Senate
24 August 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.

page 439

PETITIONS

Rhodesia

Senator WOOD:
QUEENSLAND

– I present the following petition from 24 citizens of Australia:

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

That the Charter of the United Nations clearly precludes it from interference in the domestic affairs of a country or from obstructing the free transmission of news and information between individuals and between nations.

That the United Nations, in apparent illegality, has imposed many restrictions and sanctions upon Rhodesia which has been remarkably free from the bloodshed and turmoil of Northern and Central African lands, even to the extent now of actively encouraging armed conflict against the legally elected Government of Rhodesia.

Lord Graham as Minister of External Affairs and Defence has said: ‘International communism is our enemy, all this talk of political advancement and the majority rule is no more than a smokescreen in the early skirmishes of an assault upon the whole of Africa . . . It is even difficult to see this enemy because it is not merely attacking us, but on a broad front is attacking the whole world order, its standards, its law and order, its moralities, its churches, its patriotisms, its philosophies and even much of its learning. . . .’

That communist Chinese infiltration in much of Africa over many years and Cuban communist troops reported to number 25,000 are dominating nearby Angola, and possess modern missiles, etc.

It is urgent that Mozambique, now under communist domination and which has a common border with Rhodesia, does not receive any further aid from the Commonwealth Government of Australia, which has benefited mainly, the terrorist guerilla movements that are responsible for the deaths of many Rhodesian people.

It is urgent for the Australian people to determine for themselves the actual facts of the Rhodesian struggles.

It is urgent that the Senate and the House of Representatives in the Parliament assembled, will observe natural justice and proper humanity by inviting only authorised representatives of the present Rhodesian Parliament to Australia, to do what they have been deprived of doing previously, present their case fully and publicly so that this can be examined and tested, without interference, and so that the eventual impact on Australia ‘s own security and defence alliances can be gauged with better accuracy.

Your petitioners request urgent action to be taken immediately.

And your petitioners as in duty bound will ever pray.

Petition received.

Private Nursing Homes Subsidies

Senator GIETZELT:
NEW SOUTH WALES

– I present the following petition from 40 citizens of Australia:

To the Honourable the President and Members of the Senate assembled, the petition of the undersigned citizens of Australia respectfully showeth:

That many pensioners who are holders of the Pensioners Health Benefit Card, have suffered undue hardship as inmates of Private Nursing Homes, because the Federal Government subsidy was insufficient to meet the charges as laid down.

Many pensioners whose spouse was an inmate of the Private N ursing Homes suffered poverty in an endeavour to sustain their partner while in the nursing home.

Only in rare cases was the statutory minimum patient contribution as laid down adhered to.

That the telephone was a matter of life and death to many pensioners, but because of the cost of installation of the telephone many are unable to alford the installation.

That those pensioners who have only their pension and very little else to live on and are forced to pay high rents, are in many cases living in extreme poverty.

The foregoing facts impel your petitioners to ask the Australian Government as a matter of urgency to-

Make sure that subsidies paid to Private Nursing Homes are such that each pensioner holding a Pensioners Health Benefit Card will pay the Private Nursing Home no more than the statutory minimum patient contribution, which will allow six dollars per week to be retained by the pensioner patient for their personal use.

That a pensioner holding a Pensioner Health Benefit Card shall have a telephone installed free of charge, or at a very nominal charge.

That those pensioners who have only their pension and very little else to live on, shall receive a subsidy to assist them. The subsidy to be governed by a Means Test.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Pensions

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

-On behalf of my colleague, Senator Wheeldon, I present the following petition from 90 citizens of Australia:

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 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 a 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.

Petition received and read.

Kallangur West Post Office

Senator COLSTON:
QUEENSLAND

-I present the following petition from 203 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled. We, the undersigned citizens of the Commonwealth of Australia by this our humble petition respectfully showeth:

That the proposed closure of Kallangur West Post Office on the completion of a new Post Office at Kallangur will not be in the best interests of the residents of Kallangur West and North Petrie.

That the closure would bring about considerable inconvenience to residents, particularly to the aged who would be forced to travel either to Kallangur or Petrie.

That there is a community need for the continued operation of the Kallangur West Post Office.

Your petitioners therefore humbly pray that the Kallangur West Post Office remain operating after the completion of the new Post Office at Kallangur.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Telephone Charges

Senator LEWIS:
VICTORIA

– I present the following petition from 2,286 citizens of Australia:

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

. Telephone users outside major metropolitan telephone districts, particularly those conducting businesses outside those districts, suffer an unfair burden for fees charged for calls.

The system of charging fees for calls based on the distance between non-adjoining zones instead of for the time of the call is archaic and unreasonable.

Your petitioners most humbly pray that the Senate, in Parliament assembled, should require Telecom Australia to standardise all telephone fees for calls on a time basis so that the fee for calls of equal time be the same throughout Australia.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Tertiary Education Assistance

Senator SIBRAA:
NEW SOUTH WALES

– I present the following petition from 3 1 citizens of Australia:

To the Honourable President and members of the Senate in Parliament assembled. The petition of the undersigned students, parents, teachers and citizens of Australia respectfully showeth:

That the decision of the Government to withdraw all forms of financial assistance to students of non-State tertiary institutions in the main, business colleges, is in total conflict with stated Government education policy.

The decision will result in a shortage of places for training secretarial and clerical students and an inordinate demand upon the State Government technical education systems.

At a time of severe economic disruption, this action must lead to an unnecessary worsening of the current employment situation for school leavers.

Your petitioners, therefore, humbly pray that the Commonwealth Government will act immediately to reverse its decision.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Estate Duty

Senator SIBRAA:

– I present the following petition from 10 citizens of Australia:

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

That where whole or part of a deceased estate passes to the surviving spouse it should be free from federal estate duty.

And your petitioners as in duty bound will ever pray.

Petition received and read.

The Clerk:

– Petitions have been lodged for presentation as follows:

Rhodesia

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

That the Chaner of the United Nations clearly precludes it from interference in the domestic affairs of a country or from obstructing the free transmission of news and information between individuals and between nations.

That the United Nations, in apparent illegality, has imposed many restrictions and sanctions upon Rhodesia which has been remarkably free from the bloodshed and turmoil of Northern and Central African lands, even to the extent now of actively encouraging armed conflict against the legally elected Government of Rhodesia.

Lord Graham as Minister of External Affairs and Defence has said: ‘International Communism is our enemy, ail this talk of political advancement and majority rule is no more than a smokescreen in the early skirmishes of an assault upon the whole of Africa . . . It is even difficult to see this enemy because it is not merely attacking us, but on a broad front is attacking the whole world order, its standards, its law and order, its moralities, its churches, its patriotisms, its philosophies and even much of its learning . . .’

That Communist Chinese infiltration in much of Africa over many years and Cuban Communist troops reported to number 25,000 are dominating nearby Angola, and possess modern missiles et cetera. lt is urgent that Mozambique, now under Communist domination and which has a common border with Rhodesia, does not receive any further aid from the Commonwealth Government of Australia, which has benefited mainly, the terrorist guerilla movements that are responsible for the deaths of many Rhodesian people.

It is urgent for the Australian people to determine for themselves the actual facts of the Rhodesian struggles.

It is urgent that the Senate and the House of Representatives in the Parliament assembled, will observe natural justice and proper humanity by inviting only authorised representatives of the present Rhodesian Parliament to Australia, to do what they have been deprived of doing previously, present their case fully and publicly so that this can be examined and tested, without interference, and so that the eventual impact on Australia’s own security and defence alliances can be gauged with better accuracy.

Your petitioners request urgent action to be taken immediately.

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

Petition received.

Petrol Price Equalisation Scheme

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

That the Commonwealth Government restore the Petrol Price Equalisation Scheme immediately for the benefit of those people who live away from the seaboard.

Your petitioners believe that the matter is urgent.

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

Petition received.

Red Army Choir

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 although artistically the Red Army Choir may be a great choir, it is nonetheless a propaganda unit of the Red Army, the army which is the instrument of the Communist dictatorship, bent on world domination along with the destruction of the Christian faith.

Your petitioners humbly pray that entry into Australia shall be denied to the Red Army Choir.

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

Petition received.

Red Army Choir

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 the Red Army Choir is a military propaganda unit glorifying the Soviet regime which is still hostile to the democratic way of life. The Red Army is the main instrument in keeping formally free people under subjugation, and its presence enables blatant violations of human rights to be perpetrated. The support, therefore, of such instruments of a totalitarian regime can only harm the development of free and liberal thought under it.

Your petitioners humbly pray that the Australian Government asserts its support for the aspirations of subjugated people by denying entry into this country to the Red Army Choir.

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

Petition received.

Education

To the Honourable President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of the Central Coast, New SouthWales, respectfully shows that:

The Central Coast Parents and Citizens’ Associations condemns the action of the Federal Government in issuing guidelines which effectively cutback funds to Government schools whilst increasing funds to private schools, in particular a few wealthy independent schools.

That we do not want education to revert to being used for political gain.

We call upon the Federal Government to make urgent financial assistance to education throughout Australia.

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

Petition received.

Tertiary Education Assistance

To the President and Members of the Senate assembled. The humble petition of the undersigned students of Australia respectfully showeth:

That the decision by the Government to withdraw all forms of financial assistance to students of non-State tertiary institutions is in total conflict with stated Government education policy.

The decision will result in a shortage of places for training secretarial and clerical students and an inordinate demand upon the State Government education systems.

At a time of severe economic disruption, this action must lead to a serious worsening of the current employment situation, particularly for school leavers.

Your petitioners, therefore, humbly pray that the Federal Government will act immediately to reverse its decision.

And your petitioners as in duty bound will ever pray. by Senator Tehan and Senator Missen.

Petitions received.

Nursing Homes Subsidies

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

That many pensioners who are holders of the Pensioners Health Benefit Card have suffered undue hardship as inmates of private nursing homes because the Federal Government subsidy was insufficient to meet the charges as laid down.

Many pensioners whose spouse was an inmate of the private nursing homes suffered poverty in an endeavour to sustain their partner while in the nursing home.

Only in rare cases was the statutory minimum patient contribution as laid down adhered to.

That the telephone was a matter of life and death to many pensioners, but because of the cost of installation of the telephone many are unable to afford the installation.

That those pensioners who have only their pension and very little else to live on and are forced to pay high rents, are in many cases living in extreme poverty.

The foregoing facts impel your petitioners to ask the Australian Government as a matter of urgency to:

  1. Make sure that subsidies paid to private nursing homes are such that each pensioner holding a Pensioner Health Benefit Card will pay the private nursing home no more than the statutory minimum patient contribution, which will allow six dollars per week to be retained by the pensioner patient for their personal use.
  2. That a pensioner holding a Pensioner Health Benefit Card shall have a telephone installed free of charge, or at a very nominal charge.
  3. That those pensioners who have only their pension and very little else to live on, shall receive a subsidy to assist them, the subsidy to be governed by a means test.

And your petitioners as in duty bound will ever pray. by Senator Sibraa and Senator Baume (two petitions).

Petitions received.

page 442

QUESTION

QUESTIONS WITHOUT NOTICE

page 442

QUESTION

TAX INDEXATION

Senator WRIEDT:
TASMANIA

-I ask the Minister representing the Treasurer: Is it correct that the Government introduced a system of full tax indexation to operate from 1 July 1976? Did the Government vary the system of tax indexation from 1 July 1977 and effectively water it down to 80 per cent indexation? Does the Government now propose that in 1978-79 there will be only half indexation? Is the Government committed to full indexation, 80 per cent indexation, 50 per cent indexation or some other form of indexation?

Senator COTTON:
Minister for Industry and Commerce · NEW SOUTH WALES · LP

-From time to time I have clearly provided the information by reading out advice from the Treasurer as to the Government’s intention. I think that attempts to confuse the scene further add nothing to the process of helping Australia’s economic recovery. I will once again check with the Treasurer and see that the honourable senator gets any further details that may be available.

Senator WRIEDT:

- Mr President, I wish to ask a supplementary question. I think it is fairly obvious that the Opposition is seeking clarification so that there will not be confusion. But if the Minister himself is convinced that there is confusion on the Government side, when he does refer the earlier question to the Treasurer perhaps he could also ask him whether the examples on page 19 of the prepared Budget Speech which allege to show the tax reductions afforded to persons at various income levels are based on one of those four systems of indexation.

Senator COTTON:

-Yes, I will certainly ask the Treasurer.

page 442

QUESTION

SENATE SELECT COMMITTEE ON ABORIGINES AND TORRES STRAIT ISLANDERS

Senator BONNER:
QUEENSLAND

– I preface my question, which is directed to the Minister for Social Security, by referring to remarks made in this chamber last Wednesday night by Senator Cavanagh when he stated that he had been on a number of committees and that no one took any notice of their reports and recommendations. He cited as an example the Senate Select Committee on Aborigines and Torres Strait Islanders. Can the Minister inform the Senate how many of the 97 recommendations of that Committee have been accepted by the Government? Further, can the Minister inform the Senate how many of those recommendation are currently being acted upon by the Government?

Senator GUILFOYLE:
Minister for Social Security · VICTORIA · LP

-I am unable to supply the information in any detail. I do recall that on the last day of sitting in the last session I tabled a report from the Minister for Aboriginal Affairs, Mr Viner, which was his response to the Senate committee on Aboriginal matters. I believe that the record of his response is available to members of the Senate, but I will obtain from him the specific details as to how many of the 97 recommendations he has been able to act upon and what is the status of the other recommendations which are under consideration.

page 442

QUESTION

TAXATION PROPOSALS

Senator GIETZELT:

– My question is directed to the Minister representing the Treasurer. Is it not a fact that on a number of occasions since the Budget was brought down the Prime Minister and the Treasurer have made assertions dealing with the amount of revenue which the Government will forgo in 1978-79? In a statement put down by the Minister last night in answer to a question from Senator Wriedt, the Minister once again asserted that the reforms will reduce the 1978-79 revenue by $l,857m. I ask: As the Government is so precise in its estimate of the revenue to be forgone in 1978-79, will the Minister provide to the Senate the assumptions upon which the figure is based and, in particular, the levels of employment, the levels of real wages and the rate of inflation?

Senator COTTON:
LP

– The honourable senator has asked me to obtain from the Treasurer the various assumptions on which those calculations are based. I will ask the Treasurer for that information, but whether he will provide it is another matter. I will do what I can to help the honourable senator.

page 442

QUESTION

STUART HIGHWAY

Senator JESSOP:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Minister for Transport. I refer to the industrial plight of South Australia under the Dunstan Government and to the failure of that Government to recognise the importance of constructing a road to assist in developing the potential of the northern part of the State beyond Port Augusta. Is the Minister aware that the State Minister, Mr Virgo, has not included the Stuart Highway in the.program for national roads in South Australia? Is the Minister also aware that this road has claimed many lives, due to its poor conditions, and that within the last two weeks seven deaths have occurred? As this road is the only remaining national highway to be constructed in South Australia and would make a major contribution to the development of the north as well as a restoration of business and tourism between South Australia and the Northern Territory, does the Federal Government believe that this highway should be given a high priority?

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

– The more the Opposition senators protest, the more they reveal that they have something to hide at the Dunstan Government level.

Senator Bishop:

– Did not Senator Jessop ask you for money?

Senator Gietzelt:

– It is a national highway.

Senator CARRICK:

– The Opposition senators can always be relied on to support their own case in that regard. It is true that the South Australian Dunstan Labor Government has failed to include funds for the Stuart Highway in its present Budget. It is equally true -

Senator Cavanagh:

– It is true because you will not give the State the money. It is a national highway.

The PRESIDENT:

– Order! The Minister is replying to the question.

Senator CARRICK:

- Mr President, the Opposition senators do my work for me so superlatively, why should I try myself? Their protesting only shows their culpability. The fact is, as I am advised, that the Federal Minister for Transport, Mr Nixon, has contacted Mr Virgo and has expressed the disappointment of the Federal Government at the failure of the South Australian Government to include these road works in the current program. The Federal Government has asked that this matter be reconsidered. Senator Jessop asked specifically whether I am aware that the road is in poor condition. I am aware of that. I am aware that the poor condition of the road has caused casualties. I am aware that the road is a main artery and is vital for commerce and industry. I am aware also that Mr Nixon has asked that the gravel section of the road which constitutes the link with Woomera be repaired. Of course, a final decision still has to be made as to the particular link with the north. It is true that it is very disappointing to the Federal Government that this work is not included in the South Australian Budget. It is important to the whole concept of the Northern Territory and South Australia. One hopes that the Dunstan Government will have second thoughts.

page 443

QUESTION

AUSTRALIAN ECONOMY

Senator COLEMAN:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Treasurer. Is it true that in its most recent decision, the Conciliation and Arbitration Commission found that there had been some decline in real wages since May and June of last year? Is it also true that the Commission rejected the Government’s submission that profits must go up and wages must come down on the grounds that the evidence showed that both had moved in that direction but had led to no recovery? Is the Government concerned that a body of the authority of the Arbitration Commission is persistently rejecting its submissions on the grounds that there is almost no evidence to support the Government’s case? Will the Government concede that at the very least there must be some possibility that the economic policies is it pursuing are misguided?

Senator COTTON:
LP

– That is a very long question. One cannot remember all the details. I read the Conciliation and Arbitration Commission’s statement, some of which I found interesting and some of which I did not agree with. The Arbitration Commission is constituted in its position to do a particular job, which it is entitled to do. It is entitled to make comment. The honourable senator is entitled to make comment. I believe some of the observations are quite wrong. What sufficient regard has not been given to is the tremendous wage expansion in Australia in 1973 and 1974. If the honourable senator looks at the figures, and they are available, she will see that tremendous expansion which produced a great part of Australia’s cost problem and unemployment problem. What has been happening over the past 12 or 18 months has been a decline in the rate of wage expansion, but it is still high. There is still a fair amount to recover to get back into any system that could produce what might be called reasonable equality. There has been an expansion in the rate of company profitability from a very low level, but it is not at the level that would be regarded as normal or capable of sustaining a great program of re-employment and a great program of investment. It is equally not true to say that there is no economic recovery. The trend is quite clearly discernible in the statistics.

page 443

QUESTION

THE ANTARCTIC

Senator THOMAS:
WESTERN AUSTRALIA · LP

– Will the Minister for Science comment on recent speculation that our claim to our territory in the Antarctic may not be recognised by other countries unless we increase the level of scientific and exploratory effort in that area?

Senator WEBSTER:
Minister for Science · VICTORIA · NCP/NP

-Australia’s title in Antarctica is the outcome of acts of discovery and exploration by British and Australian explorers. In the periods from 1908 to 1912 and from 1929 to 1931 specific proclamations of title on behalf of the British crown were made at various points -

Senator Georges:

- Mr President, I rise on a point of order. The Minister intends to make a statement on the Antarctic after Question Time. What he is doing now is pre-empting his own statement. I would have thought that he should take advantage of his opportunity to make a statement later and leave Question Time for the rest of the senators.

The PRESIDENT:

– There is no point of order in what you raise, Senator Georges.

Senator WEBSTER:

– I was asked quite an important question relating to the type of scientific work and the additional work we are doing in the Territory.

Senator Georges:

– Is it in the statement?

Senator WEBSTER:

-Senator Georges will have an opportunity when I put down a statement later.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– We might not give you leave if you go on like this.

Senator WEBSTER:

-We will see what your interest may be. I respond to Senator Thomas’s question. Australian activity in the Australian Antarctic Territory is an essential element in occupation of the area and to the exercise of Australia’s sovereign rights in that area. While the principal region of activity is the coast, under these circumstances this is a specific occupation of the landward area. In an area which is as uninhabitable and as little traversed as Antarctica the main activity in the AAT is directed towards scientific studies in the area. Such activity is in accord with the spirit of the Antarctic treaty, which seeks to avoid international discord, and fosters co-operation in scientific activity. The scientific program is directed towards two broad areas- gaining an understanding of Antarctica itself and the relationship between it and the global environment.

Senator Keeffe:

- Mr President, I raise a point of order. The Minister is obviously reading from a very long and previously prepared brief. I think it is quite inconsistent with the asking of questions without notice for a Minister to come in and to give that sort of reply. I ask you, Mr President, to look at that aspect.

The PRESIDENT:

– I ask the Minister to continue his reply in the manner in which he desires.

Senator WEBSTER:

-Thank you, Mr President. The scientific program covers a wide range of disciplines including glaciology, upper atmosphere physics and meteorology, which are directed towards understanding the effects of the ice cap, the sea ice and the sun on world weather and on climate changes. Australia enjoys a respected position amongst Antarctic nations due in a large measure to the quality of our own scientists and our scientific work. Australian research in the field of biology and studies of the upper atmosphere is of world standing. Our glaciology research is acknowledged as amongst the most significant in this field.

The Government’s recent decision- upon which I will be putting down a statement at the end of Question Time- is to increase Australia’s activity in Antarctica and is prompted by two factors- the need to ensure the continuation of expeditions by replacing equipment, buildings and transport facilities as existing facilities deteriorate and in view of the increasing interest in exploiting the resources of Antarctica; to ensure that Australia is in a position to participate in the formulation of adequate guidelines for protecting the environment if and when exploitation occurs. In reply to Senator Thomas, the extensions to the scientific program are directed at increasing our understanding of the marine environment off the AAT. It is towards the marine resources of Antarctica that the greatest amount of interest is presently being directed world wide.

page 444

QUESTION

QUESTIONS CONCERNING THE BUDGET

Senator WRIEDT:

– My question is directed to the Minister for Industry and Commerce but, after all that, I would prefer it to be to Senator Webster. That will keep. I refer to the answer that the Minister for Industry and Commerce gave me yesterday during which he purported to give answers to a range of questions asked of him by various honourable senators. Was the document which he read to the Senate prepared by the Department of the Treasury or by staff in the Treasurer’s office? If it was the former- that is, the Department- does this now mean that all questions on the Budget will be answered by people who have no responsibility to this Parliament and who are not necessarily privy to Government decisions? Does it leave the Senate in the position that no honourable senator is able to get an answer in this chamber from the Minister responsible?

Senator COTTON:
LP

– The information given to the Senate by myself on behalf of the Treasurer last night was prepared and supplied to me by the Treasurer’s office. The Treasurer naturally consults with the Taxation Office and officers of the Treasury. That is how the information comes to me. When I am asked questions, I endeavour to get effective answers by using that method.

page 445

QUESTION

COMMONWEALTH LITERARY GRANTS

Senator BAUME:
NEW SOUTH WALES

– Has the Leader of the Government in the Senate yet been able to examine the article entitled ‘After I Shot Arthur Calwell’ which appeared in Quadrant and to which Senator Mulvihill made rather uncomplimentary reference on 19 August? Does the article in fact fully acknowledge, to quote the author’s words ‘the dreadful violence’ done by him to Mr Arthur Calwell in 1 966? Is it a fact that it does not, as alleged by Senator Mulvihill, glorify political assassination? Does the article in fact give a useful insight into the life and mind of the man for whom Mr Calwell helped to build a new life? Is its publication consistent with the social responsibility of the magazine Quadrant’) Can the Minister say whether the objectives of the honourable senator who originally raised the question might have related to the fact that Quadrant is a major Australian cultural journal not yet in the hands of the left?

Senator Mulvihill:

– It is DLP controlled.

Senator WITHERS:
Minister for Administrative Services · WESTERN AUSTRALIA · LP

-I think Senator Mulvihill answered the question when he said by way of interjection ‘It is DLP controlled’, as if because the Australian Democratic Labor Party controls something it is wicked. That is evidently the sort of syllogism he goes on with. After Senator Mulvihill raised the matter with me last Friday I obtained a copy of Quadrant. I had informed him that afternoon that I would read it going home in the aeroplane that night.

Senator Georges:

– Did you read it?

Senator WITHERS:

-I did read it. After all, I am only a provincial illiterate, as some of your colleagues would have me known. To the best of my limited understanding, on one of the rare occasions that I read anything, I must agree with Senator Baume ‘s statement. I found the article a most interesting one both as to the problems which the man concerned was suffering prior to his attempted assassination of Mr Calwell and certainly as to the sort of reaction which he described of how he felt afterwards. I do not think he was attempting to glorify his actions at all. I also found more than interesting the way he wrote of his experiences both while on remand and during the short period of his trial, and especially his experience in what I suppose one would call a psychiatric prison or whatever the place was. I gather it is the first of two articles. I am not quite certain of that. If it is the first of two articles I certainly look forward to reading the second. I suppose the whole burden of the question is this: Is Quadrant the only respectable magazine of quality in this country which is not in the control of the Left? That was certainly answered by Senator Mulvihill ‘s interjection.

page 445

QUESTION

EFFECTS OF OIL PRICE INCREASES ON THE CONSUMER PRICE INDEX

Senator GEORGES:

– I direct a question in simple terms to the Minister representing the Treasurer. Has the Government made a decision to argue before the Conciliation and Arbitration Commission that the increases in the consumer price index due to oil price increases be deleted from any wage determinations? If so, does the Minister agree that such a decision is of fundamental importance to all consumers and that they should be informed of it?

Senator COTTON:
LP

– In response to that simple question I give a simple answer: I shall find out.

Senator GEORGES:

– If the Minister representing the Treasurer intends to find out that information, could I ask him a supplementary question? In view of the fundamental importance of this question to all Australian consumers, I ask him to explain why this notion is contained at page 36 of the statements attached to Budget Paper No. 1. For his informaton I repeat what is in that statement which was presented on 16 August 1977:

This year’s May decision of the Arbitration Commission recognised the serious consequences that would flow from compensating wage earners for devaluation-induced price increases. As noted above, similar consequences would flow from full compensation for the results of oil price increases.

Since that is in a statement incorporated as part of the Budget Papers, can he agree with me when I say that it is of fundamental importance to the consumers to know whether the Government has agreed to this proposition?

Senator COTTON:

– There are 29 pages in the Budget Speech and 1 84 pages in the statements attached to that Speech. The honourable senator may be surprised to learn that I do not carry all the details in my head. I will do what I said earlier. I will direct his question, his supplementary question and further ones that follow it to the Treasurer, where they belong.

page 446

QUESTION

FINANCE: SOUTH AUSTRALIAN GOVERNMENT

Senator MESSNER:
SOUTH AUSTRALIA

-Has the Minister Assisting the Prime Minister in Federal Affairs seen a public statement by the Premier of South Australia claiming a decrease of $9m in Commonwealth funds for South Australian Government works and housing? Is it a fact that actual revenue and loan funds for South Australia this year increased by $122m? Is this another example of the sort of cheap politicking in which the Government of South Australia has been involved since the Fraser Government’s new federalism policy was announced?

Senator CARRICK:
LP

-I have not seen Mr Dunstan ‘s statement, but it is clear that all the arguments of poor mouth have collapsed around Mr Dunstan and others because of the fact that last year all State governments, including the Dunstan State Government, managed to balance their budgets after cutting taxes. In other words, it must be clear to every taxpayer in Australia that the Dunstan Government had it within its power to carry out certain extra or additional policies and decided not to do so; it decided to forgo revenue. So, the very finality of that Budget last year proved that all its arguments that it was short of money were wrong. It had a surplus of money that it could give back. Let me make that background quite clear: It gave back surplus money which it could have spent.

The fact is that this year the six States will receive $4,336m from the Commonwealth by way of revenue sharing. That is an increase of something over 17 per cent on last year’s figure. With inflation running at about 10 per cent and falling, it is clearly a substantial and significant real money increase. If the Dunstan Government, with very considerable reserves in its capital accounts, is crying poor mouth it is doing it purely for election purposes. The electors of South Australia would do well to turn back to 1974 and analyse the major attacks on the Whitlam Government of that day by Mr Dunstan, the Premier of South Australia, in which he said that the funding processes of the Whitlam Labor Government would wreck his State Government and that the only way to achieve a reform was to give a fixed percentage of personal income tax to the South Australian Government. Indeed, he condemned what was Labor’s solution; he praised what is now our solution. Our solution is demonstrated by the fact that under revenue sharing, under federalism, both Federal and State governments have been able to cut taxation while increasing programs. The answer is that what we are hearing at this moment is an alibi because the Dunstan Government is not willing to be judged on its own State performance. What the people of South Australia have to understand is that the alibi that Canberra is doing them wrong is a smokescreen to hide a very poor performance indeed.

page 446

QUESTION

FINANCE: SOUTH AUSTRALIAN GOVERNMENT

Senator WRIEDT:

– My question which is addressed to the Minister Assisting the Prime Minister in Federal Affairs, follows the question which he just answered. I ask him whether he recalls saying in this chamber on 27 April last year, in answer to a question from Senator Walsh, that total payments to the States in the first three years of federalism would be equal to the 58 per cent increase in real terms that occurred under the Labor Government. Is he also saying that he gave an unqualified yes to the question? In view of the fact that total payments to the States in the first two years of federalism have increased by one per cent, does he still believe that in the third year of federalism his Government will be able to make up the 58 per cent increase in real terms? I also ask him, in view of a question asked earlier today: Is he aware that payments to South Australia for roads in the last year of the Labor Government increased by $9m, that in the first year of the Liberal Government they declined by $2m and that in the second year of the Liberal Government- that is, under the current Budgetthey have not even gone back to the level of the Labor Government’s 1975 Budget?

Senator CARRICK:
LP

-As always, Senator Wriedt needs to have his questions answered four or five times. As to the first part of his question, I refer him to at least five answers that I have given to that question in the form in which it has been asked. As to the part of the question regarding roads, if Senator Wriedt looks at the overall moneys that are being made available to the States today and if he looks at the comments that Mr Dunstan made about the miserly financing of South Australia by the Whitlam Labor Government, of which he was a responsible Minister, he will receive his answer. Mr Dunstan said that the Whitlam Government’s financing of the States was wrecking the Labor Government of South Australia and he asked for the solution that the Fraser Liberal Government is now giving.

page 446

QUESTION

TELEPHONE ACCOUNTS

Senator TOWNLEY:
TASMANIA

– I preface my question to the Minister representing the Minister for Post and Telecommunications by saying that no doubt the Minister has seen the recent article in the National Times in which it is intimated that the Wentworth Hotel in Sydney is considering installing computer equipment so that customers can be given detailed accounts of any telephone calls they make, particularly long distance calls. Evidently details of the numbers dialled and the duration of the calls will be made available by the hotel. No doubt the Minister is also aware that at the moment such information is not available to Telecom subscribers and this leads to subscribers having no recourse but to pay their accounts, whether they consider them to be right or wrong, or have their phones cut off. That situation would be tolerated only because Telecom is a monopoly. I ask the Minister: When will Telecom be installing equipment so that subscribers can be automatically supplied with accounts that list any long distance calls- the number and the duration of each call? This will have obvious advantages for private subscribers, businesses and even State and Federal government departments.

Senator CARRICK:
LP

-I have seen the newspaper article concerning the computer equipment in, I think, the Wentworth Hotel. My understanding is that telemeters, if that is the correct word, are available now at a price from Telecom. My understanding is that a private subscriber who seeks to have a meter for subscriber trunk dialling can get one for a rental of $ 12 per annum and that business concerns can get a meter at a charge of $20 for installation and $48 for rental, but there my information ends. I am not able to say what happens if there is a conflict between the telemeter and the account itself and I think that is the fundamental at which the honourable senator may be directing his question because the important thing is to be able to check and verify charges. On that basis I will refer the question to my colleague in another place.

page 447

QUESTION

ELECTORAL REDISTRIBUTION

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

-My question is to the Minister for Administrative Services. Has the Minister’s attention been drawn to statements made in newspapers and on radio and television by at least one member of the Parliamentary Liberal Party and some State officials of his party claiming in connection with boundaries that have been exhibited to date by the Distribution Commissioners that ‘the rules had been neglected or chucked overboard’ or that ‘the proposals are outrageous’? Will the Minister agree that on the new boundaries that are the subject of proposals at this point in time. the overall result would be that if the Liberal Party polled as well at the next election as it did in 1975 that party would win the election on the new boundaries? Will the Minister also agree that his colleagues, to whom I have referred, by their public utterances are seeking to influence the commissioners in the performance of their duties under the Electoral Act and that in so doing they are in breach of the spirit of section 22 of the Act? Will he ask them to stop their public whingeing and have them lodge in writing to the commissioners any objections they may have within the 30-day statutory period as in fact the Labor Party is doing so far as its objections are concerned?

Senator WITHERS:
LP

-I have the great advantage of not reading newspapers or listening to the radio, so I have not come across what the honourable senator alleges has been happening.

Senator Douglas McClelland:
NEW SOUTH WALES · ALP

– You look at television, surely.

Senator WITHERS:

-Yes, at Disneyland with the kids on Sunday night.

Senator Wriedt:

- Sesame Street?

