural commission of inquiry that we will submit in the amendment. Among, the things that we would want to be examined by this commission would be the expected export demand for Australian rural products, taking into account the policies of the European Economic Community, the possibility of Australian associate membership of the European Economic Community, and reciprocal trading agreements on the basis of securing constant markets for rural production by tariff concessions for consumer countries exporting secondary products to Australia - Japan in particular - and the possibility of a South East Asian Community.
– What rot.
– I hope that Senator Kennelly will have a better proposition to put forward.
– He would not know the difference.
– No, be would not know.
– We may hear from the honourable senator subsequently.
– It was a lot of waffle yesterday.
– What is wrong with him? Can’t you keep him away from a certain place?
– If the honourable senator will keep quiet for 5 minutes he can then rise and tell us all he knows. It will only take about a minute and a half. The commission of inquiry will examine rural producers’ cost, taking into account the Australian tariff; government policies and other factors tending to raise costs in Australia; the incidence of railway freights on rural producers in comparison with urban charges; road transport; and the wage structure of the rural economy. The inquiry will also consider finance, and investigate the financial structure required to support necessary changes, and the service and finance for such purposes. It will take into account whether there is a case for permanent or temporary subsidies from the urban to the rural sector; whether any aggregation or reorganisation of present rural holdings is necessary and, if so, whether it should be achieved by independent action by rural producers, or through government-assisted schemes; the expected future rural labour force required; rural education, including re-training for any farmers facing displacement; and the establishment of decentralised industrial towns which would offer employment within the region. I shall conclude on that note, and I hope that my detractor on the other side will have something better to offer.
– I was going to say that I welcome the Bill which we are considering but I do not think that we should welcome a Bill of this nature because, having regard to the disastrous circumstances in which primary industry finds itself, there is nothing very much to be cheerful about in what is essentially a salvage operation. While I am not happy about the occasion, I am pleased that the Government has been able to produce a Bill of this sort, having regard to the fact that the Bill is largely the result of consultation, debate and agreement with the States as to their needs and their requirements with regard to this legislation which they will be called upon to administer and in which they have great interest, concern and responsibility. The Government has produced the Bill in the face of great difficulties which it has confronted and the Bill goes a long way towards meeting the situation. No such Bill could be perfect in everybody’s view. Certainly, this proposal is not perfect nor does it entirely meet the position but, within the limitations that are imposed on the Government because of the uncertainty and unpredictability of the present situation, I think it is an achievement.
However, there are some aspects about which I am worried, because I am one of those members who went through the depression, one of those who knows something about the operation of the Loan (Farmers’ Dept Adjustment) Act and one of those who knows the disastrous situation in which that legislation was accepted by the farming community of that time. But the difference between that legislation and the present proposal is great indeed. The whole of the economy and all of the people were then suffering from depression but today the situation in rural areas is aggravated by the fact that the cities are enjoying a great measure of prosperity. We are experiencing a so-called booming economy in some sectors and the present difficulties arise primarily from inequalities within the farming community.
The Minister for Air (Senator Drake-Brockman) provided some figures which indicate a disastrous effect on the farming industry as a whole. A drop in net farm income from $760m to $290m between the years 1966-67 and 1970-71 is a decline of about 62 per cent in the net farm income. A fall of this sort cannot occur without having disastrous effects upon the people in the industry, especially when one recalls that, even on the 1966-67 figure, a great number of farmers had a farm income of not more than $2,000 a year, which is not much more than pensioners receive. This is their return from the farm but, of course, there is no return from the capital involved in the enterprise. So, we have gone from a situation that was barely tolerable then to one . that is completely disastrous now. When one examines the export price index figures, one wonders just how this situation has been brought about. In the last year, there has been a rise in the export prices of meat, sugar and dairy products. However, the position is readily understood by those who are in the sheep and wheat industries. Our farming structure is composed principally of the wheat and sheep industries in various mixes. Fortunately, the wheat industry, because of our international agreements, has been able to retain a price structure, but at a cost in volume. We have had to accept cuts in production and, income has been seriously depleted but it has not been evenly depleted because it has not been possible in practice to achieve a complete equality of sacrifice in the field of quotas. So there is a varying situation within the wheat industry itself, some farmers being relatively well off and others badly situated. Then, there is the component of the sheep industry having a varying effect on farm incomes. The value of wool exports is down to about $600m, and wool still accounts for IS per cent of our national export income- We cannot face up to the loss of an industry that in the past has at times returned more than half of our total income from export earnings. The position is serious not only to those directly employed in the industry but to the national economy. We must consider all the ramifications and the resultant effect on those who depend on the farming structure for a living. I refer not only to the farmers but to people living in the small towns, the businessmen, the machinery agents - all those who make up the structure of our social existence as a community. Therefore it is right that the Commonwealth is con.cerned and should be prepared at this time to venture the taxpayers’ money in their own interest and not solely in the interest of the farming community.
I suggest that the record of the wool industry deserves the utmost consideration from the Government today because over the years it is the one industry that has stood on its feet. We have heard ad nauseam about Australia riding on the sheep’s back. Today we have shorn the sheep and have broken its back. The wool industry is in no position to exist without help. The present situation in the industry is not due to any fault of the industry. It has been caught up with the movement in technology and all the scientific advances. The question facing us today is whether the wool industry will survive. I think it has a legitimate claim upon the Government. The Government should ensure that the industry has at least time to readjust, where possible; time for it to get back to some basis whereby those engaged in it can live decently as members of this community.
The Schedule to the Bill is the most interesting part of this measure and as I glance through it I would like to refer to some of the significant paragraphs in it. Paragraph 6 of Part II is very important. It states: . . the financial assistance provided by the Commonwealth under this agreement shall be allocated between the forms of assistance under the Scheme as the State considers appropriate . . .
I am pleased that this is expressed in such a way. However there is a qualification because the paragraph continues in this way: but with the general objective that one half of the financial assistance made available over the period of 4 years as hereinafter provided will be applied to farm build-up.
I am very sorry to see included this qualification providing for one-half of the financial assistance to be directed to this general objective. It seems to me that a great deal of flexibility will be necessary on the part of the Commonwealth as to the manner in which States interpret this general objective. Each State faces a different situation so far as the need for farm build-up is concerned. Personally I am not excited at all about the prospect of farm build-up. I think it is the least pressing part of the present situation. I think there are economies to be gained by having bigger farm units although there are big disadvantages, one of which is the need for more capital when in the present situation men on the land are having difficulty in financing their capital structure. The next point to be considered in this respect is the increasing liability for probate tax. Provision for this cannot be borne under the present situation. The third point is that the economies of scale that have been demonstrated in any research work done to date are so marginal, so small, that they will be caught up very quickly with the general inflationary situation. We may build up larger units and then find within 2 or 3 or 4 years that the fine margin of gain is lost.
Added to these things is the fact that when we get a larger unit we have a far greater requirement for managerial skills. Perhaps this is one of the commodities in short supply in the farming industry today. Managerial skill can be taught and can be acquired, but in he main it is inherent in the person in the industry that comes from being in the industry for a long time and thereby gaining experience. Managerial skill is not readily acquired. Therefore, on balance, I am not concerned at all about the provision for farm build-up. I think that it would have been better not to have included this direction or general objective that the States should give consideration to allocating half of the financial assistance for farm build-up.
The Minister for Primary Industry (Mr Sinclair) said that this Bill represents the first instalment, as it were; that if the amount is not sufficient to meet the requirements and the general objective of the scheme, additional moneys will be provided. I welcome that statement. The present situation is that the States have been directed to use such moneys as they have available under the old Loan (Farmers’ Debt Adjustment) Act and then to use the money being made available under this scheme. This money is to be spread over 4 years. The amount to be made available in 1 year to my own State of Western Australia is $3,657,500. If we are going to hypothecate half of it for farm build-up it means that only $1,828,750 will be available for the general purpose of rehabilitation which is the urgent necessity today. Definite review provisions are set out in the Bill. For instance, paragraph 10 of Part II states:
The provisions of the Schedule to this agreement may be amended from time to time by agreements between the Ministers of the Commonwealth and of the States for the time being responsible for the administration of the Scheme.
I welcome the inclusion of that provision. I hope the States will not delay in coming forward if they find that the terms they seek to impose are too harsh, that there are not enough people eligible or that there is something wrong with this idea of putting half the money into the farm build-up scheme. In my judgment there will be little or no demand for farm build-up. I trust that the States will press for a review and an amendment of the Agreement under paragraph 10 of Part II. I notice that there is additional flexibility in this scheme because paragraph 1 0 (2.) states that: the amendments to the provisions of this Schedule to this agreement may be made and take effect as between the Commonwealth and one or more of the States without affecting the operation of this agreement as between the Commonwealth and a State the Minister of which has not so agreed.
It is wonderful to see this included in the Schedule. It imparts flexibility. This is good because conditions are not the same from State to State. Our industries are not the same in each State. For instance, sometimes the men engaged in them cannot turn to other enterprises. In some areas a man can divert readily but in others this is not so easy. Therefore consideration must be given to differing circumstances in each State. Provision is made to cover a State which provides assistance in good faith but finds that this entails losses that could not have been foreseen. For instance, paragraph 20 (2.) of Part III states:
Should a State certify that, without taking into account its administrative costs, it has incurred losses under the Scheme from circumstances beyond its control arising after the date of this agreement and disadvantageous compared with past experience and normal expectations as to factors that affect farmers’ incomes . . ., the Commonwealth agrees to review the position with the State with a view to adjusting amounts payable to the Commonwealth by the State under this agreement to the extent of such losses.
