Senate
30 May 1977

30th Parliament · 2nd Session

  1. Senate
  2. 30th Parliament
  3. 1977

The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 2.30 p.m., and read prayers.

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MINISTERIAL ARRANGEMENTS

Senator WITHERS:
Minister for Administrative Services · Western AustraliaLeader of the Government in the Senate · LP

– I inform the Senate that the Minister for Industry and Commerce, Senator the Honourable Robert Cotton, will be absent from the Senate during the remainder of these sittings in order to represent the Government at Western Samoa’s independence celebrations from 1 to 3 June. During his absence the Minister for Veterans’ Affairs, Senator the Honourable Peter Durack, will act as Minister for Industry and Commerce and in the Senate will represent the Minister for Overseas Trade and the Minister for Primary Industry. I will represent the Treasurer.

I also inform the Senate that the Minister for Transport, the Honourable P. J. Nixon, leaves Australia today for discussions in Europe, Canada and the United States. During his absence the Minister for Productivity, the Honourable Ian Macphee, will act as Minister for Transport.

Senator McLAREN:
South Australia

-Mr President, I seek leave to make a short statement in connection with the announcement just made by the Leader of Government in the Senate (Senator Withers).

The PRESIDENT:

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

Senator McLAREN:

-I am aghast that the Leader of the Government in the Senate should come into the chamber today and tell us again the names of some of those senior Cabinet Ministers who have fled the country in recent weeks. Last week the Prime Minister (Mr Malcolm Fraser) left the country in the company of the Minister for Foreign Affairs (Mr Peacock). Now the leader of the Government tells us that one of the leading members of the Cabinet from the Senate is absent from the Parliament and also that the Minister for Transport (Mr Nixon) is leaving the country today. I think it ought to be noted by the country at large that a government which says repeatedly that it has the interests of the country at heart is now allowing its senior Ministers to be absent from the country during the dying hours of the parliamentary session and when the country is in chaos. We have an unemployment crisis, and in particular we have before the Parliament at the moment the issue of the non-payment of the unemployment benefit to school leavers.

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PETITIONS

East Timor

Senator MELZER:
VICTORIA

– I present the following petition from 93 citizens of Australia.

To the Right Honourable the President and Members of the Senate in Parliament assembled. The petition of the undersigned respectfully showeth:

Whereas there is mounting evidence that some 60 000, perhaps as many as 100 000 East Timorese may have been killed since the invasion of East Timor by Indonesian forces; and whereas a resolution of the General Assembly of the United Nations on 1 2 December1975 stated that it ‘strongly deplores the military intervention of the armed forces of Indonesia in Portuguese Timor’ and ‘calls upon the Government of Indonesia to desist from further violation of the territorial integrity of Portuguese Timor and to withdraw without delay its armed forces from the Territory in order to enable the people of the Territory freely to exercise their right of self-determination and independence’; and whereas Australia’s Minister for Foreign Affairs, Mr Andrew Peacock, in a statement to the House of Representatives on 4 March 1976 described Australia’s policy on East Timor as clear’ and calling for the ‘withdrawal of Indonesian troops ‘, a cessation of hostilities’, ‘the implementation of an act of self-determination and a resumption of humanitarian aid through the International Committee of the Red Cross’, your petitioners most humbly pray that the Senate in Parliament assembled should:

  1. Ensure the Australian Government’s policy on East Timor is re-stated publicly and unequivocally; and
  2. Pursue the implementation of the said policy as strongly as possible; and,
  3. Call for the immediate discontinuance of all military aid to Indonesia, including the training of Indonesian troops on Australian soil; and
  4. Demand that the broadcasting Acts be no longer applied selectively to prevent communication with the Democratic Republic of East Timor; and
  5. Seek a full and open inquiry into the invasion of East Timor and the deaths of six Australian journalists; and (0 Urge the Australian Government and its instrumen talities not to prevent the shipping of humanitarian aid to East Timor.

And your petitioners as in duty bound will ever pray.

Since the petition exceeds 250 words in length, under sessional orders it may not be read. However, the full text will be recorded in Hansard.

Petition received.

The Clerk:

– A petition has been lodged for presentation as follows:

Pensions

To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

That those who have retired and those who are about to retire, are being severely and adversely affected by inflation and Australian economic circumstances.

The continuance of the means test on pensions causes undue hardship to them.

We call on the Government to immediately abolish the means test on all aged pensions.

To ensure a pension for all on retirement, and guarantee that all Australian citizens will retire with dignity.

Acknowledge that a pension is a right and not a charity.

And your petitioners as in duty bound will ever pray. by Senator Durack.

Petition received.

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SENATE STANDING COMMITTEE ON CONSTITUTIONAL AND LEGAL AFFAIRS

Notice of Motion

Senator MISSEN:
Victoria

-I give notice that on the next day of sitting I shall move: That:

  1. The following matter be referred to the Standing Committee on Constitutional and Legal Affairs:

Advisory Opinions by the High Court- whether the Constitution should be amended to enable the High Court to give advisory opinions on important questions of law or fact arising out of legislation or other matters;

  1. The Committee report to the Senate as soon as possible but not later than the last sitting day in September 1 977.

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QUESTION

QUESTIONS WITHOUT NOTICE

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QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator WRIEDT:
TASMANIA

-I ask the Minister for Social Security: In view of the fact that the Director-General of Social Services has decided that Miss Karen Green had not taken reasonable steps to obtain work, will the Minister inform the Senate what she or her Director-General consider reasonable steps to obtain work?

Senator GUILFOYLE:
Minister for Social Security · VICTORIA · LP

– It is understood that, under the Act, it is for the Director-General to be satisfied that reasonable steps have been taken to obtain work. In the case of the Karen Green application on 20 December, 4 days after that application was lodged she commenced proceedings in the High Court of Australia. No evidence was given to the Department at the time of lodging her application of any steps which had been taken to obtain work. On a review of the application, the Director-General has considered all facts that are relevant to that application and he has decided that reasonable steps had not been taken and that she is ineligible for unemployment benefit.

Senator WRIEDT:

– I ask a supplementary question. Presumably some criteria are laid down by the Minister or by the Director-General as to what constitutes reasonable steps. I ask the Minister: If such criteria are laid down, will she have them tabled in Parliament?

Senator GUILFOYLE:

– I will refer that matter to the Director-General to see whether he has any statements that he wishes to make with regard to what he considers to be reasonable steps to obtain employment. It will be accepted that in March of last year the Government announced that it would adopt a policy that unemployment benefits would not be paid automatically to school leavers at the cessation of the school year. Many of these matters have been canvassed throughout question time including the need to show whether a student is on vacation or is seeking permanently to enter the work force. These matters are taken into account by the Director-General. I will refer the question to him to see whether he has any statement which he wishes to make with regard to ‘reasonable steps to obtain work’.

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QUESTION

PRIME MINISTER’S OVERSEAS VISIT

Senator YOUNG:
SOUTH AUSTRALIA

– I direct my question to the Leader of the Government in the Senate. I do so following the outburst by Senator McLaren earlier this afternoon. I ask the Minister: Is it a fact that the Prime Minister has gone overseas, as have some other senior Cabinet Ministers, to deal with affairs of state of this country, and that they are not on junkets but rather on hardworking overseas trips? In the light of the comments by Senator McLaren and the so-called impartiality of one or two Press and radio commentators, I ask the Minister. Has he any figures to show the number of overseas trips by Ministers of the Fraser Government compared with those by Ministers of the Whitlam Government over the same period? Further, as a little addendum, can the Minister say whether or not Senator McLaren will be going overseas in the coming recess?

Senator WITHERS:
LP

-As to the last part of the question, I do not suppose that we could be so lucky. If Senator McLaren is going overseas, I think that we will all club in to send him there.

Senator Georges:

– You would give him a permanent pair, would you?

Senator WITHERS:

-Yes. I would give him a permanent trip abroad.

Senator McLaren:

– I will take you up on that offer.

Senator WITHERS:

-I am delighted. I have some figures here for the first 1 17½ months, or the first 530 days, of the Fraser and the Whitlam ministries. In the first 530 days of the Whitlam Government there were 71 visits overseas totalling 1053 days. In the first period of the Fraser Government there were 54 visits overseas totalling 584 days. As a comparison, Mr Fraser has had 6 visits totalling 5 1 days and in the same period Mr Whitlam had 8 visits totalling 86 days. In the same period I have had one visit of 5 days and Senator Murphy had 4 visits of 50 days. I do not know whether the honourable senator would like me to give other examples. Mr Lynch has had 5 visits of 50 days and Mr Crean had 7 visits of 94 days. To enable honourable senators to look at this matter, I seek leave to have a table incorporated in Hansard.

The PRESIDENT:

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

The table read as follows-

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QUESTION

SOUTH AUSTRALIAN RAILWAYS

Senator BISHOP:
SOUTH AUSTRALIA

– My question, which is directed to the Minister representing the Acting Minister for Transport, refers to the present negotiations, which are in their last stages, between the Australian National Railways management and the unions. I think settlement has been reached in respect of wages. Has the Minister seen a recent statement by the Australian National Railways union leaders stating that all 24 conditional issues would worsen the conditions of the South Australian Railways staff? I ask the Minister: In view of his own plea when presenting the second reading speech on the Australian National Railways Amendment Bill a few nights ago that the parties concerned should where possible reach agreement quickly, will he take up this matter to see to what extent there might be some modified attitude towards the conditions which have applied over the years to South Australian Railways employees, particularly in respect of guards, to see what might be done to facilitate an end to the dispute?

Senator CARRICK:
Minister Assisting the Prime Minister in Federal Affairs · NEW SOUTH WALES · LP

– Whilst I have not seen the particular statement to which Senator Bishop referred, I am aware, as he is, that this is an enormously complex subject which covers a diverse range of problems. I shall refer the honourable senator’s question to my colleague, the Acting Minister for Transport, in another place and shall see whether he is willing to study it and comment upon it.

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QUESTION

DROUGHT RELIEF TO FARMERS

Senator MESSNER:
SOUTH AUSTRALIA

-My question, which is addressed to the Minister representing the Minister for Primary Industry, relates to the provision of drought relief to farmers in South Australia. Is it a fact that the Commonwealth Government has agreed to provide funds to the State governments to assist drought affected farmers? Has the South Australian Government met all the requirements necessary to qualify for assistance under the scheme? Has the South Australian Government received an allocation of funds from the Commonwealth for this purpose? If so, to what extent? Who is responsible for setting the criteria to establish eligibility to qualify for that assistance? What is the interest rate agreed between the States and the Commonwealth to be charged on loans made to farmers under the scheme?

Senator DURACK:
Minister for Veterans’ Affairs · WESTERN AUSTRALIA · LP

– The responsibility for the provision of drought relief to farmers rests primarily with State governments. However, the Commonwealth assists with expenditure on agreed relief measures when the expenditure is considered to be beyond the capacity of the State concerned to meet from its own sources. In specific terms, the Commonwealth Government meets all expenditures by a State in a year on agreed measures in excess of a base amount set for a State. In the case of South Australia the base amount is $ 1 .5m. When South Australia has expended the sum of $ 1.5m the Commonwealth will reimburse the State for any expenditure above that sum.

In regard to the specific questions asked by Senator Messner, the answer to the first question is yes and to the second and third questions the answer is no. The fourth question is not really applicable. In respect of the fifth question, eligibility for States to qualify for national assistance from the Commonwealth has been determined by Commonwealth-State agreement and the agreement is of long standing. As to the sixth question, there is no agreement in respect of interest rates. With respect to the particular circumstances in South Australia, the latest information indicates that the main use of drought funds is for the return of stock from agistment. Although there were good falls of rain in the early autumn period, conditions have remained dry since that time and some areas have reverted to drought conditions. As a result, there could be an increased demand for financial aid which could raise the South Australian expenditures above the base figure.

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QUESTION

DROUGHT RELIEF TO FARMERS

Senator WRIEDT:

-I ask the Minister representing the Minister for Primary Industry, a question which follows upon the question he has just answered: Is he aware that the sum of $ 1 .5.m to which he has just referred in respect of South Australia has been the sum which has applied for the past 4 years? Will he convey to the Treasurer the need for the base figure for all States to be raised in line with the increased commitments of the States during those 4 years?

Senator DURACK:
LP

-I am familiar with the matter of Commonwealth assistance for drought relief and the problems raised by base figures because my own State of Western Australia has droughts from time to time, as we all would appreciate. I will take up the matter raised by Senator Wriedt with the Minister whom I represent and request that these matters be looked at again.

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QUESTION

NEEDS OF THE MENTALLY HANDICAPPED

Senator DAVIDSON:
SOUTH AUSTRALIA

-My question is directed to the Minister for Social Security. I refer to an article in today’s Australian which refers to the needs of the mentally handicapped. Has the Minister or her Department undertaken any recent study of the report on the mentally handicapped which was presented by the Senate Standing Committee on Health and Welfare and tabled in this Senate in May 1971? As this Committee, which was chaired by the late Senator Dame Ivy Wedgwood and included a number of honourable senators who are still in the Senate, did extensive research into the background of a proposed institute, will the Minister again examine the recommendations of that Senate Committee? Whilst it is true that the recommendations relating to a national advisory council and some funding provisions already have been implemented, I ask whether the Minister or her Department will look again at the recommendations relating to surveys, registration of handicapped persons and a disability register so that any institute on mental retardation might be able to function more effectively?

Senator GUILFOYLE:
LP

-I thank Senator Davidson for drawing attention to the report of the Senate Standing Committee on Health and Welfare. Recently Mr Hunt, the Minister for Health, and I had discussions with people who are developing plans for an institute in this country. I will again read the recommendations of the Standing Committee and draw the attention of those interested in forming an institute to the recommendations, particularly those with regard to surveys and registration of handicapped persons. The matters that are under consideration by many people in this country with regard to an institute need further investigation. I believe there is considerable support in the country for some development of this nature but more definition would undoubtedly be required. I believe that the report of the Senate Standing Committee may well be of assistance in this investigation.

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QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator KEEFFE:
QUEENSLAND

– I ask the Minister for Social Security: Does Mr Justice Stephen state in his judgment that the Director-General of Social Services should make his decision in the Karen Green case in the light of information she could have placed before him? Before making his latest decision, did the Director-General seek further information from Miss Green?

Senator GUILFOYLE:
LP

– When reviewing the case of Karen Green, the Director-General used all the information that was known to him at that time. Certain information was given throughout the court proceedings which previously was unknown to the Department. All factors were taken into account when the review was undertaken.

Senator KEEFFE:

-I ask a supplementary question. I do not think the Minister understood the point I was making. I repeat the last part of my question: Before making his latest decision, did the Director-General of Social Services seek further information from Miss Green?

Senator GUILFOYLE:

-I am unaware of the answer to that specific question. I understand that the Director-General reviewed the case and used all information known to him. I will check to see whether he made personal contact with Miss Green to see whether she had information that she wished to offer additional to that which she offered to the court.

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QUESTION

PROPOSED ROUTE OF STUART HIGHWAY

Senator KILGARIFF:
NORTHERN TERRITORY

-I direct a question to the Minister representing the Minister for Transport. It has been reported by the media that after consultation with Mr Nixon the South Australian Transport Minister, Mr Geoff Virgo, has finally selected a route for the Stuart Highway south of the Northern Territory border to Port Augusta and has now indicated that the decision rests with the Federal Minister for Environment, Housing and Community Development, Mr Kevin Newman. Mr Virgo said that the South Australian Highways Department would commence investigative and planning activities but it was not possible to start significant road works before 1978-79. He said that he did not envisage any real progress in the building and sealing of the highway before the turn of the decade, subject to finance being made available from the Federal Government. In view of the fact that many many representations have been made to the Government, will the Federal Government take an active role in giving the highest possible priority to this national highway project to overcome the procrastination and reluctance on the part of the South Australian Government to proceed urgently with this project? Has any Federal finance been made available from the Federal Government for the sealing of any part of this road, for example, between Port Augusta and Bookaloo? Is the road to be financed by the Federal Government without any contribution by the State?

Senator CARRICK:
LP

-Senator Kilgariff and other honourable senators have asked a number of questions on this important matter over a period and I have before me some basic information which relates to, I think, the three specifics that Senator Kilgariff asked. As to his first question, the Government is well aware of the importance of the Stuart Higway both to residents of the Northern Territory and to the nation as a critical link in the total national highway system. The Minister for Transport has accepted the recommendation of a joint CommonwealthState committee that the Stuart Highway should be constructed along one of two alternative routes, each of which is some 200 kilometres shorter than the present Stuart Highway. I understand that the South Australian Minister for Transport has also accepted this recommendation. The Minister for Environment, Housing and Community Development has directed that public comments should be sought on the environmental aspects of each route. When this has been completed a final decision will be possible and it is hoped that construction works can commence when the necessary pre-construction investigations have been undertaken.

As to the second question, I understand that national highway funds have been expended on upgrading and maintaining the Stuart Highway. While no certified statements of expenditure are available, South Australia had expected to spend some $ 1 30,000 on upgrading and sealing works between Port Augusta and the South AustralianNorthern Territory border during 1974-75 and 1976-77. With major expenditure of national highway construction funds no longer required on the Eyre Highway following its completion last year, it is hoped that work can commence shortly on sealing the 50 kilometres section between Bookaloo and Mount Gunson. However, no indication has yet been received from Mr Virgo as to the specific works his State proposes to undertake in the new financial year.

As to the third question, under the National Roads Act the Commonwealth provides substantial non-repayable grants to the States for the construction and maintenance of national highways and does not require the States to contribute any of their own funds. It is expected that these arrangements will be continued in future legislation. The total level of grants available over time for national highways in South Australia and in other States will depend on prevailing economic conditions.

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QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator GEORGES:

-I direct a question to the Minister for Social Security. I express the view that the Karen Green decision is the most callous administrative action by a head of a department that has been brought to the notice of the Senate. I ask the Minister: Does she agree with the court’s findings in regard to the period of 3 months elapsing in the school vacation before a school leaver becomes eligible for the unemployment benefit? Does she agree with Judge Stephen when he said: it cannot be proper to impose such a period in the case of one class of applicants . . . while imposing upon no other class of applicant any such requirement relating to a minimum period of job-seeking.

I ask the Minister: Shall we forget about what happened in the past 6 months and consider what is going to happen in the next 6 months? What is to be the decision of the Governmenther decision- in regard to school leavers at the end of this year when the court’s decision is taken into account?

Senator GUILFOYLE:
LP

– The judgment of Mr Justice Stephen is well known to members of the Senate. It has been discussed on numerous occasions in this House. Many matters were referred to by Mr Justice Stephen in his judgment. One was an expression of his view about a period which needed to be taken into account under the present policy of the Government in regard to school leavers. He did find in his judgment that time was of significance and in this instance the Director-General has taken into account the matter of time in the decision that he has made. As to the future in regard to school leavers, the policy of the Government at present is that school leavers shall not automatically be paid the unemployment benefit on the cessation of the school year. At present, a committee under the chairmanship of Dr Myers is looking at all matters related to unemployment benefits. Dr Myers ‘ committee is looking at the philosophy of the unemployment benefits system in this country and the administration of it. I expect that there may be recommendations from Dr Myers which will have a bearing on future Government policy with regard to unemployment benefits.

Senator Button:

– You have no views yourself on the answer to the question?

Senator GUILFOYLE:

– I would not wish to pre-empt any views that could come from the committee that has been set up by the Government to investigate the matter of unemployment benefits. The former Labor Government, of which the honourable senator was a supporter, set up a working party to look at the administration and policy of unemployment benefits and this Government acted on those recommendations with regard to school leavers. With regard to the observation that was made by Senator Georges concerning the Director-General, I find it regrettable that a distinguished public servant of his calibre should be subjected to such an assertion by the honourable senator. He is the same person who served the Labor Government as Director-General of Social Services. He is the Director-General who has shown outstanding ability and integrity throughout the whole of his Public Service career.

Senator Wriedt:

– Nobody is questioning that.

Senator GUILFOYLE:

-The honourable senator has suggested that he has made a callous decision bearing in mind the judgment of the High Court which placed within his responsibility the decision to determine eligibility. I find it a regrettable statement by the honourable senator.

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QUESTION

HANDICAPPED CHILDREN’S ALLOWANCE

Senator JESSOP:
SOUTH AUSTRALIA

-I direct a question to the Minister for Social Security. The Minister will recall that I asked her to investigate a case where a child amputee in Adelaide was declared ineligible for a handicapped children’s allowance although, according to a newspaper report, another child with an alleged identical amputation was receiving an allowance. Is it a fact that since that time many parents have been notified that their children no longer qualify for such an allowance? One such case, Trina Wilkie, was described in the Adelaide Sunday Mail a few days ago and I understand that her parents are appealing to the Department. Can the Minister say how many disallowances have occurred? What reasons can she give as to why the Department has decided to withdraw these benefits?

Senator GUILFOYLE:
LP

– Without dealing with the specific case that has been mentionedbecause I am not clear that I have information which relates to it- I point out that the handicapped children’s allowance is payable in respect of a severely handicapped child. Applications for the allowance are referred to the Department of Health by the Department of Social Security and are considered by a few specially selected medical officers in each State. The medical officer’s task is to determine from the information provided on the application form, a section of which is completed by a medical practitioner who has supervised the handicapped, whether in his opinion the child is handicapped to the extent that he qualifies for payment of the allowance. The medical officer also has at his disposal details of the care and attention provided for the child and the number of hours a day such care is required. Where it is considered necessary, the medical officer may himself examine the child or seek specialist opinion, if one is not already available, to assist in his assessment of the case. There is provision for the medical officer to suggest a review medical examination at some future date if the child ‘s condition warrants it.

In the period from 1 July 1975 to 30 June 1976, 106 handicapped children’s allowances were cancelled throughout Australia, basically for medical reasons. A further 141 allowances were cancelled from 1 July 1976 to 21 March 1977 for similar reasons. Each claim is considered on its merits taking into account the severity of the handicap, any secondary disability and the ability of the child to cope with his handicap. The Department of Social Security relies on the medical opinion that accompanies each application but it is always open to any person to seek a review or make an appeal against any decision that has been given.

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QUESTION

TELEVISING OF FA CUP

Senator DONALD CAMERON:
SOUTH AUSTRALIA

– I direct a question to Senator Carrick as Minister representing the Minister for Post and Telecommunications. My question refers to the successful direct televising of the British FA Cup soccer final. In view of the fact that the Greek and Italian communities now form a large and integral part of the Australian community, will the Minister ask the Minister for Post and Telecommunications to consult with the Australian Broadcasting Commission with a view to having the top soccer finals in Greece and Italy also televised direct to Australia?

Senator CARRICK:
LP

– I will bring the question to the attention of my colleague in the other place.

page 1591

QUESTION

VIETNAM

Senator KNIGHT:
ACT

– I direct my question to the Minister representing the Minister for Foreign Affairs. I refer to a statement made in the Australian Broadcasting Commission program Four Corners on 30 April this year by a Canadian priest who recently had been expelled from Vietnam. He said:

  1. . the northerners did not fight the war to unify the country, but to conquer a colony. And South Vietnam now is being exploited. Everything is being pulled out of it for the north. They’re reducing the economy. They’re killing the economy really -

Can the Minister say, from information available to the Government, whether this statement is accurate? Can he say whether Australian aid provided, as I understand it, for the reconstruction of Vietnam is being used for that purpose, particularly in the southern areas?

Senator WITHERS:
LP

– I will have to seek some information in answer to the first part of the question. I have no knowledge of it myself. As I understand it, within this year’s financial expenditure, aid predominantly will be related to cattle and dairy products, projects and training, food aid and medical activities. That is the only information I have. Perhaps it would be a good idea if the honourable senator put his question on notice so that the Minister can give a full answer.

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QUESTION

FOX REPORT

Senator BUTTON:

– My question, which is directed to the Minister representing the Prime Minister, relates to an admission by Mr Lang Hancock on an Australian Broadcasting Commission program last week that he had prior information of the contents of the second Fox report before it was released. In the course of that interview Mr Hancock said:

Obviously I cannot disclose the scource I got it from but I did have that information. I passed it on to the Prime Minister 2 days before the Fox report was released.

He then went on to say that in a telex to the Prime Minister dated 23 May he had set out the 5 principal recommendations of the Fox report together with his comments on them. I ask: Who else other than Mr Lang Hancock had prior information regarding the contents of the second Fox report? Why was this information made available to people like Mr Hancock before the report was officially released? Is this the Government’s normal way of doing business in the interests of its great and powerful friends?

Senator WITHERS:
LP

- Mr Lang Hancock may be great and powerful but he is not often a friend. He is a friend of mine but not often is he a friend of the Government. I will have this checked. As I understand it no person in any part of the Government had anything to do with the report until it was released by Mr Justice Fox. As I understand it, it was printed under the direction of the Fox Commission. I trust that the honourable senator is not suggesting that the printers disclosed any part of the report. As far as I am aware- I will check this matter for the honourable senator- until Mr Justice Fox gave the report to the 2 Ministers concerned, the Minister for Aboriginal Affairs and the Minister for the Environment, Housing and Community Development, no other person in the Government had a copy. From where Mr Lang Hancock got his copy I do not know, if in fact he had a copy.

Senator Button:

– He said so.

Senator WITHERS:

-He has made a lot of allegations about what he had, what he said and everything else. Perhaps the best thing that I can do is to see whether I can find the telex and see in fact whether he did have information or he was taking a guess.

Senator BUTTON:

-I have a supplementary question. It is implicit in the Minister’s answer that Mr Lang Hancock is lying. Is the Minister saying that?

Senator WITHERS:

-I did not say he was lying. If the poor honourable senator likes to take it that way he can. I never said Mr Lang Hancock was lying. I said that perhaps the best thing to do would be to have a look at the telex and see what he said in it. If the honourable senator would try to get some facts occasionally instead of relying for his misinformation on newspapers he might advance a lot more quickly.

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QUESTION

COMMUNITY YOUTH SUPPORT SCHEME

Senator MISSEN:

– I direct my question to the Minister representing the Minister for Employment and Industrial Relations. I refer to a question asked by me last week in respect of the continued funding of new projects under the Community Youth Support scheme. Has the Minister any further information about the scheme and its future funding?

Senator DURACK:
LP

– Last week I was asked a question on this matter by Senator Missen. During the consideration of the reports of Estimates Committees on Friday the subject was also discussed at some length, as many other things were discussed. I am pleased to announce that the Government has decided to approve funds until the end of 1977 to enable new projects under the community youth support scheme to commence. The scheme will then be reviewed again. As I announced in answer to questions following the recent review of the scheme the Government suspended new approvals. However, as I said, it has now decided that it will continue to approve new projects until the end of this year. It has decided also that in future the period for which projects will be approved will not exceed 6 months, but that will not preclude further applications for extensions beyond that time. As I said in the discussions last week in the Senate, there are 116 projects now in operation and they involve about 1 5 000 young people.

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QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator GRIMES:
NEW SOUTH WALES

– I preface my question to the Minister for Social Security by saying that the Opposition also has a high opinion of the character and ability of Mr Daniels, her Director-General. We have always asserted that the decision he made was made under direction from the Minister, as may be done under the Social Services Act. In view of the Minister’s persistence in passing the responsibility for this decision to the Director-General of Social Security and in view of her reluctance or refusal to answer questions on this matter other than to say that she will refer it to her Director-General, will she and the Government facilitate the appearance of the Director-General before the Senate, if necessary before the Bar of the Senate, so we may ask questions and get direct answers on this very important subject?

Senator GUILFOYLE:
LP

– The suggestion that the Director-General made his determination under my direction is not a statement of fact. The rest of the questions are irrelevant to the situation which is being discussed. Under the Social Services Act the Director-General has the power and responsibility to make determinations of eligibility. This he has done. He has made a determination. He has announced that determination. The repeated questioning by the Senate and by people outside the Senate as to his capacity to make this determination seems to show a misunderstanding of the Social Services Act and its functions.

Senator GRIMES:

-Mr President, I have a supplementary question. I ask the Minister for Social Security whether it is a fact that in March last year she and another Minister announced that the Government’s policy was that it would not pay the unemployment benefit to school leavers? 1$ it not a fact that the decision of the Director-General of Social Security in the Karen Green case and other cases was made as a result of this announcement? Was this not a direction to the Director-General on how to exercise his discretion under the Social Services Act?

Senator GUILFOYLE:

– Last March the Government announced a policy decision with regard to the unemployment benefit for school leavers, the postponement of benefit to people who had voluntarily left their employment and other matters that were relevant to the unemployment benefit. That was a policy decision of the Government. I fail to understand how there can be any misunderstanding about that. I also fail to understand how it can be assumed by honourable senators opposite that there is some difficulty for the Director-General in making a determination in accordance with a policy decision of the Government. He is the same Director-General who was able to make a determination with regard to the Labor Government policy that the unemployment benefit would be paid to anyone who could not find a job of his own choice. Senator Grimes will remember the great resentment by the Australian community of that policy decision of the Labor Government. That policy decision by the previous Government and the abuse of the unemployment benefit system were matters that still had to be administered by the DirectorGeneral. He made his determinations in line with the previous Government’s policy decision, that those who wished to be beekeepers, lion-tamers, snow-shovellers in the tropics or whatever would be paid unemployment benefit if they could not find occupations suitable to their own choice. He made those determinations. He has equally found that he can make determinations in accordance with a government policy which does not automatically pay unemployment benefit to school leavers throughout the long vacation.

page 1593

QUESTION

AIR SERVICES TO KING ISLAND

Senator ARCHER:
TASMANIA

-I ask a question of the Minister representing the Acting Minister for Transport. The transport problems of King Island are well known. Last week the Minister, Mr Nixon, gave approval for the sale of 2 DC4s from Qantas Airways Ltd to Brain and Brown Airfreighters Pty Ltd, conditional upon the proprietor cancelling the purchase of 2 Carvairs on which I understand $100,000 deposit has been paid and which would be lost. Can the Minister advise whether the conditions are still as stated, whether or not they have been accepted and whether or not a reasonable service will be continued?

Senator CARRICK:
LP

– Whilst I realise just how important the question is to King Islanders, I have no specific information regarding the terms of sale either of the DC4s or the Carvairs. I will seek out that information and ask the Minister to let the honourable senator have it.

page 1593

QUESTION

ALLEGED CENTRAL INTELLIGENCE AGENCY ACTIVITIES IN AUSTRALIA

Senator BROWN:
VICTORIA · ALP

– My question is directed to the Minister representing the Prime Minister. It arises out of the Press statement by the Prime Minister on 24 May 1977 entitled ‘Allegations of CIA Activities in Australia ‘. The portion of the statement to which I refer is at the top of page 3. 1 quote:

The Royal Commissioner on Security and Intelligence, Mr Justice Hope, who was appointed by the Leader of the Opposition in August 1974, has recently completed a most extensive series of investigations and reports on all aspects of Australian intelligence and security. His investigations included the activities of foreign intelligence services in Australia. There is nothing in the Royal Commissioner’s reports which give any substance to the allegations relating to CIA activity which have occupied so much attention over the last 4 weeks.

Were the original terms of reference for the inquiry into the intelligence and security services of the Australian Government such that they would enable Mr Justice Hope to investigate also foreign intelligence services in Australia? If not, I ask: When were the terms of reference extended to cover the activities of foreign intelligence services in Australia?

Senator WITHERS:
LP

-I do not have the terms of reference with me. I will look them up and let the honourable senator know tomorrow, if possible.

page 1594

QUESTION

PROPOSED POWER STATION AT PORT AUGUSTA

Senator JESSOP:

– Is the Minister representing the Acting Minister for Transport aware of the recent announcement of the South Australian Minister of Mines and Energy, Mr Hudson, that the Electricity Trust of South Australia proposes the construction of a third power station at Port Augusta, to utilise coal to be extracted as a result of further development of the Leigh Creek coal field? Is he also aware that Mr Hudson said that the siting of the power station would depend upon the freight rate offered by the Australian National Railways? Can the Minister say whether a favourable rate has been decided? If it has not, will the Minister ask his colleague to make an early decision to enable this important South Australian project to go ahead?

Senator CARRICK:
LP

– I have an informal understanding that the 2 facts stated by Senator Jessop have been published- that is, the proposed establishment of a third power station to use Leigh Creek coal, and the Minister for Mines and Energy in South Australia has indicated that the future of the power station, its building and operation would depend upon the execution of a favourable freight rate. I am well aware of the importance of the development of Leigh Creek coal to the whole of the economy of South Australia. I am not aware of any circumstances of the development of negotiations with the Australian National Railways as to freight rates. I will bring the matter to the attention of my colleague in another place.

page 1594

QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator WHEELDON:
WESTERN AUSTRALIA

-My question is directed to the Minister for Social Security. I refer to her earlier answer to a question in which she said that the actions taken by the previous Labor Government whereby allegedly extravagant benefits were being paid to unemployment persons were taken by the Director-General of Social Services in accordance with the policy of the Labor Government. Is this not in fact an admission that the actions which the DirectorGeneral is now taking with regard to the payment of the unemployment benefit to school leavers are likewise being taken in accordance with the policy of this Government? I therefore put it to the Minister: Would it not be for the Government a more honourable course and a course which would deflect from the DirectorGeneral of Social Services criticism which should not be directed against him, if the Government were to be honest about this matter and say that the Director-General is carrying out government policy rather than that the Director-General is carrying out his own policy?

Senator GUILFOYLE:
LP

– I have stated repeatedly that last March the Government announced a policy decision with regard to the payment of the unemployment benefit. Its decision was to the effect that the benefit would not be paid automatically to school leavers. I have said that probably at least 20 times, and it takes account of the matter that was raised by the honourable senator. As I have stated, the policy of the previous Administration was that the unemployment benefit would be paid to everyone who could not find a job of his own choice. We have said that the unemployment benefit would not automatically be paid to school leavers. I have said further that the Director-General makes the determinations with regard to eligibility. I find no inconsistency between that and the proposition which Senator Wheeldon has put for the first time in this Senate- namely, that there is a government policy and that the determinations are made by the Director-General- as that is precisely the point that I have been trying to make since this matter arose. I congratulate the former Minister for Social Security on putting the question in the way that he has because it has enabled me to clarify this matter for his colleagues.

page 1594

QUESTION

AUSTRALIAN UNION OF STUDENTS

Senator BAUME:
NEW SOUTH WALES

– My question, which is directed to the Minister for Education, concerns the Australian Union of Students and its executive. Is the expenditure of vast AUS funds, perhaps amounting to $ 1 m on current account, in the hands of an executive? Can the Minister advise the method by which this executive is elected? Can he assure the Senate that the AUS election processes are fair, democratic and properly conducted? Can he assure the Senate that the AUS executive genuinely represents the majority view of students? If those assurances cannot be given, will he again examine, perhaps with his colleague the Minister for Transport, the present position of the AUS which has a monopoly position with regard to the provision of certain charter flights in Australia and which is partly being bankrolled by government?