Senator WITHERS:

-Sesame Street I enjoy. I forget who I am; whether I am Big Bird or not. I know from what one picks up around the corridors that when new boundaries come out naturally there are always people on both sides of the Parliament who are happy and those who are unhappy. I think the honourable senator is quite right in saying that on the boundaries that are coming out at the moment we will certainly win the next election, the one after and the one after no matter how many redistributions take place. I thank him for his confidence both in the Distribution Commissioners and in our capacity to have success on their boundaries.

page 447

QUESTION

BROADCASTING OF AUSTRALIAN RECORDS

Senator MISSEN:
VICTORIA

– My question is directed to the Minister representing the Minister for Business and Consumer Affairs. I refer to the Industries Assistance Commission draft report on the music recording industry in Australia and in particular to the recommendations within the report to abolish the present 20 per cent quota for the broadcasting of Australian records on Australian radio. Can the Minister assure the Senate that in the best interests of the maintenance and development of the Australian music industry, this 20 per cent quota will not be decreased in any way?

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

- Senator Missen refers to a draft report of the Industries Assistance Commission with which I am not personally familiar. Therefore I cannot really answer in any detail the question he has asked me. It is a draft report. The object of such reports is to enable further submissions to be made and public discussion to take place, and also to give the Government the opportunity to make its views known if it so desires. I have noted the question. I will refer it to the Minister for Business and Consumer Affairs.

page 448

QUESTION

STUART HIGHWAY

Senator BISHOP:

– My question, which is directed to the Minister representing the Minister for Transport, follows upon the question asked by Senator Jessop about the Stuart Highway, and also the interjections by Senator Kilgariff, concerning requests that South Australia should provide urgent moneys for the completion of the road. I ask the Minister whether he was aware, when he answered the question, that a committee of Government supporters involved in that area had met and determined that a request should be made to the Commonwealth Government for $40m to provide assistance to do the necessary work on the road. Is he aware also that after that request was made a public campaign was started, involving Senator Jessop, Senator Kilgariff and others, in which public support was expressed for such a project? If the Minister is not aware of those facts, will he inquire into them to see whether at that time the members concerned agreed that there was a shared responsibility in respect of that road work?

Senator CARRICK:
LP

– I am not aware of all the facts. I would be very happy to inquire into the circumstances and to report back, as the evidence warrants.

page 448

QUESTION

TASMANIAN SHIPPING TERMINALS: DEMARCATION DISPUTE

Senator ARCHER:
TASMANIA

– Is the Minister representing the Minister for Employment and Industrial Relations able to advise the present position relating to any moves to solve the demarcation dispute concerning which union members may tie up ANL ships and which has now tied up all Australian National Line shipping terminals in Tasmania? Is the Minister aware of the current repercussions, which are disastrous to Tasmania’s interstate and overseas trade? One company, Australian Pulp and Paper Mills, has today announced the probability of standing down 3,000 employees and meat exporters are concerned that Japanese contracts may be cancelled through non-delivery. What is the Tasmanian Government doing and what action does this Government propose to prevent futher damage to Tasmania’s industries?

Senator DURACK:
LP

– I am aware of some of the background of this demarcation dispute between the Transport Workers Union and the Waterside Workers Federation which is causing serious disruption to Tasmania, particularly in the ports of Burnie, Devonport and Bell Bay. There is certainly no doubt, as Senator Archer has said, that the continuance of these bans will cause the most severe problems for Tasmanian industry. Officers of the Department of Employment and Industrial Relations are maintaining regular contact with the Australian National Line, whose terminals of course are bearing the brunt of the problem. To that extent the Government is keeping the matter under very close observation.

I understand that the Tasmanian Minister for Labour and Industry has discussed the dispute with representatives of the unions involved and that he has criticised what he has referred to as the irresponsible actions of the unionists in causing this disruption. I point out that the Australian Council of Trade Unions has taken a policy decision regarding these stoppages that affect Tasmania, which states:

The participants in the strike are called upon to give consideration to the position of Tasmania ‘s economy and to take such steps as are practicable and required to cause the least disruption.

The ACTU has very definitely assumed a responsibility in this type of dispute involving Tasmania. It is a responsibility which ought to be discharged by the ACTU.

page 448

QUESTION

AUSTRALIAN GOVERNMENT EMPLOYEES

Senator RYAN:
ACT

– I ask the Minister representing the Prime Minister whether it is true, as stated by the honourable member for Canberra, Mr Haslem, on the radio program AM last Friday, that the Prime Minister told Mr Haslem that dismissed Australian Government employees would have the right to appeal to the Ombudsman under the provisions of the Commonwealth Ombudsman Act. If so, did the Prime Minister intend to mislead Mr Haslem and the public or was the Prime Minister ignorant of the terms of the Ombudsman Act which specifically preclude any appeal against ministerial decisions?

Senator WITHERS:
LP

-I certainly did not hear what Mr Haslem said on radio. I was not privy to the conversation which took place between the

Prime Minister and Mr Haslem. I therefore suggest that the honourable senator put her question on notice.

page 449

QUESTION

RADIO FACILITIES IN NORTHERN AUSTRALIA

Senator KILGARIFF:
NORTHERN TERRITORY

– I direct my question to the Minister representing the Minister for Post and Telecommunications. Having in mind the fact that the Government recognised the necessity of providing improved radio communications for the people of the outback and for defence purposes, and so had planned to upgrade radio transmitter facilities in the Northern Territory by procuring and setting up two short wave transmitters at Cox Peninsula, can the Minister advise whether Telecom Australia has decided that these transmitters will not be provided for the people of the Territory and the outback but will be redirected to Shepparton, where, whilst they may be of some advantage in the more highly populated areas of Australia, they will be of little advantage to the people of the outback and the Northern Territory? If this is the case, does it mean that the people of the north, while paying taxes like any other Australian citizen, are to be treated by Telecom as second priority citizens?

Senator CARRICK:
LP

– I think the transmitters referred to by Senator Kilgariff were the ones ordered for the Cox Peninsula site prior to cyclone Tracy. My understanding is that the masts on which they were to be installed were destroyed by cyclone Tracy. My understanding also is that the inland service transmitters have now been delivered and are in store in Adelaide. They are to be used to upgrade the international broadcasting facilities for Radio Australia at Shepparton. In any case, as yet there are no masts for them at Cox Peninsula. Funds have been made available for two new inland service transmitters. They will be ordered this year and installed in northern Australia. They will be cosited with the new Radio Australia transmitters, at Cox Peninsula or elsewhere. The choice of site for the new masts for Radio Australia will be made in the near future. I hope that information is helpful to the honourable senator.

page 449

QUESTION

URANIUM

Senator MELZER:
VICTORIA

– I ask the Leader of the Government in the Senate whether the Government is aware that the Federal Council of the United Nations Association of Australia at its meeting on 21 August resolved almost unanimously to call upon the Australian Government to defer a decision on its uranium policy in order to promote full public discussion on the questions raised by the mining and export of uranium, based on authoritative information such as the 1972 report of the Sutcliffe Committee of the United Nations, and to develop a national energy policy which concentrates on energy conservation and research and development of safer energy sources. Can the Minister tell me whether the Government will take this expression of opinion into account before announcing its policy on the mining and export of uranium from Australia?

Senator WITHERS:
LP

-I must say that it sits ill in the mouth of any Opposition senator or member in the other place to talk about the necessity for full public debate and open discussion when his party, as a result of a very short and not terribly searching debate in Perth a month or two ago, gagged every one of its members to a certain line of policy. Certainly one side of politics cut off all discussion and debate on this matter. All honourable senators opposite, irrespective of what they may feel about the issue, now are bound by a party policy line on this matter. I do not know why members of the Australian Labor Party keep raising the question of having a public debate and discussion on this matter when they themselves are the people in Australia who cut short the whole debate on this matter.

page 449

QUESTION

SCHOOLS COMMISSION: EDUCATION IN THE ARTS

Senator WALTERS:
TASMANIA

-Can the Minister for Education say what function the Schools Commission has in the area of the arts in education?

Senator CARRICK:
LP

– Basically, the Schools Commission is concerned to promote acceptable standards for arts education in Australian schools, as it is in other aspects of education. Funds provided to the States through the major general purpose programs can be used to support arts programs and to provide facilities. Specifically, the Commission’s special projects and innovations program has funded a large number of arts, music, drama and craft projects at both primary and secondary level in government and non-government schools in the past four years. The Schools Commission and the Australia Council, in collaboration with the State departments of education, since early 1976 have co-operated in the national inquiry into education and the arts. I would be very happy to provide details of that inquiry to Senator Walters in view of her interest in this matter.

page 449

QUESTION

TASMANIAN RAILWAY SYSTEM

Senator DEVITT:
TASMANIA

– I direct a question to the Minister representing the Minister for Transport.

Can the Minister confirm that the Government has indicated that it has adopted, in full, the recommendations of the Joy report based upon an inquiry into the Tasmanian railway system? Is it also true that the present Budget provides funding for the Tasmanian passenger rail service known as the Tasman Limited only until 28 February next, at which point the service will end? How does this square with an assurance, which I understand was given by the Government to interested parties in Tasmania, that the Tasman Limited service would be continued?

Senator CARRICK:
LP

– I am not clear about one aspect, at least, of the question asked in three parts by Senator Devitt. I therefore ask the honourable senator to put his question on notice and I will obtain a detailed reply for him.

Senator DEVITT:

– I wish to ask a supplementary question. I am surprised to hear the Minister say that he is not aware of the facts. In relation to this matter, I ask him: Is he not aware of a detailed document explaining Budget implications, which has been provided to Government members and senators but, for some reason, has not been given to members of the Opposition, and in which it is clearly stated that funding for the Tasman Limited cuts out on 28 February 1978? I also ask: What is the secrecy about this matter? Why has this decision not been publicly revealed?

Senator CARRICK:

– The simple fact is that I was asked a detailed question which had three main parts. All the details are not available to me. I have read the various public documents. This matter comes not within my specific portfolio but within one I represent. I have undertaken to obtain detailed answers for the honourable senator. The people of Tasmania are entitled to a detailed answer to any question, and specifically questions regarding transport.

Senator DEVITT:

- Mr President, I thought that the Minister in his explanation would have indicated the reason for the apparent secrecy about the document which was given to honourable senators opposite and, I understand, to some sections of the Press. Why do Opposition senators and members not have a copy of those details? Can the Minister say why that has happened?

Senator CARRICK:

-If Senator Devitt will give me details of the particular document to which he refers I will seek the information and give him an answer.

page 450

QUESTION

TELECOM AUSTRALIA: ELECTRONIC TELEPHONE SWITCHING EQUIPMENT

Senator BAUME:

– My question is directed to the Minister representing the Minister for Post and Telecommunications. It refers to the current choice facing the Government in the awarding of a contract by Telecom Australia for electronic telephone switching equipment worth at least $500m. Because the final choice will have serious employment implications for my constituents in Sydney, I ask: If the contract eventually is awarded to L. M. Ericsson Pty Ltd, the Swedish firm in contention, will the equipment be imported to any significant degree? If it is awarded to STC, the other firm in contention, will it protect and expand job opportunities in Sydney? To what extent is Telecom instructed to consider employment implications in decisions which it makes in awarding large contracts in Australia for public works?

Senator CARRICK:
LP

– I can understand Senator Baume ‘s particular interest in this matter. It does impinge upon very considerable employment opportunities, notably in his own State. As I understand it, he is referring to what is called SPC or stored program control equipment. It is a major contract to be let. My advice is that irrespective of which firm wins the contract it is expected that after the initial stages about 80 per cent of the equipment will be manufactured in Australia, so that the imported percentage will be relatively small. The question is where the actual equipment will then be manufactured. I am advised that the Telecommunications Act 1975 provides that the Telecommunications Commission ‘shall perform its functions in such a manner as will best meet the social, industrial and commercial needs of the Australian people for telecommunications services’. To this extent this Parliament has instructed Telecom to consider the effect its actions would have on Australia and Australians wherever they live. I am advised that Telecom has considered all the possible implications of this major contract and has submitted a full report to the Government through the Minister for Post and Telecommunications. The Government will have before it all the relevant information when it considers the Telecom submission in the near future. Specifically, it will be very conscious of the employment factors involved.

page 450

QUESTION

PRIMARY PRODUCERS’ INCOMES

Senator WALSH:
WESTERN AUSTRALIA

– My question is directed to Senator Cotton both as Minister representing the Minister for Primary Industry and as Minister representing the Treasurer. In reply to a question in the House of Representatives last Thursday the Treasurer stated that primary producers’ income between $3,750 and $16,000 would be taxed at the rate of 32c in the dollar. Further to that I ask whether income above $16,000 and below $32,000 received in any year will be taxed at 46c in the dollar even if the 5-year average income is well below the $ 16,000. If the answer is yes, does the Minister know that a primary producer with an income varying annually over a 5-year period from $20,000, to $9,000, to zero, to $25,000, to $6,000-that is an average of $12,000 over the 5-year period- would pay in that period $3,020 more in tax than would be paid on a stable $12,000 a year income? I ask further whether that tax rip-off is intended or whether it is just another manifestation of the Government’s inability to understand its own Budget.

Senator COTTON:
LP

-I think it will be agreed by most honourable senators that that is a question of some very considerable detail calling for explanations of varying sets of figures. It will have to go on notice. I am sorry I cannot do better for the honourable senator.

page 451

QUESTION

TASMANIAN FREIGHT EQUALISATION SCHEME

Senator RAE:
TASMANIA

– My question is addressed to the Minister representing the Minister for Transport. I refer to the Tasmanian freight equalisation scheme, which has been received with considerable acclaim in Tasmania. In view of the increases in freight charges which have occurred since the scheme was introduced in the middle of last year, will the Minister take up with his colleague consideration of commencing forthwith the promised review rather than waiting till December to commence the review?

Senator CARRICK:
LP

-I fully understand Senator Rae’s interest in the freight equalisation scheme. It has been an historic policy for Tasmania and one which is vital to the two-way movement of goods between the mainland and Tasmania. I certainly will bring the matter to the attention of my colleague and urge him to give it early consideration.

page 451

QUESTION

MEDIBANK LEVY EXEMPTION

Senator DONALD CAMERON:
SOUTH AUSTRALIA

– I direct my question to the Minister for Social Security. Has there been any increase in the allowable income of pensioners and low income earners who are now exempt from paying the Medibank levy? If no adjustments have been made will the Minister undertake to discuss the matter with the Minister for Health to ensure that pensioners and low income earners are not required to pay the levy because of the effect of inflation on their incomes?

Senator GUILFOYLE:
LP

-I undertake to discuss the question, as it was raised, with the Minister for Health.

page 451

QUESTION

FAMILY ALLOWANCE SCHEME

Senator GRIMES:
NEW SOUTH WALES

– My question is directed to the Minister for Social Security. Is it a fact that under the new Budget arrangements families with two or more children and incomes between $140 and $200 a week will have a lower disposable income than they would have had if the previous indexed rebates for children had been retained? Would this situation not have been overcome if family allowances had been increased? Why did the Government not increase family allowances in the present Budget?

Senator GUILFOYLE:
LP

– The family allowance system was not indexed in the present Budget. It was not a commitment of Government, when the family allowance scheme was introduced, that it would be indexed. The new taxation arrangements and the new exempt income level that applies to families are of assistance to those in lower income brackets. I have seen statements by the honourable senator relating to the detriment that occurs. I will refer those matters to the Treasurer to have his explanation of them.

page 451

QUESTION

FRIENDS OF THE EARTH

Senator HARRADINE:
TASMANIA

– My question, which is directed to the Minister representing the Treasurer, refers to the statement made by the President of the Australian Council of Trade Unions on PM last night that a legitimate meeting attacking the Government’s Budget was disrupted by the Marxist-Leninist organisation, and the Socialist Workers Party, in Sydney yesterday. Is the Minister aware that in the same program members of the Friends of the Earth organisation admitted to being present and holding up anti-uranium placards on the platform itself about which President Hawke complained? Is he aware also that the Friends of the Earth organisation in seeking donations requests that the donations be forwarded to the Australian Conservation Foundation for transmission to the Friends of the Earth so as to attract concessional tax deductions? If he is aware of that, can he advise the Senate how much of such money is paid to the Australian Conservation Foundation for transmission to the Friends of the Earth society? If he is aware of that, does he consider it to be a legitimate exercise in respect of concessional deductions or is it a loophole which should be closed?

Senator COTTON:
LP

-I know that the Government does to some extent fund the Australian Conservation Foundation. I do not know how much money is provided. I looked at the figures quite some time ago. I would need to get from the Treasurer the accurate details. I am quite sure that he will be fascinated by that recital of events. I do not think the Australian taxpayer would feel it obligatory upon him to finance the Marxist-Leninist foundation.

page 452

QUESTION

NORTHERN TERRITORY: OVER-FISHING OF BARRAMUNDI

Senator ROBERTSON:
NORTHERN TERRITORY

– I direct my question to the Minister representing the Minister for the Northern Territory. In answer to a question earlier this year, the Minister indicated that a large scale research program into the problem of over-fishing of barramundi would be undertaken. Can the Minister indicate whether the program due to commence in mid- 1977 has been mounted and whether the Fisheries Section has been provided with sufficient boats to enable surveillance against poachers to be carried out?

Senator WEBSTER:
NCP/NP

– I do not have the information with me. I will seek it from the Minister for the Northern Territory and bring an answer to the honourable senator as soon as possible.

page 452

QUESTION

POLITICAL DISPUTES

Senator MULVIHILL:

-I direct a question to the Leader of the Government in the Senate based on the dialogue that ensued between himself and Senator Baume on an article in Quadrant. Remembering the troublesome times of the Vietnam demonstrations and even the happenings of December 1975, does the Minister draw the conclusion that nobody from the trade unions or the left of politics ever resorted to the gun over a political dispute? Does he not believe, further, that many teenage boys today are becoming frustrated through unemployment and that they also are not resorting to the gun to draw attention to their plight?

Senator WITHERS:
LP

-I hardly know what this question has to do with the publication of Quadrant which I understand is a magazine devoted to the promotion of literature and poetry in Australia. That is what I have always understood it to be. I know my wife is a subscriber to it. Its editorial board, as I recall seeing the names listed, has on it some very distinguished people. The late Professor James McAuley, one of Australia’s better known poets, was editor for many years. I think Professor Leonie Kramer, a very distinguished professor of literature in Australia, is a member of the board. I do not think there ought to be any relationship between violence with firearms and a very distinguished and popular literary magazine in this country.

page 452

QUESTION

FUNDING FOR WOMEN’S REFUGES IN QUEENSLAND

Sentor KEEFFE-Can the Minister for Social Security inform the Parliament of the amount of funding for the current financial year for women’s shelters at Townsville and Brisbane and for projected shelters at Cairns and Rockhampton?

Senator GUILFOYLE:
LP

– I am unable to state the exact amount for Queensland women’s refuges, but I am aware of a statement by the Minister for Health in which he said that the Commonwealth would pay directly to the Queensland women’s refuges the amounts that were available to them as there had been some difficulty last year with the State Government undertaking this expenditure through the community health program. When I made a statement about these refuges, in response to an earlier question, I indicated that an additional Sim was available this year under the community health program for women’s refuges. I am unaware how that will be applied to the two additional refuges mentioned in the question. I will get that information for the honourable senator.

Senator KEEFFE:

– I have a supplementary question. I ask the Minister for Social Security: As the money which was allocated last year disappeared into the State Government’s coffers, will there be any chance of getting that back to help with this year’s funding, particularly for the projected shelters?

Senator GUILFOYLE:

– I do not know the arrangements which the Government has made about any funds that were not directed last year towards women’s shelters. A block grant was made to the States for the community health program. One item within that program was women’s shelters in the various States. I am aware that while there will be a continuation of the community health program this year the funds which are to be directed to women’s refuges in Queensland will be paid directly by the Commonwealth Government. I am unable to answer that part of the question about the funds for last year, although I assume that they probably have been expended on other matters under the community health program.

page 453

AUSTRALIAN DAIRY CORPORATION

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– Pursuant to section 29 of the Dairy Produce Act 1924 I present the annual report of the Australian Dairy Corporation for the year ended June 1 976.

Senator McLAREN:
South Australia

– by leave- I move:

I seek leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 453

AUSTRALIAN TOBACCO BOARD

Senator COTTON:
New South WalesMinister for Industry and Commerce · LP

– Pursuant to section 26 of the Tobacco Marketing Act 1965 I present the annual report of the Australian Tobacco Board for the year ended 3 1 December 1 976, together with financial statements and the report of the Auditor-General on those statements.

page 453

ACQUISITION OF LAND IN VICTORIA FOR NATURE CONSERVATION PURPOSES

Senator CARRICK:
New South WalesMinister for Education · LP

– Pursuant to section 1 1 of the States Grants (Nature Conservation) Act 1974 I present an agreement in relation to the provision of financial assistance to Victoria for land acquisition for nature conservation purposes at Yellingbo 1976-77.

page 453

PACKAGING AND LABELLING LAWS IN AUSTRALIA

Senator DURACK:
Western AustraliaMinister for Veterans’ Affairs · LP

– Pursuant to section 28 of the Trade Practices Act 1974 1 present the report of the Trade Practices Commission on packaging and labelling laws in Australia.

page 453

PUBLIC WORKS COMMITTEE REPORTS

Senator KILGARIFF:
Northern Territory

– In accordance with the provisions of the Public Works Committee Act 1969, 1 present the reports relating to the following proposed works:

  1. 1 ) Military Area at Randwick, New South Wales;
  2. Royal Australian Air Force Base Edinburgh, South Australia;
  3. Animal Quarantine Station at Wallgrove, New South Wales.

page 453

INCREASES IN AUSTRALIA’S ANTARCTIC ACTIVITY

Ministerial Statement

Senator WEBSTER:
Minister for Science · Victoria · NCP/NP

– by leave- I recently announced brief details of the Government’s plans, comprehended in the 1977-78 Budget, for a major build-up of programs and facilities in support of Australia’s activities in the Antarctic. Honourable senators will be aware of the increasing level of international interest in the Antarctic and will be pleased, I am sure, to know that the Government is backing its commitment to the area through the allocation of additional funds and staff and expansion of the areas of research in which we are already active. Details on the specific areas of build-up are as follows:

The Government has recognised that it is becoming increasingly difficult for the Antarctic Division of the Department of Science to discharge its responsibilities with the existing numbers of staff. Adequate planning and support of expeditions and the maintenance of scientific research of the highest quality are essential elements in our Antarctic program. After a comprehensive examination of the situation the Government has decided to increase the staff of the Antarctic Division by 15. The precise allocation of the additional numbers is yet to be determined but part of the increase will be required to support the first phase of the major program of maintenance and rebuilding of stations and some extra scientists will also be appointed to provide additional thrust to the scientific program.

Australia maintains three stations on the Antarctic continent- Mawson, Davis and Caseyand one on sub-Antarctic Macquarie Island. The four stations consist of approximately 1 70 separate buildings which are subjected to the harshest climatic conditions on earth. The conditions of high winds, low temperatures, drifting snow and wind borne sand and sea spray continually stress the buildings to the limit. The oldest buildings have now reached the expected 20 years of life originally set and require replacement. In addition it is now clear that deterioration of buildings has reached a stage where major maintenance or replacement is required several years in advance of the expected life span. In order to ensure the safety of expeditioners and to accord them a reasonable level of living and working comfort, the Government has decided to embark on a considerably increased level of maintenence and rebuilding.

The total value of new works to be carried out by the Department of Construction on behalf of the Antarctic Division is approximately $1.2m, of which about $470,000 will be spent in 1977-78 and the remainder in 1978-79. The Antarctic Division’s appropriations will also include an amount of approximately $850,000 for repair and maintenance of buildings and purchase and repair of plant and equipment. The combined effects of these works will be to ensure appropriate accommodation at the stations to house expedition personnel and to enable them to carry out the important scientific work being undertaken in Antarctica.

Transport of expeditions to and from Antarctica is a vital element in Australia’s Antarctic program. For many years our expeditions have enjoyed the excellent services of the Nella Dan and Thala Dan- two specially constructed ships owned by J. Lauritzen Lines of Denmark. Both those ships are aging and must soon be replaced. In July 1976 the Government commenced a study to examine alternatives to the present ships and report on the most suitable form of transport for the future. A number of alternatives were examined including the possibility of using aircraft to fly expeditions direct from Australia to our Antarctic stations, the construction of new specialised ships and combinations of ships and air transport.

An attractive option is for Australia to acquire and operate a specialised ship. It would be equipped with long-range helicopters, have passenger and cargo accommodation and an ability to serve as a platform for marine research. The new Australian/Antarctic ship would be supported by a cargo vessel, chartered as required. The combination of a ship and long-range helicopters is seen as the most flexible and, at least for the short term, most effective means of transporting Australian expeditions. The helicopters would allow personnel and light equipment to be flown over large expanses of pack-ice thus lessening the constraint of ice conditions on ship movement to the continent, a factor which presently severely limits the time during which relief operations may be carried out.

The Government has appropriated $50,000 in the 1977-78 Budget for initial design and evaluation studies of the ship. These studies, which will take two years to complete, will provide the detailed information to enable the Government to decide the precise nature of future transport systems for Australian expeditions. If, on completion of the study, the Government agrees to proceed with construction of a new ship, construction would take about three years, bringing the ship into operation in the 1982-83 season. The ship is estimated to cost $15m to $20m depending on where it is built and the precise design.

The provision of an intercontinental airstrip at one of Australia ‘s Antarctic stations will continue to be examined and there is the possibility of supplementing the present ships’ capacity by flying personnel through the existing airfield at McMurdo in a co-operative venture with the United States and New Zealand. The plan is for the Royal Australian Air Force to undertake a number of CI 30 flights from Christchurch to McMurdo in exchange for United States flights from McMurdo to Casey using a ski- wheeled aircraft. Negotiations are proceeding with a view to Australian participating in 1978. It is hoped that the RAAF will take part as observers in this year’s airlift of United States and New Zealand expeditions from Christchurch to McMurdo.

Australia presently does not conduct any significant scientific work in the waters around Antarctica. It is becoming increasingly evident that nations are looking to those waters to play an important role in providing their future supplies of food and minerals. It is essential that if those resources are to be exploited it should be under conditions which will not adversely affect the unique Antarctic environment. The Government has endorsed the principle that Australia’s scientific program be extended into the marine areas around Antarctica. As a first step two staff will be employed during 1977-78. These officers will initially concentrate their effort on encouraging and developing marine science programs which might be undertaken by government and non-government agencies, laying the foundations for programs in marine biology and physical oceanography to be undertaken by the Antarctic Division and co-ordinating participation in international marine scientific programs and the programs of other countries. It is expected that off-shore scientific work will, in the future, be a major part of Australia’s scientific program in Antarctica. A comprehensive program of marine research depends heavily on the support of suitable ships. The need for such support will be included in the design study for the Australian Antarctic ship. I will be presenting to the Parliament a detailed information paper on Antarctica in the near future. I present the following paper:

Increases in Australia’s Antarctic Activity- Ministerial Statement, 24 August 1977. and move:

That the Senate take note or the statement.

Senator DEVITT:
Tasmania

– I welcome an opportunity to make a few brief observations on the statement which the Minister for Science (Senator Webster) has put down and which I believe is timely. There is a growing focus on Antarctica and a growing emphasis on its importance in many ways. There is a growing interest on the pan of the Australian public in what is happening in the Antarctic. This is pretty clearly indicated by the interest which was shown in a number of charter flights which went down to the Antarctic late last year. It is contemplated that there will be three or four flights this year using jumbo jets and the services of a qualified commentator who will be able to point out to people the areas of interest and significance in the Antarctic. On previous flights this was done by Mr Harry Black who, I believe, is based in Canberra and who has been a member of expeditions to the Antarctic on a number of occasions.

It is a unique area of the world. It has significance, as I think I said earlier, in so many ways. There is a strategic interest and there is an interest in the scientific evaluations that can be made in a number of directions. The Antarctic is of tremendous significance- I have referred to this before- in relation to marine life. Australia is not involved in this area but other nations are involved in the taking of crill for food. Thousands of tons of this species of marine life are taken each year and supplied to world markets in a number of forms. I thought the strategic significance of the Antarctic was heightened only a couple of days ago by a news release concerning the development by the Russians of a new ice breaker. It must be a very powerful ship. It is the first vessel ever to break its way to the North Pole. It is a nuclear powered ship and I know that the United States of America, which operates ice breakers in the Antarctic, is interested to find out just how this feat was performed. Australia does not operate ice breakers. We have used the services of the United States on occasions. In fact, quite recently when the Thala Dan got into some trouble on the last expedition to the Antarctic, an ice breaker very quickly rescued the ship from its temporary difficulties.

That has some implications for Australia. I hope those implications will be studied because, as time goes on and interest in the Antarctic is heightened, our ability to get in and out of the Antarctic when we need to will be of tremendous significance. As the Minister knows, and as every honourable senator knows, the times when vessels can visit the Antarctic are extremely limited. We must take advantage of seasonal conditions to take our expeditions down there and, in due course, to relieve them. That, I suppose, is one of the reasons why until the present time the focus has not been on the need to provide ourselves with a ship; we have been able to charter vessels. Earlier we were able to charter the Magga Dan and the Kista Dan, and in more recent times the Thala Dan and the Nella Dan, the successors of the two earlier ships. They were very capably handled by their crews and well provisioned by their owners, J. Lauritzen Lines of Denmark. They have been very valuable ships to us but they operate in favourable seasonable conditions and, of course, in the other seasons of the year they are used for similar sort of work in the Arctic region.

There really is not a great comparison to be made between the Arctic and the Antarctic in terms of difficulty of access to the bases, for it is relatively easy, I understand, at most times of the year to traverse to the Arctic. We are faced with quite different conditions when we move into the Antarctic. Indeed the climatic conditions and other features of the Antarctic are very different from those of the Arctic. So we have a special difficulty and therefore a need to take some special steps to equip ourselves in such a way that we can service our bases more frequently than is presently the case. It is widely known, although not generally known, that expeditions are taken to their bases in the Antarctic and they put in a whole year there. They cannot be relieved before that year is out. That raises quite serious problems in terms of family relationships and matters of that kind. When I was on Macquarie Island recently I took a special interest in the problems that arise through separation of families.

I think two areas that could be given better attention than has been the case in the past are firstly, the remuneration of people operating in the Antarctic bases and secondly- I have raised this with the Minister before in Estimate Committee hearings- the right of people in the Antarctic to vote and the ability of those people to be able to cast their votes in elections and referenda and matters of that kind. Of course under our present arrangements it is not possible for these people to exercise their democratic right of a vote at elections. I hope that the situation can be corrected because it is one of the fundamental rights of people to be able to cast their vote at an election. The counting of that vote could be critical to the result; one never knows. The people in those expeditions are on the electoral roll. They have a legal requirement to vote yet they are not able to do so.

The New Zealanders have overcome this problem. I think the Minister touched on the point that it was easier for the New Zealanders to overcome this problem because they have an air service to their bases. But I would have thought that, since we have full time radio communication with our bases and telegraphic facilities and the like, a system could be devised whereby the people involved could be able to exercise their right to vote. They are highly intelligent people. They are tremendous people really. They are very well trained. They are skilled people and they are intensely interested in their work. From my discussions with these people down there and on the way back, I believe that they have an interest in the political life of Australia and that they want to be involved in it. I think they have a right to be involved in it. I think I could devise a simple system whereby the right to vote could be given to them.

I hope that the Minister is pursuing that matter. It would not be unique because the New Zealanders are doing so already. Surely a simple means could be found of having their votes cast and counted, as they are in the booths throughout Australia, and then the results sent by telegraph to the counting office here. The ballot box could be sealed and on the next occasion when the vessel returned from the Antarctic, the box could be brought in and its contents checked. I imagine that it is not beyond the wit of man to devise a system whereby this could be carried out.

The other question that came up in a particular context, although I think it is of general interest, concerned the remuneration of people in the Antarctic. I wonder whether, in determining rates of pay, sufficient regard is given to the rigorous conditions under which these people live, the hours of work which they are required to put in- and they do so willingly- and the fact that as they are separated from their homes, there are expenses involved in maintaining their homes in Australia. That expense could quickly be demonstrated to be greater than if the husband were home because outside people have to be brought in to perform those duties normally carried out by the husband. Then there is the tremendous factor of isolation. This is a big factor even though the people there live happily together under those conditions. I believe that in recent years there has been very little difficulty in regard to the people who have been selected in terms of the ability to get on with one another, to accommodate to the conditions and to do the job they are there to do. So I say to the Minister that that is an important consideration. Various members of the contingent on Macquarie Island raised with me- and I have raised this with the Minister- a specific case involving one person there. It shows the sort of spirit and the relationship which exists between those people down there. My last understanding was that this matter was being looked at. I certainly hope that the Minister will come to a suitable, equitable and just decision as to the rates of remuneration of the people down there.

People in Australia, looking at the particular situation of scientists or others engaged in our bases, would have very little comprehension- I certainly did not comprehend the situation- of the sort of conditions people on those bases work under. As honourable senators know, I got only to the sub-Antarctic. I imagine that there would be pretty rigorous conditions on the Antarctic continent itself. I think the decision to increase the staffing of the Division is an important consideration. It acknowledges that the work is increasing and that the range of operations of the Department of Science, through the Antarctic Division, is on the upward move. I think that is a good sign. I would have appreciated the Minister telling us how many people are actually engaged in the Antarctic. Maybe that information will be forthcoming in the future. I should also like to know what is the ceiling, if any- I imagine there would be a ceiling- on the number of people who are engaged in the Division’s activities.