I congratulate the Commonwealth for including that provision in the legislation because no authority is in any position today to lay down terms and conditions which foresee movements in prices. I draw the attention of honourable senators to one statement in the speech of the Minister for Air with which I disagree. The Minister said:
At the present time the price of wool is averaging about 30c per lb greasy. This is the lowest level wool prices have reached for 23 years.
If the price of wool were 30c per lb at the present time the industry would be in a lot better position than it is in. I have in front of me details of the average price of wool sold at auction. These details were made available by the Joint Wool Selling Organisation. In referring to the price of wool at the present time the Minister was in fact referring to the average over 9 months. The price at the present time is not 30c per lb. The Australian average for the months of March and April at the sales was in fact 26.8c per lb. The average price in my own State of Western Australia for those 2 months was 24.54c per lb. A farmer who had some 5,000 sheep producing a cut of about 10 lb each - which is not uncommon and makes it easy for me to calculate - would have a total of 50,000 lb of wool. A difference of 5c per lb represents a total of $2,500. The Minister is a long way from the mark in fixing the present price at 30c per lb. I believe that the provision of flexibility in the States is very necessary because the price that a farmer in Western Australia gets for his wool determines his viability - to use a horrible word - in relation to any plan or any scheme that may be suggested. If a State authority were to work on the basis of the price of wool at the present time averaging about 30c per lb the reconstruction would be doomed from the start. I think that it is necessary to look at this matter in relation to the price of wool that is actually being realised at the time. The Minister said that the present price for wool is the lowest in 23 years. That is so if one looks at the price without taking into account the purchasing power of money, but if one takes into account the purchasing power of money at present the price being received for wool is the lowest ever. There has never been in our history a lower price for wool. We are looking at this situation in terms of the depression years; in terms of the Loan (Farmers’ Debt Adjustment) Act.
I read with horror some of the conditions under which the Queensland Rural Reconstruction Board intends to operate. The terms of supervision of farmers are such that to me it is going back to the thinking of the 1930s. This is the sort of thing that happened in the 1930s. I remember reading at that time a headline in a Western Australian paper: ‘Farmer has unauthorised baby’. Apparently the maternity expenses of a farmer’s wife had to be submitted to the authority for payment and there was a delay in going through the machinery. It went on for a year or so. By that time there was another baby. When the account came in for this other baby the farmer got a memo back stating that the baby had not been authorised. That illustrates fairly well the extent to which the farming community can be bound by any State which attempts to administer this scheme under the old basis of the Loan (Farmers’ Debt Adjustment) Act. I was very pleased to learn that this is not the intention in Western Australia, but that there is going to be an attempt to operate the scheme in a way in which the farmer who perforce of circumstances has to come under the protection of the scheme will retain a little bit of human dignity in the administration of his own affairs. Paragraph (e) of Part 1 - General Principls - of the Schedule to the States Grants (Rural Reconstruction) Bill provides: . . it is an essential part of the scheme that adequate supervision of property management and the financial affairs of the assisted farmer is maintained. If the Authority deems it necessary it may require that moneys receivable on account of the property will be received by the Authority or its agent or a body nominated by the Authority, payments within the approved budgets being made through normal channels.
I hope that that provision is administered with intelligence, feeling and respect for the dignity of the human beings involved. We cannot in this day and age impose the same conditions as were imposed in the 1930s. I like the general principles which are set out in Part II - Debt Reconstruction - of the Schedule. I know that they are flexible and that they can be interpreted in various ways to assist the farmer who, although having sound prospects of long term commercial viability, has used all his cash and credit resources and cannot meet his financial commitments. I know that there are going to be difficulties in determining which individuals will be accepted under this scheme. I am very worried about the fact that the early applications from Victoria, for instance, indicate that only approximately 10 per cent of those who have applied have been found to be eligible.
– I am worried, too.
– I am worried about this aspect. I think that the State administration is to a great extent afraid in the early stages to look at the thing liberally enough, to interpret these provisions in the Schedule with the liberality and flexibility that the Commonwealth has intended. I think that the Commonwealth will need in the early stages to reassure the States, if reassurance is needed, that it is going to be disastrous if there is not some flexibility and expansion with regard to the acceptability of people under these circumstances. I am afraid that the requirement about the applicant who is unable to obtain from any other normal source finance to carry on and is thus in danger of losing property or other assets if not assisted under the scheme will narrow the field tremendously. If assistance cannot be extended from another source there will be grave doubt about the commercial viability of the enterprise. There will be a very sharp dividing line between those who can be carried on by normal finance and those who cannot. I think we need to broaden this provision and I hope that as we get experience in administering the scheme it will be broadened.
Paragraph (4) (d) of Part III of the Schedule states that it is required that there must be reasonable prospects of successful operation with the assistance possible. Of course, here we have two propositions. This depends on what assistance is possible under the scheme. I think that at a very early stage we will see that it is necessary to increase the amount of money available to the States for this purpose.
Otherwise the benefits will be minimised considerably. I like the provisions set out under the heading ‘Nature of assistance’. For example, assistance may mean the rearrangement and/or a composition of debts to allow more time for payment. If this can be arranged without the Commonwealth providing money, and if creditors are willing to provide the money, to that extent the effectiveness of the legislation will be expanded. I admit that this will require the co-operation and perhaps the generosity of those who have lent money to the industry.
– Will you expand that statement a bit more? Do you think that means they will be asked to coordinate the debt or do you think the Commonwealth would take it over?
– I think this means what it says - a rearrangement and/or a composition of debts to allow more time for payment. I believe that if many institutions who have lent money believe that by extending the period of repayment they will ultimately be paid they will be willing to do this, particularly if the Commonweath, as it can do, picks up some part of the load. There is provision for negotiation for a concessional rate of interest for the existing rates. For instance, a man who knows jolly well he is not going to get 7 per cent might have the prospect of 5 per cent, and he will accept 5 per cent. Another form of assistance is advances of additional funds for carry-on expenses, live stock and further property development at reasonable interest rates. I hope this is made available where it is necessary. Paragraph (3)(d) of Part II of the Schedule provides that, when the State legislation so provides, a protection order against any creditor who has threatened action for debt may apply. There is always the greedy creditor who wants to get in for his pound of flesh in advance of the rest, and this paragraph provides protection against that individual. So there is much that is very good under this scheme. I am very interested in the method of operation explained in paragraph (4) (b) of Part II of the Schedule. It states:
The possibility of creditors including the Crown, local authorities and public utilities being asked to defer or write off part of their debts - possibly at a uniform rate but with due regard to priority of security - should be considered. Creditors should not be pressed to the extent that the availability of credit to rural industries is damaged. 1 am pleased that this paragraph includes the possibility of creditors including the Crown. This takes me to a subject we have discussed before in this House. I want to refer directly to a matter that was aired in the ‘Farmers Weekly’ of 29th April under the heading ‘Probate is a Crippling Burden for the Troubled Farmer’. It concerns a Gnowangerup farmer whose probate bill was $94,000. Part of the estate that was left to him was shares. Apparently the State Government did not agree to his selling these shares. During the time that the estate was being wound up the shares fell in value from about $3 each to about $1 and there was a loss of $20,000 to $30,000 in the value of the shares. But the tax was levied at the time of death. This is something that, quite apart from this Bill needs the urgent attention of this Government because the same thing that happened to the share values happened to the value of the property. It was valued at some $43 an acre but now it is doubtful whether it could be sold at $20 or $25 an acre, and then on terms. So it is doubtful whether the amount the property would realise today would pay the probate bill.
In the meantime, the probate bill is unpaid. The farmer is being charged interest by the Commonwealth at 10 per cent and by the State at 6i per cent. The Commonwealth has come to the party, so it is said, to the extent that when the probate is paid the Commonwealth Government will consider waiving the interest charge. But the State will not make such a statement. So the farmer in question is faced with a situation which is the direct result of our stupid probate laws, which are harsh and unconscionable in their effect. I believe that the Commissioner of Taxation is very reluctant to accept the realities of the present day values. How can one value a property today when it is impossible to meet working expenses without provision for any capital value? What is the value except a speculative value for some city farmer who will use it under our tax concessions as a means of offsetting income tax.
I feel deeply that we need urgently to look at this whole question of probate in relation to the farming structure and also its effect on the general community. I think if necessary we must look to other sources of revenue derived in a way more consistent with our philosophy of pay as you earn. We have introduced pay as you earn income tax. We have derived other revenues from current expenses but with regard to probate we have what is virtually a deferred capital gains tax lodged under appalling circumstances at the time of a man’s death, which can, as it was in the case to which I referred, be an intolerable burden upon those involved. With an ageing farm population we will have many cases of these sorts of things happening, where we have people with a large obligation with regard to probate. The only glimmer of hope I get is from this paragraph which provides for the possibility of creditors, including the Crown, being asked to defer or write off part of the debts. I hope that that provision will operate and that the Government will announce its intention with regard to it at a very early date.