Senator CARRICK:
LP

– The honourable senator has asked, I think, some 5 questions. The Australian Union of Students is a second tier organisation; that is, the student body of each university or college decides by voting whether or not to affiliate with the second tier, the AUS. So, the decision is made by the student body of each institution. Those students, exercising their rights, can opt to belong or not to belong. It is a matter, of course, for the students to participate in the balloting. It is true that the AUS handles a very large amount of funds, derived from a capitation fee of $2.50 for each student of each institution.

Senator Georges:

– The price of 2 packets of cigarettes; that is all it is. They are jibbing about paying that.

Senator CARRICK:

-It is important that silience should immortalise these statements. What I was about to say was that that amounts to some $700,000, which is equivalent to slightly more than 300 000 packets of cigarettes. The AUS is also in control of a very considerable amount of incoming and outgoing funds through its travel agency. There has been a great deal of discussion whether the election processes of the AUS are democratic. Those discussions have been concerned not only with the processes that enable student bodies to decide whether to affiliate but also the voting processes of the delegates. As I understand it, a policy decision is made by the majority from a particular institution and the minority must support the majority. If that is true, it is a matter of judgment whether or not it is democratic.

The Government has been concerned about a number of allegations that have been made that, in AUS procedures, violence, intimidation and threats have been used as weapons of persuasion. The Government has indicated quite clearly to the principals of all universities and colleges that the ordinary law of the land must prevail in all institutions and that no person, student or otherwise, shall be subjected to any kinds of threats, intimidation or violence. We have been assured by the principals that that will be upheld. The Government, through me as the responsible Minister, has also indicated to the institutions that the institutions should look to their governances- their ordinances and regulations- to ensure that the rules under which student bodies function are wholly democratic and to see whether there ought to be provisions in those rules for an opting out procedure in terms of conscience. I remind the honourable senator and the Senate that, very properly, academic institutions are statutory bodies with independence of operation. They are independently governed so that academic freedom may be maintained. Therefore they are responsible entirely for the conduct of student bodies on their campuses. The Government, concerned as the honourable senator obviously is concerned with this situation, has asked the institutions to look to their rules and ordinances to see whether they are discharging their functions properly and to see whether students can be helped into a full democracy.

Senator BAUME:

– I have a supplementary question. I asked the Minister briefly about the Government’s role in placing the Australian Union of Students in an advantageous financial position through its travel service. I simply wonder whether he can assist the Senate by telling us whether the Australian travel service enjoys a monopoly in the provision of any kind of travel arrangements outside Australia.

Senator CARRICK:

– There are 2 things I should have done. I should have indicated to the honourable senator and to the Senate that the funds that go by way of the $2.50-the 300 000 packets of cigarettes- to the Australian Union of Students are from the students’ own funds and not from the Government. The arrangements for the travel service are made entirely by the AUS and thus are not directly a matter for the Government but I understand that it is a monopoly. I am not sure why there is not more free competition between other travel agencies. I will bring that aspect of the question to the attention of the Minister for Transport and see whether he will respond with relevant information.

page 1595

QUESTION

PAPUA NEW GUINEA: ALLEGED INDONESIAN INTRUSION

Senator GIETZELT:
NEW SOUTH WALES

– My question is directed to the Minister representing the Prime Minister. What information has the Government received concerning the intrusion of Indonesian armed forces into Papua New Guinea and the reported death of a Papua New Guinean citizen? Is the Government considering reports of increasing civil disturbances within West Irian? Does the Minister agree that such disturbances are of vital concern not only to Papua New Guinea but also to Australia? Can the Minister say whether there are any Australian personnel in the border region and whether they have been given any advice or instruction? Does the Government intend to express concern to the governments involved in the disturbances?

Senator WITHERS:
LP

-I will seek that information for the honourable senator.

page 1596

QUESTION

TASMANIA: FREIGHT EQUALISATION SCHEME

Senator WALTERS:
TASMANIA

-My question is directed to the Minister representing the Acting Minister for Transport. I know that the finalisation of the south bound freight equalisation scheme will be a very complex undertaking but can the Minister give any indication for Tasmanian industries as to when the list of eligible items will be announced?

Senator CARRICK:
LP

-It is true that, having established the north bound freight equalisation scheme, the Government’s announcement of a similar technique for south bound freight is of vital significance to all Tasmanians. I do not have with me details as to when the list will be available. I shall ask my colleague in another place, the Acting Minister for Transport, for that information.

page 1596

QUESTION

UNEMPLOYED TEACHERS

Senator O’BYRNE:
TASMANIA

– My question is directed to the Minister for Education and concerns the increasing number of unemployed teachers in Australia. For example, in New South Wales there are 700 unemployed teachers and in Queensland the number of teachers registered as unemployed in March was 133. 1 ask the Minister: Does the Government have any policies designed to relieve this chronic human waste in skills? Does the Minister agree that the high percentage of classes in excess of 30 pupils is a major contributory cause to this high unemployment amongst the teaching profession?

Senator CARRICK:
LP

– The first step towards the relief of unemployment in New South Wales would be to direct the attention of Senator O ‘Byrne to the election promise of the Wran Labor Government to employ all of the unemployed teachers in New South Wales. So if 700 teachers are unemployed in New South Wales no doubt Senator O ‘Byrne and his colleagues will ask Mr Wran when he is going to keep his election promise. Having said that, Senator O ‘Byrne, in common with all honourable senators, will have noted the published statements that all the States have surplus funds and therefore have available to them as a result of Commonwealth Government action a sufficiency of money to use, if they so desire, to employ unemployed teachers or other unemployed people.

Senator O ‘Byrne may have noticed that when his own State had the most chronic unemployment in Australia the State Government had a surplus in revenue of $4.7m and, I think, some $16m or $18m in capital. In other words, the answer is that the Commonwealth Government has provided through its revenue sharing funds a sufficiency of money to take up the slack in education if the Government of New South Wales has the will and the desire so to do. I must stress to the honourable senator that the State governments have elected to bring in tax reduction and therefore to forgo revenue rather than to use revenue to employ people. That is their decision and not a decision to be made by us. Their capacity to have done otherwise is demonstrable.

page 1596

QUESTION

EAST TIMOR: MR J. S. DUNN

Senator YOUNG:

-Mr President, I direct to you a question which I should like to set out in the context of certain events. For some time a Mr J. S. Dunn, an officer of the Legislative Research Service of the Parliamentary Library has been critical of the actions taken by the Government of Indonesia in respect of the former Portuguese colony of East Timor. On 23 March this year he appeared before the United States House of Representatives Sub-Committee on International Organisations and Asian and Pacific Affairs-

Senator Georges:

– I raise a point of order, Mr President. The matter which the honourable senator is raising at question time he could more properly raise at another time to allow others to present a case to you. What he is doing by way of his question is making certain very damaging inferences about a person employed in the Parliament. I view this very seriously. Today I put on the notice paper a question which reflects my concern at the attacks which are now being levelled against Mr Dunn. I think this is a very serious matter. It is not a matter which should be raised by way of question. It should be raised at a time when honourable senators on this side of the chamber can take part in the discussion and put their points of view. I ask you, Mr President, to influence Senator Young to raise the matter in another way.

Senator YOUNG:

– Speaking to the point of order, Mr President, I think this is a matter for you to decide. I am merely giving a little background before asking my question. At this stage Senator Georges has no idea what I am going to ask; hence I cannot understand his accusations.

Senator Cavanagh:

- Mr President, I want to raise another point following on from the point raised by Senator Georges. If he has placed a question on the notice paper I query whether a question -

Senator YOUNG:

-What number is it, senator?

Senator Cavanagh:

– I do not know. I said if he has done so, as he says he has -

Senator Georges:

– I am sorry, I must give further information. My question was placed on the notice paper today. Therefore, technically speaking, as yet it is not on the notice paper. I did not intend to mislead the Senate. I merely said that I was putting a question on the notice paper today. That is what I clearly said. I did not say that the question was on the notice paper.

The PRESIDENT:

- Senator Young may ask his question now.

Senator YOUNG:

– I ask: Are you aware, Mr President, that Mr Dunn gave evidence before the Sub-Committee of International Organisations on Asian and Pacific Affairs? He stated:

As one who serves the Australian legislature I am very honoured to be able to appear as a witness.

I ask: Firstly, did Mr Dunn have your authority to refer to himself before that Committee in those terms? Secondly, was Mr Dunn’s visit to Washington financed in any way by this Parliament or by this Government? Thirdly, was Mr Dunn’s visit to Washington made with your authority or with the authority of the Parliamentary Librarian?

The PRESIDENT:

- Senator Young indicated to me that he would ask questions along those lines. My reply to each of the questions is no. I point out that in February of this year Mr Dunn applied for 2 months furlough or long service leave from 7 March. Neither in the application nor at any time prior to the granting of his application did he give either me or the Parliamentary Librarian any indication that he intended to go overseas while on leave. All of his activities while on leave, including his appearance in Washington, were those of a private citizen. He certainly had no authority while on leave nor does he have any authority now to speak on behalf of the Parliament.

page 1597

QUESTION

UNEMPLOYMENT BENEFIT: SCHOOL LEAVERS

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

-My question to the Minister for Social Security follows questions that have already been asked of her concerning the decision of the DirectorGeneral of Social Services in the case of Karen Green. I ask the Minister: If the DirectorGeneral of Social Services was not satisfied that Karen Green was qualified for unemployed benefits on 20 December, can she say whether the Director-General attempted to satisfy himself as to her eligibility during the course of the school holidays and before the High Court judgment was handed down? Further, did the

Director-General have any discussion with the Minister or was there any exchange of minutes between the Director-General and the Minister concerning this case before the Director-General made his decision after the High Court judgment?

Senator GUILFOYLE:
LP

-I am asked whether the Director-General took any steps to satisfy himself with regard to Karen Green’s application after 20 December. The proceedings in the High Court commenced on 24 December. There was no other application from Karen Green after her application on 20 December. The Director-General considered an application from her for unemployment benefits from, I think, 22 February. From that date, unemployment benefits were paid to Karen Green. In relation to discussions that were held between the Director-General and myself following the commencement of proceedings in the High Court, such discussions were held by the Director-General with me and with the Attorney-General’s Department. I am not sure whether I can give an answer to the question of whether there was a specific minute. Discussions certainly were held regarding the proceedings of the High Court. Discussions have been held following the High Court judgment. Extensive discussions were held between the AttorneyGeneral’s Department and the Director-General following the High Court judgment.

page 1597

QUESTION

CONSOLIDATED MEAT HOLDINGS LTD

Senator TEHAN:
VICTORIA · NCP

– I direct a question to the Minister representing the Minister for Employment and Industrial Relations. The Minister may be aware that Consolidated Meat Holdings Ltd, an important industry in the Albury-Wodonga complex, will close down indefinitely this week because, in the words of Mr Kevin Bowtell, the managing director: ‘Industrial disruptions had made plant operations uneconomic’. In particular, members of the Australian Meat Industry Employees Union employed by the company are at present on strike for 5 days which, according to Mr Curran, the Secretary of the Union, is the first phase of the union campaign of industrial action to force agreement by the employers to a log of claims which contains, amongst other things, a demand for a 9-day fortnight and a $20 a week increase in wages, which would increase wage costs by 30 per cent to the company with the current wage indexation increase -

KEEFFE, James:
QUEENSLAND · ALP

– I rise to a point of order. It appears that the honourable senator is reading from a newspaper cutting. I do not think that is the way to ask a question.

The PRESIDENT:

– It is in order but the honourable senator must not give too much information. The honourable senator must ask for information.

Senator TEHAN:
VICTORIA · NCP

– There are only 2 further points I wish to mention. Boners get $305 a week for 35 hours and slaughtermen get $210 for 32 hours. The secretary of the union has stated also that the union has asked interstate branches to limit supplies coming to Victoria and union members to visit smaller Victorian abattoirs which are not involved with a view to stopping supplies. My question is: Is there any initiative which the Minister can take to prevent the community being held to ransom by irresponsible industrial action in support of substantial overaward wage claims?

Senator DURACK:
LP

-I will refer the question to the Minister for Employment and Industrial Relations.

page 1598

PERSONAL EXPLANATION

Senator Guilfoyle- Mr President -

Senator GEORGES:

-I wish to make a personal explanation, perhaps after the Minister is finished.

The PRESIDENT:

– I call Senator Georges. Does the honourable senator claim to have been misrepresented?

Senator GEORGES:

-Yes. During question time I prefaced a question to the Minister for Social Security (Senator Guilfoyle) by saying that the decision in the Karen Green case was the most callous administrative action by a head of the Department that has been brought to the notice of the Senate. When 1 made that statement, I made it in the belief that the statement was accurate, in my view, and I made it concerning the head of the Department of Social Security because the Minister has been consistently saying that the head of the Department was responsible for making the decision. She insisted on that. I accept what Senator Wheeldon said, that is, that the head of the Department does make decisions based on the policy of the Government at the time. But might I say to the Minister that I hesitate to use the term ‘the most callous administrative action by a Minister that has been brought to the notice of the Senate’. I hesitate to do so because I do not believe that the Minister- if she refers to a speech that I made during the Committee stage of consideration of the Estimates she will find that this is my view- on her own account would be responsible for such administration action. I will not use an adjective on this occasion to qualify that term. If the Minister so desires, we shall in future place upon her the fullest responsibility for the actions of her Director-General. I make it clear that I do believe strongly in what I have said about this decision by the head of the Department. I believe that, if the Minister is not prepared to accept responsibility, he should be prepared to accept responsibility for his actions and to accept that I shall continue to make such comments as I made in the question.

page 1598

QUESTION

ABORIGINAL UNEMPLOYMENT

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– I was rising not on the matter mentioned by Senator Georges but in regard to a question asked during question time last Friday by Senator Keeffe. In the question, the honourable senator said that the Government has recently announced a decision to allocate $2m in the 1977-78 Budget to the national employment strategy for Aboriginals. I regret that my response to Senator Keeffe ‘s statement in his question was incorrect. I want to clarify the matter. The answer should have been that no specific amount has been allocated to this program. There will be some expenditure during 1976-77, particularly on the pilot project set in train on the community development employment project scheme. The question of allocations for 1 977-78 is still to be considered within the Budget context and information will be made available at the appropriate time. In any case, accurate forecasting before the event would not be possible because of the number of departments involved and the diversity and variety of programs. The extent to which Aboriginals and employers will take advantage of this scheme is unknown. I hope that this further answer now puts accurately what my response should have been to Senator Keeffe ‘s question last Friday.

Senator KEEFFE:
Queensland

-by leave-If the figure that was quoted was an error I was justified in making the statement, lt appeared in a section of the Press and was confirmed, as the Minister said, by her at that time. I know that some research has been done since to prove that it was not the right figure. I sought to make this short contribution merely to clarify the situation because to my knowledge at the time the figure was accurate. When a Departmental officer came to me, I said: ‘Well, it has been confirmed by the Minister, so it must be right’.

page 1598

COMMONWEALTH GRANTS COMMISSION

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– Pursuant to section 25 of the Commonwealth Grants Commission Act 1973 I present the Commonwealth Grants Commission Special Report (1977) on Financial Assistance for Local Government. The report has been referred to the Premiers for their consideration.

page 1599

AUSTRALIA COUNCIL

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– For the information of honourable senators I present the Australia Council Annual Report 1975-76.

page 1599

PUBLICATIONS COMMITTEE

Senator MISSEN:
Victoria

-I seek leave to move a motion to permit the Publications Committee to move from place to place.

The PRESIDENT:

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

Senator MISSEN ( Victoria)-I move:

  1. That the Publications Committee or any sub-committee sub- committee thereof, when conferring with a similar committee or sub-committee of the House of Representatives, have power to move from place to place; and
  2. That the foregoing resolution be communicated to the House of Representatives by message.

By way of explanation of this motion, amendments were made in 1970 to Senate standing order No. 36 and House of Representatives standing order No. 28 which gave the Joint Committee on Publications broad powers of inquiry. However, the Committee does not have the power of most other Parliamentary committees to move from place to place. The power is required initially to enable the Committee to take evidence and undertake certain inspections in Sydney and Melbourne in connection with its current inquiry into the Australian Government Publishing Service. It is expected that the need will arise again, from time to time, for the Committee to move from place to place in the course of its inquiries. A similar motion relating to the House of Representatives Publications Committee will be moved in the House of Representatives this week.

Question resolved in the affirmative.

page 1599

INCOME TAX ASSESSMENT AMENDMENT BILL 1977

Second Readings

Debate resumed from 24 May, on motion by Senator Durack:

That the Bills be now read a second time.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– The Senate has before it Bills concerning income tax alterations. The most significant aspect of the legislation is that it constitutes the second of 2 major decisions taken by the Government on behalf of the private sector. The first of those 2 actions, of course, was the investment allowance decision of last year which resulted in nearly $500m in revenue foregone by the Government in a full financial year. The second move, according to the Treasurer (Mr Lynch), will mean an amount of between $400m and $450m being foregone. So we have a total figure of $ 1,000m which the Government has seen fit to forgo in the hope that it will have some stimulatory effect on the economy. I will come back to those 2 points later on.

This is essentially the first of a series of important amendments to the Income Tax Assessment Act. They are important because they introduce what may be called a concept of indexation which we have seen partly operating in the wages field for some time. The proposed amendments result from a series of inquiries but principally from the inquiry of the Mathews Committee into the structure of the Australian taxation system during the period of relatively high inflation rates. The application of this legislation is of course complex and the detail of it is really a matter for an accountant, I suppose, rather than for a politician, but the intent of the legislation is quite clear. It has some interesting implications.

One of the more important aspects of the Mathews Committee recommendations was aimed at alleviating some of the short run disadvantages suffered by companies holding stocks at the end of a financial period the book value of which had increased substantially over the preceding 12 months. Tax was levied on what amounted to a change in paper values. In many cases this led to serious liquidity problems and a number of companies were either forced to borrow on the market or alternatively to dispose of stocks in order to meet in the short run their taxation commitments. There is no doubt that in periods of tight liquidity the effect was often to force up the interest rates on the short term money market which had repercussions throughout the Australian money market as a whole.

We are not opposing the legislation. It partially introduces the recommendations of the Mathews Committee. Some aspects of the proposed amendments which are in the Bill are of some concern. Although, as I have indicated, we do not wish to oppose them, we would hope that the Government would agree to review the working of these amendments at the end of the financial year. In particular, because of the past interest that I had, I refer to the refusal of the Government to accede to the representations from primary producer organisations to increase substantially the level of taxable income within which primary producers are allowed to opt into the income tax averaging provisions. It appears that although sections of primary industry are in serious trouble there are areas where taxable income would be in excess of the current $ 1 6,000 mark.

However, the principal part of this legislation is that which concerns stock valuations. The Government is proposing that stock valuations should be increased by one-half of the percentage increase in the goods component of the consumer price index measured from the June quarter preceding the year of income. Apart from making the obvious observation that this probably will pose some problems- some difficulties anyway- for those companies whose financial year does not run from 1 July to 30 June, some other aspects of the proposal tend to shift the burden of taxation from one section of industry to another. It is especially noticeable that with any scheme that is introduced by any government to assist industry on a blanket basis there is always the difficulty of trying to get an equitable arrangement operating. We find that at present even under this scheme- I do not criticise the Government so much for this because it is difficult to make these arrangements equitableobviously many companies will benefit much more than will others. We found some years ago that of the many millions of dollars that were being paid out under the export market development grants scheme of the previous Government in fact only one per cent of companies were receiving 50 per cent of the payout. The previous Government endeavoured to make that arrangement more equitable. Of course it was very difficult to do. The scheme we are now considering will have the same shortcomings as did that scheme.

Some sections of industry could be disadvantaged seriously by the amendments to section 3 1 .

In particular I refer to the wine industry, of which you, Mr President, would have considerable experience. Notwithstanding the problems which may well arise, I just consider now the totality of the legislation as it affects the Government ‘s broader economic strategy. I mentioned earlier that the Government’s decision to introduce the investment allowance legislation last year was designed to bring about what was termed an investment-led recovery. That of course has not eventuated. The current legislation is designed along similar lines, perhaps for the same reason. The principle is the same. It will help the private sector. The significant factor that must be considered when comparing the 2 pieces of legislation is that whereas the investment allowance was brought in for a specified periodthat is, the 40 per cent component operating until 30 June 1978 and then the 20 per cent component operating until, I think, 1984- a time limit does not apply with the legislation now before us. As I read this legislation, it means that these benefits will be introduced and will be of a permanent nature unless the Government should decide to repeal the legislation or in some way amend it.

It becomes arguable whether the benefits ought to be of a permanent nature. It is true that many companies will benefit because of the better liquidity performance they will have, but will this be of any real benefit in stimulating the economy during the next 12 months or so? I would think not. It will mean that almost certainly companies will find themselves in a more profitable position, all other things being equal. We may ask ourselves what will be the position in, say, 2 or 3 years time when there may be high turnover in the economy, quite reasonable liquidity, and good cash flows. Will we continue to forgo what might then be $600m or $700m of Treasury funds for the purpose of maintaining this legislation? I assume that the Government has thought about this prospect. It must have been considered. The Leader of the Government in the Senate (Senator Withers) might care to comment on the significance of that after seeking assistance from his advisers. I have no doubt that the Government would not wish to see this allowance operating in an economy that was, as we say, overheated thus causing a further stimulus to the private sector at a time when the Government might wish to dampen it down. I presume that the Treasurer would have some thoughts about this aspect and no doubt has considered the possibility. The Minister may care to add something to that.

I do not think there is any advantage to be gained from a detailed discussion. I think as a Parliament we must accept that the Government has considered the position in conjunction with industry and with the people- the public, accountants and the company accountants- to whom this measure will be of real benefit. As an Opposition, we do not question or oppose the legislation if it is of real benefit, but we would oppose it and oppose it in future if it became an instrument that compounded the problems associated with an economy that was running too fast. Equally, we would oppose it if it meant that more of the public revenue were put into the company area in the form of increased profits above a reasonable figure.

Only recently questions were asked in this place about the return of profitability of the private sector to the pre- 1974 position. The Australian Bureau of Statistics showed that the proportion of national income going into company profits has returned to the 1 5 per cent of gross national product which it was in 1 973 and which it had been for some years prior to that. That 15 per cent level was the figure which the Treasurer himself described as the historical level of profits. If we are back to that 15 per cent, the Government will need to think very seriously about any further shift of income into the profit arena. This proposal would do that. Initially, in the first 12 month perhaps, there may be justification for it. After that it is a proposition that will need to be watched carefully by the Government to ensure that it does not become an allowance which could mean an amount being passed from public revenue into the private sector. With those few comments, I indicate that the Opposition does not oppose the Bills.

Senator MESSNER:
South Australia

– Firstly, I express my gratitude to the Opposition for supporting this legislation. It certainly is a breakthrough in some areas in respect of taxation reform. We would know that over the years the taxation law and the way in which companies, businesses and individuals in business are taxed have got far away from the principles of accounting. Consequently, the step which is being taken by virtue of this legislation, especially in respect of stock valuation adjustment, seeks to restore that situation. The whole basis of this stock valuation adjustment, which is the centrepiece of the legislation, is to establish the maintenance of the operating capacity of the business. In other words, what has been happening with inflated values of stocks over the years is that because of the increasing prices and the lack of ability of individual firms to replace stocks on their shelves, their overall volumes of stocks have fallen. Consequently, to maintain an adequate level of stocks and to increase it to keep up with demands, more and more cash needs to be poured into the business, At the rates of interest that have been applicable in the community in recent years, that has become quite a penalty on business, to the extent that many firms have found the going too tough and have gone out of business. To base taxation on profits which are calculated without an allowance for inflation is to tax capital, which is not recognised in our taxation law except in the area of estate and death duties.

Recently we heard announcements by the accounting institutes about the introduction of new principles for inflation accounting. I instance the recent statement known as ‘Current Cost Accounting’. Unfortunately, that statement has not gained immediate recognition in the community, especially not from the taxation authorities, because it fails to take into account adjustments for monetary amounts in the assets of companies and businesses. I would like to see the Government in future consider the possibility of adjusting its concept on this matter to take into account an adjustment for inflation as far as assets are concerned, calculated in relationship to the equity of businesses rather than having an adjustment applied to the total assets of a business. I believe that to be a perfectly reasonable proposition. Indeed, it ties in with the concept I mentioned earlier, namely, that of maintaining the operating capacity of the business at the level which existed previously. As I mentioned earlier, this has not yet received recognition in any way from the taxation authorities, except insofar as the adjustment made in this legislation applies.

There are many other areas that I personally would like to see taken into account in any consideration of future thinking in this regard. I have mentioned particularly the provision in regard to long service leave. Currently that item is not deductible by businesses against taxable income. That means that a business is actually being forced to pay out 42.5 per cent of its provision for long service leave long before it is ever required to pay it out to the employee concerned. Of course, an offsetting adjustment is allowed, most likely at a lesser rate, for payments made in the year for which tax is being paid.

There are other matters to which I wish to refer. For instance, there is a provision in respect of repairs to various buildings and/or assets which are leased. Perhaps those repairs are not incurred in any one year but accrue over many years. Such items are not allowable as deductions under the present tax laws. I believe they should be taken into account in assessing taxable income. Nevertheless, the Government’s moves are most welcome as they are heading in the right direction towards establishing compatibility between accounting income and taxable income.

The stock valuation adjustment provision will cost revenue some $360m in the 1977 financial year and obviously it will be a great boost to business during that period. I think it has to be made clear that it is not a gratuitous benefit that will be flowing to business; rather it is an adjustment to what might have been regarded as, or is regarded as, overstating taxable income. Safeguards are included in the legislation. They refer to the broken periods that arise from the sale of businesses from time to time. In particular, an income tax adjustment will not be allowed for a business in the income year in which it closes unless it is terminated on the death of the proprietor. In that case a special proportionate adjustment will be allowed. In the case of a new business or where there will be no trading stock on hand at the commencement of the first year, the deduction for the first year will be calculated on the basis of two-thirds of the value of the stock on hand at the end of the year. In the case of a business which changes hands, the deduction will be measured by reference to the value of the trading stock at the beginning of the year and the value of the trading stock at the date of sale, whichever is lower. The deduction allowed will be shared between the vendor and the purchaser in calculated proportions. These moves seem to be reasonable, and they certainly safeguard the revenue against abuses that could arise.

There is one area which needs a little more consideration. Perhaps the Minister may be able to clarify it later. I refer to the situation when the scale of operations of a business has been reduced substantially during a year. It is not entirely clear to me whether there will be an automatic adjustment to the closing stock value every time there is a lowering in the opening stock value. I stress here that the purpose of the stock valuation scheme is to assist those businesses which want to preserve the same level of operating capacity. But if adjustments were made to the opening stock value in circumstances in which the business had cut back production, or perhaps changed its operations through fortuitous factors and perhaps even entered into other activities, we would fail to come to grips with the main purpose of the legislation, which is to maintain operating capacity. Obviously there still will be times when the proprietor who has tried to maintain his level of stocks has not been able to achieve that end. In those circumstances consideration will be given by the Taxation Commissioner to specific cases. Consideration also will be given in cases where the current level of stocks is only just short of the level necessary and required to maintain the previous year’s stocks. I hope that there will be some formula which will take into account the changes brought about by purely fortuitous factors, such as market values, climatic conditions, man days lost through strikes, the supplies of necessary raw materials being delayed, and things of that sort. Of course, it may result in the Taxation Commissioner making purely arbitary decisions. However, I believe that he will keep these things well in mind when he comes to consider individual cases.

One other matter which Senator Wriedt referred to and I believe needs some airing is the problem of companies whose balance date falls on a day other than 30 June each year. The problem arises because the adjustment which is taken into account is calculated as at 30 June each year. Consequently, companies that may balance their books on, say, 3 1 December would have to wait until June in order to determine the exact amount of the adjustment that they could allow in their profits. That means a delay of perhaps up to 6 months before they can get an accurate statement of adjustment. That might be regarded by stock exchanges and shareholders as being too long a period to wait. The contraargument, of course, is that companies have to estimate liabilities and/or charges against their profits every year whether or not they are actually known at that particular time. In normal accounting standards, that is a reasonable thing to do. It does, however, raise the question of inaccuracies in the financial statements, and perhaps the matter ought to be given some thought in the future. I guess that at the moment it is a matter of waiting and seeing whether this turns out to be any real problem.

Senator Wriedt also mentioned in passing the problem that arises in the wine industry. Because of the technical nature of the amendments that were made in respect of wine companies last year and because of the way that this legislation affects them, those companies will lose a benefit but this will not apply to other companies.

The averaging provisions of the Bill are interesting and certainly timely. I think they tie in quite reasonably with what we call the income equalisation deposits scheme which commenced on 30 June last. Exempting for income tax purposes the rebate paid under the Commonwealth

Rebate Apprenticeships Fulltime Training scheme is, I think, a step in the right direction towards encouraging more and more apprentices to be trained in our community. Apprentices represent a key area of shortage in the labour force at the present time. It is estimated that this measure will boost the intake of apprentices by some 12 000 by 1979.

The only other points I wish to mention are those that were raised in the other House during the debate on this Bill in respect of avoidance, avoiders and/or evaders. Some members of the Opposition in the other place made the point that really there is very little difference between those who seek legitimately to arrange their affairs in such a way as to minimise taxation and those who seek to evade taxation deliberately by illegal means. I believe that that distinction must always be borne in mind, as it is clear that in our democratic society people are entitled to arrange their affairs in the way which they believe will best benefit them. As we all know, some of the areas are fairly grey areas and consequently at times we find some complaints arising from the Taxation Office. We also find references to accountants and lawyers, suggesting that they may not be putting the interests of the nation before the interests of their clients. I submit that these people are hard working people and are becoming quite expert in the operations of the Act which is becoming more and more complex each year. They perform a most valuable service in the community by maintaining a high standard of advice to their clients.

Notwithstanding that, there is one area in this Bill which is very important. It relates to the closing up of loopholes in respect of dividend stripping and the scheme which is currently being perpetrated, known as the 36A scheme, and which I understand has cost the revenue quite a deal of money. The amendments that are proposed in this Bill will clarify the question of whether or not shares and choses in action are treated as trading stock and consequently would qualify for an allowance under section 36A. I think that this is a step in the right direction to ensure that somewhat shady schemes are written out of the law as quickly as possible, in the interests of people who look after their affairs in a legitimate way. I congratulate the Government too, even though it is a break from previous concepts, on not making the legislation apply retrospectively to 1 July last year but making it apply from the date of introduction of the Bill, 2 1 April this year. I support the legislation.

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I thank the Leader of the Opposition (Senator Wriedt) and Senator Messner for their support of the 2 Bills which are at present before the Senate. As to the matters raised by the honourable senators, Senator Wriedt asked what will be done to reduce the revenue cost of the new deduction for trading stock if conditions in the economy improve. I am advised that, with an improvement in the economy, we can expect to see the annual rate of inflation falling and as the rate falls the trading stock deductions will cost the revenue less. If ever we get to zero inflation there will be no cost to revenue at all. I think that that is the wish of all of us, irrespective of on which side of the Senate we sit.

Senator Messner:

asked about the adjustments to be made when closing stock values are reduced. I am informed that these adjustments will not be made unless the stock reductions are substantial. Where they have come about because of other than temporary factors the deductions will be adjusted downwards, whereas stock levels are permanently reduced to reflect the lowest stocks carried by the firm. At the Committee stage more questions may be asked clause by clause and in a more searching way so at this stage I will again thank the Opposition and my own colleagues for their support of the Bills.

Question resolved in the affirmative.

Bills read a second time.

In Committee

The Bills.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– I want to follow up one point. I do not wish to pursue it in great depth but I was interested to hear the Minister for Administrative Services (Senator Withers), in his reply concerning the application of this legislation in times of a more active economy, indicate that on the assumption that inflation would fall presumably the commitment to the revenue would be lessened appropriately. I think that that is a fair statement, or I assume it to be a fair statement, but of course inflation may not fall. All I ask the Minister is: Even if he is not able to hypothesise on the impact of this allowance over, say, a 2-year or 3-year period, can he at least say that the Government would be prepared to police the effect of this legislation over a period of 2 or 3 years? I can understand the difficulty of anyone being expected to answer a hypothetical question from me so I cannot expect a very definitive answer.

The implication of his answer to me during the second reading stage was that there would be a continued forgoing of revenue during that period in which this Act is in operation. If inflation falls, well and good, but the odds are that it will not. Even if it does fall it is not likely that we will see it fall to a figure where the cost to revenue becomes negligible. I think it is highly unlikely through the amount of stocks held by companies throughout Australia. So I ask the Minister whether he is prepared to gamble on trying to answer that question. If inflation does not come down to zero level or even perhaps to 3 per cent or 4 per cent, as the Treasurer (Mr Lynch) so innocently hopes that it will, will the Government at least give an undertaking to be mindful and be prepared perhaps to adjust or amend this legislation in due course?

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I am informed by my advisers that all governmentsnot only this Government- would review the working of this legislation at each Budget. It would have to be taken into consideration in looking at the total budgetary situation, Therefore, whilst I cannot give the sort of total assurance at which Senator Wriedt might be looking , I think we both know from our own experience that it is most unlikely that any government would not look at it on an annual basis when it is putting together its Budget, especially when looking at the revenue side, to see what will come in and where, whether the scheme is working as one hoped it would and what defects there may be. I think the honourable senator knows that taxation laws are generally under constant scrutiny and where defects show up amendments are brought in.