Now I come to the subject of maintenance and rebuilding of Antarctic stations. It is a very important matter and again I give my own observations. What I am saying to the Senate- this is particularly for the ears of the Minister- is that when one goes and looks for oneself at what is happening one is so much better informed on the need for doing things. From time to time other honourable senators have expressed an interest in having a look at the Antarctic. I do not think it would be a bad idea if some means could be devised whereby people could go and see for themselves. Perhaps we would get another point of view. This is a tremendously important area. Daily this fact is becoming more widely recognised. I am not talking only about the minerals, and the marine life and the other things but also about the strategic significance, to my mind anyway, which we have not yet grasped.

I think that as time goes on- it may not be very many more years before this is the case- we will be involved in a pretty big discussion as to just what rights we have in the Antarctic or whether we have any at all. We assert certain rights but they have never been tested. I imagine that some countries would dispute our right to the occupation of certain of the areas of the Antarctic. While we are engaged in scientific work there is a swapping of knowledge and information and scientific discovery which is a wonderful thing. The Antarctic is one part of the world where you do not take guns and ammunition and prepare to wipe out people. The work there is of a scientific nature designed to benefit humanity, to benefit the world. That is the attractive thing about it. Knowing mankind and the selfishness of people, one fears that that will not always be the case. I certainly hope it will be the case but one can never be sure.

I was talking about the importance of the maintenance and rebuilding of the station. Some of the buildings on Macquarie Island are getting a bit long in the tooth, a bit tatty. I noticed that there had been some upgrading of the design and structure of the buildings, which was very good and very helpful to the people there. Whilst I am talking about buildings, I might just relate the fact that a debate is now going on about Mawson ‘s hut and what ought to be done with it. I believe that Mawson himself, some time after he established the base, acknowledged that the location of his expedition’s base was not the best. In fact it is not now the position of our base. The hut is some miles distant from the present base. It is rather sad to reflect that the building that Mawson put there, which was specially designed and built in Australia in a prefabricated form, taken down and erected there, is now getting to the stage where the nail heads are protruding about one-eighth of an inch to one-quarter of an inch because of the rigorous conditions which have been mentioned in the Minister’s statement. The debate now is on whether to bring that building back to Australia or to locate it in a position where it is anticipated, in time to come, tourists will visit it and be able to see this unique part of the history of the Antarctic. Matters of that kind currently are under consideration.

The Minister certainly has been involved in the question of what to do with Mawson ‘s Hut. It highlights the fact that something has to be done. It is about two-thirds full of ice now. The whole building is almost covered. It will take a lot of work to remove that ice and to carry out any restoration. Some experts say that if the building were to be taken apart it would collapse and would be lost forever. That is one of the problems with which we are faced at the moment. I am very pleased to see an increasing interest in the preservation of historical documents and artefacts relating to the Antarctic and in some of the equipment used in the early expeditions.

There is an awareness now that we should preserve this history, just as there is an awareness of the need to preserve history in so many other parts of Australia and, indeed, in so many other parts of the world.

I turn now to the building of a ship. I have alluded to the recent interest which I took in the development of the Russian ship. As the Minister will be aware, I expressed the view that a composite ship might be contemplated involving oceanographic study, marine biology study, fisheries and the service of our Antarctic bases. The Minister pointed out to me that there was some difficulty in the fact because of the type of conditions ships experience in the Antarctic they need to be round bottomed ships. I can assure the Minister that the Thala Dan is a round bottomed ship. When it is in the sea way it does just about everything but turn upside down. The handling of the ship is a great credit to the crew. Their knowledge of the conditions also is a great credit to them. I can understand that there are difficulties, but I sincerely hope that we will not be faced with a two-year study. I would have expected that a study on this matter would have been carried out already. I believe that sufficient study ought to have been carried out and we ought to have catalogued what sort of ship we should contemplate building and what functions it should embrace. I find it very difficult to accept that a study will take two years. I certainly can accept that it may take three years to build the ship, but I do not imagine that it will take two years to design the ship. I hope that that process might be expedited. Difficulties are associated with the use of wheeled aircraft. It is natural, I think, for the ship to accommodate helicopters as, indeed, the Thala Dan does. It has a helicopter deck. It limits the operation to a degree, but I think it is an important part of the equipment used in the Antarctic.

While I was at Macquarie Island I noticed that use was made of Army vehicles for landing. I have not commented on this before, but let me indicate now how capably the Army personnel who were on the Thala Dan on the trip on which I was on handled those vehicles. They were experts. Some of them had been to the Antarctic itself a couple of times. Honourable senators can imagine the conditions prevailing in the Southern Ocean. The sea is uninterrupted by any land mass. The weather just comes straight in. The Army personnel were first class. Their performance was excellent. I welcome the fact that the Minister intends to present a detailed information paper on the Antarctic in the near future. Shortly the Minister and I will be facing one another across the table during the hearings of the Estimates committee which will consider in detail the expenditure on the Antarctic.

I assure the Senate that the Antarctic is an area of tremendous interest. Recently we talked about putting a moratorium on the killing of whales. It came to my knowledge when I was on that trip that the great blue whale- which I believe is a beautiful whale- is almost extinct because of the rate at which it is being hunted and killed. I think we should turn our attention to that matter. I think that it is time we examined the fisheries side of the question and had a look at the economic value of harvesting krill and other types of fish that are found in the Antarctic. I welcome the fact that at last we are launched on a study of the building of a ship of our own. I think that if it embraces the functions which I have mentioned the full time use of a ship will be justified. The leasing of ships is very costly, of course. It will be costly to build and to run our own ship, but I think it is a cost which has to be faced and met. If we are to assert the significance of the Antarctic and the interest we focus on the Antarctic we have to be equipped to do it, and we have to be equipped to do it ourselves. I welcome the additional budgetary allocation for the present year and for next year.

At this stage I do not want to touch on the question of the repositioning of the Antarctic base in Hobart. Perhaps I should content myself with saying that I think that the Antarctic Division is very lucky indeed in having the sort of people it has working for it. In my view, there are no ‘slackers’. They are intensely hard working people and they are highly qualified people. They are very well selected, of course. One cannot just walk in and obtain employment. Unfortunately, in 12 months time I will not be able to walk in and say that I want a job in the Antarctic. I would probably be thrown out the door. A close appraisal of the suitability and the emotional set-up of people is made. Their physique and their physical capacity to withstand the rigorous conditions are examined. As a result of that, some fine people work in the Antarctic Division. I hope that that is recognised in the remuneration scales. The current scales are under review at the present time. I content myself with making those comments at this stage and seek leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 458

SENATE STANDING COMMITTEE ON CONSTITUTIONAL AND LEGAL AFFAIRS

The PRESIDENT:

– I inform the Senate that I have received a letter from the Leader of the Opposition in the Senate (Senator Wriedt) requesting that Senator James McClelland be discharged from service on the Senate Standing Committee on Constitutional and Legal Affairs and nominating Senator Wheeldon to be a member in his place.

Motion (by Senator Guilfoyle)- by leaveagreed to:

That Senator James McClelland be discharged from service on the Standing Committee on Constitutional and Legal Affairs and that Senator Wheeldon, having been duly nominated in accordance with Standing Order 36aa, be appointed to the Committee.

page 458

QUESTION

BUDGET PAPERS 1977-78

Debate resumed from 16 August on motion by Senator Cotton:

That the Senate take note of the papers.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– The Budget debate is an opportunity each year for the Parliament to consider especially the record of the Government in the past 12 months and to try to envisage the effects of its estimates in the forthcoming 12 months. It is also an opportunity to consider some matters which we believe should be placed before the Parliament and to which not only the Opposition but also the Government should give some consideration. I wish to range over three or four areas. During the course of my remarks I will analyse, as I see it, the role of the Government in the past 12 months. Towards the end of my comments I will offer some thoughts which may be of some interest to the Senate.

When this Fraser Government came to power in 1975 it promised the electorate a return to business confidence; it promised jobs for all who wanted to work; and it assured the rural community that it would be given the confidence it so desperately needed. In brief, it claimed that a vote for the Liberal and National Country parties was a vote for prosperity. Contrary to the grandiose promises in Mr Fraser ‘s election speech, we have seen the following: Industrial confidence has declined; manufacturing output has declined; real wage rates have declined; dwelling house construction has declined; unemployment has risen; the number of loans made by major institutions for all new dwellings has declined from 22,700 to 19,800 between the last quarter of 1976 and first quarter of 1977; total new private capital expenditure declined by 2.5 per cent in the first quarter of 1977; and the Sydney share market indices for manufacturing industry are at one of their lowest points.

This suggests a very bleak 12 months for us for the future. It will be a period during which no individual and few corporations will have any prospect for hope. Both this Budget and the 1976 Budget wound back public capital expenditure, and in cutting the deficit have set about causing a decline in real wages and a redistribution of income from the poorer sections of the community to the already wealthy sections. It is a sorry reflection that in two years this Government will have presided over a decline in gross domestic product, a drastic rise in unemployment and a substantial decline in business confidence.

Contrary to the view of the Treasurer (Mr Lynch) that the Australian economy is healthy, the Organisation for Economic Co-operation and Development shows that it is at the bottom of the scale. When I speak of the OECD, of course I am speaking of other countries comparable to Australia. In the most recent issue of the OECD Observer a table showing the 20 OECD members’ rates of growth of real gross national product indicates that Australia lies 17th out of those 20 nations. In 1975 Australia ranked fourth in the order of real growth rates of gross national product, but in the 2 years the Liberal and National Country Parties have been in office it has slipped badly. The decline has been exacerbated by the deliberate cut back in public expenditure and the consequent effect upon the private sector. Mr Deputy President, I seek leave to incorporate in Hansard the table of the OECD to which I have just referred.

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

The table read as follows-

Senator WRIEDT:

-I thank the Senate. It is important to note that in spite of the cut in the deficit and the reduction in public capital expenditure the public sector still contributes 29.6 per cent of the real gross domestic product, which is only a decline of one per cent over the last 2 years. It is interesting to remember that the previous Government was accused of wanting to expand the public sector beyond what was considered economic good management, but in fact after 18 months of Liberal government we find that the public sector has declined very slightly in that time, the reason being of course that the private sector itself has declined at the same time. Therefore we still find roughly the same balance as we had before.

The time has passed when this Government can blame the problems on its predecessors. Two years have gone and the devaluation of November 1976 severed any continuity of measures adopted by the previous Administration. The Liberal and National Country Party Government is on its own and must bear the responsibility for the current malaise of the Australian economy. The Government need not look behind its Budget Speech and supporting documents to establish that it is administering an economy in decline. Unemployment has risen month by month since Mr Fraser came to power. It has been a progressive rise, and the number of unemployed as at 30 June was 354,000. As a consequence of this Budget and the failure to introduce other measures that would create jobs, it is likely that unemployment will be running at between 6.5 per cent and 8 per cent of the work force by early 1978. The personal, social and economic consequences of this ever increasing hard core of unemployed are quite frightening.

Industrial production is also continuing to decline. In the second quarter of 1977 production had fallen three index points on the same quarter in 1976. Both the Australian and New Zealand Banking Group Ltd, which has publicly supported some of the Government ‘s economic policies, and the Institute of Applied Economics predict a further decline. Both the OECD and the Institute of Applied Economics are predicting a year-on-year decline in Australia’s real rate of growth of gross national product. However the Treasurer has fiddled with the figures to make it appear that gross non-farm product grew by 4 per cent between 1976 and 1977, when in fact it grew by only 2 per cent. The Government is again predicting a 4 per cent rise in our gross national product. The more likely result is that the real rate of growth will be half of what it was last year; that is, one per cent.

Look at the rural sector which of course, as we know, is a vital contributor to the balance of payment position. It has shown a drop in its rate of growth from 7.8 per cent in 1975-76 to 0.7 per cent in 1976-77. The Bureau of Agricultural Economics has also predicted that the rate of growth will fall by 14 per cent in the coming year. The Treasurer seems to dismiss this fact rather lightly in these words:

Although seasonal conditions are largely unpredictable, at this stage they seem likely to support more than a marginal increase in the volume of farm production. If so, real farm incomes would be likely to fall somewhat.

It seems a strange prediction for the Treasurer to make in the light of the authorities which I have just quoted- authorities best able to make such an assessment. It does not coincide with the Treasurer’s outlook and must cast serious doubt on the Government’s ability to make a realistic appraisal of future prospects in this important area.

Public expenditure programs have been reduced, and the Government is taking considerable pride in that reduction. But it is not explaining that very significant sections of the private sector are suffering as a consequence. The building and construction industry, transport and most of the service areas have been severely prejudiced by the Government’s approach. The consequence is that the private sector is being wound down at a greater rate than the public sector and there is no sign that this trend will be reversed. The Government appears to have closed its eyes to the serious position and presumably is hoping that recovery overseas will start a boost to the Australian economy. There has been no consideration of what action should be taken if this boost does not occur. The information coming from most of the northern European countries shows that the rate of recovery, excluding the United States of America, is not what we would have expected some 12 months ago.

It must be emphasised that this Government’s borrowings are mainly for short term purposes and that in fact since 1 1 November 1975 it has borrowed no less than $3,000m and, as I said, mostly for short term purposes. Those borrowings will add substantially to Australia’s interest costs and will complicate the refinancing task of future governments. The Treasurer is either very badly informed or so removed from reality, or is deliberately deceiving the electorate, that there is cause for very serious concern. There is only one realistic way in which Australia’s external position on current account could be improved in this financial year, and that would be by a further devaluation of the dollar. In fact this Budget is beginning to be like devaluation. It is a series of frequent, inevitable changes administered by a small group of men at the top on a day-to-day basis. The list of incompetent and bad business management is endless. The rate of inflation has not come back to the single digit figure which Mr Lynch promised last year. The current rate of inflation is running at about 13 per cent and there is no prospect of it decreasing substantially by June of next year.

The Australian Financial Review had a comment to make recently concerning the proposed three-step scale personal income tax proposals which the Government has introduced this week. The Financial Review apologised to the Treasurer for calling his tax scheme a shabby confidence trick. I doubt that it should have apologised, because if we look at the policy speech delivered on 27 November 1975 by the man who is now Prime Minister we see that the proposal is a confidence trick and is contrary to the Prime Minister’s dogmatic assertion that it makes everyone better off. The Prime Minister has claimed that everyone will be better off under this new scheme. But can we accept that claim? It appears from a comparison of the proposed scheme with the existing indexation of tax rate scales that the people in the taxable income bracket between $6,000 and $8,000 a year will in fact pay more tax on an annual basis. People earning between $8,000 and $10,000 a year will be only marginally better off. But people earning in excess of $ 10,000 a year will be substantially better off. I seek leave to have incorporated in Hansard the tax savings as we in the Opposition see the correct position.

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

The document read as follows-

GROWTH OF REAL GNP IN OECD AREAS

Percentage Seasonally Adjusted at Annual Rates

Source: OECD Observer Table 1.2 ‘The Economic Outlook’ at Mid 1977.

Table 2

TAX SAVINGS WITH NEW SYSTEM COMPARED WITH A CONTINUATION OF THE OLD SYSTEM- 1978-79

(Taxpayer with dependent spouse.* )

Senator WRIEDT:

– On this basis how can the Prime Minister claim that the whole exercise is not an election ploy? Importantly, the new tax scheme gives absolutely no advantage to anybody without a job. The Prime Minister apparently has turned a blind eye to those who are unable to find work and to whom a debate about new tax scales must appear largely academic.

The treatment of the new tax proposals in fact is very selective. The Prime Minister has not explained to the Parliament the effects upon the economy as a whole. These scales will not come into operation until 1 February 1978. Meantime, the rate of inflation is likely to accelerate and will be fuelled by the increased petrol prices. By the time the new PA YE scales are implemented actual disposable income will have declined. Any person in the middle and lower income groups who believes he or she will have additional real purchasing power should forget it right now. The Government’s own figures show that real average weekly earnings and real household disposable income have been declining. The only thing to be said about the new tax scales and associated measures is that they will maintain that trend. Thus, if the Government’s aim is to continue to reduce real wages its Budget package will certainly be effective.

I now turn my thoughts to the question of education. The income redistribution devised by the present Government under the new tax scales seems consistent with its other philosophies and particularly that of supporting the wealthiest members of society. The Government has cut funds for education but has directed the reduced funds to the wealthier members of the community. Under the Labor Government, funds for education were increased by an annual growth rate in real terms of just over 39 per cent. That was the average growth rate. Under this Government there has been no growth in education whatsoever. Indeed this year failure to provide cost supplementation in many areas will result in cuts for schools, universities and colleges of advanced education. Only technical education will receive any increase, and that increase is less than one per cent of the whole education budget.

Consistent with its program of discrimination, the Government has directed extra funds to the wealthiest private schools in an attempt to destroy the needs principle and thus heighten the iniquities in our education system. The Government is also moving towards per capita grants for non-government schools. At a time of cutbacks in funds for education, this will lead to a marked drift of funds from government to private schools. Indeed, funds for private schools in this Budget have been increased by approximately 10 per cent, whereas funds for government schools have been increased by just over two per cent. Under the guidelines delivered to the two education commissions, capital works will also be cut back. This will restrict development of our education institutions. Unemployment in the building and construction industry will be increased. Funds to the States for specific purpose grants and Loan Council programs which provide the bulk of education funds have been substantially reduced in real terms. Business colleges have been totally abandoned. Funds for them and their students have been cut off altogether. To top it off, the Government is now insisting that State governments pay up to 60 per cent of the cost of tertiary education. We do not have to think very hard of the enormous financial burden that that will place on the States.

To justify its actions in education, this Government has sometimes resorted to the claim that it has increased efficiency. But we see no signs of any increased efficiency in the current guidelines. Triennial funding has been abandoned. Funds for innovative programs have been cut to pay for transfers into the high levels of the private schools. Tertiary education courses must not be lengthened or upgraded. This has nothing to do with efficiency. This is a program to wind back the benefits of education ultimately leading to a situation where a good education will once again be available only to those who can afford it. The Government seeks to maintain the fiction that States are doing well. Once again the Government seeks to delude the public by referring to general revenue grants without any reference to other forms of State revenue. But the record shows that in total payments to the States under this Government the States are having a much more difficult time than they did in the three years of the Labor Government.

Let me remind the Senate of the line taken by the Treasurer last year. The Treasurer asserted that there would be a substantial increase in general revenue grants and that these funds would exceed the old formula by that now mythical figure of $90m. Of course, this year’s

Budget reveals the truth. The $90m did not materialise. In fact, five of the six States had to rely on a guarantee that was instituted by the Whitlam Government to get what they were entitled under that formula. The Commonwealth is offering the States an estimated increase in an attempt to balance the savage cuts made in other areas of Commonwealth grants. This year substantial cuts have been made in education, roads, urban public transport, pensioner dwellings and Aboriginal advancement. All those factors make it quite clear that the so-called federalism of this Government, which it said would be the solution to its claims of giving a better deal to the States, is as dead as a dodo.

Let me consider some of the alternatives that we as a Parliament might be considering. There are some alternatives. After two Budgets by this present Government we can see that its economic strategy has been shown to be wrong. I do not suggest that any government will come up with solutions which are suitable to everybody. No government ever has. But at least there are things that we should consider which are presently outside government policy. The immediate goal must be to create more jobs. There is no doubt that this demands absolute priority. It is no use just expanding the youth retraining scheme or similar measures because in present conditions all this will do is make an unskilled 19-year-old unemployed person into a skilled 20-year-old person. The real solution lies in creating demands and stimulating industry. The measures taken in the last Budget and this one are ineffective.

Let me consider the effect on private industry. The investment allowance and the trading stock valuation adjustments are estimated to cost the Government this year $600m at current tax rates. As we pointed out earlier, the economic conditions created do not reflect value for money. There is a decline in new private capital expenditure and a decline in the value of production in real terms. The investment allowance has at least been ineffective. It has largely encouraged investment in industries which would have made the investment anyway whether or not the allowance existed. The allowance and the trading stock valuation adjustment helped acid concentrated industries, and thus mining and heavy industries are the beneficiaries. In most cases it is large corporations which get most assistance. Particularly in the case of the mining industry where there is a large proportion of overseas ownership, the final benefit of the investment allowance would end up in the hands of foreign shareholders.

Some 94 per cent of companies in Australia have less than 100 employees. These companies form the backbone of our employment and they form the backbone of our manufacturing industries. The Government’s solution is to keep increasing tariff protection and maintain taxation incentives when the benefit is quite often doubtful. When demand is falling and the economy is sick, this approach adds to costs, fuels inflation and further redistributes income from the lower income groups to the wealthy. It sustains less efficient sections of Australian industry. It stifles adjustment and alienates our trading partners. There is a positive way of tackling the problem. The first thing to recognise is what was pointed out this year in the annual report of CSR Ltd in which it was stated:

We see that government and private enterprise each must act with due regard for the role of the other.

The funds which were being used in the investment allowance in particular would be better used for structural adjustment assistance. The Labor Government introduced a structural adjustment scheme for secondary industry which this Government dropped. The first thing that could be done is to reintroduce that scheme but on a wider scale because that would help to make Australian industries more competitive and would increase our employment opportunities. Contrary to the Government’s frequent assertions that Australian manufacturing industry has difficulty exporting its output, the value and volume of manufactured exports has been increasing steadily. When this Government came to power manufactured exports constituted 23 per cent of all exports. In fact, it was more than the proportion of unprocessed mineral products. This clearly shows that there is a sound basis upon which we can build industry to sell to world markets, particularly those in Asia and the Middle East.

Adjustment assistance schemes should be used to help the development of industries which are capable of exporting. They should assist a move out of the high cost, heavily protected industries which in many cases are unable to compete on the open market. Not only would it be possible to maintain employment by creating new industries and expanding existing manufacturing export industries but it would allow co-operation instead of the confrontation that we have seen recently with some of our neighbours which belong to the Association of South East Asian Nations. The principle and practice of adjustment have been well established in rural industry and should be supported by the current Government. There is no reason why adjustment schemes should not operate on a similar scale and with the same success in manufacturing industry. Apart from making no positive contribution to structural adjustment or fulfilling the objectives of the Jackson committee report, the Government has decided to increase company tax by 3.5 per cent. While the larger companies, which are enjoying the benefits of the investment allowance and the trading stock valuation adjustment, are probably capable of paying the additional cost the smaller companies will find it a much greater burden.

Instead of taking a positive approach and encouraging adjustment in Australian industry and orientating it towards export the Government continues to blame the wage earners for sabotaging economic recovery. Needless to say, the decline in real wages which this Government is encouraging and the confrontation approach in industrial relations is far from conducive to assisting industrial expansion. The Conciliation and Arbitration Commission in its national wage case decision last Monday criticised the data and the approach of the Commonwealth and threw serious doubt on the Commonwealth’s view of the causes of unemployment. The President of the Commission reprimanded the Government by saying that it remained highly contentious whether employment recovery would have been greater or less merely if the Commission had awarded smaller wage increases during 1976-77. Both in this Budget and in submissions made to the Arbitration Commission the Government has overstated completely the effect of any increase in real wages on the state of the economy.

The proposals that I have suggested I believe are the sorts of things we could do if we are to get a proper marriage between the public and the private sectors. This was spelt out only just recently by Sir John Dunlop, a name we well know in Australian industry. He was Chairman of CSR and a member of the Australian Industry Development Corporation. He said- his words are worth listening to:

The best solution for many problems facing industry and especially issues between government, business and the trade unions, will be found through co-operative processes rather than through confrontations.

If this Government delays deliberate restructuring of Australian industry and persists with the policies of this Budget unemployment levels will increase, the structural imbalance that we already see in this country will worsen and long term recovery will be retarded. There is a long term requirement that the public sector be used to work in with the private sector and that the private sector in turn learns to work in with government.

Another matter that I want to raise briefly is the question of the working week, something I touched on briefly last week. There have been some emotions recently concerning the strike on this issue at the Sydney Mail Exchange. I draw to the attention of the Senate- the Government should give consideration to it- that there has been a reduction in working hours from 48 hours to 44 and then to 40. This process started 30 years ago. Increasing technical knowledge and more sophisticated capital equipment enabled industry to be in a position progressively to grant shorter working hours. As technical knowledge develops job tedium will increase. As has been shown over a wide spectrum of manufacturing industry, labour and subsequently capital productivity will fall.

It is important, I believe, that we recognise the enormous advance that has taken place in 30 years in technology and manufacturing techniques since we introduced the 40-hour week. It is time that we considered as a nation that the working week be progressively reduced to something of the order of 36 hours over a four or 5-year period. If we imagine that we can employ the same number of people with this tremendously increasing capacity of machinery to produce goods, obviously we will live with unemployment for as long as we have manufacturing industry in this country. If it is done in this haphazard fashion of the present Government we must expect unrest throughout the whole of the industrial sector. The whole philosophy of the Budget is based on an illiberal view about people who are not as wealthy as many of the people in this Parliament and in other places. Its perpetuation will be divisive and disruptive. It is not a budget of reconstruction and development; it is a budget of dissent and disruption.

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

- Senator Wriedt who led for the Opposition spoke about the election promises in 1975 of the present Prime Minister (Mr Malcolm Fraser). He said that promises were made with regard to a lower rate of inflation, an increase in industrial confidence, a reduction in unemployment and other matters which we regarded as vital to Australia at the time. He did not say that in 1975 we inherited economic bankruptcy and that the promises we made at that time are still commitments of the Government, some of which have made progress, others still face difficulties ahead. The commitment to rebuild this nation was one that was made in 1975, and it is one in which we can claim progress. This Budget assures further solid progress towards the Government’s economic and social objectives.

The first goal of this Budget is to maintain the underlying trend to lower the rate of inflation. That is the first element of progress that we could claim. There is the reduction in inflation in the past year. We should ally that with our second goal, which is dependent on the achievement of the first one. That is to promote moderate and non-inflationary growth in order to create jobs and reduce unemployment. We believe this Budget will move Australia further towards achieving those goals. In so doing it will build on the foundations we laid in last year’s Budget.

I refer to some of the matters raised by Senator Wriedt before I refer to many matters which are my responsibility as Minister for Social Security. It seems to me that in the exposition we have heard nothing has been learnt by the former Government since its disastrous economic policies led us to the economic bankruptcy which I mentioned earlier. The Opposition seems to have no understanding of the relationship of public expenditure and the commitments which it made when in government and imposed upon the Australian people. It has no understanding of sound economic management. Where it was claimed by Senator Wriedt that we were wanting to wind down the private sector, I think he should understand that all our efforts are aimed at encouraging the growth in the private sector that we know will provide permanent jobs. The Opposition continually talks about creating jobs. It is unrealistic to talk about creating jobs unless there is real economic growth and unless there is some demand for the products that are produced. To talk continually of economic growth, of creating jobs and of restructuring, without realising that there needs to be a sound economic base for these is to show that nothing was learnt in the three years of government or has been learnt in the almost two years of opposition.

It was said that there has been no growth. I believe that the Treasury documents have shown precisely what has been the experience over the past year. They forecast what we expect to occur with our policies in the forthcoming year. They predict that there will be some growth. They show that we expect to have a continuing reduction in inflation and that we hope to see improvement in profitability and profit levels. They show that there will be some improvement in employment opportunities and they show that we see restraint on monetary growth as being important. The Budget documents have shown that our spending in this year will be up by 10.5 per cent in comparison with an increase of 10.4 per cent last year. Receipts will be up by 14.3 per cent. The deficit of $2,2 1 7m compares with the $2. 7m deficit of last year. The domestic deficit of $1.3 billion compares with the domestic deficit of $1.9 billion of last year. Those are the figures on which we have constructed the Budget. It is important to look at some of the aspects of it as we deal with the challenges that have been made by the Opposition in the speech of the Leader of the Opposition, Mr Whitlam, last night and also in the speech of Senator Wriedt today.

It is difficult to know the reaction of the Opposition to the Budget because it seems to me that Opposition members are not speaking with one voice on economic policy. Our newspapers of 19 August showed that we have a troika of confusion in Mr Hurford, Mr Hayden and Mr Whitlam and their attitudes to quite fundamental policies as they relate to our economic management. I will say more about that in my comments. Some reference was made to the increase in petrol prices and the effect that that would have on the disposable income of the people of Australia. I point out that the increase in petrol prices will add 0.9 per cent- less than one per cent- to the consumer price index, spread over a full year. The effect of the petrol price rise will flow through only gradually because of the lags that are involved. A rise in petrol prices is inevitable if Australia’s petrol reserves are to be conserved and if the exploration and development of Australia’s oil resources are to be encouraged.

If we are talking about the effects of indirect taxes on the consumer price index it is fair to note that this Budget does not have the effect on the consumer price index for the December quarter which accompanied the 1975 Budget and indeed the 1976 Budget. In 1975 indirect taxes were increased by about $700m and the consumer price index for the December quarter of that year was substantially higher. There were increases in respect of tobacco, crude oil, spirits and beef in that Budget. I think it is important to see that the Budget introduced last week did not show increases in indirect taxes in the way in which some people may have expected. One of my colleagues has said in very simple terms that it is a very good Budget because taxes are down and pensions are up; there are no cuts in social security; inflation is coming down; and there is the expectation that interest rates will be coming down. One can run through in simple terms what are the achievements of this Budget.

Senator Wriedt:

– He must have been one of your supporters.

Senator GUILFOYLE:

– He is, and he comes from Senator Wriedt ‘s State, which perhaps links him with some of Senator Wriedt ‘s thinking. The attitudes that have been expressed with regard to the taxation system are important because we see from the Opposition that there is no commitment to personal tax indexation- that is if we are to accept what Mr Hayden says. If we look at what Mr Hurford says we find that the National Conference of the Australian Labor Party last month endorsed personal income tax indexation. So here we have two economic spokesmen with responsibility in the Opposition saying different things about commitment to personal tax indexation. That is important in looking at the commitments that people will have with regard to personal income taxes and whether we are to recognise the effects of inflation in the future or whether we are to have from the Opposition that, if it were ever entrusted to produce another Budget, there would be no personal tax indexation.

Senator Gietzelt:

– That is rubbish. It was a Conference decision.

Senator GUILFOYLE:

– That is right. It was a Conference decision, apparently not accepted by Mr Hayden.

Senator Gietzelt:

- Mr Hayden probably missed it. It was a very long paper.

Senator GUILFOYLE:

– 1 would have thought that, as a would-be leader of the party, he would acquaint himself with decisions of the Conference if he is to make statements on behalf of the Opposition, particularly statements in the area of economic management.

Senator Gietzelt:

– What about the differences between Mr Fraser and Mr Lynch? Are you acknowledging those?

Senator GUILFOYLE:

– No. Mr President, I will make my speech in my own way. There have been no differences of Budget strategy between any members of the Cabinet or any members of our party. I instance that clash on the very fundamental means of how the revenue of government is to be collected from the Australian taxpayer. One Opposition Treasury spokesman is claiming that there will be no personal tax indexation and the other says that he is committed to his party’s policy to have personal tax indexation. It gives no feeling of security to the Australian people as to what would be the objectives of an alternative government on that fairly fundamental matter.

The new taxation system needs discussion and certainly should be open to discussion so that there is an understanding of it. The most important feature of it is that a new scale of tax instalment deductions, which will result in the majority of taxpayers paying less tax, will apply from 1 February 1978. So employees will be subject to the new rates for five months of the current year. When the time comes for making assessments based on the taxable income of the full year the new policy will be reflected in an arrangement under which tax will be levied to the extent of five-twelfths of income at the new rates corresponding to the new tax instalment deduction scale and to the extent of seven-twelfths at the rates currently in force. On the assumption that the new rates will carry through, with appropriate adjustments, into the 1978-79 income year, the adjusted rates are designed to give taxpayers in advance, as from 1 February 1978, an adjustment which has the same general effect as indexation would have. It has therefore been decided that the usual practice of applying an indexation factor- that is, the factor to prevent the rates on a given level of income in real terms from increasing as a result of inflation- will be allowed to operate only to the extent of 50 per cent of its normal effect. The new tax scales will bring a significant simplification of the rates structure.

The general concessional rebate which has applied in the last two years is to be abolished, but it will be provided instead that tax will not be payable by any individual on the first $3,750 of his taxable income. That figure is important to me as the person responsible for the 2 million people who are on pension income. I wish to mention that later. All taxable income above $3,750 will bear a standard rate of 32 per cent income tax. In addition, any taxable income between $ 16,000 and $32,000 will bear a surcharge of 14 per cent, bringing the rate on the income in excess of $ 1 6,000 to 46 per cent. For the taxable income above $32,000 the surcharge becomes 28 per cent, producing a rate of 60 per cent on so much of the income as exceeds $32,000. In keeping with the reduced rates on given levels of income, expenditure in excess of a ceiling figure qualifying for rebates will attract rebates at the rate aif 32 per cent instead of at 40 per cent as at present.