There are many other sound paragraphs in the Schedule. I invite attention to paragraph (5) of Part II of the Schedule, which provides that the Authority shall have the discretion to determine the terms and conditions of any loan it may make up to a maximum repayment term of 20 years, in a number of cases an initial period of freedom from repayments of principal would be justified, depending on the circumstances of the case and the interest rate to be charged. In that connection I notice that provision was made in the Queensland rural reconstruction scheme for an interest holiday of 3 years but with a capitalisation of the interest. That is, the total debt would be increased by the interest which it was agreed was impossible to pay. I think this is the height of stupidity and short-sightedness because if a man needs an interest holiday to get him a start it is unfair and impracticable that he should be in effect loaded with an increased rate for the next period to make up for the capitalisation of his interest. I hope that this will not be imposed under this scheme. I commend the Government for reaching agreeement with the States. It has not been an easy task. The States have varying attitudes towards the agreement but it was essential that an agreement should be arrived at. Provision has been made in the Schedule to the Bill for amendments to be made to meet conditions in one State which may be different from those in other States. I think this is a good provision. I commend the Government for bringing in this legislation. I hope that it will have regard to some of the criticisms that have been put forward. I also hope that the Senate will accept this agreement and interpret the clauses liberally and that there will be no reluctance on the part of the Government to amend as soon as possible and whenever it is found necessary to do so in order to make the scheme work as it should work.
– Mr Acting Deputy President, perhaps it would be convenient at this stage for me to move notice of motion No. 4 on the notice paper. I move:
This matter has been-
– What is the honourable senator’s intention?
– These matters will be debated together. I did not ask for a vote to be taken. I have simply moved the motion. The motion for the second reading has been moved on the other Bills.
– What about Senator Prowse?
– The honourable senator has finished his speech. I simply want to indicate that this matter has been sufficiently canvassed, not only tonight but on earlier occasions. The motion speaks for itself and I commend it to the Senate.
The ACTING DEPUTY PRESIDENT (Senator Laucke) - Senator Murphy has indicated that he wishes to move motion No. 4 on the notice paper. Is leave granted?
– I have moved the motion. These matters were to be taken together in the one debate. The motions for the second readings have already been moved.
– If the honourable senator brings this on now it will preclude anybody else subsequently speaking to the motions before the Senate. What nonsense.
– I simply moved the motion as I conceive the position to be the same as it was upon the moving of the motions for the second reading debates. The debate will now continue on all matters. At some stage the motion had to be moved. I have simply moved it. I thought I made a very short speech on it. It is in the hands of the Senate, as are the motions for the debates on the second reading on both the Bills. No-one is precluded from making his speech at all. I have just moved an original motion. I did not reply to a motion. It is quite open for any honourable senator to speak on this matter.
The ACTING DEPUTY PRESIDENTIt has been agreed that the 3 matters will be considered collectively and you may later move your motion.
– No. I have moved the motion and I have finished my speech.
– 1 take it that I may speak to the 2 Bills and also to the notice of motion No. 4 on the notice paper, is that right?
– I rise to support the measure before the Senate. I support it not because I think for one moment it is a cureall for the very grave and serious troubles that beset primary producers throughout Australia. I notice Senator Prowse’s comments relating to the old Loan (Farmers’ Debt Adjustment) Act of many years ago. My impression is that a very long time ago in the State of Tasmania that was a most effective Act. Certainly something very positive and very definite is needed to come to the rescue of the primary producers because they are in a very invidious position today. I notice that the Minister for Air (Senator Drake-Brockman) who represents the Minister for Primary Industry (Mr Sinclair) referred in his second reading speech to the fact that 40 per cent of all wool growers were receiving a net income of about $2,000 a year. I would say that that is probably an understatement. I would go further and say that if we were to leave out the wool and wheat growers and look at other branches of primary production we would find that the position would be very much worse. In fact we would have to say that in Tasmania more than half of the primary producers were not receiving an amount equal to the basic wage. When we think of that and when we think of what has been paralysing Tasmania over the past few weeks - the people who are receiving $7,000 a year plus-
– The ships’ stewards?
– The ships’ stewards. They are receiving $7,000 a year plus all the extras and they are taking it out of the hides of these people who are receiving so little. It makes one wonder at the gross imbalance ki our community. Although I support this measure I do not begrudge those people the benefits that accrue to them. But we were able to see what would accrue to people entitled to compensation under the provisions of legislation that was introduced m the last few days. Good luck to them. However, when that legislation was introduced I thought of these people on the land and I wondered who paid their workers’ compensation. Who recompenses them when they sustain an injury? Who pays them for their 3 weeks annual leave?
– Four weeks leave.
– Four weeks leave are received by some people. Who pays for all those things for the man on the land? These are the people who are on $2,000 a year. I want to repeat that it is my belief that in Tasmania more than half the primary producers are receiving even less than the basic wage. This legislation intrigues me. I am like Senator Prowse in that I do not like the word ‘viability’. I notice that in the Schedule to the States Grants (Rural Reconstruction) Bill the overriding objective is to help restore to economic viability those farms and farmers with the capacity to maintain viability once it is achieved. It seems to run in the minds of some people that viability is governed by the size of the property. I agree that, all things being equal, there is a lot to be said for enlarging a small property. If you make a property bigger you give it more chance of economic survival but, generally speaking, economic survival is not governed by the size of a property. I have seen people on small properties - there are such people today - who, because of their own capacity for work, have made them very viable. Economic survival is not governed by the size factor alone. No matter how many properties one amalgamates; no matter how much bigger one makes a property, no matter what footing one places a property on, rf this inflationary spiral continues as it has there will not be many properties in Australia that are economically viable.
We have passed through times like this before. I can remember the depression of 1929-30 and other bad times that primary producers have gone through. I can remember reading in the Press day after day headlines such as ‘The Plight of the Farmers’. There is nothing new about it except that I do not think the farmer ever before has been in the position where his prices are so completely depressed, on the one hand and, on the other hand, he is assailed with continuously rising costs. He is getting it from both ends, not only in regard to the price he receives for his product but also in regard to the price he must pay for all his production requirements. On previous occasions when he went through bad times he at least had comparative price stability. His costs of production were fairly stable. But for years now his costs have been going up and up, and so far as one can see there is no end to the process. I say without hesitation that if prices keep going up there will not be many farmers in the community who will be in a viable condition. I was talking to a farmer in Tasmania on the telephone tonight. He said he had received 2.99c per lb for his peas. Anyone who knows anything about pea growing knows that that is a completely unprofitable price.
– Did you say 2.99c?
– One might say 3c per lb. That is all he received.
– They cost 40 cents for 2 oz in the shops.
– Yes, but that is not all due to the profit of the middle man. The costs of distribution and everything else are such that the higher the distribution costs, the greater the disparity between what the farmer receives for his product and the price at which it is retailed. The other industry with which I wish to deal is the fat lamb industry. For years the primary producer has been compelled to accept the cost of production or less for his fat lambs. The same thing applies to the bean industry. The farmer has been precluded from bettering his position because immediately the price of fat lambs rises, immediately there is a scarcity of canning peas and they rise in price, immediately beans rise in price, those products come in from across the Tasman, from New Zealand. I noticed 3 outstanding things in today’s Press so far as Britain’s entry into the European Economic Community is concerned. One of them was the safeguarding clauses for New Zealand butter. I hope the New Zealanders do get those safeguarding clauses if Britain joins the Community but the fact remains that apparently there will be no safeguarding clauses for the primary producers of this country.
It does seem to me - referring briefly to the New Zealand-Australia Free Trade Agreement - that the first duty of the Government is to look to the welfare and prosperity of its own primary producers. We are suffering because our economy is in 2 compartments. What we do about it, I do not know. On the one hand we have the industrial worker and the industrialist and on the other hand we have the primary producers and their dependants. The industrial worker goes before the Conciliation and Arbitration Commission and is granted an increase in wages. The industrialist goes before the Tariff Board and is granted increased tariff protection, but the primary producer has no one to turn to; rather he has to help to pay for this inflated cost of living. That is the basic cause of the rural depression. I have here a record of some of the reasons given by the Conciliation and Arbitration Commission for the increase granted in the national wage case last December. I also have here a leading article from the Tasmanian Press on the subject which I thought was very good.
I believe that until we can get away from the process of wages chasing prices on and on, and ever and ever upwards, and until we can get down to some other basis, this must lead eventually to economic catastrophe. There is no other way out of it. The article stated:
The 6 per cent general wage increase granted yesterday by the Full Bench of the Arbitration Commission is, to say the least, disheartening. It won’t benefit wage-earners, ft won’t alleviate (he real hardship which exists among pensioners, big families on low wages and persons on fixed incomes. It will be a disaster to the whole farming community…..
Does not what was said in that article bring home the fact that no section of the community can live to itself in this integrated society and say: ‘We will get all that we can for ourselves’ without that having a disastrous effect on the rest of the community. The article stated: lt will be a disaster to the whole farming community already impoverished by rising costs and falling incomes. The sole beneficiary from this extraordinary decision will be the Commonwealth Government, lying in wait to gather taxes from higher paper incomes.
The phrase ‘paper incomes’ is most appropriate because the increases are only paper incomes. It is perfectly obvious that if remuneration is increased above productivity the extra amount is only a paper income. The finding put out by the Commonwealth Conciliation and Arbitration Commission states:
If in the present state of the economy and in the atmosphere of general affluence which exists in the community we failed to give a reasonable increase we would be failing in our duty.
The next part of the decision I will read amazes me. The Presiding Judge said:
In all the circumstances, particularly the nation’s current general prosperity, we are prepared again to give the minimum wage earner special treatment and to increase the minimum wage by $4 per week.