Senator JESSOP:
South Australia

- Mr Chairman, you are aware of the interest that I have in the wine industry in South Australia and you are aware of what an important industry it is in that State. I have received representations from the wine industry with respect to the Income Tax Assessment Amendment Bill, maintaining that in its present form the industry could be further disadvantaged. We have heard all about the controversial repeal of section 31a which imposed quite a few difficulties on the wine industry. The industry’s main concern now comes from the provision that, for purposes of stock value indexation, the value of trading stock will be that adopted for income tax purposes or the cost price of the stock, whichever is the lesser. The much heralded section 31b, introduced for the purpose of easing the burden on the wine industry created by the calling up of deferred tax which resulted from the repeal of section 3 1a, brings to account for taxation purposes the difference between standard values and cost under section 31 over a period which has now been extended to 1 98 1 . Therefore under the proposed legislation stock indexation for wine makers will be based on values less than the section 3 1 values which apply to all other manufacturing industries, denying the wine industry the full benefit of the indexation which is allowed to other taxpayers and substantially increasing their tax liability in comparasion with other industries. This in effect means they will be paying of the order of 5216 per cent tax.

The position is illustrated in an example which is based on the actual situation of a public company wine maker. In this instance the original difference between section 3 1 a and the cost value was $6,970,000. Four-tenths of this difference previously has been brought to account as deferred income totalling $2,788,000, leaving a balance of deferred income as at 1 July 1976 of $4, 1 82,000, of which one-sixth comes to account as income each year. I have a table which illustrates the predicament of this particular company and I seek leave to incorporate it in Hansard.

The CHAIRMAN:

– Is leave granted? There being no objection, leave is granted.

Senator JESSOP:

-This additional tax liability of $660,500-odd which is illustrated in the table results entirely from the manner in which section 3 1 b was legislated. Had it been legislated to defer payment of tax and not to defer assessable income stock valuation adjustment would apply to the full section 3 1 value of stock. I think this illustration is quite graphic. I did remind the Treasurer (Mr Lynch) recently in a letter of an undertaking that we made to look to the reinstatement of section 31 a. I realise that things change and the economic circumstances at the present time would possibly have some influence on the Treasurer’s decision not to go ahead with it. I reminded the Treasurer in the letter also that the wine industry reference is currently before the Senate Standing Committee on Trade and Commerce and I thought it was a little premature to take any action that would perhaps further damage the wine industry until such time as the recommendations of that Committee were tabled in the Senate. I know that Senator Archer has a particular interest in that Committee.

As a result of my representation to the Treasurer I received a letter stating, among other things, that the treatment of wine stocks under the trading stock valuation adjustment was carefully considered both before the Treasurer made his statement on 9 December 1976 and again when the industry made representations on the matter. The Treasurer said in his letter that he believes that the industry is mistaken on both the points that they raised. I suggest it could be of interest to the chamber if the full text of this letter were incorporated in Hansard. I seek leave to do so.

The CHAIRMAN:

– Is leave granted? There being no objection, leave is granted.

The letter read as follows-

Treasurer Parliament House Canberra 2600 16 May 1977

Senator D. S. Jessop Parliament House Canberra, A.C.T. 2600

Dear Senator Jessop 1 refer to your letter of 4 May 1977 regarding the application of the trading stock valuation adjustment to winemakers.

I am aware that the industry has been suggesting that under the legislation as drafted they will lose something they had a right to expect, and that it results from an accident of drafting.

The treatment of wine stocks under the trading stock valuation adjustment was carefully considered, both before my statement on 9 December 1 976, and again when the industry made representations on the matter. I believe that the industry is mistaken on both of the points noted above.

I consider first their suggestion that there was an accident of drafting in section 3 1 B. When the deferred tax was being built up under the former section 3 1 A, that result came about through reporting stocks at low values, which had the effect of reducing taxable income, which, in turn led to deferral of tax. Now that the deferred tax is being recouped, section 3 IB proceeds in the opposite direction through exactly the same steps. Stock values, taxable income and tax are all affected, and that seems the natural way to proceed.

Nor do I think that the industry’s view that they have lost something to which they are entitled can be sustained. Certainly they have not lost any of the easing of transitional arrangements which we introduced last year. That remains intact, and in addition they have a trading stock valuation adjustment which will be relatively larger than that received by most other industries.

The central question, then, is whether the trading stock adjustment should be calculated by reference to the value of stock brought to account for tax purposes where it is less than cost, or by reference to the cost. That is a question with implications going beyond the wine industry, and the legislation is on the basis announced in my statement of 9 December

The stock valuation figure will be that adopted by the firm or company for income tax purposes, as long as no stocks are valued at a figure in excess of true cost ‘.

Obviously, of course, the winemakers would get larger deductions if we acceded to their request, but the question is whether there are any grounds for saying that one treatment is right and the other wrong. I think there is, and that the basis in the legislation is right.

The treatment in the legislation where stock has been brought to account for tax purposes at less than cost, for a winemaker or for other kinds of business, was adopted because bringing it to account at less than cost already provides a tax benefit since an amount relating to that stock is thereby charged against income before the stock is sold. It was not considered that a further benefit or concession should be given in respect of that amount by way of trading stock valuation adjustment.

To depart from the present legislation could also involve some ‘doubling up’ of inflation adjustments. One method suggested to the Mathews Committee to relieve businesses of the burden of inflationary increases in the cost of stock replacement, was to allow it to immediately charge the cost of stock purchases against receipts in the year of purchase, and not bring the cost of stock to account for tax purposes. The Mathews Committee considered other drawbacks of the proposal were too great, and rejected it, but there was no doubt that it would have given an inflation adjustment. To allow a TSVA deduction as well as such immediate expensing of stock purchases would have doubled up the inflation adjustments. To allow it in respect of part of the cost of stocks, as the wine industry and certain others suggest, would double up the adjustments in respect of that part.

As will be apparent from these comments, I am convinced that the legislation should be passed in its present form. It is essential that it be passed without delay so that companies in particular, whatever their industry, will be able to take the benefit of the new concession into account when setting aside part of their 1976-77 profits as a provision for income tax. That rules out the possibility of delaying passage until the report of the Senate Standing Committee Report is received.

Yours sincerely PHILLIP LYNCH

Senator JESSOP:

– I do not think I need say any more except to point out again that the wine industry is very important to South Australia in particular as, indeed, it is to Australia as a whole. Through the Leader of the Government in the Senate (Senator Withers) I ask the Treasurer to look seriously at the undertakings we made in 1975 with the object of doing something about them as soon as the economic circumstances permit.

Senator WITHERS:
Western AustraliaLeader of the Government in the Senate · LP

– The request made by Senator Jessop is reasonable and I am prepared to pass it on to the Treasurer (Mr Lynch). As the honourable senator knows, he and all his colleagues from South

Australia, from all parties and from both Houses, are continually pressing upon the Government the claims of the wine industry. I can assure the honourable senator that the Government has a deep and imbibing interest in the wine industry.

Senator Jessop:

-Did you say ‘a deep and imbibing interest’?

Senator WITHERS:

– Yes, a deep and imbibing interest! I have circulated amendments to the first Bill before the Committee, that is, the Income Tax Assessment Amendment Bill 1977.I seek leave of the Committee, Mr Chairman, to move the amendments together.

The CHAIRMAN (Senator DrakeBrockman) Is leave granted? There being no objection, leave is granted.

Senator WITHERS:

-The amendments relate to clauses 6 and 1 8 which read:

Clause 6.

Section 36a of the Principal Act is amended by omitting sub-section (2) and substituting the following sub-section:- (2)Where-

  1. property in relation to which sub-section ( 1 ) applies has become, upon the change in ownership or interests, an asset of a business carried on by the person or persons by whom the property is owned after the change;
  2. the person or persons by whom the property was owned before the change holds or hold, after the change, an interest or interests in the property of a value equal to not less than one-quarter of the value of the property;
  3. the value of the property as ascertained in accordance with paragraph (a) of sub-section (8) of section 36 is greater than the value (if any) that would have been taken into account at the end of the year of income if no disposal had taken place and the year of income had ended on the date of the change; and
  4. the person or persons by whom the property was owned before the change together with the person or persons by whom the property is owned after the change give notice to the Commissioner, in accordance with this section, that they have agreed that this sub-section shall apply in respect of the property, the value of the property, for the purposes of section 36, shall be, instead of the value specified in paragraph (a) of subsection (8) of that section, the value (if any) that would have been taken into account at the end of the year of income if no disposal had taken place and the year of income had ended on the date of the change.’.

Clause 18.

  1. 1 ) The amendments made by sections 3, 8, 9, 10 and 1 1 apply to assessments in respect of income of the year of income that commenced on 1 July 1976 and in respect of income of all subsequent years of income.
  2. Subject to sub-section (3), the amendment made by section 4 applies in relation to payments made after21 April 1977.
  3. For the purposes of Division 2 of Part VI of the Principal Act as amended by this Act, the amendment made by section 4 applies in relation to payments made on or after the date of commencement of this sub-section.
  4. The amendment made by section 6 does not apply in relation to a change in ownership or interests that occurred before 21 April 1977.

I move:

  1. ) In clause 6, at the end of the clause, add the following sub-clause: “(2) Section 36a of the Principal Act is amended by adding at the end thereof the following sub-section:

  2. A notice for the purposes of sub-section (2) given on or after 24 May 1977 in respect of a change in the ownership of, or in the interests of persons in, property, being-

    1. a share or stock in the capital of a company;
    2. a debenture, note or other security issued in respect of a loan to a company; or
    3. any other chose in action, does not have any effect unless the persons giving the notice establish to the satisfaction of the Commissioner that the change in ownership or interests occurred before that date.’.”.
  3. In clause 18(4), leave out “section 6”, substitute “sub-section 6(1)”.

The amendments were foreshadowed in the second reading speech. They are related to the conditions under which taxpayers concerned in the formation, variation or dissolution of a partnership, may agree to value trading stock owned by one or more of the partners at cost or replacement price for taxation purposes, instead of at market value. This can be done where all the taxpayers concerned elect that sub-section 36a (2) of the Income Tax Assessment Act should apply in respect of the trading stock. Under an amendment proposed by clause 6 of the Bill, such an election may be made only where the market value of the trading stock is greater than the cost or replacement price adopted by the former owner or owners in their income tax returns.

The amendment is intended to prevent the new trading stock adjustment being misused for tax avoidance purposes. It will also overcome other artificial arrangements contrived to generate excessive deductions under the general income tax law when the value of stock has fallen. Since the Bill was introduced in the House of Representatives new schemes have been adopted by some tax planners to get around the proposed amendment. In a typical scheme, all the issued shares in one or more private companies holding accumulated profits are acquired, ostensibly for share-trading purposes, by a partnership of which some members are individuals in receipt of high incomes. The accumulated profits are then paid by way of dividend to a separate company, the shares in which are also held, and later sold, by the partnership. Section 36a is invoked so that no taxable profit arises on the sale for full value of the shares in the separate company. The shares in the other private companies are also sold at their true value but, having been stripped of their profits, a taxdeductible loss is created. The end result is that substantial amounts of other income earned by individual members of the partnership are wholly freed from tax.

The amendments I now propose will preclude an election being made under the section in respect of transfers of interests in company shares and securities or other choses in action. These amendments will not, however, withdraw any rights to lodge elections under section 36a in relation to transfers of interests in such property if it is established that they took place before 24 May 1977, the day on which the amendments were foreshadowed in the second reading speech. I commend the amendments to the Committee.

Amendments to Income Tax Assessment Amendment Bill agreed to.

Income Tax Assessment Amendment Bill, as amended, agreed to.

Income Tax (Companies and Superannuation Funds) Amendment Bill agreed to.

Income Tax Assessment Amendment Bill reported with amendments; Income Tax (Companies and Superannuation Funds) Amendment Bill reported without amendment; report adopted.

Third Readings

Bills (on motion by Senator Withers) read a third time.

page 1607

ADMINISTRATIVE APPEALS TRIBUNAL AMENDMENT BILL 1977

Second Readings

Debate resumed from 24 May, on motion by Senator Durack:

That the Bills be now read a second time.

Senator BUTTON:
Victoria

-I understand that the Administrative Appeals Tribunal Amendment Bill 1 977 and the Administrative Decisions (Judicial Review) Bill 1977 are being taken together. The Opposition does not oppose either of the Bills. For that reason I intend to speak to them only very briefly. The

Bill dealing with the Administrative Appeals Tribunal amendment is a consequence of the establishment of the Tribunal. It is another step forward in the satisfaction of the rights of those who feel aggrieved by administrative decisions. I will deal briefly with that Bill first. The main points of the legislation to which attention has been drawn in the second reading speech of the Minister for Veterans’ Affairs (Senator Durack) are, firstly, that it widens the number of ways in which the Tribunal may be constituted to deal with various matters and gives a general discretion in the President of the Tribunal as to how it will be constituted for particular matters. By so doing, it introduces a degree of flexibility into the method of constituting the bench depending on whether a question of law is involved. Secondly, by the amendment to section 26 of the Principal Act it makes it easier to transfer the jurisdiction of existing appeal bodies to the Administrative Appeals Tribunal by the making of regulations under the section. Thirdly, it also introduces a greater degree of flexibility and sensibleness into the provisions of the Act relating to the disclosure of documents. Fourthly, Clause 36 of the Bill provides for the charging of fees. By that, I mean that it enables the Tribunal to fix fees to prevent frivolous appeals.

I might say that, as a general principle, we in the Opposition are not greatly in favour of this proposal but we can see that it may well be necessary. We express the hope that the power is used only in circumstances in which it appears to be absolutely necessary for the reasons stated by the Minister in his second reading speech- that is, in circumstances in which it is desired to discourage frivolous appeals.

The only other comments I make about the Administrative Appeals Tribunal Amendment Bill relate to the comments made by the Minister himself in his second reading speech in which, first of all, he said that plans were well advanced to enable appeals to be taken to the Tribunal under the Social Services Act. That is news which we welcome. We hope that those plans are even further advanced than perhaps the Minister realised in his wildest imaginings when he made his second reading speech. The Minister drew attention to the fact that, since the Administrative Appeals Tribunal had been constituted, only 24 applications have been made to the Tribunal up to 26 April 1977. Even with the limited jurisdiction of the Tribunal that does seem a fairly low figure. I suggest that that may well be because the Tribunal got off to a very slow start in terms of appointment of its members and staff.

There seemed to be a number of delays about those processes.

I raise the question of whether sufficient publicity- not in the wider sense but in a fairly narrow sense- has been given to the existence of the Tribunal and its availability to deal with appeals under its present jurisdiction. I think it is a terribly important matter that those who might have the right to appeal to the Tribunal under the jurisdiction which it now has should be well informed of the existence of those rights. I think that it is not only true in the community generally but also true in the more limited areas of the Tribunal’s application that it is very important that the community is aware of its rights and is able to take advantage of those rights where necessary in circumstances of an appeal. I am not offering this by way of criticism of the Government or the Department necessarily, although they may indeed be deserving of criticism. I do not know. I would be grateful if the Minister would comment on that when we deal with the Bill at the Committee stage.

I turn now to the other Bill before the Senate, the Administrative Decisions (Judicial Review) Bill 1977. The purpose of this Bill is described in the Minister’s second reading speech in summary form when he says:

What the present Bill seeks to do is to establish a single simple form of proceeding in the Federal Court of Australia for judicial review of Commonwealth administrative actions as an alternative to the present cumbersome and technical procedures for review by way of prerogative writ, or the present actions for a declaration or injunction.

That being taken- for the purposes of what I hope will be a short discussion of this legislation in the Senate-as a summary of the main purposes of a Bill, the legislation is very much welcomed by the Opposition. I welcome it for the sort of reason which I put forward when discussing the other Bill, namely, that there will be greater simplification and availability of action under this Bill to aggrieved persons which will be perhaps less costly and probably less cumbersome. We hope that in each case that will be so.

The legislation is part of a general attempt to improve and to facilitate Commonwealth administrative law following on the work of the Administrative Review Committee in 1968 which led, as has been pointed out, to the establishment of the Administrative Appeals Tribunal, the Administrative Review Council and the Commonwealth Ombudsman. We are told also that the Government has in hand a Bill to provide standard procedures for Commonwealth tribunals and freedom of information legislation.

We await both of these Bills with interest, particularly the freedom of information Bill. In summary, both Bills represent a general updating and improvement of administrative law and, we believe, should be welcomed by all parties. Both parties- the Liberal Party and the Labor Partyhave been committed in recent years to the improvement of this area of the law. In our view these Bills take it a little further. As I said, we welcome them and wish them a speedy passage through the Senate.

Senator MISSEN:
Victoria

– I desire to say something about this legislation. I recognise that the Opposition is taking a constructive approach to this legislation. I think that what the legislation does has been fairly summarised by Senator Button. I do think though that these Bills are of such importance and of such value in providing a further instalment of administrative reform in this country that they do deserve the attention of the Parliament and the electorate generally. We have proceeded- it has not been a one-sided affair- since the Kerr Committee made its report in 1971 with a number of reforms of the law. We have established the Administrative Appeals Tribunal, the Administrative Review Council and have appointed a Commonwealth Ombudsman. These two pieces of legislation today help to bring us out of the jungle of administrative law and help to put a little more civilisation into that area. It provides for people who have an administrative decision and want to appeal against it. They have some idea of where to go and what they should do. lt puts some simplicity into the law that is applicable to the situation. That simplicity, of course, involves less cost and less trouble for the person who wants to appeal.

Both Bills are important. I should like to say a few words firstly about the Administrative Appeals Tribunal Amendment Bill 1977. 1 point out that the fact that only 24 appeals have been made under this legislation is, I think, most regrettable. Senator Button, when he said that so few appeals had been made, concluded that perhaps not enough publicity had been given to the legislation itself. I do not think that that is the reason. I remind the Senate how the legislation was dealt with in 1975. We, then in Opposition, saw the Bill that created the Tribunal. We noted that it had no jurisdiction initially. It was by way of amendment and by way of discussion with the Government that we ultimately obtained the Schedule to the Act which sets out a number of areas in which appeals do lie to the Administrative Appeals Tribunal. We felt at the time that they were, unfortunately, most inadequate.

Many other areas of appeal had been recommended by the Kerr Committee report. Only some of those areas were taken up at the time and a few extra areas of appeal have been added since then. I hope that the Government will continue to extend the jurisdiction that is available to the Tribunal so that in fact it will deal with more substantial matters.

I too welcome the fact that the Social Services Act is apparently to come under its jurisdiction, whether in whole or in part, because I believe it is important that there should be excellent service given in the case of appeals by people in the area of social services which I do not think is as good at the moment as it should be. The Bill enables, in a flexible way, different types of tribunals to be constituted. For example, tribunals will now be constituted in some cases by a presidential and 2 non-presidential members; in other cases by a presidential member sitting alone, who in general is a legally qualified person; thirdly, by a senior non-presidential member- a new class of member- and 2 other non-presidential members; or by a senior non-presidential member sitting alone. In other words, there is to be quite a gradation of persons with skills and experience appointed- from, a judge down to others who will have other qualifications but not necessarily of a nature covered by judicial or legal experience. I have some reservations in regard to this if in fact a good deal of use is to be made of nonlegal chairmen sitting on this Tribunal. I remind the Senate that when the Kerr Committee reported in August 1971 it consisted of Mr Justice Kerr, as he then was, Mr Justice Mason, Mr Ellicott, the present Attorney-General, and Professor Whitmore. It was a highly qualified committee. In chapter 16, paragraph 320, of its report it said this about chairmen of tribunals:

We are of opinion that, wherever possible, the chairmen of tribunals should be legally qualified. This is already the case with many tribunals but it is not, by any means, a uniform requirement. Experience overseas has shown, we would argue, that legally qualified chairmen conduct proceedings more effectively and fairly than those drawn from other fields. There are, of course, exceptions, but the general rule is correct- especially when parties before the tribunal are unrepresented.

Perhaps I have a prejudice in regard to this. I do not think that what is being done is inconsistent with that recommendation but I hope that chairmanship of these tribunals by non-presidential members will not be preferred. I hope that wherever possible people with legal qualifications will chair the tribunals. I think it is necessary to have the 4 gradations of membership so that the tribunals can deal with a lot of areas in which there are matters of fact to be determined, such as matters of a specialised nature which can be dealt with by chairmen who are not lawyers. I think it is therefore a desirable and flexible enough reform.

As Senator Button has pointed out, the ability to take over jurisdiction from existing appeals tribunals and to bring these within the scope of the Tribunal is a useful one and no doubt this will increase the number of appeals that can be dealt with by this body. I note also there are more elaborate provisions in respect of the ability of the Attorney-General to give a certificate in respect of matters which he regards as undesirable to disclose and that freedom from disclosure is something which is allowed to be put to the Tribunal where it would prejudice security, defence or international relations or would disclose proceedings in cabinet. In this case the AttorneyGeneral’s certificate can be challenged before the Tribunal and may, if the Tribunal so rules, be set aside. I think it is desirable that the Tribunal have this power. Under the additional powers it is the President of the Tribunal who will determine the setting aside of the certificate. Secondly, it is made clear that where a certificate is set aside this may be done on terms that only some of the parties may have access to the document or information concerned. This allows staff of the Tribunal also to see the document. These things were pointed out in the Minister’s speech. I think it is desirable that we have these qualifications set out so that it will be more likely that the Tribunal will act sensibly in regard to such certificates from the Attorney-General. I therefore think that this Bill constitutes a very important part of the Government’s reform program.

The Administrative Decisions (Judicial Review) Bill is likewise highly desirable. It will simplify the proceedings of the Federal Court of Australia in considering a judicial review. Somebody can appeal against a decision of the Tribunal. Whereas at the present time there are the very ancient remedies, the very ancient writs that can be used to take such action, they are not satisfactory. They have been found over the years to be unsatisfactory. This is indeed an area which needs this alternative and the simple remedy which is now provided in this Bill. If something is lawful or unlawful this will be determined on the review. The powers on review given to the Federal Court are quite considerable. This is very important in this legislation. The difficulty which exists under the existing powers of review is that a person may not be able to find out the facts or may not be given any reasons by the tribunal that makes the decision, or the tribunal may not set out the findings of fact so that people can seek proper legal advice to determine whether they have grounds for an appeal or to seek a prerogative writ. Under this Bill those reasons must be given and findings of fact must be given. I think this will be fair to the litigant or to the person who is aggrieved by a decision. I think this does constitute a more comprehensive procedure, as the Minister has indicated in his second reading speech. Therefore I believe this is a very important part of the legislation.

It was forecast in the Minister’s speech- and Senator Button referred to this-that further legislation will be coming forward to create standard procedures for Commonwealth adjudicative tribunals. This is desirable too. It is very important that people understand the procedures. It is important that there be a standard, and not the present rather jungle-like different methods which chairmen might use in conducting proceedings. Likewise, I think that the freedom of information legislation which is soon to come before the Parliament will make this legislation much more valuable. It will tie in with this legislation. It will enable people to get the facts. It will help them in proceeding with appeals against decisions made by tribunals. I very much welcome this present legislation. It accords with what has been recommended in the past by committees. It represents an important step forward by the Government and by the Opposition which is giving its support. I believe it will do something useful for this community and for any ordinary member of the public who finds himself enmeshed in the bureaucracy and unable to find his way. I therefore believe that the Bills deserve every support from this Parliament.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– in reply- I thank the Senate for its support for these Bills which are very important steps in improving and modernising the appeal provisions and procedures in respect of ministerial and administrative decisions. The Bills will expand the rights of citizens in their relations with the Government. It is pleasing to note that the Bills have been received on a bipartisan basis by both sides of the Parliament. This has been the history of reform in this area and it is very suitable that this should be so. As to some of the specific questions that were raised, Senator Button expressed concern on behalf of the Opposition about the fact that only 24 applications have been made to the Administrative Appeals Tribunal even though it has been operating now for nearly 12 months.

This matter has been discussed by the Administrative Review Council which also is most concerned that people should know the rights they have under this legislation. I am informed that some departments- in particular the Bureau of Customs in the Department of Business and Consumer Affairs- in fact do advise people of their right of appeal to the Administrative Appeals Tribunal in respect of departmental decisions. This, of course, is a very clear way of advising people of their rights. It is one which is being looked at for further application by all departments concerned. With regard to Senator Missen ‘s point concerning the non-legal chairman of the Administrative Appeals Tribunal, I think the Government would share the concern that he has expressed and the views that have been expressed by the learned men who have considered this question that there is a great deal to be said for chairmen of these tribunals having legal qualifications although other expertise is required on these tribunals. As was pointed out in the second reading speech, it is certainly the intention of the Government that in practice legal training will be required for appointment to the position of senior non-presidential member.

I think it might be of interest to the Senate that as far as the repatriation appeal system is concerned, there are provisions under that legislation for all the chairmen of any of the tribunals to have legal training or qualifications. That is widely accepted by government. As it is the intention of the Government to bring the repatriation appeals system under the umbrella of the Administrative Appeals Tribunal, it would be expected that the chairmen of panels under the repatriation legislation would continue to have legal qualifications or training. That principle is certainly accepted by government. However, it is not specifically required, as there may be some particular reason on a particular occasion to appoint someone to this position without legal qualifications. I thank the Senate for the support of these measures.

Question resolved in the affirmative.

Bills read a second time.

In Committee

The Bills.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– The Government has circulated 2 amendments to the Administrative Decisions (Judicial Review) Bill 1977. With the leave of the Committee I propose to move the 2 amendments together. The first is of a drafting nature only. The second refers to a clause which, it is now discovered, is really unnecessary. My attention has also been drawn to the fact that there are also 2 amendments of a drafting nature to the Administrative Appeals Tribunal Amendment Bill 1977.

The CHAIRMAN:

– I suggest to the Committee, as there are 2 amendments to each Bill, that perhaps it would be better to take each Bill separately. I ask the Minister to move formally the first amendment.

Administrative Decisions (Judicial Review) Bill 1977

Senator DURACK:
LP

– There are 2 amendments, referring to clauses 5 and 1 3, which read in part:

Clause S.

  1. 1 ) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Court for an order to review in respect of the decision on any one or more of the following grounds:

    1. that a breach of the rules of natural justice occurred in connexion with the making of the decision;
    2. that the decision was not authorized by the enactment in pursuance of which it purported to be made;

Clause 13.

  1. A statement or further statement furnished under this section in respect of a decision shall be deemed to be part of the record of the decision for the purposes of an application under section 5 in relation to the decision.

I move:

Senator Keeffe:

– I take it that you intend to debate the 2 amendments together but you will move only one at a time for each of the 2 Bills.

The CHAIRMAN:

– The situation is that the Committee has agreed to take each Bill separately. The Minister has asked whether he can take the 2 amendments on the one Bill together. Is the Committee in agreement with taking the 2 amendments together? There being no objection, it is so ordered.

Amendments agreed to.

Administrative Appeals Tribunal Amendment Bill 1977

Senator DURACK:
LP

-There are 2 further amendments to the Administrative Appeals Tribunal Amendment Bill1977. They are purely of a drafting nature and relate to clauses 13 and 18, which read in part:

Clause 13.

Section 22 of the Principal Act is repealed and the following sections are substituted:- 21a. (1) . . . .

  1. The President may, after taking the submissions into account, if he considers that the matters to which the proceeding relates are of such public importance as to justify him in so doing, give a direction varying the constitution of the Tribunal for the purposes of that proceeding so that-

    1. in the case of a proceeding before the Tribunal constituted in accordance with paragraph 21 ( 1 ) (b) or (c)- the Tribunal is constituted in accordance with paragraph 21 (l)(a);or
    2. in the case of a proceeding before the Tribunal constituted in accordance with paragraph 21(1) (d)- the Tribunal is constituted in accordance with paragraph 2 1 (a),(b)or(c).

Clause 18

Section 29 of the Principal Act is repealed and the following section substituted:

29.(1) ….

  1. Notwithstanding sub-section (5), the Tribunal may entertain an application referred to in that sub-section if it is of the opinion that there are special circumstances that justify it in doing so.

I move:

The CHAIRMAN:

– Is it the wish of the Committee to take the 2 amendments, as circulated, together? There being no objection, it is so ordered.

Amendments agreed to.

Senator CAVANAGH:
South Australia

– Before the Bills are reported I wish to raise one matter that is of concern to me with regard to a lot of Bills. I refer in this instance to Clause 14.(1) of the Administrative Decisions (Judicial Review) Bill, which states, in part:

If the Attorney-General certifies, by writing signed by him, that the disclosure of information concerning a specified matter would be contrary to the public interest-

If the Attorney-General give his reasons, the information will not be disclosed. I have always objected to this system. If a Minister certifies that something is to the detriment of the public interest, it is deemed to be a fact. Although I do not want to alter this Bill now, I would say that this aspect should be looked into. If a thing is to the detriment of the public interest, it should be prohibited. However, it must be proved to be to the detriment of the public interest and not just on the certification of a Minister, in this case the Attorney-General. It has been argued a number of times in this place that it must be proved to be to the detriment of the public interest and should not be prohibited by a Minister deciding to issue a certification that it is not in the public interest. I ask the Minister to comment on that.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I refer the Senate to clause 14.(4) which preserves the power of a court to make an order despite the certification of the Attorney-General so that the ordinary common law is preserved in regard to these matters.

Bills, as amended, agreed to.

Bills reported with amendments; report adopted.

Third Readings

Bills (on motion by Senator Durack) read a third time.

page 1612

AUSTRALIAN NATIONAL RAILWAYS AMENDMENT BILL 1977

Second Readings

Debate resumed from 24 May, on motion by Senator Carrick:

That the Bill be now read a second time.

Senator KEEFFE:
Queensland

-In order to set the record straight, I will set out the purpose of the Bill. The purpose of the Australian National Railways Amendment Bill 1 977 is to amend the Australian National Railways Act 1917 following the transfer of the South Australian non-metropolitan railways and the Tasmanian railway system to the Commonwealth. Honourable senators on the other side of the chamber in particular will recall that the transfer was commenced in the lifetime of the Australian Labor Party’s last term in government. Complementary legislation has been enacted in the South Australian Parliament. I understand that the Tasmanian Government will introduce its complementary legislation early in the Budget session of the Tasmanian Parliament. I have a document which, unfortunately, I have not had time to circulate to the Minister for Education, who represents the Minister for Transport in this chamber, or to you, Mr President. It is short statement on the Australian National Railways Amendment Bill 1 977 by the Honourable D. J. Baldock, the Tasmanian Minister for Transport. We were very charitable this afternoon and accepted a couple of minor documents without inspection. There is nothing subversive in it. I ask for leave to have it incorporated in Hansard.

The PRESIDENT:

-Is leave granted?

Senator Chaney:

– I take a point of order to clarify the matter. The documents had been inspected. The honourable senators concerned showed them to the spokesmen as I understand it. I refer to Senator Jessop in particular.

The PRESIDENT:

– There being no objection, leave is granted.

The document read as follows-

The Honourable D. J. Baldock, Tasmanian Minister Tor Transport, advises as follows:

1 ) Commissioner for Transport, who is a Commissioner of the Australian National Railway Commission has advised that he is fully in agreement with the amendment to the Australian National Railway Act in this Bill and that these amendments have the complete support of all Commissioners of the Australian National Railway Commission.

A number of the amendments are of a machinery nature only and the others are essential either for the efficient operation of the railways in the previously existing three regions or the transfer to Commonwealth employment of the railway employees previously employed by the Tasmanian Government railway and the South Australian (non-metropolitan) railways.

It is important that the employees of Australian National Railways Commission be brought under the Commonwealth Conciliation and Arbitration Commission instead of being under the Commonwealth Public Service arbitrator. In fact this was a requirement which has been insisted upon by the railway unions.

It also has been most important that the railways employees in Tasmania and South Australia be able to remain in their State Superannuation schemes on their transfer to Commonwealth employment. The necessary Act for these purposes has been passed in South Australia and instructions have been issued to the Parliamentary Counsel in Tasmania for the drafting of the necessary Bill. It is expected this Bill will be introduced into State Parliament as soon as possible when the Parliament resumes for the budget session. A further letter to the Commonwealth Minister for Transport dealing with this matter, drafted by the under-Treasurer will be available for my signature tomorrow. This letter confirms agreement to the proposed superannuation arrangements and is confirmation of my telex of the 26th April on this subject to Mr Nixon.

Other amendments to the Act have been requested by the ANRC and it is intended these will be the subject of a further amending Bill.

Senator KEEFFE:

– After that minor misunderstanding, I point out that the Opposition does not oppose the Bill. Let me make a few points early in the debate. My colleagues from South Australia- in fact I think at least 2 speakers will be supporting me- will go into a little more detail because it involves them more closely on a domestic basis.

This Government has made some unfortunate decisions in relation to transport. This has been pointed out in this chamber by speakers from this side and with more detail by the Opposition spokesman for Transport in the other place, my colleague, Mr Morris. It is not possible to go through them all in detail. The Minister for Transport (Mr Nixon) apparently has been happy to put Australia out of the shipbuilding industry. This action of course has brought upon him a great deal of criticism. In fact in recent days we saw deliberate confrontation designed obviously to exasperate the air traffic controllers. The confrontation prolonged the dispute. Now it appears that he has an ambition to wind up the Australian National Railways.

The Queensland Government had the opportunity of participating in the same scheme as South Australia and Tasmania- other States did too- but Queensland at that time showed tremendous reluctance to participate in the same sort of funding with the Commonwealth; anything that the Labor Government did was not good enough for the Queensland Government. The only surprising aspect I suppose, is that anything the Liberal Party is doing here in Canberra is not good enough for the Queensland Government either. So, the Queensland Government is adopting a fairly evenhanded approach. In the meantime this attitude is bringing great disaster to the State. Over $100m in grants that was offered by the previous Labor Government to Queensland was flatly refused. I understand that some overtures have been made by the present Government. Unless the Queensland Government can spend the money its own way, it does not want any money either. It seems that the National Party in Queensland has set out to bankrupt the State and to create the highest rate of unemployment in Australia.

The Federal Government is not without blame. Amongst the actions it has taken since it assumed office is the closing down of the north Australian railway system. I was under the impression at the time of closure that that railway system was to be put into mothballs and probably reopened at a later date. At least those were the implications of some of the statements made by members of this Government to people in the Northern Territory. 1 have since discovered that this is not the intention of the Government at all. I expect shortly to see tenders being called for the sale of the railway property. Unless the Minister can contradict my statement, I fear for the future of the north Australian railway.