However, it has been decided to reduce the ceiling from $1,690 to $1,590, which will mean that all persons with rebateable expenditure above $1,590 will be entitled to claim the rebate in respect of a larger amount of expenditure. About 225,000 people, including many pensioners with small private incomes, will be below the tax threshold and will pay no tax at all.

About 90 per cent of taxpayers will pay tax at a marginal rate which will not exceed the standard rate of 32 per cent. This will mean that for those people overtime and other additional earnings will not be taxed at higher rates than regular income. This should have a beneficial effect in eliminating a disincentive to take on additional work.

That briefly outlines the changes that are to be made in the personal income tax scale and the structure of it. I believe that despite what seems to be some difficulty in understanding them they are a very important feature in this year’s Budget. They are an important feature for the Australian people. I think it is important to relate them to what Senator Wriedt was saying about a decline in wages. He made claims about a decline in wages and talked of wage increases that would be desirable. I think that when the new taxation system is fully effective and people are aware of their own disposable income it will be accepted that it is real progress to allow people to have more of their own income to handle in their own way to meet their own commitments and determine their own priorities. But if we are to look seriously at an increase in real wages surely we should relate this to an increase in productivity in all sectors of the Australian economy. If we are to look at a reduction in the number of working hours a week, of which Senator Wriedt has spoken, surely this should be related also to the productivity that can be achieved. If productivity is to be achieved through automation, through efficiency, through the improved technology that we now know exists surely our income earning levels should be related to the productivity that is achieved. If we argue that there is to be structural unemployment or a restructuring of industry where we see a need perhaps in the future to have some adjustment in respect of employment opportunities and other factors which may arise, we should still be looking at the effects on economic growth and productivity that will determine whether we are able to do the things that we would wish to do in education, health, welfare and so on.

I think it is also important that if we look at the working week in the way in which Senator Wriedt has spoken of it we should bear in mind that he is probably embarking on a theory of redistribution of work. This may be something that needs to be looked at in the future. If there is to be some redistribution of work or in working hours then it needs to be seriously considered in terms of its economic effect. It should not simply be a matter of one sector of the community straining against another hoping for more for itself and forgetting about that other sector which may not have employment opportunities at all. Serious national questions were raised by Senator Wriedt. I would like to think that we will have a degree of responsibility if we are talking about a shorter working week and if we are talking about increases in wages. We should not overlook the very fundamental responsibilities I have mentioned.

I said that I would mention the effect of the income tax changes on the pensioners who number about two million. The increased tax threshold will assist the pension population. We reach a situation in which a single person without dependants will not have to pay income tax in 1977-78 unless his taxable income for the year exceeds $3,402. This means that based on the maximum pension rate to commence in November 1977 a single age pensioner without children will not have to pay income tax unless his non-pension income exceeds $839. That is, he can have, in addition to his full pension, earnings of about $16 a week. The position would be the same for a widow pensioner without children. In the case of single pensioners without children the maximum rate of pension is payable unless nonpension income exceeds $20 a week. I think that all honourable senators are aware of that free area of income of $20 a week for a single pensioner. So we have the situation that some single age pensioners and widow pensioners receiving maximum rate pensions will still be required to pay tax. The number of pensioners in this position will, however, be substantially lower than the number in the year 1 976-77 when the tax was payable if non-pension income exceeded $596 a year which is about $11.50 a week. In simple terms we are saying that the position has improved. Whereas previously a pensioner receiving other income exceeding $11.50 a week had to pay tax that person can now earn about $16 a week before paying tax. I must say that I have a personal preference to finding a way to integrate completely the tax system and the pension system so that people in the free area of income in addition to the pension would not be taxed. I would certainly aim to see that that position could be achieved some time in the future.

To continue with the effects on pension recipients, the situation is that because of the sole parent rebate a single pensioner with children will be able to receive a higher level of nonpension income than those pensioners without children before being required to pay income tax. The amount depends on the number of children and varies between $2, 1 99 and $3,046 per annum which is equivalent to about $42 and $58 a week respectively in the case of an age or widow pensioner. In respect of a married age pensioner couple this depends on the proportion of any non-pension income derived by the couple received by each partner. If all non-pension income is received by one spouse tax will not be payable unless non-pension income for the year exceeds $1,532 which is about $29.50 a week. If the non-pension income is received in equal shares by each partner the corresponding figure is $2,532 combined or $1,266 for each partner which is $24 a week each. So as a general rule it can be said that most maximum rate pensioners will not be required to pay income tax under the new arrangements. The only numerically significant exceptions to this rule will be some age and widow pensioners without children where non-pension income lies in the small range just below the point where pension reduction commences under the income test. That is about $16 to $20 a week in the case of a single pensioner or $29.50 to $34.50 a week in the case of a married couple. It is expected that from 1 July 1 978 most or all of these pensioners will also be free of any income tax liability. I think that would be the aim of government because I find it inconsistent that one arm of government gives a pension benefit and another arm of government extracts tax from the beneficiary but of course where a person with pension income and other income reaches into the same level of income as other people in the community I dare say there is some equity in ensuring that the same level of taxation is applied to those pensioners.

The other matters that I wish to raise in the context of this Budget are the new proposals in my own Department’s activities. It has been announced that the next increase in pensions and benefits will be paid in November of this year. This will mean that the maximum single rate will increase by $2.20 a week and the maximum combined married rate will increase by $3.70 a week. There are about 1.9 million pensioners who receive payments from the Department of Social Security. These increases are a consequence of the indexation of pensions under the provisions of the Social Services Act which were introduced by us last year. The increases will give benefit to those who receive them and will maintain the purchasing power of pensions in accordance with movements upwards in the consumer price index. All pensions and benefits at the standard rate and at the married rate will attract these increases and I believe that they are significant in terms of our Budget. They are certainly significant in terms of the money allocated in the Budget. Probably I should have said earlier that the Department of Social Security has been allocated $6,345 m in this Budget. This is the largest area of government expenditure. It is the one field of government expenditure which has suffered no changes to areas of application. There have been no changes to the eligibility for pensions and benefits.

There is a change with regard to the procedures for processing claims for unemployment benefits. From 1 November 1977 all benefits will be paid in arrears. At present payments for unemployment benefit are made fortnightly in advance. This has caused payments to be made beyond the date a person returns to work. It is this procedure for advance payments that is being altered. The seven-day waiting period after becoming unemployed and before payment of benefit can commence will be retained. As at present, the first payment to a beneficiary for the first fortnight after he becomes unemployed will be for one week’s benefit. Further payments will be made fortnightly in arrears. These changed procedures will apply to all new beneficiaries who make application for benefits on or after 1 November 1977. Existing beneficiaries at that date will still be paid benefits in advance and will receive individual notification of their position.

The other change in Department of Social Security benefits relates to sickness benefit. In the Budget Speech it was announced that the Government had decided to remove an element of discrimination in the payment of sickness benefit and to repeal the relevant section of the Social Services Act. Sickness benefit is payable at the same rate as unemployment benefit to a person who is temporarily incapacitated for work. The rate of sickness benefit payable cannot exceed income lost by that incapacity. The maximum rate is currently $47.10 per week for a single person without dependants and $78.50 for a married couple. Where there are children, additional pension may be payable. At present the Social Services Act provides that a married woman is not entitled to sickness benefit if it is reasonably possible for her husband to maintain her. This provision does not apply in the case of a married man. This is seen as discriminating against women. In future a married woman will be able to qualify for sickness benefit on the same basis as a married man.

In addition, sickness benefit has been the only income tested benefit under the Social Services Act which has not taken account of the income of both husband and wife. Sickness benefit is out of line with all other income tested pensions and benefits under the Social Services Act because the income of a wife is not taken into account in assessing the husband ‘s entitlement to benefit. A married man may receive sickness benefit to the maximum single rate of $47.10 per week with additional pension for children, irrespective of his wife ‘s income. The Government has decided that this position is no longer tenable. In future, the income test for sickness benefit will take into account the income of both husband and wife. In future the combined income of both husband and wife will be taken into account in assessing the rate of sickness benefit, as is the case with all other pensions and benefits.

I would like to mention a change in the handicapped child’s allowance. At present the handicapped child’s allowance is payable subject to the medical criteria applicable to the definition of a severely handicapped child in the Social Services Act. The allowance amounts to $15 per week. The Government is conscious of the additional costs that can be incurred in caring for a handicapped child at home. At present low income families may not be eligible for the handicapped child’s allowance because their child does not satisfy the medical criteria of a severely handicapped child. This can lead to particular hardship. The Government has now decided to extend eligibility for the handicapped child’s allowance. The Director-General of Social Services, at his discretion, will be able to grant a handicapped child’s allowance of up to $ 1 5 per week to a person on low income who has the custody, care and control of a substantially handicapped child. This new eligibility will apply in respect of a child whose handicap does not fully meet the medical criteria currently applying where, because of continuing substantial expenditure associated with the child’s disability, the parent or guardian is, in the opinion of the Director-General, suffering severe financial hardship. The Government hopes that the widening of the criteria will be of assistance to low income families who have continuing expenditure for a substantially handicapped child.

The aged persons homes and hostels programs, the handicapped persons assistance scheme and the Commonwealth Rehabilitation Service have been continued, as was foreshadowed in last year’s Budget. The Commonwealth Rehabilitation Service is now able to offer one additional service. I am told by those who have worked in the Commonwealth Rehabilitation Service for many years that this is a widening of eligibility that gives them very great satisfaction. The Government has decided that disabled housewives and other persons who are deemed unlikely to have reasonable prospects of undertaking gainful employment are now able to be given access to the Commonwealth Rehabilitation Service. At present assistance, free of charge, through the Commonwealth Rehabilitation Service is confined to certain pensioners or beneficiaries under the Social Service Act, in addition to a small number of special groups.

In future the remedial and training program of the Service should be made available, without cost, not only to those without reasonable prospects of undertaking employment but also to all those within the broad working age group who, in spite of substantial residual handicaps, have reasonable prospects, with rehabilitation assistance, of resuming a former role as a housewife or mother or of increasing their capacity to lead an independent or semi-independent life at home. It is intended as a starting point that the acceptance of disabled housewives would be a priority, at least during the current financial year. The Government’s decision is in line with one of the recommendations of the Poverty Commissioner, the Reverend Martin, in the third report of the Poverty Inquiry and also in line with strong representations that have been made to me by the National Advisory Council on the Handicapped. The Government believes that this will be of assistance to those people who were formerly not eligible but who now will be able to have the services of the Commonwealth Rehabilitation Service in the future. There is an increase in expenditure in the Telephone Interpreter Service, which is important to migrants in Australia. There were many reports prior to the bringing down of the Budget that the activities of the Service were to be curtailed or abandoned completely but contrary to those reports the Government has provided increased funds and I am able to announce that the Telephone Interpreter Service will be extended to Wollongong in the near future.

This has outlined some of the matters relating to the Department of Social Security in the context of this year’s Budget. I conclude where I began by saying that this Budget places a continuing emphasis on the reduction of inflation and the encouragement of incentive and activity in the private sector. The Government hopes that it will build on what was achieved throughout the past year and lead Australia on the road to economic recovery.

Senator WRIEDT (Tasmania)-I seek leave to move an amendment, which, unfortunately, I omitted to do when I spoke.

The PRESIDENT:

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

Senator WRIEDT:

-I move:

Senator GIETZELT:
New South Wales

– In supporting the amendment that has been moved by the Leader of the Opposition (Senator Wriedt) I think it must be said that the 1977-78 Lynch Budget, like its predecessor of last year, turns its back on the needs of Australia and most Australians. It purports to represent the basic economic interests of the Australian people, but the Opposition believes that it has more political importance than economic importance. It believes that this Budget is going in the wrong direction and is, in fact, based on a totally erroneous philosophy. I think it must be said that the morning after the Budget was presented most of the reaction seemed to be favourable, from the Government’s point of view. The media in general expressed some belief that it would generate business confidence and reactivate the Australian economy. But as the news filtered through, as journalists, those in the media, most economists and others in various sectors of the Australian economy began to look more closely at the Budget, they reached the position which the Opposition reached on the following days and which it has raised in Question Time, that is, that the Budget is one of complete and utter confusion. Today is the first time in the Senate that a Government speaker has sought to explain away some of the basic features of the Budget. The Minister for Social Security (Senator Guilfoyle) asked: ‘What sort of reaction is the Government to expect from the Opposition?’ I do not think there is any doubt that the Opposition, from the inception of the Budget, saw it as it really is- a Budget that confirms the Government’s determination to redistribute income away from the majority of Australians in favour of the minority, the higher income groups.

When we see editorials and comments by economists, including even the Government’s own advisers- I refer particularly to Professor Hogan- and statements from business leaders and farm leaders, all coming to a similar conclusion, I think we have to say that this Budget represents a Judas kiss to economic recovery. The basic Budget strategy places all its faith on economic recovery by the private sector. Nowhere in the Western world has the private sector in any way taken up the challenge and responded in a way that would satisfy the views of conservative economists, or for that matter, conservative governments. I am attracted to a statement that was made by a British economist who was in Australia recently, Stuart Holland. He said:

In practice the private sector is failing the nation on a massive scale -

He was talking about the United Kingdom- and represents a dead weight on the backs of working-class people, who, through taxation, subsidise distributed private sector profits.

So when we look at the Budget in its totality, we see those who will gain most from it. They will certainly be the petrol companies. They will certainly be the corporate private sector and the private entrepreneur. They will certainly be the politicians but they will certainly not be those groups within the community that require the sort of stimulus to bring about the basic strategy of the 1976 Budget, which was to lead us towards an economic recovery based on consumerism and investment. In his Budget Speech that year the Treasurer, Mr Lynch, said that the basic philosophy was that individuals and businesses should have more to say in spending decisions which concern them and governments have less. At the same time the Budget proposals were intended to strengthen confidence among consumers and investors and thereby advance the recovery of the economy.

This year’s Budget shows the Government’s determination not to intervene on behalf of the Australian people in the economic processes which shape the direction of the Australian economy. By reneging on its duty the Government puts beyond doubt that Australia will continue on Fraser’s predetermined path of 1976. That is a path of increased unemployment and no government senator or member can say otherwise. It is a path of high inflation- perhaps a difference of one per cent or two per cent. It is a path of below economic activity, reduced Australian equity in Australia’s mineral wealth, reduced assistance in the rural sector and the further integration of the Australian economy into the world economy to satisfy the profit dictates of the major transnational corporations and foreign capital investment. The objective of this Budget, as with other economic measures and decisions outside the Budget, is to redistribute income away from the majority of Australians and to redistribute profits out of Australia. The mammoth devaluation of November 1976, perhaps more than the Budget of 1976, served this implicit objective. This 1977 Budget continues the process.

The Budget has been condemned far and wide for its lack of clarity, its lack of detail and the inability of Ministers in this place to explain or defend it in any way at question time. The Government has attempted to conceal the true impact of the changes to the tax scales. It must surely be conceded that confusion reigns throughout Australia in regard to the tax scales as newspaper after newspaper seeks to present tax scales given out by the Prime Minister (Mr Malcolm Fraser) and the Treasurer whose statements are contradictory. The Budget seeks to conceal that the Government has gone back on its commitment to full tax indexation. The Treasurer states that everyone will be better off. In his own Budget Speech, he said that the much improved and simplified tax system will provide very substantial benefits to taxpayers at all income levels. A closer analysis exposes the complete dishonesty of this statement. If the Fraser Government had stuck to its commitment of full indexation of the tax scales and rebates, all taxpayers earning $11,500 and below would have been better off under this system or had substantially the same income. The new Lynch scheme for 1978 gives substantial benefits to those taxpayers earning $ 1 1 ,500 and above, to the top 20 per cent of taxpayers. Therefore this surely cannot be said to be a Budget that will lead towards the sort of economic recovery, the consumer-led recovery, which the Prime Minister and his Ministers promised in 1975-76 and 1977.

One of the other features of this Budget is that it is designed to reduce real wages, to encourage a reduction in purchasing power and to increase the profitability in the private sector. It is interesting that Mr Lynch, in his Budget Speech of last year, suggested that when profits were back to somewhere around 15 per cent of the gross domestic product it would be an historical level that should bring about economic recovery. Everybody knows that that level has been reached. Yet in the reaching of that level there has been no sustained recovery and there cannot be. When the Treasury documents are studied it is shown that some 55 per cent of all profits made by the corporate sector of Australia, leave this country to satisfy the shareholding interests of parent companies. So when we put emphasis on profitability as against real wages we negate the principle of a consumer-led recovery and we strengthen that section of finance which is leaving the country to satisfy parent companies overseas.

As I said earlier, the 20 per cent of taxpayers in the middle or lower income bracket will be worse off and the 20 per cent of the taxpayers in the top section will be better off. This fact alone shows that the Budget cannot possibly lead to any economic recovery. Those most able to pay obtain greater benefits from those least able to pay under the new system. If the Minister for Social Security, Senator Guilfoyle, is genuine in her belief that there is a need for more production, I remind her that there is no point in having more production unless the community has sufficient funds to purchase that increased production. Is not our problem in the car industry today that we have more cars produced than we can sell? Of course, that runs right through the whole of the Australian economy. Unless steps are taken to increase considerably the amount of money available to people who purchase goods produced in this country, there is no way that investments will increase. From the point of view of increasing production techniques, there is no way that the goods that would be produced in greater quantities could be purchased by the Australian community.

Returning to the tax scales, a person on $5,000 benefits by $1.32 a week. Even though that is an improvement on the existing rates scale, surely the Government does not believe that that will have any measurable impact on the living standards of the Australian people when today it has been announced that in the month of July, for example, food prices in this country increased by one per cent throughout Australia. Surely the Government cannot be serious when it suggests that a person getting such a small benefit will be able to assist in the consumer-led recovery. A person earning $ 15,000 benefits by $5.83 a week. A person on $50,000 benefits by $52.2 1 a week. The tax rate for persons with incomes above $32,000 has been reduced from 65c in the dollar to 60c in the dollar. This shows the regressive nature of the Budget and the tax scales. People on incomes of between $6,000 and $8,000 will be paying more tax. I hope that I will have the opportunity to show that this group which now encompasses about 1,400,000 taxpayersaccording to a schedule that has been prepared by the Legislative Research Section of the Parliamentary Library- in fact will be paying more tax under these tax scales.

The Treasurer misled the Parliament and the Australian people in his Budget Speech when he said that all people will obtain benefits. He cannot claim ignorance of the effect of the changes.

He misled his own party. He misled the Parliament. He misled the Australian people. The Conciliation and Arbitration Commission- a socalled independent commission upon which the Government continues to heap blame for its own failed economic policies- has openly rebuked the Treasurer and the Government for another false statement. In his infamous speech, Mr Lynch had this to say about real wages:

There can be no doubt that, had the wage determination processes permitted real wages to decline in 1976-77, recovery would have been stronger and unemployment less.

Instead, so far from having declined, as has been repeatedly asserted by our political opponents, real wages were actually higher at June 1 977 than a year earlier.

Sir John Moore and his fellow commissioners have produced figures which directly contradict this statement. The consumer price index rose by 13.4 per cent between June 1976 and June 1977, while average weekly earnings over the period rose by only 10.8 per cent. There has to be a margin. There has to be an acceptance that real wages in fact declined in that period, and the Commission has so ruled. Yet Mr Lynch has the temerity and this Government has the audacity to suggest otherwise, in the face of all the evidence that is freely available from the Treasury, the Library and the Conciliation and Arbitration Commission.

There has been a real wage reduction. There has been a vast increase in the profitability of the major corporations. Yet despite that- that is, a drop in wages and an increase in profitabilitythere has been, instead of a decrease as promised, an increase in unemployment. The Fraser economic strategy has failed and no amount of misleading or false statements can conceal this fact. The Government claims to be reducing the tax liability of wage and salary earners. It has made that assertion several times since the Budget Speech was made. The Minister for Social Security made that assertion again this afternoon. The plain facts are that payasyouearn tax receipts in money terms are up 1 7 per cent from last year. Overall receipts from PA YE tax and tax on individuals as a percentage of total receipts, according to table 1 found at pages 6 and 7 of Budget Paper No. 10, will be approximately 52 per cent. That is a 2 per cent increase on the figure under the last Labor Budget. In the last Labor Budget- that of 1975-76-50 per cent of total tax receipts came from individuals. In this Budget, 52 per cent comes from individuals.

It is worth having a look at pages 6 and 7 of Budget Paper No. 10 in a little more detail when we have regard to the assertions that have been made by this Government. In the 1967-68 Budget- it was a Liberal Budget- personal income tax, PAYE tax and tax paid by individuals, represented only 27 per cent of Budget income. It is true that in the intervening years the figure rose slightly and in 1973-74 it reached 49 percent.

Senator Young:

– Which party was in government then?

Senator GIETZELT:

-It reached 50 per cent in the following year. I point out to Senator Young that in this Government’s Budget last year it reached 54 per cent. This year, this Government has dropped it back to 52 per cent, but that is double what the figure was 10 years ago. Yet this Government, its Treasurer and its Prime Minister are trying to convince the Australian people that in fact there has been a reduction in personal taxation. There has not been a reduction in personal taxation.

I can show this to the Senate by referring to the incidence of PAYE tax per head of population. Under the Hayden Budget of 1975-76, $637.16 was paid by every taxpayer in this country. What is that figure in this Budget? It is $707.02. The overall tax per head of population in Australia last year was $1,532, and this year it is $1,726. There is no question that the Government has tried to hoodwink its own parties and its own supporters. It would do the Parliament good if Government senators analysed the Budget a little more closely and stopped being lickspittles of the leadership of the Government and of their own parties. The Fraser Government, in percentage and actual money terms, is extracting more from the Australian taxpayer than did the last Labor Budget. More importantly, it is extracting more but providing less to the Australian people. It is providing fewer hospitals, fewer schools, and less money for decentralisation programs, roads, sewerage, education, the arts, farmers and people in need. If honourable senators opposite have any doubts about how people see the present Budget, they should note what the rural sector has had to say about it. I could not go to more reputable mouthpieces of country interests than the newspapers Stock and Land, the Land and Country Life and the Australian National Cattlemen’s Council. An article in Stock and Land states:

This week ‘s Federal Budget is the biggest setback so far for the country people’s confidence in the Federal Government . . . Those 1 1 farmers among the Federal Government’s 26 Ministers will need to throw their hats in the door before they return home to their electorates.

And so will those Government back benchers from country electorates.

A special editorial in the Land is headed ‘Budget is disappointing’. An article written by Alan Goodall in Country Life states:

Nothing to start a rural bank. Nothing to push beef carcass classification. No wheat stabilisation contribution. No equalised petrol prices … but a petrol rise. The Lynch budget is not a good one for primary producers.

An editorial in Country Life- I am told that Country Life is owned by people who, if they are not members of the National Country Party, support that party- states:

Primary producers may be forgiven for thinking this week that the Federal Government has forgotten them.

I do not need to stress what members of the Australian National Cattlemen’s Council think, because Mr Seccombe distributed a paper to all members of Parliament. In part, it states:

Cattlemen throughout Australia are entitled to feel completely let down because tonight’s Budget gives no recognition of the continuing and desperate plight of the industry.

I propose to spend part of the rest of the time available to me to speak about the Budget Speech itself. I have gone through the Budget Speech and have found 10 falsehoods or lies. Therefore, I propose to deal with the falsehoods that have been referred to in this Budget Speech. In his Budget Speech, the Treasurer said:

Unlike our predecessors we believe that taxes have taken too much from the community and that people now want greater charge of their own affairs.

In point of fact, the Budget income has been increased by 33 per cent in the last two years. I have already indicated the amount by which personal income tax has been increased and there is no point in labouring that. The second misstatement of the Treasurer reads:

Union leadership bears an equal responsibility; it is the trade union leaders who have to consider the unemployment consequences of their demands for higher pay for those presently in jobs.

Of course we know it is a common feature of this conservative Government to blame everybody but itself. It blames the workers for not producing enough. It blames the farmers for producing too much when the farmers cannot market their product. It blames the trade union leaders for carrying out their job of protecting the economic interests of their members. Of course last week Mr Lynch went on the rampage blaming the Conciliation and Arbitration Commission. A newspaper article on the subject stated:

The Treasurer, Mr Lynch, yesterday blamed the Arbitration Commission for the lack of improvement in unemployment. Mr Lynch accused the commission of consistently refusing to face up to the employment consequences of its decisions.

He ignored the fact that factories in Australia are now operating at only 75 per cent of capacity.

What manufacturer would want to produce more? What manufacturer would want it suggested to him that he should put in more machines to produce more goods when he has a quarter of his machines not producing to capacity now and when if he has to update his technology or his machines to produce more at cheaper cost he has to invest a considerable sum of money in such new technology. On page 3 of his misleading statement to the Parliament the Treasurer said:

The burden of Labor’s policy failures on the export and import-competing sectors made devaluation inevitable.

But, because of the determined action by the Government, overall policy was not blown off course and the basic strategy was maintained.

What did the same Treasurer say in his Budget Speech of the year before? He attacked the Opposition. At page 7 of his Budget Speech last year he said:

But, whether they know it or not, those who, in the name of reducing unemployment, call for higher Government spending, or bigger deficits, or full wage indexation, or devaluation of the Australian dollar, are calling for highernot lower- unemployment in this country. The overwhelming weight of evidence is against such courses.

What happened? It was this Government that took the step to devalue and it was this Government that pledged itself to tax indexation. The present Prime Minister (Mr Malcolm Fraser) when he was the caretaker Prime Minister in 1975 was reported as follows:

We will fully index personal income tax for inflation over three years, ‘ Mr Fraser said.

It will support wage indexation. It will make government more honest with your money. ‘

Yet the same Treasurer and the same Prime Minister are on the record as having attacked the Conciliation and Arbitration Commission for applying the principles of full indexation, and in this very Budget tax indexation is to be halved for the 1978 financial year, no steps are being taken to index the spouse allowance in respect of the current year, and family allowances have not been indexed either. Yet this is a government that talks about honesty. This is a government that has the temerity to suggest that inproprieties were taking place during the period of the Whitlam Administration.

Mr Lynch asserted in the Budget Speech that consumers are spending more. The fact is that household disposable income is down on what it was at the time of the last Budget. It is down from 15 per cent to 13 per cent. We can go on. Time does not permit me to itemise the various lies that appear in the Budget document.

Perhaps I ought to conclude by mentioning what has been claimed so many times by Senator Carrick in this place- a claim that is reported in the Budget document. On page 15 Mr Lynch talks about the relative generosity of the Australian Government in respect of the States. I searched the documents and compared them with the previous Budget documents and I came to the conclusion that what Senator Carrick has been telling us in respect of the benefits flowing from the Commonwealth to the States has been untrue. So I asked the Legislative Research Service of the Parliamentary Library to compile some figures. With your permission, Mr President, I would like to have them incorporated in Hansard. They show that in 1975-76 the Australian Government contributed 38.7 per cent of total Budget outlays to the other two arms of government and that in 1 976-77 the contribution dropped to 37 per cent. In this Budget it has received a measly increase to 37.4 per cent. The contribution has gone up 0.4 per cent. Clearly, in a period in which inflation is still at double figures, the States will not be able to avoid increasing charges for the goods and services they provide at the State level.

The PRESIDENT:

- Senator Gietzelt, did you seek to incorporate certain material in Hansard?

Senator GIETZELT:

– Yes.

The PRESIDENT:

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

The table read as follows-

COMMONWEALTH PARLIAMENTARY LIBRARY STATISTICAL SERVICE

Australian Government Budget Outlays- By Economic Type

Senator GIETZELT:

– I would like also to submit to the Senate the assertions I have made as a result of my own investigations which I have had confirmed by the Legislative Research Service. It has produced figures which show that people earning $7,000 a year will pay 6 lc a week more and those on $8,000 a year will pay 6c a week more in taxation under the new scheme. I seek permission to have the table incorporated in Hansard.

The PRESIDENT:

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

The table read as follows-

  1. Pre-February 1978 tax rates indexed by 12 per cent, with taxation rebates of $757 (general) and $622 (wife) allowed.
  2. Post-February 1978 tax rates indexed by 6 percent, with taxation rebate of $622 (wife) allowed. Rebate indexed by full amount.
  3. The Medibank Levy has not been calculated for incomes of $10,000 and above for a single man, and $15,000 and above for a man with a dependant wife, where it would be cheaper for the person to take private health insurance.
Note: For incomes between $6,37 1 and $8,096 inclusive the amount of tax to be paid would be less under the present tax rates indexed by 12 per cent than under the proposed tax rates indexed by 6 per cent. {: .speaker-RG4} ##### Senator GIETZELT: -- The table indicates that the generosity about which the Government speaks when it refers to the taxation scale does not exist. Time does not permit me to go on in any more detail other than to read to the Senate an extract from *Money Matters* of 19 August. Money Matters is a publication which deals with economic trends, investment hints and industry surveys. It states: >The economic outlook forecast or implicit in the Budget is far from cheering for investors. There is no impetus to economic recovery until inflation is under control. The Budget sees no change in unemployment, little chance of an inflation rate substantially below 10 per cent, a slower rate of growth in Gross Domestic Product, slower wages growth, little real growth in consumer spending and, most importantly for the *share market, no* guarantee of any marked reduction in interest rates. > >Stagnant economic growth- even with a rise in the business sector's share of GDP- is not going to get share prices rising unless investors are sure interest rates are going to move down. There is no clear indication of this in the Budget. For those reasons we oppose the Budget and I urge support for the amendment. {: .speaker-10000} ##### The PRESIDENT: -- Order! The honourable senator's time has expired. {: #subdebate-39-0-s4 .speaker-KBY} ##### Senator YOUNG:
South Australia -- We have just listened to a speech which one is used to and expects to hear from **Senator Gietzelt.** The main thrust of his argument again has been that 'profit 'is a dirty word and that private enterprise is something that should not exist within a society such as ours. I remind **Senator** Gietzelt firstly that this country was developed by private enterprise and hard work, and, secondly, that in the postwar period the great developments and expansion that took place in secondary industry took place because of investment by private industry and its encouragement of initiatives. It was not until 1972, when we saw a change of government which brought with it a change in philosophies and which not only said that 'profit' was a dirty word but also embodied this belief in its legislation, that we saw a great downturn and concern within industry generally in this country. I was glad to hear **Senator Gietzelt** say what he did because whilst members of the Australian Labor Party such as **Senator Gietzelt** continue to criticise the Government and its Budget, keep hammering away with the assertion that 'profit' is a dirty word and assert that they do not like private enterprise, I hope that more and more people will hear this. They have had a taste of what attitudes are all about when the Labor Party puts them into policy. The people of Australia showed clearly what they thought about the policies pursued during the three years that the Labor Party was in office. The present Budget still maintains and reinforces the economic strategy that the Government introduced when it first came to power and which it has consistently pursued over the last 1 2 months. I refer particularly to the aspect of inflation and also to the huge deficit which gradually grew in this country from 1972 onwards. The Government has stuck rigidly to its targets. The Government is succeeding with regard to inflation, no matter what **Senator Gietzelt** says. The Government is also succeeding in reducing the huge deficit. Inflation this year has been down to an average of some 10.2 per cent. In the last two quarters of this year the inflation rate was calculated to be 10 per cent a year. Honourable senators should compare this with the previous year, 1 975-76, when there was an inflation rate of some 12.3 per cent. In 1974-75 the inflation rate was some 16.9 per cent. I think the Government should be given every encouragement and congratulations. The record shows clearly that it is achieving the target it set out to achieve- the reduction of inflation. The Budget deficit this year is some $2,700m. When this Government came to office the deficit which the Labor Party had achieved for 1975-76 was some $4,500m. Budget outlays for this year are only 10.4 per cent higher than they were in 1976-77. This is an improvement of 24 per cent on the increase in outlays for 1975-76. This can be compared with the 46 per cent increase in outlays when the Labor Party was in power in 1974-75. It is all very well to go on and on spending money as though money was something that grows on trees. This was something the previous Government did not learn until too late in its life. By then so much of the damage had been done. I commend the Government for what it is doing in what it said would be its two prime target areasthe reduction of inflation and the reduction of the huge deficit that the Government inherited. The Government also restructured taxation. We have heard criticism today. No doubt we will hear more. The restructuring in itself will provide a stimulus for consumer spending. It will also, I hope, ease excessive wage demands because it will allow a great deal of the work force to take home more in terms of real wages. This to me is very important. When the new taxation scheme is introduced it will encourage further incentives to work. One factor that concerns me and the Government very much is the high level of unemployment in Australia at present. But I am concerned that many people at present who are receiving unemployment benefits quite frankly are abusing the system. We know that. Some people just do not want to work. We have to make sure that those who are genuinely out of work will be given full support. This is essential. I would like to see some type of scheme introduced by the Government whereby the genuine can be sorted out from those who are not genuine. It is all very well for members of the Opposition to smile when I say that. Deep down they agree with me that a lot of people in the community today prefer to live on unemployment benefits rather than go out to work. I would like to see some sort of works scheme for those who have been on unemployment benefits for a long time. For example, there could be part time community work- I refer to old folk 's homes and so many other things- whereby these people could be paid for work done. We know what is happening at present. We hear many reports of people who may work for six months and then go to Surfers Paradise and other places for another six months while on unemployment benefits. This is going on. {: .speaker-K6F} ##### Senator Cavanagh: -- Name them, **Senator.** {: .speaker-KBY} ##### Senator YOUNG: -It is all very well for honourable senators opposite to say that. If they are honest, they will stand up and agree with what I am saying. There is a difference between the genuine unemployed and those who do not want to work at present. These people are costing the taxpayer a lot of money and discouraging many genuine workers in this country. I would like consideration to be given also to a voucher system whereby people who have been unemployed for a long time and have not given satisfaction when they have obtained employment- I do not intend this system to operate immediately a person is out of work- will get a certain amount of benefit in the form of vouchers for their food and clothing instead of receiving total cash benefits. Therefore these people will not have the same amount of ready cash as at present. I hope that the Government will look very closely at this matter. I feel desperately sorry for the genuinely unemployed. These people themselves become concerned because they have to stand up amongst other people who do not want to work in our community. As I said earlier, the Government's economic strategy has been working. It should continue to encourage and restore business confidence and consumer confidence which have been lacking for quite some time. The Government cannot do all alone. It is a case for united effort by all people within this country. At this point I wish to refer to some of the radical sections within our trade unions. I fully support the trade union movement and agree wholeheartedly that the average worker in Australia is a good guy. I want to make this particularly clear. But we are still having industrial unrest in this country. I refer to the recent strike of 37 days at Mt Newman which cost something like $42 m in lost iron ore production alone. It also damaged the trading confidence between Australia and Japan. I refer to the Seamens Union of Australia ban on foreign oil tankers at Australian oil refineries which has gone on for a long time over the demand that a certain ship, the *Howard Smith,* should be an Australian flag tanker on the overseas run for crude oil. This ban is costing approximately $12,000 a day every day that ship is held out of port and not delivering its crude oil to refineries. Let us look at another aspect. If that ship were to go on the overseas run as an Australian manned tanker, the increased cost of shipping crude oil to Australia would amount to the equivalent of a subsidy of some $30,000 a seaman per annum for every member of the *Howard Smith* crew. That is what the action would cost. It is unfortunate that what is happening in some sections of this country is that we are tending to cost ourselves out of jobs. I wish to turn very quickly to the economy of South Australia and to refer to a statement made by the Deputy Leader of the Opposition, **Mr Uren,** when he addressed the South Australian State Labor Conference on 13 June this year. He said: >Now the foreign-owned companies are moving to rationalise their production and distribution structures and as a result, the interests of the people of this State are threatened. > >There will be strong moves to transfer productive capacity from South Australia to the eastern states, and in some cases they will be moving overseas. Some are already doing this. > >The South Australian work force is dependent on keeping a strong manufacturing base. I agree with what the Deputy Leader of the Opposition has said, but for different reasons. Costs in South Australia today are now virtually as high or in many cases higher than they are in other States. I seek leave to continue my remarks at a later stage. Leave granted. Debate adjourned. Sitting suspended from 6 to 8 p.m. {: .page-start } page 477 {:#debate-40} ### DEVELOPMENT OF THE NORTH WEST SHELF GAS FIELDS {:#subdebate-40-0} #### Ministerial Statement {: #subdebate-40-0-s0 .speaker-DV4} ##### Senator WITHERS:
Western AustraliaMinister for Administrative Services · LP -- by leave- The Commonwealth Government has now completed its consideration of the proposals submitted by the North West Shelf Joint Venture companies last year in which they outlined the plans for development of the large gas reserves they earlier discovered in the Rankin Trend area on the North West Shelf. It is also understood that the Western Australian Government has now reached agreement in principle with the Joint Venture in regard to the supply of gas to the Western Australian market both in respect of quantity and price. The agreement in this respect is now awaiting ratification by the Joint Venture companies. The parties in the Joint Venture are: Woodside Oil Ltd, Woodside Petroleum Development Pty Ltd, Mid-Eastern Oil Ltd, BP Petroleum Development (Australia) Pty Ltd, and California Asiatic Oil Company. BHP and Shell Development Australia Ltd each hold a 50 per cent interest in North West Shelf Development Pty Ltd which has a controlling interest in the Joint Venture through its holdings in Woodside Petroleum Ltd. The companies have already expended about $175m on petroleum exploration in the North West Shelf area and in this context the Rankin discoveries were made in 1972. It will be remembered that the companies were keen to proceed with development in 1 974 but were prevented from doing so by the policies of the previous Government. Since returning to office our Government has co-operated closely with the Joint Venture and the Western Australian Government and we are now at the stage where the Joint Venture should soon be able to decide to move on to the next and very important stage of project definition. This will involve further collection of data including appraisal drilling, seabed analysis, soil and site surveys, and firming-up design, costing, revenue and timing forecasts. At the same time negotiations would be set in train in respect of the long term contracts for the sale of liquefied natural gas- LNG- to overseas markets. During this stage all the environmental aspects of the proposed development will be taken fully into account through the environment protection administrative procedures to ensure that the Commonwealth environmental legislation is complied with. An environmental impact statement will be required in time to enable it to be adequately examined prior to the granting of any production licence. When the project definition study has been completed consideration will then be given by the Joint Venture to moving to the final substantive development stage. This will involve the construction of at least two offshore platforms, a 120-kilometre pipeline to shore, processing and LNG plants and a number of specialised LNG tankers. On current estimates the costs involved are expected to be in the vicinity of $2, 500m at current prices and it is anticipated the gas will come on stream in 1 984. Against this background it is not surprising that with the long lead time involved the Joint Venture sought the clearest possible assurances from the Commonwealth and State governments as to the conditions that will apply to the project and its end products. These were aspects that the Joint Venture considered had a significant bearing on the viability of the proposed project. As indicated on numerous occasions previously the Commonwealth Government attaches the highest priority to this project. It will be the most costly project ever undertaken in Australia. As well as supplying much needed gas for energy starved Western Australia, obviously great economic benefits will flow to Western Australia and to Australia as a whole. Most importantly it would be invaluable in providing further incentive and encouragement to the petroleum exploration industry. Unless it is apparent to exploration companies that any gas discovered can be developed within a reasonable time, exploration, especially for much needed oil, could be seriously retarded. But in addition, I believe a decision by the Joint Venture to press ahead with the project definition study and then, we all hope, to full scale development, will be a demonstration of confidence that will give a lead to the nation as a whole. The principal areas of Commonwealth responsibility involved in the consideration of the project to date have been related primarily to the export of LNG and to a number of taxation aspects. It is quite apparent that without a reasonable level of exports the development of the project would not be viable as the companies would not be able to generate an early cash flow to cover the investment involved. The gas would then remain in the ground, Western Australia would be denied the much needed energy source, significant export earnings would be lost and much needed off-shore exploration discouraged. It is for these reasons that the Government has agreed that approval should be given for the export of 53 per cent of the currently estimated reserves in the three fields- North Rankin, Goodwyn and Angel- over a 20-year period. The remaining reserves are expected to be adequate to meet the requirements of Western Australia through at least until the end of the century. Exports of condensate will also be permitted subject to satisfactory evidence that every reasonable effort has been made to market the product in Australia. The views of the National Energy Advisory Committee will be of interest to honourable members in this regard. As will be remembered this high level Committee was set up earlier this year to provide advice to the Government on energy matters. The Committee recently considered the various options that may be open in regard to the development of the North West Shelf gas resources and the Chairman has now advised the Minister for National Resources and Minister for Overseas Trade **(Mr Anthony)** by letter that on balance it would be appropriate for the Government to approve the present proposals for the development of the North West Shelf gas which call for export of gas from the Shelf area. The Committee expressed the view that, to assist, the export of reasonable quantities of gas should be permitted. At the same time the Committee sees the need to keep under review the extent to which Australia's domestic requirements may be met from known reserves or from discoveries yet to be made. In regard to taxation matters the Government has decided to introduce legislation during the current sittings of Parliament to amend the income tax law in three important respects. By arrangement with the Treasurer **(Mr Lynch)** I now outline the details of these proposals. Firstly, it is proposed to extend by 2 years the period within which capital expenditure on the acquisition of certain plant and equipment will be able to qualify for an investment allowance deduction of 20 per cent. Where plant ordered before 30 June 1978 is first used or installed after 30 June 1979, or where plant is ordered, et cetera, after 30 June 1978 and no later than 30 June 1983, the investment allowance is available under the present law at the rate of 20 per cent of the capital cost of acquisition, provided the plant is used or installed ready for use and held in reserve by 30 June 1984. Under the proposal, eligible plant or equipment ordered by 30 June 1985, or which the taxpayer concerned commences to construct by that date, will be able to qualify for an investment allowance of 20 per cent of the capital cost, provided that the plant is brought into use or installed ready for use no later than 30 June 1986. In deciding to extend the period of the concession by 2 years, the Government wishes to ensure that, in the long range forward planning of large development projects, business enterprises will be influenced by the availability of the incentive provided by the special income tax deduction. The very heavy capital expenditures to be made by the enterprises involved in developing the North West Shelf gas fields, in particular, can now be undertaken on the basis that, for plant and equipment to be acquired under contracts let by 30 June 1985 and brought on stream no later than 30 June 1986, an investment allowance of 20 per cent will be available in addition to the ordinary deductions which are available under the rapid write-off provisions applicable to petroleum mining companies or over the estimated effective life of the plant. The second proposal is to amend the petroleum mining provisions of the income tax law to include within the range of allowable capital expenditures of a petroleum mining company the cost of a liquefaction plant for use in processing natural gas. As a result of this decision the cost of such plant will qualify for accelerated deductions over the life of the relevant field or on a diminishing value basis at the rate of 20 per cent per annum, whichever basis gives the greater deduction. The decision will mean also that the cost of a liquefaction plant will come within the scope of the third proposal that I will now mention. Finally it is proposed to introduce a new income tax concession to encourage exploration for, and development of, off-shore petroleum deposits. The new concession will be available in respect of moneys subscribed after today as paid-up capital to companies holding valid licences or permits under the Petroleum (Submerged Lands) Act, or registered interests in licences or permits under the Act. These companies will be able to lodge declarations with the Commissioner of Taxation forgoing the right to deductions to which they would become entitled under Division 10AA of the income tax law for capital expenditure incurred after today on off-shore exploration for petroleum or on the development of off-shore petroleum fields. Capital expenditure on on-shore facilities that are directly related to off-shore exploration and development operations, to the extent that it qualifies under Division 10AA, will also be within the scope of the declarations. However, the cost of acquiring petroleum mining or exploration rights or information will not qualify under the scheme. By lodging a declaration a company will be able to confer an income tax rebate on both corporate and non-corporate shareholders in respect of their share capital subscribed that is spent on eligible outgoings. The tax rebate will be allowable in the subscriber's income tax assessment for the year of income in which the moneys are subscribed and will be an amount of 30c for each dollar subscribed. Consistently with the normal taxation treatment of rebates, the new rebate is not to give rise to a refund of tax or to any form of carry-forward credit. The concession will be available where moneys are subscribed directly to a petroleum exploration or mining company or to a company interposed between the shareholder and the operating company provided there is an appropriate connection between the interposed company and the operating company. There will be a number of safeguards to protect the new concession from abuse. Broadly, the law will provide that declared moneys must be spent on eligible outgoings - within the two income years following the year in which the moneys are subscribed. Subscriptions not spent immediately on receipt must be held by the operating companies on readily realisable deposits such as with a bank or in the short term money market. Declarations will be permitted only in respect of all, or a specified proportion, of a particular capital subscription. Where declared moneys are spent on ineligible outgoings or are not spent within the two years following the year of subscription, the tax rebate to the subscriber will be withdrawn. Other safeguards along the lines of earlier safeguards associated with the former scheme of shareholder deductions will also apply. A number of other decisions have also been taken by the Government which have specific or general implications for the North West Shelf development. In regard to foreign investment the Government has indicated to the Joint Venture that it has no objections on foreign investment policy grounds to its proposals for the development of the Rankin Trend area. In regard to overseas borrowing controls the Government has decided that it is prepared to provide, in respect of major projects, longer term assurances of freedom from future adverse changes to the controls on overseas borrowings which might prejudice forward plans for funding subject to the following conditions: The assurances would apply only to projects involving estimated capital expenditure of $500m or more; applicants would be required to demonstrate that there is a very high probability of the project being commenced within three years; and no assurances would be given in respect of overseas borrowings with a repayment term of less than four years. Assurances provided by the Government would be on condition that the applicant reached satisfactory arrangements with the Reserve Bank in respect of the timing of the drawdowns of the overseas borrowings. Once these conditions have been met, the Government would provide an assurance for the North West Shelf Joint Venture and others that met the conditions. The Joint Venture has had preliminary discussions with Australian Customs with regard to the more specific details of the development details. The Joint Venture has been informed that the existing by-law procedures will apply in regard to any imports for the project. The announcement in the Budget Speech last week that the crude oil levy will not apply to condensate marketed separately from the crude oil stream will also be relevant to the North West Shelf project. Whilst keen to assist the North West Shelf project in getting off the ground, the Government has nonetheless been very mindful of the possible shortfall of gas supplies in the eastern States and South Australia by the end of the century. This shortfall has been estimated at between 3 and 4 trillion cubic feet. There have been suggestions that the North West Shelf gas should be held in reserve for this eventuality; or alternatively a transcontinental pipeline be constructed with the LNG plant located on the east coast rather than in the north-west. Neither of these proposals is acceptable to the Joint Venture or the Commonwealth and State governments for a number of reasons, some of which have been explained above. In addition, the economics of a transcontinental pipeline are open to some questioning and a detailed examination of such a proposal at this late stage would almost certainly lead to a further serious delay over and above the two years that was lost because of the policy of the previous Commonwealth Government. The end result could well be that the project may not proceed at all. It is almost certain that the further gas resources required by the eastern States and South Australia will be discovered or proved up. There is optimism in respect of the Cooper and other basins in South and central Australia, especially as exploration becomes more economically attractive. Further gas discoveries are also anticipated off-shore, especially on the North West Shelf. In considering proposals for the development of other gas fields in the future the Commonwealth Government will continue to give proper weight to domestic requirements. The Government has decided that it will continue its policy of allowing exports of reasonable quantities of gas but exports will be permitted only after the Government is satisfied that domestic requirements of gas and gas liquids, including petro-chemical feedstocks, have been considered. Any proposals to meet domestic requirements would, of course, have to be realistic and economically justified. The whole question of the future domestic requirements of gas in Australia has been and will continue to be examined in such important forums as the Australian Minerals and Energy Council and the National Energy Advisory Committee. It is the intention of the Commonwealth to continue to co-operate with the States to ensure that the necessary action is taken to meet the future domestic requirements, expecially in the eastern States and South Australia. The Commonwealth believes that within the context of its responsibilities it has provided a satisfactory climate for the Joint Venture now to review its position. I confidently expect that it will make an early decision to proceed to the next stage and look forward to the significant impact this will have in so many ways throughout Australia. I present the following paper: >Development of the North West Shelf Gas FieldsMinisterial Statement, 24 August 1977. And move: >That the Senate take note of the statement. {: #subdebate-40-0-s1 .speaker-KTA} ##### Senator Douglas McClelland:
NEW SOUTH WALES · ALP -This is the first official indication from the Liberal-National Country Party Government that it supports the concept of large scale natural gas exports. The statement that has been made this evening by the Minister for Administrative Services **(Senator Withers)** on behalf of his colleague the Minister for National Resources **(Mr Anthony)** outlines commitments which would cover investments in the North West Shelf extending nearly to the end of this century. Because of this factor the attitude of the Australian Labor Party, as an alternative government, is important and indeed critical to the future of the investment that is the subject of the Minister's statement. The statement details a number of important aspects relating to the project, the prime one being that the Government would permit the export of 53 per cent of the currently estimated reserves of gas in the three fields that are involved, namely, North Rankin, Goodwyn and Angel, over a 20-year period. Let me state the attitude of the Australian Labor Party. As has been stated in its national platform, the attitude of my party is that it supports the development of the North West Shelf gas field and it does so in the terms that I outline. What we have said is that an incoming Labor Government will allow exports of natural gas from the North West Shelf sufficient to justify development expenditure but no more than should be allowed in the national interest having regard to Australia's domestic needs for hydrocarbons. The Labor movement is of the view that the development of this field now is important for Australia in a number of respects. Firstly, the infrastructure established by an export market can supplement Western Australia's vital energy needs with natural gas in the coming decades. Secondly, the project will demonstrate that Australia is capable of developing a field of the size that is involved and this should serve to stimulate further confidence in investment in serious off-shore exploration and developments of hydrocarbons in Australia. Turning to the specific proposals that have been announced by the Minister on behalf of his colleague the Minister for National Resources and Minister for Overseas Trade **(Mr Anthony),** the Labor Party finds that a number of areas need to be clarified and amplified as a result of the Minister's statement. Whilst we agree with the export of natural gas we are also vitally concerned to ensure that adequate reserves are maintained for Australia's future domestic requirements. We firmly believe that natural gas will provide an energy foundation block for Australia's industrial development between now and the end of this century. The Minister has indicated in the statement that he read this evening that the estimated shortfall of gas supplies to the eastern States and to South Australia by the end of this century is of the order of three trillion to four trillion cubic feet. But what the Minister on behalf of the Government has failed to tell the Parliament, and of course, the Australian people, is precisely how the Government arrived at an export figure of 53 per cent of current estimated reserves which, according to those who advise us, are of the order of six and a half trillion cubic feet. It is not sufficient for the Government to declare that 53 per cent of reserves is the minimum export level needed to justify the investment when in fact we believe it could be less. Therefore the Labor Party suggests that the Minister should provide the Parliament with adequate documentation to back up what is said to be the Government's assessment. We suggest it is of only marginal value to refer to the opinion of the National Energy Advisory Committee without providing the correspondence from the Chairman and also of course the Committee's calculations. Bald statements are insufficient. Because this statement by the Government is only the beginning of a long feasibility study by the joint venturers we say there is adequate time available to satisfy the Parliament that the Government's permissible export level is correct. The Minister has indicated in his speech that exports of condensate will also be permitted subject to satisfactory evidence that every reasonable effort has been made to market the product in Australia. Whilst there can be a technical argument about whether the liquefaction plant is fundamentally a manufacturing plant or part of the mining process it is quite clear that accelerated depreciation allowances on this item of equipment at mining rates will facilitate a more substantial cash flow to meet debt servicing requirements. The Minister has also indicated in the statement on behalf of his ministerial colleague that the Government proposes to extend by two years the period within which capital expenditure on the acquisition of certain plant and equipment will be able to qualify for an investment allowance deduction of 20 per cent. The Minister went on to say that in deciding to extend the period of this concession the Government wished to ensure that in the future large development projects would be influenced by the availability of the incentive provided by the special income tax deduction. As far as we can see, the Government has provided for an investment allowance on a permanency basis and this is what greatly concerns us as an alternative government. If it is intended by the Government that the investment allowance will be available permanently for large investments at the discretion of Cabinet then we say the Minister should tell the Senate accordingly whether the provision is an acrosstheboard measure or whether it is limited to this particular project. Until that point is clarified by the Government the Labor Party can give no indication of its attitude to that specific measure. I say in passing that the investment allowance that has been referred to in this statement- not only in this statement but also so often by the Government- has not done anything to assist the employment situation in this country. The Minister's statement also outlines a completely new income tax concession to encourage exploration and the development of off-shore petroleum deposits. While this may be associated with and applicable to the North West Shelf venture obviously the measure is intended for wider application and we say that that should properly have been the subject of a separate statement. Certainly there is a need to step up off-shore exploration. The Government is long overdue in coming to terms with the inadequacy of Australia's off-shore exploration effort and in this sense the Labor Party is somewhat sympathetic to proposals which encourage new exploration activity. The new concession that has been outlined by the Minister will operate in much the same way as the former concession under section 77 (c) and section 77 (d) before it was repealed by the Whitlam Labor Government. It was repealed by us because of the abuses which took place under the guise of subscriptions for exploration. The new provision apparently recognises this problem because in the statement the Minister has indicated that moneys will need to be spent on eligible outgoings within the two income years following the income year in which the money is subscribed. We say that when the legislation is introduced it must have a provision which requires proof of expenditure being established before deductions are permitted for subscriptions. The ministerial statement that has been delivered by the Leader of the Government in the Senate is a little unclear as to whether subscriptions will be limited only to companies holding licences under the Petroleum (Submerged Lands) Act or whether the provision will be extended to on-shore explorers. In the statement the Minister refers only to a petroleum exploration or mining company. The general tenor of the proposed legislation meets with the Labor Party's approval. However, the Opposition reserves the right to scrutinise and finally determine its attitude when the amending legislation is presented to the Parliament. Finally, the Opposition believes that the Government has been remiss in this statement in not referring to the foreign investment aspects of the project. This has been merely peremptorily dismissed in one paragraph. The Minister has given no indication of the level of foreign participation in the venture or on what basis the Government has approved of the percentages. It therefore appears to the Labor Party that the level of foreign equity is about 52 per cent of the total project. While this is near the targets established by the foreign investment guidelines of both major political parties, it is still technically breaching the guidelines of the Government. Obviously, one or more of the foreign partners will need to shed a small percentage of their equity to Australian interests so that the project can comply with the letter and the spirit of the foreign investment policy. This would certainly be required by an incoming Labor Government. We of the Labor movement accept the proposed policy of the Government, wherein the Minister states, in respect of major projects involving estimated capital expenditure of $500m or more, that longer term assurances of freedom from future adverse changes to the controls on overseas borrowings will be guaranteed. These provisions that have been announced by the Government are but the beginning of a massive undertaking. Because of its importance to the national economy, the Labor movement would like to see the project proceed and also succeed. However, as I have indicated on behalf of the Labor Party, we will require far more information on its development and will closely monitor all Government initiatives in respect of the project. Having set out on behalf of the Labor Party, the alternative government in Australia, its policy on this nationally important matter, I seek leave to continue my remarks at a later stage. Leave granted; debate adjourned. {: .page-start } page 482 {:#debate-41} ### QUESTION {:#subdebate-41-0} #### BUDGET PAPERS 1977-78 Debate resumed. {: #subdebate-41-0-s0 .speaker-KBY} ##### Senator YOUNG:
South Australia -- Before the suspension of the sitting for dinner I was commencing to deal with the economy of South Australia. I referred to a statement made by **Mr Uren.** Businesses are moving out of South Australia. There is no doubt about it. They are moving out because South Australia no longer has the cost advantages that it previously had. Whereas in the past we had a freight disadvantage, we did have cost advantages. But today in South Australia costs are virtually as high as, and in some cases much higher than, those in other States. For example, premiums for workers compensation in South Australia rose by more than 90 per cent between 1973 and 1975. They rose a further 39 per cent in the year 1975-76 and a further 20 per cent in the year 1976-77. Payroll tax has doubled from 2V4 per cent to 5 per cent. State taxation has increased, on a per capita basis, more than in any other State in Australia. So one could go on. I wish to refer briefly to the statement made tonight by the Leader of the Government, **Senator Withers,** concerning the green light being given to the development of the North West Shelf gas reserves. This will be a great boost to Australia and to Western Australia. It will bring a great deal of employment and revenue to this country. There has been some criticism tonight of this statement. Perhaps **Senator Douglas** McClelland would say that it was constructive criticism in some areas, but I do not agree with him. It is all very well to express concernSenator Wright describes it as nit-picking- about perhaps 2 per cent more foreign investment, but we are looking at an investment in overall terms of perhaps $3,000m, an investment that is fraught with risks, including marketing risks. The companies concerned need all the encouragement and support they can get. Unless companies are prepared to accept those risks the gas that is in the north-west will not be an asset to Australia because it will never be brought onshore. I am pleased to note that the Government has given tax concessions and other concessions to encourage the development of this highly potential area for hydrocarbons. I am also very pleased to note that the Government has not agreed at this stage to a transcontinental pipeline because, quite frankly, it may never be necessary. We know of the potential of the Moomba-Gidgealpa fields. We know there are other structures as yet untouched, both in that area of the Northern Territory and in the south-west corner of Queensland. If a transcontinental pipeline were to be built from Dampier to Sydney and the eastern markets, it may not be necessary for a great number of years. Also, such a pipeline would be a disincentive to further exploration in the northern part of South Australia and the other areas I have just mentioned. Further, with the agreement by the Government for the exporting of natural gas to the various overseas markets, if this gas were to be exported from Sydney, there is a great risk that we would be confining ourselves to one market only and that would be the American market. The cost of that gas would increase greatly. It is estimated that the pipeline itself would cost in the vicinity of $ 1,500m- possibly nearer to $2,000m- which would have to be added to the transmission costs of that gas. We could be disadvantaging ourselves, firstly, for an export market and, secondly, risking that market as we would be confining ourselves to one market only when we have a potential market in Japan as well as in Europe and other places. Having spoken about gas in the Cooper Basin of South Australia, I wish to refer to the Redcliffs petro-chemical project, which unfortunately did not start many years ago when it could have, again because of the interference of the Whitlam Government. Now we find that a company, Dow Chemicals, has again expressed interest in the establishment of a plant at Redcliffs, which would cost in the vicinity of $500m. Discussions have taken place between the Federal Government and State Governments regarding the financing of the construction of a liquids pipeline, and many other aspects of the project such as wharf facilities and housing which altogether would be valued at another $250m. This project should be given every encouragement, not because it would be established in South Australia but because of its national importance. There would be benefits in the balance of payments and also for those Australian industries that would use the by-products of an established petro-chemical industry. Moreover, further stimulus would be given to exploration in this highly potential area. It is estimated that the Cooper Basin contains 9 per cent of the total proved and probably proved liquid hydro-carbon reserves in Australia, a fact that perhaps is overlooked by many people. There are approximately 49 million barrels of crude oil, 39 million barrels of gas condensate, 86 million barrels of liquefied petroleum gases and 123 million barrels of ethane in the Cooper Basin. All these liquids are known to be recoverable provided there is a suitable market for them. At the present time the Cooper Basin producers cannot meet their contractual obligations to supply gas to the Adelaide and Sydney markets without producing a very large proportion of these natural gas liquids to which I have just referred. This will still be the case even if all the gas dry fields which at present are being used are fully developed before these wet fields, some of which are very wet, are brought on stream. In the absence of such a market, the whole of the gas stream itself will be very costly. This could lead to an increase in the price of gas, both for Sydney and Adelaide markets because of the fact that there is so much liquid in some of the wells that will soon have to come on stream to meet the requirements of those two major markets. Liquid petroleum gas and ethane are being sold as part of this gas stream. Some of the heavier crudes and condensates are being used in the Cooper Basin for such things as boiler fuel. This represents a complete misallocation of resources. It is possible for the producers to sell both the ethane and the LPG as part of a gas stream. Unless we can get these gases separated from the wets and sell them at a higher price, there is no alternative but for companies to waste this very valuable asset by using a less productive method. I shall deal with that aspect a little later. The value of this gas, when sold as sales gas or fuel, at present is some $ 1 3m, but the actual market value as feed stock for a petrochemical industry is about $ 1 50m. That gives a good example of a wasted asset because at present there is no alternative but to use these liquids as gases. The absence of a petrochemical industry will exacerbate the whole problem. Eventually we may need a liquid pipeline to bring these heavier crudes down to the Adelaide market. If this is not done there will be no