In the decision he also said:
During 1969-70 the overall picture was a rise in output and employment and, with the exception of some sections of the rural sector, the economy was in a strong position.
But the decision goes on to state:
However, demand pressures were increasing and inflationary pressures were evident. Monetary policy measures designed to restrain demand pressures were introduced.
– What is the honourable senator quoting from?
– I am quoting from the reasons which were given for the decision of the Full Bench of the Commonwealth Conciliation and Arbitration Commission granting the 6 per cent wage increase last December. The reasons for the decision continued:
Although demand, particularly in relation to housing has been reduced to some extent, the pressures still appear to be strong. Indeed in the first months of 1970-71 there seems to have been a renewal of the upward tendency.
After saying that the economy was in a strong position the Commission, in the next paragraph or so, says that it was in ari inflationary condition. It states further - this amazes me and gives credence to the contention-
– Who said this?
– Just a few moments ago I told the honourable senator who said this. He would not understand it, anyhow. The next section gives credence to the contention, often advanced, that this tribunal should not be the prerogative of legal men only. The reasons continue:
Overall it would seem that some important sections of the rural industry would be in difficulty in absorbing further cost increases.
But the Commission did not hesitate to increast costs. A further passage indicates the perspective in which many people view the rural industries. It reads:
We do not consider that the situation of rural industries is such that it should be used to deny an increase to wage earners generally when the economy is in an overall strong position.
After saying, prior to that statement, that the economy was in an inflationary condition the Commission ends up by saying that the increase is justified because the economy is in an overall strong position. It expresses the pious hope further in the decision - I will not bother to read it - that demands will be restrained; that because of this 6 per cent increase there will be a restraint of the demands for further and further increases. It says that if demands are not restrained the position could be deleterious to the whole economy. We know what has happened in regard to that restraint about which the Commission spoke.
With that aspect in mind I have here an article which intrigued me so much that, although I hae read it in this place before, I am going to read it again. It relates to the New Zealand-Australia Free Trade Agreement. It shows the thinking which emanates from some people when they consider rural matters. This was a reference to the Tariff Board relating to electric shavers. The reference was this: . . whether, having regard to the objectives and other provisions of the New Zealand-Australia Free Trade Agreement, the inclusion of electric shavers falling within paragraph 85.07.11 of the First Schedule to the Customs Tariff 1966-1968 in Schedule A of that Agreement would be seriously detrimental to the Australian industry.
In other words, if New Zealand sent electric shavers into Australia, would they be seriously detrimental to the Australian economy? After a full scale inquiry the Tariff Board came to this conclusion:
The Tariff Board finds that, having regard to the objectives and other provisions of the Agreement, the inclusion in Schedule A of the goods under reference would be seriously detrimental to the Australian industry.
– Did the honourable senator say ‘would be’?
– Yes, would be. As a result electric shavers were not included. But the pea grower, the bean grower and, to an extent, the lamb producer were taken like fowls to the block, put on it and their heads were cut off. There was no appeal to the Tariff Board or anyone else in regard to that decision. When one lives among these people and tries to represent them one finds that these sort of things do not go down very well at all. I say that that is one of the things that should be cleared up. I am a devout believer in the fact that the Australian primary producer, because of his payments by way of tariff, almost since federation has built up his own local market. He has been largely responsible for the growth of cities such as Melbourne, Sydney and Adelaide because he has had to contribute towards the fostering of secondary industries in this country. Therefore I say witnout any hesitation that, within reason, he is entitled to his own local market.
I support this measure. I believe that the Opposition’s amendment will only delay it. There is an urgent and very definite necessity for prompt and decisive action. With others, I regret that this measure has been brought in so late in the session because I know well that there are many primary producers - to say that they are in a parlous position would be to put it mildly - many of them in my own State, who live on their farms and go out to work. This is very deleterious to the economy. I believe that the primary producer is the very salt of the earth.
– I support the introduction of these 2 Bills which will provide assistance for our primary industries in their present state. I appreciate the fact that they are not the be-all and end-all of measures to overcome the problems of primary industry but at least they are a move in the right direction. The history of primary industry has been one of ups and downs as far as profitability is concerned. I have no doubt that that will happen again in the future. If we can assist our producers over their present difficulties in whatever way we can we will be doing something worthwhile, bearing in mind the great contribution that these industries have made to the development of this nation. I appreciate the proposed operation of this legislation. The funds to be operated by the boards are limited and, at this stage of the profitability of the industries, few producers may be able to qualify.
I believe that in an operation such as this it is better to start off in a responsible manner, and then to see the conditions as the picture becomes clearer, rather than to start off with a blank cheque and have a lot of the funds go down the drain. The Minister for Air (Senator Drake-Brockman), in his second reading speech, said that the matter will be reviewed from time to time. The amount of money that will be put into the fund and the conditions under which it will operate will be reviewed. I believe that this is a good thing. I shall not go into all the details of the legislation, as there are other speakers to follow. Senator Prowse and Senator Lillico have gone into the problems of primary industries and also the provisions of the Bill fairly well.
In my State of Queensland there are certain industries, such as the sugar industry and the beef industry, which are reasonably profitable. Without question the wool industry in Queensland is in dire straits, not only because of the recession in prices but also because of the drought which has been suffered over many yean. To try to reconstruct the wool industry at present would be very difficult. The key to any reconstruction is the profitability of this industry. In this respect we have to consider ways and means of increasing the returns to growers. The system of marketing wool must be reviewed. Eventually we will have to get some sort of system for acquisition of the wool clip and for marketing it at the least possible cost. After all, we are concerned about the wool from the time it leaves the sheep’s back until it reaches the factory.
I believe that the industry has been carrying a lot of people for too long. There is an avenue here for saving which will greatly assist in the profitability of the wool industry. The industry, under this legislation, will be controlled by boards set up by the- various States. The Commonwealth has to see that the boards that are set up are capable of administering this Act in a reasonable fashion. I believe that the board which has been set up in Queensland is a very competent board, as I hope that boards in the other States will be. It is most essential that the composition of these boards is such that they have not only business acumen but also the interests of the primary producers at heart.
Tonight I want to speak particularly about the serious drought that has been experienced in western Queensland, because people from other States may not be fully aware of it. This area has been described by the Premier of Queensland as a disaster area. What has happened out there is that, as a result of years of drought, these primary producers who were viable - if I may use what seems to be an ‘in’ word at the moment - prior to the drought have found the costs involved in maintaining their flocks have put them into debt. In some cases they have been put into considerable debt. Because of wool prices and production being well down, they have not been able to recover any of their expenditure. People who in other generations were able to operate profitably are now in trouble.
Many of these people will not qualify under the conditions laid down by the Board. It has been said in this place and elsewhere that as you move around the rural areas you notice a growing feeling of anxiety and despair similar to that of the great depression of the 1930s. I can assure honourable senators that that state of affairs has arrived in western Queensland and has been operating for some time. A large area of this nation will die if help is not given quickly. I am speaking not only about the wool producers now, but also about the people in the towns and the business houses who are in trouble. Employees who have lost their employment find that they cannot sell their homes. I think most people would appreciate that employees in rural areas would have most of their assets tied up in their homes. To have to abandon a home and seek employment somewhere else many miles away is not a very pleasant experience. If these people - and I mean all the people because they are all part and parcel of the industry - had contributed nothing to the progress and wealth of this nation the rest of the community might be excused for saying: Well, it is just bad luck’. But the wool industry in Queensland since the war has earned $2,700m in overseas income and at least $ 1,500m of that amount has been earned by this disaster area.
The Queensland Government has asked for special financial assistance amounting to $10m from the Federal Government. 1 hope that in the not distant future the 2 governments will be able to get together and work out the differences that may exist and the conditions under which this fund is to be administered. The Queensland Government has suggested that the Rural Reconstruction Board through the Loan (Farmers’ Debt Adjustment) Act would be the appropriate body to handle this matter. I believe it is a necessity for special funds to be given by the Commonwealth to this area immediately. It is in the interests of the nation that this be done. These people live under conditions that are not altogether easy. Most of them have not got television in their area; some even have not got telephones. With poor communications and road systems many of these people live very lonely lives. They have produced this wealth for the nation and all we are asking is that they be put back on their feet and that the towns be kept going. We should keep the people who service this industry where they want to be and where they can be of help. The sum of $10m is merely chicken feed when related to the great wealth that this area has produced and can produce in the future.
– Has the State Government sought this money from the Commonwealth?
– Yes. As honourable senators will appreciate, when such special requests are made other States also have special requests and it takes time to work out the conditions. All I ask is that this process be speeded up. Action can be taken by both Governments at the moment without even worrying about the terms under which assistance is handed out to the industry or how it will help the producers and the towns. Priorities have been established for government works. A year or two ago Longreach Aerodrome was considered as a site for an alternative jet airport. Maybe this is 7 or 8 years away in priority but it is in the interests of this nation that its priority be advanced so that the money can be spent now when it is needed most. It has to be spent some time, as that is the Government’s intention; but if it can be spent now when it can help these towns I believe it should be provided. It will not be in the form of a handout. It will be for specific work, but it will enable that work to be undertaken earlier than it otherwise would be. This argument also applies to beef roads that are not completed, other main roads and public buildings intended for the future.