As well the Government has set out on a course to reduce substantially the operations of the Tasmanian railway system and to freeze construction of the Adelaide-Crystal Brook standardisation project. We wanted to see these programs as on-going projects. The Government has slowed the rate of construction of the TarcoolaAlice Springs rail link by reducing funds sought by the Australia National Railways Commission for construction this year. This is the good old policy of the ‘firm’ we now have which apparently works hand in hand with the federalism concept. It says: ‘We won’t pay for it but, as a State Government, you can pay for it’. The Government has already cancelled a second rolling stock program of 800 wagons which would have given a much needed lift to rolling stock manufactures and the heavy engineering industry as a whole as well as providing much needed railway wagons.

A number of manufacturing organisations in Australia if not on the verge of bankruptcy are getting very close to it. These are companies that construct railway rolling stock and engines but in this moment of almost economic bankruptcy they are not getting the jobs. Rather than deferring any expenditure the Government ought to be looking at the proposition of making more money available to provide the employment needed in these areas. We have suffered for a long time in this country because of the insular, narrow minded attitudes of States which in the old days decided that they would have a multitude of different railway gauges. There were three. There was the 3 feet 6 inch gauge, the 4 foot 8’/4 inch gauge, which ultimately became the standard gauge, and the 5 feet 3 inch gauge. In addition to that we had a number of tramways that operated on smaller gauges.

It is true that a lot of progress has been made in comparatively recent years. In the days when Labor was in government that progress was speeded up. In recent times we have seen the Melbourne-Sydney line standardised. The line from Brisbane to Sydney was standardised many years ago. The Sydney-Perth line was linked up a number of years ago and work on the TarcoolaAlice Springs line is progressing. One would hope that somewhere in the not too distant future if governments have sufficient initiative we will see a standardisation of railway services into the Northern Territory. It is the people of the Northern Territory at the moment who are paying most in terms of freight because of the inability of governments to be able to pursue the construction of a proper railway line in that Territory. The fact that we have made some progress does not git away from the point that we still have 6 different railway systems operating in Australia. Each State has its own little perks and its own little ideas about how the systems ought to be operated.

I can probably speak with some authority so far as Queensland is concerned. Very little rolling stock for the carriage of passengers has been constructed there in the last 15 or 17 years. Work on the electrification of the Brisbane metropolitan system is now about to be started. This was scrapped by the present Government in the late 1950s when it said that Queenslanders did not need the electrification of the metropolitan system. It will now cost billions more than it would have cost to construct at that time. In fact when the State Government took over on 3 August 1957 one of its first jobs was to wreck some of the buildings that had been set up for construction purposes associated with the electrification of the railways at the time. It seems to be a general sort of attitude for conservative governments in particular not to plan for tomorrow but to make a mess of whatever is happening today.

It seems that no consideration has been given by this Government, any of the other State governments or our predecessors prior to 1972 to the electrification of the mainland railway system. It is obvious that one can only hope that there will be some movement away from that attitude. One of the big problems that this country must face over the next few years is the inability of our planners to provide an alternative energy source. As we know, most of our major locomotives these days are diesel fuelled. There has been electrification in some metropolitan areas and not others.

I was very interested in reading in a very small country magazine only two or three days ago a statement by a member in another place who belongs to the National Party in Queensland that we would have to do something about the energy crisis. One measure he suggested was that we ought to go back to the time when trains on the general railway system were fuelled by coal instead of diesel. I do not know -

Senator Collard:

– Only a few of us could do it.

Senator KEEFFE:

– We have an ex-railway driver on the other side. The person who made this suggestion comes from the honourable senator’s area. They had better get their heads together at some time because we will not always have the fuel we will need. I am not too sure that we will be able to get a nuclear fuelling system into trains. We will have enough disasters with that type of fuelling as it is. Imagine 2 very heavy locomotives both nuclear fuelled having a headon collision. It is just possible that a couple of train drivers might be wiped out. The points I have raised are complementary to those that will be raised by my colleagues on the Opposition side of the chamber. Whilst we do not oppose the legislation, we have to take this opportunity to utter a number of criticisms. No doubt the Minister will be able to reply later in the debate.

Senator ARCHER:
Tasmania

-There always has been a lot of fascination about driving or owning trains. It reached its height at a time when various people rushed off and brought 2 beaten-up train sets at the one time. That was taking matters a little too far but we are left stuck with the fact now. However the sale gave great pleasure at the time to those 2 second-hand dealers, Dunstan and Neilson. They thought they had well and truly got stuck with their old train sets until they found this willing and anxious buyer who charged along, paid double the price and did not ask for any guarantees or anything. It did not matter whether the trains worked or not. That was the way it happened.

When train services were set up originally in the late 19th century trains were very much the big thing because it was pre-automobile days and the choice was either trains or horses. At that stage it was very important that adequate transport should be provided and it was decided that it should be trains. That was the only other means of transport. In Tasmania the trains started in about 1865 and they did not reach their peak, I think, until 1930. The length of track reached 1093 kilometres. This length has been reduced to 850 kilometres by a few closures. But the rail system still exists and it is very important. It still has a place to fill. We regret that it has suffered from between 20 and 30 years of absolutely total neglect, a total avoidance of all responsibility, particularly great ineptitude and just plain bad management all rolled into one.

By 1967-68 the Tasmanian Railways had reached the stage where they were losing $1 per train kilometre. By 1970 the figure had passed $2 and by 1975-76 it had passed $3. Still, losses on trains are nothing new and they are not small. At a recent transport seminar I attended I was told that the Australian loss on trains has now reached approximately $650m a year or approximately 10 per cent of the total personal taxation paid in a year. Rail costs seem high because every bit of them is totally identifiable whereas road transportation costs are not. Railways produce balance sheets but road transportation does not. If we could transfer more of the heavy traffic from the roads to the railways we could remove a lot of the overall transport loss.

As Senator Mulvihill said recently when we were talking about roads, there is still not enough integration or an overall traffic policy. If we could put more of the heavier cargoes onto the railways and less on the roads it would be better for both systems. We could reduce the losses on one and save a lot of the costs on the other.

The main purpose of railways is to handle the long hauls and the bulk cargoes. But we have to update railways somewhere along the line. At present the costs of loading, unloading, shunting and things of that sort are the main costs. If rail is to remain the force that it should be, a lot of changes will have to be made in the most expensive areas of use. There will have to be more encouragement to use rail and possibly even some disincentives not to but this will have to be considered in line with road costs and rail losses.

The Joy report was given much publicity in Tasmania in particular. It is an independent assessment. While there are several items in it that I do not like and feel at the moment I cannot fully support, I accept that they are probably quite correct. However, they must be considered fully. When due consideration has been given to all the issues then certainly some action will be necessary. I would like to quote one or two of the conclusions of the report. The first states:

Tasmanian Railways has slid into its present losses (nearly $3 for every $1 revenue in the current year) because of increasing road competition for traditional traffic, and the entering of some bulk freight contracts on unfavourable terms.

The unfavourable terms are quite a feature of most of the contracts that apply to the Tasmanian rail system. The third conclusion states:

Without radical changes in the traffics which are carried, and the methods of operating, Tasmanian Railways’ deficits will rise explosively from their present level of over $9,000 per head of staff.

I repeat, ‘over $9,000 per head of staff’. The seventh one states:

Tasmanian Railways will never make a profit, but it should be possible in a few years to reduce the deficit.

Conclusion No. 2 1 was as follows:

In attempts to make the limited track maintenance funds go as far as possible, Tasmanian Railways has been forced to make a number of doubtful economies.

I suppose that derailments at the rate of about one a week could be classified as doubtful economies. Just how long some goods remain either on the track or beside the track while repairs are being made is becoming really alarming.

In summary, while it is nothing to be proud of, one of Tasmania’s greats is that it has the worst rail system in Australia. Nobody will argue with that point. The recommendations and implications of the Joy report have to be considered fairly thoroughly. Various recommendations have been made concerning 3 lines in Tasmania. One is the line to Circular Head, one is the northeastern line, and the other is the line for the passenger service known as the Tasman Limited. I took up the matter of the Circular Head rail system with the Minister for Transport (Mr Nixon). I was aware of the fears that residents had of total closure of the line. They said that Dr Joy had taken incorrect information into account.

The Circular Head area has several industries -dairying, meat, timber and fish in particular. The people rely on transport to get their goods interstate. There is a shipping service from Stanley but the majority of the traffic is usually via Burnie and sometimes Devonport. It is important that the people have a completely reliable service. At present practically all the traffic is carried by road because that method is reliable. I discussed the matter with each of the industries in the area and nobody told me that he would not use rail if rail were provided in a way that he could use. I approached Australian National Railways to see whether it would be prepared to quote a one-up rate for a partly rail and partly sea transport system from Smithton to Melbourne. While I understand that a representative of the ANR has been to Smithton and interviewed representatives of industries concerned, I also understand that no proposition has been put forward yet. In the meantime the very survival of the Circular Head line is in the balance. I want the read portion of the letter dated 3 May I received from Mr Nixon. It says in part:

The Committee has not recommended closure of the railways beyond Wiltshire Junction, but has recommended that full load traffic only be accepted in the Stanley/Smithton area, with loading and unloading by the shippers . . . unless the cost of operations in the Stanley/Smithton area can be substantially reduced, the rail services in question have a very limited future … the future of the Tasmanian rail system, including the lines to Smithton and Stanley, will be made only after a detailed examination of the Committee’s report and taking account of the views of the Tasmanian Government.

That is what is important at the moment. We must see that the local interests are fully protected. I am not so sure about the future of the passenger service. It is poorly patronised, it is expensive, it has become badly out of date, it is too slow and so on. A lot was said in the Press 12 months ago about the possible closure of the rail, with people saying that it was too expensive to retain. An estimate by people who could calculate the volume of traffic normally carried in Tasmania indicates that it would take 450 semitrailers on 2 shifts a day and $25m to $30m spent on the roads to shift the same amount of traffic that the Tasmanian rail currently shifts, in spite of the problems that it has. To do that would throw such items as logs, sulphuric acid, cement, ores and a lot more containers on to the roads. The roads certainly are not equipped to cope with that.

The main purpose of the legislation was stated as being to enable the ANR Commission to manage the State railways in accordance with agreements between the Commonwealth and South Australia and the Commonwealth and Tasmania. As far as the employees are concerned, it is a tidy-up act. The retirement scheme that has been put forward has now been dealt with sufficiently so that it seems to satisfy the unions concerned. I quote from the Tasmanian Press recently. Mr David Northey, State Secretary of the Australian Railways Union, was quoted as saying that it appeared that ‘Tasmania’s rail workers would benefit from the transfer’ and that ‘personnel would either retain their wage position or improve their earnings’. That is a long way from what was stated less than 12 months ago, in September 1 976, when the President of the ARU in Tasmania, Mr Doug Jones, said that the State’s 2000 railway employees could be out of work and the Tasmanian railways system scrapped. I am glad that that did not come about. I fully understand the problems that the railway employees faced at the time. I refer to page 63 of Dr Joy’s report. He said:

At the end of September 1976, Tasmanian Railways employed 1955 staff. Staff numbers have fallen considerably over recent years from a peak of 2956 in 1 955.

At page 77 he said:

The major benefit which Tasmanian Railways bestows on Tasmania at the moment is that, by employing about 800 more people than can be justified on social benefit grounds, and about 1 500 more people than could be justified on crude financial grounds, it brings in between $8m and $l5m each year in payrolls . . .

On that basis I understand the feelings of the employees. I refer now to one or two particular items. Section 46, sub-section (2), sets up a provision for a normal appeals board set-up. The employment questions generally are regularised in line with similar employment. The Conciliation and Arbitration Commission is to replace the Public Service Arbitrator. We must remember that there are severe problems in a small organisation such as the Tasmanian Railways. There are 24 unions, 26 awards and 600 classifications. I notice that a speaker in the other House said that in his opinion there were too many unions. The question of retirement at age 60 years, with the permission of the Commissioner, is universally approved. The giving to members of the option of retaining their State rights is also generally applauded. Proposed new section 46, sub-section (5), irons out the misconduct question. I am very pleased that Mr Northey, on behalf of his union, has given basic approval to all these things.

Even the then State Minister, Mr Chisholm, who was very rapt in certain aspects, was quoted in the Press of 13 August as agreeing that the Commonwealth had relieved the State Government of debt charges totalling $63.3m. That, together with the Federal Government paying $5m for operating costs per year and the statement by the Commonwealth Minister in the last week or so that the Commonwealth would expend $23m for upgrading of the system, certainly sounds like being a fairly good deal for Tasmania. Tasmanians, I can assure the Government, are very satisfied with the treatment that they have had. I feel that I must read this little piece that appeared in the Examiner last year, at the time that Mr Chisholm was complaining. There was a letter in the Press which stated:

In the fairyland of Tasmanian politics -

We know what is meant there- we are witnessing scenes of sheer hypocrisy and railwaymen in the audience should fully understand the depths in which the scenes underline their sell-out 12 months ago.

The Premier, Mr Neilson, sits in his corner, pulls his budget plum out of the economic pie and says what a good boy am i.

He also tells us that the sale of the railways made it so.

He tells us that the railways were a liability but he does not say that 20 years of Labor Government mismanagement gave us the shambles of a railway that exists today.

He tells railwaymen for the first time of their near brush with industrial death.

The alternative to selling them’, he said, ‘was to close them down’.

Anybody working in the industry must wonder whether that was the State Government’s opinion only, or whether others are thinking on those lines now, from the federal side of the fence.

Then we have the State Minister for Transport, Mr Chisholm as Cinderella, sitting in the ashes of his old railway and shedding crocodile tears as he tells of Demon King Nixon’s threat to break the agreement if freight rates are not increased.

He says we are being forced by the Federal Government to increase the rates, as though the ANRC has no right to look after the revenue of the bankrupt railway which it inherited.

There would be no opposition to the 1 5 per cent increase if it were a State Government decision because such finance would be going to the State Treasury.

By opposing the ANRC direction, the State Government was trying to obtain a further Federal Government subsidy for Tasmanian freight.

The hypocritical position would then be that the unwanted railways would incur further losses to suit a State administration that had already said they were a liability.

Mr Nixon (the Federal Minister) could not break the rail agreement, and if Mr Chisholm reads the legislation which he helped to pass he would know this.

Making cheap political capital out of the situation does neither the State or its railwaymen any good.

The facts are that the ANRC can vary the rates and services of the railway and its directives are mandatory.

This was agreed to by the Whitlam and Neilson governments and has nothing to do with political claptrap.

It was signed by R. C. Robertson, State Secretary, National Union of Railwaymen. The whole of the Australian railway system is under scrutiny at present. I suggest that the statement in the White Paper on manufacturing industry stressing the need for flexibility and the ability to cope with necessary changes in industry applies also to the transport situation. Changes are essential. Innovations and rethinking are imperative for survival. I am a person who genuinely supports the rail. An adequate system is necessary. Particularly in the case of the Tasmanian rail service, a limit must be set on the standards and the financing of it. I hope this is one of the things to which we can look forward. Rail has an important place. I think finally I should quote this statement of the Minister in his second reading speech:

Rail services must be provided to meet the needs of the States concerned at the least cost to the community and inquiries such as these undertaken by Dr Joy will assist the Government and the Commission to decide how this is to be achieved.

I think that is the basis of it. I commend the Bill.

Senator MULVIHILL:
New South Wales

– I understand that the batting order has been changed and that I have to take on the task of being nightwatchman. I enter the debate on the Australian National Railways Amendment Bill 1977 largely prompted by the remarks made by Senator Archer, who preceded me in the debate. It is no use trying to apply just a sort of banking philosophy to railway economics. Under all State governments railway systems have been a sort of milking cow for the primary industries in times of drought and flood. I do not say that in any antagonistic way towards the farming community. What I do say is that in our present economy what usually happens is that the bulk transport is handed over to be dealt with by the railways. In the case of much lighter and profitable goods, on which a quick profit can be made, road transport has gone in for its cut. Most State governments have been very diffident about trying to rationalise what are probably lucrative incomes to be made from transport. I said on a previous occasion that the perfect system would be to have road transport branching out to 200 links to the main railway systems. That is a generalisation, of course.

Senator Archer referred generally to the idea of railway system economics. The Treasury boffins, in both Federal and State governments, were adamant that profits would be dramatically increased with the advent of diesel traction. But the plain fact of the matter is that while we live in a dictated private enterprise economy many of our railway debts will remain. As an illustration of that point, I mention that at the end of World War II there was a fair amount of overseas indebtedness. The British Government of the day did no want us to fund that indebtedness. It preferred to live on the interest that it was being paid. I know that when Europe was being rehabilitated the British Government reduced the interest charges to certain eastern European countries as a sort of rehabilitation measure. Despite that fact, all of the State railway systems in Australia, with their extensive distances to be covered, were due for rehabilitation. Because there was so much to be done in other areas, very little attention was given to improving rolling stock. Directing my mind to the New South Wales scene, I know that the Garratt locomotives were not the success that it was thought they would be. It is true that the 38s had their role to play, but even then we were told that diesel traction was the answer. To a degree that was true.

With the expansion of road transport it was found that those involved in interstate hauling were quite happy to destroy the roads. They tried every constitutional trick to get out of their justifiable taxation commitments, and they have been doing it ever since. I am not objecting to having a combination of all forms of transportation but the railways were beset by private enterprise road hauliers on the one hand, and on the other hand the railways provided cheaper transportation and gave all sorts of freight rebates when concessions had to be given following bad seasons. For a long while Canberra made no attempt to inject adequate funds into the State railway systems. Each time that the railways did improve their traction, it was found that because of the lack of any modernisation program during the previous 5 years the expenditure required was colossal. Of course, interest had to be paid on the money needed.

The main reason I entered the debate was to say that I think that some ideas held are completely erroneous when we consider the economics of the railway system. After all, in terms of awards and conditions, the railway unions were the pace setters in regard to the concepts of long service leave and annual leave. But the wages paid to railway workers back in the 1950s were considerably lower that the wages paid in comparable industries in private enterprise. So it is of no use anyone implying that there was any featherbedding.

I notice that the Minister for Education (Senator Carrick) refers in his second reading speech to the multitude of awards, as though the State governments had hoodwinked the then Federal Government when it took over the State railway systems. I want to make one thing clear to anybody from the Government side who has any misgivings about the Government meeting its obligations to superannuated railway employees. Nobody can lay the criticism against railway employees that was made by Senator Wright of the golden handshake given to retired members of the judiciary. In the 2 States to which I am addressing my remarks, most of the railway men spent their working life doing long hours on various shifts. I feel that any tab that the Federal Government has to pick up on their behalf is certainly justified. We should compare the annual hours worked by a railway shunter, a locomotive engineman or those who work in many other grades with the hours worked by one or two of those retired gentlemen to whom Senator Wright rightly referred and who work only eight or nine months of the year. So let us have no more of these shenanigans about how good a Federal Government would be to meet these obligations.

The Minister’s second reading speech seems to carry an implication in relation to the various State and Federal awards and the multitude of gradings. I do not know who drafted the second reading speech for the Minister, but I think it is an insult to the intelligence of the members of the Senate. The speech should back up its claims with facts. It may be that we in the Senate have got into a lazy frame of mind in that it is very easy to incorporate second reading speeches in Hansard. I do not mind if those speeches contain relevant detail, but the second reading speech on this legislation refers to a multitude of grades, 600 occupations and all these sorts of things. It does not point out that this situation is different from that of a foundry worker or somebody else in private enterprise. I believe that the negotiations are going ahead. People such as Glen Moorehead, Federal Secretary of the Australian Federated Union of Locomotive Enginemen, and Ralph Taylor, the National Secretary of the Australian Railways Union, do not have Utopian concepts. They are men who have their feet on the ground. They know that when there is a bumper wheat crop, as so often happens, the railways provide the magnificent effort that is required to get the wheat to the sea ports. That is what always happens when the silos are bulging with wheat. I am amazed at the brickbats that sometimes come from some honourable senators opposite. They do not realise that sometimes that type of situation occurs.

The Bill we are debating is one for which nobody has to apologise. I say again and again that if we are able to get our railway system attuned to modern traction, whether it be along European lines or even along the lines of the monorail system in Japan, we will find that we will get an even break. Far too often in the past we have had progressive railway commissioners who have got from governments a response which was too little and too late All I say is that the Bill contains an equitable adjustment; it is equitable in relation to what has been done. I repeat that in the final agreement I hope that the requests made by Mr Taylor and Mr Moorehead are met in full.

Senator McLAREN:
South Australia

– I rise to support the Australian National Railways Amendment Bill 1977. The principal Act is the Australian National Railways Act 1917, and the purpose of the Bill is to amend that Act. It is rather revealing and quite strange to read these words in the second reading speech of the Minister for Education (Senator Carrick):

Honourable senators will recall that the present Government, when in Opposition, did not oppose the legislation to approve the rail transfer agreements with South Australia and Tasmania on the grounds they were agreements between sovereign governments. This was the correct course of action for us to take.

Yet the shadow Minister for Transport, Mr Morris, said in reply to the Minister’s second reading speech in the other place, as is recorded at page 1564 of the House of Representatives Hansard of A May: l mention also that on 21 July 1976 the Treasurer (Mr Lynch) told the Department of Transport that the Prime Minister (Mr Malcolm Fraser) wanted to hand the railways back to the States. The Minister for Transport during a radio interview on 10 August 1976 said that he had wanted to get out of the railway transfer agreements but that it had been found that the agreements were valid.

Of course, all the agreements entered into by the Whitlam Government between 1972 and 1975 were valid because that Government was not slipshod in its methods. The second reading speech was made in this place by the Minister representing the Minister for Transport, Senator Carrick, who said that his Party supported this legislation when it was introduced by the Labor Government and felt that the legislation was correct and that it was taking the correct course. But we find that both the Prime Minister and the Minister for Transport (Mr Nixon) have said that they endeavoured to get out of the agreement once they were in government. Mr Nixon is reported at page 1655 of the House of Representatives Hansard for 5 May as saying in answer to the honourable member for Shortland, Mr Morris:

I freely confess that I tried to get out of the agreements.

If that is not doubletalk, I do not know what is. Both the Prime Minister and the Minister for Transport said that they agreed with the legislation when Labor brought it in but they are now on record as having admitted that they tried to get out of the agreements. As I said, that is doubletalk. I invite Senator Carrick to give us some explanation why Government members indulge in doubletalk of that nature in this Parliament.

When we were in government, Senator Carrick was one person, then on this side of the House, who repeatedly accused the Whitlam Government of double standards, who said to the people at large that they could not trust the Whitlam Government because it did not mean what it said. Yet here we find Senator Carrick, in delivering Mr Nixon’s second reading speechSenator Carrick must have agreed with him and it must have been discussed in the Party room before this amending Bill was introduced- saying that his party was in accord with the legislation when it was introduced by the Whitlam Government and that it was the correct thing to do. Now when he is forced to do so we find Mr Nixon in debate freely confessing that he tried to get out of these agreements. How can we or how can any State government have any faith in any other agreements that may be entered into with this Government during its term? Senator Carrick may find problems with education agreements into which he has to enter if he on the one hand is prepared to say on behalf of the Minister for Transport that his Party agreed with the agreements and his own Minister says in the other place that he tried to get out of them. One can imagine the chaos that will reign in the country if the precedent for other agreements that wil be entered into with the States is that the Government will try to get out of them when it suits its purpose.

In the debate Senator Archer accused the South Australian Premier and the Tasmanian Premier of being first class secondhand dealers because they were able to negotiate the sale of their respective State railways to the Commonwealth Government. Of course, they were only doing what the then Mr Bolte said he would do many years ago when he was Premier of Victoria. I think that the then Mr Askin also made the same statement in New South Wales. Both of those gentlemen when they were Premiers of their respective States would have been quite happy to hand over their railway systems to the Commonwealth Government. But of course we find that when Labor came to power, like a lot of Liberal governments they reneged on those statements and would not hand over their railways. The South Australian and Tasmanian Labor Governments handed over their railways. In my view, all the State railways should be under the jurisdiction of the Commonwealth. One recalls that there have been 2 State elections since the handover of the railways, one in Tasmania and one in South Australia. In South Australia in particular the last State election was fought on the transfer of railways, and the people of that State agreed with the measures taken by the South Australian Government in effecting the transfer. The Dunstan Government was returned to office on that very issue. The South Australian election was brought forward by some 12 months or more because of the fact that the Liberal Oppposition in South Australia at the time was making all sorts of noises about the illegalities and the ramifications of such a transfer. It even went so far as to make some outlandish statements to the effect that the transfer of the railways would lead to the handing over to the Commonwealth of the wharves and all the bulk handling instrumentalities associated with the shipping of grain. The Opposition knew very well that that was not the case but, in keeping with Liberal Party politicking standards, it tried to scare the people and fool the people, but it was not successful. Mr Dunstan fought the election on that issue. He won the election and he is still Premier of South Australia.

Senator Archer also made great play of the losses incurred by the railways. I will refer to some figures later on. The railways incur losses because they have to service areas of Australia where there is no profit to be made. If the Government does what it is doing in the Northern Territory- closing down the railway services, as referred to by Senator Keeffe, the shadow Minister for the Northern Territory- and handing transport over to the whims of private enterprise the residents of the Northern Territory will be held to ransom by the private transport operators. That is what would be done if there were not a railway system in the rest of Australia. Liberal and National Country Party members make great play of being in sympathy with and supporting people in country areas but those areas would never have been opened up and developed if we had not had a railway system. If the transport system had been left to the whims and the wiles of private enterprise there would have been no country services for farmers in this country because no profit is to be made there and private enterprise is interested in only one thing- the profit it can make on the mighty dollar. Private enterprise is not interested, as the railway systems in this country are interested, in giving a service to the people who live in country areas.

I am afraid that if this Government has its way we will see more and more of the non-paying country rail services closed down, to the detriment of the people who live in country areas. All that private enterprise thinks about and what is uppermost in its mind is showing a profit irrespective of the service that the people receive. That is wrong. The Government will have to answer for this policy as it closes down more and more country railway systems. The people in the country ought to be aware of what the Government is trying to do. Senator Archer talked about the transfer of business to the railways instead of to road haulage. I agree with him that we ought to be doing everything in our power to encourage people to use the railways. I mentioned in my speech on the Appropriation Bills that the Government, instead of cutting down on capital works for public services, ought to be spending money. To use my own words, it ought to be putting down a dual track between Perth and the eastern States as far as Queensland so as to provide an efficient and fast transport system. It is well known that one cannot travel from Adelaide to Melbourne any faster today on a passenger train than one could travel back in 1884 when the service was first instituted because there are all the holdups of the cross-overs and because there is only a single line track. This is to the detriment of business and of people at large.

We are spending millions of dollars trying to upgrade roads and putting great juggernauts on the road. Hardly a day goes by without a semitrailer overturning and the driver being killed, a trailer colliding with a motorcar or a motorcar colliding with a trailer because of the congested roads in the Adelaide Hills. This has been brought about because the operators of these great juggernauts claim that they can provide a better service to business and to the community than the railways can provide. I defy them to prove it. They cannot prove it. We ought to be looking at adopting a system that has been instituted in many of the States of America where these great heavy transports are forced to put their trailers on to flat cars in the railways and take them off at the station of destination, hook them up to prime movers and take them away. They put all the heavy freight onto the railways.

The other matter to which close consideration should be given is the working conditions of people in the railways and the working conditions of those who drive transports. We know that a railway employee works under an award. He has decent working conditions such as hours of work, overtime payment, sickness payment, long-service leave and all those provisions to which workers are entitled. But how many people driving transports have those sorts of conditions? They work on a barter basis or a charter basis. They receive so much for driving between Perth and Adelaide and between Adelaide and Brisbane. The faster they do it the more money they receive irrespective of the conditions. One sees them sleeping in the cabins of their trucks. I see this happening repeatedly because I drive frequently between here and Murray Bridge. Right across the Hay Plain one sees trucks pulled up on the side of the road for people to have an hour’s sleep, then get back behind the wheel and again drive those vehicles dragging great heavy loads. One even has to push one’s car to well in excess of the speed limit to get past these great juggernauts on the road because of the speeds they travel. The damage they do to the roads has to be seen to be believed. It is costing the New South Wales Government millions of dollars to upgrade its roads just for the use of heavy transports.

Another thing we are faced with is having these heavy transport operators bringing their trucks into South Australia and registering them in Naracoorte under bodgie company names so they do not have to pay the road tax in the eastern States. Whilst this may be of some small benefit to the revenue of the South Australian Government, because it receives the money from the registrations, it represents a great loss to the governments of the eastern States, such as Queensland, New South Wales and Victoria. Because of a loophole in the law these people can register their great trucks in South Australia. I hope that in time to come something can be done to overcome that problem.

So much for the honourable senators opposite who blame the railways for their losses. I have cited some of the reasons why the railways run at a loss. Another reason is that the railways have to carry the main commodities used by primary industry. They have to carry superphosphate for the farmers at a cut rate because the farmers cannot afford to pay the rate that private transport hauliers would charge if it were carried by road transport. The price that road transport hauliers would charge would be exorbitant because they have to make a profit. As I said earlier, that is all they are interested in doing. Is any honourable senator opposite prepared to say that if country railways were closed down private enterprise could cope with the carriage of grain from the country silos to the seaboard? That grain is of vital importance to the economy of the farmers and of this country. Could road transport haul that grain to the seaboard? Of course it could not. There would be further congestion on the roads, more fatalities and more problems if they were to attempt to do so. We have to look into this.

Despite what honourable senators opposite say when they claim that railways run at a loss, as Senator Archer said, we have to look into devising some means of encouraging people to get back to using rail transport for freight, as well as for passengers. It has been said that great losses are incurred in passenger railway services, be it losses suffered by the Australian National Railways or the State governments. At least if one travels by rail one is sure of getting to one’s destination. If there is an accident on the track at least accommodation and meals can be provided for the passengers at a far better cost and with far more comfort than can be provided by road passenger services when vehicles are stranded because of wet weather in the outlying country areas. We find that in many cases the Commonwealth Government has to come to their rescue by flying in stores by helicopter, which again is a heavy expenditure to be met by the community.

I was disturbed to read recently in the Adelaide Advertiser of Tuesday, 10 May, of a statement made by Mr V. H. Dyason, the General Manager of the Australian National Railways. What he is reported to have said has caused great concern to many railway men in South Australia. Under the headline ‘Must cut rail jobs: Make you cry- rail chief: He is reported by the Industrial Reporter of that newspaper, Matt Abraham, as follows:

The railways have obviously failed to meet the challenge of the past four decades and to move with the times’, he said.

This may be so, because State governments have not had the money to spend on upgrading their railways. That is one of the reasons why both the South Australian and Tasmanian governments were prepared to hand their railway systems over to the Commonwealth. They hoped we would get a uniform railway system throughout Australia. The changes in railway gauges we have had to put up with over the years constitute one of the greatest reasons why railways run at a loss. Often in this Parliament the wisdom of our forefathers is mentioned. I would dispute most vigorously any claim that our forefathers showed any wisdom when they drew up the railway system. What we need is a one gauge railway system from Perth to Brisbane and on all the feeder services. They should all be of one gauge and operated by the one authority. If one tries to send freight by rail from Perth to Queensland so many dockets have to be made out that for a small article the administration costs are greater than the amount of freight that can be charged. This ought to be taken into consideration when the railways are criticised. The newspaper article continued:

We must reduce manpower drastically’, Mr Dyason said.

I am talking about the kind of reduction that will make you all cry in Adelaide.

We are talking about thousands of jobs lost in South Australia.

This statement caused great concern to every man and woman who works in the railways in South Australia. This statement was made by the General Manager of the Australian National Railways. He is reported further as follows:

Passenger services are the curse of the railways ‘.

That may be the case insofar as the profit margin is concerned. As I said earlier, we should not be looking at the profit margin when considering the railways. What we have to look at in a railways system is the provision of a service to the people. Such a system is not meant to make a profit. If any railway system is making a profit it is charging the user too much. In that same newspaper article the Acting Secretary of the Australian Railways Union, Mr N. N. Alexandrides, is reported to have said:

Mr Dyason was ‘pushing’ the policy of the Minister for Primary Industry ( Mr Sinclair).

I do not doubt that he was. Still referring to Mr Alexandrides the article stated:

He was disappointed, but not surprised at Mr Dyason ‘s remarks which were the messages of the Minister.

Mr Dyason would be better advised if he sought the opinion of those people who administered the railways.

I agree with what Mr Alexandrides said. As Senator Archer said, it is of vital importance that we get on with developing some system to educate people to the value of our railway system and to the good reasons for their using it rather than road transport. I add that there is a place for road transport in the Australian transport system but its place is not to operate in competition with the interstate railway services. The interstate services offered by the railways, if the track were upgraded, particularly if it were a dual track, could carry more freight more rapidly than road transport could ever hope to achieve and it could do so at a lower cost. I do not refer only to the cost as far as the actual carriage is concerned; one has to look at the overall cost.

On many occasions the railways are accused of having large deficits. At least they maintain their own track from their own revenue. But road transport hauliers do not do the same. They look to governments, both Federal and State, to find money to upgrade the roads. Also, a lot of the money from the general motorists’ registration goes into upgrading those roads. An ordinary motor car does no damage at all to the roads. Most of the damage is done by the heavy transport operators and of course they do not even want to pay the road tax. They do not even want to contribute by way of registration fees to the damage caused to these roads. As I said, they register a great number of their trucks in South Australia so they do not have to pay road tax in the eastern States. They make the great cry that road tax ought to be abolished. What I am interested to know- perhaps this will be taken on board by the Government- is whether if the Government ever were to decide to abolish road tax and to make that retrospective it would call on the road transport hauliers to refund to all the people who gave them the opportunity to carry their goods what those hauliers charged in freight, to compensate for road transport taxes which in the main they did not even pay. Although they say the road transport tax is crippling them, most of the major hauliers do not even pay the tax because, as I said, they register their juggernauts in South Australia.

Senator Bishop:

asked a series of questions today which he wanted to pursue. I think the Minister for Education, Senator Carrick, accepted them. I hope Senator Carrick has consulted the officers who are assisting him with this Bill and will be able to give Senator Bishop answers to his questions today before we get into the Committee stage. We might have to pursue some of the matters raised by Senator Bishop then.