alternative but for many of these liquids, heavy condensates, to be flared off because as more and more gas is required and as more and more of these wells are brought on stream, naturally these wet gases will have to be scrubbed. So there will be a great volume of liquids which at present cannot be pumped down the pipeline because the pipeline does not have the capacity to cope. So we have two alternatives: Either a pipeline has to be built or companies will have to flare off a very valuable asset. Ethane, sold as natural gas, commands at present only $2 1 per tonne, but if it were used as a petrochemical feedstock it would obtain a price of more than $100 per tonne. This in turn would bring greater benefits because it would result in higher royalty and tax payments by the producers. Also, from the national point of" view, it would give a more efficient use of this very valuable asset. The company concerned with the proposed petrochemical industry at Redcliff in South Australia proposes to construct a world scale plant capable of producing chlorine, caustic soda, ethylene dichloride and other petrochemical products for use in plastics and other industries. The plant would utilise this very valuable ethane, propane and butane from the Cooper Basin and, of course, salt from Lake Torrens, which is not so far from the proposed site at Redcliff. The salt would be pumped down in liquid form close to the petrochemical industry. To give some idea of the demand for caustic soda in Australia I point out that at present we are importing nearly 80 per cent of our requirements. In 1975-76 some 460 million tonnes of caustic soda were used in the bauxite and aluminium industry alone. The import price amounted to some $51m. The Australian demand for caustic soda is expected to be more than 800,000 tonnes per annum in the early 1980s. If the proposed alumina projects or bauxite projects go ahead in Western Australia and elsewhere, an additional 350,000 tonnes per annum of caustic soda will be required. Of course, the Redcliff project could go a long way towards meeting this demand. It is estimated that by the early 1980s we can expect a shortfall in annual domestic production of some 125,000 tonnes of ethylene dichloride and a further 100,000 tonnes of polyethylene. So we can see that this plant would help to overcome these shortfalls. On top of this, it would result in a great saving in the balance of trade. Overall the petrochemical industry would lead to a reduction in our imports of caustic soda and other petrochemical products. The import savings resulting from domestic caustic soda production alone are expected to be in the vicinity of some $64m per annum. The foreign exchange benefits from both import and export replacement from Redcliff is estimated to be some $320m per annum. I mentioned earlier that Lake Torrens is very close to Redcliff. I also mentioned why I wholeheartedly support Redcliff as a site for a petrochemical industry. Redcliff has a number of geographical and other advantages over many other proposed sites in Australia. One advantage is the very close proximity of the plant to the Cooper Basin from where the liquids could be piped. Also, as I said earlier, it is very close to Lake Torrens for a supply of salt, of which great amounts are required for a petrochemical industry. It is also sited on a deep water channel, again very close to a current pipeline that goes down to the Adelaide market. More importantly- and perhaps I should have put this at the top of the list- a great deal less expenditure will be required for infrastructure at this site as adequate road, rail, power and fresh water facilities already exist in the area. Concern is expressed sometimes about the establishment of such a petrochemical industry but many environmental impact statements have been carried out in relation to this complex. These were carried out earlier when everybody hoped to see the establishment of a Redcliff plant. Unfortunately, because of certain attitudes of a previous government, the Redcliff project was stood over. But all of the studies done with regard to the environment have come out with a very clean bill of health. I emphasise that such a plant would make a great contribution, not just to South Australia but to Australia. It would also encourage decentralisation which is so badly needed in South Australia. It would be a further stable industry in a very important area of South Australia, and I refer to Spencer Gulf, where a great number of people would be employed in the industry. It has been estimated, for example, that some 3,500 people would be employed during the construction of such a plant and that overall some 700-odd jobs directly related to the petrochemical industry plant would be involved. The plant itself would be capable of supporting a community of some 4,000 people. The expansion of production at Moomba and at Lake Torrens would have a great impact upon employment in this very important area of South Australia. There is need for another petrochemical industry in Australia. There is a great need for encouragement of exploration. Incentives should be given for exploration in the CooperGidgealpa area and other areas, and to Redcliff because of its proximity to the area of exploitation of gases at present. Because of the need to use the liquids from these gases and not to waste such valuable assets, we should be giving all the encouragement we can to the establishment of a petrochemical industry in Australia. Frankly this exploration in South Australia should be encouraged because of the many factors I have referred to tonight. There is likely to be a shortage of gas in South Australia in the not too distant future, talking in reasonably long terms. The Sydney market is all right because there is a guarantee to supply the Sydney market from the Moomba-Gidgealpa areas until the year 2000. Quite frankly, South Australia was sold down the drain by the Dunstan Government when contracts were let to supply gas to New South Wales. South Australian consumers are in a tenuous position because their supplies are guaranteed only until 1987. Even then, of course, problems will arise when any more gas is found because when more gas is found the next 800 billion cubic feet of gas will go to New South Wales before any upgrading of guarantee is given to the South Australian market. Having emphasised this point, I again say that the establishment of such an industry would be of great benefit to the nation and also to South Australia. It would give great encouragement for further exploration in a high potential area of our State which must be continued but cannot be continued unless encouragement and incentives are given to companies to invest risk capitalcapital which could be lost but capital which, if it is fortunate enough to bring a return, not only will bring a return to a company but also will bring a great asset to the general community throughout this country. I hope that the Government will continue to have discussions with the South Australian Government. I hope that eventually we will see the establishment of such an industry in South Australia. The ACTING **DEPUTY PRESIDENT (Senator Devitt)-** Order! The honourable senator's time has expired. {: #subdebate-41-0-s1 .speaker-TJ4} ##### Senator WALSH:
Western Australia -- I am not surprised that **Senator Young** chose to speak about gas and petro-chemicals instead of speaking about the Budget which is supposed to be the subject of this debate. If I were a back bencher in a government which had brought down a Budget as incoherent and as disgusting as the one that was brought down in this Parliament on Tuesday of last week, I would not want to speak about the Budget either. Therefore, I understand **Senator Young's** dilemma in that matter and I understand also the reasons why he chose to speak about something other than the Budget. It is Australia's current misfortune to be governed by a quartet of clowns which comprises a pre-Keynesian economic primitive dedicated to recreating the pre-Keynesian economic realities of the Great Depression, a trick accountant whose liking for misrepresentation and distortion extends- as he proved in the *Sydney Morning Herald* last Monday- to misquoting his own Budget Speech, a director of bankrupt funeral companies who in his spare time presides over the impending bankruptcy of Australian agriculture, and the mineral moguls' mouthpiece who masquerades as the farmers' friend while simultaneously adding $100m to the profits of the Esso company and $600 to the average farmers' fuel costs. The ministerial colleagues in the Senate of Messrs Fraser, Lynch, Anthony and Sinclair- to their credit, I suppose- do not even pretend to understand the Budget or to know what it is about. It is almost two years since this group, their lackeys and sycophants siezed the government of Australia. They sought to rationalise the political, judicial and vice-regal chicanery which they engineered at that time on the grounds that they would provide purposeful leadership, they would stop inflation and they would restore full employment. How have their promises and pledges measured up? For the year ended June last the consumer price index was one-tenth of one per cent lower than it had been in the previous year. What the Treasurer **(Mr Lynch)** calls the underlying rate of inflation' was identical at 10.2 per cent for both years. The implicit price deflator in the second half of the 1976-77 financial year was higher by nearly 4 per cent compared to the first half year of that financial year. Inflation at best is stagnant and at worst is probably rising. There are 68,000 more people unemployed now than a year ago. The Budget Papers forecast a work force growth of only 0.75 per cent on average in this financial year. That inevitably means an addition of at least 60,000 people to the number of unemployed in this financial year. After 2 1 months of Rand-Fraser economics, the economy not only is worse than it was 20 months ago but also is getting worse at a faster rate. During this period, panacea after panacea has been eagerly adopted and then quietly abandoned by the Government's economic snake oil merchants. We were promised an investment-led recovery, induced- we were told- by the misconceived investment allowance. Then we were promised an export-led recovery, induced by devaluation. Now we are promised a consumerled recovery, induced by tax reductions for the rich, tax increases for the middle and low income earners and so-called incentives to work harder, when the real problem is that people cannot get jobs and cannot get offered any overtime. How anyone will work or work harder when there is no overtime and no jobs available for the people who already are offering themselves for employment has not been explained. This Government seeks to shift the blame for its miserable failures on to scapegoats. It says that the economy remains stagnant because of excessive wage demands and industrial disputation. On 14 August- only two days before the Budget was presented- the Minister for Employment and Industrial Relations **(Mr Street),** who is not noted for his forthrightness and frankness, nevertheless buried that particular lie when he stated- for once correctly- that more than 95 per cent of wage settlements in the last year were under indexation and that the level of industrial disputes in the first five months of this calendar year was the lowest for a decade. The Government persistently says that full employment will be restored when inflation and real wages fall. Real wages have fallen, as the Conciliation and Arbitration Commission somewhat aggressively pointed out this week in contradiction of the Treasurer and the Prime Minister **(Mr Malcolm Fraser).** According to the Treasurer- if anyone believes what he says any more- inflation also is falling and thus, according to the logic of the theory postulated by this Government, unemployment also must be falling. The facts, of course, show that unemployment is rising, and rising at an accelerating rate. Now the Government blames the arbitration commissioners for its own failures. When will the Ministers in this Government accept the responsibility for their misgovernment of the country? When will they admit that they are miserable failures? When will they resign? When will they make way for a government which at least will accept the responsibility for governing Australia instead of seeking to shift the blame on to a series of scapegoats. The Government wails that men are being replaced by machines in manufacturing industry because wages are too high. Simultaneously it subsidises the machines with a ridiculously expensive 40 per cent investment allowance and it forces the States to impose a 5 per cent payroll tax - {: .speaker-KBW} ##### Senator Wright: -- How does it force the States to impose - {: .speaker-TJ4} ##### Senator WALSH: -- It forces the States to impose payroll taxes because this Government, which **Senator Wright** supports, has failed to honour the unequivocal promise given in the Senate on 27 April 1976 by **Senator Carrick,** the Minister Assisting the Prime Minister in Federal Affairs. **Senator Carrick** unequivocally stated that this Government would increase total payments to the States in the three years commencing November 1975 by more than 58 per cent in real terms. This Government, having failed to honour that unequivocal promise given by **Senator Carrick** 16 months ago has, of course, forced the States to increase payroll taxes in order to obtain their necessary revenue. This Budget's tax handouts to the rich, to the wealthiest 10 per cent of the population, would have financed the abolition of payroll tax. This Government had the option of saying to the States: 'On the condition that you will abolish payroll tax, we will grant to you an additional billion dollars'. The Government chose not to take that option. It chose, instead, to provide massive handouts to the 10 per cent of wealthiest people. If that proposition had been adoptedthe abolition of payroll tax- wage costs would have fallen by 5 per cent. This Government will harangue interminably the Conciliation and Arbitration Commission and the unions for lesser wage reductions than that. This Government, which seeks industrial confrontation and even industrial anarchy to force wages down, voluntarily and presumably consciously forwent the opportunity to reduce wage costs by 5 per cent simply by adopting a different Budget strategy. Of course it was precluded from adopting such a sensible Budget strategy by the Prime Minister's massive and irrational ideological prejudices. The Ministers in this Government are miserable failures. The greatest failure of all is their leader, the economic neanderthal man who believes that deficits must be paid back like an overdraft, who believes that a nation which runs a deficit Budget, to use his own words must go without for the next few years while it pays back the deficit just like a family that establishes an overdraft. This ideological bigot believes that a tax dodge, especially for the wealthy, is the panacea for all economic problems. In the primitive pre-Keynesian world of the Prime Minister the answer to all recessions is to force wages down. In his fantasy world the phenomenon of deficient aggregate demand simply does not exist. According to the Prime Minister, all that is needed is wage flexibility. J. B. Say would be proud of him. As the Prime Minister and his Ministers follow Say's law they push the economy deeper into recession just as their ideological forebears did in the 1930s. In my speech on the Budget a year ago, **Senator Wright,** I told you Government senators - The ACTING **DEPUTY PRESIDENT (Senator Devitt)-** Order! **Senator Walsh,** pleas' address the Chair. {: .speaker-TJ4} ##### Senator WALSH: -Mr Acting Deputy President, in my speech on the Budget a year ago I told Government senators that if they had any interest in remaining in government their most rational, their first action, should be to unload their present leader, the Prime Minister. They did not heed that advice. Consequently, the latest gallup poll in the *Bulletin* a fortnight ago was headed 'Labor would win federal election: The electoral support for the Labor Party is higher than for the Liberal and Country Parties'. Of course the Prime Minister is not entirely responsible for that, but without doubt he must be granted the lion's share of the blame or credit. So again I give Government senators some gratuitous advice. Probably it will not be acted on this year. It will be ignored this year as it was ignored last year. I advise them to get rid of the fantasyridden ideologue who is taking Australia to economic disaster and them into the political wilderness at an accelerating pace. This man is as ignorant of the most basic economic realities as he is convinced of his own infallibility. The Treasurer, when he was introducing the new tax system on Tuesday of last week, said that it embodied- and I use his own words- 'our own tax philosophy'. That is the tax philosophy of himself and the Prime Minister. That is probably true. It certainly bears no relationship to tax equity or to rational economic expectations. The so-called tax reforms are fraudulent. The claim repeated by the Prime Minister in his electoral talk last Sunday that- and I use his words- 'the plain fact remains every taxpayer will be better off' is simply not true. I seek leave to incorporate in *Hansard* a table which I have prepared which shows the tax payable in different income brackets under the present schedule if it was indexed by 10 per cent to 1 July 1978 and the new schedule announced by the Treasurer last week indexed by5 per cent or half the indexation factor. The ACTING DEPUTY PRESIDENT-Is leave granted? {: .speaker-KAS} ##### Senator Webster: -- Prior to the document being accepted I just ask the honourable senator to put on the record who is the author of the paper. {: .speaker-TJ4} ##### Senator WALSH: -- I have prepared the paper myself. If **Senator Webster** doubts its veracity, I mention in passing that it is far more favourable - The ACTING DEPUTY PRESIDENTSenator Walsh, **Senator Webster** simply wanted to know the author and you have identified the author as yourself. Before you go on, is leave granted for the table to be incorporated in *Hansard]* There being no objection, leave is granted. *The table read as follows-* {: .speaker-TJ4} ##### Senator WALSH: **-If Senator Webster** doubts the veracity of the table, I simply point out to him that it is far less unfavourable to the fictions being perpetrated by the Treasurer and the Prime Minister than the statements made by **Mr Eric** Risstrom of the Taxpayers Association on *AM* this morning. My calculations based on the assumptions I have already stated show that in fact only one million taxpayers will be paying more tax under the Government's so-called tax reductions, whereas **Mr Risstrom** says that something more than two million will be. I believe I am correct in that one million. It is an honest estimate but perhaps **Mr Risstrom** could be right. Perhaps in fact two million people will be paying more taxation whereas I believe that it will be only one million. But certainly at least one million will be paying more taxation. Yet the Prime Minister had the audacity only 3 days ago to state: >The plain fact remains that every Australian taxpayer will be better off. So much for the veracity of the Prime Minister. The plain facts which emerge from my tableand which emerges with even greater force if one likes to accept the table of **Mr Risstrom** of the Taxpayers Association- is that at least one million taxpayers, that is more than 1 6 per cent, will actually pay more tax after 1 July 1978 than they would have if the existing schedule had continued. Another three million, that is something over 50 per cent, of all taxpayers will have their taxes reduced by less than the amount their petrol prices will increase, while a tiny minority will receive very large gains. Foremost among that tiny minority will be those on an income of $60,000, which just happens to be about the Prime Minister's salary level. People on that sort of income will pay $3,353 less tax under the new schedule than they would have done under the old schedule. So this new schedule will present the Prime Minister with a net gain of $3,300 to go with his $5,000 a year superphosphate bounty which he voted himself last year. This highly regressive redistribution of the taxation burden reflects the Prime Minister's value judgments and it reflects an irrational dogma concerning the alleged dissincentive effects of taxation on the work ethic. If the people who propounded that dogma, the people who mouth it and mindlessly regurgitate it, had only bothered to read a fraction of the literature available on the subject they would have seen that there is absolutely no evidence to support it. For example, if they had bothered to read the publication 'The Individual Income Tax' put out by the Brookings Institute of New York, at pages 52 and 53 they would have come across this passage: >The available evidence, though inconclusive and to some extent contradictory, offers more support for the hypothesis that the supply of labor as a whole is either insensitive or negatively related to the wage rate than for the hypothesis that there is a high positive response. {: .speaker-KBW} ##### Senator Wright: -- I suppose you understand that. {: .speaker-TJ4} ##### Senator WALSH: -- What that means is that there is more evidence to support the view that if taxation is increased people will endeavour to work harder to maintain the same level of after tax income as they had beforehand. {: .speaker-KBW} ##### Senator Wright: -- Walsh from the ground? {: .speaker-TJ4} ##### Senator WALSH: -- Now one of the dogmatists, **Senator Wright,** is ridiculing this idea. Perhaps **Senator Wright** will care to quote from outside the 50c league fantasists within the Liberal Party some authentic publication which suggests the opposite. I certainly have not come across one, nor has anybody else who writes for the financial Press, so far as I am aware. But perhaps **Senator Wright** can quote some objective study which supports the fantasies propounded by the 50c league in the Liberal Party. We hear nothing from **Senator Wright.** I will not hold my breath while I am waiting for the reference. This fantasy is supposed to generate a consumer-led recovery. After the ignominious internment of the investment-led recovery and the export-led recovery, we are now about to have, according to the spinners of fairy tales who are temporarily governing Australia, a tax induced consumer-led recovery. Apart from the nonsense of the alleged disincentive effects of high taxation on the work ethic, their theory is technically wrong anyway. The gains are concentrated on the people with the highest incomes. I have already demonstrated that the medium to low income earner will in fact be paying more tax. More than 50 per cent of income earners will gain less in tax relief than they will lose from increased petrol prices. Between 70 and 80 per cent of the benefits of this so called tax reform are concentrated among the top 10 per cent of income earners. It happens to be another empirical fact that what economists call the marginal propensity to consume among people in that income bracket is significantly lower than it is in the community generally. That means that if these people have their income increased by X per cent or X dollars they are much less likely to spend the increase than an aged pensioner or someone on the minimum wage. I would have thought that the commonsense reality of that proposition could be grasped even by **Senator Wright.** The people will spend less of their income so the reform will be less effective in inducing a consumer-led recovery than if it had been concentrated among people on lower incomes. Apart from that, even if these people do spend it, they are far more likely to spend their additional after tax income on grand tours of Europe and other overseas trips, on luxury imported goods, on Ferraris and Mercedes and on French perfumes and champagnes and what have you which will do virtually nothing to generate economic activity within Australia. Of course the cost of this disgusting handout to the rich in terms of the ideological framework of this Government is a cutback in capital works programs for the Federal and State governments. A fortnight ago, I was down at Bunbury. An aged persons village there is trying to build an aged persons hostel. The proposal has not been accepted for funding within the next two years. Only 1 5 beds are available in aged persons hostels in the entire south west of Western Australia. There is a clear need for them. Commonwealth funding cannot be obtained. It is obvious, because of the Government's repudiation of its promise a year ago, that even those who were promised funding last year will not get it. This Government will cut back from the $90m it promised for aged persons accommodation last year to $50m. Given the surplus capacity which exists in the building industry now and the fact that building activity is going down, I would have thought that even the most bigoted member of this present Government might have recognised that the Keynesian theory of compensatory spending had some merit and that, far from cutting down on an already low base of public capital spending for which nobody denies the need, funding should be increased. I do not think that even **Senator Wright** denies the need for more aged persons accommodation in Australia. He, above all, certainly should not deny it. I do not think anyone denies the need for it. At this time when there is an increasing surplus capacity in the building industry, this Government because of its ideological prejudices and its overwhelming desire to provide tax handouts to the rich, chooses to cut down on this building program. This is the most despicable and contemptible thing this Government has done second only to its refusal to provide $900,000 for women's refuges, to provide somewhere for women who were bashed up by brutal or alcoholic males. Let us look at inflation. As the Treasurer said the other day, 'inflation is the primary goal of this Government'. That is the quotation from the Treasurer. It is not my Freudian slip; it is his. He said 'inflation is the primary goal of this Government' at the National Press Club last week. He added that it retains its primacy. Perhaps it was not a Freudian slip. If we look at one of the more important decisions made in this Budget we find that the Government has decided to increase the excise on, and the price of, crude oil and to increase the excise of fuel to the point where that alone will add 1 per cent- I think **Senator Guilfoyle** gave that figure as 0.9 per cent as an honourable senator reminds me; I will not argue with it- to the consumer price index over the next year. This impost was rationalised on grounds of fuel conservation.The Government was asked last week what its estimates of the price elasticity of demand for petrol within a price change of 1 lc a gallon were. No answer has been received to that question. The Government does not have any estimates. It knows no more about the price elasticity of demand for petrol than it knows about the Budget that it brought down here last week. Simultaneously with that decision to increase the price of petrol by 1 lc a gallon on the grounds that it would conserve supplies, the same Government in one of the few areas of Australia where it has direct control- the Australian Capital Territory- increased more than proportionately the registration fees on small cars which use less petrol. I find it quite amazing that even this Government on the one hand can say that it will put up the consumer price index by one per cent to conserve fuel- not being able to produce any evidence that it will have that effect incidentallyand on the other hand say it will increase the registration fees on small cars by more than it will increase the registration fees on big cars. That is amazing even for this Government, a government which has a 40 per cent investment allowance to subsidise the replacement of men with machines and which then bewails the fact that this is happening. Let us look at the farmer. Net farm incomes, so the Bureau of Agricultural Economics estimated a month ago, would fall by 14 per cent in real terms this year. That estimate was made before this Government's fuel policy was announced. As a result of this Government's fuel policy, fuel costs to the average farmer will increase by $500 or $600 or, according to the former Director of the National Country Party, for beef producers will increase by between $1,000 and $1,200. I think his estimate is a bit high. I think the $500 or $600 is about the true position. Nevertheless, that will reduce net farm income by a further 5 per cent or 6 per cent. So, instead of the 14 per cent decline that the BAE forecasts we will have about a 20 per cent decline. **Mr Sinclair,** that part time Minister who directs primary industry in his spare time when he is not directing bankrupt funeral companies into bankruptcy, said: >There is no doubt that there was general disappointment at the extent of the increase in fuel costs as a result of the excise on indigenous crude oil. So much for **Mr Sinclair!** He then had the audacity to assert that the proposed changes to the personal income tax scale will reflect significantly directly and indirectly to the primary producers advantage. In fact what will happen among other things, because of this changed income tax scale and its effect on income averaging- the Government was unable to give any sort of answer to a question on this subject today- is that any farmer whose income varies throughout a five year period from, say, $20,000 to zero, to $25,000, and $6,000 or to $9,000, which is an average of $12,000, will pay under this new tax schedule in that period $16,220 in taxation. That is not an atypical case. If the income was received in constant annual amounts of $12,000 the tax paid would be $13,200. So, over that five year period, because of these tax changes which **Mr Sinclair** has the audacity to assert will benefit farmers, the farmers will in fact pay $3,020 more in taxation than they would pay if the money was received in equal annual amounts. He said that the Government was committed in principle to establishing a rural bank. During the 1975 election campaign this Liberal-Country Party coalition gave an unequivocal commitment to establish a rural bank. Yet 2 1 months later it has claimed as a great advance that it has committed itself in principle to the establishment of such a bank. The worst aspect of this Budget so far as the agricultural sector is concerned is not readily apparent. There is no doubt that as a result of this Government's economic mismanagement, particularly in this Budget, the unemployment level will rise by at least one per cent and the economy will be driven deeper into depression. Equally there is no doubt that while the member for Wannon remains Prime Minister the Government's response to that reality will be to increase the tariff protection for Australian manufacturing industry as more and more manufacturers are driven towards bankruptcy by the depression policies of this Government. The people who will finally pay the cost of that double compounded irrationality will be the people on the land. This is an ideological budget framed without reference to common sense and in defiance both of empirical evidence and economic logic. The Government had two options for a noninflationary economic recovery- by direct spending on capital works or by reducing the deficit, thus reducing the pressure of public borrowings on interest rates. The former would have been more effective, but the Government did not choose even the second best. It chose the worst conceivable option. Inflation will continue at least at its present level. The numbers of unemployed will rocket, certainly to above 400,000 and probably to above 450,000. The Budget's only saving grace is that it will destroy the Fraser Government. {: #subdebate-41-0-s2 .speaker-KAS} ##### Senator WEBSTER:
Minister for Science · Victoria · NCP/NP -- As an annual event the Budget has a greater effect on Australia than any other decision that this Government or Parliament can make. Even the man in the street who frequently takes little notice of the deliberations of this place cannot fail at least to note the broadest implications of each budget, especially those provisions which affect his hip pocket. Some budgets may be remembered because they are enlightened reforms; others may be remembered because they have harmful impositions, misjudged fiscal options or ideological prejudices. Prior to another budget being brought down in this Parliament electors of Australia will go to the polls for an election. That may be an election for half the Senate. At the discretion of the Prime Minister **(Mr Malcolm Fraser),** it may be one affecting another place. We have had the opportunity of listening to an Australian Labor Party senator, who comes from Western Australia, **Senator Walsh.** He comes with a great reputation as probably one of the finer speakers and outstanding brains in the Labor Party. It is said that he is already a challenge to **Senator Wriedt** as leader in this place. Opposition senators- Ha, ha! {: .speaker-KAS} ##### Senator WEBSTER: -- I think it is quite despicable that members of the Labor Party should laugh when I make those serious comments. It goes to show that a member on this side of the House can be wrong on a number of things. I think it is important that we had the opportunity to listen to **Senator Walsh** this evening because he used comments which indicate his ability. I understand some of his work in Western Australia has pointed him out as a very capable man in his field. His comments about trick accountants and his slur against the Deputy Leader of my political party are indicative of the problems he has experienced in his State. Of course he describes some of us who are associated with this Government as miserable failures. **Senator Walsh,** in his comments indicating the harsh effects that he believed this Budget would have on rural people, did not tell those listening that he was one member of the Labor Party which, when in government, took away tax concessions from rural people. He supported the Labor Party through its three years in government, when tax concessions to farmers for fencing, drainage and fuel and fodder conservation were taken away by the vote of that honourable senator. He supported Labor's decision to take the fuel equalisation scheme from the rural community. He complains about the situation today- of prices going up. He laughs to himself like some goat out of the west, and that is what he branded himself to be this evening. It is most disheartening that one finds in a situation such as we have at this Budget time members of the Opposition in this place today and the Leader of the Opposition **(Mr E. G. Whitlam)** last night indicating to us that they knew what a budget should contain. They are the men who brought this country into disrespect and who ruined the finances of Australia. **Senator Walsh,** the advisers to the Labor Party including **Mr Hawke,** who is so vocal at this time, are the advisers to a government which dragged Australia into the dirt by its socialist fiscal policies. We have to put up with them, but it is a good thing that we have been able to hear from **Senator Walsh,** who now leaves the chamber. This Budget is therefore not only an important document in that it implements Liberal-National Country Party philosophy but is important in conveying to the public positive evidence of the Government's resolution to the difficult task of lowering what has become known as the inflation rate and attempting the more difficult task of encouraging people with initiative to get back into the task of rebuilding Australia after those 3 disastrous years of Labor. The Budget provides the implementation of the most significant personal income tax reform in Australia's history. That reform will make the Australian personal taxation system one of the most enlightened systems of taxation in the world. I believe that most members of the Opposition would agree with that. The philosophy behind the system of taxation is one which I did not believe the Treasurer **(Mr Lynch)** would be able to bring about this year. While taxes must necessarily be a part of financing the proper management of Australian society these reforms will be quite momentous in their application. The Budget will go down in history if for no other reason than this tax reform. It is interesting to note that the tax threshold for a single person is $3,751. Any single person earning below that figure will pay no tax. Imagine the great benefit for a married couple earning up to $5,485. They will not pay income tax. I never believed the Government could bring this about, but it has brought it about in this way. I wonder whether the public recognises - {: .speaker-7V4} ##### Senator Georges: -- They are getting a hundred bucks a week and you are boasting about it. {: .speaker-KAS} ##### Senator WEBSTER: -- I hear the honourable senator singing out about 'a hundred bucks a week'. I believe that **Senator Georges** is one of the senators who are going to propose that members of Federal Parliament do not accept their latest pay increase. {: .speaker-7V4} ##### Senator Georges: -- Are you? {: .speaker-KAS} ##### Senator WEBSTER: **-Mr President,** you hear him ask: 'Are you?' This man who is unable to make up his own mind is pointing across the table at me. I was saying that 225,000 Australians will completely escape paying personal income tax. According to the figures I have given, the old and the young will be especially advantaged. I am advised that a taxpayer earning $10,000 a year will pay approximately $147 less a year in taxation under the proposed scheme. Those with a taxable income of $20,000 will save $754 in a tax year. {: .speaker-KTZ} ##### Senator McLaren: -- Look after the big man. {: .speaker-KAS} ##### Senator WEBSTER: -That does not quite reach the scale of that grand socialist from South Australia on the other side. He says: 'Look after the big man'. He has taken himself away from the workers and has entered the big scale, and how pleased he is to do so. No other group of politicians have done more to advantage themselves than the Labor politicians did when they were in office. The honourable senator who speaks from the other side and who had a great poultry background is making his voice heard now. These new tax rates herald the return of incentive to those Australian who are prepared to put their shoulder to the wheel. I advocate that they take advantage of the situation. The sluggishness in the economy can be attributed directly to inflationary pressures. **Senator Walsh** said that he had been to Bunbury, and I was about to interrupt and say that it was regrettable that he had ever come away from there. He spoke about the aged persons homes. {: .speaker-PF4} ##### Senator Colston: -- Do not point at me. {: .speaker-KAS} ##### Senator WEBSTER: -- I did not. You do not come from the West, do you? {: .speaker-PF4} ##### Senator Colston: -- Well, do not point at me. {: .speaker-KAS} ##### Senator WEBSTER: -You just happened to be in that general direction. The whole problem is that it is very difficult for people who want to build aged persons homes today to set aside sufficient money and to find the capital with which to commence. Because of the inflationary rate, which was caused by Labor's policies, instead of $50,000 being sufficient capital they now require probably $ 1 50,000 or $200,000 and the matter is out of their hands. They know that they cannot get the money to do it, and that is most regrettable. The sluggishness in the economy can be attributed directly to inflationary pressures which pushed diligent people into higher and higher marginal tax rates. The consequence of this was that many people adopted the attitude that they were not being adequately rewarded for their extra effort and they simply scaled down their activities to maintain their incomes within reasonable tax levels. They worked fewer days. They worked fewer hours. They worked less overtime. We all know that that has occurred during the past years. The nation received less value from its work force. The opportunity for incentive is now being given by this Government and I advocate that the community take full advantage of it. I hope that those workers who would have been anxious to stop work on Friday having gained a sizable income, or those workers who did not wish to work on Saturday because of the impost of a higher rate of taxation on their earnings, will now see the advantage that is being given to them by this measure which has been brought in by the Treasurer. I am told that these bold tax initiatives will restore incentive. I genuinely believe that. Taxpayers will know quite clearly where they stand. They will know at which levels the tax scales change. They will know that within each range they will be levied a known rate of tax. They can be confident that income earned by extra effort will not be wiped out by unreasonable tax rates. The three tax rate progressions are fairly and logically established. Let it be recognised that those who earn up to $16,000 per annum will now pay tax at the rate of only 32c in the dollar. On income between $16,000 and $32,000 tax will be paid at the rate of 46c in the dollar and beyond $32,000 tax will be paid at the rate of 60c in the dollar. From looking at the rate of 60c in the dollar to be paid by those on high incomes, how can one say that the Government has forgone its responsibility to the community and favoured the high income earners? That tax rate is a heavy impost and those on very high incomes will continue to contribute a large slice of their earnings in tax. The capacity to pay principle still holds. The big breakthrough is that the vast majority of Australians, the middle income earners, are being afforded a long awaited relief. Some 90 per cent of taxpayers will pay tax at no more than the standard marginal rate of 32 per cent. The Treasurer and the Prime Minister are to be congratulated. Their bold initiative and foresight in restoring incentive to our work force will be of profound assistance to the economy as it slowly but surely climbs out of the doldrums of ALP economic philosophy. {: .speaker-7V4} ##### Senator Georges: -- Who wrote that for you? {: .speaker-KAS} ##### Senator WEBSTER: -The economy was devastated by Labor in three short years, as **Senator Georges** knows. No man who ever ran a turtle farm does not know that. One scarcely needs to repeat it. {: .speaker-7V4} ##### Senator Georges: **- Mr President,** I am raising a point of order. If the Minister continues to talk drivel he ought to base his comments on fact. He has made disparaging remarks about turtle farms and my activities in connection with those turtle farms which saved the nation no more and no less than $ 1 m. He ought to get his facts clear. {: .speaker-KBW} ##### Senator Wright: -- You are making a speech and making a mockery of the Senate. {: .speaker-7V4} ##### Senator Georges: -- How often have you made a mockery of this place and got away with it? How often have you made a mockery of this place on a point of order? You have the cheek to mutter and rumble in the background. **Mr President,** he has gone. At least we are saved the interjections from that direction. {: #subdebate-41-0-s3 .speaker-10000} ##### The PRESIDENT: -- Order! No point of order is involved. {: .speaker-KAS} ##### Senator WEBSTER: -Senator Georges likes to interrupt my speeches so that they will not be heard, but he knows that the economy was devastated by Labor in its three short years in office. One scarcely needs to repeat it, but I do so. In another place as well as here the incompetent men who brought this nation to its knees are still loud in their advocacy and self-righteous in their wisdom. They and the experts who came here and avised them during their three years of office should hide in shame at this time, but they do not do so. {: .speaker-K1Y} ##### Senator Bishop: **- Mr President,** I draw attention to Standing Order 406 which says: >No **Senator shall** read his speech. I suggest that the Minister is reading a speech prepared for him by one of his staff and I ask you to consider whether he might throw his notes away. {: .speaker-10000} ##### The PRESIDENT: -- I have been listening to the Minister. He is referring to some notes occasionally, but he is speaking extempore. I call the Minister. {: .speaker-KAS} ##### Senator