I believe the wool industry is one industry that will come back. We have great avenues in which to move. In the past we have been able to carry our handling and marketing costs but we can carry them no longer. I feel that this region can become an economic area once again and that the money that will be expended in helping it to become an economic area will not be money down the drain. This nation cannot afford to let such a large area just disappear. Other honourable senators wish to speak and I do not want to take much time. I support these Bills and I hope they will receive early consideration. I believe the States have their boards set up and that the scheme will be in operation shortly. I hope that in the not distant future we will be able to determine the problems and that these will be ironed out upon consultation between the States and the Federal Government.
– Honourable senators will agree that this is one of the most important pieces of legislation that has been before the national Parliament for many a long day. It has its effect on all sections of the community, not only those in rural areas. It has its effect also on city dwellers and on the national economy. The attention that honourable senators have given to speakers in the debate on these Bills indicates that they also appreciate the seriousness of this legislation. The Australian Labor Party believes that the legislation is deficient in some respects and accordingly Senator Wilkinson has moved an amendment which gives expression to our points of view. The Opposition has no desire whatsoever to knock the legislation but we believe that acceptance of our proposal will improve the legislation and help to achieve the objectives for which it is designed.
The Schedule is in 4 parts and part II dealing with debt reconstruction states that the purpose of the agreement is to assist a farmer who although having sound prospects of long term commercial viability, has used all his cash and credit resources and cannot meet his financial commitments. It then sets out the tests of eligibility and 1 think it is important that we read them. They are:
If we look at those tests I believe we will arrive at the conclusion that a person has to be almost bankrupt before he is eligible to receive assistance under this scheme. In order to determine how good the scheme is we must look at the type of industry in which the person is engaged, the amount of money he is to receive from the scheme and his interest repayments. The wool industry is probably the most important industry to the rural section of the community and has been over many years. What will be the situation with the wool grower who has been loaned money under this scheme? I emphasise the word ‘loaned’ because it is a loan attracting a rate of interest. The wool grower has to make sure that in the long term, with the assistance of the loan, he will have a profitable commercial undertaking. Can we suggest with any degree of confidence that a wool grower today would have the prospect of long term commercial profitability? We see a situation in which wool prices have decreased. Is there any indication that wool prices will increase? I would say that the evidence is to the contrary.
But if we accept that wool prices will increase, by how much will they be required to increase to make a wool growing farm a profitable undertaking? That would be most difficult to determine. We would need a great deal of optimism to suggest that in the forseeable future wool prices will increase. But we can be sure of one thing: The way we are going in Australia today costs will increase. If the wool grower does not receive a better return from his wool but has to meet increased costs for his good, it adds to the problem of determining whether his property will be a profitable commercial enterprise. I suggest that a person would need to be particularly optimistic to see wool prices reaching the stage where they would make wool growing the profitable undertaking that it has been in the past. I repeat that I think the evidence is to the contrary. When we look at the amount of wool purchased by the Australian Wool Commission, and when we consider whether there is a cartel amongst the overseas wool buyers we begin to imagine all the difficulties in determining the profitability of the industry in the future. I have no evidence to show that price fixing is practised amongst the overseas wool buyers. However, I believe one would need to be a child of nature to suggest that something of that kind is not occurring. If one adds all these factors together one will see that it is a most difficult proposition to determine whether a farm will be a profitable undertaking in the immediate or the long term history of the industry.
Perhaps I could refer to those people as being in category A. I think there is another category designed to be helped by this legislation, and perhaps I could refer to it as category B. The second category includes those people who are in a hopeless financial position. They will receive but little assistance. I repeat that the prospects of people in category A are not as bright as we might imagine. If one of the wool growers is loaned $100,000 he will pay interest at the rate of 4 per cent per annum on that loan. Where is he going to find the money to pay that 4 per cent per annum over the period of the loan? He will be required to pay $4,000 a year in interest alone. Unless the price of wool increases how is he to meet that commitment to start with? It should be borne in mind that the Bureau of Agricultural Economics has indicated officially that there will be no decrease in prices, but there will be an increase in costs that the farmer will have to meet in the future.
– His overhead will increase and his prices are not going up.
– That may be so, but we have to look at the factual situation. I believe that a person would need to use some imagination to come to the decision that this scheme will operate in the interests of those whom it is designed to help. That is why we say that the Bill is wrong in its content. It imposes financial difficulties on farmers. I suggest that it is a most difficult thing to determine whether a farm will be a profitable undertaking in the future.
What will be the future of the wool industry in the face of these discouraging aspects of life today? One would need to be a super-optimist to suggest that the prospects are particularly bright. But let us look at the position of a wool grower who accepts a loan of $100,000. He will have to repay that $100,000 but, in addition, he will have to pay interest at the rate of 4 per cent per annum for the period of the loan. That is a substantial commitment for him to face in the future. I know the calibre of some of these people. They have hearts as big as houses, but I suggest that their pockets will need to be lined with gold to meet all their commitments in that direction. Paragraph 20 (1.) of the Schedule to the Bill gives rise to an astonishing situation. It is as follows:
Each State agrees to operate the Scheme in such a way that, taking into account its experience with other schemes of rural assistance and the normal expectations as to factors that affect farmers’ incomes that are current at the date of this agreement, the amounts received by the Authority in the course of the operation of the Scheme could be reasonably expected to equal the payments of principal and interest which the State is required to make to the Commonwealth under this agreement.
So it is not only the farmer who’ is involved, but the State then comes into this and is required, by the conditions set out in paragraph 20 (1.), to face up to its obligations. Paragraph 17 (1.) indicates that this Bill will impose severe hardships on anybody who receives a loan. It states:
Interest at the rate of six per centum per annum shall accrue in respect of so much of each amount that has been advanced or paid to the State under this agreement as is repayable by the State under clause 18 of this agreement and has not for the time being been refunded or repaid to the Commonwealth, calculated from the date upon which the advance or payment was made by the Commonwealth.
Six per cent is a fairly high interest charge.
– That is in relation to farm build-up.
– That is true. I appreciate that. I will turn my attention to that matter in one moment. I refer to the 4 per cent rate of interest that is required to be paid under part I of the Schedule. Paragraph 8 reads:
The rates of interest at which moneys are lent by the Authority of a State under the Scheme shall be-
for loans for debt reconstruction - at such rates as will average not less than four per centum per annum over all loans made; and
for loans for farm build-up - at not less than six and one-quarter per centum per annum.
I wonder whether the people who apply for loans will appreciate the substantial interest charges that are to be made? I repeat that I believe it is wrong that such a high interest rate should be charged to people we are trying to assist. As Senator Maunsell has said, these people are in dire difficulties and if interest charges of such a substantial nature are to be imposed the scheme must fail, because it will not assist the people it is designed to assist. Paragraph 1 of Part III describes the purpose of the farm build-up provisions as follows:
To supplement, without discouraging, the normal processes under which properties which are too small to be economic are amalgamated with an adjoining holding or are subdivided and the subdivided portions are added to adjoining holdings, or to assist a farmer with a property toe small to be economic to purchase additional land to build up his property to at least economic size.
I emphasise the term ‘at least economic size*. How can anybody determine an economic size of properties in the rural sector today? How can anybody accurately predict that it will be possible to build up a property to at least economic size in 5 years or 10 years?
– The bigger the size, the bigger the loss.
– That could quite easily be true. The point I am making is that farmers are to be loaned money on which interest is to be paid, but it will be necessary to determine whether their properties are at least an economic size. In view of the conditions prevailing in the rural sector today I suggest that to determine an economic size for a property is almost impossible. Paragraph (3) (c) gives details of the nature of the assistance to be furnished. It provides for assistance to include:
Advances, at an interest rate not less than six and one-quarter per centum per annum, for carry-on expenses, plant, livestock, and property development in respect of the additional land where not available from other sources.
Because finance is not available from other sources a farmer will borrow to finance his carry-on expenses, plant, livestock and property development. He will pay interest at 6* per cent annually on his borrowings. What are his prospects? Can anybody say authoritatively that his prospects are sound? Asking a farmer to pay 6£ per cent interest per annum is surety not the way to help him and others like him who are in dire difficulties at present.
– He would be better off to die and have his property confiscated for probate.
– Possibly he would. I wish to draw the Minister’s attention to some positive and abstract features associated with the interest charge. I have quoted a paragraph which provides for interest to be charged at 6i per cent per annum. I invite honourable senators now to consider paragraph (4) fh) of Part III, which provides:
The rate of interest payable on advances made by the authority under the farm build-up proposal will be set by the Authority, but will not be less than six and one-quarter per centum per annum.
So there is no escape from his paying 6i per cent interest. The rate is set out in 2 paragraphs of the Schedule.
I refer now to the section of the legislation which deals with the question of rehabilitation. Again I think honourable senators will find that this is hardly a charitable proposition nor a worthwhile contribution to those to whom it is directed. Part IV refers to the question of rehabilitation, and its purpose is as follows:
To provide limited assistance to those obliged to leave the industry where in the opinion of tha Authority administering the scheme this is necessary to alleviate conditions of personal hardship.
But the conditions of eligibility which have to be met are these:
I will stop there for the moment. If a person’s farm does not appear to have sound long term commercial prospects he meets that condition. The other condition is that the applicant’s property must have been purchased by an adjoining owner who has been assisted under the farm build-up provisions. If the applicant does not meet either of those conditions he gets nothing whatsoever. Perhaps he might be lucky if he does not get anything. If current events continue, it might be better for him to walk off his farm. But providing he meets either condition of eligibility - I want honourable senators particularly to note this - the nature of assistance to be provided h a loan on such conditions as to interest rate, if any, and repayment as are determined by the Authority up to a maximum of $1,000 in any one case’. The applicant will be provided with the magnificent sum of $1,000 with which to rehabilitate himself and his family. But that money will not be given to him as a grant; it will be a loan and it will have to be repaid.