I want to go further and mention some of the matters that are still awaiting settlement. I think about 24 matters concerning this transfer of responsibility still have not been settled. They include matters related to the long standing Australian Railways Union conditions and allowances. Barracks detention is another matter. Broadly, that applies to when drivers or guards have to be detained in barracks after they have done a shift on a train and are waiting to make their return trip. Other matters under consideration are the guard’s time, transfer from the home station, and the requirement that existing employers should get preference. Mr Virgo, the South Australian Minister for Transport, said repeatedly when negotiations for those transfers were taking place, that he would not sacrifice any conditions of the South Australian railways employees. He said that until he was assured that their conditions, rates of pay, superannuation and all those types of things were safeguarded he would not sign the transfer agreement. I hope that all those things will be taken care of now that we have this legislation before us for ratification.

Sitting suspended from 6 to 8 p.m.

Senator CARRICK:
New South WalesMinister for Education · LP

-in reply- The Senate has been debating the Australian National Railways Amendment Bill 1977 and all political parties are unanimous in their support of this measure. With Senator Georges’ concurrence my remarks will be brief but I will respond briefly to one or two points that were made in the course of the debate. Senator Keeffe referred to the future of the north Australian railway. The simple fact is that in recent years Australian National Railways reported that the north Australian railway was becoming more and more uneconomic as the volume of freight traffic upon it lessened, particularly following the closure of the mine at Frances Creek. As a result, the demand for freight by rail had fallen. The general picture of the north Australian railway for the time being- until perhaps a discovery of further mineral deposits in the Territory or until some other stimulus occurs- is that there is no apparent need for a railway. The aim is not to dismantle it any way but to look towards its rehabilitation as and when the demand arises.

Senator McLaren raised a number of matters. He made much of the fact that he saw some conflict in a statement in the second reading speech by myself and by my colleague the Minister for Transport (Mr Nixon) that at the point of takeover of the Tasmanian Railway systems and the South Australian non-metropolitan railway system, the then Opposition had not opposed the takeover on the ground that the matter was an arrangement between 2 sovereign governments. It was done on that principle and not because the then Opposition, the present Government, believed that there was virtue in what was being done or that the terms and conditions of the takeover were equitable. It is easy to talk about these matters as though the taxpayer was not involved. The simple fact is that whether it is a railway, a road train or a road haulier that carries goods, the ultimate freight costs will be borne by the ordinary person. If the railways do not run at a profit or at a moderate loss, the ordinary working taxpayer will pay the cost in higher taxes instead of paying a higher freight component in the cost of goods. The cost for freight represents about 40 per cent of the cost of all goods, so it is of vital importance. It is not a tolerable arguement to argue that one sees virtue in a nonpaying railway because it provides a service but does not see virtue in a road haulier because he makes a profit. The fact is that one should have a railway to provide a service but consistent with providing a service, including one of nonprofitable lines, that railway ought to be operated as effectively as possible and with the most modern equipment.

I was asked whether I could respond at this stage to some questions asked by Senator Bishop. I will respond in some brevity at the moment and not in detail. If the honourable senator considers that more extensive answers are necessary I will obtain them for him. My advice is that across the whole spectrum of terms and conditions that will apply to all employees there could be some areas in which, to a minor extent, employees might be worse off than before. On the other hand, on the whole there will be many more areas in which employees will be substantially better off than before. The general pattern is that there will be an improvement. There may be some minor areas in which there may be a fall-back in terms and conditions.

It is understood that discussions are continuing about barracks detention and travelling time and no decisions have yet been made. I am informed that discussions are to continue next week with the unions and that the negotiations with the unions are aimed at gaining agreement on all terms and conditions of employment. If that is not a full enough answer, perhaps honourable senators will let me know. I fully understand the interest of South Australian senators in the whole situation. Finally, I want to say that the Government understands the service to this country and to its transport system by railway employees. I fully understand the need to give good working conditions to those employees and to preserve for them, at least, the conditions which they expected in the past. I believe that this measure is a substantial step in that direction. I commend the Bill to the Senate.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator JESSOP:
South Australia

-As a South Australian, of course, I am very pleased that eventually this agreement has been put forward. We are now debating a Bill relating to the transfer of the South Australian nonmetropolitan and Tasmanian railway systems to Australian National Railways. I think that it is about 12 months since the transfer of these railways took place but it has taken a long time to deal with the problems associated with working out the conditions of employment and so on. I thought that would be the case. I recall what happened when we debated the Bill introduced by the Labor Party when it was in government. Senator Bishop handled the Bill and I referred to the confusion that I thought would exist as a result of the agreement. I thought that it had been poorly drafted and that it left a few loopholes that would have to be overcome.

Mention was made by the honourable member for Newcastle (Mr Charles Jones) of the number of trade unions in the Australian National Railways. I think he has a point because 24 or 26 unions are associated with the Australian National Railways. Contrary to what I thought a few years ago when I doubted whether we ought to be seeking amalgamation of unions, I think it would simplify matters if the number of unions was reduced to a certain extent. I have changed my views in that regard. I think that if that situation prevailed in future, negotiations would be far simpler.

Senator Kilgariff:

– It is for the good of the unionists.

Senator JESSOP:

-Yes, that is right. As the Minister for Education (Senator Carrick) said earlier, the unions are still negotiating on matters associated with the amalgamation. I think this bears out the truth of what I have said. I regret some aspects of the amalgamation. I recall that in South Australia Mr Virgo accused the Federal Government of welching on the deal when he was referring to the Adelaide-Crystal Brook railways standardisation program. I thought that was unfair because the Federal Minister for Transport, Mr Nixon, had seen fit to present Mr Virgo with the Joy report, the object of which was to point out various alternatives available to the Government compared with the original Maunsell plan for that particular standardisation program which would have cost the Federal Government $145m today. I remember that Mr

Virgo was kind enough to invite me and Senator Bishop to come over to Canberra with him to talk to Mr Nixon on that standardisation program. I believe that Senator Bishop and I demonstrated that we were anxious that this program should proceed at the earliest possible time for the benefit of South Australia. I recall that the Minister for Transport at that time, Mr Nixon, was well aware of the State Government problems associated with alternatives to standardisation. As I recall it- and it is some weeks ago now- Mr Virgo was asked to go back to his departmental officers and discuss matters of constructive substance that would assist the Federal Government in arriving at an economical solution to the question of constructing that line. I believe that the Minister from South Australia has subsequently had talks with Mr Nixon and I understand that there is an alternative standardisation program that could well be considered by the Federal Government and the State government which would save us approximately $70m.

The whole bone of contention at that time, as I recall it, was associated with the matter of a central train control system. The State government believes this was inadequate and there may well be a need to spend more money to provide a central control system which would meet with the South Australian Government’s approval. Mr Nixon was sympathetic on that point and suggested that the State Government ought to bear in mind that the economic state of the nation at present was such that we could not afford $145m and should keep that in mind when the submission was being prepared. I understand from what the Minister has said in his second reading speech that the State governments of Tasmania and South Australia have had regard to this aspect.

I am disappointed that we have not been able to make a decision in respect of the Crystal Brook-Adelaide line. I hope that the Minister will be able to give me more information as to what consideration has been given to the alternative standardisation program for the Crystal Brook-Adelaide section. I notice that Senator McLaren paid some attention to the role that railways have played in the development of country areas. I agree with him that in the early days that was certainly true and had it not been for the railway systems of Australia some country areas would have been disadvantaged. We have to examine very carefully the attitude to railways in Australia. We have already heard from Senator Archer who said that the railway systems were the worst in the world. That may well be right but I will put in a plug for the Australian National Railways because I have fairly close knowledge of that system. In my view the Indian-Pacific railway system could hold its head very high in the sphere of world railway achievements. So I do not say that Australia’s railways are completely the underdog, although I gather from what Senator Archer said that he was referring to a conglomeration of railway systems that have grown since Australia was founded.

I remind Senator McLaren that the nonmetropolitan railway system in South Australia has been running at a loss of about $37.5m a year. This agreement that we have is really fairly inflexible because it does provide- and I am not objecting to this completely- that the Federal Minister cannot make a decision in respect of the closure of an uneconomic line without the approval of the State Minister. I suggest that we have to look very carefully at some country railway lines that are not being used. I suppose there is a certain aura of pride on a country town’s having its railway station, stationmaster and so on but I think we have to look at the lines that are only transporting a few parcels to the major centres, perhaps four or five passengers and one or two farmers who might choose to use that form of transport to carry their produce rather than use their own vehicles. In a lot of areas in South Australia we find when we get up at a meeting and ask farmers how many of them are using the railway line very rarely do we see a hand put up because most farmers are using their own methods of transport.

Senator Steele Hall:

- Senator McLaren would get into a lot of trouble if he tried to sell his story at home in South Australia.

Senator JESSOP:

-I think that is right. After all, the taxpayers are entitled to the protection of responsible government in respect of this matter. I support the railway system as much as Senator McLaren but I also believe that we have a responsibility to protect the taxpayers’ money. In my view that is one area in which the spirit of cooperation and the sympathy that has existed between the 2 governments so far should continue. I support the Bill and I thank you, Mr Chairman, for giving me the opportunity to say a few words at the Committee stage.

Senator BISHOP:
South Australia

– In response to the explanation given by the Minister for Education (Mr Carrick) I thank the Minister for his ready reply to the questions that I raised this morning. Perhaps I should say that I think this has been a very successful operation because I know that management and the union have met under the control of the Australian Council of Trade Unions since a Bill was passed during Labor’s term in office and great progress has been made in the area of wages, which I thought was a very complicated issue. I understand they have settled the issue on wages and the related matters which I was asked to bring up today by the union. I raised them because I thought it would be better to bring them to the attention of the Minister for some special consideration before there was a threat which might produce some dispute. So on that matter I thank the Minister for what he has said. I think that has answered my query.

As to what Senator Jessop said, I do not want to take up the time of the Committee unduly but the situation is that Senator Jessop said he supported the Bill when Labor was in office. As everybody knows, at that time Senator Jessop and others on the then Opposition side applauded the agreement. I might say that I thought the State Minister for Transport, Mr Virgo, had been very co-operative. During the time that Senator Steele Hall was the Premier of South Australia there was an agreement to accept the Maunsell report which provided a much more perfect engineering job in the conversion to standard gauge than is now proposed. We had accepted that. Anybody who considers this matter would say, ‘if we could afford it we would accept the Maunsell report’. The State Government decided in view of the economic conditions under this Government to consider what the Joy report had recommended.

Mr Virgo said that he would consider whether the proposed economy was necessary. He invited me and Senator Jessop- I do not think it was by direction of anybody in this place- to accompany him and a delegation to see the Minister for Transport, Mr Nixon. As a result there has been certainly a most constructive suggestion put which will save some $40m or $50m. What the Opposition would like to know now is what the Government intends to do about the recommendations of Mr Virgo, supported by Senator Jessop and myself. At that point I can no longer support Senator Jessop because I think the remainder of his address was trying simply to highlight the differences between the 2 governments. Perhaps, according to the Government’s ideas, the Labor Party in government placed too much attention on the position of railways and urban transport in the general Australia-wide scene. I do not think it did. I think most thoughtful people would agree today that someone in Australia must consider the general question of railway transportation and how it might be revived.

As all honourable senators know, in the general area of communication and transportation in Australia, the railway organisations in each of the States are losing millions of dollars. From memory, in New South Wales the forecast deficit last year was approximately $400m. In Victoria the same position applies, although the railway system in that State is under the expert guidance of an old colleague of mine, Mr Gibbs, who has had great experience in private industry. So, there are some great considerations necessary to revive railway organisation. I am reminded by what the general manager of the Australian National Railways said only last week. I think his views were distorted. I raised them in the Parliament. He is an old colleague of mine and of Senator Jessop. He was frightened by the suggestion that railways carrying passengers would continue to lose more money and that they should convert to the higher intensification of general cargo and container traffic which pays handsomely. As I see it the fact is that in Australia, as the country develops, railways still have a great role to play. If we look also at the related defence implications of railways, most of us would agree that we must support them as much as we can.

I support the general prospects of the Labor Government. They may have been expensive but they were very necessary. I think that the issues raised by Senator McLaren- I was at a committee meeting when the matter was dealt withare important. If the Government takes over State railways, I cannot see how it can do other than agree to confer with the new owners and the old owners about country lines. I put it to Senator Jessop that, if the Labor Government had been commissioned to disband country lines, I am quite confident that his attitude would have been that the Wilmington line must be saved. Having regard to the fact that the obligation is on this Government to consider whether the Wilmington line and other lines might be saved, he tends to defend that attitude. There must be some general consensus and there must be arbitration about those matters. The fact is that in my own State- in Senator Jessop ‘s and Senator Young’s own State- there is a local community urge to maintain country lines as far as possible. The issue must be determined by conciliation. In the event of no agreement being reached, there must be some authority coming in and saying that the Government must disband the line because it is too expensive. As I see it- as honourable senators probably know I am an old railway workshop man- there is still a necessary role for railways in Australia. I hope that in association with the State governments we might see a future for them, as there was in Europe. The Minister will know that although everybody said that the railways were finished in Europe, the fact is that in Europe, and particularly in Germany, the railways carried the burden of supplies for armies on both sides during the Second World War.

Senator CARRICK:
New South WalesMinister for Education · LP

– I wish very briefly to respond to 2 matters. Senator Jessop raised the question whether the multiplicity of unions involved in this matter had delayed, or otherwise, the settlement. I am not brave or foolhardy enough to open up the question whether one industrial union of an umbrella type would have been better than a series of craft or other unions. That is a matter for a broader canvas at another time. I believe that it is to the credit of all that they have achieved what they have. I acknowledge this. I believe that it is a very great progress to have achieved this journey. The unions, the management and the Australian Council of Trade Unions are to be commended for the destination that they have arrived at.

I was asked whether I could throw some more light on the progress of the Adelaide to Crystal Brook railway. Honourable senators very rightly have pointed to the Maunsell report which provided for an amount of about $ 146m and to the Joy modification, which mentioned an amount of something like $76m, and to the discussion by Mr Virgo with the Minister for Transport, Mr Nixon. I draw attention to the fact that Mr Virgo more recently put forward a modified Joy report. That had been under discussion and I understand that it has more recently been under further discussion. A number of problems is associated with it. For example, there are some worries about the plans for the connection to Wallaroo and signalling proposals. These are being discussed and reviewed. At the moment a modified Joy proposal is being looked at. Its practicability is being studied. I know that my colleague, the Minister for Transport, is anxious to have the matter finalised. I commend the legislation.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 1626

HOUSING LOANS INSURANCE AMENDMENT BILL 1977

Second Reading

Debate resumed from 25 May, on motion by Senator Carrick:

That the Bill be now read a second time.

Senator GIETZELT:
New South Wales

– The Senate is debating the Housing Loans Insurance Amendment Bill 1977 which originates from the Housing Loans Insurance Act 1965 and the proposed amendments which the Government has had endorsed by the House of Representatives and for which it seeks the support of the Senate. The Opposition does not oppose the Bill although it is critical of two of the three fundamental amendments to which the Senate is asked to give consideration. Whilst commending the Government for extending the categories of loans which may be insured by the Corporation, the Opposition nevertheless con.dems the Government for inhibiting the Corporation in other ways. It does so, firstly, by reducing the reserves of the Corporation by $4.5m, which will be paid now into Consolidated Revenue and, secondly, by needlessly making the Corporation pay income tax and territorial duties and charges.

It has been said that the original legislation of 1965, some 12 years ago, was an initiative taken by the Federal Government which has proved, in the passage of time, to be a very important innovative piece of legislation. At the time there was no competition from private enterprise. In other words, there was no other organisation or instrumentality that was offering the service that was supplied by the Housing Loans Insurance Act of 1965. The establishment of the Corporation offered a service to the community as a whole because the private sector had shown at that stage no interest in the proposal or in the facility. As housing was an important social problem- it will remain so for many years- it was correct that the Government took the stand that it did, particularly so because the service which was offered in the original Act was paid for by the user at no expense to revenue. So we have established a corporation which stands on its own 2 feet.

The very success of the Corporation since is began is evidenced by the fact that over the years it has built up reserves in excess of $ 1 2m whilst at the same time it has been able to reduce premiums paid by mortgagors. The Minister for Environment, Housing and Community Affairs (Mr Newman) acknowledged this record in his second reading speech by stating that the premium payable is amongst the lowest in the world. We have a must unusual situation by conservative standards insofar as a government instrumentality that was innovative and without competition from the private sector was a success story. Just because it has been a success story we now find that the Government is putting this amendment before the Parliament and seeking to restrict the Corporation somewhat by putting it in competition with the private sector that has subsequently come into this field. In the House of Representatives my colleague, Mr Uren, moved an amendment which stated:

That all words after ‘That’ be omitted with a view to substituting the following words: ‘whilst not declining to give the Bill a second reading, the House is of the opinion that the Government by reducing the present and future capital available to the Corporation has ignored the opportunities available to it to influence the policies of lending institutions in the housing and land fields.’

I think that that is where our criticism perhaps is at its sharpest point. The Corporation has shown itself to be successful and to be more than competitive. In a period in which there are problems of raising finance to cover mortgages in the housing area we should be taking no steps that would restrict the right of this very successful public corporation.

The Opposition is concerned that the policies of lending institutions in the housing and land fields do not take into consideration the needs of the lower and middle income earners. We are all aware of the fact that in the last decade or so a very constricting situation has been developing with regard to home ownership and that lower and middle income earners are finding it increasingly difficult to obtain adequate housing at a cost which does not place them in an ecomonic strait-jacket. It is true that the Bill before us does not deal directly with any instrument which is able to change lending policies of institutions but nevertheless the mere presence of this organisation in the field acts as a stimulator and in fact a regulator to the private organisations. The Corporation, however, can remove the objections that these lending institutions may have to provide finance on a more flexible mortgage basis. Put another way, the existing lending institutions are unlikely to make funds available to people on a basis which will materially assist them in obtaining housing if guarantees are not provided. The Corporation therefore should be given every encouragement to provide these guarantees and the funds to carry out such policy.

We are living in a period of flexible mortgages such as short repayment mortgages, mortgages carried to a constant proportion of income, capital induced mortgages, deferred repayment mortgages and shorter term mortgages based on household income. We should be able to extend these mortgages if there is a drop in household income. This is particularly necessary in a period when young married couples need assistance as borrowers to obtain housing needs. These types of flexible mortgages would particularly assist people who earn up to 1 35 per cent of average weekly earnings. That constitutes something like $250 a week. Honourable senators are well aware that a great number of people can be placed in that category. Under present conditions these people find it increasingly difficult to cross the home ownership income threshold.

Economic conditions are such that governments have to recognise that we have reached that point in the current difficulties in Australia where it is very difficult for funds to be provided and for a borrower to be able to meet his commitment. I have been told for example that thousands of homes which were built in the last 6 to 10 months were built by people in the speculative building field who believed the Government when it said that business confidence would return as a result of the change in government. These people were told in various Press comments by Mr Newman and other spokesmen for the Government that there would be an improved economic climate in this country. Many people involved in the speculative provision of homes went out in that period and began to build considerable numbers of homes for sale in the market. Because of the very constrictions in the lending market due to the current economic climate, those people who invested their capital with a view to being able to take advantage of the more favourable labour position and the availability of materials and resources generally now find it difficult to sell those homes.

Even as late as a few weeks ago a representative of the Master Builders Association in Canberra said that we have to recognise that we are still living in a depressed market state. The Government has to recognise that the legitimate rights of citizens should be placed on the same footing as the professed concern of lending institutions to maintain cash flows, quick returns and secure loans if they are interested in coming into the home ownership area. However, the Government’s paranoia to support the private sector has imposed, by way of the amendments which the Senate is now considering, upon this Corporation a reduction of its reserves. I think it has to be said that it is not anticipated that the Corporation will be stymied as a result. Its competitive record, as I have indicated, is impeccable. Despite the changes that have come into this area in the last 12 years, the Corporation still accounts for some 60 per cent of the market for this type of insurance in Australia. The balance is in the hands of the Mortgage Guaranty and Insurance Corporation of America- a large foreign owned and controlled company-to the extent of some 25 per cent and the Australian Mortgage Insurance Corporation which has approximately 15 per cent of the market. I put it to the Government that there was no point in permitting that American company to come into the Australian market when a government instrumentality was already providing an adequate service on the initiative of the Liberal and Country Party Government in 1 965. As the record subsequently shows, there has been absolutely no advantage to home owners, nor has there been any advantage to the Government, in having so-called competition in this area.

The record shows- I do not think it can be argued otherwise by Government speakers- that the Corporation provides the best possible service. That is why it has been able, despite the competition of the foreign company and the newly established company in Australia, to maintain 60 per cent of the market. It should be of concern to all who have followed the acute problems of housing in this country that less funds, not more funds, should be made available directly or indirectly to the industry. It is true that about a week ago the Australian Government took certain steps in this area. I think I heard on the news, although I was not able to read it anywhere in the newspapers, that something like $40m has been released to the building industry to try to inject some confidence-cum-stimulation. Nevertheless it is clear that the housing industry today does not have the level of finance needed to maintain production and ensure that the housing needs of people are satisfied within their financial reach. In a country in which nine out of ten could have expected to own their own home in 1967, it has been estimated a short 10 years later that only two out of ten can hope now to achieve that objective. I am sure other Government senators would be as concerned as are Opposition senators about that objective being reduced because of the whole of the circumstances which honourable senators have debated here for so long.

Senator Archer:

– Whose figures are those?

Senator GIETZELT:

– We always get these interjections. It is claimed that a Labor Government that was in office for a mere 3 years is responsible for all the ills that have befallen Australia. According to some people there were no problems before 1972 and that every problem we have arose between 1972 and 1975. That is simplistic and quite out of character with the type of thinking that ought to be developed in looking at this problem of housing. Even when the Australian Labor Party came into Government in November 1972 the facts are that the highest number of people in the history of Australia required public housing. Because we recognised this we took steps to correct the situation and we channelled the largest amounts of funds ever into the housing sector through the Housing Corporation to the States. We adopted a housing policy aimed at reducing house prices and providing welfare housing for more Australians. Surely it cannot be argued that the high cost of land, which is a component of housing costs, can be attributed in any way to the brief 3 years of a Federal Labor Government. The responsibility for providing a stock of land for housing rests with the States. The position is not made much better by a Liberal Government or a Labor Government. We know that it is a product of a market situation. The Housing Corporation was designed to overcome the backlag that had accumulated in housing. Steps were taken to provide housing for that section of people who did not qualify for public housing and could not afford loan repayments because of their financial means. One of the first things the Fraser Government did was to disband the Housing Corporation when it won office in December 1 975.

Whilst the Liberal and National Country parties have instituted a variety of substitute schemes aimed at assisting Australians to obtain home ownership it cannot be denied that the result has been unsatisfactory because there has been a deepening of the recession in the housing and building industry. No sweet rhetoric by Housing Ministers or Ministers for Construction will change those basic facts or that basic problem. I suggest that those who think otherwise should go into the field and discuss the matter with those builders who are endeavouring to sell the great stock of homes that is available in all the capital cities of Australia. Young couples today are confronted with fewer home ownership possibilities and many of them are paying up to 80 per cent of their total weekly income, that is the income of husband and wife, to obtain housing. One never hears about this from the moralists who keep talking about the family unit, the breakup of the nuclear family or the problems of zero population growth. One never hears the fundamental approach that needs to be taken in this area of trying to establish what are the economic factors that force that sort of situation and make a double income the basic means of obtaining a house or other accommodation.

The Labor Party, when it was in office, was criticised for distortions in house prices that took place during its term of office, particularly in the capital cities of Sydney and Melbourne. It must be emphasised that in no way could these distortions be attributed to Australian Government policy. Recent reports in the Australian Financial Review and other newspapers have pointed out who were the real culprits of the property boom. It had nothing to do with the Federal Labour Government. The boom raised the price of housing well beyond the reach of the majority of Australians. In the late 1960s and early 1970s large companies pumped into the property market huge sums of money which pushed up prices. The volume of money used is indicated by the subsequent enforced write-down of assets of companies. I want to refer to a small number of these which contributed towards this problem. It was not the mere election of a Labor Government. The Abbey group has had some $ 140m in property investment the subject of a write-down. IAC (Holdings) Ltd, the biggest property development house, has had to reconsider the value of its capital assets, and calculations made indicate that the value should be reduced by some $60m. The actual write-off of property over 2 years has been $2 1 .4m. Parkes Development Pty Ltd was a property developer which comprised some 70 companies. It has gone into liquidation. The current value of assets is expected to be far below the book value of $100m. These companies were well established and did a great deal of land development, housing development and speculative development. Commercial and General Acceptance, commonly known as CAGA, has has some $24m in property investment the subject of a write-down. FNCB- Waltons Corporation Ltd has written off some $6m from its property loans since 27 January this year. This is only the tip of the iceberg of the problems facing Waltons as the sum represents a mere 10 per cent of its problem loans.

Therefore the need is apparent to place housing beyond the manipulation of companies which because of their concentrated strength and purchasing power are able to exploit the market. It is ludicrous and totally erroneous to believe that this problem accrued just because there was a change in government in one State or in the national arena. The acceleration of prices for homes, home units and land which occurred during the boom ultimately was to the detriment of home owners. We are talking about a period of approximately 20 years when the big land boom took place, particularly in Sydney and Melbourne. It is poetic justice that so many of the large developers themselves have been caught up in the same exploitative trap as they set for others. Needless to say, the Australian public suffers more than these large corporations, because the losses have to be paid for by somebody. They are paid for by the community not only in the losses that are sustained but also in the lack of confidence that is created in those people who might otherwise want to invest in the activities of those corporations. Contrary to the views expressed by Mr McLeay, the Minister for Construction, the recession in the building industry has not ended. The Government has not solved the housing problem, and by not releasing adequate money has deepened the recession in the industry.

We regret that the Government has seen fit to amend this piece of legislation because it was the Government that introduced it in 1965. The Opposition cannot understand why the legislation should now be bent to accommodate the private sector. The argument that there should be selective stimulation for the housing industry in New South Wales remains unanswered. The number of new houses commenced in New South Wales in the December quarter fell by 25 per cent. I am sure that no honourable senator will suggest that this is because Mr Wran was elected Premier on 1 May 1976. After 18 months of Wran Government the private sector has not provided adequate stimulation for the housing needs in New South Wales. While the position of other States is perhaps marginally better the prospects in New South Wales are that there will be no immediate improvement. Only Federal Government initiative of the type responsible for this legislation being introduced in 1965, will cause some improvement in the general building industry in this country.

The sooner we put aside party political differences that so often emanate when in the Senate we discuss the housing problems the sooner we look at the problem as a general problem and not as a political problem and the sooner we provide adequate finance to stimulate the building industry the sooner we will have the sort of response that is necessary to return to the position where nine out of ten Australians who want to own their own home will have the opportunity to do so. In conclusion, the Opposition does not propose to oppose this Bill although we are critical of the constrictions and restrictions that are to be placed on this very important Housing Loans Insurance Corporation.

Senator ARCHER:
Tasmania

-As a member of the organisation which from the early 1960s did so much to have the system of housing loans insurance established in Australia, I support this Bill with great enthusiasm. It is the second half of the total mortgage insurance package. To me, it is very much part of Liberal housing policy and liberal-thinking housing policy. To understand the purpose of the Bill, we must go back to the early 1960s, in the days when home loans were restricted to something like 50 per cent or 60 per cent of the valuation. At that time the commencement of the system of mortgage insurance added millions of potential home owners to the market by enabling lenders to lend substantially more than they had in the past. As with everything else, as an action it had a corresponding reaction. It was no exception. There were many immediate advantages of the system. The disadvantages which it brought must be remembered, because it created a demand both for houses and money which had been unprecedented in the years before. Both of these factors tended to increase the price of houses when the system started.

The system commenced in fits and starts. There were times when the demand grew very quickly. There were other times when it slowed down. There were times when it was necessary for the Government to put various constrictions on the money made available. Looking back now, I am prepared to admit that while the decisions were unpopular at the time they were nonetheless necessary, as can clearly be seen now. The position carried on for longer than I think was expected then because at that time we were going through a period of steady increases in income and steady predictable growths in the national economy as a whole. The Housing Loans Insurance Corporation and mortgage insurance generally did much to keep the system going. The pressures that they placed on ownership in the early years produced some relief in the rental market. As one went ahead, the other was relieved to some extent. Many of the tenants at that time who had been unable to purchase until then became potential purchasers.

On this basis Australia became one of the top home owning countries. There are no records which show that Australia was at any stage close to 9 out of 10 of its people being potential home purchasers. There is no information available today which would indicate that the number of potential home purchasers is down to two out of ten. These comments do not do anything to further the cause of the Bill. There is no doubt that since the war mortgage insurance has been the most significant single change in the conventional housing policies of the country, and it must be recognised as such.

This is an important Bill, as was the first one. In any total housing policy, mortgage guarantee or mortgage insurance will of necessity be the cornerstone. At the commencement of the system there were no commercial entrants. It was not envisaged at that stage that there would be any. When the legislation came forward it was noted that provision had not been made for them. This was taken up with the Government of the day, because it was felt that provision should have been made then. Now, after this long period has elapsed, that provision is being incorporated. There was no doubt that the introduction of nongovernment insurers was welcomed by the HLIC and by the investing public at large. It certainly added a lot of zing to the HLIC and put it on its toes, to the stage at which it became a very virile operative organisation. I am fortunate to have been in close association with the HLIC since it commenced. It certainly comes to my notice that my old and dear friend Lyle Moore did so much for it before it got off the ground. He was later one of its commissioners. The same can be said of Frank Blundell who is still with it and who has been with it from the very early days, in a range of activities, and who looks like staying with it for some time to come.

The Corporation was never an organisation set up to produce vast profits, but it was set up to perform a necessary function. It took some years before it had sufficient profits to take it out of the range of organisations which may have needed government support. It is really only in the last few years, since 1970, that the profits have been of any magnitude. I note that for each of the financial years from 1970-71 to 1973-74 it made over Sim profit. It made $2.4m in 1974-75 and almost $3m in 1975-76. With the aid of those profits, it produced reserves of $ 12.7m to this date. It is a business that needs some capital because, being a once-only premium which will cover long term mortgage, there is a long term liability, even allowing for a reasonable rate of inflation.

I am unable to understand the objection expressed to the paying of some of the reserves out of the funds of the HLIC. People with a good grip of insurance and finance believed that it was perfectly safe to remove $4.5m from the reserves, as they would serve no purpose there, when that money could be put to far better use in other ways. After allowing for all the contingencies, the funds of the organisation are still in excess of $8m. That is held to be sufficient for any eventuality. I am very pleased that the organisation is now to pay normal commercial operating costs, stamp duty, taxation and dividend. It is a good organisation. It has proved itself through the years, and it is capable of standing on its own feet. It has done so until now and will continue to do so. The people involved are not looking for any props to put under it. They are not looking for any special inside running to take advantage of their competitors; nor do they need it. The Corporation has established itself as a virile competitor. Now that it has been freed of some of the constrictions which it had, it is able to move in the market place and to compete in a red blooded way with any competitor. It can take the same risks. It can pay the same overheads. It can have a full competitive place in the market.

On the other hand, it will encourage private operators to do likewise. Whatever is said to the contrary, it can be only for the good of the market to have virile competition from the outside sector. I think it is a very good move to allow it to cover mortgages on land. It is easy for us to look back now and say that, if that had been the case over the last 10 or 15 years, we would not have suffered all the problems we have in regard to the sale of land under vendor terms. I trust that those States that have not already done so will now be able to make provision for the complete banning of vendor terms.

I am pleased to see also the legislation extended to cover rental property. That is long overdue, since rental property represents the biggest shortage in the present market. Any assistance which can be given to allow people to build rental housing will be greatly appreciated. During the time that it has been in operationduring that time it has insured $3.5 billion worth of mortgages for 235 000 insurers- the HLIC has done very well. I trust that it will continue to expand.

Mortgage insurance has done more than anything else to influence the housing money market of Australia. It has had a tremendous influence on the building society movement and has really taken it from the relatively small position that it occupied 1 5 years ago to one of great strength in the housing business today. Building societies have gone through a period of tremendous growth. Mortgage insurance has completely stabilised their market, has made them a respected investment and has encouraged people to invest with them.

During this period we have seen the trebling of the number of 2-income families. The higher incomes and greater savings have generated considerable funds which have gone into housing. Losses during the period have been absolutely minimal. A loss would be quite easy in inflationary times when a 95 per cent loan in one year is perhaps an 80 per cent loan the next year or when a 90 per cent loan in 1 965 would probably be less than a 50 per cent loan now. But that was not always the position. In the early years of stability and growth the situation kept everybody honest and really good management was required to see that the risks were calculated correctly, that they were well covered and of a good, sound nature.

I commend the Corporation for the excellent management that it has had during its period of operation. The HLIC has made a most valuable contribution in all sectors of housing- construction, sales and finance. Great credit is due to the founders for what they did in the early days. I greatly appreciate the value that the Government places on it and the position it holds. I have said before, and I say again, that when introduced the legislation setting up the Corporation was the best single piece of legislation to deal with housing since the war; and it still is. The amendments proposed by the Bill before the Senate will make it better. It still definitely is the cornerstone of any total and integrated housing policy, in that it encourages home ownership, produces private sector participation, enables the public sector to concentrate on the needs area, and adds great stability all round. I give the Bill my full support.

Senator CARRICK:
New South WalesMinister for Education · LP

– in reply- The Housing Loans Insurance Amendment Bill 1977 which is before the Senate aims to do 2 things. It aims to widen the powers and the capacities of the Housing Loans Insurance Corporation which was set up 12 years ago by a government of Liberal faith and, at the same time, to bring the Corporation into more equitable commercial arrangements with its competitors in the marketplace. The Corporation has had a tremendous success. It has insured something like $3.5 billion worth of properties; it has in fact helped something like 235 000 borrowers. As other speakers in the debate have pointed out, in all measurements it has been successful.

