Senate
11 October 1978

31st Parliament · 1st Session



The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 2.15 p.m., and read prayers.

page 1187

PETITIONS

Budget 1978-79

Senator McLAREN:
SOUTH AUSTRALIA

– I present the following petition from 101 citizens of Australia:

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

That because this Budget will further increase the number of persons unemployed, because it reduces the average worker ‘s spending power by $ 1 0 per week, because it will reduce the incomes of pensioners, because it is unfair in placing a greater burden on the poor rather than the rich, and because it is driving this country into a depression.

Your Petitioners therefore humbly pray that.

The Federal Government withdraws this Budget and provides Australia, within this Session of Parliament, with a revised Budget that increases the level of economic activity in Australia, lowers unemployment, removes the burdens placed on the disadvantaged, and revives business and consumer confidence in the future of this potentially great country.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Age Service Pension

Senator LAJOVIC:
NEW SOUTH WALES

– I present the following petition from 136 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled.

The Petition of the undersigned respectfully showeth:

Australian Citizens of Polish origin, wish to bring to the Honourable Senators attention, the promise made by the Prime Minister, the Right Honourable J. M. Frazer,, in his election policy speech on November 21st 1977, when he said:

The age service pension will be paid to non-British former members of the allied forces. ‘

Although we have faithfully served our former country and the allied cause throughout the second World War and having since resided in Australia for thirty years, we find ourselves being denied the simple justice accorded to other exservicemen, by their respective countries.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should ensuure that the promise made by the Prime Minister be fulfilled, that we may once again believe, that a man’s word is his bond.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Australian Scholastic Aptitude Test Scores

Senator KNIGHT:
ACT

– I present the following petition from 68 1 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled.

The petition of the undersigned Senior Secondary Students of the Australian Capital Territory respectfully showeth that the publishing of the Australian Scholastic Aptitude Test scores on our Year 12 Certificate by the A.C.T. Schools Authority, is unjust and unnecessary, as it could lead, and has lead, to the misuse of the score, deliberate or otherwise by individual and/or organisations from whom the test results were not designed to aid, especially in the adjudication of the academic abilities of a student as the A.S.A.T. was only designed as a moderating and not an academic test.

Your petitioners most humbly pray that the Senate in Parliament should: Pass an order to remove the A.S.A.T. score from our Year 12 Certificates, thereby removing any threat or possibility of the score being misused by an individual and /or organisation for whom the resulting score was not intended.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Education Funding

Senator ROBERTSON:
NORTHERN TERRITORY

-On behalf of Senator Evans I present the following petition from 89 citizens of Australia:

The Honourable the President and members of the Senate in Parliament assembled.

The petition of the Victorian Federation of State School Parents ‘ Clubs respectfully showeth:-

That as citizens of Victoria and parents of State school children, we are most concerned that the quality of education available in our school be of the highest possible standard.

We believe that this can only be achieved if adequate Federal funds are provided. The recently announced policy of direct cuts to Government schools for 1 979 must have an adverse effect on them.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should arrange for:

Withdrawal of the Guidelines to the Schools Commission for 1979 and acceptance of its recommendations for Government schools.

An increase of a minimum of 5 per cent in real terms on base level programmes for 1979.

Restoration of the $8 million cut from the Capital Grants for Government Schools.

Increased recurrent and capital funding to Government schools. and your Petitioners, as in duty bound, will ever pray.

Petition received and read.

Metric System

Senator CHIPP:
VICTORIA

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

To the Honourable the President and Members of the Senate in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully showeth objection to the Metric system and request the Government to restore the Imperial system.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Uranium Mining

Senator KILGARIFF:
NORTHERN TERRITORY

-1 present the following petition from 25 1 citizens of Australia:

The President and Members of the Senate in Parliament Assembled.

The Petition of the Undersigned Citizens of Australia respectfully showeth that we are gravely concerned over the extreme weakness shown by our Prime Minister and his Government in his handling of the uranium mining situation in the Northern Territory.

While the Parliament allows a small group of antigovernment advisers to Aboriginal organisations to delay the commencement of mining the great majority of citizens and business people are being caused financial loss, and being denied the right to participate in a legitimate business.

Your petitioners therefore humbly pray that permission be given- and not again withdrawn- for mining to commence immediately.

Petition received and read.

Pensions

Senator COLSTON:
QUEENSLAND

-I present the following petition from 1 9 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament Assembled.

The Petition of the undersigned citizens of Australia, respectfully showeth:

That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index Figures.

And whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November.

It is the current intention of the same Government to Legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics, of Democratic Government, and also deprives many needy pensioners of increases that are essential to the Subsistence.

The foregoing facts impel the under-signed Petitioners to request the Australian Government to uphold the principle that trustworthiness of Governments should at all times be above question.

And to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian Pensioners, by rejecting any Bill which has for its aim the introduction of annual adjustments of Pension rates.

And your petitioners as in duty bound will ever pray.

Petition received and read.

South Australian Country Rail Services

Senator McLAREN:

– I present the following petition from 106 citizens of Australia:

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

That any downgrading or closures of Country Rail Services in South Australia would have grave consequences for the Railway Industry, Primary Industry, Individual Country Communities and the State as a whole and calls on the Parliament to ensure that the Federal Minister for Transport takes the necessary action to maintain all existing services.

That continued and increased Public Subsidy is fully justified in the long term National Interest.

Petition received and read.

Abortions: Medical Benefits

Senator LEWIS:
VICTORIA

– I present the following petition from 29 citizens of Australia:

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

That the provision of payments for abortion through items of the Medical Benefits Schedule is an unacceptable endorsement of abortion which has now reached the levels of a national tragedy with at least 60,000 unborn babies being killed in 1977.

Your petitioners therefore humbly pray that the Government will so amend the Medical Benefits Schedule as to preclude the payment of any benefit for abortion.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Budget 1978-79

Senator HAMER:
VICTORIA

– I present the following petition from 59 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 the people of Australia having taken part in the government of Australia through universal suffrage in December 1975 and again in December 1977 and that on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition and that, whereas by virtue of being elected through universal suffrage, the Government Members now sitting in the House of Representatives were authorised to implement their state objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely- o Revoking the legislation for twice-yearly pension payments. ° Imposing a freeze on the free-of-means-test pension. ° Unemployed divided into those with dependents and those without. ° Imposing income tax on pensions under age pension age- invalid and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis sufferers (civilian and service) and any other impositions. Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people, therefore, Your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.

And your petitioners as in duty bound will ever pray.

Petition received.

Education Funding

Senator PRIMMER:
VICTORIA

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

The Honourable the President and Members of the Senate in Parliament assembled.

The petition of the Victorian Federation of State School Parents ‘ Clubs respectfully showeth:

That as citizens of Victoria and parents of State school children, we are most concerned that the quality of education available in our school be of the highest possible standard.

We believe that this can only be achieved if adequate Federal funds are provided. The recently announced policy of direct cuts to Government schools for 1979 must have an adverse effect on them.

Your petitioners most humbly pray that the Senate, in Parliament assmebled, should arrange for:

. Withdrawal of the Guidelines to the Schools Commission for 1979 and acceptance of its recommendations for Government schools.

An increase of a minimum of S per cent in real terms on base level programs for 1 979.

Restoration of the $8m cut from the Capital Grants for Government Schools.

Increased recurrent and capital funding to Government schools.

And your petitioners as in duty bound will ever pray.

Petition received.

Pensions

Senator MULVIHILL:
NEW SOUTH WALES

-I present the following petition from 205 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully showeth:

That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index figures; and whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November; it is the current intention of the same Government to legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics of democratic government and also deprives many needy pensioners of increases that are essential to their subsistence.

The foregoing facts impel the undersigned petitioners to request the Australian Government to uphold the principle that the trustworthiness of governments should at all times be above question, and to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian pensioners by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.

And your petitioners as in duty bound will ever pray.

Petition received and read.

Education Funding

Senator CHIPP:

– I present the following petition from 1 4 citizens of Australia:

The Honourable the President and Members of the Senate in Parliament assembled.

The petition of the Victorian Federation of State School Parents ‘ Clubs respectfully showeth:

That as citizens of Victoria and parents of State school children, we are most concerned that the quality of education available in our school be of the highest possible standard.

We believe that this can only be achieved if adequate Federal funds are provided. The recently announced policy of direct cuts to Government schools for 1 979 must have an adverse effect on them.

Your petitioners most humbly pray that the Senate, in Parliament assembled, should arrange for

Withdrawal of the Guidelines to the Schools Commission for 1979 and acceptance of its recommendations for Government schools.

An increase of a minimum of 5 per cent in real terms on base level programmes for 1 979.

Restoration of the S8m cut from the Capital Grants for Government Schools.

Increased recurrent and capital funding to Government schools.

And your petitioners as in duty bound will ever pray.

Petition received.

Pensions

Senator DAVIDSON:
SOUTH AUSTRALIA

– I present the following petition from 39 citizens of Australia:

To the Honourable the President and Members of the Senate in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully showeth:

That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index figures;

And whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November;

It is the current intention of the same Government to legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics, of Democratic Government, and also deprives many needy pensioners of increases that are essential to their subsistence.

The forgoing facts impel the under-signed petitioners to request the Australian Government to uphold the principle that trustworthiness of Governments should at all times be above question.

And to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian pensioners, by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.

And your petitioners as in duty bound will ever pray.

Petition received.

Budget 1978-79: Pensions

Senator PRIMMER:

– I present the following petition from 50 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 the people of Australia having taken pan in the government of Australia through universal suffrage in December 1975 and again in December 1977 and that on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition and that, whereas by virtue of being elected through universal suffrage, the Government Members now sitting in the House of Representatives were authorised to implement their stated objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely- ° Revoking the legislation for twice-yearly pension payments. ° Imposing a freeze on the free-of-means-test pension. ° Unemployed divided into those with dependents and those without. ° Imposing income tax on pensions under age pension age- invalid and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis sufferers (civilian and service) and any other impositions.

Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people, therefore,

Your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.

And your petitioners as in duty bound will ever pray.

Petition received.

Education Funding

Senator RYAN:
ACT

– I present the following petition from 37 citizens of Australia:

The Honourable the President and Members of the Senate in Parliament assembled.

The petition of the Federation of Parents and Citizens Associations of New South Wales respectfully showeth:

That as citizens of N.S.W. and parents of State school children, we are most concerned that the quality of education available in our school be of the highest possible standard.

We believe that this can only be achieved if adequate Federal funds are provided. The recently announced policy of direct cuts to Government schools for 1 979 must have an adverse effect on them.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should arrange for:

. Withdrawal of the Guidelines to the Schools Commission for 1979 and acceptance of its recommendations for Government schools.

An increase of a minimum of 5% in real terms on base level programmes for 1979.

Restoration of the $8 million cut from the Capital Grants for Government Schools.

Increased recurrent and capital funding to Government schools.

And your petitioners as in duty bound will ever pray.

Petition received.

The Acting Clerk- Petitions have been lodged for presentation as follows:

Pensions

To the Honourable the President and Members of the Senate in Parliament assembled-

The Petition of the undersigned citizens of Australia respectfully showeth:

That whereas the Fraser Government was elected in December 1975 after promising that pensions would be adjusted instantly and automatically in relation to quarterly Consumer Price Index figures; and whereas that Government subsequently announced that pension adjustments should properly be made half yearly each May and November; it is the current intention of the same Government to legislate for pensions to be adjusted only once a year, and this constitutes a serious breach of generally accepted ethics of democratic government and also deprives many needy pensioners of increases that are essential to their subsistence.

The foregoing facts impel the undersigned Petitioners to request the Australian Government to uphold the principle that the trustworthiness of governments should at all times be above question, and to appeal to the Parliament to prevent the imposition of further economic hardship upon Australian pensioners by rejecting any Bill which has for its aim the introduction of annual adjustments of pension rates.

And your petitioners as in duty bound will ever pray. by Senators Mason, Guilfoyle, Teague, Georges, Watson, Archer, Keeffe, Thomas, Puplick, Messner, Lewis, MacGibbon, Scott, Townley, Collard, Young, McAuliffe, Gietzelt, Maunsell, Button and Jessop.

Petitions received.

Budget 1978-79: Pensions

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

THAT the people of Australia having taken part in the government of Australia through universal suffrage in December 1975 and again in December 1977 and that on the basis of their expressed choice at the ballot box the people of Australia gave authority to the LiberalNational Country Party Coalition to form a federal government to bring into effect specific policies promulgated throughout the length and breadth of Australia by the said Coalition and that, whereas by virtue of being elected through universal suffrage, the Government Members now sitting in the House of Representatives were authorised to implement their stated objectives by legislation and that such authority did not extend to acting otherwise or to enact legislation not previously submitted to the will of the people, namely:- ° Revoking the legislation for twice-yearly pension payments. ° Imposing a freeze on the free-of-means-test pension. 0 Unemployed divided into those with dependents and those without. ° Imposing income tax on pensions under age pension age- invalid and repatriation service pensions; rehabilitation allowances and incentives; sheltered employment and allowances for tuberculosis sufferers (civilian and service) and any other impositions.

Your petitioners submit that all or any of the foregoing proposed legislation of the Lower House, if implemented, will greatly disadvantage many thousands of citizens as either against their expressed will or not submitted to universal vote as the democratic right of the Australian people, therefore,

Your petitioners call on the Senate as the House of Review to take appropriate action to release these persons from burdens unfairly placed in order to finance a deficit not of their making.

And your petitioners as in duty bound will ever pray. by Senators Hamer, Webster, Lewis and Guilfoyle.

Petitions received.

Education Funding

The Honourable the President and members of the Senate in Parliament assembled.

The petition of the Victorian Federation of State School Parents ‘ Clubs respectfully showeth:

That as citizens of Victoria and parents of State school children, we are most concerned that the quality of education available in our schools be of the highest possible standard.

We believe that this can only be achieved if adequate Federal funds are provided. The recently announced policy of direct cuts to Government schools for 1 979 must have an adverse effect on them.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should arrange for:

  1. . Withdrawal of the Guidelines to the Schools Commission for 1979 and acceptance of its recommendations for Government schools.
  2. An increase of a minimum of S per cent in real terms on base level programmes for 1979.
  3. Restoration of the $8 million cut from the Capital Grants for Government Schools.
  4. Increased recurrent and capital funding to Government schools. and your Petitioners, as in duty bound, will ever pray, by Senator Guilfoyle and Senator Webster. Petitions received.

page 1191

MINISTERS OF STATE IN THE SENATE

Notice of Motion

Senator HAMER:
Victoria

– I give notice that, on the next day of sitting, I shall move:

  1. 1 ) That, in the opinion of the Senate-

    1. Senators should no longer hold office as Ministers of State, with the exception of any senator holding the office of Leader of the Government in the Senate, who, in order adequately to represent Government priorities to the Senate, should remain a member of the Cabinet; and
    2. Chairmen of the Senate’s Legislative and General Purpose Standing Committees should be granted allowances, staffs and other entitlements similar to those currently granted to Ministers other than Ministers in the Cabinet.
  2. 2 ) That copies of this resolution be forwarded to-

    1. The Chairman of the Remuneration Tribunal, and
    2. The Prime Minister, with a request that he initiate action to give effect to the proposals, including any necessary amendments to departmental estimates.

page 1191

QUESTION

QUESTIONS WITHOUT NOTICE

page 1191

QUESTION

INFRASTRUCTURE FINANCING

Senator WRIEDT:
TASMANIA

-I ask the Minister representing the Prime Minister: Has the report by the Commonwealth and State Treasury officials on infrastructure financing been made available to the Commonwealth and State governments? Will the Minister make available to the Parliament a copy of this important document? When will an Australian Loan Council meeting be held to consider which projects will receive Loan Council support?

Senator CARRICK:
Vice-President of the Executive Council · NEW SOUTH WALES · LP

– I am not aware of the information sought. It is important. Infrastructure financing is a new, very imaginative and effective approach. I will seek out the answers to the three questions and let Senator Wriedt know.

page 1191

QUESTION

URANIUM MINING

Senator THOMAS:
WESTERN AUSTRALIA

– I direct my question to the Minister representing the Minister for Trade and Resources. It relates to the difficulties being experienced in the negotiations between Ranger Uranium Mines Pty Ltd and the Northern Land Council which are causing further delays to Ranger Uranium Mines, Pancontinental Mining Ltd and Queensland Mines Ltd. As the delays will make it difficult for Australia to meet its existing contracts for the supply of uranium to overseas countries, will the Minister consider giving early approval for the export of uranium from Yeelirrie and other Western Australian deposits?

Senator DURACK:
Attorney-General · WESTERN AUSTRALIA · LP

– The Government is very hopeful that the current consideration being given by the Northern Land Council to the initial Ranger Uranium Mines Pty Ltd agreement will enable the agreement to be executed with minimum delay. No Government decision to mine in relation to the proposals of Queensland Mines Ltd and Pancontinental Mining Ltd will be taken before final environmental impact statements have been submitted and considered. This applies to any other uranium project. Before the question of approving exports can be considered, these environmental requirements have to be completed. There are also other aspects of Government policy such as foreign investment approval. The Government has noted that Mr Morgan, Executive Director of Western Mining

Corporation Ltd, in a recent address in Melbourne indicated that for a number of reasons that company was planning for its Yeelirrie project to come into production in 1985. The Senate will appreciate that it is not a simple matter to bring forward a development project of this scale, involving some $400m and with a construction phase covering a number of years.

page 1192

QUESTION

MAKINE SCIENCES

Senator BUTTON:
VICTORIA

– My question is addressed to the Minister for Education. In view of the extension of sovereignty to 200 miles off-shore, has any consideration been given by the Government to the training of people needed for research and data gathering in the marine sciences? Has the Tertiary Education Commission carried out any assessment of the adequacy of research and teaching facilities in Australian tertiary institutions in view of the likely increase in activity in this 200-mile area?

Senator CARRICK:
LP

– This is an interesting question which touches upon a number of portfolios. Obviously, the portfolio of Science is one of them. I will seek information from my own Department, the Tertiary Education Commission and other departments, and let Senator Button know.

page 1192

QUESTION

WATER PURIFICATION: SIROTHERM

Senator JESSOP:
SOUTH AUSTRALIA

– Has the Minister for Science noted a report in yesterday’s Australian of a Government undertaking to back a multi-million dollar venture with private industry to develop and market a revolutionary water treatment process developed in Australia by the Commonwealth Scientific and Industrial Research Organisation? I understand that the process is referred to as Sirotherm and that it involves the desalination and purification of water. Is the thrust of this article correct? What are the principles upon which Sirotherm depends? Where can honourable senators expect to find working examples of the Sirotherm process which may be inspected?

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

– The honourable senator asks a number of questions relating to an article which appeared in the Australian yesterday and which was headed: ‘Government to back salt water breakthrough’. My recollection is that during 1976 in South Australia I opened the first Sirotherm process plant for the Commonwealth Scientific and Industrial Research Organisation and for ICI Australia Ltd. Under the process brackish water or salt water was put through a bed of resin beads and made much more acceptable. There is quite a story involved in that process and the work that has been done by CSIRO.

There have been several major achievements by CSIRO since that time in two other developments. One was the Sirofloc process and the other was a way by which the resin beads can be magnetised to take up some of the residues in brackish water.

I recall that yesterday’s newspaper article referred to the fact that in recent months CSIRO had been involved in discussions with its licensee- ICI Australia Ltd- the Department of Productivity, the Department of National Development and the Perth Metropolitan Water Supply, Sewerage and Drainage Board with a view to exploring possible arrangements for setting up a series of water treatment demonstration plants in Perth. As you know, Mr President, in recent years major problems relating to the delivery of fresh water have been encountered in that city. It is envisaged that such plants would demonstrate a battery of treatment methods, one of which I believe would be the Sirofloc process. That has no relationship to the Sirotherm process to which the honourable senator directed his question. The article in yesterday’s Australian must, I believe, be classed as speculative comment. It appears to be based on a misconception regarding arrangements being formulated for the establishment in Perth of certain water treatment demonstration plants. No firm proposals to that end have yet been made. In addition, the article contains a number of factual errors regarding the possible use of Sirotherm. For example, the process is not designed to desalinate sea water and is not capable of treating water which has very high concentrations of salt. Undoubtedly, Senator Jessop, as Chairman of the Standing Committee on Science and the Environment and as one who comes from South Australia, has a great deal of interest in this matter and I will give him further information.

page 1192

QUESTION

PROPOSED DOMESTIC SATELLITE SYSTEM

Senator McINTOSH:
WESTERN AUSTRALIA

-I ask the Minister representing the Minister for Post and Telecommunications: Is it a fact that the Government is contemplating the expenditure of nearly $200m on a domestic satellite system? If so, how much more rapidly will national and international news be distributed to the people of Australia when a satellite is in orbit than it is now, with radio? Will the satellite be manufactured and launched in Australia, or will the Government find yet another way of accentuating the already deplorable condition of our international debt? Can the Minister inform the Senate of the effect that the satellite would have in reducing the hundreds of thousands of unemployed, or will it be like Telecom’s most recent venture and cause large numbers of trained people to be thrown on to the industrial scrapheap?

Senator CHANEY:
Minister Assisting the Minister for Education · WESTERN AUSTRALIA · LP

- Senator Mcintosh has asked me a series of questions about a domestic satellite. As a senator from Western Australia, he would know that at least some of his constituents would not share his apparent aversion to that proposal. In fact, last week in Meekatharra at a gathering of people from all over the more remote areas of Western Australia I found very great enthusiasm for the prospect of a domestic satellite. On the other aspects of the honourable senator’s question, it is quite clear to the Senate, since a report has been tabled in this place and a statement has been made by the responsible Minister, that the Government has before it a report which comments on the feasibility of such a proposal and, I think, in fact recommends in favour of having a domestic satellite. The Government has said that it will consider that report and has sought public comment on it. I understand that a period of three months has been set for that public comment to be received. No doubt the unions and others interested in the matters raised by Senator Mcintosh will be making comments on it.

The honourable senator has asked how much more quickly information will become available. Again, I can only refer him to the sort of people who were at Meekatharra last Friday- people who perhaps have no mail delivery or only one a fortnight, or who have either one radio station or none- and say to him that for people in that category there may well be a very substantial improvement in communications; that indeed there may be a substantial improvement in communications Australia- wide. As to whether the satellite would be launched in Australia or overseas and whether it would reduce unemployment, I have no information and will seek an answer for the honourable senator.

page 1193

QUESTION

WHEAT DISEASE

Senator MAUNSELL:
QUEENSLAND

– My question is directed to the Minister for Science. Mention has been made recently in the Queensland Press of a little known wheat disease called black chaff disorder. I believe that this disease is causing concern in the Dawson-Callide region. Will the Minister say what work is being done, and by whom, to combat the problem? What is known of the origin and method of propagation of black chaff disorder? In terms of the whole wheat crop, is the disease regarded as serious?

Senator WEBSTER:
NCP/NP

-So far as I know, no investigation of this disorder is being carried out in any area of my Department. I understand that the problem has occurred in the past, particularly in western Queensland. The Queensland Wheat Research Institute states that there is quite a deal of undue concern amongst growers about the effects of the disorder. Institute officers have been attempting to allay the fears of growers over the past weeks, emphasising that the disorder is not likely to spread and that it is due to the most unusual season which in some areas of Queensland has resulted in very high humidity.

The Institute says that as far as can be ascertained the damage earlier attributed to black chaff was in fact largely due to frost in the area. In some areas blackening is conspicuous where the varieties gatcher and songlen are being grown. However, there are no visual signs of a reduction in grain yields and whilst no evaluation can be made until harvest, there is no indication of any serious effect on grain yields associated with the blackening. I understand that the Queensland Wheat Research Institute attaches no great significance to the outbreak of the black chaff disorder, and is emphasising that it is only a matter of seasonal conditions. The Institute is the body which is making the assessments and it will continue to make them through to harvest time.

page 1193

QUESTION

ISOLATED PATIENTS TRAVEL SCHEME

Senator WRIEDT:

– My question is directed to the Minister representing the Minister for Health and I refer to the Government’s program of assistance to persons who live outside a 200- kilometre radius of medical centres and who require specialist treatment. Is the Minister aware that in certain remote areas and outlying areas, I presume in all States but certainly in my own State of Tasmania, many persons who one would assume should be able to benefit under that scheme are not able to do so? I assume that the Minister and the Government have considered the possible anomalies that would arise under the scheme. Could she indicate whether the Government intends to reconsider the present payment arrangements in order to ensure that those persons whom one would expect to enjoy the benefits of the scheme could enjoy them?

Senator GUILFOYLE:
Minister for Social Security · NEW SOUTH WALES · LP

– The isolated patients travel scheme commenced on 1 October and was designed to provide some form of assistance, where previously there was no assistance, to people who lived in isolated areas to reduce the expense involved in having to travel significant distances from their homes to obtain specialist medical treatment. When the Government was setting the parameters for the scheme notice was taken of existing specialist services and it was established that a comprehensive range of these services was available in all capital cities except Darwin and in those cities having a population of over 100,000 people. For this reason it was decided that persons living in local government areas having more than 50 per cent of their population within 200 kilometres of these cities, as calculated by the most direct surface transport route, were not isolated from specialist medical services and thus would be ineligible for assistance under the scheme.