I ask honourable senators to visualise the circumstances of a person in this category. Although I could refer to any State of the Commonwealth, I hope honourable senators will pardon me if I use Queensland as an illustration. Let us consider a person at Blackhall, which is 640 miles from Brisbane. His farm is completely gone. He is over his head in debt and he sells his farm. Then he receives a loan of $1,000 with which to rehabilitate himself and his family. He goes to the city. What will he do in the city? There is no provision whatsoever in the Bill under which he can be retrained in any occupation. He may never be retrained in a skilled trade. There are some semi-skilled trades in which he may be retrained. But this Bill makes no provision whatsoever for that. This person probably has spent all of his life on his property and he comes down to a metropolitan area and is thrown on to his own resources. Probably he does not know one main street from another. Yet there is no provision in the legislation which tells him how to go about getting retrained or how to go about obtaining employment. Yet we use the word ‘rehabilitation’ in connection with this man.
– What about his home? What is he to do? He has sold his property.
– I am not aware what he could do in those circumstances, but obviously it would be a financial loss to him. I am pointing out the failings, as I see them, of the Bill as it stands. I repeat: It is a most important piece of legislation. It is not one which can be taken lightly. It is one which will affect many people over the next decade. Therefore, we have to be sure that in trying to assist primary producers we do not deprive them of their rights because they have been an important unit in production for Australia. In the main, it is not their fault that they are suffering hardship on the farms. It is because of adverse circumstances.
We are a most unusual race of people. We become so emotional about some things. If there is an earthquake in Peru or if there are tragic bushfires in Tasmania, we become so emotional; rightly so. We pour out money to these people in their distress.
– What about if Labor Party members are going to China?
– Certain members of the Labor Party are going there to assist people in this country. If Senator Webster cannot appreciate that point of view it is only because of his blind political ignorance. We become emotional about these issues - rightly so - because we want to help human beings in distress. But human beings are in distress in Australia today. I would suggest that although this legislation sets out with the admirable objective of trying to assist primary producers, in a lot of cases it will prove an additional hardship to them.
Senator Sir MAGNUS CORMACK (Victoria) (10.12) - I had hoped that I would not be expected to speak on this Bill tonight because I am involved in my lifetime of experience on the frontiers of Australia in the early days of my life when the frontiers were being pushed back and when families cleared the land, lived in primitive conditions and, after spending a lifetime on it, some of them made good, and some of them failed. My next experience of this problem of Australian life occurred in the tragic years, which I have never forgotten - men of my generation will never forget them - both in the city and in the country. I am relating my remarks at present to the problems of the country where I saw people who literally, as Senator Milliner mentioned just now, had to leave their properties. Driving along a road or moving along a road with a mob of cattle or sheep, one would probably stop and say to someone: ‘Who lived there?’ He would say: ‘They have gone. The game has beaten them’. I had thought that this would never happen again in my lifetime, but I see it happening again in my lifetime. It is a catalogue of tragedy.
The interesting point, if it can be interesting in these tragic circumstances, is that on each occasion that these events have taken place in the Australian primary economic area the reasons have been different. In the first instance, the means used in pushing back the frontier to develop this country were sinew, muscle and the most primitive form of life and living. With small accretions of a profit and loss account, when labour was not counted as part of the cost, eventually these people made good. In 1930 the problem was the failure of the world economic system to sustain the capacity for nations to buy that which they needed or for sales to be made, because people had no money.
When we turn to the present we find that the reason for the economic depression in the primary area of this country, in which there are great resources in terms of money, is that the cost structure in other areas of development has pushed the cost of producing everything on the land up to a point where the primary producer no longer is able to bear the burden of the cost structure that has been placed upon him. Senator Lillico made that quite clear. I have no doubt that every honourable senator who has any experience of life in the countryside today will readily admit, although I doubt whether the economists would admit it, that in this period of declining prices and increasing costs the primary producer has used every device that lay within his wits in an effort to absorb the cost structure that has been placed upon him. 1 know that the learned men on the Conciliation and Arbitration Commission, when national wage cases are considered and the cost structure of primary industry is mentioned, merely say blandly: That is a responsibility of the Government. We can look only at the totality of the national wealth expressed in money terms’. They have paid little heed, until their last arbitral decision on hours of work, to whether the primary producer in Australia can continue to absorb the increasing costs, which have a multiplier effect, in view of the decline in prices.
It is interesting to discover - one can generalise on this point, but I am speaking in the context of where my experience lies, namely in the high rainfall area of the south-eastern Australia - that part of the problem that faces the small farmer has been caused by governments which, backed by the resources and concepts of economists and agricultural scientists, have been encouraging primary producers to develop their resources and to increase their production and their productivity on the basis that this will absorb the effects of the rising cost structure. A great number of primary producers have gone on to the money market and borrowed money in order to do these sorts of things, which they have been encouraged to do by government education, extension services, encouragement of farm clubs and so on.
We have the illustration of the wool industry in the high rainfall area of south eastern Australia, where men of the Commonwealth Scientific and Industrial Research Organisation, after looking at the problems in wool production, encouraged a great number of wool producers in that area to go in for high density stocking. The idea seemed all right on the basis of fairly widespread laboratory tests, but it ruined a great number of wool growers in Australia. I quote that only to illustrate the fact that governments, both State and Federal, along wih other people, bear a large share of the responsibility for producing the circumstances in which primary producers find themselves at the present time.
I rise in my place tonight, first of all to take the populace view on this because I see this, perhaps wrongly, in terms of a problem of people, and I see it in economic terms next. The tragedy when dealing with and debating this Bill is that there is no place in government for financing for a sense of compassion, nor can there be; there can exist only an area in which we attempt to devise the greatest good for the greatest number. Probably our efforts will fall into nothing because we will achieve little that we are expecting from this measure. I say this because notwithstanding anything that Senator Milliner said, we have 3 problems, which are not similar problems, in the wool industry for example.
The problem of the wool grower in western Queensland of which Senator Maunsell has been speaking is different from the problem of the wool grower in the mixed farming areas in South Australia or Western Australia where wool growing can go in conjunction with a diversification of other products, such as wheat, barley or oats. But it becomes finally an almost intractable problem when we consider the high rainfall zone where most of the sheep numbers of Australia tend to be carried. It looks as though we are back to an old problem again. A great number of people wish to stay on the land, irrespective of whether it is profitable for them. They cling to the land. I have seen them clinging to the land merely because this is the place where they can have a home and perhaps run a few sheep. They are not interested in the economics of it.
On the other hand, there are a great number of people who, under the impetus of government agencies, put themselves into substantial areas of debt in order to increase their production as the push of prices and increased costs bore down on them. They have devoted their lives to the land. I am thinking specifically of a great number of ex-service settlers in my own State who served their country honestly and faithfully in war, who have continued to serve their country honestly and faithfully as farmers, who have reared their children decently, who are now in a situation of extreme poverty and who are not in any position, at their age, to leave the land after a lifetime of struggle in war and peace. What would they become in the urbanised conglomerates? They are not fitters and turners, they cannot be taught to use a lathe and they cannot become plasterers or painters. They cannot get into the high wage earning area. They are in fact people who are being thrown on the industrial scrap heap. The nation owes something more than this to the primary producers of this country.
One of the characteristics of a society which is building up its secondary industries and its tertiary industries is that it does this constantly by destroying the citizenry who live on the land. This is the history of the country which invented the industrial revolution. The decline of the farming community in the United Kingdom was a remorseless process which went on for nearly 100 years. In that time there were swept away from the Scottish Highlands, the Irish lands and the Welsh hills, thousands of people who eventually found their way to the United States of America, Canada or Australia and sought to reestablish themselves on the land. This they did. But it seems to me that in the fullness of time we are beginning to repeat the lesson that we should have learned long ago from the development of this remorseless process in other countries. This happened in the United States of America where a whole generation was driven off the land after the 1914-18 war. It is happening in Canada at present. It is certainly developing in New Zealand to a much lesser extent than it is here. The primary producers bore the brunt of the development of secondary industries in Australia in the 1920s. They produced the income by which the great secondary industries and service industries in Aus tralia developed in the 1950s and the 1960s and I think that they require more in their travail than has been proffered at the present moment.
I support the Bill for one reason and that is because it is a humane step and, I believe, an economic step towards helping to retrieve the situation into which we, as politicians, have got the area of primary industry - and let no honourable senator sitting here say that he is without sin. The essence of the present attempt to improve the position is contained in part III of the Schedule which relates to farm build up. There must be a build up in area because this tends to produce an increase in stock carried and reduce the labour required. I do not know what area would be required in western Queensland, but I suppose that under average conditions one could increase the number of sheep carried on a given property by anything up to 33 per cent or, perhaps, 50 per cent without increasing the amount of labour required to maintain them. One may have to accept an increased loss rate from natural circumstances of one sort or another but the fact is that in the economics of the wool growing industry a pattern has been worked out over the 120 or so years of settlement in Australia. An economic area is one which will carry a minimum of about 10,000 sheep under average conditions. If a property is running substantially fewer than 10,000 sheep or an equivalent number of cattle, then there is not much hope of seeing that area rehabilitated.