The thrust of criticism by Senator Gietzelt has been along the lines that the Government should not be taking steps to restrict the activities of the Corporation and should be giving it every opportunity to insure deferred mortgage repayment loans and short term mortgage loans. I say to the Senate and to Senator Gietzelt that that is not a restrictive activity at all. In fact, this Bill will substantially widen the Corporation’s powers. The repayment of $4.5m of accumulated profit by way of a deferred dividend and tax payment will not restrict the Corporation in any way. It will still have some $8m in general reserves and $ 10m in underwriting. The Corporation already insures deferred mortgage repayment loans and short terms mortagage loans.

The Bill will give the Corporation a much extended range of powers to make it even more effective and able to insure the full range of housing loans. The requirement to pay taxes and dividends will only put the Corporation on the same basis as its competitors and will not restrict it. That is a good story. It is the story of a Corporation which has accumulated up till now $ 12.7m in reserves, even though it has made 3 substantial reductions in its premium rates. That is the picture, and it is a good one.

Senator Gietzelt, in the course of his remarks, sought to link that with the basic fall in the rate of home construction, the basic fall in the capacity of the Australian population to purchase a home. He sought to level blame. This is no time to have a debate on housing. But since the matter has been raised, I draw the attention of the Senate and of the community to these points: Up till the advent of the Whitlam Government any wage earner or household head in Australia on an average weekly wage was capable of purchasing a home by paying one-quarter of his average weekly wage towards the purchase of that home. As a result of that state of affairs, approximately 70 per cent or more of Australian homes were owned or being paid off by those who lived in them. When the Whitlam Government left office it was no longer possible for a person on the average weekly wage to acquire a home. The percentage cost of a block of serviced land to the total cost of a house had increased appreciably. When the Whitlam Government left office it was necessary for a man and his wife both to work and for one-quarter of their collective incomes to go towards the purchase of even the most modest home. Before the Whitlam Government came to office the average percentage cost that serviced land bore to the cost of a home was about 25 per cent. The cost moved to 40 per cent or 45 per cent.

The primary destruction of home ownership came with the inflationary policies of the

Whitlam Government. Inflation destroyed the capacity of the ordinary wage earner to buy a home. The solution to the problem in relation to home ownership will come when inflation is brought under control again, when in fact it is possible for the building industry to revive. I remind the Senate that the building industry was effectively destroyed by the Whitlam Government. The real solution to housing industry problems is for inflation to be brought under control. I was delighted to hear Senator Gietzelt say tonight that in fact he saw blame with the States. I thought that centralism was something that took unto itself the virtues of vices. I was delighted to hear also that the Labor Party is advocating home ownership of the kind we had in the 1960s. The Act which is being amended tonight is a part of the mechanism which established home ownership for all. This Bill is vital in that regard. The Corporation will be in full competition with private enterprise and that is good news. I must repeat, in commending the Bill to the Senate, that the primary solution to home ownership for the average wage earner and the capacity to buy a home on some reasonable proportion of a wage, such as quartering, will come when inflation is reduced to manageable terms.

Senator Georges:

– What are manageable terms?

Senator CARRICK:

– I remind Senator Georges that in the 1950s and 1960s, under Liberal-type governments, one could say that there was sustained employment in Australia, the lowest inflation rates in any industrialised country, the highest proportion of home ownership in any country and the greatest sharing of wealth. All that was achieved because the governments of the day were looking towards the needs of the average wage earner. This Bill itself aims towards that. I commend it to the Senate.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator GEORGES:
Queensland

-I want to ask the Minister for Education (Senator Carrick) one or two questions about this admirable legislation which is receiving the support of both sides. Will he not agree that the need for this legislation is to free the industry which makes loans available for housing from the responsibility of failure in repayment? Is that not the correct situation? That is how I view it. Does he also accept that the reason why it is necessary to have such legislation and to improve upon such legislation is that high interest rates exist in the community at the present time for those who wish to purchase homes? Would he not agree that the reasons for these high interest rates is that one of the main responsibilities for home lending has rested with the building societies which he, as a member of the party that was in government before 1972, encouraged? Is it not also correct that those building societies have been the pace setter in interest rates? Furthermore, does he not accept that the Government, by making special loan issues to the community at high interest rates has forced up to record heights the interest rates that building societies have to pay and therefore have to charge? In making these statements in the Committee stage I may be somewhat out of order but these matters were raised by the Minister in closing the debate. So I ask him this question: Is it not a fact that interest rates have risen and will continue to rise until such time as the building societies are brought under some control and are rationalised into one, two, three or four major national concerns? The sooner this is done, the better.

Senator CARRICK:
New South WalesMinister for Education · LP

– The one question upon which I think I can agree with Senator Georges was his opening question as to the general purposes of the original Act. After that we part company because I do not say that the Act or its amendment find their need for existence in high interest rates. The Act functioned throughout the 1960s when interest rates were moderate. The Housing Loans Insurance Corporation was needed to act in a reinsurance fashion then because there is always some element of risk. The honourable senator referred to building societies. I think that I can add one other claim for governments of Liberal faith. My belief is that it was the Stevens Liberal Government in New South Wales which introduced building societies. It gave to the average working person and working family in Australia the first practical way in the co-operative building society movement -

Senator Georges:

– That is a permanent building society. That is different.

Senator CARRICK:

-I am talking about building societies generally. It gave the average working family the first opportunity to gain its own home. For my part the building society movement, whether co-operative, terminating or permanent building societies, have played a magnificent role in Australia in the development of financing homes for people on average incomes. The honourable senator asked whether it is true that they were the pace setters in high interests rates. The answer is no. The only pace setter in high interest rates was the Whitlam Government. The Whitlam Government, through its Minister for Labor constantly talking up the need to break awards and go for above award rates, forced the inflation rate in Australia up to approaching 18 per cent at the end of 1975.

The interest rates that exist in a country are governed by the long term bond rate. Anybody with any knowledge of finance knows that the long term bond rate reflects the general economic malaise or ease. The long term bond rate was rising very rapidly because of inflation in Australia, that inflation having been caused by the deliberate attempt to jump the fence of award rates and go for above award rates. No, the building societies were not the pace setters; the Whitlam Government was the pace setter in interest rates. No, it is not true that the special loans introduced by the Fraser Government forced up “interest rates. I remind Senator Georges that in the quarters that are now under perview there is every indication that, putting Medibank aside, inflation today is running at a single digit pace- that is, compared with 1 8 per cent or thereabouts at the end of 1975, some 16 months later it is running towards half that figure and is running in a descending scale. Furthermore, I remind the honourable senator that if he looks at the over-subscription of the recent loan he will know that that over-subscription is an indication by the general community that, in the longer term, interest rates are falling. That is excellent news for all except those who, with the prejudice of the Labor Party, see it as bad news politically.

The answer is that the special loans helped to draw off from the non-bank sector the money which would have been surplus money lying around and helped to service and pay for the huge deficit inherited by this Government which is running into almost $5 billion. The special loans were deflators, not inflators. I welcome the role that building societies, whether terminating or permanent, play in Australia. I welcome the day when, interest rates being under control, we can return to the situation in which the average family can buy a home on the wage of the main wage earner and not on the collective wage of the family.

Senator GEORGES:
Queensland

– Let me make it clear that I did not include terminating or co-operative building societies in my criticism of building societies. I am talking about the permanent building societies which, in my mind, are s”till running out of control in the money market. It would be in the interest of the Government to give more support to the terminating building societies and the cooperative building societies, and then legislation such as this would not be as necessary as it is at this time. If inflation is running at a single digit level, as the Minister says, why is it necessary for building societies at the present time to be paying as high as 10Vi per cent on borrowings and 12 per cent on loans?

Will the Minister not admit that the special loans which the Government has created has taken money away from the building societies, forcing them to put up their interest rates to attract money, one in competition with the other? This supports my argument that they are pace setters. If the Minister will just agree to that we possibly could dispense with this debate. At the present time the interest rate that building societies are changing on home loans is 12 per cent. The interest which they are paying on moneys which they borrow from the community is running as high as 10½ per cent. Can the Minister indicate when it is likely that there interest rates will come down? What initiative is the Government going to take to support the terminating building societies and the co-operative building societies and to bring the permanent building societies back to their rightful level?

Senator CARRICK:
New South WalesMinister for Education · LP

– As I stressed before, this is not a debate on the whole issue of home ownership or home finance. This is a debate about a housing loans insurance corporation, a device whereby a lender can lend to a person of moderate and low means with a very low deposit. That is the aim of this legislation. In other words, it will bring into the borrowing market people who have a very small amount of savings. As to the whole question of interest rates, my earlier statement remains, that is, that the high interest rates are the direct result of the disastrous policies of the Whitlam Government. The fact that interest rates are receding now is the result of the remedial policies of the Fraser Government. The special loans at special interest rates drew off non-bank savings and by so doing helped to finance the disastrous deficit of the Whitlam Government. The answer to the honourable senator’s question is that the most recent loan floated by the Government gives an indication of the good news which the honourable senator sought in his question asking when interest rates will fall. It is clear that the ordinary borrowers of Australia believe that interest rates are about to fall and to fall significantly in the months ahead. I commend the Bill.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 1634

LOAN (WAR SERVICE LAND SETTLEMENT) BILL 1977

Second Reading

Debate resumed from 27 May, on motion by Senator Cotton:

That the Bill be now read a second time.

Senator GIETZELT:
New South Wales

– The Opposition does not oppose the Loan (War Service Land Settlement) Bill 1977, which provides for the raising of $3m in loan moneys for war service land settlement in 3 States- Western Australia, South Australia and Tasmania. It is interesting to note that the Queensland Government withdrew from this scheme in 1950 and that the agreement as it covers the States of New South Wales and Victoria is limited in another way to financing certain operational losses. This particular legislation and the sum of money that is involved are required to fulfil the obligations of the Australian Government under the terms of the agreement with the State governments of South Australia, Western Australia and Tasmania entered into at the end of the war to provide the opportunity of returned soldier settlers to go onto the land. Under the terms of the agreement with these 3 States the Commonwealth undertook to provide the working capital at 33A per cent interest for the soldier settlers to cover current working expenses, the purchase of stock, and capital funds for replacement of plant as part of the settler’s normal operation of the property. It is interesting that this particular type of war settlement was made available to soldier settlers who had no capital of their own; so it did have a specific purpose to fulfil.

Each couple of years or so the Parliament is presented with a Bill asking for the approval of such funds. I can recall the occasion in 1972 when an honourable senator opposite, Senator Drake-Brockman, on behalf of the then LiberalCountry Party Government, asked for approval for the sum of $6.5m for the scheme. In his contribution to the debate he outlined the difficulties faced by soldier settlers on Kangaroo Island. He indicated that the problems they faced were the subject of investigation by the Department of Primary Industry in conjunction with the States.

At that time he attributed most of the difficulties to the specific problems related to the unique environment of Kangaroo Island which, it appears from all the evidence available, militates against farming by normal procedures. I am sure the honourable senator would agree that that was the way in which he presented the argument on that occasion. He expressed the pious hope that research would solve the production problems faced by farmers on the island and ignored the longer term implications already coming to light about the loss of overseas markets.

I mention this only to highlight the hypocrisy and inconsistency not of the responsible Minister at that time, Senator Drake-Brockman, but of the present Minister for Primary Industry, Mr Sinclair in his speech in reply to the 1975 Bill which was put before the Parliament by the Labor Government, and in his second reading speech to the Bill presently under consideration. I should like to remind the Senate of Mr Sinclair’s contribution to the debate in 1975. At page 1685 of House of Representatives Hansard for 16 April 1975, Mr Sinclair is reported as having stated:

I do believe that in both mendicant and principal States, the continued position of soldier settlers in Australia is a complete condemnation of those who would sit in government.

Later, on page 1686, he is recorded to have stated:

I see it as most regrettable that in this very brief second reading speech and in a Bill which allocates $4m but no more, no reference has been made to what is an acute problem of the maintenance of the viable operations of the many soldier settlers throughout Australia.

Mr Sinclair ignored the specific problems confronting soldier settlers as outlined 3 years earlier by Senator Drake-Brockman, a member of his own Party. By 1977 Mr Sinclair seems to be no longer concerned about the problems of soldier settlers on Kangaroo Island. He stated in his equally brief second reading speech to the Bill presently before this chamber, as recorded on page 1 6 1 6 of House of Representatives Hansard foi 5 M&y 1977:

  1. . much publicity has been given to the plight of a small number of settlers on Kangaroo Island who are in financial difficulties and who are non-viable. However, they are the exception.

That was the end of Mr Sinclair’s contribution at that stage. I might add that only $3m is allocated in this legislation, no doubt because there are fewer soldier settler requirements than were in 1 975 or, prior to that, in 1 972.

The only breakdown of how the money is to be allocated is made in broad terms. South Australia is to obtain half of this allocation,

Western Australia about one-third and Tasmania the balance, and a small sum of S 10,000 which may be required to meet costs in relation to a drainage study which is in progress at Loxton in South Australia. So South Australia will do very well out of this piece of legislation. Of course, that Loxton study received a portion of the allocation made in 1972 and 1975. So the problem is still with us after all those years. Quite clearly the Minister has not provided enough information on this particular expenditure or for expenditure under the scheme. It is no excuse to claim that the liability is an ongoing liability to the States concerned and the program as administered by the States. The duty of the Government is to present to the Parliament an adequate report from which it can be determined what progress has occurred, what improvements can be made to the scheme with the agreement of the States and what are the future prospects for soldier settlers.

When in Opposition the present Minister called for the tabling of all departmental reports and recommendations covering the scheme. Now, as a Minister and after he has been in office 18 months, the Parliament is no wiser as to whether reports or recommendations even exist. If the scheme is under constant review, the Parliament is entitled to be informed of any recommendations which may be made or which are likely to be made to improve the operation of the scheme, or, more importantly, to assist the soldier settlers. I remind the Senate of the statement made by the same Mr Sinclair in 1975 when in Opposition. He said:

Government should provide further assistance to soldier settlers, but more specifically, we think that the whole of the continuing function and operation of soldier settler schemes around Australia should be reviewed.

That is good thinking, good advice and it may be good criticism. But one would have expected, in the presentation of this legislation for consideration of the Parliament, that the Minister for Primary Industry would have applied that advice to himself, to his own Department and to his own Government. Today, as I have indicated, $3m is allocated- Sim less than in 1975. Yet there is no report of any review. Just as Mr Sinclair claimed in 1975, we still do not know what is happening in soldier settlement schemes. I do not wish my comments to be misinterpreted as being in any way against the Commonwealth continuing to be involved in soldier settlement schemes. Legally and morally the Commonwealth Government is bound to its agreement. It is also bound to ensure that the recipients receive the best possible assistance in the allocation of funds. If there is any need for this assistance to be continued, it is because of the parlous state of rural industry in Australia. The Parliament also is entitled to be informed on the maintenance and drainage problems at Loxton. No report has been forthcoming in that respect.

I should like to conclude with a few comments on the failure of the Government to assist farmers. More than once in debates in the last year I have said that the Opposition is prepared to consider favourably any legislation that the Government will bring before the Parliament that would take fundamental steps to improve the lot of rural producers. Of course, evidence is increasingly put before us about the real drop in farm income. It is dropping year by year. More farmers have been forced off the land or forced to live in near poverty conditions. One would imagine that we would be concerned about the viability of those in the soldier settlement scheme who took up the grants. In this particular type of legislation, where there was no capital requirement for the original soldier settlers, it is clear that they would be the persons more likely to be affected in the current run-down in agriculture than those who otherwise would have had some financial resources when they went on the land. In those circumstances, of course, we have to raise a critical note that the legislation does not do any more than carry forward one of the existing schemes. It will not have the opposition of the Labour Party because it does that. In fact, we concede that it continues a program which is needed but we do ask that the Government give consideration to presenting the necessary reports so that we can have a fundamental review of the problems associated with soldier settlement.

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I thank the Senate for its support of these measures. Senator Gietzelt has endeavoured to have a somewhat perfunctory debate about the purpose for which the money will be allocated to the States. I would simply like to point out that this particular money is being made available to schemes in 3 States in which the State government and authorities are administering these schemes. The Commonwealth, of course, does consult with the State governments and authorities about the administration of the schemes. If Senator Gietzelt is concerned about the way in which they are being administered, the way money is being spent or the position of the settlers under the scheme, of course there are ways and means by which these matters can be raised.

The purpose of this Bill, however, is simply to make the continued availability of advances to settlers under these schemes at the very favourable interest of 33A per cent for the purposes of working capital, replacement of plant and so on. That is the immediate purpose of this Bill. It is important that the money should, of course, be made available in the coming financial year. This Bill gives authority for that. I commend the Bill to the Senate.

Question resolved in the affirmative.

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

page 1636

ROADS ACTS AMENDMENT BILL 1977

Second Reading

Debate resumed from 27 May, on motion by Senator Carrick:

That the Bill be now read a second time.

Senator KEEFFE:
Queensland

-As I said about a Bill that was introduced earlier today, I think it is appropriate that I give some introduction to the purpose of the Bill. This Bill will provide Western Australia with an additional $3.2m by amending the National Roads Act and the Roads Grants Act. My colleague Senator Coleman will go into more of the domestic details when she makes her contribution to the debate. The Bill also seeks to amend those 2 Acts, the Commonwealth Aid Roads Act and the Transport (Planning and Research) Act, so that where a State increases expenditure on road work in the form of payroll tax, that expenditure will be eligible for funding under each of the Acts.

The Bill provides for additional financial assistance for roads in Western Australia of $3.2m, as I mentioned earlier, which will bring the total for Western Australia for the year 1976-77 to $58.8m. That is the same amount it received in 1 975-76 which, in real terms, represents a reduction of 14 per cent. I know that honourable senators opposite will say that this Government has done very well in making this particular allocation. I hope that some Western Australian senators will speak in this debate and will point out the difference in financial assistance to Western Australia. I know that we have had problems in the past when the Government has claimed that there is no inflation in Australia today. This is not in accord with the real facts of the case. In fact, this amount of money that is now being made available is considerably less than the allocation in 1975-76. The Bill will bring the total allocation to all States in 1976-77 to $436.7m.

We do not oppose the Bill but we must take the opportunity, of course, to make a few remarks about the deviousness of the Government and the fact that it has not lived up to the promises that it made in 1975 when it was going to solve all these worries. In fact, it has not worked out that way. The Minister for Transport (Mr Nixon) also has refused to give any indication to Western Australia of how its road funds will fare under the Government’s policy of enforced federalism. This is another bone of contention. In the latter months of1975 the Government, I suppose for publicity purposes, said that it would introduce a new federalism policy. A number of the States fell for the new proposition. They thought it was delightful because they were going to get back the powers they thought they were losing under the Whitlam Labor Government. But in the early months of the new Government it was clearly indicated that the new spirit of federalism was not exactly what has been spelled out in the policy speech. The States suddenly found that it was a case of funds not being provided to them. The States were being forced to find from their own resources funds they needed to balance their Budgets. This did not apply only to roads. It applied to a whole host of other areas of activity.

This policy of federalism is undoubtedly one of the rocks on which the current Government will founder. I understand that Senator Steele Hall is to make a contribution to this debate. I think that he will probably agree with what I have said because he was one of those who in the latter days of the Labor Government criticised some aspects of the then Opposition’s national financial policy. The new system of Federal policy, as I said a few moments ago, is the current Government’s method of abrogating its responsibilities. It does not agree with the Labor Party’s policy, and this is why we are critical of this aspect of this Bill and the other Bills that have gone through this chamber during the current session. We believe that there has to be a cooperative policy- a policy of consultation between State governments and the Federal Government. It comes back very much to our local government policy under which we made a number of grants to various local government authorities not only for road building but for all sorts of other needs at the local government level. The situation under this legislation is very little different.

Australia is a very big country. The standard of many of our roads in outback areas is totally deplorable. In the last few months I have asked for additional help for the Gulf country merely to make the roads trafficable. I am not even asking for a bitumen surface. I know that in remote areas of Western Australia road conditions are totally deplorable. If we are to adopt some sort of total transport policy which will provide adequate roads throughout this country this must be done at the national level. There has to be a co-operation between the States and the national government. But this is not happening at all at the moment because the situation has been reached where the amount of money that the previous Government made available for road construction and road maintenance is way in front of what is now being made available in this financial year. The details of the criticism of the allocations can be more properly spelled out by those people who are more involved in this problem. I will leave my contribution on that note.

Senator STEELE HALL:
South Australia

-This is a bad Bill and I oppose it. I oppose it because it continues a policy by design or by neglect which disadvantages South Australia and ignores the recommendations of the Bureau of Roads which ought to be the basis of Federal Government allocations to the States. It is interesting that the Bill is brought in and explained in a short second reading speech by the Minister in another place and the Minister here which does nothing to justify the allocation of $3. 2m to Western Australia compared with the position of the other States of this nation. It again treats the Western Australian situation in isolation in a most political manner. The long term bias against South Australia is one which I will outline directly. The Bill adds to the existing road grants for the year 1977-78 in this way: To create totals, as outlined in the speech by the Minister for Education (Senator Carrick) -

Senator Chaney:

– The allocations are for

1976- 77.

Senator STEELE HALL:

– Yes, I am sorry. The allocations for 1 976-77 perpetuate a percentage disadvantage against my State. This disadvantage has been maintained ever since I became involved in this question in1968-69. In fact the funds that are proposed for1977-78 also perpetuate this percentage difference. As announced in a ministerial release in March this year the 1977- 78 figures are $40.4m for South Australia and $60.20m for Western Australia. This will perpetuate, as I have said, next year the percentage which I complain about now; it will keep South Australia’s allocation at about 66 per cent of the road grant to Western Australia. It is interesting that this percentage of the Western Australian grant should be maintained not only in disregard of the recommendations of the Bureau of Roads but in disregard of many other statistical factors which the Government used in some way as a comparison of economic and population standards which the 2 States enjoy. For instance, the latest statistics on the number of motor vehicles per 1000 people is 499 in South Australia and 508 in Western Australia. The population of South Australia is 1.234 million; in Western Australia the population is 1.122 million. South Australia is 69 per cent urbanised; Western Australia is 62 per cent urbanised. In South Australia there are 15.3 per cent residents rural; there are 18.2 per cent residents rural in Western Australia. It is interesting to know also that South Australia collected in the year 1974-75 $26.3m from motor vehicle registration and tax and Western Australia collected $26. 7m. The total motor vehicle taxation for the 2 States was $43. 58m for South Australia and $41.226m for Western Australia. That is more or less an aside to show that there are many factors that equalise the States in their economic and population statistics.

I start my complaint tonight, which is related to this Bill, from the road allocations that were made in 1969. I have here copies of the newspaper reports in my State on the increases which were then granted by the Gorton Government to the various States in the new allocations that were made over a 5-year period. In 1969 South Australia received another $43 m. It was expressed in a form to indicate that South Australia’s actual allocation would rise to $ 129m. The report states that Victoria was to receive $254m- an increase- and Western Australia to receive $200.4m. If honourable senators dissect these figures they will find that a conference arranged to consider the new recommendations of the Bureau of Roads- which were quite severe- that Western Australia not attain the high percentage of Commonwealth road funds that it had been getting under the previous arrangement. The Bureau of Roads almost- not quite, but almost- put South Australia and Western Australia on an equal footing in relation to their future needs. The Prime Minister of the day, Mr Gorton, at that roads conference which I attended at that time, said that it would be severe, in fact too severe, to apply the new recommendations of the Bureau to the allocations that were being fixed in 1969 and he recommended that one-half of the new recommendations and one-half of the old recommendations be applied. He arrived at a figure which certainly disadvantaged South Australia in relation to Western Australia but not as much on a percentage basis as in the past. Then, using the same device which this small Bill uses, the Prime Minister said that no State should get less in the future than it had received in the past. The government of the day produced a new allocation of a sum of $70m. In any case, of the new sum which Mr Gorton produced to add to the already re-calculated figure, South Australia received $9m and Western Australia received $40.8m, without any justification at that conference other than that that was a fact of life. At that time we complained at that conference on behalf of South Australia that the Bureau of Roads, in a practical sense, put Western Australia and South Australia on an almost equal footing of need. Yet South Australia emerged under great protest from that meeting with 65 per cent of what Western Australia had obtained. The Prime Minister at that time, Mr Gorton, was challenged as to how he expected South Australia to meet its almost equal needs with those of Western Australia in future programs with 65 per cent of the amount allocated to Western Australia. He had no answer except to say: ‘That is the way it is to be’. I need not say much more about that conference except to say that that is the way it was.

South Australia emerged with almost the identical percentage of funds in relation to Western Australia that had been received in the previous arrangements. That was after what was the most expensive and, I believe, comprehensive review of the road situation in Australia ever undertaken by the Bureau of Roads. It was a most shameful disregard of expensive and expert advice which the Government had asked for and then deliberately ignored. One can say, of course, that this is in the past. Unfortunately, the same distribution of funds in relation to Western Austalia occurs today and, apparently, is to occur in the next financial year, as was announced by the Minister for Transport (Mr Nixon) in March. It is rather interesting to find that both major parties in the Parliament have agreed to continue this most inequitable distribution. I have turned to the Bureau of Roads’ records to find what it has recommended over a number of years. In 1969 the Bureau submitted a report to the Minister which stated:

This report, entitled Australian Road Systems 1968, relates to investigations conducted by the Bureau during 1967 and 1968. The results of these investigations were used by the Bureau in the preparation of its report to you concerning Commonwealth financial assistance to the States for roads dated 20 January 1969.

It is a fact that in 1967 and in 1968 the Bureau presented its report specifically to assist the Federal Government to allocate its road funds to the States. In that report it appeared that the Bureau was not as specific in its recommendations to government as it was in later years. It submitted a number of tables showing in most cases about 3 possibilities of model distributions based on different capital sums and benefits. On page 64 of the first report for that year the Bureau recommended or posed the possible expenditure of total road funds to be allocated to the States under 3 various conditions. In the first report they are called ‘warranted road construction expenditure’. In no case in those tables does the percentage in relation to South Australia come below 91 per cent of the allocation to Western Australia. In that same report a little further on the Bureau made possible recommendations which it called ‘optimum schedules’. In that regard it mentioned such figures as $264m for South Australia compared with $243m for Western Australia under a distribution by area. An amount of $264m as against $243m was mentioned under a distribution by functional class of road. The same figures were mentioned for groups of roads. That, of course, advantaged South Australia.

In another table called ‘distribution of expenditure which could be undertaken with a total increased budget to $33 82 m’ the figure is still in South Australia’s favour. In no case did those particular recommendations drop below a figure which for South Australia was less than 8 1 per cent of the amount for Western Australia. That report was ignored by the Gorton Government, which produced the figures I have given previously. South Australia received $129m, which was 65 per cent of Western Australia’s amount of $20Om

In 1973, the time when the new Labor Government was forming its policy on roads, the Bureau reported again. It presented a number of tables and was more specific in its report and advice to the Government. It made a number of suggestions. It presented a table called ‘distribution of economically warranted expenditure’. It relates to Western Australia and South Australia and recommended the greatest difference in favour of Western Australia than in any of the reports that I can find. In that table, the Bureau recommended $503m for Western Australia and $388m for South Australia, reducing the allocation for South Australia to 77 per cent of that for Western Australia. The report then goes on to table the possible expenditure of a different capital figure. The result was $386m for South Australia compared with $4 10m for Western Australia, or 94 per cent of the allocation for Western Australia.

After presenting those possibilities the report recommended to the Labor Government in 1973 that the amounts should be $536m for South Australia and $566m for Western Australia. The amount for South Australia represents 94 per cent of the amount for Western Australia. What did South Australia receive from the second report of the last decade? In his speech introducing the Bill on 1 8 July 1 974, the then Minister for Transport, Mr Charles Jones, announced that the allocation for South Australia would be $100m and for Western Australia $ 1 50m, which is the same percentage of two-thirds or 66 per cent. Those amounts represent the allocation from the Commonwealth; the other figures that I have read are for total road programs but nevertheless they give an indication of the final program. The Bureau of Roads again reported in 1975 and again provided relative road programs. I will not bore the Senate with individual figures. The report recommended quite firmly a total program of road expenditure for Western Australia and South Australia with South Australia receiving 88 per cent of the amount for Western Australia.

It is very difficult to understand why both Liberal and Labor governments are sustaining this unfair allocation. Obviously I will be the only person tonight to vote against this Bill. I will do so to establish my feeling on it. It would appear that there is a very long held and deliberate attitude by all governments, at least since 1968-69, to disadvantage South Australia in relation to road funds allocated by the Federal Government. The evidence of this disadvantageous attitude is maintained in this Bill which we are considering tonight. Obviously it pays to be uncooperative in this so called new federal system. Let us look at the States which are getting the highest subvention of federal moneys. We find they are the States whose Premiers are the least co-operative to the Federal Government. It seems that our Government is denying the very principles which it wants to institute in Australia and which are based on a new attitude towards federalism, a co-operative federalism which will establish some equity between States and a new pride in achievement for State administrations in being on their own feet.

Under the banner of new federalism this Government acceded to the tantrums of the Premier of Western Australia, well documented, at the time when the Minister made his announcement in relation to the future road program in March. It appears that the Premier who is least co-operative will get the funds and the citizens of other States which have co-operated will be much worse off. It is a bad lesson, I believe, that this Government is teaching the Premiers by way of this Bill which is to the disadvantage of some States, particularly my own. The

Government has listened to what I have said are the political tantrums of a Premier and has given in and presented this House with legislation for an additional sum of money for Western Australia which already stands at great advantage over my own State.

The Opposition of course has continued its policy that it maintained in its 1 974 legislation. Mr Morris, in speaking to the Bill in the other place, said:

The Opposition welcomes the additional $3.2m which is to be appropriated to Western Australia for road funding in the current year. It does not oppose the Bill.

I suppose that it is too frightened to do the fair thing because of the electoral consequences it fears in Western Australia. Mr Cotter, my Liberal colleague in the other place, is quite specific about supporting my contention. As a Western Australian member he does not hide his enthusiasm for this Bill. If I were a Western Australian I do not suppose I would either. He is quite specific. He says at page 1957 of Hansard of ‘26 May 1977:

The generosity of the Commonwealth Government in providing these extra funds is certainly appreciated by Western Australia . . . These funds have been in excess of the recommendations of the Bureau of Roads.

I repeat: ‘These funds have been in excess of the recommendations of the Bureau of Roads’. He goes on to say:

There is no doubt that the Commonwealth has played its part in providing a massive direct infusion of money for roads in Western Australia … I believe, as a whole, this has been a very generous Commonwealth approach to the road problem in Western Australia.

He continues:

It is significant that State and local government authorities in Western Australia contribute less when compared with their counterparts in other areas of the Commonwealth.

They contribute less. I have figures here. The figure I produced in regard to motor taxation shows that Western Australia and South Australia are almost on an equal dollar for dollar basis. It is true when other figures are compared that Western Australia collects less in other taxation towards its road program. Mr Cotter goes on to make his point when finishing his speech by saying:

The basic question is that the Federal Government has been very generous in the past, I have no doubt that it will be generous and sympathetic in the future, and I would ask that the Government look very seriously at the formula for allocating road funds.

I admire Mr Cotter. I think he is a very valuable member of the House of Representatives, but I suggest on behalf of his constituents that he does not get the Government to look properly at the allocation of funds. If the allocation of funds is looked at properly and the Bureau of Roads’ recommendations are adhered to his State will get less in relation to other States than it has in the past.

I have not used the percentage figures tonight. The percentage which was recommended in 1 969, from memory, was 7.7 per cent of the total Australian road funds for Western Australia and 7 per cent for South Australia. These figures were a marked reduction. Both States fought them. The essential part of my complaint is that the Bureau of Roads’ percentages were recommended to be almost identical for South Australia and Western Australia. It will not matter how the Minister may tend in his defence to juggle these figures or in some way to make them seem something which is justifiable. The evidence over one decade has shown that South Australia has had the most shabby treatment and that we are subject to some sort of deliberate neglect or antagonism. Whether it is departmental or not I do not know. No politician, no Minister, should sit in Cabinet and approve such an inequitable distribution.

As I said previously, this matter is proving to all Premiers in Australia that they should not cooperate, that they should not be reasonable and that they should not think nationally if they are to obtain the best benefits of the new federalism which this Government apparently has adopted. I believe the Bill is a divisive, an invidious and a partial piece of legislation. It is most unfair to South Australia. I ask the House to think seriously as it ponders the legislation. I know that honourable senators will not join me in opposing it. I say that not in any way criticising them for their views. They have not, I believe, been aware of successive governments’ complete disregard of the Bureau of Roads. I hope governments are beginning to become aware of the Bureau of Roads. I trust that the Government will not again approve a road program that so disregards the Bureau. If the Bureau is to be disregarded in this way I suggest it may as well be the subject of the Government’s next economy measures. There is no point in having a bureau if governments are to make simply political decisions, if they are to simply please the most strident and uncooperative Premier in this federation of Australia. We had better do away with a body which is so disregarded. In any case, I state my own opinion. I oppose this Bill because of the dismal record of both political parties in their disregard of the Bureau and in particular their disregard of the citizens I represent in the Senate.

Senator COLEMAN:
Western Australia

– In case anyone should imagine that we are in actual fact having a Western AustralianSouth Australian pique let me assure the Senate that I and my colleagues on this side are in full support of the Bill. Whilst it does not give as much money as Western Australia would like to have it is at least something. We will take anything that we can get from this Government which professes to be federalist and in actual fact is nothing. The purpose of this Bill is to provide my State with an additional $3.2m by amending the National Roads Act and the Roads Grants Act.

Senator Baume:

– Very generous too.

Senator COLEMAN:

-No. Mr Cotter said that the Government had been generous and sympathetic in the past and he hoped that it would be generous and sympathetic in the future. I think one thing that Senator Hall failed to take into consideration in his tirade a moment ago is that South Australia is roughly one-third the size of Western Australia. A great proportion of our population, lives outside the metropolitan area. A great proportion of our population, especially those connected with the north-west shelf and the mining centres, produces more than any other area in Australia.

Let us have a look at what Mr O’Connor, another Liberal Party member and the Western Australian Minister for Transport, had to say in Sydney when the roads money was being allocated by the Federal Minister for Transport. He said then that it was not enough. He said in fact at the meeting at Sydney’s Menzies Hotel that the Pilbara region in Western Australia deserved special consideration because it would contribute about $ 1,000m in export income this year. Is Senator Hall saying that we should not be able to upgrade our export roads? Is he saying that these mining communities are not supposed to have facilities which enable them to communicate with each other?