The other point that was taken into account by the Government was the necessity to ensure that this scheme did not provide an incentive for the by-passing of existing specialists who were established, in many instances due to encouragement by State governments, in smaller cities. For this reason a further basic requirement before being eligible for assistance is that referral must be to the nearest suitable specialist.

Senator Wriedt raised the question of anomalies that can arise in a scheme which has a parameter of 200 kilometres. The Government appreciates that some anomalies could become apparent in operating the scheme. It is intended to evaluate the scheme continually to see whether it is effective with a view to bringing any difficulties under notice and in the general context of Government policy at the time to consider amendments to the criteria and the legislation affecting the scheme. The particular circumstances in Tasmania mentioned by Senator Wriedt will be closely considered in the continuing evaluation of the scheme. I will draw his question to the notice of the Minister today to see whether he can give some special consideration to the people who are living in the remote areas of Tasmania who were mentioned by Senator Wriedt.

page 1194

QUESTION

TRADE WITH ASEAN COUNTRIES

Senator SIM:
WESTERN AUSTRALIA

– I direct my question to the Leader of the Government in the Senate in his capacity as Minister representing the Prime Minister or as Minister representing the Minister for Foreign Affairs. I refer to a recent Government decision to impose further restrictions on certain imports from countries in the Association of South East Asian Nations and complaints from these countries at the failure of Australia to consult prior to the imposition of further trade restrictions. I ask: Did not the Australian Government give an undertaking in August 1977 at a meeting between the Prime Minister and ASEAN heads of government that consultative arrangements would be established for discussions on impending action by Australia against imports from these ASEAN states? Have not the ASEAN countries previously complained at the failure of the Australian Government to provide adequate warning of impending action? Can the Minister say how far discussions, both within Australia and between Australia and ASEAN countries, have developed to establish consultative arrangements and what are the factors preventing final agreement? In view of the Prime Minister’s justifiable criticism of developed countries for their failure to provide greater access to their markets to the less developed countries does the action of the Australian Government measure up to these principles?

Senator CARRICK:
LP

- Senator Sim asks me five significant questions each of which I think requires a detailed answer. I do not think that the information I have would be full enough to reply. I will refer his question not only to the Prime Minister but possibly also to the Deputy Prime Minister in his capacity as Minister for Trade and Resources and seek a detailed response.

page 1194

QUESTION

UNEMPLOYMENT FORECASTS

Senator WALSH:
WESTERN AUSTRALIA

– My question is directed to the Minister representing the Prime Minister. I assume that he would be familiar with the Prime Minister’s statement in the House of Representatives on 28 September in which he claimed that the October 1977 national income forecast predicted a 10,000 decline in what he called registered unemployed ‘ from December 1 977 to March 1978. I ask: Does the use of the term registered unemployed’ imply that the Prime Minister was using Commonwealth Employment Service figures? If so, is the Government claiming that it was forecast that actual CES unemployment registrations would fall between December and March, or was the Prime Minister using a seasonally adjusted figure? If the latter, how could he use seasonally adjusted CES figures when seasonal adjustment had already been abolished? If he was using any seasonally adjusted figures, can the Minister explain why the Prime Minister on Monday Conference on 1 1 September attempted to defend his claim that unemployment would fall from February onwards on the basis of actual and not seasonally adjusted figures?

Senator CARRICK:
LP

-Clearly this question asks what the Prime Minister intended and had in his mind at the time. I will refer the question to the Prime Minister.

page 1195

QUESTION

EXPENDITURE ON SPORT

Senator LEWIS:

– I ask the Minister representing the Minister for Environment, Housing and Community Development: Is it a fact that in 1 978-79 the Federal Government will spend 9c per head on national sport, $1.86 per head on the arts and approximately $200 per head on health? This, from a sports viewpoint, on a ratio basis compares most unfavourably with other Commonwealth countries. I am aware that the Government is giving substantial support to the Life. Be in it’ campaign but in comparison national sport appears to be suffering. Is the 9c per head not a miserable contribution to national sport? Might an increase not help to reduce the amount needed for health? Will the Minister review the Federal Government’s contribution to the Confederation of Australian Sport with a view to increasing it?

Senator CHANEY:
LP

– I do not intend to make any comment on the word ‘miserable’ and the other expressions used by the honourable senator in his question. I think it is highly unlikely in the context of the present Budget and in accordance with present Government policy that the amount allocated to sport will be reviewed this year. I will refer the matter to my colleague. I think in fairness to the honourable senator I must say that I do so without any optimism.

page 1195

QUESTION

RADIOACTIVE WASTE

Senator GIETZELT:
NEW SOUTH WALES

– I refer the Leader of the Government to a question on notice of 10 December 1976 on radioactive waste and to a reply forwarded to me by his predecessor, Senator Withers. The question I asked contained six parts. The answer from Senator Withers stated:

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

The Minister for Defence has directed that an inquiry be conducted into all aspects of the material buried at Maralinga as a consequence of the tests conducted under the auspices of the Memorandum of Arrangements between the United Kingdom and Australian Government.

As that answer was given nearly 20 months ago, I ask the Minister whether that inquiry was established. If so, what were its terms of reference? Has it yet reported to Cabinet? If so, is the report available? Has it been considered by the Government?

Senator CARRICK:
LP

-I will seek the information and let the honourable senator know.

page 1195

QUESTION

SURVEY OF INDUSTRIAL TRENDS

Senator ROCHER:
WESTERN AUSTRALIA

– I preface my question to the Minister representing the Treasurer by referring him to the September quarter survey of industrial trends conducted by the Confederation of Australian Industry and the Bank of New South Wales. Details of the survey were released recently. Will the Minister inform the Senate of the main points made in the latest survey and the conclusions reached?

Senator CARRICK:
LP

– I am aware of the September quarter survey conducted by the Confederation of Australian Industry and the Bank of New South Wales. My understanding is that the survey showed that the net balance of manufacturers reporting an increase in the volume of new orders rose significantly to the highest net balance since March 1974. I think that that is encouraging. It encompasses a four-year period. Although the number of manufacturers reporting an increase in output was less than that recorded in the June quarter, the result was the strongest September quarter result since 1973. The proportion of respondents who reported working at a satisfactory full rate of operation increased. Manufacturers’ expectations regarding the general business situation over the next six months are less optimistic than in June but slightly more optimistic than a year ago. However, the net balance of respondents expecting an increase in output in the next three months was higher than in both the June and September quarters 1977. 1 think that note of cautious optimism should be applauded.

page 1195

QUESTION

UNEMPLOYMENT BENEFITS: ELIGIBILITY

Senator PRIMMER:

-Has the Minister for Social Security received an approach from her Victorian colleague, Mr Brian Dixon, to lower the age of eligibility for unemployment benefits to 1 5 years? Does the Minister disagree with the logic of Mr Dixon who said that, as 1 5 is the legal age to leave school in Victoria, the refusal to pay unemployment benefits immediately causes serious social problems?

Senator GUILFOYLE:
LP

- Mr Dixon has communicated to me by letter a matter that I had previously read in the Press. He expressed the view that he believed that unemployment benefits should be paid to children reaching the age of 15 years. The letter has been received by me. It is a matter that has not been considered by the Government. I have no statement to make on the matter at this stage.

page 1196

EXPORT EXPANSION GRANTS BILL

Senator MISSEN:
VICTORIA

– My question is addressed to the Minister representing the Minister for Trade and Resources. I seek information regarding the Export Expansion Grants Bill, which was introduced into the House of Representatives on 6 June 1978. Is the Minister aware that there is considerable concern in the export industry about the slow progress of this important Bill and that this has inhibited planning and expansion by Australian exporters? Can the Minister inform the Senate when this Bill is likely to be further debated in the Parliament?

Senator DURACK:
LP

-I think I had better refer the question to the Minister for Trade and Resources to get a clear answer to the question as to when the Bill is likely to be debated. I can say generally that, as I understand it, the Bill will be debated shortly. Some further consideration has been given to one or two aspects of it. I think it will be debated quite shortly but I will refer the question to the Minister to try to get a more definite answer for the honourable senator.

page 1196

QUESTION

TAXATION OF ACCRUED LEAVE PAYMENTS

Senator CHIPP:

– I direct to the Minister representing the Treasurer a question concerning tax on accrued leave payments, particularly with reference to many employees of the Victorian Railways Department with 30 or even 40 years service who find themselves with substantial amounts of accrued leave on retirement because they were unable to take all the leave due to them when replacements were not available. Does the Government’s Budget decision to raise the rate of the tax on the value of accrued leave from 5 per cent to 33 lA per cent penalise these and other employees who have made sacrifices to maintain a service to the public? What was the rationale behind the Government’s decision? How can he justify the retrospectivity of its effect?

Senator CARRICK:
LP

– There are Bills before the Senate on this matter and we will be debating them today. The matter will, of course, be examined in full and the rationale will be given then. I am not aware, as a primary point of information, of the situation of the Victorian Railways Department workers, although I have heard some reference to it in passing. I will ask the Treasurer whether there is any specific information about those particular employees that could be considered. Within the Budget document itself and within the second reading speeches now before us, the Government has set out its rationale on this and other matters.

page 1196

QUESTION

TASMANIA: PENSIONER HEALTH BENEFIT CLAIMS

Senator WALTERS:
TASMANIA

-Is the Minister representing the Minister for Health aware of a report that Tasmanian pensioner health benefit claims will be processed in Melbourne after 1 November? Can the Minister say what would be the extra cost to the Government if the processing of these bulk billed claims were retained in Tasmania? Is it a matter of efficiency that has prompted the Government’s decision?

Senator GUILFOYLE:
LP

– I have some information from the Minister for Health on this matter. The implications of the new health insurance arrangements, including new work arrangements required to implement the Government’s decisions by 1 November this year and the staffing consequences of the changes required, have been under close examination by the Department of Health and the Health Insurance Commission, in consultation with the Public Service Board. Because of the relatively small volume of bulk billing and private hospital claims work emanating from Tasmania, only a small number of staff would be required to process it. In view of this small work volume, it was not considered economically justifiable to establish in Tasmania the computer and other facilities required to process the work.

As there will be sufficient capacity in the Melbourne processing centre to undertake this work, it was decided that it should be undertaken there. The Department of Health, however, will be seeking to employ additional staff in Tasmania to undertake work in connection with other new functions. The precise number of staff involved has not been finalised and currently is under consideration by the Public Service Board. The overall result will be that additional jobs will be created in the Department of Health in Tasmania. I believe I was asked a question with regard to the cost. I am not able to give any figures with regard to this but, as I said, the facilities in Melbourne are able to handle the smaller volume of work that is required in Tasmania.

page 1196

QUESTION

INDEXATION OF PENSIONS

Senator GRIMES:
NEW SOUTH WALES

– My question, which is directed to the Minister for Social Security, seeks information which will assist senators in the debate which will take place shortly on the Social Services Amendment Bill. Can the Minister tell the Senate what is the saving to the Government in a full year of indexing pensions only once a year instead of twice a year? What is *he saving to the Government in a full year of income testing pension increases to the over- 70s? If she does not have these figures could she let senators have them before we debate the legislation shortly?

Senator GUILFOYLE:
LP

– I have not readily to mind the costing for a full year of annual indexation. I am aware that in this year there is expected to be a saving of $2 7m. It will be realised that that is only an estimate because we are unaware of what the inflation rate that will be applicable next year will be. I have not the figure on hand with regard to the over- 70s, but I will see whether I can get that information before the end of Question Time.

page 1197

QUESTION

COMMONWEALTH EXPENDITURE ON HOSPITALS

Senator TEAGUE:
SOUTH AUSTRALIA

– My question is directed to the Minister representing the Minister for Health. I refer to the total Commonwealth expenditure on hospitals over the last five years. What has been the pattern of spending on hospitals? Does this pattern show that the Liberal Government in the last three years has been able in each year successively to achieve its aim not only to provide fully for the hospitals required in the community but also to consolidate spending and ensure value for money in public expenditure on hospitals in Australia?

Senator GUILFOYLE:
LP

– I have advice to the effect that the total recurrent expenditure on hospitals in Australia in the past three years was in 1975-76, $2,412m; in 1976-77, $2,823m; and in 1977-78, $3,239m, which is a preliminary estimate. The rate of increase has been controlled, but it is regarded by the Government as still being too high. It would be the objective of the Government to pursue responsible growth and expenditure in the hospital area. To this end a review of hospital productivity, efficiency and cost containment involving representatives of the Commonwealth, State and Territory authorities is currently being undertaken. There is an expectation of cost containment in the area of expansion of hospital facilities and services arising out of the review through taking further steps to rationalise their use. These savings will also flow through to 1978-79 and to later years.

I might add that so far as hospital capital works are concerned, Commonwealth funds have been made available over the past five years to the States through the Capital Cities Hospitals Development Program in 1973-74 and through the Hospitals Development Program from 1 July 1 974. The grants that were provided under these programs in the year 1973-74 totalled $2.3m; in 1974-75, $30.3m; in 1975-76, $107.1m; in 1976-77, $108m; and in 1977-78, $47.8m. In view of the present economic climate of continuing expenditure restraint the Government has decided to cease as from 1 July Commonwealth assistance under the Hospitals Development Program other than in respect of its firm commitment to meet half the approved costs of stage 1 of the redevelopment of the Launceston General Hospital. An allocation of $5. 9m has been made by the Commonwealth for this project.

The broad question that was asked with regard to medical and hospital costs is one that is of considerable and continuing concern. We hope that the review that is being undertaken will lead to containment of costs and certainly to value for money.

page 1197

QUESTION

BENEFITS FOR SECONDARY STUDENTS

Senator COLSTON:

– I direct a question to the Minister for Social Security. Is it possible that mothers of some students who complete their full time secondary education in November this year will not receive family allowance payments for those students in December? Will full time secondary students who complete their education in November but who cannot find a job not become eligible for unemployment benefit until January? If the answer to both questions is yes, will the Minister investigate whether some family allowance or other assistance can be provided over this transition period1?

Senator GUILFOYLE:
LP

– I intend making a statement with regard to unemployment benefit and family allowances in time for the conclusion of the school year. I will give consideration to the questions that have been raised by Senator Colston and see that the points that have been made by him are covered in that statement in time for people to understand what is required of them and what their entitlements will be under the various programs.

page 1197

QUESTION

SCIENCE PROGRAM

Senator WATSON:
TASMANIA

– My question is directed to the Minister representing the Minister for Post and Telecommunications. Despite severe cost disciplines, will the Government make a request to the Australian Broadcasting Commission to tape transcripts of the popular and informative Science Show to meet a growing public demand for this service?

Senator CHANEY:
LP

– That sounds a most worthwhile suggestion. I will refer it to my colleague.

page 1198

QUESTION

RADIOACTIVE MATERIALS

Senator ELSTOB:
SOUTH AUSTRALIA

-Will the Minister representing the Minister for Defence tell the Senate of all the locations in South Australia where uranium by-products and other radioactive materials have been buried? Is it a fact that quantities of such materials are buried in the western suburbs of Adelaide? What checks are being kept on all locations to determine the safety of these materials to the people of South Australia?

Senator CARRICK:
LP

– Whilst the total answer requires more technical knowledge than is available to me I would say that the Government would be highly unlikely to tell publicly the location of disposed radioactive material. My understanding is that a series of reports over the 1970s and, I think, heavily so in 1974, set out where the radioactive material was located. That information was made available from the then Federal Government to the South Australian Government of the day. I understand, therefore, that the State Government would know of the locations. The remainder of the question requires a technical answer. I will ask my colleague to look at it to see whether he can respond.

page 1198

QUESTION

DEVELOPMENT OF THE MURRAY VALLEY

Senator DAVIDSON:

– I direct a question to the Minister representing the Minister for National Development. I refer to statements by the South Australian Minister of Environment at a Murray Valley Development League symposium held in Adelaide, which remarks related to what he called a lack of inter-government activity. Is the Minister aware of the agreement between the Commonwealth, South Australia, Victoria and New South Wales to extend the role of the River Murray Commission? As the Commonwealth Government has indicated its agreement and as the South Australian Government has approved the proposals, will the Minister take up with the appropriate Ministers in New South Wales and Victoria the matter of their formalising the appropriate agreement? Will the Minister further remind the State Ministers concerned of their responsibility in this area and call for their recognition of the total place of the River Murray system in which South Australia is last in the line?

Senator DURACK:
LP

– I will refer that question to the Minister for National Development and endeavour to obtain an early answer for the honourable senator.

page 1198

QUESTION

CHANGE OF NAME ON GOVERNMENT BUILDINGS

Senator TATE:
TASMANIA

– Is the Minister for Administrative Services aware of the very costly change of plaques on a Federal Government building in Hoban indicating that it is now to be known as the Commonwealth Government Centre rather than the Australian Government Centre? Is this step being repeated throughout Australia? If so, what is the estimated cost of this Australia-wide conversion process? Why and when did the Government take this decision to use scarce tax dollars to expunge the title ‘Australian Government ‘ from its buildings?

Senator CHANEY:
LP

- Senator Tate raises a matter which concerns many people in Australia, namely whether we should use the word ‘Australian’ or the word ‘Commonwealth’ in various circumstances. It is a matter on which I have received many representations. I am a little surprised that Senator Tate should take us to task in his question about incurring unnecessary expenditure especially when one thinks back to 1973 when there was a massive changeover of building names et cetera from the word ‘Commonwealth’ to the word ‘Australian’. In fact, when the present Government assumed office it decided that it would resume the use of the title Commonwealth of Australia’ or other expressions, such as ‘Commonwealth Government’, in an internal context and that it would maintain the use of the expresssion ‘Australian ‘ externally. In other words, we decided that we would go on referring to ‘Australian’ departments in an overseas context. But it is important to note- this goes to the substance of the question put by Senator Tate- that the Government decided not to indulge in the sort of wholesale changeover of stationery, names and all the rest that was indulged in by the previous Government.

In fact, there has been a process of gradual changeover. Indeed, that process is not yet complete. Within the past two days I have raised within the Government the question why that process is not going along quickly enough. A number of Government departments are still using the expression ‘Australian’ in circumstances which are causing considerable distress to many electors in Western Australia and, I am sure, to a lot of electors around Australia. However, Senator Tate will be shocked to know that I do not have in my immediate possession the figures he requested. But I will check the matter that he has raised and give him further information on it.

page 1199

QUESTION

AYERS ROCK

Senator KILGARIFF:

– I direct my question to the Minister representing the Minister for Environment, Housing and Community Development. Members of the tourist industry at Ayers Rock are strongly voicing their concern in regard to the loss of time and what they see as procrastination by authorities in bringing about final plans for the proposed new village some several kilometres from the Rock and in regard to the fact that, in the present area of accommodation and houses and in the camping area, servicing facilities are still found to be wanting. Can the Minister advise: What is the present position in regard to the plans for the proposed new village; what government- that is, Federal or Territoryand which department are to have the ultimate responsibility for the administration of the area; and is the upgrading of facilities which was commenced during the past year to be completed and are other most urgently required services to be commenced in the areas of water reticulation, sewerage, rubbish disposal, electricity reticulation, et cetera, to give much needed relief to the tourist industry at Ayers Rock?

Senator CHANEY:
LP

– This is a matter which I think probably now falls within the responsibility of the Minister for Home Affairs. In fact, the precise position with respect to the development of the tourist village is a matter which might or might not be the responsibility of the Department of Home Affairs because I understand that as of 1 July the responsibility for the area of the Park was transferred to the Northern Territory Administration. So I will have to seek for the honourable senator information as to the precise extent of the continuing responsibility of the Commonwealth Government with respect to the tourist village.

As far as the Park is concerned, I am advised that this year a budget of about $200,000 has been allocated for the sort of work which the honourable senator has mentioned. That will not enable the complete program to be carried out this financial year. The reason for that is financial stringency. A limited amount of money has been made available. I am advised that the Australian National Parks and Wildlife Service is currently liaising with the appropriate Territory body to determine the priority works on which the money should be spent.

page 1199

QUESTION

CROATIAN ‘EMBASSY

Senator MULVIHILL:

– Can the Minister representing the Acting Foreign Minister indicate the present state of play with respect to legislation aimed at dismantling the Croatian ‘Embassy’? Has the legislation received royal assent? If so, what has happened since then?

Senator CARRICK:
LP

-Senator Mulvihill refers to an Act called the Diplomatic and Consular Missions Act, which passed through all stages, received royal assent and came into operation on 24 August this year. Senator Mulvihill will recall that the introduction of the legislation was occasioned by the establishment of a so-called Croatian ‘Embassy’ in Canberra. It does not, however, single out that particular body, or socalled ‘Embassy’, since the purpose of the Act is directed to any false and misleading claims to diplomatic or consular status. As a responsible member of the international community, Australia has obligations to ensure that the functions of duly accredited diplomatic or consular missions are not interfered with and that the dignity of those missions is not impaired.

The Government now has under consideration action to be taken against the so-called Croatian Embassy’. I should add that the Act is not directed at legitimate political activity, criticism or dissent in relation to the Australian or other governments. The Government has a responsibility to take action in relation to the so-called Croatian ‘Embassy’. It is not deterred by comments made by the self-styled Charge d ‘Affaires to the effect that any attempt to force closure of the so-called ‘Embassy’ would be met by a challenge in the High Court. That is the status as I understand it.

page 1199

QUESTION

QUALITY OF SUNGLASSES

Senator MESSNER:
SOUTH AUSTRALIA

-Has the Minister for Science noted recent Australian National University tests concerning the weaknesses of properties of some sunglasses which show that they inadequately filter harmful rays of the sun, and the exhortations of some medical consultants that squash players should wear protective spectacles? In the light of the Minister’s most recent experience concerning eye protection, is he able to comment on the value of these suggestions? If he is not able to do so, will he please investigate the evidence on this matter with a view to possible regulation under the Trade Practices Act?

Senator WEBSTER:
NCP/NP

-Substantially, I feel that this question is not one to which I should respond. Investigation of a number of things is carried out in areas of my Department, particularly by the Australian Government Analytical Laboratories, as the honourable senator knows. The matter of sunglasses may be handled by the Department of Health. I will seek information from that Department. I think the wearing of sunglasses or protective spectacles when playing squash or other sports is of value. I will see whether the suggestion can be evaluated. I do not think the Trade Practices Act is applicable to this matter, but I will take it up with the appropriate Minister.

page 1200

QUESTION

NOMAD AIRCRAFT

Senator BISHOP:
SOUTH AUSTRALIA

– My question is directed to either the Minister representing the Minister for Business and Consumer Affairs or the Minister representing the Minister for Productivity. Both Ministers will recall questions and representations directed at seeking a review of the specifications which were laid down for the purchase of three aircraft for customs surveillance and under which the Nomad aircraft was excluded. I had a response from the Minister for Transport and I understand that Mr Macphee and Mr Fife have conferred about the matter. Are the Ministers in a position to advise whether such a review has been made? Will the Government in some way protect the investment that it has in the Government Aircraft Factories and the Nomad project?

Senator DURACK:
LP

– I will take up this question with the Minister for Business and Consumer Affairs, whom I represent. 1 think it is really a matter for him although Senator Bishop has already had some indication from the Minister for Transport. I will endeavour to get an early answer for the Senate.

page 1200

QUESTION

PRODUCTION OF OIL FROM COAL

Senator ARCHER:
TASMANIA

– I ask a question of the Minister representing the Minister for National Development. In a Press release of 10 October the Minister for National Development gave much detail of a coal to oil study being carried out in conjunction with the Federal Republic of Germany. Can the Minister advise the basis of the contributions from the three States mentioned, namely, Queensland, New South Wales and Victoria. When will the study commence and how long is it expected to take?

Senator DURACK:
LP

– I will refer that question to the Minister for National Development and endeavour to obtain an early answer for the honourable senator.

page 1200

QUESTION

ABORIGINAL UNEMPLOYMENT

Senator ROBERTSON:

-Has the attention of the Minister representing the Minister for Aboriginal Affairs been drawn to a statement made yesterday by the Northern Territory Director of Health, addressing the first national conference of Aboriginal health workers in Darwin, that in most cases unemployment in Aboriginal communities ran at more than 50 per cent? The Director is reported further as saying: ‘No wonder a sense of hopelessness has overtaken such communities, giving rise to excessive drinking, petrol-sniffing, and a breakdown of law and order’. Would the Minister confirm or deny that unemployment is of the order claimed by the Director and, if it is, indicate what steps are being taken by the Government to overcome the problem, which has such disastrous consequences?