Sub-paragraph (d) of paragraph (4) is probably the key to the problem that must be faced in the context of the wool industry. It states:
Since it is required that there must be reasonable prospects of successful operation of the builtup property, the Authority in considering the transfer price of land will have regard to its productivity value.
In simple terms that means the capacity of the individual. There may be 2 equal areas of land as to size, rainfall, soil types and sheep. One man, because he is skilled, will make a profit and the other man will make a loss. The test comes back to the capacity of individuals to take advantage of and properly use the resources that society will now place behind them. If they cannot do that, I foresee an inevitable tragedy, one which I had hoped never again to witness in my life. I regard the Bill as only a first step towards dealing with this problem. It is an urgent step which must be taken, and for that reason I commend the Bill.
– The position of the Australian Democratic Labor Party in relation to both the Bill before the Senate and the amendments moved by the Opposition through Senator Wilkinson was enunciated by Senator Kane when he foreshadowed certain amendments which the Democratic Labor Party will be moving in respect of this Bill and the associated Bill. As honourable senators know, 3 matters are being considered together in the course of this debate. They are the States Grants (Rural Reconstruction) Bill, the Loan (Farmers’ Debt Adjustment) Bill and the motion on the notice paper in the name of Senator Murphy stating:
That there be referred to the Standing Committee on Primary and Secondary Industry and Trade the following matter - Measures to alleviate the cost price squeeze on primary producers and to overcome the plight of the primary industries.
I want to indicate the attitude of the Democratic Labor Party in relation to matters which Senator Kane did not advert to specifically. As the honourable senator told the Senate, our projected amendment to the first Bill contemplates the creation of a commission of inquiry into the whole structure of the rural economy.
– How long do you think that would take?
– That is a fair question. We have spelt out on many occasions and in many documents and statements the reasons which prompt us to refer the whole structure of the rural economy to an expert commission of inquiry. We do this knowing, firstly, that there is a crisis in the rural industries requiring immediate relief and alleviation. More than that, there is a total movement in the whole structure of rural economies throughout the world, but particularly in this country. There is going to be a major readjustment, especially in Australia where up to this time primary industries have provided the bulk of our export income and have been responsible for the settlement of our people over vast areas of this great continent. But those things are changing. They are changing so dramatically and so fundamentally and in such a way that obviously the mere attempt to redress the immediate difficulties of a particular industry is not going to solve the problem.
There must be immediate relief for those industries and the people engaged in them but there must also be some attempt to examine the whole rural economy to see how it is going to adjust to the new world. That is going to take a long time. But, of course, this is such a major problem - it is going to involve the restructuring of our economy for many years to come - that it would be foolish to presume that the suggested commission of inquiry would not have to be an inquiry of great magnitude and of considerable length. That should not deter us from embarking on it. If we were going to rely only on this to redress the immediate difficulties of primary industry I think Senator Webster’s intervention would be well warranted. It would be an unreal approach. But that is not the position. This really is an attempt to make an assessment of the role which the rural sector is going to play in the whole of Australia’s national economic life. We have said that it should cover the period at least up to the year 2000. We think that this should be done.
After all, what have we seen? We have seen rural industry after rural industry moving from crisis to crisis - a hole being plugged up here and then something breaking out in another place. That cannot be allowed to continue. Obviously this is going to be a continuing process, resulting in a continuing drain on the national economy and revenue, unless the problem is tackled at the base, right at the grass roots. This is the objective behind the proposal we put forward.
– Does this proposal arise from the answers you may have got to the letters your leader sent out in Queensland?
– This amendment is in accordance with the terms of the approach we made to all primary industries in Australia and to many other areas, including academics operating in the field of agricultural economics, major primary institutions and other organisations of that character. We have received very many replies and they now are being collated, assembled and digested. 1 can say that there is considerable and wide and diversified support from many areas - from individual primary producers, from primary producer organisations and from academics, for an inquiry of this character. They say that it is necessary and that it is the way this problem must be tackled. Therefore we are not only justified in our proposition, we are comforted and encouraged to pursue it.
We will indicate to the Government in due time the course we think it should take. We will do this when we have been able to assemble, collate and digest this information and to present the views of so many organisations, institutions and people to the Government for its consideration. As I said, what prompts us to do this is the need for a basic investigation of the whole structure of the rural economy. The Australian Democratic Labor Party hopes that this investigation will be embarked upon in terms of the Vernon Committee’s report, though it hopes that such an investigation will meet with a much more practical response than that magnificant investigation and report and that its recommendations will be implemented.
– Is there any reason why the honourable senator has some confidence that the position will be different on this occasion?
– No. I must say that if I were to rely on the fate of the Vernon Committee’s report I would not approach this matter with a great deal of confidence. It is obvious that the condition of these industries is so dire that something must be done. My Party feels that ultimately the Government and those who do not see my Party’s way at the moment will come down to an acceptance of its proposition as the only real, practical, forward looking proposition encompassing the whole of the rural economy. I have spelt that out in some detail because of the motion of Senator Murphy that is being debated at the same time as the 2 Bills before the Senate that the cost-price squeeze on primary producers be referred to the Standing Committee on Primary and Secondary Industry and Trade. The Democratic Labor Party opposes this proposition for 2 reasons. Firstly, because it does not think that such a body would be equipped to undertake an investigation of such a major character. I say that with due respect to the honourable senators who comprise the Committee. I appreciate that there are some who are skilled in the practical application of agricultural methods, but there are a number who would make no claim to expertise in that field or to expertise in any field which might give such a committee an authoritative status which might make its report worth while and acceptable.
That is one reason why the Democratic Labor Party could not find it possible to support this proposition. The second reason is, of course, that the motion which Senator Kane has indicated will be moved as an amendment after the disposition of the amendment which has been propounded by Senator Wilkinson includes a provision for an examination by the Democratic Labor Party’s method of inquiry the thing which Senator Murphy’s motion proposes should be examined by his method, namely, the question of the costprice squeeze. If honourable senators were to refer to the circulated copy of the Democratic Labor Party’s proposed amendment they would find that, under the heading of rural producers costs, it takes into account the Australian tariff, Government policies and other factors tending to raise costs in Australia, the incidence of railway freight on rural producers in comparison with urban charges, road transport and the wage structure of the rural economy. Obviously it would involve a much more comprehensive exercise than the one contemplated by Senator Murphy and it would be undertaken by anybody which, if it is created, would be much more skilled, would have a greater command of expertise, and would have greater administrative and other resources at its command. We could therefore expect a very much more comprehensive and valuable investigation and a much more worth while report to come from such a body. The Democratic Labor Parly would much prefer, if it is a matter of preference, the type of examination it has suggested of the cost-price structure of the rural industry. For that reason the Democratic Labor Party will support its own proposal on this matter and will not find itself in accordance with the motion put forward in this regard by Senator Murphy.
The amendment which has been moved by Senator Wilkinson is, in its terms, extremely drastic. It is common ground in this chamber that there is a crisis in the rural industry. This fact is acknowledged by the Minister for Air (Senator Drake-Brockman), who in this chamber represents the Minister for Primary Industry (Mr Sinclair), and it is acknowledged by every honourable senator who has addressed himself to the matters which are now before the chamber. The fact that there is a crisis means that there is something which is calling for immediate relief and alleviation. The amendment which has been propounded by the Opposition is in the terms that the Bill be withdrawn. That is not merely an expression of opinion by the Opposition; it is an attitude of the Opposition. Its attitude is: ‘We want this. If we cannot get this then we think the Bill should be withdrawn and the whole of the proposed scheme should fall to the ground’. That would be a most drastic proposition to propound. It is a most dangerous thing to put forward. It would have dire consequences on the rural industry. After all, this chamber will be rising within the next 24 hours or perhaps the next couple of days. If this legislation is not passed at this stage and the Parliament does not assemble until August many primary producers will go to the wall in the meantime. That would be the inevitable and irrefutable consequence of acceptance of the amendment which the Australian Labor Party has seriously propounded in this chamber. I hope that, even at this stage, on reflection the Opposition will consider withdrawing this amendment or at least propounding it in different terms, because it amounts to nothing less than a betrayal of the rural industries either for some reason which may be theoretical or for political purposes. On that I do not dogmatise. But I think that every rural producer would be dismayed if this amendment were brought to his attention, and he would be confounded if in any way, due to the support of any group in this chamber, it should be carried.
All I can say is that the Opposition has put this proposition forward knowing that no party with any sense of responsi bility - I think our Party at least must be accepted as a Party of responsibility - could under any circumstances, and more particularly under these circumstances, be expected to support it. I can only feel that something like that must have actuated the Opposition. Members of the Opposition do not expect their amendment to be carried. They would be terrified by the consequences of their own action, and they are relying on the sense of responsibility of the Democratic Labor Party to destroy an amendment that they do not really want to be carried. That is a very serious position and. as I say, whether the Opposition considered the consequences of its action or not I do not know, but I think that on reflection it should even at this late stage be prepared to withdraw the amendment so that at least such relief as this Bill propounds could be made available without any risk or probability of denial to the primary producers who so tragically need it today.