In other States, in smaller States perhaps, one could say that roads are used as a means of getting from point A to point B. This is not the case in Western Australia. They are used as a means of communication. They are used to keep communities in touch with other communities. In areas where people are living in isolation they are needed in cases of sickness, death or urgency.

I do not think anyone in this chamber would be foolish enough to say that it is an inappropriate Bill. To me it is inappropriate insofar as it does not have enough in it. Mr O’Connor said that the $ 1 ,000m in export income that was to be contributed to the national income by the Pilbara region was about $1,800 a head of population and that that was more than double the Commonwealth average. He went on to say that some residents in the northwest were 500 kilometres from the coast, with no connecting bitumen roads. I dare anybody who has tried to travel from Perth to Darwin by road to tell me that it was an enjoyable trip. In Western Australia we are endeavouring to create a tourism benefit for the people as a whole who visit Australia and for Australians who want to see the rest of their country. We have no completed national highway joining each State or Territory in Australia, and we are not likely to get one with the paltry amount that has been allocated in this Bill for that purpose.

The Bill is to provide additional assistance for roads in Western Australia of $3.2m, bringing the total for Western Australia for 1976-77 to $5 8.8m, That is exactly the same amount as was appropriated in 1975-76. The Minister in his second reading speech said:

The proposed increase in financial assistance to Western Australia is necessary to ensure that no State receives less financial assistance for roads than in the previous years.

He did not say that Western Australia would get more, because the very next sentence was:

The extra amount of $3.2m will bring the total road funds allocated to Western Australia for the year 1976-77 to $58. 8m, this being the amount received by that State in 1975-76.

In real terms, there is a reduction of 14 per cent. That is just not good enough. The $475m for road grants in 1977-78 announced by the Minister is only some 68 per cent of the $704.5m recommended by the Commonwealth Bureau of Roads for expenditure in 1977-78, and the total road funds to all States will increase by only 8.8 per cent. The proposals of the Fraser Government have slashed the grant to Western Australia for urban arterial roads by more than 45 per cent. When more and more people are living further out from the city of Perth proper, a considerable number of these people are being denied roads by this slashing. Urban arterial roads would enable people to live further away from the main industrial areas and still be able to commute to work each day. In Western Australia we do not have an efficient rail transport system. We do not even have an efficient road transport system. In fact, some people live so far out of Perth that we might have to think of ways and means of instituting a helicopter or airline system so they will be able to get to work, so poor are the roads.

Let us look at what a recognised body, the Royal Automobile Club of Western Australia had to say about the situation with roads. As reported on 4 February 1977 under the heading RAC launches attack on road cuts ‘ the following report appears:

The Federal Government was undermining road safety in W.A. with its clamp on road funds . . . The RAC president, Mr L. A. Jones, said that more funds were urgently needed for road maintenance and to upgrade accident-prone areas.

The Federal Government’s attitude towards road funding is undermining efforts by the Main Roads Department and local authorities to make roads safer and help save lives, ‘he said.

An adequate injection of finance would be money well spent. It would mean a cost saving to the nation by reducing fatalities and serious casualties.

Each year Australia loses about 3 500 people in traffic accidents and another 100 000 are injured.

The Commonwealth Bureau of Roads has shown that a program of roads construction to 1981 will achieve benefits worth almost 4 times its cost. ‘

These savings included about $800m in accident costs, $ 10,000m in occupant travel time and more than $4,000m in vehicle operating costs.

The Government’s legislation to remove the independence of the Bureau of Roads was further evidence of its design to downgrade the priorities of road planning and road funding in the national accounts. Fraser federalism will destroy the integration and co-ordination of transport expenditure or integration that would embrace efficient use of public moneys on road planning and construction. One of the points that this Government has to recognise is that local government needs to have time to plan its roads, its programs, its work force and its materials. It is just not sufficient to say: ‘Here we have a little bit of money. We will let you have it now. Perhaps next year we will increase the amount’. Local government authorities need to know at least 12 months in advance just how much money they will have, what they will be able to spend it on and what they will be able to do with it.

The Minister has given an undertaking that $60.2m will be made available in 1977-78, but this really is not any increase when one takes into consideration the inflation factor. The cooperative federalism that this Government is always talking about has been disputed. Even Senator Hall made a point of this. He called the Premier of Western Australia strident. He said he was able to talk most against the Federal Government. To my mind he does not talk enough against the Federal Government. He lets the Federal Government get away with too much. Let us look at what he had to say in one of his leaked letters when a State election was coming on. Nobody bothered to query how it was leaked or by whom it was leaked. As it bears the name ‘Sir Charles Court’, we may think that it was leaked from his office. It certainly did not come from any of the Western Australian Federal members who are in this Parliament. The Premier, describing the Australian Transport Advisory Council meeting in February as a serious blow to Federal-State relations and the credibility of the Prime Minister’s federalism policy, had this to say:

There appears to be a complete misunderstanding in Canberra of the road situation in Western Australia-

I would just interpolate that I think there is a complete misunderstanding in South Australia too of the road situation in Western Australia. The quotation continues: . . or I have to assume that there is a deliberate attempt at either ministerial or departmental level to reduce our program to unrealistic proportions.

In the West Australian of 28 February Sir Charles Court was reported as saying:

An increase of only $I.9m in funds for 1977-78 would severely retard Western Australia’s road progress. Many major projects of vital importance to the State’s economy and development would have to be deferred or slowed down. This would lead to a significant increase in unemployment, which would have a serious economic effect.

On another occasion Sir Charles Court, a former staunch advocate of the Fraser federalism policy, responded by saying:

It is time that Mr Nixon and some of the Western Australian federal members of Parliament realised that Western Australia has urgent needs and will continue to fight for more funds and fight hard.

So much for co-operative federalism! The Minister for Transport has refused to give any indication to Western Australia on how its roads funds will fare under this Government’s policy of enforced federalism.

As I mentioned earlier, whilst the Opposition does not oppose the Bill, it takes the opportunity of reminding the Australian electorate of the true motives of this conservative Government. I would just remind honourable senators once again that Western Australia is unique. It is unique in its size alone. The ratio of its population to its size is unique. If Senator Hall has a complaint against the Premier of Western Australia he might suggest that Sir Charles Court move out and let a proper government take over the State. Perhaps then Western Australia would be more successful in getting more money.

I finish on the point I made before. I emphasise it now. It has to be recognised that roads in Western Australia are used as a means of communication and as a means of keeping communities in touch with other communities. It is not just a case of a person getting into a car and driving to see his or her nearest neighbour or getting on the telephone and ringing his or her nearest neighbour. That nearest neighbour could be some hundred kilometres away and the person would have no means of communication except perhaps by pedal radio or by driving if he or she needed assistance. I think it is time that the Federal Government looked particularly at that situation. I hope that before the Budget comes down it will accede to the request of the Premier and people such as myself for an increase in funds for the period 1977-78. 1 support the Bill.

Senator CHANEY:
Western Australia

– The debate this evening has been a very refreshing one because all Western Australian senators and members are fresh from Western Australia where we have been roundly abused for the recent Government decisions on road funds. I recall a leading article in the West Australian which suggested that it was time that Western Australian senators and members showed their mettle and did something about the despicable meanness of the Government with respect to road allocations to Western Australia. So it is refreshing to come here and to find that at least in the eastern States we are regarded as a brand of pirate which has managed, to the great detriment of our sister States, to get a very much larger than fair share of road funds for our State. I am tempted to circulate Senator Steele Hall’s speech to as many of my constituents as I can, in the fond hope that they may regard the figures which he has produced as an example of the extremely effective representation which we are giving to Western Australia.

I am sorry that he marred the figures which he presented, which I have no doubt are correct, with some factual inaccuracies. He suggested that the consistent favouring of Western Australia, as he saw it- the consistent allocation by the Commonwealth of a greater percentage of road funds than had been recommended by the Commonwealth Bureau of Roads- was a sign that it pays to be unco-operative. Therefore I assume that he was suggesting that over the long period that his figures covered the Premiers, Sir David Bland, the Labor Premier Mr John Tonkin and the present Premier Sir Charles Court, were all examples of unco-operative Premiers, and that was all that lay behind the matter. I would have thought that if one bore in mind the different characters of these 3 men it became fairly obvious that it was an oversimplification to suggest that some form of uncooperative behaviour lay behind the significant excess over the Bureau of Roads recommendations which have applied for the last 10 years. It suggested to me that the significant increase over the Bureau of Roads allocation could be related to a great contribution which Western Australia has made and is able to make to the economic development of Australia and to the peculiar difficulties that Western Australia suffers because of its vast area and long distance.

I particularly point out to the Senate that it cannot be said- I quote my colleague Senator Steele Hall-that this $3.2m flows from the tantrums of the Premier of Western Australia in March when the road program was announced. That is, as near as I can recall, a direct quote from what was said by my colleague. The extra $3.2m was announced in January. It was announced after discussions between the Premier and the Prime Minister (Mr Malcolm Fraser). It followed representations which commenced in June of last year, which ran through August and October of last year and which culminated at a meeting in Canberra in January. Although it is true that some rather strong words emanated from the Premier and, I think, his Minister for Transport, when the current progam was announced it reduced the percentage share that Western Australia would get in future. It gave us the smallest percentage increase in road funds of any of the States. Although they complained, that was long after the extra $3.2m had been allocated.

I would have been more impressed by the case put forward by Senator Steele Hall if he had bothered to cost some of the benefits which acrrue to his State because of the extraordinary level of tariff protection granted to the motor industry, which provides so much employment in South Australia, and to what I might call the white goods industry in which his State seems to specialise. In fact, the south-east corner of Australia benefits greatly from a system of tariffs which costs the Australian consumer billions of dollars each year. The fact is that my home State, Western Australia, receives very little benefit from that. A minute percentage of our population is engaged in manufacturing. I think it is about 2.5 per cent of the work force. Therefore, if he had brought some of those figures into account I would have been more impressed with the case which he put forward.

The case for a significantly increased allocation to Western Australia over the amount paid to South Australia, I think, is based on 2 factors. Firstly, I would refer to the area factor which has already been referred to by my colleague, Senator Coleman. I am very pleased to be batting on her side on this one occasion.

The enormous size of Western Australia is something which ought to be appreciated by all senators. I invite Senator Steele Hall to spend a little of the winter in the northern part of Western Australia to see for himself the vast distances and the great difficulties under which people in that area live. Perhaps even more important than that is the economic situation in Australia generally which requires that Western Australia, the Northern Territory and Queensland basically shall fuel the growth in the Australian economy over the next 10 or perhaps 20 years. It is a sad fact that for the last 20 years, certainly for the last 15 years, Western Australia was capital hungry. Undoubtedly in the future it will be capital hungry. It will be short of capital. In our economic development in the past we have had to call upon private industry to plough in or to pay for most of the infrastructure that one would normally expect government to supply. That situation cannot continue to the same extent. There will be less ability on the part of private industry to pay for all the infrastructure in the future.

I think that this Senate and the Government will have to look over the next few years at the extent to which both Western Australia and Queensland will have greater calls upon the capital resources of the Commonwealth, because I believe that unless those States are given access to considerable capital resources we will not get the economic recovery that everybody in Australia wants. We will not get States such as South Australia getting the full value from the manufacturing industry that we protect so assiduously with high tariffs. We will not get a sufficiently high level of benefit in South Australia. I suggest that any honourable senator who has doubts about allocations of road funds to Western Australia should spend some time around Dampier and Port Hedland and driving inland to towns such as Tom Price or Mount Newman. They should sample the excessive isolation of those communities and the very great difficulties of travel on unsealed roads. I think they would come back and find that an additional allocation of $ 1.4m out of this $3.2m to seal part of one of those roads was something that might be defensible and was defensible in the national interest.

I suggest to the Senate that this debate tonight has highlighted the peculiar difficulty that senators face in doing what so many of our supporters would like us to do, and that is to act simply as defenders of our States. The debate tonight is a very interesting example of the fact that if Caucus chooses to support the Government on an issue- we know that that means that all Labor senators will vote with the GovernmentGovernment senators from five of the six States could cross the floor if they wished and the Government would still get its legislation passed. It is an interesting reflection on the operation of the States House when one of the parties is totally caucused.

Senator Coleman:

– Come on!

The ACTING DEPUTY PRESIDENT (Senator Bonner)- Order!

Senator Georges:

– ‘Order’ my foot!

Senator CHANEY:

– It is an extremely interesting example of the effect of Caucus. Government senators from five of the six States could cross the floor and the Government would get its legislation passed.

Senator Georges:

– I apologise.

The ACTING DEPUTY PRESIDENT-

Senator Georges, you will withdraw.

Senator Georges:

– I withdraw it. It came out suddenly and unexpectedly. I reverted to my past behaviour. I am now reformed.

Senator CHANEY:

– I am in the embarrassing situation of not knowing what my colleague has withdrawn. I will find out later and complain to him then. The other interesting fact on which we can ponder is that if the Caucus determines that it will oppose the Government and Government senators from any one State cross the floor, they can defeat any Government measure. That is a formula for an unworkable Senate, from the point of view of the Government. I suggest that those interesting combinations of possibility are things about which we as senators have to think and about which our supporters have to think when we are working out how we will behave in the Senate.

I know that my colleague, Senator Steele Hall, as an ex-Premier who has sat in at Premiers Conferences and has seen what happens, perhaps has stronger feelings than most on issues such as the one which has come before us today. I simply commend to him a visit to my State. I think he will find the factor of distance and the economic need for greater capital investment in Western Australian matters which quickly become selfevident. I would be very happy to accompany him on such a visit and hope that I might gain a convert to our cause.

Senator CARRICK:
New South WalesMinister for Education · LP

-in reply-The Roads Acts Amendment Bill 1977 which we are debating in the Senate does 2 things. It provides an additional sum of S3.2m to Western Australia to bring its grant from the Commonwealth for roads up to the grant made to it in the previous year, that is, $58.3m. In addition, it provides, with relation to other relevant legislation, that the States may count payments of payroll tax in relation to roadworks in the moneys that are allocated by them to roads. They are the 2 situations. Senator Steele Hall has drawn attention to the long history of this matter and says that South Australia has been basically disadvantaged. Before I make specific comment on that point, I will be very happy to draw the attention of the Minister for Transport (Mr Nixon) to the situation upon his return from overseas, and to ask him to give special contemplation to it and to study the points that the honourable senator has made. Indeed, if the honourable senator so desires I will arrange for him to discuss those matters with the Minister on that occasion.

The States concerned cannot be compared in the ways that Senator Steele Hall has said. For example, let me advert to what other honourable senators have said regarding the size of States. Beyond any doubt Western Australia has a major and unique problem in relation to its size. That unique problem is not only in relation to its size but also its size in relation to the number of vehicles. For example, South Australia has more vehicles per head of population and has a better tax base. That has been taken into account. In any case, it is important to understand that when road grants from the Commonwealth are considered quotas are devised, being the minimum amounts that it is considered that a State might allocate for road works. Indeed, it could allocate more. It is important to keep in mind that in 1976-77 the South Australian quota is $34.2m, while the Western Australian quota is $36. 6m. South Australia has had difficulty in meeting its quota.

Senator Steele Hall:

– That is not all the program, is it?

Senator CARRICK:

-If the honourable senator will give me some information later I will certainly look at it. I do not say that in any defensive fashion. I hope that the honourable senator will take my remarks to be those that would add to the debate so that the Minister in another place may have a balance of facts before him on which to adjudicate. Certainly I am advised that South Australia has had difficulties in meeting its quota and, as such, has a disability compared with Western Australia.

In a moment I shall seek leave to incorporate in Hansard 3 tables. Perhaps I should describe them first and then seek leave to incorporate them. One of them is in my own pencilled handwriting. It is a table showing the Commonwealth road grants to the States for the past 3 years, figures abstracted from the departmental tables. I shall draw upon that table to give some information in a moment. The second table, which is entitled ‘State Percentage Shares of Commonwealth Roads Grants Actual and as Recommended by the Bureau of Roads ‘, shows for the period from 1974-75 to 1979-80 the percentage recommended for each State by the Bureau of Roads and the percentage actually provided by the legislation. If honourable senators study that table in Hansard they will observe a gradual movement towards a proper rectification of the recognition of particular phenomena in the States. The table shows, for example, that in 1976-77 Western Australia is scarcely getting an advantage because in the previous year 1975-76 Western Australia received, through the legislation, 13.75 per cent of the money allocated by the Commonwealth and is this time receiving 13.35 per cent. So there is no specific warping in that regard. I invite honourable senators to observe that when the table appears in Hansard because I do not want to prolong the debate.

Senator Steele Hall:

– Can you read South Australia’s percentage?

Senator CARRICK:

– Yes, I will. South Australia’s percentage of the allocation by way of legislation in 1974-75 was 8.97 per cent; it was 9.06 per cent in 1975-76; and 8.88 per cent in 1976- 77. That shows a trend. I think the honourable senator will be advantaged by studying the table. The third table is entitled ‘State QuotasPer Motor Vehicle on Register 1972-73 to 1977- 78’. I think Senator Keeffe indicated that there had been a cut in road funds. We find from the first table that this year, 1976-77, Commonwealth funds will amount to $436.7m compared with $423.9m in the previous year. It shows that every State except Western Australia will receive increased funds compared with those allocated last year. For example, the New South Wales allocation will rise from $13 1.9m to $ 137.3m; Victoria from $88m to $91. 10m; Queensland from $87.4m to $90.7m; and Senator Steele Hall will know that South Australia will receive a very modest increase from $38.4m to $38. 8m. The West Australian allocation remains static at $58.3m. I have provided those figures simply to form a base for discussion and not for an argument here tonight.

The situation to which I have referred concerns the fact that in 1975 the Bureau of Roads report stated that Western Australia and South Australia were making efforts in relation to road tax which were below the average in the provision of road funds for the average years 1972-73 to 1974-75. The projection for the following year was that that level of funding would remain unchanged. The Western Australian quota increased from $ 16.4m to $36.6m over that period 1972-73 to 1976-77, which was an increase of $20.2m. The South Australian quota increased from $ 1 5.8m to $34.2m, which was an increase of $ 18.4m. In other words, in terms of quota a bigger effort was put forward in Western Australia, even though one could say that because of the problems faced by Western Australia it may well have been at a disadvantage. With my eye on the clock, and because I think it is the general consensus of the Senate that this legislation should be passed, I seek leave to have those 3 tables incorporated in Hansard.

The PRESIDENT:

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

The tables read as follows-

Senator CARRICK:

-Against that background, I commend the legislation to the Senate.

The PRESIDENT:

– The question is: ‘That the Bill be now read a second time’. Those of that opinion say aye; to the contrary no.

Senator Steele Hall:
The PRESIDENT:

– There appears to be only one voice calling for a division. Under standing order 168 a division cannot be held unless more than one voice calls in favour of the ayes and likewise with the noes. However, under the standing order, in such a case the one honourable senator calling for a division may have his vote recorded in the journals if he so requests. Do you so request?

Senator Steele Hall:

– I do so request.

The PRESIDENT:

– It shall be done.

Bill read a second time.

In Committee

Clauses 1 to 3 agreed to.

Clause 4 (Grants of financial assistance to States).

Senator STEELE HALL:
South Australia

– I want to ask a question of the Minister for Education (Senator Carrick). I am not sure whether it fits in here, Mr Chairman, and I hope that you will guide me if I am trespassing on this clause. Clause 4 deals with grants of financial assistance to the States. That seems to me to be a general enough heading for me to ask a question of the Minister. Before doing so I would like to thank the Minister for his very temperate reply to my speech- it was helpful- and especially for the table which he read out which confirmed everything that I was saying. The percentages are almost identical, or near enough for argument’s sake, for the point I was making. Therefore the history of what has occurred is not in dispute between us; the dispute is whether it properly occurred or not.

In relation to the grants to the States, following Senator Chaney ‘s quite remarkably able putting of his State’s position and following the Minister’s reply in which he said that Western Australia had somewhat different needs, I draw attention to the most comprehensive review of Australian road conditions by the Bureau of Roads. From my reading of it- I do not read every word of the Bureau’s voluminous reportsit seems that the points they made about setting Western Australia aside are fully covered in the report. It would be little use having a bureau operating around Australia at such great expense- I understand that a most comprehensive study cost some millions of dollars- and coming back with a report that ignored the essential facts to which Senator Chaney and the Minister had referred. Those matters are specifically included in the reports. To remind the 2 gentlemen of the width of the investigation let me mention the headings in the 1975 report: Areas, growth centres, road classifications, physical conditions of Australian roads, finance for roads, evaluation of national highways, export and major commercial roads, rural and outer urban roads, and roads in built-up areas.

The Bureau considered many other matters submitted to it including local government, State government and individual matters, petroleum resources and so on. Without wanting to transgress the Standing Orders I point out to the 2 gentlemen that all the points they have made are already included in the assessment which has been presented time after time to the respective Ministers before the road grants to the States have been decided. The point that I made and that I am now making is that consistently politics have overridden the good sense of the Bureau.

That is essentially the point that I am making tonight. I do not expect in this debate or in considering this matter in Committee that we will make any progress on these matters but I simply ask the Minister whether he has any idea, under this clause which deals with grants of financial assistance to the States, why after the most comprehensive road investigations that can be undertaken in this country by the most highly respected Bureau of Roads, taking into account all the matters he and his supporting speaker mentioned in the debate, there have been differing percentage allocations to Western Australia and South Australia as is revealed in the tables he incorporated in Hansard.

Senator MISSEN:
Victoria

– I would like to add a different point here. There is a constant complaint about the extent of moneys that are made available to the Victorian Government, particularly for rural roads and for the hundreds of culverts, drains and dangerous situations that are to be found in the Country Roads Board roads. I was surprised tonight to hear Senator Chaney indicate the great difficulties suffered by Western Australia. I appreciate the point that Senator Steele Hall made but I think that there is a further point to be considered. I remember reading recently of grants and the general reimbursement of tax per head of population. I wonder whether the Minister for Education (Senator Carrick) can supply this information. As I recall it, the figures were something like $1 10 a head in Victoria, $120 a head in New South Wales, something like $250 in Queensland and $350 in Western Australia. I would be happy to be corrected if I am wrong.

There is such a general difference in the amounts paid overall, not only in road moneys but also in general revenue, and I have heard alleged tonight that Victoria was being supported by Western Australia and others. One gets a little tired of hearing that statement being made. It shows a certain ungenerous nature on the part of those States in view of the great percentage of moneys that goes to them in the Commonwealth’s general reimbursement. I wonder also whether the Minister, in answering Senator Steele Hall, could tell me whether or not this is so, so that we can put into perspective the financial position of the States involved and perhaps then understand why States like New South Wales and Victoria have so much trouble when providing for their roads programs.

Senator GEORGES:
Queensland

– When the Minister for Education (Senator Carrick) is considering the case put to him by Senator Missen will he also consider the amount of fuel tax that is paid by the States? He will probably realise that in States such as Western Australia and Queensland people have to travel distances of 500 or 600 miles using a darned sight more petrol than is used per capita in Victoria. Queenslanders and Western Australians pay much more fuel tax a head of population than people in Victoria pay. I listened to the case put by Senator Chaney. I was impressed by the case for Western Australia. It is a case that could be put for Queensland. I appreciate that we cannot grid the whole of the nation with roads just to carry one or two vehicles but some roads are necessary to be built. An extra $3.2m will not seal much road when one considers present day costs.

My sympathy seems to lie with Senator Chaney except when it comes to his statement about the caucusing that takes place in the Australian Labor Party. At least we have a little bit of discipline in our Party. I understand Senator Chaney ‘s concern that he no longer seems to have any control over his members on that side as to what they are going to do, what they are going to say and how they are going to vote. It must be embarrassing for him and for Senator Withers. I have just received my instructions as to what is going to happen for the rest of the evening. I do not need to seek leave to continue my remarks because the Government has other intentions. I will leave the matter at that. I would like the Minister to consider the points I have raised.

Senator YOUNG:
South Australia

– I would like the Minister for Education (Senator Carrick) to explain to me if he can why this year the funds for Western Australia will be in excess of the amount recommended by the Bureau of Roads. As Senator Steele Hall pointed out tonight, this is not the first time that this has happened. I am concerned to know how much longer this type of thing will continue. I appreciate that, as Senator Georges said, $3.2m is not very much. It is a fair bit of money for some States; let me put it that way. As far as I am concerned, over the years we in South Australia have been disadvantaged, particularly when compared with Western Australia. In fact, for a long time one particular road was regarded as a State road when we argued it was a national road. It was sealed only in recent times. That road, which was of grave importance- I stress the word ‘grave’- provided, once it was sealed, a sealed road from Sydney to Perth through South Australia. I refer to the Eyre Highway.

Senator Wright:

-But Western Australia did that as a State.

Senator YOUNG:

– No. For years there were dirt tracks on the South Australian side of the border.

Senator Wright:

– But on the other side-

Senator YOUNG:

-Western Australia did have theirs sealed, yes, but they did so also with some assistance. We had places like Woomera, with the rocket range, a place of national and international importance, where we did not even have a sealed road. That was one of the most dangerous roads on which one could ever travel. Heavy transports travelled on it, there was a problem with bull dust, and numerous deaths were caused on that road by the dirty, dusty, dangerous conditions. One could go on talking about these areas, but I come back to what I asked the Minister earlier. Can he give me a specific answer as to why funds in excess of the recommendations made by the Bureau of Roads have been allocated this year, and what will be the position in the future? Perhaps it will not be as it is this year.

Senator CARRICK:
New South WalesMinister for Education · LP

– Briefly, and in a general and quick reply to Senator Steele Hall, the fact is that the Bureau of Roads is there to assist the Government. The methods of evaluation which are used by both the Bureau and the Government make assumptions which can be varied from time to time and which have been varied from time to time, such as the value of travel time, production benefits, vehicle cost savings and things of that nature. The Government has to consider all factors, including social factors, distances and the nature of living conditions. In the Government’s view these had been undervalued in the past by the Bureau and this applied particularly in Western Australia. I mention also the quotas for the States and their indicated capacities to meet those quotas. These all add together to give some picture of the past, but the matter is a complex one and I think it is better dealt with in a more detailed fashion. I think the thrust of Senator Missen’s argument was accurate in general terms, that is, in terms of the general percentages that he set forward. I shall endeavour in due course to get a table to give more accurate figures. Of course, it is a recognition of the difficulties of the less populous States that we have had a Commonwealth Grants Commission, that we have had a growth of relativities and that we have undertaken to persist in those relativities. Senator Georges talked about the fuel tax and the amount of fuel tax paid in the more extensive States. I can understand that. Frankly, I have to confess that I had not fully appreciated Senator Young’s question. I shall have a look at it and give him a written reply.

Clause agreed to.

Clause 5 agreed to.

Clause 6 (New schedules)

Senator STEELE HALL:
South Australia

– I refer to the Schedules to indicate to the Senate how the allocations are made for both rural and urban areas to the advantage of Western Australia compared with my State. I make this comparison very briefly to refute, I believe, any suggestion that Western Australia is being advantaged numerically simply because it has rural problems beyond those of my State. I shall indicate the funds that the Minister for Transport (Mr Nixon) announced in March would be allocated for 1977-78, that is, the future year. The rural arterial roads for South Australia were allocated $7m and for Western Australia the allocation was $9.4 1m. Rural local roads for South Australia were allocated $6.7m and in Western Australia $ 14.4m. At this point I am sure Senator Chaney would say, as I have said earlier in debate, that his State has a larger area and some greater problems. I could dispute that, but that is what he would say and he would look to those figures to prove his point. Then we come to the urban areas, under the heading ‘Urban arterials’. South Australia is allocated $4.6m and Western Australia $llm. Urban local roads in South Australia are allocated $2.2m and in Western Australia $2.37m. For the MITERS program, which I believe is a sort of cleaning up grant arrangement for various aspects of roads, the allocation was $1.7m in my State of South Australia and $2m in Western Australia. Western Australia gets the great big slice of the cake, for both rural and capital urban roads. When it comes to urban roads, in respect of Adelaide, with its drastic need of renovation roads entering and leaving the city, that work is being sadly neglected under the State Labor Government that Government cannot enter into programs it would like to enter into when it is confronted with this sort of allocation.

Senator CHANEY:
Western Australia

– I am in no position to respond in detail to all the figures that have been given by Senator Steele Hall. One of the matters that has been vexing and concerning Western Australia is the very substantial reduction in the allocation for urban arterial roads. As I understand it, the allocation in that particular segment has dropped by about 46 per cent in 1977-78 from the 1976-77 proposal. The thing to bear in mind is that most of the urban arterial programs are programs which are not planned on a year by year basis only. They are major projects which involve substantial resumption, substantial capital works and are usually planned on a multi-year basis. The fact of the matter is that the Western Australian Government is severely incommoded by the fact that it has in hand substantial programs on the basis of the sorts of previous allocations which have been made. It now faces a quite sharp reduction in funds for that particular area.

I suggest to Senator Steele Hall, and indeed to the Committee that if reductions are being made, as in fact they are, they are not as substantial as one could possibly hope. Indeed, I should have thought that in view of the problem of maintaining continuous programs with such wide fluctuation they are perhaps more extreme than is reasonable. These matters certainly can be debated in far more detail when in the Budget session we look at the 1977-78 allocations. I am grateful to Senator Steele Hall for the warning that the matter will be the subject of debate from both sides of the chamber.

Senator McLAREN:
South Australia

– I am prompted to say a few words at the Committee stage because of the provocative remarks made by Senator Hall in his fight with the Western Australian people who he said have been able to take unto themselves more money for road construction than the other States. I do not quarrel with him on that issue, but I do quarrel with him when he says that the South Australian roads have deteriorated under the Labor State Government. He knows that that is not true. I challenge him to bring into this Parliament facts to prove his statement. As anyone who drives a motor car over those roads would know, they are comparable to, if not better than, the roads of most other States in this Commonwealth.

Clause agreed to.

Clauses 7 to 12- by leave- taken together, and agreed to.

Title agreed to.

Bill reported without amendment; report adopted.

Third Reading

Motion (by Senator Carrick) proposed:

That the Bill be now read a third time.

Senator STEELE HALL:
South Australia

– I do not wish to speak for very long. I raised this subject tonight and quoted the figures

I have quoted for the specific purpose not of winning any vote, which I know would be impossible here in the circumstances, but to give notice to the Minister for Education (Senator Carrick) and the Government that this matter is not going to rest easy in the future. The history is bad for my State. As I have said, the comparison is invidious. Frankly, I do not blame the Minister.

Debate interrupted.

page 1650

ADJOURNMENT

The PRESIDENT:

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

That the Senate do now adjourn.

Question resolved in the negative.

page 1650

ROADS ACTS AMENDMENT BILL 1977

Third Reading

Debate resumed.

Senator STEELE HALL:
South Australia

– I was saying that my purpose in raising this matter tonight is one of protest, seeking to put an end to a decade or more of misadvantage to my State, and to give notice that the representatives of my State will in the future, I feel sure, demand a fair and more equitable allocation. I have much appreciated the reply of the Minister for Education (Senator Carrick) to the rather short case I made. The material is most voluminous. I feel that no part of my case has been destroyed. In fact, most of it has been confirmed by the material the Minster himself has produced.

I certainly will do a great deal more homework on this matter in the intervening period before another agreement is presented. Whether I happen to be around this place or not, I certainly hope and believe that South Australia’s representatives will not allow this inequitable situation to continue. I particularly ask Labor senators to stop taking some sort of loyal attitude to their previous disastrous course in supporting this inequitable allocation. I ask those honourable senators from South Australia to forget the antagonisms which may have made them support this Bill in its entirety this evening. I ask them to make sure that they present their view on the next occasion this matter is raised on the merits of the case. I ask them further to seek to ensure that the South Australian road program is as nearly aligned to the most expert advice that we can have in Australia- that will come from the Bureau of Roads- in the form of the program which is recommended to the Minister before the next allocations are made. In that way, South

Australia will be able to achieve the justice which has been denied to it for all these years.

Question resolved in the affirmative.

Bill read a third time.

page 1650

PUBLICATIONS COMMITTEE

Message received from the House of Representatives intimating that it agreed with the resolution of the Senate that the Publications Committee or any sub-committee thereof, when conferring with a similar committee or subcommittee of the Senate, have power to move from place to place.

page 1650

JOINT COMMITTEE ON FOREIGN AFFAIRS AND DEFENCE

Message received for the House of Representatives intimating that it agreed with the resolution of the Senate relating to the granting of leave to the Joint Committee on Foreign Affairs and Defence and its sub-committees to meet for the remainder of the present period of sittings during sittings of either House of the Parliament.

page 1650

SUPPLY BILL (No. 1) 1977-78

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

First Reading

Motion (by Senator Withers) proposed:

That the Bill be now read a first time.

Debate (on motion by Senator Georges) adjourned.

page 1650

SUPPLY BILL (No. 2) 1977-78

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

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

The speech read as follows-

This Bill seeks interim appropriation for capital works and services, payments to or for the

States and certain other services totalling in all, approximately $745m, for the period 1 July 1977 to 30 November 1977. The effect of the Government’s continuing policy of expenditure restraint is reflected by the fact that this Bill seeks appropriations of some $73m or 9 per cent less than those in the Supply Act ( No. 2 ) 1 976-77. The Bill includes $l00m for the advance to the Treasurer- the same amount as was provided in last year’s Supply Act. As I emphasised when introducing Supply Bill (No. 1) 1977-78, the provisions in the Bill are not to be interpreted as in any way anticipating what amounts might be included in the 1977-78 Budget. I commend the Bill to honourable senators.

Debate (on motion by Senator Georges) adjourned.

page 1651

WOOL INDUSTRY AMENDMENT BILL 1977

Bill received from the House of Representatives.

Ordered that the BDI may be taken through all its stages without delay.

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

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans ‘ Affairs · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

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

The speech read as follows-

The object of this Bill is to amend the Wool Industry Act 1972 so as to extend the statutory accounting provisions in respect of the floor price scheme for wool to include the 1977-78 season. When the floor price scheme was introduced in September 1974, it was designed to operate for the 1974-75 season only. This was reflected in the associated financing and accounting provisions made in legislation at the time, which were restricted to operations in that season.