Senator GUILFOYLE:
LP

– I am not aware whether the Minister for Aboriginal Affairs has seen the statement mentioned by Senator Robertson concerning unemployment amongst Aboriginal people; but I am aware, of my own knowledge, of the unemployment problems that exist in many of our Aboriginal communities. As I have stated previously, the Minister for Aboriginal Affairs and the Minister for Employment and Industrial Relations have co-operated in the provision of work programs in a small number of communities. I understand that the Minister for Aboriginal Affairs is seeking discussions with me, I believe today, with regard to unemployment and what measures may be taken by our two departments to make some response to the problem that undoubtedly exists. I will seek from the Minister information regarding the statement referred to and also will report to Senator Robertson on any developments which may arise from the discussions I will have with the Minister, as they affect our two departments.

page 1200

QUESTION

RIVER MURRAY: EUROPEAN CARP

Senator YOUNG:
SOUTH AUSTRALIA

– I preface my question to the Minister for Science by saying that I am aware that already questions have been asked of him concerning the problem of the presence of European carp in various lakes and rivers. Has the Minister seen reports, and, if so, are they correct, that the early great increase in the numbers of European carp in the River Murray system appears to have slowed down, but that little is known of the effects of this voracious weedeating fish on the ecology of Australia’s biggest river? Has the Commonwealth Scientific and Industrial Research Organisation done any research into the ecology of the River Murray, with particular regard to the presence of European carp? Does the Minister have knowledge of any research into the control of European carp which involves the introduction to the River Murray systems of a predator fish such as barramundi, which is both an excellent table and game fish and a predator which thrives in the northern rivers of Australia?

Senator WEBSTER:
NCP/NP

-Neither my Department nor the Commonwealth Scientific and Industrial Research Organisation has done any research into methods of controlling European carp. CSIRO fisheries research is concerned largely with marine species of commercial significance in Australian waters; but, as I have stated here previously, earlier this year the Victorian Minister for Conservation informed me of the plans of his Ministry to study European carp. The three-year program financed by the Victorian Government includes research into the impact of carp on fish and water fowl, as well as the investigation of possible control techniques. I believe that that investigation includes research overseas. Those studies of the impact of carp on other species, and on the environment generally, should provide a fairly sound basis for deciding just how deleterious European carp are in Australian environments.

The concurrent studies on possible control mechanisms also may provide a basis for restricting carp populations, if this should be shown to be desirable. Two possible methods of control are being studied. The first is biological control and involves the introduction of a virus which is known in Europe to affect carp in pond culture. It is thought to be specific to carp, but its introduction in Australia would not be considered until exhaustive tests had been carried out to ensure that it would not attack non-target fish or other organisms. That is always a problem with biological control methods.

Senator Wriedt:

– Has anyone done any tests on you?

Senator WEBSTER:

– I hear Senator Wriedt carping again, as he always does when anything like this comes up. He has no intelligent questions to ask- unless they be Dorothy Dix questions to the Leader of the Government, as they were today. He dislikes somebody else giving good information on a very important subject. Senator Young will be interested to know that the second possible control technique being examined is the application of ionising radiation to mature female carp in order to create sterile progeny which would compete with local wild carp and so reduce the fertile population.

Senator Young raised the specific question of introducing a predatory fish to control carp. He suggested that the barramundi might be one such fish, although my understanding is that the barramundi is indigenous to the warmer northern waters of the continent and spawns at sea. It is a warm water fish as distinct from the carp which would have to be controlled in the cold water of southern rivers. The barramundi is known to prey on certain other fish and perhaps could survive in southern waters, but one might guess that if it is to be a predator of carp it might also be a predator of other types of fish. This aspect would have to be studied. I will suggest that the honourable senator’s question be further investigated.

page 1201

QUESTION

OVERSEAS LOANS

Senator MCAULIFFE:
QUEENSLAND

– My question is directed to the Leader of the Government in the Senate and follows the question I asked yesterday of the Minister. Is it correct that since coming to power in November 1975 the Fraser Government has borrowed in excess of $3,000m overseas? Is it also correct that the actual borrowings of the Labor Government are set out in table 6 at page 215 of the Budget Papers and total only $462m? Senator Carrick in his reply to me yesterday, as recorded in Hansard, said:

The Khemlani loans amounted to some $US4,000m with interest rates of between 7.7 per cent and 8.35 per cent compound and with charges and commissions of 2.5 per cent.

Does this mean that table 6 in this year’s Budget Papers is incorrect? If so, will Senator Carrick explain why the Treasurer has taken this action, or is it that the sum of $4,000m was never borrowed and Senator Carrick ‘s answer yesterday was incorrect?

Senator CARRICK:
LP

-I had hoped by today to give to Senator Wriedt details which would embrace the earlier points of this question as well. My understanding is that the Treasurer has prepared the information and that within the next 24 hours it should be available. That information will relate to the earlier question asked by Senator McAuliffe. If, when I see the reply furnished to Senator Wriedt, it needs further amplification I will add to it. As to my answer yesterday, I wonder why Senator McAuliffe was shy in referring to the matter. Whether it was an actual loan or an intended loan which was stopped by the good sense of the ballot box did not alter the thrust of my answer. Senator McAuliffe was nervous about one part of the answer which I gave yesterday, and which he did not quote, to the effect that repayments were intended to be for 20 years from the date of receipt of funds and involved total repayments in excess of SUS17.6 billion on a $4,000m loan. I will look at the information and if there is a need to supplement the information for Senator Wriedt I will do it for Senator McAuliffe.

page 1202

QUESTION

EDUCATION: HANDICAPPED CHILDREN

Senator KNIGHT:

– I address a question to the Minister for Social Security. It relates to the undertaking given during the 1977 general election campaign by the Prime Minister that the Government would provide additional funds to ensure that the cost to parents of educating handicapped children should be no greater than the cost to parents whose children are educated in the usual government school system. Can the Minister indicate what progress has been made towards implementing that undertaking?

Senator GUILFOYLE:
LP

– That election undertaking was one that jointly concerned Senator Carrick as Minister for Education and me, and our two departments have been working closely on a submission to the Government. An earlier submission made to the Government was sent back for further work to be done by the two departments. That is proceeding and I hope that jointly Senator Carrick and I will be putting a submission before the Government in the near future. The promise of the Government with regard to education of handicapped children is a commitment by the Government which it wishes to see put into effect. But because of the nature of education services and the services provided through many of the centres supported by my Department it is one on which we needed consultation with groups outside of government and with State governments. It requires considerable background work before the proposal can be put before the Government. But I hope that it will be dealt with by the Government at an early date.

page 1202

QUESTION

SOUTH SEA ISLANDERS

Senator CAVANAGH:
SOUTH AUSTRALIA

– I ask the Minister for Social Security: Did an interdepartmental committee of inquiry on the disadvantage of South Sea Islanders living in Australia recommend employment by the Department of Social Security of two additional welfare rights officers to give support and guidance to South Sea Islanders living in Australia? Have such officers been appointed? If not, will such officers be appointed? If so, when?

Senator GUILFOYLE:
LP

– I tabled the report on South Sea Islanders a short time ago. It contained a number of recommendations. Since then or at that time I advised that the Government did not accept the recommendation with regard to separate welfare officers being employed in the interests of South Sea Islanders. But the Government has made available an officer of the Department of Social Security to deal with these matters. It is hoped that in this way it will be able to put into effect some of the recommendations of the report and to give recognition to the problems which occur amongst these people. But the officer appointed is an officer of my Department and not a separate welfare officer as was suggested in the recommendations.

page 1202

QUESTION

RHODESIA

Senator CARRICK:
LP

– Yesterday Senator Young asked me a question regarding the visit of Mr Smith and the Reverend Sithole to the United States of America to seek support for the internal agreement signed in Salisbury on 3 March this year. I am advised that on 14 September of this year the Minister for Foreign Affairs made clear the Government’s attitude to that agreement. Specifically, the Minister pointed out that while the agreement has positive elements it had not achieved the principal objectives claimed for it by its signatories, neither had it demonstrated that it had the support of the people of Rhodesia as a whole, which must be the ultimate test of any settlement. Honourable senators will be aware that for some time now the United States has been deeply involved in negotiations to find an acceptable settlement to Rhodesia’s problems. The decision of the United States to admit Mr Smith on this occasion should be seen in this light and is consistent with the continuing efforts by the United States Administration to use its considerable influence to bring about a peaceful, negotiated solution in Rhodesia rather than in the strict context of the United Nations sanctions against Rhodesia. The situation as it affects Australia is different. We are not directly involved in negotiations and the same arguments could not be used to justify a visit to Australia by Mr Smith.

page 1202

QUESTION

CYPRUS

Senator CARRICK:
LP

-On 28 September Senator Mulvihill asked a question relating to Cyprus. I have been given information which states that the Government views the situation in Cyprus as not just an international question which arises every year on the United Nations General Assembly’s agenda but as a tragic situation for the Cypriot people. The presence in

Australia of Cypriot, Greek and Turkish settlers gives added impetus to the definition of our concern which in brief is that there should be an equitable and peaceful settlement of the dispute. Such a settlement depends firstly on the determination of the two Cypriot communities to achieve it and, secondly, on adequate good will and support from the governments of Greece and Turkey. The interests of the North Atlantic Treaty Organisation are also keenly involved and have led, for example, to renewed efforts by the United States to try to reconcile the conflict of interests and attitudes in the eastern Mediterranean which undoubtedly have complicated the Cyprus problem. Other countries like Australia can also make contributions towards trying to resolve the dispute, mainly and pre-eminently through the United Nations. This Australia is doing and will continue to do.

Honourable senators will be aware that successive Australian governments have provided a contingent of police to the United Nations force in Cyprus since 1964. These Australians have contributed to the maintenance of law and order and have been invaluable in helping protect the civilian population. Over the years Australia has also contributed some $2m towards underwriting the cost of the United Nations force in Cyprus generally. This is in addition to the selffinancing of the Australian police contingent and to our contribution totalling $255,000 provided by way of relief and to displaced persons. The information may be of interest to honourable senators.

page 1203

INDEXATION OF PENSIONS

Senator GUILFOYLE:
LP

- Senator Grimes sought information from me with regard to the annual indexation of pensions and the means test on pension increases for people aged over 70 years. I undertook to provide that information. I am able to advise him that the annual indexation in this year, as I advised earlier, will show a saving of $27m. In the year 1979-80 the saving will be $60m. With regard to the means test on pension increases for those over 70 years of age, the new proposal will result in a saving of $ 14m in this year and $45m for 1979-80.

page 1203

QUESTION

HANDBOOK FOR COMMONWEALTH MEDICAL OFFICERS

Senator GUILFOYLE:
Minister for Social Security · Victoria · LP

– In accordance with the undertaking given to the honourable member for Hindmarsh (Mr Clyde Cameron) by the Acting Minister for Finance, the Treasurer (Mr Howard) in answer to Question No. 1626 of 10

October 1978, I present for the information of honourable senators pans III and IV of the Handbook for Commonwealth Medical Officers which relate to the medical guidelines used in the administration of the Superannuation Act.

page 1203

REVIEW OF AUSTRALIA’S INTERNATIONAL CIVIL AVIATION POLICY

Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP

– For the information of honourable senators, I present the report of the review committee entitled ‘ Review of Australia’s International Civil Aviation Policy’ and annexes to the report together with the text of statements by the Minister for Transport and the Minister for Administrative Services.

Senator GIETZELT:
New South Wales

-by leave- I move:

I would like to make some brief remarks on this lengthy report. Obviously honourable senators have not had an opportunity to read the report, least of all to debate it with any degree of understanding of what is involved in the Government’s new proposals. I think it ought to be said that the report refers to the fact that the airline industry and transport generally as it relates to the airline industry have not been discussed or debated in the Parliament for many years. I think that the Government ought to give us an undertaking that it will give us such an opportunity to debate the many recommendations and proposals that are contained in the report. From the brief survey that I have been able to make of the report, I am led to believe that airline traffic in this country has grown tremendously in recent years. Something like one million passengers leave and return to our country in any year.

I think I read somewhere recently that about $ 1,000m is expended on overseas travel by Australians. This indicates that overseas travel has become a very important industry. I request that the Government set aside some time in the Senate and in the House of Representatives, of course, for a proper debate on all that has been recommended. The report has many ramifications. It is a change in policy and a change in direction, and is a matter of immense publicinterest and importance. I seek leave to continue my remarks.

Leave granted; debate adjourned.

page 1204

TERMINATION OF PREGNANCY ORDINANCE 1978

Motion to Disallow Ordinance

Senator RYAN:
Australian Capital Territory

– I move:

I have moved for the disallowance of the Australian Capital Territory Ordinance No. 16 of 1 978 which was tabled on 1 5 August this year. At the outset I urge honourable senators to consider my purpose in doing this. I point out that I am not wishing to canvass the issue of abortion laws; nor am I wishing to canvass the issue of abortion clinics in the Australian Capital Territory. This is not the proper forum or the proper occasion for such a discussion. I have a very limited purpose in moving the motion of disallowance. I have moved it because the Ordinance defies a principle of self-government; it defies a democratic principle in its present form.

The Ordinance, in its present form, has been brought in by the Government in order to circumvent the clearly expressed wishes of the people of Canberra and their elected representatives on the Australian Capital Territory Legislative Assembly. It embodies a very bad principle of legislation; that is, to legislate on a grave and controversial matter by the expedient of changing a temporary ordinance brought in for a very restricted purpose into a permanent ordinance which has a much broader and, indeed, a different purpose. In bringing in the Termination of Pregnancy Ordinance 1978, the Government has flouted the democratic principle and reneged on its own promise, given when the Minister for Health (Mr Hunt) said:

We have decided as a government, and quite rightly so, that matters relating to the Australian Capital Territory, matters that have great social consequence and matters that have wide-ranging consequences for the people in this community will be debated, discussed and decided by those people who were elected by the local community. I pay full credit to the way in which members of the Legislative Assembly have faced up to taking decisions . . .

That was a reply by Mr Hunt on this matter on 24 March 1977. He proceeded to say:

I conclude by saying that the Australian Capital Territory Legislative Assembly voted to ban abortions outside the recognised hospitals in the Australian Capital Territory for a 90-day period during which time it will debate the wider issues and take decisions in respect of the way in which abortions will be carried out in the Australian Capital Territory.

Honourable senators will understand from those words of Mr Hunt that the Government had promised the people of Canberra that they could decide through their elected body, the Legislative Assembly, the manner in which abortions would be carried out in the Australian Capital Territory. The Legislative Assembly was charged by the Minister for Health, Mr Hunt, with deciding whether there should be independently run abortion clinics or special abortion clinics run by the Capital Territory Health Commission or whether there should be no abortion clinics in the Australian Capital Territory.

The Ordinance to which I am referring now was brought in originally as a temporary measure to prevent the establishment of abortion clinics while the Legislative Assembly debated the issue and came to its own decision on the question. It was brought in as a temporary measure, and the words of Mr Hunt support that. It was brought in originally as a 90-day temporary ordinance so that there would be no development in the matter of establishing abortion clinics while the Legislative Assembly debated the matter and came to a decision. It was quite proper that the temporary ordinance should have been brought in. I had no opposition to it and the Legislative Assembly had no opposition to it.

The Legislative Assembly did fulfil the responsibility with which it was charged by the Minister for Health, Mr Hunt. It did debate the question. Its deliberations were exhaustive and considered. It conducted a public inquiry to which all members of the community had access. As a result, it brought down a report making 47 recommendations with regard to the establishment of abortion clinics in the ACT. One of these recommendations opposed the establishment of privately run abortion clinics. Another one, which was the major recommendation because most of the others related to it, recommended the setting up of a special abortion clinic under the control of the Capital Territory Health Commission and within the grounds of a public hospital. It went into great detail as to how this clinic should operate, how it should be administered, staffing, what sort of counselling procedures it should carry out and so on.

The Legislative Assembly recommendation that a special abortion clinic should be set up is an accurate reflection of the wishes of the people of Canberra. For example, in May 1977 an Australian National Opinion Polls survey conducted in the Australian Capital Territory investigated community attitudes towards abortion and the establishment of abortion clinics in Canberra. This survey showed that, in answer to the question ‘Do you think Canberra should or should not have clinics where doctors carry out abortions under suitable medical conditions?’, 70 per cent of the respondents said yes and only 24 per cent said no. It is interesting to note that in the same survey many of the people who did not favour easier abortion laws did favour the setting up of a special abortion clinic. So the people of Canberra, both through their elected representatives and in reputable opinion polls, have made very clear their wish for a quality medical facility for early term abortions.

But the Government having so forthrightly proclaimed the democratic right of the people of Canberra to decide this issue for themselves, now has completely disregarded their wishes. As I have said, the Legislative Assembly report made 47 recommendations to the Government, concerning mostly the establishment of a public clinic administered by the Health Commission. In response to this, the Government has ignored 46 of the recommendations- the major recommendations- and has acted on only one of the recommendations. The Government has brought in this Ordinance as a permanent measure to prevent the establishment of any abortion clinics, whether they be privately or publicly controlled. It has been claimed that this Ordinance with which we are dealing today does carry out one of the recommendations of the Legislative Assembly report. That is only partly true. It is not a precise expression of recommendation No. 2 in the Legislative Assembly report which states:

That a permanent Termination of Pregnancy Ordinance be made to ensure that private free-standing abortion ciincs do not operate in the Australian Capital Territory.

That happens to be a recommendation which I personally support, although that is not the issue at stake at the moment. That recommendation was made and it is true that the Ordinance does partly implement recommendation No. 2. But it goes further than that. Clause 3 (2) of the Ordinance states:

A registered medical practitioner shall not carry out treatment for the termination of a pregnancy otherwise than at a hospital conducted by the Capital Territory Health Commission.

That is the provision of the Ordinance which is supposed to implement recommendation No. 2 of the Legislative Assembly report. Of course, it does that. Clause 3 (2) will prevent the opening of private abortion clinics. I have no argument with that. But it is so worded as to prevent also the establishment and administration of a public abortion clinic as recommended in the Legislative Assembly report. The Ordinance cannot be claimed to represent accurately or precisely even that one recommendation of the report, although it does so partially.

It appears that, rather than respect the democratic decision of the Australian Capital Territory’s elected representatives, the Government has made the temporary ordinance permanent. The temporary ordinance has served its purpose. Its purpose was to prevent the establishment of a commercial clinic while the matter was being discussed. That was the only purpose it had when it was brought in. It has served that purpose and, in my view, it now should be allowed to expire. A new ordinance should be prepared and introduced by the Government, incorporating the 47 recommendations of the Legislative Assembly report. Any other course of action should be repugnant to anybody who believes in the rights and responsibilities of democratic government. It should also be repugnant to any senator who has championed the cause of selfgovernment for the Australian Capital Territory. It would seem that the Minister for Health, Mr Hunt, has preferred the advice of Cabinet, a group of men who are not answerable to the people of the Australian Capital Territory, to that of the representatives of the community affected by his decision. Contrary to his earlier undertaking made publicly in the Parliament he has not allowed the people of the Australian Capital Territory to decide on this grave and sensitive issue. For the purpose of stressing to honourable senators the undertaking which was made by the Minister for Health on this matter, I read again what Mr Hunt said:

We have decided as a government, and quite rightly so. that matters relating to the Australian Capital Territory, matters that have great social consequence and matters that have wide-ranging consequences for the people in this community will be debated, discussed and decided by those people who were elected by the local community.

I ask the Senate for support of my motion. I hope that all senators will agree with me that the principle at issue is the right of all Australian citizens to democratic government and that a Minister who has given publicly an undertaking in the way that the Minister for Health has done should keep that undertaking. I urge the Senate to support my motion to disallow the Termination of Pregnancy Ordinance 1978. I point out that the effect of my motion would not be irresponsible. It has been claimed already by some outside groups that the effect of disallowing this motion would be to allow the flourishing of private abortion clinics in the Australian Capital Territory. That would not be the case unless the Government decided to act in a grossly irresponsible manner.

I point out very carefully that what I expect the Senate and the Government to do is to disallow this ordinance on the grounds that it does not fulfil the undertaking given by Mr Hunt, it does not reflect the wishes of the Legislative Assembly and it does not embody the 47 recommendations of the Legislative Assembly report. Therefore this ordinance which was to be only a temporary ordinance in the first place should be disallowed. During the period of time that this matter will be resolved the Government should develop and present to the Parliament a permanent ordinance which will honour its promise to the people of Canberra that their elected representatives will take decisions in respect of the way in which abortions will be carried out in the Australian Capital Territory.

I urge all honourable senators to consider this matter very seriously and to consider it in the proper terms. The terms are not, as I said at the outset, the rights or wrongs of abortion clinics. Those matters have been canvassed by the Legislative Assembly. The point at issue is this: The Legislative Assembly was asked to report on a certain grave and sensitive matter. It carried out its task in good faith; it reported. The Government, through the Minister for Health, had made a prior undertaking to accept that report. I believe that it has a responsibility now to accept that report even though some honourable senators may object to the recommendations contained in it. I remind honourable senators that there is at this stage only one effective tier of government in the Australian Capital Territory. The Legislative Assembly is not a self-governing body. We still do not have from the Government proper decisions with regard to delegation of powers to the Legislative Assembly. This matter must be raised in the Federal Parliament because it is the only tier of government in which decisions affecting the Legislative Assembly can be made at this stage.

I do not wish to involve the Senate in matters beyond its jurisdiction, but at this stage the ordinance related to these matters must be allowed or disallowed by the Senate. I urge honourable senators not to be led astray and not to be confused by what I have moved in this chamber today. I have not moved anything relating to the laws affecting abortions or the facilities provided for them. I have moved disallowance of an ordinance which should not have been presented in its present form. I have done so in the hope that if my motion is successful- if this ordinance is disallowed- the Government will accept its responsibility, will fulfil its promise and will bring down an ordinance which all honourable senators can support because it will incorporate all the recommendations by the Legislative Assembly, reflecting the wishes of the people of the Australian Capital Territory.

The DEPUTY PRESIDENT-Is the motion seconded?

Senator O’Byrne:

– I second the motion.

Motion (by Senator Carrick) agreed to:

That the debate be now adjourned.

Motion (by Senator Carrick) agreed to.

That the resumption of the debate be made an order of the day for Tuesday, 7 November 1 978.

page 1206

INCOME TAX ASSESSMENT AMENDMENT BILL (No. 2) 1978

Second Readings

Debate resumed from 10 October, on motion by Senator Carrick:

That the Bills be now read a second time.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– I understand that the Government is anxious to have the five Bills passed in order to meet the deadline of 1 November for the implementation of measures which were contained in the recent Budget. Instead of being labelled a taxation debate, this debate should be called the ‘abrogation debate’ because the Fraser Government now has to reverse a number of the major promises it gave at the last election. It claimed to be the party of lower taxation; it claimed to be the party of economic recovery; it claimed to be the party of good money management; and it claimed to be the party of morality and integrity. As the Werriwa byelection showed and as the New South Wales election enforced, the path of this Government, that is the path of liberalism, is in retreat. The resounding swing in that by-election and also the landslide victory in the State election in New South Wales show clearly that the people of Australia are disillusioned by the string of broken promises and the inability of this Government to put the economy back on the road to recovery. The electorate can see through the specious excuses and the ever-changing scapegoats which the Fraser Government now has to find for its failures.

Before the last election and after the recent Budget, the Prime Minister (Mr Malcolm

Fraser) claimed that he was creating international acceptability and that everywhere he went no one spoke against the Budget. The most damning indictment come from that bastion of conservatism, the London Times, after watching the debacle of the fifth Liberal Party Cabinet Minister going down ‘the gurgle hole of history’, to quote a recent phrase. On 23 August, the London Times, under a prominent editorial heading which read: ‘Monitorism, Scandal and Mr Fraser’, said this:

The Liberal Government and the Party are in disarray, the Prime Minister’s halo has gone, and the hope that a spell of honest government might restore Australia’s declining confidence in their tribe of politicians has been jeopardised.

As if that were not enough, the world respected Financial Times also said in a front page article on 7 October:

Australia has been borrowing heavily on the international money markets during the last 18 months to bridge gaps caused by a decline in private capital inflow.

It is important that we dwell just for a moment on the tremendous problem that is developing in this country for the immediate years ahead due to the massive overseas borrowing program that this Government is embarking upon. The effect this program will have is directly related to the Bills before the Senate. I will come back to that in a moment. As we know, at present this Government is currently in debt to the extent of $3,600m which it has borrowed in the short three years that it has been in office. This is in marked contrast to less than $500m that was borrowed by the previous Government during its three years in office. It would be safe to assume that by this time next year the present Government’s borrowings will have exceeded $4,000m.

It is important to realise that these loans are not being negotiated for the purpose of developing the Australian economy but simply to support the Australian dollar and finance the deficit. At the same time, they will mean that the Australian people will be repaying loans from 1981 onwards- that is only three years away- at a rate of nearly $500m a year to the overseas lenders from whom the money has been borrowed. Every man, woman and child in this country is being mortgaged by the Fraser Government to these massive repayments of overseas capital as a direct result of Mr Fraser ‘s policies.

On top of that and again because of this Government’s refusal to make adequate funds available to the States for developmental purposes, the State governments are currently negotiating with the Federal Government to borrow a further $2,000m for various developmental programs. Although that large sum of money will also have to be repaid at least it will be used to develop wealth in the Australian economy in exactly the same way as the proposed $4,000m loan of the Labor Government in 1974 was intended to do. It is an irony when we consider the criticism and distortions that were used and are still being used against that Government’s borrowing program and then consider that today this very Government three years later is negotiating with the State governments to permit them to do exactly the same thing.