WEBSTER: **-Mr President,** I would like to have a little piece of the honourable senator who just tried to interrupt my discourse again. We listened to **Senator Walsh** for half an hour reading word for word every point in his speech. I assure honourable senators that when I referred to turtles and other things relating to the other side of the chamber by no means was I reading from anything written for me. These men who stand up and speak on the opposite side display a level of wisdom which is really a spectre for Australia. It is regrettable that they even hold their heads up. **Senator Bishop,** who was just on his feet, was a Minister in the last Labor Government that brought disaster to the economy and his is one of those men who are responsible for Australia being in the situation that it is in today. That disaster occurred in such a short time. For reasons of irresponsibility and incompetent fiscal management by a succession of Labor Treasurers- admittedly they were thrown out one by one when Labor was in office- inflation escalated from a manageable and relatively insignificant 4.5 per cent when Labor took office to a staggering 17 per cent when it left office. Electors must not forget that fact. Consider for a moment the implications that this had for the prosperity of all Australians. We are an exporting nation. Our wealth and prosperity depend on our ability to compete on world markets. Rampaging inflation simply priced us out of our export markets. Our farmers were unable to dispose of their products profitably on overseas outlets despite the fact that they are the most efficient food producers in the world. Under Labor their costs of production rapidly outstripped export returns. The socialist philosophies as expounded by the Opposition in this place drove the producers to the wall. The throttling of our export earnings has snowballed throughout the economy as a direct consequence of Labor's fostered cost explosion. **Senator Walsh** spoke of how manufacturers are in trouble. The whole array of honourable senators now sitting on the other side was responsible for taking a decision to impose a 25 per cent across-the-board tariff reduction for all protected industries in this country. Very seldom do we hear honourable senators opposite say how wrong they were in taking that action. But Labor made no secret of the fact that it believed in transferring resources to the public sector regardless of the cost to private enterprise. Even in 1975 the more realistic- and I hear one honourable senator opposite laughing now- of Labor's advisers were beginning to wake up to the fact that Labor's policies were wrecking the economy. How well we remember **Senator James** McClelland coming in here day after day and apologising for the foolishness of Labor Ministers. **Mr Hayden** was bent on promoting extravagant and non-productive initiatives in the public sector. I draw attention to these things simply because, as I said at the outset, before another Budget is brought down there will be a Federal election. {: .speaker-KTZ} ##### Senator McLaren: -- You will be annihilated. {: .speaker-KAS} ##### Senator WEBSTER: -There is that man who had great experience in the poultry industry in South Australia interjecting again. One would have thought that Labor would have learned at least a little from its experiment in government. One would have expected that the magnitude of Labor's electoral debacle would have sheeted home to the Labor policy makers that their ideas were not acceptable to the Australian electorate and that the parlous condition of the economy is directly attributable to their efforts. In the last few days we have been treated to the spectacle of public disagreement among Labor's many economic spokesmen. I wonder where **Mr Hurford,** the basic Opposition treasurer, was when the Sydney launching took place. He was, I expect, cleverly shunted out of sight. What about the contradictions of **Mr Hurford** by **Mr Hayden** at the Labor Press conference last week? This behaviour is typical of Labor's utter inability to produce and adhere to cohesive and sound economic policies. In contrast to the confusion in Labor's ranks this Budget is a well balanced and humane Budget. It sets out to assist those within the community most in need- the taxpayers, the pensioners and the farmer- and at the same time it builds upon the sound base established in the previous Budget. As the Treasurer **(Mr Lynch)** noted: >Our first goal is to maintain the underlying trend to lower inflation. Notwithstanding the progress made over the last 12 months there is still some way to go in restoring the pre-conditions for lasting economic growth. {: .speaker-7V4} ##### Senator Georges: -- Watch out lest you lose your place. {: .speaker-KAS} ##### Senator WEBSTER: -- I know that **Senator Georges** agrees now that inflation must remain the No. 1 enemy. We are winning, but we must maintain the fortitude to employ stringent expenditure restraints until inflation is completely beaten in this community. Progress is being made. For instance, the consumer price index figures, excluding health charges, rose by 10.2 per cent in the last year compared with 15.4 per cent in 1975-76 and something in excess of 17 per cent when **Senator Bishop** was a Minister in the last Labor Government. The Budget continues the generous assistance to the disadvantaged. Social welfare outlays are estimated to total $7,250m which is an increase of about 13 per cent on last year's expenditure. Few people realise- it is well to say this-that for every dollar paid in personal income tax 56c is allocated to social welfare expenditure in this community. Education expenditure has not been curtailed. With an increase of 10 per cent it now totals a massive $2,37 lm. I am of the opinion that we, as members of Parliament, should give close scrutiny to our expenditure on education. Are we really getting value for our money? Time and again I see the duplication of services - {: .speaker-KTZ} ##### Senator McLaren: -- I rise a point of order. I again draw attention to Standing Order 406 and ask whether **Senator Webster** has protection under Standing Order 364. {: .speaker-10000} ##### The PRESIDENT: -- The honourable senator is referring to a document quoted by a senator. This gentleman is not quoting from a document. {: .speaker-7V4} ##### Senator Georges: -- I would like to speak to the point of order. {: .speaker-KAS} ##### Senator WEBSTER: -You want me to run out of time. That is all you want. {: .speaker-7V4} ##### Senator Georges: -- You have had sufficient time. As a matter of fact, you have had too much time with the drivel that you have been speaking. {: .speaker-KAS} ##### Senator WEBSTER: -- I do not have too much time for you. {: .speaker-10000} ##### The PRESIDENT: -- Order! {: .speaker-7V4} ##### Senator Georges: **- Mr President,** the Minister has been referring to a document. It is fairly obvious to us on this side of the Senate that he has been reading from that document. Occasionally he lifts his head and by way of interpolation throws an insult at us. He is reading from a prepared document. He continues to do so. I think the Standing Orders should be upheld, especially since he is as provocative and insulting as he has been today. {: .speaker-EF4} ##### Senator Chaney: **- Mr President,** no one could accuse Opposition supporters of reading from any document including the Standing Orders. Standing Order 364 has just been misquoted. If Opposition supporters believe that **Senator Webster** is quoting from a document they may move that the document be tabled. I can assure them that such a motion will not succeed in the present circumstances. In any event I draw attention to the fact that they are wasting **Senator Webster's** time to try to prevent an extremely effective speech from being made and I would ask you, sir, to rule on the point of order and stop the interruptions. {: .speaker-K1Y} ##### Senator Bishop: **- Mr President,** I take a point of order on the same point raised by **Senator McLaren.** It seems to the Opposition that **Senator Webster** is in fact quoting from a document. His actions would indicate that that is so. I would simply ask you, **Mr President,** to satisfy yourself whether he is quoting from a document. I would rest upon your judgment in that respect. {: .speaker-10000} ##### The PRESIDENT: **- Senator McLaren** has raised two points of order, one in relation to Standing Order 406 and the other concerned with quoting from a document. Standing Order 406 says: >No **Senator shall** read his speech. This matter involves an interpretation of reading a speech or using reference notes. Points of order could have been raised this afternoon by any honourable senator in respect of the point that is now being taken. It is claimed that an honourable senator not be permitted to continue his speech because of the provisions of Standing Order 406. 1 have said that I have listened to the Minister. He is referring to his notes. {: .speaker-KTA} ##### Senator Douglas McClelland:
NEW SOUTH WALES · ALP -- Copious notes. {: .speaker-10000} ##### The PRESIDENT: -- Yes, I agree that they are copious notes. From my observations the speech was not being read. I call upon **Senator Webster** to finish his remarks. {: .speaker-KAS} ##### Senator WEBSTER: -- I am quite willing to table my notes if the Opposition cares to have them. I remember that this situation occurred the last time I delivered my speech on the Budget Papers. I was just coming to the point a few moments ago of giving the Senate some very interesting facts in relation to the Science portfolio when the same thing occurred. As honourable senators opposite have quite effectively stifled my doing that, on some other occasion I will have to bring forward copious notes relating to the very excellent outcome of the Budget in relation to science. From statements that I have made in this House yesterday and today honourable senators will be aware of the great benefit that will accrue to Australia as a result of the allocation of funds for the Landsat facilities which the Government hopes to introduce to Australia and the advance that is being made in relation to Antarctic research. I see that my time has nearly expired. I reiterate that those who take note of speeches made by honourable senators opposite should recognise that they come from a totally incompetent group of men. They are the same men - {: .speaker-7V4} ##### Senator Georges: **- Mr President,** I must rise on a point of order. Do you not consider the remark that members of the Opposition are to be considered totally incompetent men as being wholly offensive? It is the Government supporters who are totally incompetent. If this were to be said of Government supporters it would be acceptable, but if it is said of the Opposition surely it is offensive. I ask you to rule that way, **Mr President.** {: .speaker-10000} ##### The PRESIDENT: -- An offensive remark about an individual must be withdrawn. There is no point of order. I call **Senator Webster.** {: .speaker-KAS} ##### Senator WEBSTER: -- I assure honourable senators opposite that I did not mean the remark to be offensive. I thought it was congratulatory of the Opposition. However, we will hear addresses from honourable senators opposite who have been advising the Senate in this regard. {: .speaker-10000} ##### The PRESIDENT: -- Order! The Minister's time has expired. {: #subdebate-41-0-s4 .speaker-PF4} ##### Senator COLSTON:
Queensland -- It is always a pleasure to follow the doyen of the Fraser Government's Ministers, the Minister for Science **(Senator Webster),** who has boasted in this chamber - {: .speaker-IE4} ##### Senator Archer: -- I rise on a point of order. The honourable senator is reading his speech. {: .speaker-10000} ##### The PRESIDENT: -- The point raised is frivolous. I call **Senator Colston.** {: .speaker-PF4} ##### Senator COLSTON: -- As I was saying, before **Senator Archer's** ridiculous comment, he is the Minister who has boasted in this chamber that as the Minister for Science he can add up a set of figures. He is also a very great expert on the timber industry. He told honourable senators tonight that the Fraser Government has a wellbalanced budget. During the course of my speech this evening I intend to point out some of the deficiencies in the Budget that has been brought down by this Government. I remind those who are listening that the Minister who has just spoken is the Minister for Science, but for only two whole minutes of his 30 minute speech did he mention matters relating to his Science portfolio. He told us that inflation was the No. 1 enemy that this Government had to attack. Let him come with me throughout the length of the State that I represent and say that to the unemployed in my State. I shall quote to honourable senators some of the unemployment figures for Queensland to show what the past Budget did and, unfortunately, what this Budget is doing in relation to unemployment. The last employment statistics that are available are for July 1977. At the end of that month 5.64 per cent of the Queensland work force was registered as unemployed. I stress the word registered' because I am sure that there are many more unemployed in Queensland, in fact in any State, than those who are registered as unemployed. Let us look at some of the cities and towns in the State that I represent and see how the position has became worse over the past 12 months. Let me take Bundaberg. I am not choosing these in any particular order; Bundaberg happens to head the alphabetical list that I have. In that city there are 1,260 people out of work. To put this into perspective, we look at the figure for the same time last year, and find that there has been an increase of 3 8 per cent in the number of unemployed in that city. In Cairns there are 3,000 people unemployed. Yet this Government, through the Minister for Science, says that inflation is the No. 1 enemy. I submit that unemployment is a greater enemy than inflation. Unemployment is what this Government should be tackling. I will mention some other cities in Queensland. Gympie, with 667 people unemployed, has 45 per cent more people unemployed than it had this time last year. Ingham has 139 per cent more people unemployed than it had this time last year. These are figures which I hope this Government will look at when it says that inflation is the No. 1 enemy. It is a pity that the Minister has just gone through a tremendous amount of irrelevant information telling us how good this Budget is and that inflation is the No. 1 enemy when things are not improving one bit throughout the community. Indeed, things are getting worse in the employment sphere in every State. I remind those who are listening to this broadcast that we are debating a motion to which was moved an amendment. The motion was 'That the Senate take note of the papers', those papers being the Budget Papers. To that motion the Leader of the Opposition in the Senate **(Senator Wriedt)** moved an amendment which reads as follows: >At end of motion add: > > But the Senate is of the opinion that the Budget: > >1 ) will intensify and prolong the recession; > >2 ) will increase unemployment; > >3 ) will have little impact on inflation; > >will make regressive changes in the tax system; and > >will reduce living standards.' In my speech I will be supporting the amendment moved by the Leader of the Opposition. I intend this evening not to dwell on matters that have been mentioned by previous speakers but to speak on one particular matter which the Minister for Science mentioned in passing. Like the Minister for Education **(Senator Carrick)** and some other people who have been propounding what a 'sound' Budget this is, the Minister for Science said: >Expenditure on education has not been curtailed. As I shall outline, expenditure on education has been greatly curtailed. There has been an increase in the amount of money allocated for education but one knows that in days of inflation one cannot look at money values only. One has to relate these, using a deflator if necessary, to consumer price index increases so that one year can be compared with another. If we do that to the The area of education is of extreme importance. It is of importance not only to those who are at school, colleges or universities at present, but it is important for us as a whole nation. Over the past years great advances have been made in education, especially in education spending. I speak particularly of the years since 1972. But this year, with a definite cut in the budget for education, every advance that has been made in recent years has suddenly been reversed. This is where this Government should hang its head in shame. As I said, the students, the teachers, the parents throughout Australia will now lose any faith they once had in this Government. Any faith they might have had that this Government would look after education spending in Australia will have completely disappeared out the window when they see that this Government has definitely set out to cut education spending. Let us go back over the past few years and look at the figures concerning the financial commitment of the Commonwealth Government in regard to education. We will then be able to appreciate what has happened over recent years. With your concurrence, **Mr Deputy President,** and with the concurrence of the Minister for Science, who can understand figures very well, I seek leave to incorporate in *Hansard* a table The **DEPUTY PRESIDENT (Senator DrakeBrockman)** Is leave granted? {: .speaker-KAS} ##### Senator Webster: **- Mr Deputy President,** I only seek to know who is the author of the document. {: .speaker-PF4} ##### Senator COLSTON: -- The author of this document is an educationist of long standing. The DEPUTY PRESIDENT-Is leave granted? {: .speaker-KUU} ##### Senator Missen: **- Mr Deputy President,** I rise on a point of order. If the name is given I will certainly grant leave, but if it is not, leave will be refused. {: .speaker-PF4} ##### Senator COLSTON: **-Mr Deputy President,** as Senators Webster and Missen well know, I am the author of this document. The DEPUTY PRESIDENT-Is leave granted? There being no objection, leave is granted. *The table read as follows-* {: .speaker-KAS} ##### Senator Webster: **- Mr Deputy President,** I rise on a point of order. DidI hear the honourable senator correctly when he said that the document was written by an educationist of some note? The DEPUTY PRESIDENT- That is not a point of order. I call **Senator Colston.** {: .speaker-PF4} ##### Senator COLSTON: -- In this document I have set out the education expenditure for the years 1970- 71 to 1977-78. First of all, in 1970-71, at current prices, $298m was spent on education. In 1971- 72, $349m was spent on education. I have set out the figures through to 1977-78 where the estimated expenditure as taken from the Budget is $2,37 lm. If one examines this table one can see that the figures have been adjusted according to the consumer price indices and that it shows expenditure at average 1970-71 prices. These figures have been adjusted to show that until this year there has been a definite increase in the amount of money in real terms spent on education. It goes from $298m in 1970-7 1 to $327m in 1971-72, through to 1976-77 when $l,125m was allocated for education in the Commonwealth Budget. Unfortunately, one cannot be absolutely sure of what the inflation rate will be in 1977-78, but by searching through the Budget documents, the best I could ascertain was that the inflation rate for 1977-78 will be about 10.5 per cent. If this is the case it means that education spending has decreased in real terms from $l,125m in 1976-77 to $1,1 17m in 1977-78. Even if one takes an inflation rate of 10 per cent, as I will show later on, there is still a definite drop in real terms in the amount of money set aside for education in this Budget. So much for the statement that education spending has increased. On the night that the Budget was introduced, much play was made of the fact that there was extra money for education in the Budget. There was extra money in today's money terms, but in real terms there was no extra money. Unfortunately, although there was a great expansion of funds in real value spent on education from 1972 onwards, it all changed in 1977. It did not really change on the night of the Budget; actually it changed on 3 June 1977. This is a date that will be long remembered when this Government's approach to education is evaluated. I should like to look at the reasons why this date of 3 June 1977 is so significant, but to do so, first of all we have to go back to May 1976. On 20 May 1976 the Minister for Education, **Senator Carrick,** announced guidelines for the Education Commissions in their planning for the 1 977-79 rolling triennium. In 1976 the Minister stated what would be available regarding increases in education spending for those Commissions in 1978. The 1976 guidelines provided that universities could work on a growth rate of 2 per cent. It was the same for Colleges of Advanced Education. Technical and further education could work on a 5 per cent increase and the Schools Commission on a 2 per cent increase. Unfortunately, all that changed on 3 June 1977 when new guidelines were introduced. Universities, colleges of advanced education, schools and technical colleges had worked on the basis of those percentage increases- they had planned that way- but suddenly they were told that in 1978 they would not be given that son of allocation. Universities were told that there would be no increase in their funding. Colleges of advanced education were told that they would receive no increase. Technical and further education colleges were told that they would receive a 10 per cent increase. Schools were told that they would receive no increase. That 10 per cent increase stands out and looks like a great amount, but it represented only $8. 2m in a total of about $ 1,737m. As the author of a table headed 'Commission Guidelines for 1977 and 1978 as Announced in 1976 and 1977', I seek leave to incorporate it in Hansard. The DEPUTY PRESIDENT-Is leave granted? There being no objection, leave is granted. *The table read as follows-* >COMMISSION GUIDELINES FOR 1977 AND 1978 AS ANNOUNCED IN 1976 AND 1977 {: .speaker-PF4} ##### Senator COLSTON: -- When we examine the decreases from the 1976 guidelines to the 1977 guidelines, let us not forget that cost supplementation was drastically reduced in the 1977 guidelines for 1978 and thereafter. This will mean that even a lower amount of money will be made available this financial year. It was against this background of 3 June 1977 that many of us who are concerned about education awaited the Budget with some trepidation. Our trepidation was not without cause because we found, as I pointed out earlier, that, although the amount of money allocated for education in 1977-78 appeared to be greater than that allocated in 1976-77, it was an increase of only 9.8 per cent. It we take an inflation rate of 10 per cent- which I think will be an underestimatethe amount of money that is to be made available this year, according to the Budget, means that in real terms less money will be spent on education than was spent last year. In fact, because of the change in guidelines, including the changes to cost supplementation, estimates have been made- not by me but by members of the staff of the Parliamentary Library who have circulated a paper to those people in the Parliament who are interested in this field- that the total real cut in education expenditure for 1978 and 1979 will be about $ 125m. So much for this Government's concern about education in Australia! In the short time that is left to me to speak in this debate I intend to make some comments about the number of postgraduate awards that this Government is providing. When I mention postgraduate awards, I am speaking of a very limited field- a field which is of interest to a relatively small body of people in the total field of education. In doing this, I do not deny that there are other areas where vast improvement is required in education. If one goes into almost any school in Australia one will find that funds are needed. There are some schools, of course, where the facilities are grand. But when I travel throughout the electorate that I represent I find schools where there is a great need for equipment, a great need for playgrounds, teachers do not have proper staff rooms and all the facilities that are required for a school generally need some improvement. When I speak about postgraduate awards, I do not want to give the impression that I do not realise that these other problems exist. I am sure that some of my colleagues, during the course of the Budget debate and during the Estimates committee hearings will be mentioning these problems. I have a great interest in postgraduate awards. Last year there was a reduction in the number of such awards offered by this Government. I mentioned this when the number of awards being offered for postgraduate work was reduced from 900 to 800. Last year the Minister for Education, in reply to some of my comments said: >I acknowledge the real significance of postgraduate research and postgraduate development in the universities. I acknowledge that it is one of the main factors which give universities their distinctive characteristics of scholarship both in pure and applied research. I acknowledge that as soon as the economy of Australia is in sufficiently good shape we should look towards the field of university research and see what can be done. That is what the Minister said last year when I complained to him that the Government of which he is a Minister cut the number of postgraduate awards from 900 a year to 800 a year. At the same time, he said: >I stress and acknowledge the importance of postgraduate work in universities. I acknowledge that it ought to be kept under review. It was kept under review all right, because this year when the Minister for Education presented his paper, the day after the Budget was presented he announced: >For 1978, 700 new awards - he was referring to postgraduate awards- will be offered for competition. This is a reduction of 100 on the number offered in 1977 . . . The Government did keep this matter under review. Not only did it decrease the number of awards by 100 last year, but it decided to decrease the number of awards by a further 100 this year. Last year the number was reduced because of economic stringencies. This year the Government offered a new excuse. This is its excuse: >This decision, which brings the number of awards on offer to approximately the number made in 1974 - that statement, by the way, is misleading- has regard for the increasing supply of students with higher degree qualifications in recent years, a situation which justifies a small tapering of the scheme. A reduction of 100 in the number of awards offered does not bring it back to the figures of 1 974. It brings it back much further. It brings it to the level of 197 1 or a little earlier. The Minister was saying that there is a much larger number of postgraduate students and because of that the Government would decrease the number of awards offered. No study was made to see whether there should be a reduction in postgraduate awards, whether we had an oversupply of postgraduates or whether there was any way in which postgraduates could finance their own education. The Government took a bland look at the numbers and decided to decrease the number of awards by 100. 1 asked a question on this matter in the Senate last week. The Minister stated: >As soon as there is an economic recovery, as soon as more resources are available in this country we will put the matter under close scrutiny again. In one way I hope that the Minister does not do so, because the last time he put this matter under scrutiny he knocked off another 100 awards. If he puts it under scrutiny again he may do that again. Nevertheless, I think that the Government should carefully examine the decision it has made to cut the number of postgraduate awards it will offer this year. It is interesting to note that at the present time there are 18,000 higher degree students in Australian universities. This Government has cut the number of awards being offered for this type of educational endeavour from 800 to 700. What a great difference this will make to the total number of people studying for higher degrees in Australian universities! The approach that this Government has taken to those awards is far different from the approach that it took to student loans. One can perhaps question the motives of the government with regard to these two different types of approaches to see whether there is anything suspect about them. Reducing the number of post-graduate awards would reduce expenditure. Having student loans rather than allowances for students probably would reduce expenditure also. The decision with regard to the number of awards was an ad hoc decision. The other with regard to student financing by way of loans was the subject of a great report. I presume the report was examined by the Government. It was examined within the community. Yet it was rejected in this Budget. The approach that was taken for the two issues was quite different. I would say that if any reductions are to be made in the field of education they should be made only after a proper study and proper consideration. Such study and consideration was made with regard to the student loans. I started this evening by pointing out that the Budget strategies that we have experienced so far have failed. They have failed especially in the State I represent, where we have increasing numbers of unemployed and the second highest rate of unemployment of any State in Australia. I moved on and pointed out that this Government had also failed the teachers, the parents and the students of Australia by cutting funds for education. It cannot continue to say that it has increased funds, because this is patently false. The funds for education this year have been decreased, and it is up to the Government to realise this fact, to admit and to make sure that in future Budgets the position is rectified. {: #subdebate-41-0-s5 .speaker-KKD} ##### Senator JESSOP:
South Australia -- I support the Budget that has been presented by the Government. I believe it represents responsibility in economic management and that in the long term it will re-create incentive in the community and will advance Australia a long way along the path to reducing inflation. Already the Government has a reasonable record in that regard. People may realise that there is to be an election in South Australia. I was amused when the Premier of South Australia decided to make the main election issue the matter of unemployment. Although I say I was amused, I realise it is a very serious problem. Going back in history, I believe that the State Labor Government in South Australia does not have a very good record with respect to creating job opportunities and developing that State. I listened with great interest to **Senator Young** earlier in the debate when he referred to the Redcliff petrochemical works which has been in prospect for South Australia for a number of years. I thought **Senator Young** set out very clearly the economic benefits of such a project not only to South Australia but also to Australia as a whole. This reminded me of the time when I first entered Parliament in December 1966. I started agitating for the provision of a pipeline from Gidgealpa along the west side of the Flinders Range to serve the area of Port Augusta, Port Pirie and Whyalla with the ultimate objective of establishing a Redcliff petrochemical industry. That was 11 years ago. I recall also that at that time the Hon. Lin Riches, who unfortunately is now deceased, was a strong advocate for that proposition. Together with **Mr Hall** as he then was, **Senator Hall** now, who was leader of the Liberal Opposition in that State, we did our best to persuade the then Labor Government to spend an additional Sl.Sm to provide natural gas to the Spencer Gulf area. Had that been carried out at that time we would have had a nourishing industry and many subsidiary industries in that area providing many jobs for the people in the north. {: .speaker-9I4} ##### Senator Messner: -- Do you think you would have got Redcliff then? {: .speaker-KKD} ##### Senator JESSOP: -I believe that had that action been taken the Redcliffe project would have been a going concern. I remember that I asked my first question on 23 February 1967. I asked the then Treasurer whether the Federal Government was to provide some funds for the construction of that pipeline. The Liberal Government at that time provided through Loan Council funds to the tune of something like $20m. In the 1973 election campaign **Mr Dunstan** boldly and loudly promised that he would build a petrochemical works at Redcliff at a cost of $300m. That is the truth of the matter, but unfortunately that promise, like many of his promises, was not to be seen in evidence in South Australia. At that time the cost of a pipeline to Redcliff *from* Gidgealpa would have been $32m. Today a 12-inch pipeline would cost $5 7m. **Senator Young** pointed out that for that project to go ahead now the requirement is for a loan amounting to $247m to enable the infrastructure to be provided to service a petrochemical industry at that site. It is a loan, and I emphasise that. I suggest that the Federal Government ought to do all it can to provide that loan to the South Australian Government through the Loan Council because this will be at no cost to the taxpayer. The South Australian Government will be indirectly paid back this amount by the Dow Chemical Co. once the industry is established. It will pay by way of electricity charges, rental for houses and water charges. Therefore in time this loan will be repaid. I note that the ICI company is interested in expanding its factory and facilities at Botany Bay. Of course this must be considered by government, but I remind the Government that although this is a possibility we must look at the consequences of such an expansion of those facilities. For a start, no salt is available. Therefore very little caustic soda would be available from that expansion proposition. The environmental consequences would be quite serious because the technology that is used in that factory is the mercury cell technology which creates tremendous environmental problems. However, Redcliff will produce between 500,000 and 600,000 tons of caustic soda by 1982. We must look at the advantages in that respect because by that time Australia will have to import no less than 800,000 tons of caustic soda. So the economics of that proposition are clear. The petrochemical works at Redcliff would be using the diaphragm cell technology which has no environmental problems. At the ICI installation there would be tremendous wastage of ethane. As **Senator Young** pointed out quite clearly, that would not be evident at Redcliff. Apart from that the Redcliff establishment would be able to provide all the Australian ethaline product requirements from 47 per cent of its output which means that 53 per cent could be used to benefit our export trade. I make these few points in support of what **Senator Young** has already said and to urge the Government to give favourable consideration to provision of a loan through the Australian Loan Council for the infrastructure requirement. **Mr Dunstan,** the person who promised this industry in 1973 and broke his promise, is now campaigning on an unemployment issue. The Redcliff industry would provide 3,300 jobs for the 4-year construction period and 710 jobs permanently once the works were functioning. This would support an additional population of 4,000. In one hit we could have 3,300 jobs over a 4-year period. {: .speaker-K1Y} ##### Senator Bishop: -- Would you like to talk about Whyalla? {: .speaker-KKD} ##### Senator JESSOP: -- I have some interest in Whyalla too. **Senator Bishop** has hit on a very good point. I am glad that he introduced the subject. The 3,300 jobs at Port Augusta would be a very great interest to the unemployed people at Whyalla. I am glad the honourable senator made the point about Whyalla. I am glad that he supports what I am saying about the need for development of the northern part of South Australia. This of course has not been at all evident with his Labor Party colleagues in South Australia. They have ignored the urgent requirement to provide a sealed road from Port Augusta to the Northern Territory. They have ignored the fact that $80m worth of business has been lost from South Australia to Queensland because there is a sealed road from the Northern Territory to Brisbane. These matters do not seem to be of any great consequence to the State Labor Government. {: .speaker-K1Y} ##### Senator Bishop: -What did your Government say? {: .speaker-KKD} ##### Senator JESSOP: -This particular project, the Stuart Highway, in which **Senator Bishop** should have some interest- he should be supporting the concept of having the project completed as soon as possible- would provide 273 jobs for a construction period of 5 years. {: .speaker-K1Y} ##### Senator Bishop: -- Did your Government reject it? {: .speaker-KKD} ##### Senator JESSOP: -- My Government has done quite a lot in respect of national development in this area. Let me remind the honourable senator opposite of another project or two that could be developed in the northern part of South Australia. {: .speaker-CAK} ##### Senator Rae: -- Tell us about Dunstan and Redcliff. {: .speaker-KKD} ##### Senator JESSOP: -- I would like to continue the development of my theme of unemployment in South Australia. There could be 3,300 jobs at Redcliff. The project was promised by **Mr Dunstan** in 1 973. It was frustrated by the Federal Labor Government at the time which said it would go ahead with it because it wanted another company to be involved; otherwise, perhaps the project may have been under construction at present. Another suggestion I make is that **Mr Dunstan** has showed no interest in developing the minerals in the northern part of South Australia. He was giving a lead to the rest of Australia with respect to a uranium enrichment plant only about 18 months ago. He was one of the great advocates for the establishment of that industry in South Australia. {: .speaker-9I4} ##### Senator Messner: -- What is he saying now? {: .speaker-KKD} ##### Senator JESSOP: **- Senator Messner** asks what is happening now. **Mr Dunstan** has had to bow down to the pressures of the Left wing of the Labor Party. **Mr Dunstan** is not too happy about it either. He has a committee still operating in South Australia examining nuclear energy in that State and examining still the possibility of attracting a uranium enrichment plant to South Australia. These poor fellows do not know which way they are going. They do not know whether the Government will change its policies. I think that perhaps they hope there will be a change in government so that there will be some hope for development of the northern part of South Australia. I mention two projects that may well be - {: .speaker-K1Y} ##### Senator Bishop: -- What about Whyalla? Did you mention Whyalla? {: .speaker-KKD} ##### Senator JESSOP: **- Senator Bishop** is supporting me continually for what I am advocating is the establishment of job opportunities in South Australia which have been ignored by the State Labor Government. I would like to tell a little story about a mining company that has, in the vicinity of Lake Frome- dare I say it- a uranium lease. The person concerned put forward a proposition to me that this deposit could be mined by a very acceptable environmental technique of leaching the ore body. In this way a solution of ammonium carbonate and hydrogen peroxide is injected into the ore body. {: .speaker-K1Y} ##### Senator Bishop: -- He is getting like **Senator Webster.** {: .speaker-KKD} ##### Senator JESSOP: -- I am sorry to get technical, **Senator Bishop.** I will give you a simple explanation, if you care to see me later. The technique is most acceptable to the environmentalists. There is no disturbance of the soil apart from the injection of a pipe. {: .speaker-K1Y} ##### Senator Bishop: -- You have not talked about Whyalla yet. Would you like to mention Whyalla? {: .speaker-KKD} ##### Senator JESSOP: -- Again this would provide more jobs for the people at Whyalla. Let me proceed. This technique leaches the uranium out of the ore body leaving the undesirable elements underground. The technique also eliminates the question of radon which everyone seems to be concerned about. The slurry is then ready for enrichment if wanted. The significant point is that 1,000 jobs would result directly and indirectly from this project. Some 22,000 tons- or 'tonnes' I think the correct term is- of uranium represent about $ I billion - {: .speaker-K1Y} ##### Senator Bishop: -- But you are not sure, are you? {: .speaker-KKD} ##### Senator JESSOP: -- The Opposition does not like us to talk about economics when we mention mining. {: .speaker-K1Y} ##### Senator Bishop: -- Now talk about Whyalla for a change? {: .speaker-KKD} ##### Senator JESSOP: -- Moreover- and this ought to be of some interest to the people at Whyallasome $ 100m worth of plant would be required to be prefabricated. That could be done at Whyalla. How many jobs would that represent? How many jobs would result if we installed a uranium enrichment plant in South Australia? Millions of centrifuges would be required. This again would give an opportunity of jobs for the people at Whyalla. I believe those matters ought to be given serious consideration by the State Government in South Australia. {: .speaker-9I4} ##### Senator Messner: -- Is not the cheapest steel made in Whyalla? {: .speaker-KKD} ##### Senator JESSOP: -That is perfectly right; the cheapest steel is made at Whyalla. Therefore the economics and the job opportunities in my view are tremendous. Let us look also at Roxby Downs which of course has the potential of becoming another Mount Isa. It would support a town population of 30,000 people. **Mr Virgo** says No, we do not want to develop that. We do not need a road up to the Northern Territory. We do not need to worry about the jobs that would be created. We do not want to worry about that'. {: .speaker-K6F} ##### Senator Cavanagh: -- Who said that? {: .speaker-KKD} ##### Senator JESSOP: **- Mr Virgo** is the man who does not worry about it. He does not want to build a road. Honestly it amazes me that **Mr Dunstan** has the confounded impertinence to campaign on the unemployment issue when he has done nothing about it in South Australia himself. {: .speaker-9I4} ##### Senator Messner: -- He is dancing on the graves of the unemployed. {: .speaker-KKD} ##### Senator JESSOP: -- That is right. Another matter I raise is my concern at the lack of oil and gas exploration on the Australian continent. Recently, in company with other colleagues, I visited the Cooper Basin. I learned that only about 100 exploratory drill holes had been put down. In the Pedirka Basin to the north a mere five exploratory drill holes have been put down. This area is approximately the size of France. I was most concerned to learn that two oil rigs had been taken from South Australia. They had remained idle since 1972, due to the former Labor administration in Canberra. These rigs had to be removed to Houston, Texas, so that they could be employed at full capacity. About 2,027 oil rigs are working continuously on the North American continent. The removal of the two rigs disturbed me because it left only one oil rig working in South Australia. That rig has drilled only three exploratory holes since 1 974. All of them were productive. For the rest of the time it has been drilling developmental holes. It occurred to me that although the Government recognised in this Budget the need to stimulate this area of our economy more should be done to encourage drilling rigs to operate continuously. Those two rigs leaving the shores of Australia probably cost the Government about $1.7m, because the jobs that were lost as a result of those rigs being taken away must be considered. We are missing out on income tax, we are missing out on company tax and we probably will have to pay unemployment benefit to those who may be out of work as a result. I think that is a very serious matter, particularly when we are crying out for further development of our oil supplies. So I request the Government to give that matter more serious consideration. I have taken the trouble to send a deputation to the Minister for National Resources, **Mr Anthony.** I hope he will regard that matter as a very serious one. I hope he regards my suggestions as constructive. I believe they are quite workable. I hope the Minister for Science, **Senator Webster,** will support my concern in this matter and give impetus to my suggestions to his senior colleague. {: #subdebate-41-0-s6 .speaker-K6F} ##### Senator CAVANAGH:
South Australia -- I think it is very unfortunate that I have to follow **Senator Jessop** 's pathetic contribution. I recognise his limitations. I do not like to be too critical. {: .speaker-KBW} ##### Senator Wright: -- You condescend? What rot! {: .speaker-K6F} ##### Senator CAVANAGH: **-When Senator Jessop** has to be reinforced by the **Senator from** Tasmania who also recognises **Senator Jessop** 's limitations, that demonstrates that **Senator Jessop** needs some moral backing. {: .speaker-K8H} ##### Senator THOMAS:
WESTERN AUSTRALIA · LP -- What a disgraceful thing to say! {: .speaker-KBW} ##### Senator Wright: -- I do not have to listen to that drivel, {: .speaker-10000} ##### The PRESIDENT: -- Order! **Senator Cavanagh,** the words which you have uttered contain a reflection on **Senator Jessop.** There is an imputation of inadequacy which is not correct. {: .speaker-K6F} ##### Senator CAVANAGH: -- I am sorry. I will withdraw them and say that he has no limitations, as his utterances were designed to show. He is the authority on South Australia. He knows everything about South Australia. He can cure all the unemployment problems in South Australia. He has every solution in South Australia. Everyone else is out of step with **Senator Jessop.** When he was the member for Grey and he talked about building a gas pipeline to Redcliff, the people rejected him. He is a man without limitation. He will never be recognised in South Australia or in this Senate. If we could export him to some other country I think he would rise to fame and receive due recognition. He started his speech by saying that there will be an election soon in South Australia. The purpose of his speech was to gain support for his party in South Australia. I do not condemn him. He is not concerned about the welfare of South Australia or the Budget proposals. He is not concerned about what this Government could have done and should have done in this Budget. He is concerned about defeating a progressive government in South Australia. I do not condemn him for his concern because he is a member of a party which is in serious difficulties and whose leader has shown incapabilities. In the proposed redistribution of federal seats in South Australia some have been cut out. Two members of the House of Representatives who should be in unity to win the State election are fighting each other for the seat of Wakefield in South Australia to see who gains Liberal Party pre-selection for that seat. That is how the Liberal Party has fragmented in South Australia. That is one reason why a South Australian Liberal senator said going home last weekend that he could not get enthusiastic about the State election. He said: 'You cannot get enthusiastic when you know the results of the election'. Everyone knows the position. South Australia has a progressive government that is supported by the people. It is led by a Premier who has more respect than any other Premier and who is recognised as the outstanding Premier of Australia. Everyone knows what the result of the election will be. Of course **Mr Dunstan** said he would fight the election on the unemployment issue. It is the real issue in South Australia. It is the issue in Australia. It is the issue about which everyone is concerned. The South Australian Government, which is condemned for not doing anything about the number of unemployed, has out of its surplus funds put in $20m to absorb the unemployed, to keep the pressure off the Commonwealth for unemployment relief and to get thousands of men employed on relief schemes in South Australia during the past 6 months. It has been accused of not spending money on the Stuart Highway and other things. It was only when the State Government used its surpluses and was unable to carry on the scheme that it appealed to the Federal Government, and the Federal Government knocked it back. The Federal Government would not give the State Government lc to carry on the unemployment scheme. Now we are told that if the State Government built a petrochemical works or developed some road works **Mr Dunstan** could assist the unemployed. We have been appealing to the Federal Government for assistance on these things in order to absorb the unemployed that the Federal Government has placed on the unemployment list. The blame for the number of unemployed in Australia remains with the Federal Government. Not only Don Dunstan but also Bjelke-Petersen want an election in their respective States to condemn this Government for the unemployment level which it has created in Australia. Unemployment would not have been a problem in the northern parts of South Australia if it were not for the Federal Government closing the shipyards. The Minister of Transport in South Australia, **Mr Virgo,** has made repeated requests for money to upgrade the Stuart Highway. On the last occasion, when South Australia's road grant was cut, the Government had to decide priorities for roads. The State had no highways. It was regrettable that work on the Stuart Highway could not be proceeded with. When **Mr Nixon** sent me a list of the roads that would be built in South Australia with the grant I wrote to him saying that I regretted very much that there was no allocation for the Stuart Highway and he replied telling me about the impossibility of the present road grant. Every honourable senator from South Australia knows where the blame lies for the Stuart Highway situation. In their own State honourable senators are prepared to unite to get something done, but they come over here and use the matter as political propaganda and try to place the blame on someone who they know in their own consciences is not to blame for the position. **Senator Jessop, Senator Young** and **Senator Messner** the Liberal senators from South Australia- organised a bus tour from Port Augusta to Alice Springs so that those on the bus tour could experience the difficulties of the Stuart Highway and in an effort to get the Federal Government to make money available. I received an invitation, but I would not be a party to such a display of notoriety by people who proclaim themselves as protectors of the State but who know full well that they are ratting on the State by their refusal to condemn this Government. When they arrived at Alice Springs they held a public meeting. A big demonstration was arranged. They obtained information as to the loss to the Northern Territory, the loss to the State of South Australia and the cost of maintenance of vehicles travelling on the highway. They showed the urgency of the matter and they sent all the information to **Mr Nixon,** demanding money for the work on this highway. There was no condemnation of **Mr Nixon** when he answered no. These cheap political propagandists come in here trying to blame a government unfairly. The whole purpose of the political propaganda is that an election is to be held and they know that the result will be hopeless for them. They fear that the majority of voters in that election will condemn the Fraser Government anc. will show a twist from its support in 1 975 to its loss of support in 1 977. In view of the lateness of the hour I suppose that I will have to continue my speech at a later time; so I can think of no better subject on which to spend the next five minutes than **Senator Jessop.** A very false and very unfair accusation was made against **Mr Don** Dunstan by **Senator Jessop** when he spoke about **Mr Dunstan** 's support for uranium mining. **Senator Jessop** said that **Mr Dunstan** set up a committee and had to back off because of the pressure from his left wing friends within the Labor Party. This man gives all the information, knows nothing about it and is not prepared to listen. **Mr Dunstan** was one of the leaders of the campaign for the adoption of Labor's policy on uranium mining at the Perth Conference, because he had set up a committee within the South Australian Parliament to examine uranium mining and its consequences and ramifications and the committee reported to him that it knew of no way in which safety could be guaranteed in the treating of uranium. {: .speaker-KKD} ##### Senator Jessop: -- That is not true. {: .speaker-K6F} ##### Senator CAVANAGH: -- I am telling the honourable senator that that was the report from **Mr Dunstan** 's committee. **Mr Dunstan,** in all honesty and sincerity, said that therefore he could not go along with supporting the mining or export of uranium. That was his attitude on the question. It is thought that the Roby Downs Station contains big deposits of copper and everyone agrees that it is worth developing. The Minister for Mines, **Mr Hudson,** has done everything possible to achieve progress in the Roby Downs Station mining, including appealing to the Federal Government for assistance in road building. {: .speaker-9I4} ##### Senator Messner: -- Tell us why he cannot. {: .speaker-K6F} ##### Senator CAVANAGH: -- I just told the honourable senator. The only avenue of appeal is to the Federal Government, and that is hopeless. Exploration is still being carried out at Roby Downs. It will be mined. There is no doubt about that. But today we have seen a parochial attitude shown by these men. The people of South Australia have rejected them. **Senator Young's** address today - {: .speaker-KKD} ##### Senator Jessop: -- It was very good. {: .speaker-K6F} ##### Senator CAVANAGH: -- It was very good for the purpose of winning the election for the Labor Government in South Australia. When **Senator Young** came to this place everyone liked him and thought that he was a small '1' Liberal and a progressive type of fellow. Today he talked about people working for 6 months and going to the Gold Coast for 6 months. He said that he knew them. He made accusation after accusation. He did not support those accusations with one iota of evidence. Now he wants to prevent those people from receiving cash payments for a long period and suggests that they be given goods coupons so that they can go to a shop and buy so many pounds of meat. {: .speaker-K1M} ##### Senator Primmer: -- That is a soup kitchen mentality. {: .speaker-K6F} ##### Senator CAVANAGH: -- It is a soup kitchen mentality and it goes back to the dole days. If he had studied the history of South Australia he would know that the greatest violence that occurred in South Australia was when men with meat coupons demonstrated in Victoria Square in Adelaide in the 1930s to be allowed to buy beef with their meat coupons. They used to receive the scrapings of the kitchen, the ends of the mutton. Here we have a progressive member of the Liberal Party from South Australia who wants to reintroduce that situation. He is an advocate for the election of a Liberal Government in South Australia. {: .speaker-9I4} ##### Senator Messner: -- They are red herrings, **Senator.** {: .speaker-K6F} ##### Senator CAVANAGH: -- Of course they are red herrings. Where will such people receive support for a Liberal Government in South Australia which is one of the most progressive States in the Commonwealth. For the first time in living memory in South Australia we have a system of voting which is near to one vote one value. When the Government is decided by a majority of voters the electorate supports Labor on every occasion. We will see that Labor will be returned again. **Senator Messner** and **Senator Jessop** know that Labor will be returned, but in order to gain preselection in their party they have to make a gesture of support for the Government in this place. Let me return to the Budget. This is the occasion every 12 months when consideration of the Budget takes place. Debate interrupted. {: .page-start } page 504 {:#debate-42} ### ADJOURNMENT {:#subdebate-42-0} #### National Sewerage Program- Geelong Animal Health Laboratory {: #subdebate-42-0-s0 .speaker-10000} ##### The PRESIDENT: -- It being 1 1 p.m., in conformity with the Sessional Order relating to the adjournment of the Senate, I formally put the question: >That the Senate do now adjourn. {: #subdebate-42-0-s1 .speaker-PF4} ##### Senator COLSTON:
Queensland -- This evening I raise matters which appear in two questions which I have placed on the Senate Notice Paper seeking details of funding provided by the Commonwealth Government for sewerage works in Australia. After 1972 a national sewerage program was established. It was established in 1973 to eliminate a backlog of over half a million unsewered dwellings throughout Australia. The Commonwealth Government allocated to the States $36m in 1973-74,$ 108m in 1974-75 and in 1975-76, in a Budget which was introduced when the Labor Party was still in power, the Government allocated $1 13m. Unfortunately after Labor was no longer in power the position changed and in 1976-77 only $49m was provided compared with $ 1 1 3m in the previous year. It now seems that the whole program has been dropped. Within Queensland this program had special significance in that in 1973-74 - {: .speaker-9I4} ##### Senator Messner: **- Mr President,** I raise a point of order. It seems to me that the honourable senator, although I respect what he is saying, is questioning a matter that is before the Senate in the Budget Papers. He is discussing a matter which obviously is raised in them and consequently I do not believe it is relevant for it to be raised on the adjournment debate. {: .speaker-10000} ##### The PRESIDENT: -- There should not be, in an adjournment debate, a continuation or a revival of debate on a matter which is before the Senate. I am listening to you **Senator Colston;** please continue. {: .speaker-PF4} ##### Senator COLSTON: -- As I was saying, **Mr President,** in Queensland this scheme was of special significance because in 1973-74 an amount of $2. 8m was allocated for sewerage in that State. In 1974-75 the amount was $6.8m; in 1975-76 it was $8.1m but in 1976-77 the allocation dropped to $lm. Unfortunately this Government seems to have shown a complete lack of interest in reducing the sewerage backlog and in urban regional development programs in general. In Queensland there has developed a certain amount of publicity which has been fostered by the Deputy Premier, **Mr Knox,** and another Minister in the Queensland Government, **Mr Hinze,** who have been asking for more funds for the State for this purpose. As I mentioned before, in the Hayden Budget of 1975-76 an amount of $1 13m was appropriated for the national sewerage program. The full amount of that allocation was expended. In the first Lynch Budget of 1976-77 an amount of $50m was appropriated for the program. That was a cut of about 70 per cent. The reason I mention these figures is that the whole program was of tremendous importance not only to the State that I represent but also to the nation as a whole. It is important, I believe, to determine whether the change of Government policy has been due to a close examination of all the details that should be looked at or whether it is just another ad hoc decision of government to save government funds. It is because of this that I put some questions on notice. Last Wednesday I received answers to two questions on notice that suggest the Government made a decision without the full recognition of the problem. They also seem to suggest that the Government is attempting to whitewash the problem by withholding facts. Firstly I draw attention to question No. 946 which reads as follows: {: type="1" start="1"} 0. 1 ) What is the estimated extent of the current backlog in sewerage services in (a) Australia, (b) each State and Territory and (c) each capital city in Australia. 1. What action is the Federal Government taking to overcome the backlog. 2. What effect has the cutback in funds allocated for sewerage backlog programs in the 1976-77 Federal Budget had on the rate of overcoming the backlog? In other words, the question asked was: What was the backlog, what action was the Federal Government taking and how much of the backlog was reduced by the funds allocated in the 1976-77 Budget? The answer to part ( 1 ) (a), (b) and (c) of the question was: >No figures currently available. This was the answer that I received in respect of the estimated extent of the current backlog in sewerage services in Australia, in each State and Territory and in each capital city. The answer that I received- this is the point I would like to raise with the relevant Minister- is quite at variance with the contents of a brief that I have been privileged to look at, a brief that was developed by the Department of Environment, Housing and Community Development. In part the briefing stated: >The National Sewerage Program by which the Commonwealth provides assistance to the States resulted from a review by the Cities Commission. It has been estimated that there is a $4,000m backlog in services with a $850m backlog in Perth alone. In other words, the brief from the Depanment of Environment, Housing and Community Development set out the extent of the backlog, namely $4,000m throughout Australia and $850m in Perth alone. But the answer that I received last Wednesday to my question stated that no figures were currently available for the backlog in Australia, in each State and Territory and in each capital city. I draw the Minister's attention to the fact that there is a discrepancy between the answer that I received and the briefing note that was developed by the Department. Further, I draw attention to question No. 945 in which I asked: {: type="1" start="1"} 0. 1 ) What response has been received from each State on suggestions by the Federal Government that water quality standards be imposed as a condition of State Grants under the National Sewerage Program. 1. What action is the Federal Government taking on this suggestion. The answer to part ( 1 ) of the question in respect of what response had been received in relation to water quality standards being imposed was as follows: {: type="1" start="1"} 0. 1 ) No response has been received because the suggestion has not been made. Again, that answer is at variance with the information given in the brief by the Department for Environment, Housing and Community Development. Part of the brief stated: >There had been an attempt to impose water quality standards as a condition of States Grants under the National Sewerage Program but in Federal State discussions it had been difficult to reach an appropriate consensus. That seems to indicate that the suggestion was made that water quality standards should be imposed as a condition of State grants under the national sewerage program. As the Minister represents the Minister for Environment, Housing and Community Development **(Mr Newman)** I would not expect that he would be able to provide answers to the discrepancies that I have outlined this evening, but I do think they are important. I think it is important that when we receive answers to questions we can accept them as being accurate. Either the information that I received in the answer is not accurate or the information in the briefing by the Department is not accurate. I ask the Minister whether he will look into this matter and perhaps give me a reply at some subsequent date. {: #subdebate-42-0-s2 .speaker-KTZ} ##### Senator McLAREN:
South Australia -- I desire to raise a matter in the adjournment debate this evening which I have previously raised in this Parliament on no fewer than three occasions. Although I have raised this very important matter on those occasions, it appears that the Government as yet has taken no action to carry out a promise which was made by the Deputy Prime Minister **(Mr Anthony)** in the 1975 election campaign. I will refer to that later. The Government has taken no action to construct the animal health laboratory at Geelong, in Victoria, which was put in train when the Labor Government was in office. A Press release was issued by then Prime Minister, **Mr Whitlam,** on 2 April 1974.I am prompted to raise this matter again this evening by a letter that has been forwarded to me as the Secretary of the Parliamentary Labor Party Resources Committee by my colleague Ralph Jacobi, the member for Hawker in South Australia. **Mr Jacobi** received the letter from the South Australian Stud Merino Sheep Breeders' Association. I will read the letter which is addressed to the Hon. H. R. Jacobi, M.P., Commonwealth Parliament Offices, 1 King William Street, Adelaide, South Australia. The letter is headed 'Exotic Diseases of Animals'. It reads: >The Management Committee of this Association is extremely perturbed at the threat of introduction into this country of some of the diseases of animals rampant in many overseas countries. The recent establishment here of two new varieties of aphid demonstrates how easily this could happen and it is considered our quarantine laws, vigilance and defence against these things are proving insufficient. > >Immigrants, legal and illegal, enter Australia unannounced. Foreign fishermen spend nights on our shores and it is not known what kinds of animals they may have with them. Foot and Mouth Disease and many others are rife in some of their home countries. > >Once a serious disease gained a foothold here of course the cost of eradication would be more than industry could bear and substantial government financial involvement would obviously be necessary. > >It would be appreciated if you could bring this matter up in the appropriate place and do anything you may be able to to have our regulations tightened and our resources marshalled more effectively against this threat. > >Yours faithfully, R. E. RULE Secretary As I said, that matter came before our committee last evening. I raise it tonight to draw the attention of the Senate to the inactivity of this Government in carrying out a policy which was put in train by the Labor Government and which was designed to do the very thing which the South Australian Stud Merino Sheep Breeders Association is now requesting be done- that is, to set up a laboratory and a quarantine station for the protection of the Australian livestock industry. On 15 March 1977 I posed a question to **Senator Webster** as to what had been done. **Senator Webster** told me that he would attempt to obtain some information for me during the day. On 23 March he wrote to me. I will read the letter which appeared in *Hansardof3* 1 March. He said: >Dear **Senator McLaren:** > >You will recall your question without notice on 15 March seeking information about the proposal to construct an animal health laboratory at Geelong, Victoria. > >I now have additional information from the Minister for Primary Industry, who has the responsibility for construction of the laboratory. > >He advises me as follows: > >Construction of the Australian National Animal Health Laboratory at Geelong was not commenced last year. > >It has not yet commenced, as the project was deferred early in 1976 because of the need for the present Government to institute deliberate and careful restraints on all forms of expenditure. The position will be reviewed again this year. Existing arrangements with reference to laboratories overseas are being maintained to ensure that we have support if necessary to aiding in diagnosis of any introduced exotic animal disease. > >Yours sincerely, J. J. WEBSTER I have searched the relevant appropriation documents for this year and nowhere can I find any appropriation to allow construction of the laboratory to be carried out this year. So two years have gone by. **Mr Anthony** in his policy speech delivered at the Festival Hall, Brisbane, on 26 November 1975 stated: >We will pursue the establishment of a Maximum Security Laboratory and Quarantine Station to guard the nation's livestock. So another policy promise has been broken by this Government to the detriment of primary industry in Australia. We find that representatives of the industry have had to resort to writing to members of Parliament to ask us to take what action we can to try to safeguard their industry. We well know that, particularly in the cattle industry, people are in dire straits at the present time in trying to make a living. As the Association points out in its letter, some exotic disease could be brought into this country by illegal immigrants. Daily, in recent weeks and months, we have heard of people coming down from Vietnam and landing on the north west shores of Western Australia. We are not to know what sort of disease they bring with them in the foodstuffs they carry. Who is to know that that disease is not already in this country? If it is, what precautions has this Government taken to try to eradicate the disease. As I say, the Australian Labor Party Government was well aware when it came to office in 1972 of the need for this animal health laboratory at Geelong. The then Prime Minister in his Press release stated that the cost of the complex which the Government intended to establish was expected to be $56m. He stated: >This spending will begin in 1976-77 and will be spread over 5 years. We were cognisant of the fact that a danger existed to our livestock industry. Also no doubt **Mr Anthony** was cognisant of the fact when he made that speech at the Festival Hall in Brisbane in November 1975. But like so many other promises the Government has forgotten about it. **Senator Webster** in his answer to me last year said that it was because of financial restrictions that the Government could not carry out the promise of the Labor Government. I suppose this year we will get the same answer when I pose the question during the hearing of the Estimates Committee: 'Why has the construction not started?' So we are facing a grave danger because of the neglect of primary industry by this Government. I am sure that members of my party and my committee will do all in their power to force this Government to take some remedial action at the earliest possible opportunity to try to have the laboratory established at Geelong where it should be established. Research was done by the Labor Government and it was proved that that was the proper place in which to see the laboratory established. To put the story in its proper perspective I seek leave to have incorporated in *Hansard* Press statement No. 209 of **Mr Whitlam** of 2 April 1974 which outlines the action which the Labor Government of the day proposed to take. **Mr President,** I showed the document to you earlier this evening. {: .speaker-10000} ##### The PRESIDENT: -Is leave granted? There being no objection, leave is granted. *The document read as follows-* >PRIME MINISTER > >Press Statement No. 209 2 April 1974 > >ANIMAL HEALTH LABORATORY > >The Australian Government has approved a project to provide major protection for the Australian livestock industry. > >It has decided to build a laboratory complex, to be called the Animal Health Laboratory, at Geelong, Victoria. > >The capital cost of the complex is expected to be $56m. This spending will begin in 1976-77 and will be spread over five years. > >The laboratory will help provide protection on a national basis for one of our most important rural industries. > >The Australian livestock industry had an estimated gross value of production in 1972-73 of $3,000m. In the same year the industry's exports were worth an estimated $2,000m. > >The laboratory complex will provide protection by performing the following functions: diagnosis of exotic animal disease, testing of vaccines required for exotic disease control, research on major virus diseases in Australian animals, the production of foot and mouth vaccine if required. > >The laboratory complex will be established on the Geelong Rifle Range, which is owned by the Australian > >Government. Compensating arrangements will be made as required for organisations disadvantaged by the project. > >The Australian Health Laboratory will be administered and operated by the CSIRO on behalf of the Australian Government. > >Following the establishment of the laboratory a consultative committee, consisting of CSIRO and departmental representatives, will be formed to assist in the determination of priorities and to ensure effective liaison on policy matters. > >The Consultative Committee will provide an essential link with the Animal Quarantine Branch of the Department of Health for the testing of livestock in the proposed off-shore High Security Animal Quarantine Station. > >The Committee will also provide a liaison channel for special research, training, diagnosis and epidemiology with the proposed Bureau of Animal Health in the Department of Primary Industry. > >At full operation, the Animal Health Laboratory will employ a staff of 1 70 including 25 scientists. > >Its annual operating costs will be approximately$3m. > >The laboratory would play a vital role in minimising the impact on the Australian economy of an outbreak of foot and mouth or other introduced animal disease. > >Should an outbreak of exotic disease occur, the existence of the laboratory would be vital to any eradication program and would be an important factor in persuading Australia's trading partners that eradication had been achieved. > >It will also provide a facility for carrying out special testing for potentially valuable livestock held in quarantine before they were allowed into Australia for breeding programs. > >It will also be a valuable facility for research on virus diseases endemic in Australia, several of which affect man as well as livestock. > >Final design of the laboratory followed a study tour of overseas microbiological security establishments by a government evaluation team. > >The Geelong site, currently the Geelong Rifle Range, was chosen following extensive consideration of a wide range of alternative sites. > >The final choice was made on the advice of the Cities Commission in the light of the Government's policy of developing specific growth centres and with the approval of the Victorian Government. > >A comprehensive environmental impact statement for the site accompanied the Cabinet submission. > >The Department of the Environment and Conservation which assessed this statement noted the amount of technical detail supplied and advised that it was satisfied that the environmental issues of the proposal had been adequately covered. > >Because of the extreme precautions built into the design, there will be no risk to Australian livestock. > >The laboratory complex will be technically the most sophisticated major structure in Australia and the most modern animal diseases laboratory in the world. > >It will operate as a series of integrated engineering systems, which provide isolation from the external environment. > >It features multiple fail-safe devices and procedures including air locks, shower locks, filter systems of many kinds and sophisticated waste disposal apparatus. > >All air entering or leaving the laboratory will be specially filtered. > >The air leaving the high hazard area will be heat sterilised to kill vims particles. > >Solid wastes will be destroyed or rendered sterile. > >Operation or the complex will have no detrimental effects on the environment. > >In accordance with overseas practice, the keeping of susceptible livestock will not be permitted in a buffer zone one mile in radius around the laboratory. > >This will include sheep, cattle, pigs, goats, horses, fowls, turkeys, geese and ducks. > >The Victorian Government has agreed to the relocation of the trotting and dog-racing track currently in the vicinity by the time the laboratory is complete in 1 98 1 . > >The building has been designed by a group of specialists formed within the Department of Housing and Construction who have worked in close consultation with CSIRO and an expert from the Department of Health. > >BACKGROUND INFORMATION > >The impact of an outbreak of foot and mouth disease in the livestock industry would be immediate and far reaching. Much of our trade in meat and other livestock products would cease and it would be many months, even years, before normal trade was resumed. > >There are many other livestock diseases exotic to Australia, some as potentially devastating as foot and mouth disease, others less so, but all capable of seriously affecting our livestock industries. While Australia has a remarkable record of success in remaining free of these diseases, there is no certainty that this situation can be sustained for ever. > >It is difficult to escape the conclusion that sooner or later a major exotic disease of livestock will penetrate our quarantine barriers. If this were to happen, Australia's veterinary authorities would be severely handicapped at present by the absence of a laboratory possessing a great enough degree of microbiological security to enable highly infectious material to be handled in complete safety without risk of escape. If vaccination became necessary for control and eradication of a disease, the Animal Health Laboratory would be involved in testing the potency and safety of the vaccines used. > >The Laboratory would be absolutely essential for the enormous amount of work needed not only to eradicate the disease but also to demonstrate to other countries that eradication had been successful. If a situation arose where overseas trade in meat or some other livestock products had been suspended as a result of an outbreak of a major disease, the absence of such a facility could seriously prejudice the early resumption of trade with our trading partners. > >Canberra, ACT {: .speaker-KTZ} ##### Senator McLAREN: -- I thank the Senate for granting leave for the incorporation of that document. I hope the Minister for Education **(Senator Carrick),** who is in charge of the Senate tonight, will take up the matter with the Minister for Primary Industry **(Mr Sinclair)** and see whether some money cannot be found at a very early date so that we can go ahead with the construction of the animal health laboratory at Geelong in Victoria. {: #subdebate-42-0-s3 .speaker-2U4} ##### Senator CARRICK:
New South WalesMinister for Education · LP **- Senator Colston** raised a matter which concerned what appeared to him to be an apparent difference between the briefing data provided by, presumably, the Department of Environment, Housing and Community Development and replies given through myself from the Minister concerned in relation to questions put on notice by **Senator Colston.** As the matter can only be clarified within the jurisdiction of the Minister for Environment, Housing and Community Development **(Mr Newman)** and his Department, in response to **Senator Colston's** request I shall draw the attention of the Minister to the matter and seek clarification. **Senator McLaren** raised the matter of the animal health laboratory and its proposed building at Geelong. The Fraser Government is, of course, acutely conscious of the need to protect Australian animals and livestock generally from the introduction of an exotic disease. It is taking all available steps to do so. On the questions whether there is a specific proposal in the Budget for the commencement of that building this financial year and what is the specific timetable of the Government, I shall invite the Minister for Primary Industry to respond to **Senator McLaren's** request and give him an answer. Question resolved in the affirmative. Senate adjourned at 11.21 p.m. {: .page-start } page 509 {:#debate-43} ### ANSWERS TO QUESTIONS The following answers to questions were circulated: {:#subdebate-43-0} #### State Dental Hospitals: Assistance from the Commonwealth (Question No. 426) {: #subdebate-43-0-s0 .speaker-PF4} ##### Senator Colston: asked the Minister representing the Minister for Health, upon notice, on 29 March 1977: >Do any State dental hospitals receive funds from the Commonwealth Government through Medibank or any other scheme; if so, what are the details, including broad details of the fee structure and specific details of any means test for treatment in any such hospital or hospitals. {: #subdebate-43-0-s1 .speaker-C7D} ##### Senator Guilfoyle:
LP -- The Minister for Health has provided the following answer to the honourable senator's question: >Certain State dental hospitals receive financial assistance from the Commonwealth under the hospital operating costsharing agreements between the Commonwealth and each of the States. In addition, State dental hospitals are eligible for capital assistance under the Hospitals Development Programs submitted by the States. > >Cost-Sharing Agreements > >Under the cost-sharing agreements the Royal Dental Hospital in Melbourne, the South Brisbane Dental Hospital, the Brisbane Dental Hospital and the Brisbane Children's Dental Hospital (the latter three are annexes to public hospitals in Brisbane), together with numerous dental clinics annexed to public hospitals throughout Queensland, and the Perth Dental Hospital, are recognised for the purposes of the Hospital Cost-Sharing Agreements. Under the Agreements, 50 per cent of the approved net operating costs based on agreed budgets of recognised hospitals are met by the Commonwealth Government. Details in respect of the amount of Commonwealth funds receivable by each dental hospital will be available in respect of the first financial period of the Agreements, viz. 1.10.76 to 30.6.77, late in 1977. > >Access to Services in State dental hospitals > >In all dental hospitals covered by the cost-sharing agreements means tests are applied in respect of outpatient services. The means test applied at the Royal Dental Hospital Melbourne, sets limits on gross weekly income below which persons are eligible to receive treatment free of charge. Persons failing to meet the means test are not eligible to receive treatment, unless they require urgent or specialised treatment. Such persons are charged for the services provided. The income limit for a single person is $ 13 1 a week. Limits for a family include an allowance of $15 for a wife, $13 for each of the first three children and $ 1 5 for the fourth and fifth children. The means test is applied in such a way as not to impose hardship. > >In Queensland, where a private dental practitioner is not available, hospital dental clinics may treat persons who are not eligible under a means test; in these cases fees are charged. If a private dental practitioner is reasonably available the treatment provided by the hospital dental clinics is free, but limited to persons who are eligible under a means test or to other persons requiring emergency treatment only. For married persons the means test is based on the guaranteed adult minimum wage, taking into account such factors as husbands' and wives' incomes, dependants, rental or house repayments, loss of income due to sickness or unemployment or other extraordinary expenses. The Hospital > >Boards controlling the dental hospitals and dental clinics have discretion to determine on merit each case seeking treatment and any person who feels his financial circumstances are such that he is unable to afford private dental treatment may approach the Board for consideration of his particular case. > >At the Perth Dental Hospital, with the exceptions noted below, charges are raised for all outpatient services. For persons eligible under a means test the fee may be reduced or waived depending on a person's financial circumstances. The means test is also used to assess eligibility for treatment, although persons who fail the test can qualify for treatment in certain circumstances (e.g. remote location). Free treatment is provided to women in receipt of widows pensions and no other income, who have a dependent child or children, and also in cases of genuine hardship. > >Charging for Services > >The charging of inpatients or dental hospitals follows the normal pattern for recognised (public) hospitals, as contained in the cost-sharing agreements; that is, free treatment for standard ward patients (hospital patients) and $40 or $60 a day for private patients. In addition, private patients are required to pay the dental/medical fees charged by the private dentists or doctors whom they engage. > >Where fees are payable for outpatient services by the dental hospitals in Melbourne and Perth such fees are in accordance with a scale of fees determined by the respective State Health Authorities. No charges are made for outpatient dental treatment in Queensland except in those areas where there is no private dental practitioner. In these cases persons who normally would not qualify for treatment are charged fees in accordance with a scale of fees set down by the State. In all these States a comprehensive range of services is provided and fee levels are established both with regard to current fees charged by private practitioners and to the capacity of people to pay. > >Assistance Under Hospitals Development Program > >In regard to capital assistance by the Commonwealth, State dental hospitals are eligible for inclusion in Hospitals Development Programs submitted by the States for funding. Under the Program individual projects do not receive allocations; Commonwealth grants 'top up' State funds allocated against a total program agreed at Commonwealth and State levels. It is the responsibility of the States to manage the total funds under the program and assess the day to day priorities of the individual projects within the agreed program. In 1976-77 the following dental hospitals were included in the Hospitals Development Programs: > >United Dental Hospital, Sydney > >Royal Dental Hospital, Melbourne > >South Brisbane Hospitals Board- New dental hospital > >Royal Adelaide Hospital- Dental school development > >Perth Dental Hospital {:#subdebate-43-1} #### Venereal Disease (Question No. 840) {: #subdebate-43-1-s0 .speaker-4F4} ##### Senator Button:
VICTORIA asked the Minister representing the Minister for Health, upon notice, on 4 May 1977: {: type="1" start="1"} 0. 1 ) How many cases of (a) syphilis, and (b) gonorrhoea, have been reported in each State and Australia in each of the years from 1970 to 1976 inclusive. 1. How many syphilitic babies have been born in Australia in each of the years from 1 970 to 1 976 inclusive. 2. How many venereal disease clinics presently operate on both a State and nation-wide bases and where are these clinics located. 3. How are these clinics funded; if so, what proportion, if any, of their total funding does the Federal Government provide. 4. ) Has the Federal Government considered conducting a nation-wide campaign to (a) alert the general public to the rising incidence of venereal disease in the community, and {: type="a" start="b"} 0. in the event of suspected cases, where members of the general public can receive confidential medical help and advice. {: #subdebate-43-1-s1 .speaker-C7D} ##### Senator Guilfoyle:
LP -- The Minister for Health has provided the following answer to the honourable senator's question: {: type="1" start="1"} 0. The number of reported cases of syphilis and gonorrhoea for the years 1970 to 1976 (inclusive) are detailed in Table1. 1. It is not possible to obtain this information from currently available national statistics. 2. Venereal disease clinics in Australia are located as follows: New South Wales- (1) Sydney (corner of Albert and Macquarie Streets). Victoria- (1 ) Melbourne- (Gertrude Street, Fitzroy). Queensland- (4) Two in Brisbane- one for each sex: Women- Butterfield Street, Herston, Men- Diddums Street, Petrie Bight; One attached to Townsville Base Hospital; One at Cairns Base Hospital. Western Australia-(3) One at Royal Perth Hospital (Moore Street); One at Fremantle (Alma Road); One at Boulder ( near Kalgoorlie ), Ware Street. South Australia-(2) One at Adelaide adjacent to Royal Adelaide Hospital; One at Port Adelaide, 32 Nile Street. Tasmania- Nil. Northern Territory- ( 1 ) Alice Springs, Flynn Drive. Australian Capital Territory- Nil. It should be noted, however, that the majority of venereal disease patients are treated in public hospital out-patients or casualty departments and by general practitioners throughout Australia. {: type="1" start="4"} 0. Most of the Venereal Disease Clinics in the States are provided and run by the States. However, the clinics in West Australia are attached to hospitals and the Commonwealth meets half of the net operating costs based on agreed budgets, the State Government meeting the remainder. The clinic in the Northern Territory is funded entirely by the Commonwealth. 1. I am advised that a national campaign was planned approximately two years ago, but was never implemented due to the unavailability of resources.

Cite as: Australia, Senate, Debates, 24 August 1977, viewed 22 October 2017, <http://historichansard.net/senate/1977/19770824_senate_30_s74/>.

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