The other matter to which I wish to refer is the proposed amendment which Senator Kane has indicated we will move to the Loan (Farmers’ Debt Adjustment) Bill. To answer Senator Webster’s earlier intervention, this amendment propounds a method for the immediate relief of the primary producer as against the idea of long term investigation and relief which was embodied in our first amendment, to which I have referred. This amendment is in 3 stages. Paragraph (a) states:
That the most rapid and most effective emergency relief to the primary producers would be achieved by the Commonwealth establishing a National Rural Finance Corporation outside the banking system; such Corporation to be financed by the Commonwealth to fund and re-finance rural debts, making provision for interest free non-redemption periods of the debts so funded;
That is what we think. I do not go into any details on that paragraph at this stage. It has been discussed before. We are of the opinion that only such a loan organisation, properly equipped and relevant to the cyclical type of production of the rural industries, can really, on the proper terms and in the proper way, provide the necessary finance not only for the immediate, urgent and emergent relief for the rural industries but for their on-going finance. What we contemplate is a completely new method under a completely new corporation to provide finance in the rural economy.
– Do you know how much money that may require?
– It may take some money. After all, there was very heavy capitalisation of the Australian Industry Development Corporation and there has been very heavy capitalisation of the wool scheme. Anything like this will take heavy capitalisation. But in matters relating to the rural industries the Parliament has been prepared to capitalise and to provide public revenue in great sums. We propose a way in which it might be done with very much more effect and very much more value to the industry.
– The rural industries would require about $2,500m.
– We would not have to capitalise a lending institution to that figure immediately. I am sure of that, and I think the honourable senator knows that the immediate loan demands of the rural industries are nothing of that nature. We would not have to capitalise a lending institution immediately to the extent of the ultimate loan level at which finance may be required. Paragraph (b) of our amendment states:
That such Corporation should be especially structured to the cylical nature of rural production and should provide on-going finance by way of low interest loans over a repayment period up to 25 years;
This amendment has the 2 paragraphs which I have quoted and a third paragraph. When this amendment is formally presented and comes before the Senate for decision,I will ask leave of the Senate that paragraphs (a) and (b) be taken together as 1 question and that the third part of the proposition be presented as a separate question for registration of a separate vote by the Senate. That third paragraph states:
That the Commonwealth Government should retire from the field of estate duties thus granting relief from the dual incidence of succession duties imposed by both the Commonwealth and State Governments.
There has already been a vote taken on that but I feel that this is a matter on which there should be insistence and reinsistence. Therefore I trust that when the occasion arises the Senate will be prepared to grant leave so that those who may not find themselves disposed or able to accept the first propositions embodied in paragraphs(a) and (b) may well find themselves disposed and able to accept the proposition contained in paragraph (c). For that reason we hope that the Senate will give an opportunity to have the two aspects of the means of relief presented separately. The Australian Democratic Labor Party therefore presents a short term solution and proposes a long term solution. I think that the rural industries are deserving of no less. They have immediate problems requiring urgent attention. They have long range problems of a most fundamental character which most of us will agree require deep examination and long range solutions. The Parliament would be doing less than its duty if it merely tried to heal these wounds by a process of healing by first intention without examining the base troubles at the very bottom of the structure of the rural economy. The Democratic Labor Party has continuously pressed in this field and it will continue to press and we trust that upon this occasion we will get support from both sides of the Senate for our propositions which go to the long range solution of the problems and the short range alleviation of the present crisis in rural industries.
– I support the Bills now before the Senate. They are very important Bills and I make no apology whatever for taking up the time of the Senate on such an important part of Australian industry so late in the sessional period when it is nearly finished. I think that this is a very important matter and that it should be debated thoroughly and looked at properly. Although the provisions in these Bills are not all that we have asked for it is a start and we must get the rural reconstruction scheme into action as soon aspossible. Many people have worked hard over a long period to bring about this scheme. It has not been easy and we want to see it in operation. Any amendment designed to delay this scheme should not be entertained in any way. I am rather surprised that Senator Wilkinson has moved that type of amendment which he has moved. He obviously does not understand the position in many of the rural industries in
Australia. If his amendment were carried it would have the effect of delaying the commencement of this scheme for quite a considerable time, and this is something that we do not want. Let us get the scheme off the ground and get down to business. If we find that there are weaknesses in it we can move amendments to the legislation to tidy it up and strengthen it.
Primary industries have only been able to survive since World War II by increased efficiency. They have doubled the volume of production in that period of 25 years without any increase in the work force. In that way they have kept pace with rising costs. Rising costs and falling world prices have caught up with primary industries generally and more especially the wool industry. The news tonight concerning the European Economic Community would seem to indicate that Great Britain has almost achieved her objective in being accepted as a member of the EEC. It was the most definite statement that I have heard on this matter. If it is a fact it will change the whole outlook of our primary industries and of our business generally. While many people have anticipated and have taken action to cope with it when it does happen, it is nevertheless catching up with us and there will be a great change in our way of life because of the difference in our trading operations in the future.
I want to refer particularly to the effect that this scheme will have on those areas of inland Queensland which were mentioned by Senator Maunsell. This whole area has been described as a disaster area. This situation has been brought about by years of drought and the fall in wool prices. The area also has probably the highest average freight costs in Australia owing to the fact that the wool areas of western Queensland are probably further from the coast than is any other wool area in Australia. They are arid or semi-arid areas and so cannot be ploughed. This makes it very difficult to diversify except that possibly some areas could go into cattle. It would appear that unless something is done fairly soon a wholesale walk off from those areas is imminent, not only from the station properties and the farms but also from the towns. As has been mentioned, people have invested in the towns, in small businesses and in their homes. Naturally there will be no demand for homes in those towns so if they have to leave they will be unable to sell their homes. It is generally accepted that the well being or otherwise of the rural areas is interlocked with the wellbeing or otherwise of the country towns, and when the rural areas fail the country towns go down with them.
In the areas I speak of large amounts of public money are invested. There is a big involvement of Federal and State governments and shire councils in railways, roads, public buildings, hospitals, schools, aerodromes and all those kinds of things. There will be a tremendous loss and writing off of public investment in those areas if something is not done to save them. The Australian Wool Commission has held the price of wool at about 30c a lb average but a much higher return than this is needed to make wool producers viable, to use the word that has been thrown about so much lately. Not only does a high return for the wool produced have to be achieved but also, to achieve any result in rural reconstruction, there must be some reduction in costs. One pf the things I have mentioned already in relation to this part of Australia is the high freights. Road and rail freights have increased along with other costs, and I believe that freights particularly have to be reduced to help producers in those areas. Freight has a twoway application. Firstly, everything brought into those areas becomes very expensive because of the high component of freight costs and the fact that in many cases sales tax is charged on the freight cost. Secondly, produce transported outwards - in this case wool - also attracts a very high freight rate. I believe that some help should be given to primary producers by a reduction in costs and by an endeavour to increase the price of wool.
I understand that the Queensland Government has asked for a special grant of $10m to help bridge the gap between now and the time when this scheme will become fully operative. This is a holding action designed particularly to keep these people on their properties. Many of them already face the prospect of leaving. It is designed to keep the properties intact until some scheme can be developed under this Bill. I hope that an early decision will be made by the Federal Government to grant this help to Queensland. I understand that the Queensland Government has applied for this aid and that it has spelt out the details showing why it wants the money. As I said this is a type of holding operation designed, possibly, to pay living allowances - we might call them that - to people to keep them on their properties until such time as something else can be evolved.
Tonight mention has been made of the possible effect of the changing setup in primary production. It was mentioned that this was a world wide trend. But I do not believe that we can afford to have a mass exodus from the land in any part of Australia. We must keep as many of these people as we can on the land. People in the rural industries have struck other troubles. Naturally there has been a big fall in land values in the rural areas and because of this the property owners have lost and equity they might have had in their properties. When land values were higher their debt could be handled, if they had a reasonable income, and if the debt was not too large. But when the value of the security drops by at least 50 per cent and the debt is still the same, the property owner does not have the same equity in his property. I am informed that the banks and the wool firms are having liquidity problems owing to the huge amounts tied up in unrealisable assets in the areas to which I have referred. This situation not only affects these immediate areas; it also affects lending throughout Australia for developmental purposes in other industries. When a lot of money is more or less frozen in particular areas the lending institutions cannot lend or use the money anywhere else. The inability to sell properties has prevented the creditors - mostly banks and wool firms - from realising on many of the properties and putting people off the land. That is why I suggest that, until we have some clarification of what is going to happen in the future, this holding operation becomes so necessary.
I would like to refer briefly to the demands of death duties particularly on estates where death occurred some time ago. As honourable senators know the valuation is taken at the date of death. Consequently in addition to debts to wool firms and other people some of these property owners have a tremendous debt owing to the Commissioner of Stamp Duties who is trying to collect death duties from them although they do not have any assets at all. They have to pay death duty assessed on the tremendously high values of a year or two ago. Under the present setup there is no prospect of establishing values on many of the properties. There have been no sales and when sales cannot be quoted, it is pretty hard to convince a valuer in these cases that values have dropped tremendously. There have simply been no sales so there is no effective way of establishing the value.
The DEPUTY PRESIDENT (Senator
Bull) - Order! In conformity with the sessional orders relating to the adjournment of the Senate, I formally put the question:
That the Senate do now adjourn.
Question resolved in the affirmative.
Senate adjourned at 11 p.m.
Cite as: Australia, Senate, Debates, 13 May 1971, viewed 22 October 2017, <http://historichansard.net/senate/1971/19710513_senate_27_s48/>.