The reason I mention these matters is that it will make it very difficult for any future government to reduce personal income tax or to resist imposing additional indirect taxes. A mandate was given to this Government. Promises were made about reduced taxation. The restoration work was to repair much of the initial damage done by the Gorton and McMahon Governments whose problems, of course, the Labor Government inherited. It seems that the present Government is determined to create the same problems for the incoming Labor government in 1980. The Government’s record in this area is lamentable. It is a government of broken promises, fired Cabinet Ministers and rubbery figures. It is appropriate to recall the words of that learned senator from Victoria, Senator Webster, who unfortunately is not with us at the moment. In 1975 he said:

It appears to me from looking at the Budget figures that again this year the Treasurer has overestimated his receipts and grossly underestimated expenditures.

What do we find today? Abrogations of government commitments are necessary because the now deposed Treasurer, Mr Lynch, had admitted rubbery figures. The present Treasurer, Mr Howard, had to admit that his estimates were up to 50 per cent out. I hope that Senator Webster will remember his words because it is the Government’s inaccuracies or incompetence which are forcing us to consider some of the worst measures which are contained in these tax Bills. It is also essential to remind the Australian people that the situation even on the Prime Minister’s own recent admission is not likely to improve in the next two or three years. This is in spite of what he said when speaking to the Appropriation Bills in 1975. These were his words:

The Treasurer and the Prime Minister have sought alibis for their own economic mismanagement. Even in recent days, the Treasurer has been saying that inflation is basically caused overseas. Today the Prime Minister says that inflation is caused by excessive wages; but last year the Prime Minister was saying that inflation was imported. Then he sought to blame the Treasury for poor advice.

I suggest that with very little variation the same remarks can now be directed at Malcolm Fraser.

The reason which makes the Opposition oppose some of the proposals contained in these Bills and be sceptical about the assumptions on which they are based is that the Fraser Government has lost credibility. The Prime Minister has failed to convince the Australian people as a whole that he can be trusted and that he is governing in the interests of all Australians. That scepticism is based upon the early indicators that the Budget figures are already blowing out. In the first two months of this financial year Budget outlays were 13 per cent above the same period for 1977-78. There is very good reason for believing that revenue will be lower than projected.

This is in spite of the fact that the Fraser Government has desperately tried to introduce State income taxes under Stage 2 of the new federalism. There seems to be little doubt that the Prime Minister believed that by the end of the 1978-79 financial year he could have all the States shouldering a greater responsibility for financing many activities which are traditionally the responsibility of the Australian Government. He believed that those activities would be funded through State income tax. This, of course, has not eventuated. As the New South Wales election results show, the voters were not deceived by Mr Coleman’s promise of an income tax rebate. They knew all along that that would never eventuate and that had they been prepared to elect Mr Coleman as their Premier it would have meant the imposition of a State income tax.

I now direct my remarks specifically to the tax measures proposed in these Bills. It might be best if I were to summarise the Opposition’s attitudes to the various proposals. We oppose the increase of 1 .5 per cent in the standard rate of personal income tax. We oppose the proposal that the full amount of any lump sum payment for annual leave made on retirement after 15 August this year be taxed. We support the averaging arrangements for primary producers. We oppose the self-assessment proposals for provisional taxation and the penalties which are proposed. We also oppose the rebates on concessional expenditure exceeding $1590. We oppose the removal of the reduction for housing interest. We seek modification of the arrangements for the Commonwealth post-graduate awards. We oppose the abolition of rebates for dependants residing overseas. Lastly, we support the inclusion of the Wildlife Australia Fund as a charity to which gifts will be tax deductible. However, we are surprised that the provision was not extended further.

My colleague, Senator Grimes, as the shadow Minister for Social Security will deal with the Opposition’s attitude towards the changes in the health insurance levy arrangements. We are surprised that the Government appears to ignore to a large extent the recommendations of the Asprey Committee on taxation which was commissioned by Sir Billy Snedden. The reluctance to grapple with the Asprey Committee recommendations which are pertinent to this debate illustrates why this Government resorts to ad hoc measures and imposes what it calls a temporary tax increase of 1.5 per cent. It is necessary and appropriate that we look at a couple of the comments which are made in the Asprey Committee report. On the question of personal income tax the Committee said:

If income can be accepted as the primary feature in comparisons between the ability to pay of individuals, it follows that, if the problems of definition and information collection can be solved, a personal income tax is an admirable vehicle for fairness. An almost limitless range of provisions for horizontal equity can be introduced into it. Any degree of progressivity can be enacted. It is indeed the only tax currently in the tax system that is capable of raising large revenues and into the structure of which a refined set of progressive provisions can be incorporated.

In contrast the Committee commented on narrow-based taxes such as those falling on only a few consumption goods and services. It said:

Narrow based taxes rank badly for equity. They discriminate between persons with the same incomes but different tastes. It may perhaps be desirable to levy a heavier burden on the smoker and the drinker than on other people but if so, it has to be remembered that the real sacrifice will be borne by the families of those on whom it is intended to lay the real impost. Nor can such taxes be made in any way effectively progressive in terms either of consumption or income.

There seems to be little doubt that the present Government is avoiding grasping the truth of this report. International economic conditions and poor employment prospects within Australia make any short term recovery most unlikely. At the same time, the increased unemployment benefit payable and other commitments mean that any government has to be assured of obtaining adequate revenue without lumping the burden of tax on to a section of the economy or the community which cannot afford to pay it or which is unequally bearing the burden. This Government has failed to come to terms with the overall financial requirements of an Australian government. It has sought only to shunt financial responsibility on to the State governments.

The fact that the Fraser Government is considering the reintroduction of a European-style value-added tax shows that, rather than taxing according to capacity to pay, the burden will be shifted on to those groups who have less capacity to pay. Arguments for both forms of tax can be produced. But there seems to be little disagreement that a progressive personal income tax and low indirect taxation are the most equitable and the most simple system of tax collection. This Government would be better to state honestly what it believes its total tax collections should be. It should then examine the equity position and propose for discussion at least a series of alternatives.

The breach of an election promise and the imposition of what is labelled a ‘temporary increase’ in personal income tax will have adverse effects on consumer confidence. There is little doubt that the reduction in take-home pay which will occur from 1 November, combined with the increases in excise on cigarettes, beer and spirits and the substantial increase in fuel prices, will offset the impact of the measures which were contained in last year’s Budget. The Senate might recall that it took the Government a least four weeks to sort out and to determine what they really were. The reduction in disposable income which will really start to bite after Christmas is going to prejudice further the chance of private sector recovery. Part of the reason for introducing this measure no doubt is the Government’s obsession with the size of the deficit and its financing. The results of the August loan suggest that, if the Government had approached the matter sensibly, it could have financed a slightly larger deficit without contributing to inflation.

Apart from the breach of faith with the electorate, this Government has been less than honest about its taxation changes. Because the increase in the rate of personal income tax is to operate after 1 November, the effective increase for this year will not be 1.5 per cent, but will be 1.5c in the dollar. On a rate of 33.5c in the dollar it represents an increase of 4.5 per cent. As the tax is compressed into the November to June period of this financial year, the effective increase in the deductions from pay-as-you-earn collections will be 7.5 per cent. If a person on an average income has a dependent spouse, the rate of increase will become much higher.

The effect of this increase will be to wipe out the tax cuts which came into operation on 1 February. These tax cuts were not based on full indexation, as the Government originally promised. Honourable senators will recall that those tax cuts were the key issue on which the Government fought its general election campaign in 1977. In the first Budget since the introduction of those cuts we are seeing those taxation promises being taken off the Australian people by the present Fraser Government. Mr Deputy President, I seek leave to have incorporated in Hansard a table which shows what taxpayers in the salary range of $1 14 a week to $238 a week, which comprises about 50 per cent of all taxpayers, will actually lose as a result of these tax increases. The table is calculated on Treasury figures.

Leave granted.

The table read as follows-

Table 1

TAXPAYER WITHOUT DEPENDENTS

Weekly tax payments

Table 2

TAXPAYER WITH DEPENDENT SPOUSE

Weekly tax payments - Difference between

Income 1 July (78) 1 Nov. (78) 1 Feb. (78) 1 Nov. increase and

The table does not take into account the fact that we have only half indexation and that, because of the Government’s adjustment of the components of the price index used, we really are dealing with only 33 per cent indexation. If we retrace the Government’s broken tax promises we find the following: An increase in personal income tax at an effective rate of 7.5 per cent in the remainder of this financial year; the abolition of the effects of the February tax cuts for 50 per cent of Australian taxpayers; and, lastly, one-third instead of full indexation. It is to be hoped that at the next general election the Australian people will remember the full page advertisements of the previous general election and will realise that the bunch of notes which were shown in that advertisement as being the great inducement to vote for Mr Fraser was nothing more than a mirage.

My real fear is that, combined with other measures adopted by this Government, the tax surcharge, which may have to remain for at least two years even though the Government has said that it will be imposed for only one year if the economy does not recover, will have an actual and psychological impact on consumer confidence and will comprise the worst Christmas present the Fraser Government has given the Australian people yet. One of the real concerns about this and other tax measures is the redistributive effects. The Prime Minister more recently has dropped his claim that he is governing for all Australians. I suspect the reason is that he has now been told that the tax measures will mean that, whilst the low and middle income earners will have tax ripped off them and their real incomes will decline, the higher income earners will be better off. For example, a person earning $450 a week or over will benefit from the tax changes in the area of $10 to $11 a week. This will mean that the policies of the Fraser Government are undoubtedly favouring people on higher incomes to the detriment of people on the middle and lower incomes.

Had it not been for the pressures- I might add they were pressures from the Opposition and also from a whole range of community groups throughout Australia- the Government would have attacked family allowances much more severely than it did and would have means tested income earned by children; what has become widely known as the ‘newsboys’ tax’. But eventually the Government saw fit to revoke that decision. It surprises me that the more sensitive bachbenchers on the Government side have not shown the same feeling for those people on wages and salaries who are about to retire and whose lump sum payments for unused annual and long service leave will now be taxed.

Senator Townley:

– Give us time.

Senator WRIEDT:

– I hear the interjection: Give us time’. I am encouraged at least to hear that interjection from an honourable senator on the Government side. This measure is a vicious attack on the expectations of many low and middle income earners who might be looking forward to retirement over the next five to 10 years and who, for a number of reasons, have been unable to take their full annual leave or long service leave entitlements. Whilst the tax rate of 33.5 per cent which will now be applicable to the amount of long service and annual leave accrued will be payable only on the amount paid, the harshest impact of this measure will be on those people proposing to retire over the next five years who may have been foregoing a week or so of annual leave and long service leave in order to have a little bit salted away.

The increase in tax will be dramatic. An employee with an income of $220 a week who has his employment terminated and who leaves with payment for four weeks leave will have a lump sum entitlement of around $800. At the rate of five per cent he would have paid $13 tax. Under the new arrangements of the Fraser Government that amount will skyrocket by no less than 2,000 per cent to $267. If there is any long service leave entitlement, the figure will increase proportionately. The Government argues that these measures are designed to prevent workers accruing leave and obtaining lump sum payments at lower tax rates. The harshness of these measures will fall on blue collar workers just as much as they will fall on any other section of the community. Blue collar workers are rarely people who have access to superannuation funds on which to rely. The harshness of these measures falls also on the long serving employees of small businesses who often find it difficult to take their full entitlements to annual and long service leave during the period of their employment.

One could cite numerous examples of when employees might take two weeks annual leave and let the remainder of their leave accrue. I suspect that the electoral impact of this measure will be to alienate many people who over the years have been traditional supporters of the Liberal Party of Australia, who will see their reserves which have been accumulated for retirement being salted away in the Government’s coffers and not in their own. They will see this as a breach of the spirit of reduced taxation which Mr Fraser so blithely promised. Other taxation measures fall into the same category. It is for these reasons that the Opposition is strongly opposing the changes in the self assessment of provisional tax penalties for alleged underestimation of provisional tax.

The Treasurer claims that the provision is aimed at overcoming a loss of revenue but he has not been forthcoming in showing what revenue is estimated to be lost. We believe that if the Government is serious in trying to help people own their own homes, the removal of housing loan interest as an allowable deduction is an attack on the low income earners and particularly on young people in the community who bought their homes in the expectation and belief that interest payments would be deductible. The means test on these deductions seemed to effectively prevent abuse by high income earners. The Opposition also contends that the withdrawal of the exemption for Commonwealth postgraduate awards should be matched by increasing the awards by the amount of tax which will now be payable. The real value of these awards has fallen and people accepting them will also be adversely affected by the new health insurance measures.

We are also surprised at the attack on Australia’s ethnic communities by the proposal under this legislation to withdraw rebates for dependants overseas. Again, the Treasurer has provided no information to justify his claim that there is mounting abuse. What happens where it is not possible to bring dependants to Australia immediately? With present unemployment rising there is little incentive unless there is some assurance of employment. Instead, Mr Fraser has chosen to increase uncertainty, hardship and worry amongst many recently arrived migrants. As I have indicated, the Opposition will support the provisions in relation to primary producers ‘ income averaging. This proposal appears to remove the opportunities for sections of the nonfarm communities, mainly among city based professions, who abuse the present concessions given to primary producers. Whilst this provision may be aimed at those who attempted to equalise incomes before the introduction of the Labor Party conceived initiative of income equalisation deposits, it still leaves open the opportunity for abuse. We presume the Government will match this situation with the zeal with which it has watched children who might be earning an income.

Whilst we do not oppose the gifts to Wildlife Australia we are wondering why that organisation should be singled out. There are many worthy charities to which donations are not presently deductible for taxation purposes. It is clear that the present Government is not the good money manager which it has tried to convince the electorate it is. The Government has increased taxation for 50 per cent of Australian taxpayers and it has mortgaged their homes, cars, assets and incomes up to the hilt by massive overseas borrowings. The Liberal Government has very little idea of what it will do and how it will do it. The Australian people can take so much of Mr Fraser’s ‘Life was not meant to be easy’ mentality. Perhaps life was not meant to be easy but neither is it the role of a government to deliberately make it more difficult.

Senator TOWNLEY:
Tasmania

-I wish to discuss several aspects of the taxation Bills which are currently before the Senate. I say at the outset that I am disappointed at the speed with which these Bills have been brought into the Senate and into the other place and at the speed with which they are being dealt with. It is such that if any amendments were attempted to be formulated, limited opportunity would be available to those who formulated the amendments to get them ready in time. Of course, at other times, governments have come into the Senate and said that Bills were so important that they had to be through in a certain time. Sometimes on those occasions the Senate has held up Bills for one reason or another and the world still seems to go on without much disturbance. That makes me wonder just what is the real reason for the rush which is being applied to these Bills and why they were not presented to both Houses much earlier than they have been. In relation to the Income Tax Assessment Amendment Bill (No. 2) 1978, the Minister for Education (Senator Carrick) in his second reading speech, which is found on page 1 1 64 of Hansard, stated:

Whilst the Government’s decision on annual leave will have altered the expectations of some who had accumulated annual leave entitlements at Budget time, it is incorrect to claim- as some have- that the Budget decision is a retrospective change to the law.

Of course, the Minister was talking about the Government’s intention to tax lump sum payments for unused annual leave at the standard rate. This year the standard rate is 33.5 per cent. The Minister claims that that is not to be retrospective. Further on in the Minister’s speech, on the same page of Hansard, he stated: the Treasurer has acknowledged it will result in persons who had accumulated annual leave prior to the Budget paying a higher rate of tax when the lump sum is received than they might have anticipated at the time the accumulation took place.

Let us examine a case and see whether the Minister is correct in saying that this is not retrospective or whether he is simply using words to fog the situation which is before us. Let us take the case of two people who started in employment with a firm on the same day several years ago. On the day prior to the Budget one of those people retires with some sizable payment for unused annual leave. Of course, he had to include only five per cent of that lump sum in his income for it to become taxable income. Both persons may have had several weeks or months of holidays saved up over several years. They may not have taken their holidays for many different reasons. For instance, it may not have been their decision. They may have been asked not to take their holidays.

So one chap retires just before the Budget is presented and the day after the presentation of the Budget the other chap decides to retire. Not only is he taxed at the standard rate which was 32 per cent but also he is slugged an additional 1.5 per cent. This provision was introduced this year and I wish to say something about that in a few minutes. I contend the second person legally and rightly expected that he would have certain money in the bank because he had decided or had been asked, or whatever, not to take his holidays over the past years. The Government, with a stroke of the pen, says that instead of taking somewhat less than five per cent of that accumulated income tax it is taking some 33.5 per cent. That person may have a very special reason for accumulating that money. He may have had some special purpose in mind. Maybe I am treating the situtation too simply but it seems to me that this is retrospective. It also seems very much that it is splitting hairs to say otherwise. With regard to this matter of holiday pay and taxation, I feel that the Government should have done as it did in relation to long service leave. It should have made any leave payments from Budget day of this year onwards the only payments subject to this new tax.

If the Government does things retrospectively like this, how can people plan their affairs? How can people have confidence if we, here in the ivory towers of Canberra, act in this way? It may well be that the person concerned cannot even work for a longer period and earn extra money to make up for the money he will lose because of this action on the part of the Government. I have heard of one case in which a person was asked to stay on for an extra month and it cost him, effectively, $3,000. Also, the people involved might be at an age at which they will not have time to make up for the loss that the Treasury will impose upon them under the new rules. Let it be clearly understood that I am not against the philosophy of taxing holiday pay, but I am very much against the action of the Government in this case, affecting as it does people’s savings, money that they have felt was as good as money in the bank and have accumulated in a way which until now was quite legal.

I wish to refer to another anomaly which I do not think has been mentioned yet. If a person who retired after 30 June next, when the 32 per cent base rate of tax will have been restored, were to receive a lump sum payment of, say, $1,000 for holiday pay, and were to do no other work, he would pay about $300 in taxation.

Senator Gietzelt:

– Ordinary tax?

Senator TOWNLEY:

– No, on holiday pay. He would be taxed at a rate of 32 per cent which, on $1,000, would amount to $320. Under ordinary circumstances, if that person did not earn any other money during the rest of the financial year, at the end of the year he would put in an income tax return and would receive that money back. But I am advised that under this Bill, even if he did not earn anything else and received merely the holiday pay, the tax paid would not be refunded; the holiday pay would be dealt with separately and would be taxed at a rate of 32 per cent. That seems to be an anomaly that has been overlooked. In fact, it was brought to my attention only in discussions with people earlier today.

The subject of retrospectivity was dealt with in an article which appeared in the Australian today. Even though the article did not relate specifically to the matters with which I am dealing, it might be worth quoting. It reads:

Equally chilling … is the Liberals’ new policy of legislating retrospectively. Whatever you ‘re doing now, stop. It may become illegal if the Government lightly decides to pass a backdated law against it.

Virtually unchallenged by Labor (which may lipsmackingly be looking forward to using the precedent when it’s in power) the Government has naively backdated several bills related to tax.

The first retrospectively outlawed (to July 1, 1977) that virtuoso exercise in accountant’s acrobatics, the Curran Scheme. Another amends the Customs Act, backtracking to July 1, 1976.

In the hands of a ruthlessly ambitious regime-in-a-hurry (and readers over three years old may remember one) retrospectivity would be the ultimate weapon.

A business, legally constituted today, could, a year hence, find its structure retrospectively unlawful- with back taxes that would close its doors. The Libs have obligingly made Labor’s front-door nationalisation plans unnecessary.

Backdated laws could batter at civil liberties, too.

Migrants could be de-naturalised: journalists declared undesirable for having written columns like this one.

It can happen. During the golden Whitlam years, when the Media Department proposed controls on the press, I received calls from functionaries who told me that my days as a newspaperman were numbered.

Retrospectivity is a cancer that must be excised from the statutes. We need a law declaring it illegal . . .

The writer ends the article by saying- I think with tongue in cheek- that that law itself should be retrospective.

Senator Button:

– Was any restrospective legislation introduced by the Labor Government, that you can recall?

Senator TOWNLEY:

– I am sorry that I cannot answer that, but I am afraid that I must agree with the article that I have just read, by John Pinkey. The philosophy of backdating tax is one that the Liberal Party should have nothing to do with. Those honourable senators who were here when the Curran scheme legislation was passed will recall that the Government argued then that retrospectively was essential in order to prevent millions from being lost by the Treasury. We never did get an accurate assessment of how much the Treasury saved as a result of that action, and no estimate has been given of how much the Government hopes to obtain by taxing holiday pay in the way that is envisaged. Unfortunately once again, I feel, the Government is throwing away the rule book and setting precedents that we all could live to regret. We must remember that the Liberal Party ‘s platform states clearly that the Party is against retrospectivity in tax matters; in fact, very much against it.

I believe that unless we stick to the rules people will become disillusioned and confused and will end up not trusting us. We cannot drop some of our ideals one day, because they do not suit us, and readopt them the next. We cannot get over a matter such as this simply by having a Minister say that a matter is not retrospective when it so clearly is. I am afraid that I must disagree quite violently with the actions of the Government in this matter. In this case, and in another that I shall mention in a moment, we should stick to our Party’s principles. Taxation legislation should not, in any circumstances, or where there is any doubt, have a retrospective effect. The taxation system is a most important part of any democratic government system. As I have said previously, changes should not predate a clearly definitive statement by the responsible Minister. Once such a statement has been made, the legislation enacting the change should be speedily, but not hurriedly- as has happened in this case- introduced. Otherwise we have government by ministerial statement, and the countries where that happens are usually called dictatorships.

If we in the Government parties expect people to plan their affairs within the law, we should have nothing to do with legislation such as this. The Government has been badly advised and should realise that. How can people plan when they do not know where they stand from one day to the next? Retrospectivity is against the platform of the Liberal Party. It is unwise and, in my opinion, leaves people not knowing quite what will happen next. This Bill should be amended so that the provisions which apply to long service leave will apply also to ordinary leave; namely, that only leave which accrues after Budget day will be subject to the new tax and leave which accrued prior to Budget day- unless used before a person retires- will be taxed under the old rule, as many people had expected it would be.

I leave that example of retrospectivity to turn to another. I refer to the proposed increase of 1 Yi per cent in the personal income tax rate. I think honourable senators will agree that there can be no argument whatever but that the Government has made the increase retrospective to 1 July. At page 20 of his Budget Speech the Treasurer (Mr Howard) said.

It is intended to adjust pay-as-you-eam instalment deductions from 1 November 1978.

The increase is effective from 1 July, and therefore the extra deduction to be made from a taxpayer’s wages or salary after 1 November will be designed to meet his or her additional tax liability for the whole of 1978-79 and not just for the period after 1 November.

What happens to people who retired between 30 June and Budget day this year? They will have paid tax on whatever they earned in that time but will find when they fill in their income tax return at the end of the financial year that they have to pay an additional amount of tax on whatever money they earned between the end of the financial year and Budget day. Surely that is retrospective. It is taking money from people when they no longer have the opportunity to earn it, and this very simple example shows just how dangerous this practice of retrospectivity is.

I do not think there can be a much clearer definition of the philosophy of the Government to accept retrospectivity than in the statement from the Budget Speech which I read a few moments ago. I am very disappointed that the Government did not say that it would increase the tax to a slightly higher rate from Budget to Budget- that would have had the same effect- or even from Budget time to the end of the financial year. Once more it appears that the party platform has been ignored and I believe it is being ignored in a most important area. The Government should look at altering the backdating or retrospectivity of this 114 per cent provision. I close my remarks by saying that I want it clearly understood that I do not agree with the backdating of any legislation. It is time we had incorporated in the Constitution clauses that stop such legislation and I believe a referendum along those lines, especially in view of some of the things contained in this Budget, would be passed quite easily by the Australian people.

Senator BUTTON:
Victoria

-The Senate is debating cognately a number of taxation Bills which provide for the legislative enactment of the taxation proposals announced by the Government in the Budget. There are a number of measures in this so-called package, which has all the characteristics of a blown-up letter bomb, but I want to speak only about the measures which seem to me to be most important. I remind senators that we speak about these items of legislation in the context of a government which in the 1977 election cynically exploited its proposed February taxation deductions for the purposes of that election. In the course of that election campaign the Prime Minister (Mr Malcolm Fraser) said:

We have reduced taxes, revived incentive and restored fair reward for achievement.

That is a high flying piece of rhetoric, someone as cynical as I might say. He went on to say:

The Australian people will not accept a return to high taxes.-The Government will bring taxes down further- not increase them.

Senator Townley, who has just spoken in this debate- modestly, if I might say so- drew attention to some of the discrepancies between the Government’s action and its past statements in relation to retrospectivity in taxation legislation. The Prime Minister said in December last year that the Australian people would not accept a return to high taxes and that the Government would bring taxes down further, not increase them. More graphically, listeners will recall the advertisements of the Liberal-National Country Party Government in the election campaign in November and December last year. Those advertisements, which appeared both on television and in the newspapers, brandished fistfuls of dollars in front of the Australian electors- fistfuls of what turned out to be phoney or counterfeit money. More graphically still listeners will remember that the people of Australia were asked to dial a tax cut- to ring up to find out what the Fraser Government would give to them in February 1978 if it were returned to power. It was a service provided to them by the Liberal and National Country parties. I understand that many people availed themselves of that service and rang up to find out what their tax cut would be in February 1978. ‘Dial-a-tax-cut’, the service was called.