The Wool Tax Acts were amended to impose a special 5 per cent levy on sales of wool by growers in 1974-75. The levy was intended to provide a reserve for meeting any losses that might arise out of the floor price arrangement. Secondly, the Wool Industry Act was amended to provide for the establishment of the market support fund as a repository for the proceeds of the 5 per cent levy and also to lay down special accounting provisions for the reserve price operations. The subsequent decisions to continue the floor price scheme in 1975-76 and 1976-77 required the extension of the amendments to include those seasons.

Consequent upon the Government’s decision to extend the scheme to include the 1977-78 season, it is now necessary similarly to extend the coverage of the accounting provisions in the Wool Industry Act as well as to continue the special 5 per cent levy on wool sales for another year. The first of these actions is the purpose of this Bill, and involves merely an alteration of a specified termination date so as to include in the existing arrangements wool purchased by the Australian Wool Corporation under the floor price scheme up to 30 June 1978. The other legislative step required is amendment of the Wool Tax Acts to extend collection of the 5 per cent levy on wool sales during 1977-78. The extension of the floor price scheme and the associated accounting arrangements, and the continuation of the 5 per cent levy on wool sales have the approval of the Australian Wool Industry Conference.

The Government’s decision to guarantee the continuation of the floor price scheme during 1977-78, at a level not below that set for the current year, has been welcomed not only in Australia but also by the international wool industry as a means of providing security to wool growers and wool users in planning for wool production and wool usage, and thus fostering greater stability in the industry. The floor price arrangements of course are only part of the Government’s policy of assisting the wool industry. Honourable senators will be aware of the decision by the Government to authorise the Australian Wool Corporation to operate a limited scheme of direct purchases of wool from growers with the object of demonstrating new and improved methods of wool handling which provide much needed economies in the handling and distribution of wool. The scheme will operate initially on a trial basis in the 1 977-78 season.

The Government has also decided, in order to assist the strongest negotiating position on freight rates for Australian wool carried overseas, that authority will be provided for the Corporation to negotiate directly on overseas freight rates, subject to ratification by my colleague the Minister for Transport, and to set conditions for the carriage and handling of wool exported. The necesary legislation will be introduced during the Budget session. The Government will continue to contribute jointly with wool growers for wool research and promotion, and legislation will be brought down during the Budget session to provide for the Government’s contribution during 1977-78. I commend the Bill to honourable senators.

Debate (on motion by Senator Georges) adjourned.

page 1652

WOOL TAX LEGISLATION

Suspension of Standing Orders

Motion ( by Senator Durack) agreed to:

That so much of the Standing Orders be suspended as would prevent the questions with regard to the several stages of the passage through the Senate of the Wool Tax Amendment Bills (Nos 1 to 5) 1977 being put in the one motion at each stage and the consideration of such Bills together in the Committee of the Whole.

WOOL TAX AMENDMENT BILLS (Nos 1 to 5) 1977

Bills received from the House of Representatives.

Ordered that the Bills may be taken through all stages without delay.

Bills (on motion by Senator Durack) read a first time.

Second Reading

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

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

The speech read as follows-

These 5 Bills will amend the Wool Tax Acts (Nos 1 to 5)1964 so as to continue in force for another year the special levy of 5 per cent on the sale value of shorn wool which is collected in connection with the floor price scheme for wool. The levy was introduced at the inception of the scheme on 2 September 1974 to provide a fund for meeting any operating losses. Originally, both the scheme and the levy were to operate for one season only. Their operation was extended successively to the 1975-76 and 1976-77 seasons and the present statutory provisions for the payment of the levy expire on 30 June 1977.

As already announced, it is now proposed that the floor price scheme for wool be extended further to operate during the 1 977-78 season and that the levy of 5 per cent be similarly continued. If there is to be no interruption in the collection of the levy, the statutory provisions under which the levy is imposed must be amended before 30 June. Revenue from this levy is credited to the market support fund established by the Australian Wool Corporation. For administrative convenience the special levy of 5 per cent is collected in conjunction with the 3 per cent levy that represents wool grower contributions towards the financing of programs of wool research and promotion and the administration of the marketing functions of the Australian Wool Corporation. The present total levy of 8 per cent has been in force since August 1 975.

All the 5 Wool Tax Bills are similar in their text, which simply extends the operation of the special 5 per cent levy until 30 June 1 978. The Acts which they amend are also similar but each covers a different wool marketing channel. The need for 5 separate Acts arises from a constitutional requirement that laws imposing taxes should deal with one subject of taxation only. 1 commend the Bills.

Debate (on motion by Senator Georges) adjourned.

page 1652

STATES (PERSONAL INCOME TAX SHARING) AMENDMENT BILL 1977

Bill received from the House of Representatives.

Ordered that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

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

The speech read as follows-

The purpose of this Bill is to amend the Act to provide for periodic reviews of the per capita relativities between the States in their tax sharing entitlements under the States (Personal Income Tax Sharing) Act 1976. That Act provided for the first time that the States should receive a specified share of Commonwealth income tax collections. That arrangement is of course a central element in the Government’s federalism policy which is aimed at restoring a proper distribution of powers and responsibilities between the 3 spheres of government- Commonwealth, State and local.

The States (Personal Income Tax Sharing) Act 1976 provides for 33.6 per cent of net personal income tax collections to be shared between the States on a weighted per capita basis. A practical demonstration of the benefits to the States from Stage 1 of the Government’s federalism policy is their present financial position. New South Wales, Queensland, South Australia and Western Australia are running substantial surpluses while deficits in Victoria and Tasmania are very much lower than at the same time last year. For example, the revenue budget of New South Wales for the first 9 months of 1 976-77 showed a surplus of almost $ 1 1 1 m. State revenue budgets showed an aggregate surplus of $2 16.3 m over the latest available accounting period which is, in the case of New South Wales, Queensland and Victoria, up to the end of March, and for the other 3 States up to the end of April. It is relevant that these surpluses are being achieved in spite of the fact that no State government increased levels of Taxation in 1976-77 and, indeed, the majority of them made some quite substantial reductions in particular taxes.

The considerable increase in funds available to the States under the income tax sharing arrangements is, of course, an important factor in the States’ favourable financial positions. As I have mentioned, the legislation provides for sharing of net personal income tax collections on the basis of per capita weights, or relativities; these are set out in section 4 of the Act. They were derived from the 1975-76 financial assistance grants to each State divided by the estimates of the populations consistent with those used in deriving the grants.

The present Bill provides for the first time for the distribution between the States of the Commonwealth ‘s general revenue payments to them to be the subject of independent inquiry and report. At the Premiers’ Conferences in February, April and June 1976 which laid the foundations for implementing the federalism policy, it was decided that there would be a periodic review of relativities between all States; that advice in relation to this review would be sought from an independent review body; and that the first review would be made before the end of 1980-81.

Unresolved issues at the time the existing legislation was enacted were the questions of how the review body should be constituted and the guidelines under which it should operate. These matters were referred to Commonwealth and State officers for report and, on the basis of the officers’ report, were discussed again at the Premiers’ Conference in April. Some States had argued that the Grants Commission should not conduct the review. They argued, in particular, that the special grants now paid to claimant States after inquiry and recommendation by the Commission are, in effect, adjustments to interstate relativities, and that if the Grants Commission were also responsible for recommending on these relativities in the first place, a State seeking a special grant would in effect be appealing from Caesar to Caesar. We do not accept that proposition. The Commonwealth Government adheres to the view that the Grants Commission is the appropriate body. The review of relativities would be a natural extension of the work now undertaken by the Commission. The Commission has over a period of some 40 years developed a methodology for making the necessary interstate comparisons. It has the expertise and the standing to conduct the review- and this has not been challenged by any State. Another body would merely duplicate the work of the Commission and apart from anything else the Government will not support that kind of wasteful proposition. Moreover some of those arguing for an ‘appeals’ body ignore the fact that the Commission is not a judicial body but an advisory one and the Commonwealth Government has undertaken that the Commission’s advice on this matter will be discussed at a Premiers’ Conference before action is taken in relation to it. Accordingly, this Bill proposes that the Grants Commission shall be the body to inquire and report on the per capita relativities between States under Stage 1 of the income tax sharing arrangements.

The guidelines for the review, as set out in the Bill, are in broad general form as agreed at the April Premiers’ Conference. The Commonwealth Government perceived some advantages in more specific guidelines but in the spirit of federalism it has accepted the States’ view of this matter. The basic principle to be applied in the review is the equalisation principle in line with the approach developed and applied over the years by the Grants Commission in its inquiries and reports in relation to special grants to the States- that is, each State will be enabled to provide, without imposing taxes and charges at levels appreciably higher than those of other States, government services at standards not appreciably below the standards of other States.

I turn now to the major specific provisions of the Bill. Clause 3 of the Bill proposes the addition of several sub-sections to section 1 3 of the Act. Proposed sub-section 13(3) provides for the Minister to institute reviews from time to time.

There was in fact extensive discussion of the timing of the first review at the April Premiers’ Conference and general agreement that the review should commence shortly. It was recognised that the first review could take some time to complete. Accordingly, the Government would propose to issue an early reference under the new legislation once enacted. Sub-section 13 (3) in conjunction with proposed sub-section 13(6) defines the purpose of the review to be to determine whether any change is desirable in the figures set out in section 4 of the Act, that is, the per capita relativities.

Sub-section 13(1) would also provide for the Grants Commission to be the review body and sets out the basic equalisation principle referred to earlier. Proposed sub-section 13 (4) elaborates on that general principle. Proposed subsection 13 (5) requires the Commission to examine the factors set out in section 4, that is, the per capita relativities, and to inquire into and report whether any events have occurred since those factors were determined which in the opinon of the Commission affect the continued operation of those factors. Proposed sub-section 13 (7) provides that the review should be confined to services normally funded through the States’ revenue budgets. This is in accordance with long established Grants Commission practice. The proposals embodied in this Bill represent the completion of the Stage 1 machinery of the tax sharing arrangements. It is, therefore, an important and necessary step in the implementation of the Government’s federalism policy. I commend the Bill to the Senate.

Debate (on motion by Senator Georges) adjourned.

page 1654

INCOME TAX (RATES) AMENDMENT BILL 1977

Bill received from the House of Representatives.

Order that the Bill may be taken through all its stages without delay.

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

Second Reading

Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP

– I move:

I seek leave to have the second reading speech incorporated in Hansard.

The PRESIDENT:

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

The speech read as follows-

This Bill will amend the provisions of the income tax law that fix the amount by which personal income tax for 1977-78 is to be indexed. The amendments concern the effects on the consumer price index, and hence on personal tax indexation, of last year’s health insurance changes and the devaluation.

Under existing law, the personal income tax scale for 1977-78 is to be adjusted by a tax indexation factor derived from the increase in the average level of the consumer price index for the year ended 3 1 March 1977 over its average level in the preceding year. In announcing the Government’s decision on 20 May last year to index the personal income tax system the Treasurer (Mr Lynch) said, inter aiia, that:

In indexing the system each financial year we shall allow for price movements, other than those due to increases in the level of indirect taxes . . .

Accordingly, the law permits the making of a regulation fixing a smaller adjustment factor, so as to exclude the effect of indirect taxes on the consumer price index. The new funding arrangements for health insurance are similar in their intent to increases in indirect taxes on other goods and services. Although the Medibank levy seeks to have people pay more, and the Budget less, of the cost of their health care, the law as presently drafted does not permit this to be taken into account in determining the indexation factor. The Government now proposes that this situation be corrected.

Therefore, this Bill will require that in fixing the personal tax indexation factor, account is also to be taken of the effects on the consumer price index of the October 1976 changes in health insurance arrangements and the devaluation. In its submission to the recent national wage case the Government argued that devaluation effects on the consumer price index should be treated, for wage indexation purposes, in the same way as indirect tax increases in order to preserve the gains to the economy flowing from the changed exchange rate. The Conciliation and Arbitration Commission accepted that principle, and I quote from the judgment:

We should in these circumstances minimise as far as possible any action which would reduce the benefits conferred by devaluation on the competitiveness of the Australian economy . . .’

Consistent with that, this Bill will further provide that account be taken of the effects of devaluation on the consumer price index in determining the personal tax indexation factor. By amending the law in this way the Government is, in part, safeguarding the stimulus to activity, and the consequent employment effects, that devaluation is beginning to bring about.

I turn now to the basis of the calculation of the tax indexation factor in 1977-78. The average level of the unadjusted consumer price index was 1 3.6 per cent more in the year ended March 1977 than in the year ended March 1976, which are the relevant years for determining the indexation factor. Increases in excise duties in the 1975-76 Budget account for 0.7 of the 13.6 per cent, as they increased the index for only part of the first year, but the whole of the second year. After removing that effect, and the effects of the health care changes and devaluation, the personal tax indexation factor for 1977-78 is to be 10.9 per cent. The cost of the Commonwealth Budget next financial year of reducing personal income tax by this factor is estimated to be some $825m.

Personal tax indexation, applying for the second year on 1 July next, represents the most significant reform of the personal income tax system in our time, and certainly the most costly in terms of revenue forgone. Taxpayers in general will gain substantial benefits from the application of tax indexation next financial year: As from 1 July all taxpayers will have extra cash in their pay packets. For purposes of illustration I mention the gains from tax indexation next year for a taxpayer without dependants earning $10,000 per annum- around the level of average weekly earnings- and for a taxpayer with a dependant spouse on the same annual income level. The benefit to a taxpayer with an annual income of $10,000 with a dependent spouse will amount to some $188 in 1977-78, or $3.61 per week. The benefit to a taxpayer with the same annual income without dependants will amount to some $133 in 1977-78, or $2.55 per week. Mr President, I now seek leave to have incorporated in Hansard tables setting out tax payable in 1977-78 at selected levels of income and that demonstrate the very considerable savings to taxpayers resulting from indexation. Technical features of the measure are explained in a memorandum that is being circulated to honourable senators.

The PRESIDENT:

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

TAX PAYABLE IN 1977-78 AT SELECTED LEVELS OF INCOME WITH INDEXATION AND WITHOUT INDEXATION

Taxpayer Without Dependants

TAX PAYABLE IN 1977-78 AT SELECTED LEVELS OF INCOME WITH INDEXATION AND WITHOUT INDEXATION

TAX PAYABLE IN 1 977-78 AT SELECTED LEVELS OF INCOME WITH INDEXATION AND WITHOUT INDEXATION

Senator WITHERS:

-I commend the Bill to the Senate.

Debate (on motion by Senator Georges) adjourned.

page 1656

ADJOURNMENT

Torres Strait Islanders- Family Allowances-Public Service Staff Ceilings

Motion (by Senator Withers) proposed:

That the Senate be now adjourned.

Senator COLSTON:
Queensland

– In the Brisbane Telegraph of 24 November last year there was a report of an attack made by the Premier of Queensland on not only the current Federal Government but also the previous Federal Government. I would like to Quote part of that report which was headed ‘Sim islands lash by Joh ‘. It reads:

More than $1 million had been spent by federal governments in an attempt to swing Torres Strait islander support away from Queensland, the Premier, Mr Bjelke-Petersen, said today.

It had not worked and on top of that there was little to show for the investment.

It is time there was an investigation into the whole financial mess, ‘he said.

Mr BjelkePetersen said a cooperative headed by island representative Mr George Mye, who was based on Murray Island, had received $688,000 in federal money but had only three houses to show for it.

Another group, the Torres Strait Co-operative Ltd received just under $250,000 and also had little to show for it.

Mr Bjelke-Petersen said he was not surprised at allegations being made about Queensland under-mining attempts by the Federal Government to negotiate a new seabed line between Australia and Papua New Guinea.

The article then went on to make further comments. In one part Mr Bjelke-Petersen was reported as also attacking the Papua New Guinea

Foreign Affairs Minister. Following that article in the Telegraph I put a question on notice on 30 November last year. The question was No. 1467 and it read as follows:

Senator COLSTON: To ask the Minister representing the Minister for Aboriginal Affairs- Has the Minister’s attention been drawn to an article in the Brisbane Telegraph dated 24 November 1976, in which the Queensland Premier, Mr Bjelke-Petersen, is quoted as making severe criticisms of Commonwealth expenditure in the Torres Strait region since December 1972; if so, (a) has ‘more than $ l million been spent by Federal Government in an attempt to swing Torres Strait Islanders support away from Queensland’, as claimed by the Premier; (b) nas the Murray Island Co-operative built only 3 houses with $688,000 provided by the Commonwealth; if so. what are the details; (c) has the Torres Strait Co-operative Ltd ‘little to show’ for the $250,000 provided by the Commonwealth; if so, what are the details; (a) if any, or all, of the allegations made by the Queensland Premier are incorrect, what action does the Minister intend taking to ensure that the Queensland Premier desists from making allegations that are untrue and injurious to the aims of Commonwealth expenditure in the Torres Strait Islands; and (e) has the Queensland Premier made similar allegations in the past about Commonwealth expenditure in the Torres Strait Islands; if so, (i) what are the details, (ii) were the allegations in questions subsequently refuted in detail by the Australian Government, and (iii) does the Minister intend taking any further action concerning the Queensland Premier’s call for an investigation into Commonwealth expenditure in the Torres Strait Island.

As I did not receive an answer to that question I would not be surprised if the Government was hoping that the question would be lost off the notice paper after Parliament was prorogued. Nevertheless I replaced the question upon notice after Parliament was prorogued and subsequently re-opened. It became question No. 5 on the notice paper after I had placed it on notice on 8 March 1977. Question No. 5 is identical to the previous question that I placed on notice on 30 November. I have still not received a reply to that question after 6 months. I believe that 6 months is too long a period to have to wait for an answer to a question such as the one I have placed on the notice paper. I ask the Minister for Social Security (Senator Guilfoyle) who in the this chamber represents the Minister for Aboriginal Affairs whether it is possible for a reply to be given to my question before the rising of Parliament at the end of this session.

I think that my question is of special importance because Thursday Island will be celebrating its centenary from 16 to 23 July this year. The Queensland Premier has announced his intention to visit the Island during this period. If some of the allegations he made in November last year were incorrect I would hope that he does not make similar incorrect allegations when he is on Thursday Island for these celebrations. I would be grateful if I could receive a reply to my question, bearing in mind the length of time it has been on the notice paper.

Senator McLAREN:
South Australia

– I wish to raise a matter which I have been endeavouring to raise for the last 3 sitting days. Because I have not received the call at question time I have been impelled to raise the matter tonight during the adjournment debate. It revolves around something about which we have been talking in this Parliament for quite some time, namely, staff ceilings in the Commonwealth Employment Service and the Department of Social Security. As a result of staff ceilings and the absence of officers because of sickness or leave requirements replacements cannot be found for them- the work seems to be getting further and further behind. This is affecting people in the community who depend on the payment of unemployment benefit, in some cases on the payment of pensions and particularly on the payment of the family allowance.

I have had drawn to my attention the case of a woman living at Mount Gambier who had the necessary form forwarded to her during the school vacation this year when her eldest child turned 16 years of age. She filled in the necessary paper that was sent around to verify that her eldest child had not, in fact, left school and was still a student. She received the usual form for 16- year-olds questioning whether the child was still at school or working. This was completed and returned in January advising the Department that the child was at school. Up to the date of mailing of this letter to me last week that lady still had not received the family allowance for her eldest child. It was discontinued in January. Tomorrow is 1 June, which means that a period of nearly 6 months has elapsed. Here is a woman with 4 children still waiting to receive that family allowance which she had been receiving for her eldest child.

This situation can only be brought about because of the staff ceilings that this Government has imposed on the 2 departments of which I have spoken. Because of the staff ceilings a heavy workload is being imposed on the people who work in the departments. I do not intend to deliberate too long on this matter tonight because I think the Minister is well aware- I am pleased that she is in the chamber tonight- of the problems that are being experienced by many people in the community, not only the recipients of family allowance payments but also the recipients of other social service benefits. She is well aware of the problems that are being faced by her own staff because of this staff ceiling and she is well aware of the problems that are being experienced by the staff of the Commonwealth Employment Service.

At no stage am I laying any blame on the staff who work in these departments, nor am I laying any blame on the staff of the Mount Gambier office. I have had a very good relationship with the staff of the Mount Gambier office in any of the problems that I have had to bring to their attention. They have been most attentive to any queries that I have brought to them. But because of the heavy workload it would appear that this particular lady has had to wait at least 6 months before she can obtain the payment. No doubt she will receive it in time. It will be made retrospective. In the meantime she has to suffer the inconvenience of not being paid the family allowance for her oldest child. No doubt when one has a girl who is 16 years of age it costs a lot of money to provide that child with a uniform to go to school and other requisites for the child, which are not or cannot be provided for out of the weekly pay packet.

It is causing very great inconvenience to this lady. I hope that the Minister can do something in the very immediate future to overcome the problem that exists. As Senator Donald Cameron pointed out to me, this woman would not even be receiving a student allowance for this child whilst this matter is being held up. This is a very grave problem and I have no doubt that there are many hundreds of people in the same predicament. I hope that the Minister can say tonight that after all that has gone on in this Parliament in the last three or four weeks she can give some undertaking that staff ceilings will be lifted and that both her Department and the Commonwealth Employment Service will in the very near future be provided with extra staff to cope with the workload and so overcome this inconvenience that has been caused to many parents.

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

- Senator Colston raised a matter concerning a question on notice for which he has been awaiting an answer for several months. I recognise that he requires this information and expects to receive an answer before the end of this week. I will draw it to the attention of the Minister for Aboriginal Affairs (Mr Viner) to see whether an answer can be facilitated. I can understand Senator Colston’s interest in this matter, particularly with regard to the celebrations on Thursday Island.

Senator MsLaren raised a matter relating to my own Department and the difficulties and delays with regard to family allowances in Mount Gambier. I am able to say that today the interdepartmental committee which has been reviewing the staff ceilings in my Department has made a recommendation to the Acting Prime Minister (Mr Anthony) for an increase in staff. I am hoping that an early decision will be made on the Committee’s report and that the Department will be able to alleviate some of the difficulties that have occurred in recent weeks in departmental regional offices.

If the matter to which Senator McLaren referred specifically is given to my office I will see what can be done to facilitate a family allowance payment for the person mentioned in Mount Gambier. I mention in passing that the Department makes about 2 million family allowance payments and about 325 000 student endowment payments to families at either 4-weekly or quarterly intervals. This is a heavy load of family allowance cheques and payments. I do not use that as an argument to challenge the right of any person to have a cheque facilitated. I use it as a statistic to show the volume of work that is handled by the Department. However, as I have said, the staff ceilings that have been recommended by the interdepartmental committee will, I hope, enable the Department to have an early resolution of the difficulties and the work bans that have been imposed in several offices of my Department.

Question resolved in the affirmative.

Senate adjourned at 11.26 p.m.

page 1659

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Meat and Wool Marketing (Question No. 337)

Senator Sibraa:
NEW SOUTH WALES

asked the Minister representing the Minister for Primary Industry, upon notice, on 22 March 1977:

  1. 1 ) Is the Minister aware of widespread dissatisfaction that exists within the Australian rural community, particularly within the United Farmers and Woolgrowers’ Association, with the Government’s failure to proceed with substantial reforms in the areas of meat and wool marketing.
  2. ls the Minister further aware that the rural community is waiting on a definite statement from him on the Government’s attitude to the future of the Australian Meat Board.
  3. In view of this, will the Government consider expediting decisions on the matters raised.
Senator Cotton:
Minister for Industry and Commerce · NEW SOUTH WALES · LP

– The Minister for Primary Industry has provided the following answers to the honourable senator’s question:

  1. 1 sympathise with the views of many producers who are dissatisfied with the marketing of primary products, particularly livestock for slaughter. It is, however, very difficult to overcome many of the problems in the short-term.

I acknowledge that the present system of marketing livestock and meat has many inadequacies. I see a pressing need for a nationwide system of carcase classification and weight and grade selling and I am doing all I can to hasten the implementation of these. Funds have been provided by the Commonwealth and State Governments for commercial trials of the classification system developed by the Meat Board and these trials are already underway or will commence shortly at selected meatworks throughout Australia. Just as soon as the commercial feasibility of the system is established, I will be moving for its implementation on a nationwide scale.

The Government is aware of diverse requests from the rural community both for and against substantial reforms of present wool marketing methods.

The Government has undertaken measures to assist wool marketing by increasing substantially the floor price at wool auctions and guaranteeing continuation of the floor price throughout the 1977-78 season. It has continued large grants to assist wool research and promotion and recently authorised the Australian Wool Corporation to undertake a limited trial for direct purchases of wool from growers in order to demonstrate efficient cost-saving methods of handling and selling wool. The Government has also announced its decision to provide the Corporation with increased authority to negotiate overseas freight rates and to set conditions for the carriage of wool for export to assist in bringing about coordination and cost savings in wool transport and handling.

  1. 1 have made a statement on the Government’s attitude to the future of the Australian Meat Board. On 27 April I indicated that the Government had endorsed proposals submitted by me for an Australian Meat and Livestock Corporation to replace the present Australian Meat Board.
  2. The answers in ( 1 ) and (2) above cover the Government’s position on the matters raised.

Proserpine Airport (Question No. 396)

Senator Colston:

asked the Minister representing the Minister for Transport, upon notice, on 24 March 1977:

  1. 1 ) With reference to the upgrading of Proserpine Airport, what expenditure will be incurred by (a) Ansett Airlines of Australia, (b) the Commonwealth Government, (c) the Proserpine Shire Council, and (d) the Queensland Government.
  2. ) Will expenditure be incurred by any other body of persons not mentioned in ( 1 ). If so, what will be the amount of this expenditure.
  3. On what will the expenditure in (1) and (2) be incurred.
  4. Will the Proserpine Shire Council be reimbursed by the Commonwealth or any other body for any expenditure; if so, what are the details.
  5. How many flights have been made in and out of Proserpine Airport over the last five years by (a) Ansett Airlines of Australia, (b) subsidiaries of Ansett Airlines of Australia, (c) Trans Australia Airlines, and (d) any other airline.
  6. What has been the annual cost of maintaining Proserpine Airport for each financial year since the Commonwealth assumed responsibility for the Airport.
  7. What is the estimated annual cost of maintaining the Proserpine Airport following its extension.
  8. How are Commonwealth costs for Proserpine Airport to be recovered and what is the estimated annual recovery after the airport is extended.
Senator Carrick:
LP

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

  1. 1 ) Whilst Ansett Airlines of Australia is initially funding the project, the Proserpine Shire Council, as owner of the aerodrome, has requested that the cost of development (except terminal) of the aerodrome be accepted under the Local Ownership Plan. Their proposition is for the Commonwealth Government to contribute 50 per cent of the $ 1.81m development costs of runway, taxiway, apron, etc. works and 100 per cent of the installation of navigation aids and associated communication facilities- $0.2 1 m. In addition there is now a requirement for Air Traffic Control facilities the cost of which could be of the order of $0.22m.

No decision has yet been made by the Commonwealth Government on the level of funds, if any, to be provided. If the Commonwealth Government decides to contribute, then its share of the cost of runway, taxiway and apron works will be paid to the Proserpine Shire Council which will then reimburse Ansett Airlines.

The Queensland State Government has indicated that it will contribute 20 per cent of the cost of runway, taxiway and apron works provided that the Commonwealth contributes 50 per cent. Again this would be paid direct to the Proserpine Shire Council.

  1. Yes. TAA with Ansett Airlines of Australia will bc providing new terminal facilities at a cost of about $750,000.
  2. and (4) Details are included in ( 1 ) and (2) above.
  3. The annual airline aircraft movements (a landing or a takeoff) during the last five financial years were:
  1. Proserpine Airport is now and has always been owned by the Proserpine Shire Council. The Commonwealth however provides grants to the Council for 50 per cent of the maintenance costs. Grants paid over the last five years were:

1971-72- $3,926; 1 972-73-53,149; 1973-74-54,102;

1974-75- $3,667; 1975-76-$ 19,9 14 (including reseal of runway pavements)

  1. The total annual costs of maintenance after completion of the current developments are estimated at $70,000 for the aerodrome and $50,000 for the maintenance of airways facilities including navigation aids and Air Traffic Control facilities.
  2. No decision has yet been made as to Commonwealth financial participation in this project. If funds are subsequently provided, recovery would be by means of Air Navigation Charges levied on the users of the facilities.

Australian National Line (Question No. 400)

Senator Wriedt:

asked the Minister representing the Minister for Transport, upon notice, on 24 March 1977:

  1. 1 ) Is the annual report and financial statements of the Australian National Line prepared on the basis of traditional historical cost accounting or on an inflation accounting basis.
  2. Does the exchange rate adjustment loss of $401,596 for the year ended 30 June 1976 arise from losses as a result of trading operations, or from capital equipment procurement, or from loan raisings, or a combination of the three.
  3. 3 ) Were there any losses or profits arising from exchange rate adjustments for the six months ended 31 December 1976, which were not covered by forward exchange cover. If so, what was the value of those losses or profits.
  4. What is the value of the shares held in each of the companies represented by the amount of $76 1,551.
  5. 5 ) What is the current market value of those shares.
  6. Are all the shares fully paid; if not, what is the Line’s contingent liability for calls on the shares for each company.
  7. Was the increase of $130,000 in the value of investments between 30 June 1975 and 30 June 1976 represented by the purchase of shares in or outside Australia and what were the shares represented by that amount.
  8. 8 ) In the amounts for the year ended 30 June 1 976, what were the amounts for doubtful and bad debts.
  9. If no provision was made for doubtful and bad debts, does it mean that the Commission anticipates there will be no bad debts.
  10. 10) What has been the amount written off as had debts for each of the years from 30 June 1970.
  11. Which banks or financial institutions provided $44,971,055 of foreign currency loans to the Line and what security, if any, have the lenders taken.
  12. What are the maturity dates for each of the loans and in what currency is each loan repayable.
  13. Are all or pan of these loans covered by forward exchange cover; if not, what amounts were not ‘at risk’ as at 30 June 1 976 and 3 1 December 1 976.
Senator Carrick:
LP

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

  1. 1 ) The financial statements of the Australian National Line are prepared on a traditional historical cost accounting basis.
  2. The exchange adjustments amounting to $401,596 shown in the accounts for the year ended 30 June 1976 arise from losses of a capital nature.
  3. 3 ) During period ended 3 1 December 1 976 losses arising from exchange rate variations taken to account totalled $651,088. This is the variation relating to loan repayments made during this period.
  4. The shares in companies totalling $761,551 are made up as follows-
  1. The shares detailed in part 4 above represent investments in unlisted companies and therefore a current market value cannot be readily quoted.
  2. All the shares listed in part 4 above are fully paid shares and no contingency exists with respect to uncalled capital.
  3. The increase of $130,000 represented the purchase of 130 000 additional one dollar shares in PAD Shipping Australia Pty Ltd.
  4. No amount was provided in the accounts for the year ended 30 June 1 976 for bad or doubtful debts.
  5. A thorough review of all amounts owing to the Line was made and as a result of this review it was considered unnecessary to provide in that years accounts for any bad or doubtful debts.
  6. 10) No amounts have been written off to bad debts from 30 June1970.
  7. The amount of $44,97 1 , 055 of foreign currency loans provided to the Line repayable after twelve months from 30 June 1976 represents both on lent overseas borrowings by Treasury and various balances due under trade credit and shipbuilding finance provided by various suppliers of goods and shipbuilders. The identity of the lenders is of a commercial confidential nature and will be made available to the honourable senator on a confidential basis for his personal information. Securities given to the lenders have been in the form of Treasury or Bank Guarantees in cases other than on lent overseas Treasury borrowings.
  8. 12) Maturity dates and currency of repayment as follows:
  1. 1 3 ) No loans are covered by forward exchange cover and therefore were at risk at both the 30 June and 3 1 December 1976. It should however, be noted that the Line has substantial earnings in foreign currency and it is the policy of the Line to endeavour to internally balance currency risks.

Note

  1. repayable in half yearly instalments
  2. repayable in monthly instalments.

Health Services (Question No. 486)

Senator Colston:

asked the Minister representing the Minister for Health, upon notice, on 20 April 1977:

With respect to the Minister’s press release dated 27 March 1 977, entitled ‘ Health Program Grants for Evaluative Research and Development’, why was it necessary to establish an advisory committee within the Department of Health to ‘look for ways of getting better value for the nation’s increasing health expenditure’ when the Senate Standing Committee on Social Welfare is currently conducting an evaluation of the adequacy of Australian health and welfare services.

Senator Guilfoyle:
LP

-The Minister for Health has provided the following answer to the honourable senator’s question:

The extension to the health program grants, which I announced in my press release of 2 7 March 1977, is intended to provide finance for projects directed towards the development and evaluation of new, improved forms of health care, quality assurance methods and cost containment systems in health services. The Advisory Committee referred to was established to develop administrative arrangements for assessing pilot or demonstration projects submitted for funding through the new Health Program Grants arrangements. The Hospitals and Health Services Commission will have the responsibility for recommending to the Department of Health whether projects submitted for funding should be approved and a Research and Evaluation Working Party of the Commission has been established which will take over the functions of the Advisory Committee. The Working Party comprises representatives of the Commission, Department of Health, Hospital and Allied Services Advisory Council and the National Health and Medical Research Council. The Working Party will also monitor the progress of approved projects.

Active encouragement is being given to the development of project proposals that have potential for demonstrating increased effectiveness, efficiency and quality in the delivery of health services, as well as the containment of inexorably rising health costs. The outcome of such demonstration projects will be assessed by the Working Party and discussed with State and other health authorities, with a view to determining the suitability for wider implementation.

From my interpretation of the terms of reference of the inquiry of the Senate Standing Committee on Social Welfare, I believe the Committee will primarily be concerned with standards of performance, pattern of current practice, mechanisms for evaluation and requirements for ongoing evaluation, the purpose generally being to ensure that the latter are made an integral part of health and welfare programs. On the other nana, the Working Party will be evaluating in detail individual demonstration projects aimed at cost containment and efficiency. I therefore see the activities of this Working Party being complementary to those of the Senate Standing Committee on Social Welfare without duplication of purpose or function.

Cite as: Australia, Senate, Debates, 30 May 1977, viewed 22 October 2017, <http://historichansard.net/senate/1977/19770530_senate_30_s73/>.

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