One might ask in the Senate whether it is the intention of the Government to provide on 1 November 1978 for the electors of Australia, the facility of dialling a tax rise. If we asked that question in the Senate we would be told: ‘That is not within the responsibility of a Minister in the Senate. It is not our responsibility to say in the Senate what the Government would do about this because it is a Liberal Party responsibility. The Party did it in 1977 when it advertised dialataxcut; if it wants to do it in 1978 that is not within my ministerial responsibility’. However, it is the responsibility of every Minister in the Senate and the responsibility of every Minister in this Government, including the Prime Minister, because they are the people who in 1977 initiated that campaign for their own benefit. That is one of the reasons they sit where they do today, but they will not offer the same facility to the people of Australia on 1 November 1978.

In fairness to the Government, there may have been a need for the tax rises which have been imposed. Perhaps it was necessary to break the promises made in 1977 in order to meet the pompous rhetoric which Ministers were engaging in about the size of the deficit. I admit that this is a very difficult dilemma to be in- to make promises on the one hand, to indulge in pompous rhetoric on the other and then to find in 1978, as people were pointing out to them that they would find, that the two were inconsistent. The reason why the deficit has increased and the tax cuts had to be imposed were as I have given them before in the Senate, and they were eloquently summarised by a former Liberal member of the Victorian Government when he said that Mr Fraser had ruined the economy and the building industry. He also said that the Prime Minister had done something else to the economy, but I cannot mention it here because of the Standing Orders. The ‘former Minister is reported to have said:

Fraser will cause a greater calamity in the next 12 months in the building industry than Gallagher has caused in the past five years. Over the next 12 months there’ll be more Mainlines’ caused by Fraser’s fiscal madness than in the whole period of the Whitlam Government.

That is what a responsible Minister, a Minister for many years in the Victorian Liberal Government, had to say about the present Government’s management of the economy. That may be one of the reasons why the solemn promises of 1977 had to be abandoned in favour of the tax rises which are contained in this legislative package now before the Senate.

There are one or two aspects of the legislation contained in the package to which I will refer. Firstly, I refer to the 2lh per cent surcharge on taxable income which all Australian taxpayers will pay after 1 November 1978.

Senator Messner:

– It is 1 Vi per cent.

Senator BUTTON:

– It is in fact 2Yi per cent. It is Vh per cent over the full year, and that is the matter to which I was just coming. I am grateful to the honourable senator for his interjection; he is speeding me along. From 1 November 1978 the surcharge will be effectively 2lA per cent but will represent a surcharge of 1 V4 per cent over the whole financial year.

Senator Walsh:

– Of income, too.

Senator BUTTON:

-As pointed out by Senator Walsh, this relates to income. It is a repudiation of an electoral promise and in our opinion it will further depress demand in this country. An amount of $560m will be gained by the Fraser Government. This money will be taken out of the pockets of the taxpayers, consumers and spenders of this country. We believe that that will have an important consequence. But the worst aspect of the surcharge- the income tax rise which people will have to pay on 1 November 1978 as distinct from the income fax fall that was promised in 1977- is the gross inequality of the proposals. If one considers the February so-called tax cuts, the phoney tax cuts, the tax cuts heralded with handfuls of counterfeit money and the November increase, one sees that 55 per cent of the Australian community- people without dependants and people with dependants on about the average weekly income level- will be worse off as a result of these two packages of tax cuts and tax rises put together.

In a moment I will seek leave to have incorporated in Hansard two tables. One relates to taxpayers without dependants and the other to taxpayers with dependent spouses. They show that for persons on incomes of between $ 1 14 a week and $200 a week there will be significant increases in taxes as a result of the two packagesthe so-called February tax cuts and the November increases- taken together. The same sort of situation applies to taxpayers in that income group with dependent spouses. The table which I will seek to have incorporated shows that it is those people in the community with incomes of between $ 1 14 and $200 a week who will suffer most as a result of this proposal from ‘a government for all the people’, as the Prime Minister reminded us in 1977. The tables show that it is not a government for all the people with regard to the much vaunted Fraser freedom to have money in one’s pocket. It is a government for the wealthy people; it is not a government for the people on those income scales. Mr President, I seek leave to have the two tables to which I have referred incorporated in Hansard.

Leave granted.

The tables read as follows-

Table 1

TAXPAYER WITHOUT DEPENDANTS

Weekly tax payments - Difference between

Income 1 July (78) 1 Nov. (78) 1 Feb. (78) 1 Nov. increase and (weekly) to 31 Oct. (78) to 30 June (79) Increase tax saving 1 Feb. saving Table 2 TAXPAYER WITH DEPENDENT SPOUSE Weekly tax payments - Difference between Income 1 July (78) 1 Nov. (78) 1 Feb. (78) 1 Nov. increase and
Senator BUTTON:

-I thank the Senate. The worst thing about the 2Vt per cent surcharge on incomes which will commence on 1 November 1978 for all Australian taxpayers, all voters, all people listening to the Senate, is its gross inequity. Of course that is consistent with one or two other items in this so-called package to which I wish to refer.

The next matter on which I comment is the question of the taxation of annual leave and long service leave. This means simply, in terms of the annual leave entitlement of a worker on a wage of, for example, $200 a week who under the present arrangements which he has enjoyed year after year, instead of paying tax of about $13 on four weeks annual leave entitlement amounting to $800 which is taxed on 5 per cent of the total when his employment is terminated, he will now pay $267 instead of $13 which he would have paid hitherto. In my submission in simple terms that indicates what that sort of provision will do. All annual leave payments on termination of employment after 15 August will be taxed at the rate of 33V4 per cent. All long service leave that accrues after 15 August will be taxed at the rate of 33lA per cent when paid on termination of employment. As I said, at the moment these lump sums are taxable to the extent of only 5 per cent of the total.

I refer the Senate to the sort of calculation in respect of annual leave which affects a worker on $200 a week. What does this mean? Has the Government given attention to what this means for workers in many industries? Senator Chipp on behalf of the Australian Democrats today asked a question on this matter in regard to Victorian railway workers as though they are some son of unique group specially penalised by this legislation. I feel very sorry for Victorian railway workers; but they are not some unique group. The only thing unique about them is that Senator

Chipp obviously thinks that in addition to the 2 per cent of environmentalists or others who support his Party he might add the Victorian railway workers as a new group to which in some degree of desperation his Party might appeal.

The principle of his question relating to railway workers in Victoria goes much further than that. The new taxation provisions will have a much worse effect on relatively itinerant people in industries such as the construction industry where there is a tremendous turnover in employment, if indeed there is anything of the construction industry left after this Government has continued the economic management of this country for much longer. Anybody who knows anything about the construction industry knows that there is a very high turnover and change from job to job of skilled tradesmen and others engaged in that sort of industry. Of course this sort of taxation proposal drastically affects their annual leave entitlements and has a real effect in the long term on any long service leave entitlements which they might have as a result of some scheme which applies to the industry.

The Government’s rationale for this taxation at the rate of 33 Vi per cent on annual leave payments and long service payments is simply that the Government considers that the current tax law encourages people not to take their leave when it is due but instead to accumulate it. That is why it is changing the taxation law. This shows that the Government is, with the greatest respect, quite spastic in its approach to the various functions of government. If the Government feels strongly about that principle the place for it to go is a place to which it goes very frequently, the Commonwealth Conciliation and Arbitration Commission, and there argue that in Australian industrial awards there should be a prohibition on people deferring the taking of annual leave. That would be simply done and would probably be acceded to by Arbitration Commission because the rationale of all these leave provisions over many years, as argued in the Arbitration Commission, has been that workers should take leave when it falls due because it is a matter not only of money but also of health, appropriate recreation and so on. The Government rationale on this discriminatory little taxation impost which affects a poorer section of the community- the wage earners of Australia- is absurd and shows again that this Government in its taxation policy takes no account of its industrial policy. One hand does know what the other hand is doing. It grabs something with the right hand to justify some dirty blow with the left hand. That is precisely what it has done. It has used from the field of industrial relations an argument which is totally irrelevant to the proper management of the taxation system to justify this taxation measure.

The real purpose of this measure is simply to gain extra revenue. The people who will suffer most, as I have said, will be those who swop jobs frequently such as people in the construction industry or itinerant industries of one kind or another. Some workers must by virtue of the very nature of their employment change jobs frequently. It should be remembered by this Government that most blue collar workers and most workers in industries like the construction industry do not have superannuation to fall back on when they retire. All they have is their accumulated long service and annual leave. That is the golden handshake a person gets if he is a builders labourer. He does not get a big dollop of superannuation to tide him over as do honourable senators or other people in the community who are on high incomes. AH these workers get is their accumulated annual and long service leave. All some employers say to their employees is: Off you go. Thanks for working for us for 40 years. You can go on the old age pension’. It is against these people that this measure is particularly directed. It is against these people that the effect of it is most particularly iniquitous.

I mention another matter which is of concern to a much more limited group of people in Australia but is of concern to me as Opposition spokesman on education. I refer to the taxation of post-graduate awards. The Treasurer (Mr Howard) in his Budget Speech said:

Commonwealth awards under the Post-graduate Awards Scheme, which are not means tested, are essentially of an income nature and it is appropriate that they should be taxed like other income.

Accordingly, these awards are to be made assessable income in the hands of the recipient with effect from 1 November 1978 with an estimated gain to revenue of $0.6m in 1 978-79 and $ 1 m in a full year.

Big deal! Big money; it might be said. The extraordinary thing is that one cannot object seriously about the Treasurer’s justification for this action. Of course, post-graduate awards are not means tested. Of course, they may be seen to be income. But as a small sum is involved one would have thought that the Treasurer and the Minister for Education (Senator Carrick) who sits in this place might have examined the whole question a little more closely. Many of the people concerned are doing very valuable work for this countryand for themselves as well as in pursuit of higher degrees- in research and other things. The point is that this Government saw fit in January of this year to raise the level of the allowances, which are very small for people to live on, to $4,200. The Government made great virtue of that at the time. The effect of the taxation of these allowances will be to decrease them to considerably less than the $4,200 to which they were raised in January, and to put them back very much where they were when the Government decided to make its decision in January of this year.

Senator Messner:

– What is your estimate?

Senator BUTTON:

– I am not giving an estimate, Senator. I am outlining the effect to the Senate. This is something the Government should have looked into when it made these arrangements. Otherwise the action which the Government took in January was totally hypocritical.

The next matter which I just want to touch on- again it illustrates the same point- is the abolition of the deductions for interest on home loans. Again it is discriminatory and again it is very much against the low income purchaser of a house. The move again comes from the Government which always has prided itself on being the party of home owners. The income of the average worker buying a house will be effectively reduced by some $3 a week. I refer also to the abolishing of tax rebates for overseas dependants. This is a matter of some concern to migrant communities in Australia. It is a matter about which I doubt migrants have been sufficiently alerted. The justification for this action is the Galbally report, the report on migrant services and programs, which was brought down in the Senate a month or two ago. Page 87 of the report, which deals with tax rebates, states:

Many migrants claim tax rebates in respect or dependent spouses, parents, parents-in-law and invalid relatives living overseas. The majority of people for whom claims are made are said to be dependent parents and parents-in-law and are not Australian citizens.

Those comments baldly state the problem. The report goes on to say that the cost of these rebates is something like $20m a year. In accordance with the words of the report, it was not felt that the rebates were justified. Let me make one or two points. It is very difficult for a single migrant- or even a married migrant- living in Australia if his relatives overseas with whom he has strong family and emotional ties are suffering as a result of poverty or distress of some kind or another. The ability to transmit money overseas to relatives of that kind is important to these people and important to anybody who is earning a good income and living in a country different from his country of origin. It is important that these people should be able to claim these tax benefits.

I felt that the intention of the Galbally report was not that the tax rebate for overseas dependants should be abolished as the Government has done but rather to point to the fact that there have been abuses of the system by some members of migrant communities and to suggest ways in which these abuses could be overcome. The Government has abolished the whole system. This sort of action in my view will cause untold hardship to many migrant families with relatives and particularly close relatives living overseas. I mention the point again because it illustrates the same theme which I was trying to illustrate earlier in this speech- the importance of the rather discriminatory nature of many of these provisions which are included in this package of Bills.

I mention one other matter. The Government has made one important concession in this package of legislation. It has made donations to the World Wildlife Fund tax deductible. It has taken tax deductibility away from Australian migrants. Contrary to promises, it has taken tax deductibility away from the Australian wage earner, from the Australian home buyer and from the Australian post-graduate students and has changed the taxation provisions for people receiving lump sum payment for annual leave and long service leave and has made donations to the World Wildlife Fund tax deductible.

Senator Walsh:

– Why did it do that?

Senator BUTTON:

-Senator Walsh asks why the Government did that. I have a theory as to why the Government did it. I think it was because Mr David Ogilvy, the Madison Avenue advertising man who, I think, is President of the World Wildlife Fund-the Duke of Edinburgh may be President but Mr Ogilvy is high up in the hierachy- came here earlier this year and had lunch with the Prime Minister. He came to Australia on a ship which cost him about $5,000 a day. He had lunch with the Prime Minister and persuaded the Prime Minister that donations to the World Wildlife Fund should be made tax deductible. That is a theory as to why the donations have been made tax deductible, but there is no explanation in any of these documents as to why it was done. The Australian people are entitled to know why the World Wildlife Fund has been singled out for this special treatment instead of all sorts of other charities about which every honourable senator may be concerned and about which every Australian citizen might be properly concerned. I offer one explanation why the donations were made tax deductible.

I have singled out these elements because I wanted to make general comments about them and about the nature of the measures. All governments have to take unpopular decisions. It would be very popular in politics to offer no taxation at all. Some people have done very well in countries such as Denmark by doing that. The Prime Minister of this country makes a positive virtue of his unpopularity and of his broken promises, in effect. He shares that sort of pride in unpopularity with the Emperor Caligula and people like Idi Amin who pride themselves on unpopularity of that kind and see their unpopularity as evidence of their being tough men, responsible men and things of that kind. If honourable senators examine the details of the legislation they will find that that is not so at all.

In fact, these taxation measures taken as a whole represent a number of things which quite clearly can be pointed to. They represent the broken promises of this Government, promises made as late as 1977. In November 1977 we heard: ‘Dial-a-tax-cut; find out what the Liberals will do for you’. What is happening now? There are broken promises, intellectually dishonest measures and desperate acts by a government which cannot match its rhetoric with its competence. The rhetoric is there- the rhetoric is always there- but the competence is not. But, more than that, the Government has shifted the burden of these taxation measures again- not to the wealthy people, but from the wealthy people of this community to the poor people of this community. I refer again to the table which I had incorporated in Hansard and which is very clear documentary evidence of this fact. Not only are they dishonest, not only are they broken promises and desperate acts, not only do they reveal the Prime Minister as a man who thinks he is being consistent and strong when in fact he is being just dishonest, but they shift the burden of taxation measures and they are grossly inequitable. On behalf of the Opposition, I oppose these taxation measures.

The PRESIDENT:

– Order! The honourable senator’s time has expired.

Senator MESSNER:
South Australia

– Listening to Senator Button speak in the last few minutes, one thought that he was going back about four years to the years of the Labor Government, particularly during the period when there was so much confusion in the policies of that Government and certainly in its legislative program that taxation measures and economic measures of all sorts were being changed by the Caucus almost weekly. The Labor Government became so disreputable that it lost the election with such derision in the eyes of the public in December 1975. Certainly the one great thing about the Fraser Government since it came to power in December 1975 is that there has been consistency in its policies right from that time. In fact, the Government’s aim has been to reduce inflation as a prerequisite to the reduction of unemployment and the creation of a climate for further investment in this country. That is precisely the strategy contained in the Budget which sets out quite clearly the economic objective of encouraging overseas investment and determining a better value for the Australian dollar on the world market, thereby ensuring a growth in the Australian economy. Of course, if one reads statistics which have emerged recently, for instance the retail sales statistics, one finds that there have been real increases in retail sales in the last 12-month period in all States, except South Australia where there has been a real fall in the last 12 months. That, of course, is consistent with State Government policies in that area.

Let us have a look at some of the particular matters which were raised in this debate by Senator Button and, in particular, the matter of personal income tax. As Senator Button rightly said, it would be a very popular government indeed which decided that it would go to the people in any election process and declare that it would cut taxes or remove them altogether.

Senator Gietzelt:

– That is what Mr Coleman said.

Senator MESSNER:

– Poujadists exist only on the other side of the chamber. As I was saying, the degree of consistency in the Liberal Government’s policies since 1975 has been perfectly evident. Its aim of reducing the deficit and reducing interest rates has been consistent with its policy since 1975. Consequently, the Government, when faced with a possibility of a very difficult deficit situation, grasped the nettle and in fact imposed an unpopular increase- an unpopular surcharge- in income tax of V/i per cent, at a time when obviously it was very difficult to educate the public to accept a higher level of taxation. Clearly, the claim of the Australian population is for lower taxation. That is, of course, amongst all people except members of the Opposition. We can well remember the clear statements by Mr Willis, the economic spokesman for the Labor Party, in Brisbane a matter of three, four or six months ago when he claimed that the Labor Party had to spend more time educating the Australian population and that it was a good thing to pay more taxation.

Senator Walsh:

– You are doing it for us.

Senator MESSNER:

– Honourable senators opposite cannot deny that. These are tenets of their philosophy and their policy: Higher taxation in order to increase the size of the public sector. The earnest of that is the fact that during the period 1973 to 1975 we saw taxation increase by over 100 per cent. When we consider it in that light- when we consider which party is in fact a low tax party and is dedicated to the reduction of income taxes- we find that for the first time in 20 years this Budget results in a real decrease in income tax.

Senator Gietzelt:

– What rubbish!

Senator MESSNER:

-This is the first time in 20 years that income tax has decreased. That is after taking into account the personal income tax indexation and, of course, the income tax cuts which were introduced bravely in February 1978. If one considers that situation- that this Government, faced with an extremely difficult position, increased income tax rates by Vh per cent across the board as a temporary measure for one year only- one will find that even after that increase there was still a net saving, a net reduction, in income tax in the Budget , for this coming year.

Senator Gietzelt:

– That is not true.

Senator MESSNER:

-That is perfectly true. Senator Gietzelt should have a look at the tax figures. Senator Gietzelt says that that is untrue. If he looks at the Budget Papers he will see that the increase in revenue from personal income tax expected this year is about 6.7 per cent. In fact, the expected inflation rate, as predicted and mentioned in various discussions around the place, is about 7 per cent. That represents a real decrease in income tax collections. Perhaps Senator Gietzelt ought to look at his mathematics a little more closely.

Let us have a look at some of the pluses paid on the income tax side. The Vi per cent surcharge is a matter of some concern. It is certainly something which I do not believe anybody in the community would enjoy paying. For a person on the average wage level of, let us say, a little over $200 a week, the average cost will be about $ 1 50 during the current financial year; but offsetting that is the saving which the average taxpayer will be making in respect of his Medibank payment. A Medibank levy payer will be saving 2Vi per cent on that figure, or a maximum of $150. The average person- the Medibank levy payer- will come out square with the increased costs. Overall, he will not be suffering any further charge. If he decides to take out private health insurance on top of that, that is his own decision, and rightly so.

That example illustrates the consistent attitude of the Fraser Government. It puts the decision making process as to the people ‘s future in their own hands. That has been a consistent policy objective since this Government came to power. In the light of that example, let us look a little further at the position of people who are contributing to private health funds now. A middle income earner who is on the highest medical benefit table is going to save something in the order of $4 a week, according to the statements made by the private health funds last week. This means that about $200 will be saved in a year. If he has a total taxable income of $15,000 he will be paying about $225 extra in income tax. His net cost is therefore $25. These points are not clear nor have they been made clear by the Opposition. Rather of course it takes the sensational publicity seeking line of trying to create some sort of impression in the community that disaster lies ahead. In fact it is quite obvious from the way in which the Budget has been received in the stock exchanges and overseas that it is clearly establishing a basis for sound investment in the Australian community.

Senator Gietzelt:

– What about the Australian people? We are concerned with how it has been received by the Australian people, not in the stock exchanges and overseas.

Senator MESSNER:

-Senator Gietzelt talks about the Australian people. We must remind him that the Whitlam Government created an unemployment level of over 200,000 people. Those jobs cannot be brought back through the Opposition’s sorts of policies. New jobs need to be created. We should look at the amount of capital required today to create new jobs. I cite the example of the Redcliff proposal in South Australia. To create 700 new jobs in the Iron Triangle area we need to spend $ 1,000m. That is an extra cost of over $1.3m per job. In future Australia needs to encourage more capital- not to deny it- to provide more jobs. The only way in which we are going to create a viable economy is by starting all over again from the Whitlam mess and creating a whole, new range of jobs and industrial structure. Accordingly, the Fraser Government’s policies are aimed in that direction.

Let us look at the other areas of legislation before us today. I mention particularly the matter of taxation of lump sum retirement payments in regard to unused leave, particularly annual leave and long service leave. Prior to the Budget coming down there was a considerable amount of confusion in the minds of the public, fostered by the Labor Party and certainly by the Press, that the average person would have his superannuation benefits taxed under these new arrangements. In fact, for many years five per cent of superannuation payments have been taxed at the current rate of income tax applying. Senator Chipp apparently did not understand that today when he said in his question that five per cent was the amount of tax imposed on unused leave and so on. The truth is that taxation is applied at the current rate to five per cent of the amount received. The point about this legislation and the Budget statement is that this taxation provision does not apply to superannuation payments, nor does it apply to retirement allowances generally, those retirement allowances being of a character different from superannuation. It does apply to annual leave that is accrued up to the date on which a person leaves his employment. That full amount of income which is defined as income in a proper sense will be taxed at the current standard rate of taxation which will be 33!£ per cent this year or 32 per cent next year. The same principles as applied previously are being applied to the taxation of that form of income. The difference is that instead of only five per cent being taken into account the full amount- 100 per cent- of the annual leave is being taken into account.

Mr Acting Deputy President, I am glad that you are in the chair at the moment because you will not tolerate any interjections. The point here is that annual leave changes in character once it is paid to the taxpayer in that lump sum form. It is not in itself paid as annual leave. The reason it has been subject only to that special provision of five per cent in the past is that employers have calculated a lump sum to be paid to employees at the date on which they terminate their employment in accordance with the formula that is applied to annual leave or long service leave. At the point of payment it was not called payment of annual or long service leave; it was called a lump sum on retirement. That payment then became eligible for the concession that applied to superannnuation and other retirement benefits. In other words it was a tax gimmick. It was an alteration of the character of the payment in order to take account of and receive the benefit of that law. It is as simple as that. Very largely it has been used as a tax avoidance device.

Senator Gietzelt:

– Come off it.

Senator MESSNER:

-Senator Gietzelt might complain about that. I did not think he would be on the side of the tax avoiders generally.

Senator Gietzelt:

– That is not tax avoidance. Nobody in the legal profession worked that out as they worked out all the others.

Senator MESSNER:

– I just explained to the honourable senator the reason why it has been worked out in that way. It is a practice which has grown extensively over the last few years.

The second point about the matter is that a person who decides to organise his affairs in a particular way is always at risk in relation to the point at which the law will apply to him when he finally decides to have tax charged on his income. If he decides as a matter of his own judgment to accumulate his annual leave he takes the risk that the rate of tax in respect of that amount, whenever it is received, will change. Let us take as an analogy to the situation a person who normally conducts his affairs on a cash basis- let us say he is a small businessman who receives his income in cash- and who renders his tax returns on the basis of cash received; he does not include the accounts that he has rendered to his customers. Although he has sent a bill to his clients some three or four months before he is paid, whenever that income is received it could be subject to different rates of tax that will apply from that time onwards.

That to me is a perfect analogy to the situation with respect to annual and long service leave. In fact, there have been people who through their own positive decisions have decided to take the risk on what the rate of income tax would be when they finally received that income. Consequently some people have had the misfortune of finding themselves in the situation of having that increased taxation imposed upon them. I reiterate that this provision does not apply to superannuation payments or to retiring allowances. In fact it applies genuinely to items of annual and long service leave to which it has applied in the past. I am glad to see in the legislation that the concession is retained in respect of deceased taxpayers and that tax at the full rate will not be applied to their spouses.

I notice that the Government has moved to narrow the gap by which people can estimate their own incomes for provisional tax purposes so as to ensure that there is a closer relationship between the tax finally paid and the amount estimated for provisional tax purposes. I regard that as a perfectly reasonable step, provided that the Commissioner of Taxation is flexible enough to allow for reasonable fluctuations in income and is careful not to impose tax at the higher rate in situations where unusual things happen to people’s incomes at the times when they are affected by this proposal. I believe that on the whole the measure is quite reasonable in the way in which it has been drawn. Of course, it is a matter of administration. Therefore, we look to the Commissioner of Taxation to consider individual cases in a reasonable way so as to ensure that no inequity is caused.

It is a fact of life that the averaging provisions in respect of primary producers are becoming more and more complex in terms of understanding and calculating their effect. Until recently some of us tried to interpret the statements that have been made by the Treasury without having the Act before us. We found it extremely difficult to make calculations. Although the provisions are complicated I am pleased to see that calculations can be made reasonably simply. There is a problem inasmuch as farmers who normally prepare their own taxation returns may find it very difficult to do the calculations in respect of the averaging provisions. Not being trained in accounting, nor being terribly proficient in reading Acts of Parliament, they may find it difficult to understand the nuances of the calculations involved.

I am particularly pleased to see that the Government has moved to ensure that people who have income from sources other than primary production are limited in their ability to use the averaging provisions of the Act for tax avoidance purposes. It is something which I believe ought to have been done many years ago. However, recognising the reality that farmers will need to have income from other sources particularly in bad years- in a drought year, for instance, they may be forced to work for the local council- a ceiling of up to $10,000 on a shaded-in basis on income from sources other than primary production will be taken into account and will not affect the averaging provisions. I believe that on the whole the decision to introduce this provision is reasonable. It is certainly in the interests of the revenue.

I now refer to two or three matters which Senator Button mentioned. He referred to the taxation being imposed on post-graduate students. As I understand it the amount of a postgraduate award is at present approximately $4,200 per annum. This compares with the threshold of $3,833 at which income tax applies. The average post-graduate award recipient will incur tax at the standard rate- this year 33W per cent- on the difference between $4,200 and $3,833. This is roughly $100. That assumes that the student has no other income or deductions. For instance, if he had a dependent spouse with no other income he would not pay any tax. He would probably be in receipt of family allowance in addition. A student will not be detrimentally affected to a great degree, certainly not to the degree that Senator Button mentioned.

To compare post-graduate awards with incomes that are applicable generally in the community is not the way to look at this particular problem. As we know, under-graduate students who receive allowances under the Tertiary Education Assistance Scheme receive approximately $1,600 a year if they have no dependants. That compares with the amount of $4,200 which a post-graduate student receives. Surely, if a person is eligible to enter the work force, having gained one degree, and receives from the Government through a post-graduate award nearly three times as much as an under-graduate student who has no job it is reasonable that taxation should be applied to his award. I believe that this is the true essence of the test in this regard. A post-graduate student is receiving extra benefit from the community by receiving approximately three times as much as an undergraduate student.

Senator Cavanagh:

– What about the postgraduate ‘s research work?

Senator MESSNER:

– I am very much in favour of that. I would be very surprised to find that the amount of $100 was a serious disincentive to post-graduates completing second and further degrees and then finding work in Australia.

Senator Cavanagh:

– When it is given for research you take it away again.

Senator MESSNER:

– I see that in exactly the same light. I cannot accept the point that Senator Cavanagh makes. In the light of that particular comparison I believe that Senator Button’s point is irrelevant. When questioned by interjection he was unable to give us any estimate of the effect on the average student. I visited a post-graduate organisation at the Flinders University in Adelaide last Thursday to discuss economics. I was very surprised to find that a great number of students regarded this measure with no concern at all. They recognised that they would be paying very little tax.

Senator Gietzelt:

-It is only $70 a year but $70 is $70 to a person getting only $80 a week.

Senator MESSNER:

– I am reiterating my experience in that regard. As I indicated earlier, I support these Bills. I believe that the philosophy behind them is generally consistent with the Government’s policy. The Government has faced up to very difficult decisions. Nobody likes imposing heavier taxation. Consequently, the decisions that the Government has made in imposing a surcharge of 1.5 per cent for this year only is a very careful but important decision in ensuring the recovery of the Australian economy.

Senator CHIPP:
Leader of the Australian Democrats · Victoria

– I claim that Senator Messner has misrepresented me; unintentionally I am sure. I seek leave to make a short statement.

Leave granted.

Senator CHIPP:

- Senator Messner referred to a question I addressed to the Leader of the Government in the Senate (Senator Carrick) today about the increased taxes on accrued leave of certain people, particularly railway workers in the Victorian railways who, in being loyal to their employer and the public, had not taken their annual leave over a number of years. They now find themselves being taxed on it at a higher rate. I asked the Leader of the Government in the Senate two questions: The first concerned the rationale behind the Government’s decision on that matter and the second dealt with whether he could justify the retrospectivity of the tax imposed. I received no answer to either of those questions. The point I want to make is that at no stage during my question did I mention superannuation, as Senator Messner alleged I did.

Senator EVANS:
Victoria

-These Bills bring to a final and formal close that dishonest, cynical charade which the Fraser Government has been playing with the Australian people on income tax matters over the past 12 months. Who could forget the fanfare with which the Fraser Government foreshadowed its substantial tax cuts in the August 1977 Budget? Who could forget the fanfare with which it promised again in the 1977 general election campaign to introduce massive tax cuts? This was accompanied, it will be remembered, by an advertising campaign which, as subsequent events have shown, was perhaps the most blatantly and unselfconsciously dishonest advertising campaign in Australia’s political history? Who could forget the way in which the Government finally summoned up its political courage actually to implement for once some of these promises. I take it that that was the phenomenon which Senator Messner had in mind when he called it ‘bravery’ when in February 1978 the Government actually delivered some of these long foreshadowed tax cuts.

But who, remembering all that fanfare, can now overlook the sheer brazen effrontery and gall with which those tax reductions are now being absolutely and completely swept away, by the August Budget now embodied in these Bills before the chamber, for the overwhelming majority of Australian taxpayers, particularly those towards the lower end of the scale? Who can fail to note the way in which every tax initiative which this Government takes, whether to make tax reductions or to take them away again, is inequitable, regressive and redistributive from the poor to the rich? When the original tax cuts were granted those people at the top end of the tax scale benefited the most, as is always the case with this Government. If a person is right at the top of the tax scale with an income of the order of $2,000 a week his tax saving would have been worth $1 12 a week. If a person received average weekly earnings of $200 a week, he scored a mere $3 out of those tax cuts. What an awful disappointment it must have been for those people who were taken in by the fistful of advertised dollars in that last November-December general election campaign.

Now the tax cuts are being taken away again by this legislation. Again, it is legislation which operates regressively and inequitably so that, as always, it is the poor who will lose most. If a person is earning around $200 a week he will lose every cent of the tax cuts he was previously granted. But if he is right up at the very top of the tax scale and earning $2, 000-odd a week he will keep a full $62 out of that $1 12 a week I mentioned which came to him as a result of the February tax cuts.

The central feature of this legislation before us is the so-called Vi per cent surcharge which it imposes across the board. It is not sufficiently appreciated I think that even this rather evenhanded sounding provision- 1 lA per cent across the board- is a thoroughly regressive provision. What is in issue is not 1 Vi per cent of tax paid for everybody, without exception; rather, what is being added by this legislation is 1 xh percentage points to each of the separate rates at which people are taxed, such that at the base rate of 32 per cent, which goes up to 33 Vi per cent, the actual increase- the increase of the tax a person will now pay compared with what he was paying before- will be 4.7 per cent.

On the middle rate, which goes up from 46 per cent to 47V4 per cent, the actual increase will be 3.3 per cent. At the top of the range, at the rate of 60 per cent, which goes up to 6 1 lA per cent, the real increase will be 2.5 per cent. I hope that it will not have escaped notice that, once again, those figures are regressive- 4.7 per cent at the lower rate down to 2.5 per cent at the top of the range. If a person is at the bottom of the pile he will stay there, lose more and pay more than if he is at the top of the pile. Like everything about this Government’s performance and its tax legislation in particular, these provisions are unfair, regressive and thoroughly inequitable.

I turn from the general aspects of this set of income tax provisions to some of the particular matters on which this Government is especially vulnerable. The first matter to which I wish to draw attention is one specific aspect of the operation of this Vh per cent surcharge. I refer to an aspect of it which so far, to my knowledge, has received practically no attention at all. That is something for which the Government ought to be exceedingly grateful because I point out that what it does is amount to a fiddle of rather spectacular proportions. What I am referring to is the operation of this surcharge in the calculation of provisional tax. Provisional tax is simply that class of income tax which is paid by income earners who receive their income otherwise than by wages or salaries.

The basis of provisional tax is that it is payable in each year by reference to the income that one earned in the previous year, with the amount that is paid being subject to adjustment later in the light of the income that is actually received when the final calculation is possible. The payers of provisional tax are by no means confined to higher income earners. What matters in defining liability for provisional tax is not the amount of one’s income but rather its source- as I said, whether the income comes from wages and salaries on the one hand or from other sources on the other hand. In fact, provisional income taxpayers extend right across the income spectrum.

The Government’s intention in respect of the application of the surcharge to provisional tax payments, as it was stated in both the Budget Speech and in the second reading speeches for these Bills, was to take into account in the calculation of provisional tax for 1978-79 the increase of Vi per cent in the standard tax rates for 1978-79. On the face of it, there is nothing whatsoever that is objectionable about that proposition. There is no reason, certainly in principle, to treat provisional taxpayers any differently from the way any other class of taxpayer is treated. But I suggest to this Parliament that, whatever the stated intention of the Government might have been, this is not the real intention of the Government as appears in the Income Tax Assessment Amendment Bill’(No. 2).

On the face of this legislation, what the Government is about is the extraction from provisional taxpayers of very much larger sums of money than will be paid by ordinary nonprovisional taxpayers. I suggest further that the only possible purpose for this exercise is artificially to inflate government revenue for this finacial year, thereby, by yet another means, to conceal the real extent of the deficit which this Government will be accumulating.

How does this situation come about? It comes about as follows: The actual rates of tax applicable for everybody in 1978-79, if this legislation goes through- of course, I hope it will not- will be calculated by reference to rates as they stood at the end of 1 977-78, the last financial year, plus the Vh per cent surcharge. It will be remembered that the tax rates at the end of 1977-78 were in fact lower than those which prevailed for most of last financial year as a result of the February tax cuts to which I have referred. That is how the actual rate that everybody has to pay is calculated. We begin with the rate as it stood at the end of 1977-78 and add the Vh per cent surcharge. But it seems that provisional tax is not to be calculated on this basis; rather it is to be calculated on an idiosyncratic, eccentric, strange little basis of its own- a basis which bears no direct relationship to the actual rates that will be payable this year by everyone else, indeed, ultimately by provisional taxpayers as well.

The provisional tax calculation will begin not with the rate that was paid by everyone at the end of 1977-78, but rather with the rate that was paid over the whole of 1977-78. That is the rate- I am simplifying a very technical matter as much as I can- which was averaged out on a composite basis for the whole year, taking into account the ups as well as the downs in the tax rate for that year. Then, added to that, is 1.5 per cent of the income above a specified minimum sum which was actually received by provisional tax payers in the last financial year, 1 977-78. As a result of this calculation provisional tax will be levied this year not at the standard rate which everybody else is paying but rather at this odd little rate of its own. I say ‘little’ rate, but that is somewhat inaccurate as I shall demonstrate in a moment. It is a rate which has never been in operation for anyone paying tax in any year. It is a rate which will never be in actual operation for provisional tax payers or for any one else in this financial year or, as far as we can tell, in the future.

The significance of all this is that the provisional tax which will be derived from this calculation at most levels will be on a scale substantially greater than the actual amounts which will be payable. For example, figures which I have seen and taken out show that at the bottom of the range of income- let us say in the range $3,750 to $3,893- an extra amount of tax of not less than 30.6 per cent will be payable by provisional tax payers. That is the amount by which the provisional tax will be higher than the actual standard rate of tax which everybody else will be paying. In the middle range, to take out a figure, someone with an income of $12,532 to $16,000 will be paying provisional tax at a rate of 7.6 per cent higher than the actual rate paid by other classes of taxpayers.

For incomes up towards the top of the tree, say $32,000 to $33,216, the increased amount which will have to be paid by provisional taxpayers is 16.9 per cent higher than the standard rate. Once one gets over $33,216 the extra amount falls away again to 2.9 per cent, but of course, the actual dollar sums represented by that percentage amount here are quite substantial. These percentage figures which I have indicated add up in dollar terms to a very substantial sum both for the individual provisional tax payer who has to find this additional amount and for the Department of the Treasury which will be the cheerful recipient of, I suggest, not merely hundreds of thousands of extra dollars but millions of dollars as a result of this calculation. The question that remains to be considered is: Why on earth has the Government struck the rate in this way given that, to the extent that the provisional tax rate is more than the actual rate, then the Government will ultimately have to give the excess back, at least in the form of a credit on next year’s provisional tax payment.

One suggestion is that this is just another product of the Government’s by now familiar incompetence, another demonstration of that gap between aspiration and intention on the one hand and accomplishment on the other which has become such a routine feature of this Government’s performance. I suggest that the real motive of this exercise is simply that the Government is anxious to inflate its revenue artifically this financial year by any means possible so as to be able to conceal the true extent of its already alarmingly mounting deficit. For the future it will wait Micawber-like for something to turn up. For the present, any fiddle is better than none.

The second detailed aspect of this legislation which I wish to consider is one that, unlike the provisional tax question with which I have been dealing, has received a good deal of comment both in this debate and in the media. Because of the scale of the inequity which is involved I suggest it can stand rather more comment. I am referring to the question of taxation of accumulated annual leave payments.

Sitting suspended from 6 to 8 p.m.

Senator EVANS:

– I turn now to the question of the taxation of accumulated annual leave payments- that provision in the legislation before us which this afternoon Senator Townley, in one of those fits of candour that periodically condemns him to the respect of this side of the chamber, said that he ‘violently disagreed ‘ with. The legislation before us makes accumulated annual leave payments, taken as lump sums on leaving a job, no longer taxable as to 5 per cent, as has been the case hitherto, but rather as to the whole at the standard rate of 33% per cent.

The provision is an unhappy one in a number of respects; but its worst single aspect, as Senator Townley pointed out, is its retrospective application. It applies to any lump sum paid after 1 5 August of this year; but it is not confined to leave accumulated after that date. The reality is that leave that has fallen due in past years is to be well and truly taxable at the new rate. To suggest, as did both the Treasurer (Mr Howard) in his Budget Speech and the Minister for Education (Senator Carrick) in his second reading speech, that the provision operates otherwise than retrospectively is to engage in the worst possible form of logic chopping. The legislation applies, after all, to decisions that people have taken in the past to accumulate rather than actually to enjoy leave, decisions taken without any possible knowledge of what are now to be their consequences. People have postponed their leave, deferred their leave or abandoned their leave on the basis that they would not be penalised for so doing. They now find themselves paying very large sums to the Treasury, sums that they could not possibly have anticipated paying. The essence of retrospective legislation is that it operates so as to change the rules after the game has been played. This legislation is a classic example of that.

The scale of its consequences ought to be well and truly appreciated. Let us examine the case of someone with the average weekly earnings of $200 and an entitlement of four weeks annual leave. If he is able to save his holiday pay he accumulates such entitlement at the rate of $800 per annum. Over a period of five years he will become entitled to a lump sum of $4,000. In the past, when taxed as to 5 per cent only, such a lump sum would have attracted a taxation liability of approximately $66. Under the Bill, taxation will now have to be paid at the rate of 33’/i per cent, or 33’/£c in the dollar. On $4,000, the liability will amount to $1,340, a very large liability- one almost $1,300 greater than it would have been hitherto. This is, of course, in addition to all of the tax that the worker in question would have paid anyway by virtue of paying full rates while he was actually earning, rather than sitting back and enjoying his holidays.

What conceivable rationale could there be for introducing legislation of this kind? All we have been offered by the Treasurer and by the Minister in his second reading speech is the proposition that the taxation system should not be such as to encourage workers to defer leave. As a general principle, I for one, and the Labor Party generally, certainly would not disagree; but two very important qualifications which must be borne in mind in the present context undermine the validity of that proposition. The first is that, whilst there may be some justification for changing the law as it applies to the future, there can be no justification whatever for giving retrospective effect to this kind of provision. No amount of encouragement’ of the kind that is embodied in this taxation legislation will enable leave which could have been taken in the past to be taken. It is, as it were, water under the bridge. The worker is in the position of being fined for having deferred or abandoned his holidays. He will suffer serious financial consequences as a result of making a decision that was hitherto under the law both allowed and, indeed, encouraged.

The second reason why the rationale offered by the Minister ought not to be regarded as sufficient to carry the day on this provision is that, quite apart from the retrospective unfairness that I have mentioned, there are particular contexts in which this legislation will operate in a totally unfair way to the employees in question. Senators Wriedt and Button, in the course of their contributions this afternoon, have indicated some of those contexts. Let me take a few moments to mention another specific context in which the very nature of the work in question is such as to make the accumulation of leave both a normal and an inevitable part of the job. I am referring to civil engineering projects of a major kind, such as are in train in my own State at the Dartmouth Dam or in the metropolitan areathe Westgate Bridge and the underground rail loop construction, projects of such a scale and duration that at any time there are about 30 in operation around the country. They are projects which have an average life of three, four or five years and often are in locations which are remote from metropolitan areas. They are projects which traditionally have adopted a work pattern of shift work, overtime and six-day weeks and, more immediately pertinent, are of such a nature that workers at all levels, including staff and administrative people continue straight through the job from start to finish without taking annual leave en route.

At the end of such major civil engineering projects the normal course of events is for everyone to be retrenched. As a result, there is no prospect of accumulating long service leave. Nor is there provision for superannuation of any kind. The traditional practice on projects of this kind, which at any given time employ a very large number of Australian workers, has been to pay in a lump sum the accumulated annual holiday leave entitlement. The practice has been not to take holidays but rather to accumulate them in this way and then be paid a lump sum which is then used to tide the worker over until the next major source of employment can be found. Under present economic circumstances that is likely, of course, to be a very lengthy business.

Let me illustrate what this means by giving an example from just one project which I visited recently. I refer to the Dartmouth Dam construction in the north-east of Victoria. It is one of the largest earth and rock fill dam constructions in the world and has been under way for some few years. In the next few months it will be in the process of winding up. More than 350 workers at the site have accumulated between them nearly three-quarters of a million dollars in holiday pay entitlement. Under the old system, taxation of the order of $15,000 would have been payable on that sum. The amount that will now be payable will be of the order of $330,000. In short, if the Bill becomes law, more than $300,000 will be taken from those 350 workers. That will represent an average loss per worker involved of almost $1,000.

Senator Messner:

– That is not true.

Senator EVANS:

– It is true, and I challenge the honourable senator to go to the site, to talk to the men and to the management, to look at the figures and to see exactly what is involved. In many cases, as a result of the passage of this legislation more than $ 1 ,000 per worker will be lost. The most disgraceful aspect of it is that the Government’s decision in this respect has been made quite without warning, quite without notice and quite without any opportunity whatsoever for the workers in question to rearrange, if management indeed would have countenanced it, their work patterns and to make different decisions about how they would organise their work time.

One further point that ought not to be overlooked when one is considering the implications of this provision is that it is not only necessarily the workers themselves who will suffer; I suggest that it is a decision that will return to haunt this Government in another way. The way in which I suggest that will happen- it is not difficult to see this- is that this measure will not do other than add very substantially indeed to the construction costs of projects, particularly the kind about which I have been talking. It is to be recalled of course that the projects that I am talking about are very largely government financed. The result is that the extra costs, if any, will shift across as yet another burden on the treasuries of this nation. The reality inevitably is that those construction firms that are tendering for projects such as this will know that they will either have to change completely in the future their work methods which will involve substantial additional labour and overhead costs in so doing or, let us face it, they will have to provide some other form of financial incentive to the workers in question to compensate them for the loss that is involved in this kind of exercise. Some indication of what might be expected in this respect of course is the negotiation that was necessary to resolve the Westgate Bridge dispute which erupted when this legislation first came to the attention of the workers there. The point that I am making is that whatever the Government might pick up from this proposal by way of additional revenue as a result of increases in tax returns on these payments, it is almost certain that it is bound to lose in higher construction costs on projects of this kind.

The legislation is not only bad in principle because of its retrospectivity and because of the way in which it discriminates adversely against particular classes of workers of the kind that I mentioned and that Senator Wriedt and Senator Button before me mentioned, but, like so much else that this Government does, it is lacking, I would suggest, in both economic and financial sense. I urge, I suppose more in a spirit of hope than expectation, a number of other Government members to follow the lead that Senator Townley offered in respect of this matter before the suspension of the sitting. I urge them to summon up such reserves of honour, integrity and consistency as they can and indeed vote against their Government on this proposal. If that expectation is unsatisfied- knowing my colleagues on the other side of the chamber, I have no doubt that it will be- under those circumstances I can urge only that the Government summon its own reserves of integrity, or what is left of them, and reconsider this iniquitous decision.

The PRESIDENT:

– Order! I must point out that we are about to hear the first speech to be delivered in this chamber by Senator Rocher. I trust that the traditional courtesies that are extended on these occasions will be honoured. I now have pleasure in calling upon Senator Rocher.

Senator ROCHER:
Western Australia

– It is not unusual for someone who finds himself in the situation in which I find myself this evening to speak on matters which do not entirely follow the main theme of the debate. However, as there are few parliamentary occasions which do not have some relevance to taxation measures, my remarks this evening should not be entirely out of place. At the outset I wish, somewhat belatedly, to congratulate you, Mr President, on your re-election. I look forward to receiving your guidance and assistance in the years ahead.

By the judgment of the people of Western Australia I succeed in this place an eminent Australian citizen. The honourable Tom DrakeBrockman gave distinguished service as a senator for Western Australia for almost 20 years. During that period he held many positions in the Parliament and was a delegate on many occasions. It is not my intention to recite the details here this evening. However, I must mention his service as a Minister of the Crown over the three years ending December 1972 and, later, his term of service as Chairman of Committees. Tom Drake-Brockman saw service with the 10th Light Horse and subsequently with the Royal Australian Air Force. He attained the rank of flight lieutenant and was awarded the Distinguished Flying Cross. After almost half a lifetime of service to his country, during war and peace, he carries with him into his retirement my best wishes and, I am sure, those of other honourable senators for a long and relaxed future. In my reference to my predecessor I mentioned the office of Chairman of Committee. I should like formally to offer my congratulations to my coalition colleague, Senator Douglas Scott, on his election to that high office. I wish him well and, as with you, Mr President, ask for his tolerance and guidance where it is earned.

The hitherto generally accepted growth of governments in Australia has been fed by revenues which have increased year by year. Hence we have witnessed and, to a thankfully diminished degree, continue to witness the transfer of wealth from individual hands which created it to the hands of public instrumentalities which merely redistribute it. The number of consumers is being increased as the result of such redistribution while the numbers of producers is being diminished. Tax funded services which people regard as being free are partaken of without much thought as to the source of the funds. Although conceived as a compensatory measure mainly for the benefit of the less fortunate, the need for increasing tax collections to service the areas of social welfare, education and health has been shown on occasions to bring by way of response demands for more pay. That pay must come from wealth, the sum of which is declining.

There has been a general inability on the part of politicians to destroy the myth that there is such a thing as a free lunch, leaving little alternative for governments but to borrow money or to enlarge the amount of it in circulation. In doing so, as a consequence, it is sometimes said that the future is to some extent being mortgaged to pay for the present. To complicate matters we have suffered at the hands of the most insidious tax of all, which is inflation. The Fraser Government has achieved major progress in reducing the rate of inflation, which is all the more commendable if we look at the record levels of inflation which were reached during the term of the Labor Administration. As the power to distribute wealth is transferred to Australian governments, it is natural that individuals and groups in the community at large will look to those governments to meet more and more of their needs, whether it is reasonable to do so. Amongst the groups which are looking towards government to provide a panacea for difficulties, both of their own making and otherwise, are sectors from private industry. In that context I quote from F. A. Hayek in Individualism and Economic Order which was published in 1963. He stated:

There is some justification at least in the talk that many of the pretending defenders of free enterprise are in fact defenders of privileges and advocates of government activity in their favour, rather than opponents of all privilege. In principle, the industrial protectionism and the Government supported cartels and the agricultural policies of conservative groups are not different from the proposals for a far reaching direction of economic life sponsored by the socialists. It is an illusion when the more conservative interventionists believe that they will be able to confine these government controls to the particular kinds of which they approve. In a democratic society, at any rate, once the principle is admitted that the Government undertakes responsibility for the status and position of particular groups, it is inevitable that this control will be extended to satisfy the aspirations and prejudices of the great masses.

I think this is the most important sentence. It states:

There is no hope for a return to a freer system, until the leaders of the movement against state control are prepared to first impose upon themselves that discipline of the competitive market, which they ask the masses to accept.

While I do not suggest that those in government in Australia can, or even should attempt to, abruptly reverse long-established policies, we should at least, firstly, begin to examine those new measures which are proposed with a view to avoiding the mistakes of the past and, secondly, regularly review past measures to see whether they offend against the objectives inherent in the last sentence of the quote from Hayek. It is reassuring to note that the present Federal Government seems to want to make progress along those lines.

However, the problem for the survival of the market economy arises when the voters permit or encourage the expansion of government power to such an extent that private business can gain short-term profits through intervention into the competitive market by government officials. If a businessman is offered the opportunity to escape constant pressures of market competition it is unlikely that he will withstand the temptation. This is understandable because no one pays the entrepreneur to be ideologically pure; nearly everyone expects him to make a profit and, in fact, governments rely on it for a great proportion of their own funding. By direct political intervention into internal markets, governments possess an extremely potent device for expanding political power. Governments are well placed to transform markets into bureaucratic, regulated and even centrally directed organisations. Bureaucracy then will replace entrepreneurship as the principal form of economic conduct. Already there are examples of individual enterprises which either benefit or expect to benefit from government programs and which have short-run financial incentive to promote intervention. On the other hand, those enterprises whose affairs are adversely affected find it difficult to mount their opposition. In other words, beneficiaries of government intervention are concentrated and are likely to be immediately profitable; potential losers are widely spread around the country and their opposition is quite often ineffective.

It is generally fair to suggest that everyone engaged in private business, including owners, employees and investors alike, give a little more than they get back in terms of production and productivity. They certainly give energy, initiative, ingenuity and some enthusiasm, but there are commercial risks involved. For someone seeking to establish a business, which sells either a product or a service, and seeking to get into the market, capital is required for both productive and unproductive needs. Most people seeking to establish new businesses are prepared to take a risk but not many have enough savings of their own or even possessions which may be offered as security to borrow the money- the risk capital.

Banks are not in the business of taking risks because they have responsibilities to their depositors and shareholders. Governments are not supposed to take that sort of risk either because they have a responsibility to the taxpayers. Potential businessmen are left with the problem of finding someone who will advance risk capital. Suppliers of risk capital may work on the basis that six out of 10 of their investments will not succeed. Therefore, they must be assured of sufficient return from the four possible successes to make up for the failures. Their returns are frequently a long time coming.

Here we come to the crux of a problem which is typical of those confronting individual enterprise. Unless there are equity investors willing to back potential entrepreneurs, risk taking by individuals will become an extinct economic phenomenon. The misconception of profit has become so widespread and the supporters of government planning have been so influential that risk taking by individuals is a dying art. In many of the acts of government risk taking is discouraged. Without equity, the main source of creative wealth and, just as important, jobs is disappearing. Central planning and risk taking are poles apart. The more government plans the harder it is for individuals to make plans of their own. This is because investing entrepreneurs need to know the ground rules well in advance of committing funds and other resources. Meaningful long-term government planning is not achievable for a number of reasons, not the least of which is the normal life of a parliament which is limited to three years.

In Australia today we require the impetus that only a confident business community can generate. Part of that confidence can be created by the Fraser Government continuing, and continuing to succeed in, the fight to reduce inflation and interest rates. In the longer term, if we are to meet the needs of the needy and less fortunate in the Australian community we need to free private industry from the constraints of big government and from government intervention. Our present high standard of living was achieved because the incentive to produce was allowed to exist and, to some extent, because it was encouraged to exist.

Australia can do no better than to learn from the example of Western Australia in determining where its future lies. Economic development in my State blossomed in 1959 with the election of the Brand Government. Almost immediately the impact of .a motivated energetic government was felt on all fronts- agricultural, mineral, industrial and commercial- right across the State. During the 12-year term of the Brand Government, Western Australia ‘s population grew at an average rate of 3,000 people per month. This was the first wave of events which swept us in Western Australia to economic prosperity. A feature of this new era was the concept of total development. We also went beyond the point of making the most of passing opportunities and in aggressively pursuing them we created further opportunities. In the 12 years from 1959-1971 the net value of rural output nearly doubled, the net value of industrial production nearly trebled, while the value of mineral output was multiplied by 14. Mineral sales rose from $44m in 1959 to a staggering $646m in 1971. This period also saw the creation of a new farm every day for 10 years, many fine new civic buildings and 30 new townships. Western Australia emerged from medicant or claimant status to become a fully paid up member of the federation of Australian States. It more than paid its way then and has done so ever since.

In Western Australia we are now confronted with a second wave of development which will see the development of energy-oriented programs, such as the North West Shelf gas project and the uranium mining project at Yeelirrie and elsewhere. Since the Court Government assumed office in 1974, 27,000 new jobs have been created in Western Australia compared with minus 82,000 for Australia as a whole. Our population has grown by 7.1 per cent’ compared with a growth of 3.5 per cent for Australia. Unemployment in Western Australia has grown at only two-thirds the rate for Australia even though thousands of unemployed . from other States have been absorbed into Western Australia ‘s work force. Given a continuation of good government at State, and Federal levels, as is presently enjoyed, Western Australia will continue to force the pace in our sluggish national economy. ‘

Few would disagree that the issue of uranium mining, export and its possible enrichment has caused anxiety and some division within Australia. There are many reasons for this state of affairs and perhaps one is that the Labor Opposition at its 1 977 Perth Federal Conference decided upon a policy calling for a two-year moratorium on further uranium development- this, after having taken an enthusiastic development approach whilst in government. One of the most significant outcomes of the initial mood of enthusiasm was the decision by the Whitlam Government to make itself a partner in the development of the Ranger uranium site by signing the memorandum of understanding in October 1975.

I hope to see an ultimate divestment of this government holding, preferably by selling the Australian taxpayers’ shareholding to individual Australian investors. Of equal importance is the present impasse in negotiations with the Northern Land Council. Together, these two factors naturally enough have resulted in considerable publicity for the Ranger project. However, other significant deposits of this energy source exist within Australia. 1 have in mind the deposit at Yeleerie in Western Australia which is free of direct government participation and which is free of the concerns presently being encountered by members of the Northern Land Council and the Federal Government. Rather than be unnecessarily held up by these unique and localised problems, and in order that all parties concerned with the Ranger project have adequate time to consider their positions in a calmer atmosphere, it seems desirable to permit the development of projects free of such considerations and to allow them to go ahead to the development stage. Such a stance would serve to improve Australia’s international reputation as a reliable source of commodities; it would provide the necessary time for all involved with the Ranger project to be clear minded about their interests and concerns; and, finally, it would assist in alleviating present unemployment problems.

Mr President, I come to the Senate only two short years after the Australian electorate called on Malcolm Fraser and his Government to restore economic sanity to this great nation. We have since retreated from the brink and the difficult task of rejuvenating our economy is well under way. Despite recent history, I remain unconcerned with the controversies surrounding the existence and acceptance of the constitutional powers of the Senate. I am more interested in how this chamber acts to have those powers maintained and even reinforced. My acceptance of the Senate as a States house and as a genuine house of review is complete. As has been pointed out by others on more than one occasion, we in the Senate provide one of the more important checks and balances within our constitutional democracy. Our constitutional obligations can be further strengthened, by developing the Senate ‘s other powers of scrutiny and review of federal affairs.

The Senate remains an important cog in the machinery of parliamentary government and, as such, is one of the bulwarks of liberty and of private and public wealth and well-being in this country. While not being unreasonably resistant to change, we owe it to future generations to examine carefully proposals which may be said to alter our constitutional rights and objectives in the name of ‘progress’. The full implications of any alteration to the status quo must be the substance rather than the shadow in any future deliberations.

Mr President, the time is right for reversing the trend towards centralisation of powers in Canberra. I detect that the electors of Australia, and especially those in Western Australia, are calling for devolution, deregulation and true federalism. And good reasons exist for such a stance.

We have been through a period where the individual and combined efforts of so many have been squandered by the over-powerful and overorganised few. The aspirations and ideals of the majority can so easily be mischievously redirected towards unpublicised goals and ends.

We are fortunate indeed that the course of federal government has already been re-set. Already the Fraser Government has embarked upon a new path- one which seeks to take account of the underlying causes of recent malaise.

New federalism, by assigning to the federal and State parliaments certain defined rights and responsibilities, has set the stage for the long haul back. Programs that have been advocated over and over again since 1919, which call for the investiture of unlimited legislative powers in a single national chamber of delegates, have no acceptable relevance today. The effect of such a course would be only to exacerbate past errors. In the west of Australia, this course has not merely been rejected, it has been rejected twice- in 1975 and 1977. The doctrines and ideologies upon which such a program depends have never been accepted and, I submit, they never will be accepted.

In case honourable senators present should be led to the conclusion that in making this reference I am failing to express a bi-partisan view, I refer briefly to an article published recently in the West Australian by Mr F. J. S. Wise. Mr Wise was the Labor Premier and Treasurer of Western Australia during the years 1945 to 1947. His public career included the holding of ten ministerial portfolios in State Labor governments. In his article, Mr Wise calls for a return of powers and responsibilities to State and local governments, on a scale that even at the present stage of my Government’s new federalism policies does not envisage. I recommend the article to all honourable senators. It is not possible, or indeed advisable, on the occasion of one’s first speech in this place to attempt to speak on all, or even most, of the matters which are of serious concern. It is certainly the custom in the Senate to avoid controversy and I have attempted to do that tonight.

In concluding my remarks, I would like to pay a tribute to those who have contributed to my election as a senator for Western Australia. I acknowledge first of all that I would not be here without the support of the Liberal Party, including the staff and those on my pre-selection committee. Particular thanks are due to them and to members of Curtin division of my Party. I consider it a great privilege to represent my State as a senator and this is foremost in my mind when I express my gratitude to the electors of Western Australia who saw fit to give overwhelming support to their Liberal Senate team in general, and consequently to me. Perhaps most important of all, I acknowledge the support of my wife and children and thank them in advance for the personal sacrifices they will be called on to make due to. my absence from home on parliamentary business. I thank honourable senators for their indulgence.

Senator WALSH:
Western Australia

– With all the rabid proselytisers of free enterprise who seem to populate the Liberal Party of Western Australia, I am surprised that there was not a palace revolution when Sir Charles Court nationalised the Midland Railway Co. in the mid-1960s. The purpose of this package of Bills being debated now is to implement the tax changes outlined in the Budget, or more accurately the tax changes outlined in the Budget minus the numerous amendments which have subsequently been made to these tax changes at the instigation of the frightened rabbits on the Government backbench.

The most significant of the Bills of course is that one which imposes a 1.5c in the dollar increase in personal taxation, the Income Tax (Rates) Amendment Bill. I stress that it is an increase of 1.5c in the dollar in tax for every dollar of taxable income as distinct from the misleading but common description of this increase as a I’A per cent increase in taxation. In fact the amount of tax paid will increase for low income earners by about 4.6 per cent and for the highest income earners by some 3.2 per cent. Compressed as effects of the measure are into a 7-month period, many taxpayers will in fact have an 8 per cent increase in weekly tax deductions after 1 November.

This Bill in particular provides further evidence- if any evidence were needed- of the cynical dishonesty of this present Government. I remember very clearly staring in November and December of last year at page after page of newspaper advertisements showing a hand holding out a fistful of fivers- I understand there were 14 notes in that hand- and three inch banner print which said: ‘Liberal gives tax cuts- Labor gives nothing’. Underneath the fistful of fivers was the working class hand with nothing in it. It was highly appropriate, when the Treasurer (Mr Howard) was attempting to rationalise the contradictions- the about-faces- in the Budget at the National Press Club on 16 August last, that he was asked a question by the Canberra representative of the Adelaide Advertiser, which is not a newspaper which has any reputation of being even mildly left wing. It is a highly ‘respectable ‘ establishment paper.

Senator Teague:

– It does not support the Liberal Party.

Senator WALSH:

- Senator Teague says that the newspaper does not support the Liberal Party. I have never noticed it supporting the Labor Party. I do not know what it supports. Perhaps it supports the Progressive Party, the Workers Party or something like that. Certainly I have never noticed it supporting the Labor Party. The Canberra representative of the Adelaide Advertiser, when his opportunity came to ask a question, quoted to the Treasurer statements made by the Prime Minister (Mr Malcolm Fraser) prior to the 1977 election in which the Prime Minister had followed his usual line and said that if Labor got back into government it would increase income tax and that everyone knew that that would be disastrous and therefore the people could not let Labor get back into government. The representative of the Adelaide Advertiser then said to Mr Howard:

Mr Treasurer, can you give us an assurance that the l’/ic taxation surcharge will be abolished on 30 June 1979? If you can give us such an assurance can you give us any reason why we should believe you?

Why, indeed! In looking at the Prime Minister’s policy speech of 21 November 1977 one remembers these words:

From February 1st, further tax cuts will come in for every Australian wage and salary earner. This year alone, the person on average earnings will be saving $6 a week from-these two reforms . . . And because we have reduced the marginal rate of tax- it ‘s now worth working overtime again.

Then he said, thundering to the climax:

The Australian people will not accept a return to high taxes. The Government will bring taxes down further- not increase them.

Why, indeed, should anyone believe the Prime Minister or the Government? The fact of the matter is that at the time the Prime Minister made that statement he, above all people, must have been well enough briefed by the bureaucracy to know that unless there was to be a massive increase in the deficit for the present financial year taxation in one form or another would have to go up. He knew that when he said:

The Government will bring taxes down further- not increase them.

The plain fact is that, after this 1 ¥ic in the dollar increase becomes operative, everyone with an income between just under $100 a week and $238 a week will pay more tax than he would have paid under the tax schedule operative 12 months ago, and that includes about 80 per cent of taxpayers. The very rich, such as people on the Prime Minister’s salary, still get significant advantages, but about 80 per cent of taxpayerseveryone with an income from just below $100 a week to $238 a week- will pay more taxation under the schedule now operative for this financial year than he would have paid under the schedule operating 12 months ago. That, of course, does not count the effect of fiscal drag. Because of the so-called tax cuts of 1 February, the Government applied only 50 per cent indexation on 1 July this year. That was 50 per cent of a fiddled figure which had been discounted for a number of changes in the consumer price index which the Government said that it was not going to count for indexation purposes. In fact, the effective rate of indexation measured against the CPI was about 36 per cent.

As well as the increase in tax payable by the overwhelming majority of taxpayers- some 80 per cent- also operating is what Mr Fraser once called a massive unlegislated tax increase applying because of fiscal drag, because the Government has not adjusted the tax scales for changes in the consumer price index as it had solemnly promised to do prior to the 1975 election. Most of that is fairly well known. What is less well known is the long term performance of this Government which always has proclaimed itself to be a government of low taxes. Honourable senators will remember the Prime Minister saying:

The Australian people will not accept a return to high taxes. The Government will bring taxes down further- not increase them.

From February 1st, further tax cuts will come in for every Australian . . . Quite apart from our tax concessions to business our personal tax reforms have saved taxpayers $3,300m.

How does the Government’s record in the area of taxation fit the rhetoric which I have quoted and which is lying around in abundance? It is possible, because of changing levels of incomes and so on, to distort taxation figures in various ways and to misrepresent significantly the underlying reality.

I think that any person who has a conceptual understanding of these matters and who has any objectivity will recognise that an acceptable measure of the burden of taxation in the community is the amount paid in tax expressed as a proportion of gross domestic product. That is a highly relevant indicator of the true burden of taxation on the community. I think it could well be argued that it is the best indicator of the true burden of taxation. If we look at this Government’s actual performance in the taxation area as distinct from its rhetoric, we find that in 1974-75- a period in which the Liberal Party alleges the massive tax increases of the Labor Government were operating- 13.79 per cent of gross domestic product was paid in personal taxation. In 1975-76, under the last Labor Budget, total personal taxation equalled 14 per cent of gross domestic product. In 1976-77, after these alleged Liberal tax cuts had become operative, personal taxation equalled 14.55 per cent of gross domestic product. In 1977-78 personal taxation equalled 14.77 per cent of gross domestic product. In other words, in 1977-78 the figure was almost 1 per cent higher expressed as a proportion of gross domestic product or 7 per cent higher expressed as a proportion of itself than it was in the days of the Labor Government when allegedly, according to the Liberal Party, taxation had reached punitive and unbearable levels.

The inescapable fact is that there has been a steady increase in the proportion of gross domestic product paid in personal taxation ever since this Government came into office. We cannot, of course, compute a figure for this financial year because we do not know what gross domestic product will be and we do not know what taxation will be. It is possible that there could be a marginal fall in the proportion paid in personal taxation because of the massive increases in indirect taxation, with the increase in the excise on liquor and tobacco and of course the massive crude oil levy. I seek leave to have incorporated in Hansard a table which I have prepared from information contained in Budget Paper No. 1 and which shows personal taxation paid over the years, from 1974-75 to 1977-78 as a percentage of gross domestic product.

Leave granted.

The table read as follows-

PERSONAL TAXATION AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT

Senator WALSH:

– Whatever one believes about tax levels or the appropriate levels of taxation- it comes down ultimately to a value judgment as well as an economic judgment- it is important to recognise that there is an innate contradiction between a professed policy of low personal taxation and high tariffs. Indeed, anyone who claims to have a strong philosophical commitment to low taxation and simultaneously supports high tariffs is a fool or a knave, or possibly both. Tariffs are taxes to raise revenue or to subsidise domestic industry. In most cases, tariffs do both of those things and they are usually regressive measures. Of course, they also contradict all this Government’s rhetoric about maximising the choice of the individual in the disposal of his own income. Tariffs are taxes. I repeat that anyone who claims to have a strong philosophical commitment to low taxes and simultaneously supports high tariffs is a fool or a knave.

The major measure being debated, as I have already mentioned, is the Viz increase in tax for each dollar of taxable income which is, of course, for a significant number of taxpayers, an 8 per cent increase in the amount of tax which will be paid and for any taxpayer is more than a 2.8 per cent increase in the amount of tax paid. It is interesting to note also that the collection of this increase has been compressed into seven months so far as PA YE taxpayers are concerned. Normally, the actual receipt of funds by the Treasury is about one month behind the actual payment of wages by the employers. So to get in the full financial year’s revenue from this measure the Government has compressed the collection into seven months, starting from 1 January. The consequence of that little fiddle compared with the normal method of collecting PA YE taxation in a financial year is that there will be a cosmetic reduction in the deficit of some $77m. That little fiddle, of course, follows a trend or practice which has been well established by this Government, given its obsession with the deficit, of coming at every little accountancy trick that it can think of to achieve a reduction in the figure which is printed at the end of the year. It does not make any difference at all to any real economic indice.

Senator Button:

– It is a trendy practice.

Senator WALSH:

– Yes, it is a trendy practice. I think it could possibly be more accurately described as a shonky practice. I also note in passing that the reduction from 20 per cent to 10 per cent in the permissible error for self-assessment of provisional tax will, of course, have the same effect. It will have the effect of increasing revenue in the current financial year at the expense of revenue in the next financial year or in future financial years. One does not have to be terribly suspicious to realise that that would have been a factor motivating the Government in this change. Personally I think the change is justified. People can estimate their income within an error of 10 per cent quite satisfactorily unless unforeseen circumstances arrive. It is possible in nearly all instances for people to estimate satisfactorily their income for provisional tax purposes within a margin of plus or minus 10 per cent. If some unforeseen circumstances should arise which increases income beyond that estimate, I know that the Commissioner of Taxation takes quite a reasonable view of this and rarely imposes a penalty if it is a genuine or unforeseeable error.

I observe, following the recent publicity about impending significant borrowings by the States from overseas, that this also is in keeping with the new accountancy practices- if they can be called accountancy practices- which this Government has adopted of shifting as much expenditure as possible out of the Government accounts. Some commentators predict that the States will be borrowing $ 1,000m in the next financial year. If the previous practice had been followed and this money had been borrowed overseas by the Government then, of course, the figure published as the deficit would have increased by about 51,000m. The Government is following this practice, given its obsession with the deficit and its desire to fiddle with the figures, to present some cosmetic end-of-the-year result which it thinks will have some political advantages to shifting as much expenditure as possible out of the Government accounts- $ 1,000m from the States, $300m from Telecom Australia and so on.

I observe also that even with all that fiddling the deficit for the first three months of this financial year already has reached $2.5 billion. According to the present Minister for Industry and Commerce (Mr Lynch) three years ago, the correct way to estimate the likely end of year deficit at the end of three months was to multiply by four whatever the deficit was to the end of September. If we follow that practice which the present Minister for Industry and Commerce said was the correct practice three years ago, the impending deficit that the Government is now facing is $10 billion. It also of course will owe, after it has finished its massive borrowing program in Japan, some $4.3 billion overseas. That money does have to be paid back. Our total overseas reserves at the moment stand at just over $3 billion. If one were to extend Mr Fraser ‘s little homily on a national deficit being analagous to a household budget, or that sort of economic primitivism, into the international sphere one could indeed be arguing that the nation is now insolvent and will shortly be going into international receivership because overseas debts exceed our overseas reserves.

Senator Button:

– That is what Yeppoon is all about.

Senator WALSH:

-That is to get it back, is it? That apparently will be set against the $4.3 billion that we owe. I have little doubt that if the present Prime Minister were still in Opposition, if the roles were reversed, he would have no scruples about using that sort of argument concerning the level of overseas debt and the level of overseas reserves because it makes just as much sense as his analogies and his homilies about household budgets being analagous to national deficits.

Looking at some of the specific measures in this package of Bills, one matter of some importance is the amount of non-farm income which may be included for primary producers’ averaging. The amount which may be fully included has been reduced to $5,000 and then there is a shading in range up to $ 10,000. The Labor Party supports that measure. I personally wonder whether there is justification for even $5,000 being fully allowed, but we have not had sufficient time to study the implications of it to suggest a change. I do note in passing that that, of course, represents a partial correction for the panic which overtook the Government after it introduced its Budget last year and its sweeping taxation reforms which apparently had been cooked up in the Department of the Prime Minister and Cabinet without the advice of the taxation experts from the Treasury. Of course, some major blunders were incorporated in the changes which Mr Fraser thrust upon the Government and the community. The Government in its panic, knowing that an election was looming, made massive and overgenerous changes to the averaging provisions for primary producers in a way which left them wide open to exploitation. This measure is to correct partially the Government ‘s mistake of last year.

On the broader question of taxation, it is unfortunate that the most significant single tax increase which, in a full financial year, would have raised $800m in revenue, is not included in these taxation Bills. That, of course, is the massive increase in the crude oil levy which will affect the agricultural area for which I have a particular responsibility now. The cost of that measure to agriculture will be between three and four times as much as farmers get from the superphosphate bounty. I have noticed with some disappointment that the anger of the farmers throughout Australia about this totally unnecessary increase has been diverted by dragging a red herring across the trail. At the instigation of members of the National Country Party in particular who are in trouble in their own electorates the farmers have fallen for a trick and are campaigning for exemption for agriculture from this particular impost. It is probable that some crumb will be thrown to them in the near future and that they will be satisfied with it but their efforts of course are misguided.

This measure is a revenue raising measure. It has nothing to do with conservation. As the responsible Minister admitted in this chamber last month under interrogation in the Committee stages of a Bill on a related matter, this increase in the accrued oil levy is to gain revenue. It is not a conservation measure. It is also totally unnecessary. We have this impost on the Australian petroleum consumer- farmers, country people, everyone in the community- because the Government caved in under pressure from BHP and dropped the resources tax which it had promised in the 1977 Budget. As the Prime Minister himself admitted the morning after the Budget was delivered, with respect to Bass Strait oil it was never a question of a resources tax or no tax. It was a question of a resources tax or a levy. The Government did not have the courage to impose a resources tax on the windfall profits of the oil producers and others who are mining mineral bonanzas. Instead it decided to impose this tax on the people of Australia. I am very disappointed, and it does not say much for the perspicacity of the farmers’ leaders that they have fallen for this trick of agitating for some partial exemption for farmers. They will get a crumb out of that but what they ought to be doing is campaigning for the abolition of this totally unnecessary increase in the crude oil levy. They should stand up to the National Country Party leader, Mr Anthony, and the Senator for Utah and demand that they impose a resources tax on the windfall profits of Esso-BHP, the Utah Development Co. and similar companies and relieve the Australian consumers- farmers and others- of this impost which has been unnecessarily thrust upon them.

The last matter on which I wish to make some brief comments- I will be brief because it has been pretty well covered by Senator Button and Senator Evans- relates to the changes to taxation provisions for long service and accrued annual leave. It is interesting to note firstly that superannuation has been left alone. There are no changes to the taxing provisions for superannuation payments. If that is regarded as a concession I can see no difference between superannuation and the other benefits which have been changed, such as long service and accrued annual leave. It just seems to me that there is likely to be some difference in the class of people that they would affect. Those who will be affected by the higher taxation on accrued annual leave are far more likely to be blue collar workers who do not have superannuation schemes. The provision with respect to accrued annual leave is of course retrospective. Senator Townley has had something to say about this. I do not know how many other Liberals will have something to say about it.

I want to make it very clear that I am not against retrospectivity for taxation cheats. Indeed, my personal belief is that there should be a firm declaration of government policy that the definition of taxable income is subject to amendment at least during the current financial year and even for the previous year. If such a firm declaration of policy were made the taxcheating industry would be killed stone dead. It would not have a client left. But the people affected by this retrospective change to the taxation of accrued annual leave are not tax cheats. The Government itself had laid down the rules quite explicitly that accrued annual leave will be taxed although only five per cent of it will be liable to taxation. There was no cheating; there was nothing underhand, there were no shonky lawyers and accountants advertising their highly paid services to teach people how to cheat the Government. It was all done in the open and done honestiy. The Government has decided to crack down retrospectively on these people who were not trying to cheat and it is doing nothing really effective about the tax-cheating industry. But I guess we cannot expect taxation justice or any taxation morality from a government of which nearly all the senior Ministers, despite all their public posturing about cracking down on tax evasion, participate directly in tax dodging family trusts. (Quorum formed).

Senator MARTIN:
QUEENSLAND · LP

-I say in brief response to the speech we have just heard from Senator Walsh that he illustrates that the Labor Party is at least consistent in Opposition and in government. Its economic adventurism has not changed despite the lessons it should have learnt from December 1972 to December 1975. This Government- the Liberal and National Country Parties- in Opposition and in government has pursued a consistently responsible line towards the management of the economy of this country. It is so easy in politics to take a soft option at all times and to encourage people to believe that if they ask they will receive. That is the sort of encouragement that Senator Walsh had in his speech tonight. But in fact governments face difficult decisions and have to take a responsible line.

I believe the Government since its election in December 1975 has consistently been responsible to all Australian people in recognising that if our economy is not well and soundly based then we do not have a country with a soundly based future. Senator Walsh may rant and rave all he likes and he may indeed throw in his obnoxious references to certain individuals in the Cabinet, as he did right at the end of his speech and which under different circumstances would have merited the taking of a point of order. But the facts remain that the policies which have been pursued by the Fraser Government have moved a long way towards restoring this country to some sound basis of future operation. I believe the people of Australia understand that and accept it and do not accept that in 1975 this country had any such prospect. I believe that in 1975 Australians recognised that they were taken on a ruinous path by the previous Labor Government which chose the soft options at nearly every turn except when it panicked at the last stages of government and reversed some of its early decisions.

This evening we are debating specifically some taxation Bills. I do not intend to speak at any length. I rise to speak specifically to one issue and to make a brief comment on another. The issue on which I wish to comment is the income tax provisions proposal for the lump sum retirement payments for unused leave. As I said, the Government has faced many difficult decisions. Nearly all of them I support. However, I regret that the Government has deemed it necessary to pursue the course it has pursued in this particular case. I accept, however, that the Government has the right to pursue the course it has taken. I regret that the Government did not choose to pursue the same course with unused annual leave as it did with unused long service leave in relation to taxation.

I make it quite clear that I have no objection to the new taxation arrangements on long service leave and accrued annual leave as from 15 August. A condition prevailed previously whereby only 5 per cent of any lump sum was subject to tax. That condition is to be changed. I think it is reasonable that taxation should be paid on long service leave and annual leave as it would be paid if it were taken as such- that is, as holidays or as long service leave. I do not think it is unreasonable that a higher rate of tax should be paid on it. The Government has been generous in deciding that the payments should be taxed at no more than the standard rate. That I welcome because there could have been some anomalies and injustices otherwise. What I regret is that the Government has chosen, as I said, to treat holiday pay in a different way from long service leave.

I think that all of us know some cases of people who for reasons usually beyond their control have not been able to take their annual leave in full each year. Many awards allow workers to accumulate large amounts of annual leave. They do not require them to take their full amount of annual leave each year. People have accumulated leave for a variety of motives. Until this Budget it was possible for people to accumulate leave in the expectation that on resigning from a job they would pay a low rate of taxation on it. I know of cases where people have deliberately accumulated leave and have made decisions not to take their full leave so that they could get a lump sum payment at a low rate of taxation for sound financial reasons. The case that concerns me particularly, however, is that of the lower income earner who will resign from a job and take accumulated long service leave or holiday pay and possibly superannuation available to him. He will use that money for some very sound reason such as putting a deposit on a home. The money has accumulated in a way in which lower income earners could not otherwise have accumulated it. They put it towards their future security.

People have made decisions relating to the taking of their annual leave or long service leave according to the law which prevailed at that time. Many people have made the decision not to take that leave in the expectation that they would receive a financial benefit for good reasons whether it be for putting a deposit on a home, as

I have mentioned, a deposit which they would not otherwise have been able to accumulate, or to move into financially independent status through investment in a business. The rules have now been changed for those people. I think that is unfortunate. I do not think it is for governments to say that people ought to take their annual leave every year. For example, while tribunals might decide that there should be, say, four weeks annual leave for most workers, perhaps more for others, I do not think that we’can conclude that those workers necessarily have to take that amount of leave each year. Industrial tribunals also make decisions such as people not being required to work any more than 40 hours per week. Many people in the community work those 40 hours and then move on to a second part time job. They choose to increase their incomes that way. People make all sorts of choices about how they will improve their economic situation either in terms of income or future investr ment in lump sums. That is their right under the prevailing law.

It is unfortunate that a large number of people will have decided not to take their annual leave believing that they were thereby earning money which they could use in the future in a way that they had chosen to use it. Now that option is closed to them. I would have preferred the Government to have been equally generous with holiday pay as it has been with long service leave. I do not accept for one minute that annual leave is necessarily different from long service leave. People accrue long service leave. They are not required to take their long service leave as soon as they are eligible for it. They can accrue a very large amount of long service leave before they avail themselves of that benefit. We have not attempted to draw the moral judgment that they ought to be taking their long service leave just as there have been suggestions of a moral judgment that people ought to take their annual leave. It is a matter of individual choice.

Senator McAuliffe:

– I do not want to interrupt you–

Senator MARTIN:
QUEENSLAND · LP

– The honourable senator may not. It is a matter of individual choice -

Senator McAuliffe:

– What about the Queensland Railways Department? Some employees of the Queensland Railways Department cannot get annual leave. The Department will not let them take annual leave.

Senator MARTIN:
QUEENSLAND · LP

– I appreciate Senator McAuliffe ‘s trying to improve on my speech. I indicate to him that the aspect that he is trying to raise is the next part of my speech. He should be patient. As usual, he is a little ahead of me. I am coming to that point. As I was saying before I was interrupted, people ought to be able to make that choice. It is not for governments to sit in moral judgment. There are also those people who have not been able to take their full amount of leave. As Senator McAuliffe generously pointed out, the Queensland railway workers are in that situation. They are by no means unique. A number of individual cases have come to me over the past few weeks. One cannot categorise the types of worker involved but an individual arrangement has been entered into between employer and employee. The employee has agreed to a request from the employer to take less than the full amount of annual leave per year. That was a decision between the individuals involved. It was a decision which apparently carried some risk to the employee of which he was unaware.

In deciding that he or she did not wish to take the full amount of leave it is quite possible that one of the compensations for not having full annual leave each year in the minds of those employees was that at the time they took their full amount of leave entitlement at least there would be an additional financial benefit for them in that only 5 per cent of the amount of money involved would be subject to tax. In fact, workers who have not taken their full annual leave have earned a deferred income. Without any doubt they have earned that income in the past although it will not be paid until the future. There is an argument that that is the risk people run. Laws change. When making the decision in the past people were running the risk that the law would change in the future and that a new system of taxation would prevail. I will accept that argument as a principle but I do not see why the principle is different for annual leave as against long service leave. I would have preferred that the Government had applied the same principle to annual leave as it has to long service leave.

As I said earlier the decision the Government has made in relation to the rate of taxation at which the payments will be assessed, is a welcome one. I think that there would possibly have been room for the Government to look at discretionary cases. I know that there are difficulties involved but without a doubt many cases have come to us of people who have not been able to take their leave. Large sums of money have been involved. People have accepted the situation that they could not take their leave because there was some additional financial benefit for them. Most of that benefit has now gone. Nevertheless, that was one of the many difficult decisions the Government has made in relation to the Budget.

Finally, I wish to say a couple of words on the incensed rantings of Senator Walsh against the rate of taxation. It is ludicrous for any Labor member of Parliament, particularly one who was a member of the previous Labor Government, to rise in this place and to criticise the increased rate of taxation. The Labor Party increased taxation by stealth and deceit. It was well aware that it was increasing the taxation take enormously. It did not attempt -

Senator McAuliffe:

– I take a point of order. Senator Martin said that the previous Labor Government was deceitful.

Senator Lewis:

– True.

Senator McAuliffe:

– Little Sir Echo has now said that it is true. I recall that a few days ago Senator Walsh was removed from this chamber for using the word ‘liar’. What is the difference between ‘liar’ and ‘deceitful”? It is the same rose under another bush. Mr Deputy President, I think that Senator Martin should be requested to withdraw her remark about the previous Government being deceitful.

The DEPUTY PRESIDENT- I do npt believe that there is a point of order. The word has been used on a number of occasions on both sides of the chamber.

Senator MARTIN:
QUEENSLAND · LP

– Thank you, Mr Deputy President. Let me say that the Labor Government stealthily and possibly deliberately increased the rate of taxation. As I was saying, at no stage did it attempt to justify to the Australian people the fact that it had increased the taxation take and would make no move in the direction of reducing the taxation burden. The taxation provisions that we have introduced in government have been very much to the benefit of the average Australian taxpayer. I believe that Australians accept that governments have the right, as long as they do it clearly and honestly, to vary the rate of taxation. The Government has stated what it is doing in relation to the rate of taxation, as against the Whitlam Government’s methods of increasing taxation without giving any sort of explanation or rationale for doing so. I think that the .Australian people will accept that, given the present budgetary situation of the Government, we as citizens can tolerate a slightly higher rate of taxation in the next 12 months. The rate is not a high one and the taxation benefits that have been enjoyed by Australians under the Fraser Government are real ones, and the Australian people are well aware of this.

I commend to the Senate in principle most of these Bills. I have indicated my reservation in relation to one of the Bills. I indicate very briefly also that in the Bill relating to tax averaging for primary producers a great deal more might be involved than Senator Walsh said. I have had difficult cases brought to me by primary producers in Queensland, particularly beef producers. The Government has attempted consistently to make sure that the taxation system applies fairly to primary producers. The phasingout of tax averaging when income is earned from another source may have an unfortunate consequence. I emphasise that this might be so particularly in relation to people who have been in a very poor economic situation in recent years. In Queensland that is notably our beef producers. Many of our beef producers have had to go out and take often quite menial and not particularly highly paid jobs and have had to leave their wives and families on their properties.

Senator McAuliffe:

– Do you agree with the tax on annual leave payments? Say yes or no.

The DEPUTY PRESIDENT- Order! Senator Martin is speaking.

Senator MARTIN:
QUEENSLAND · LP

– The wives and families are running the properties so that they can maintain them. Alternatively, wives have had to leave the properties and take other -

Senator McAuliffe:

– You won’t give an answer.

Senator MARTIN:
QUEENSLAND · LP

- Mr Deputy President, I find Senator McAuliffe ‘s interjections tedious. I said for 15 minutes what my attitude is on the taxation on annual leave payments. This time Senator McAuliffe is 15 minutes behind me, not 2 minutes ahead of me. If he likes to read my speech in Hansard tomorrow he will find out what my attitude is. I am sorry that he was not listening when I indicated what it was.

Senator McLaren:

– We will find out on the vote.

Senator McAuliffe:

– Yes, that is when we will find out.

Senator McLaren:

– We will find out on the division.

Senator MARTIN:
QUEENSLAND · LP

– Honourable senators will find out in my speech; they will not have to wait until a division is called.

I was speaking on the matter of taxation in relation to primary producers and was pointing out that a large number of primary producers who in recent years have been in an extreme economic situation might well be upset by this provision. I think that the Government might have to look more closely at the actual effect of this provision. I do not have any particular objection to people earning income from another source if the money that they are earning is going back into the primary production area and into our country towns. I think the notion that Senator Walsh put forward when he criticised even the $5,000 to $10,000 income range being kept is quite false. I think that there are benefits for the development of our rural areas, which is the development of our whole nation and whole economy, in allowing people or giving them particular incentives to involve themselves in investment in primary production areas, even if they are not fulltime primary producers, regardless of whether their reason for not being fulltime primary producers is one of choice or one of necessity, as has been the case with many of our beef producers, particularly in Queensland although I think probably also in Western Australia in recent times.

In brief summary, I say that I support the general thrust of the Government’s Budget. I accept that many of the measures that it has been necessary for it to take, particularly in the taxation area, are justified and will have the desired and right benefits. I look forward, as all of us do, to a time when Australia will return to the prosperity which it knew before the time of the Labor Government, when a few more of those softer options can be taken up by government. Of course, it is always easier to be popular and to do the things that win plaudits; it is much harder to be responsible. The Australian Labor Party has shown by the contribution to this debate by its members that it has learnt nothing either in government or in opposition on that particular subject.

Senator McAuliffe:

- Mr Deputy President, I referred you to Standing Order 4 1 8 when I raised a point of order earlier. Standing Order 418 reads:

No Senator shall use offensive words against either House of Parliament or any Member of such House, or of any House of a State Parliament, or against any Statute, unless for the purpose of moving for its repeal, and all imputations of improper motives and all personal reflections on Members shall be considered highly disorderly.

Will you explain to the Senate why you ruled that there was no substance to my point of order when Standing Order 4 1 8 makes that provision?

Senator Missen:

– May I speak to the point of order, Mr Deputy President? It is perfectly clear- surely the honourable senator knows this-that that standing order relates to the use of an offensive word against a House of Parliament or against any member. Some days ago an offensive remark was made against a distinguished member of the other House.

Senator McLaren:

– Who said that he was distinguished? People at the election in New South Wales did not think so.

Senator Missen:

– I do not for one moment consider withdrawing that word. What I am saying is that the point of order raised tonight relates to a different matter. What was suggested -

Senator McAuliffe:

- Senator Martin said ‘a deceitful government ‘.

Senator Missen:

– What Senator Martin spoke about tonight was ‘a deceitful government’. That is perfectly permissible under the Standing Orders and does not in any way infringe Standing Order 418. It is a pure statement of fact, which an honourable senator is entitled to make in this chamber, and it does not come within Standing Order 4 18.

Senator Chaney:

- Mr Deputy President, I wish to put just one small gloss on what was said by Senator Missen. I disagree with him only insofar as my recollection of Senator Martin’s words is that she suggested that inflation amounts to a deceitful method of raising taxation. No imputation against any member, this chamber or indeed any statute was made. Therefore, there can be no point of order under Standing Order 418.

The DEPUTY PRESIDENT- I ruled in the first place that there was no point of order, and I do so again.

Senator GIETZELT:
New South Wales

– The Senate is being asked to give its assent to five tax Bills which are part of the 1978-79 Budget proposals introduced into the Houses of Parliament just six weeks ago. The significant issue is that the Senate, in a matter of a few hours, is being asked to give mature consideration to these Bills. They were rushed through the House of Representatives in one day- in less than one sitting day in terms of hours- and we are expected to do the same here. I make those comments in the light of the constant repetition by Government senators that the Senate is a House of review and that it should be seen in that light. Of course, what has happened is that the Government parties’ caucus room has been the House of review. Four changes have been made to the Budget because of its unpopularity and because of the obscene propositions of this Government which relate to the imposition of new taxes upon the Australian people.

I find it somewhat amusing that Senator Martin should refer to the Government of which I was a member, as being involved in some economic adventurism when this Government, in fact, is involved in economic dishonesty. What may be said about that so-called adventurism is that we sought to borrow sums of money abroad which would have enabled the Australian Government to purchase considerable assets for the Australian people. It would have established equity in the very rich mineral resources of this country. All Australians would have profited as a result of such public investment in gilt-edged resources of this country. I think it is about time that honourable senators on the Government side stopped referring to the endeavours that were made as being dishonest and deceitful measures. In fact, they were measures which were designed to give greater tax relief to the Australian people. The profits from such investments would have flowed back to the benefit of every Australian.

We are being asked to give consideration to these Bills but it is clear that the Government intends to ignore some of the very considered judgments that have been made in this debate today about the retrospectivity provisions in relation to lump sum payments for long service leave and annual leave. But what has been said by one honourable senator on the Government side and the reasoned case that has been put up by other honourable senators in this debate have absolutely no bearing upon the decisions that have been taken in the Government party room in respect of that issue. So, I think we ought to forget about the rhetoric that from time to time we have traded in this place to the effect that the Senate is, in fact, a House of review when we know, of course, that that is not the case at all. The purpose of the legislation is to raise additional revenue for the Government’s spending program.

As I understand taxation- if there is any equity in it whatsoever- its purpose should be to bring about some redistribution of wealth and to tax that section of the Australian community which is able to pay. Capacity to pay tax should be the cornerstone upon which all taxation measures should operate. They should take from the rich to distribute to the poor; to provide goods and services to those who are not able to obtain them because of their position in society. I find it somewhat ludicrous for honourable senators on the Government side to suggest that there is some equity in the five Bills that we are considering. Firstly, the Bills do not have regard to the capacity to pay. I think there has been ample debate to back up that assertion. Also, I think that in the debate we have been able to show that the Government’s promises upon which it was elected have been disregarded not only in this Budget but also in previous Budgets. The strategy upon which the Government has based its three Budgets since it has come to office is already beginning to fail.

The Government said that the economy was in such a state that we would have to develop the private sector and that to do this we would have to develop consumer demand.- Yet, this’ very strategy is negated by the five Bills that we are considering because $5 60m will be taken out of the hands of the consuming public, particularly out of the hands of those to whom payasyouearn taxation applies, at a time when the Government states that private sector activity is part of its aim. One of the few options available to this Government is to try to develop ari increase in consumer demand. So what does it do? It brings in taxation that reduces that capacity, failing to recognise that these very measures reduce the capacity, by some 60 per cent, of consumer demand in the Australian community.

Similarly, the Government’s proposals have maintained the general decline in the Australian building and construction industry. Of course, the Government’s proposals, particularly as they relate to deficit spending, have been designed to prune heavily public sector activity. So from where do we get growth if it is not from consumer demand and if it is not from public sector activity? There is only one other sector that can come into focus and that is the area of exports. They are the three principal areas in which we get growth. What do the facts show? They show that our export deficit for this last month is down by $3 70m. This is the second month in succession in which that fall has been recorded.

If we are to take any cognisance of what the community believes about the- Government’s strategy, we can look at a further- increase in bank savings deposits which are up by $ 160m in the past month. This means that there is now some $ 18,360m deposited in the savings banks. Of course, that means that there is no consumer confidence. This is reflected in the fact that we have a stagnation in retail sales despite the massive advertising spree which is taking place in the country to try to excite response from the consumers. So one of the cornerstones of the Government’s strategy is shown to be not working. If we need any further evidence of that the recent survey carried out by the Melbourne University’s Institute of Applied Economic and Social Research shows a drop of 12.2 points in consumer demand.

The Government has been paranoid about deficits. We have heard remarks about Budget deficits repeated time and time again in this place. If we look at page 203 of Budget Paper

No. 1 and compare the deficit in the three years in which Labor was in office- I am sure my arithmetic is not at fault; if it is I will be challenged by one of the honourable senators on the Government side- it shows that the total deficit in the three Labor Budgets between 1972 and 1975 was $6,445m. The deficit in the three Liberal Budgets in 1976, 1977 and 1978 was $8,886m, which is an increase of almost 30 per cent. This is shown in the Government’s Budget documents. Of course, the latest figures show that the Budget deficit is $2.5 billion. It is estimated by those who have some understanding of the reading of the current quarterly returns which are available to honourable senators that, as a result of PA YE tax revenue failing to realise the estimates of this Government’s Budget, the estimated deficit is likely to be exceeded by $500m by the end of this financial year.

Yet honourable senators opposite suggest that taxation was higher three years ago than it is today and that the big spenders were the Labor Government. They should compare the Budget documents for this year with those for 1975-76. They should look at the rates of tax per head of population. The documents are freely available. Under the Howard Budget PA YE is up by $83 per head of population compared with what it was three years ago under the Hayden Budget of 1975-76. Sales tax per head of population is up by $2 1 and customs and excise duties per head of population are up by $133. I refer not to taxpayers but to the figures per head of population. For the average, or the large family, those increases represent a considerable impost upon their budgeting.

I do not know whether one is entitled to come to the conclusion that Government members are illiterates- that they cannot or do not want to read- or that they simply want to mislead both the Senate and the Australian people about this Government’s approach to economic matters, by attempting to concretise the very difficult economic conditions that we are experiencing in this country, by suggesting that it all started in December 1972, and that here we are, three years afterwards, still reeling from the results of Labor’s administration.

If honourable senators opposite really wish to play a review role I invite them to amend these propositions on the basis of the debate that has taken place about the taxing of long service leave and annual leave. In fact, I invite the Government to go to the polls on the issue. After all, it went to the polls a year early last year, for no reason. It had a majority of some magnitude. There was no attempt in this place to amend or obstruct government legislation. LiberalCountry Party senators tried to do that consistently between 1972 and 1975 and placed the Labor Government- the first Labor Government since 1949- under seige. They tried to make the Labor Party’s attempt to govern almost impossible. Obviously Labor’s opponents were engaged in a conspiracy to bring about its downfall. Yet, with all the favourable conditions during this Government’s first two years of office it called an election a year early.

Every senator opposite who has spoken in this debate tonight has claimed that this Budget enjoys the confidence of the Australian people. I invite them to test that claim by rejecting one of these Bills, as they rejected Bills in 1975. Then they will see whether what has happened in New South Wales and what will obviously happen in Ballarat in a couple of weeks’ time represent accidents of history. It was tragic to hear poor Mr Coleman in New South Wales say, even on election night, that it was not the Federal Budget, or Mr Fraser, that was at fault. The more he allied himself to Mr Fraser, the more votes he lost. We had in New South Wales an incredible development: In seats such as Vaucluse and in seats north of the Harbour- some of which fell to the Labor Party before the night was over- where in years gone by the Labor Party had not even bothered to field a candidate, it will be necessary to count preferences to determine the outcome.

If senators opposite are so confident about the Bills and so confident that the Australian people support their strategy I suggest that they look at the level of bank savings. That shows that there is no confidence in this Government and that people are putting their money in the banks because they are afraid of the future. They see the need to keep a little money in reserve. I suggest that the results of the New South Wales election have intimidated senators opposite. After all, those results have confirmed the result of the Werriwa by-election, which was fought on federal issues. I am not aware that any member of the State Parliamentary Labor Party was involved in that campaign. It was fought on federal issues by members of the Federal Parliamentary Labor Party. That resulted in a 12.5 per cent swing to Labor. That result was subsequendy confirmed at the New South Wales election. It is easy for Mr Fraser to say that it was attributable to Mr Wran: It is nice and simple to say that he is a tremendous leader of great personal capacity and that that was the reason for the election result. If that is so, why do not senators opposite test that contention? Why do they not have the courage of their convictions and rhetoric and go to the polls now, as they did a year ago, to see whether their Budget strategy is acceptable to the Australian people and whether these tax Bills enjoy the support of the people?

These Bills put 55 per cent of Australian taxpayers who are in the PA YE classification in the position that they will be paying more tax. One of the reasons, I suggest, the Government is in difficulties electorally is that it has broken every election promise on which it came to power in 1975 and 1977. The Government suggested that it would retain Medibank but has now dismembered Medibank. When these Bills become law the levy will be abolished, but in its place every consumer of medical services will be paying more for them. He will in fact be paying the difference between 40 per cent or 85 per cent of the cost of each medical visit. The Government claimed that it supported wage indexation, but time and time again it has gone before the Conciliation and Arbitration Commission to argue about the flow-on effects of wage indexation. It said that it was in favour of tax indexation but has shown that it cannot be relied upon to put into effect honestly its election promises.

There has been some debate about the proposed increases in taxation on long service and annual leave. What is ignored is that one of the options before Cabinet was a proposal to tax superannuation as well. Fear of electoral reaction prompted the Government to introduce the increase in respect of long service and annual leave only. I do not want to reiterate what has been so ably put by those senators who addressed themselves to this problem today. This legislation will affect adversely casual workers who do not enjoy continuity of employment; those lower-paid workers in government instrumentalities who often are called upon to work on projects for a given period of time; and public servants, whether they be Commonwealth, State or local government, who because of particular demands- especially when there are changes in public administration as a result of elections and other factors- are called upon to work 52 weeks a year and cannot take their annual and long service leave. Without any warning, without any hint at all, this Government has moved in to take from these people who, in the great majority of cases, are the people least able to afford to pay an additional tax. These people find themselves having their emoluments which are provided for in their awards and often as rewards for long and faithful service brought into a new taxing area.

What has the Government done in respect of this Budget? It has not only reneged on its promises with respect to pay-as-you-earn taxation; it has not only introduced new legislation for taxing holiday savings; it has also moved to tax post-graduate awards. I find it rather hypocritical of Government senators to suggest that somebody who is receiving under a post-graduate award $4,200 a year, which is only about $80 a week, can afford to pay any taxation for the privilege of higher education. It ill behoves members of parliament who receive salaries in excess of $500 a week to talk about a section of people being brought into a new sphere of taxation which is proposed in this legislation.

Not only will they have to pay this form of taxation, but they will now fail to be covered by Medibank. If they do not have the wherewithal to join a health fund they will receive only 40 per cent of the money that may be expended on medical accounts in any one year. Of course we have seen the Government backing down on taxing the few lousy dollars that children earn as a result of their activities. We have seen the reintroduction of taxation for those people who are over 70 years of age and who have laboured all their lives to produce the wealth of this country. We have seen the introduction of taxes on money received by ex-servicemen. Of course we have seen the abolition of home loans deductibility. All of these measures show very clearly that this Government is not interested in an equitable taxing system. In a recent survey of wealth in Australia, carried out by Phil Raskall in 1977 he found that the top one per cent of population owns 22 per cent of personal wealth, the top five per cent owns 46 per cent of personal wealth and the top 10 per cent owns 60 per cent of personal wealth. In other words, in Australia today half of all Australians own less than eight per cent of the wealth. Yet if one examines the Budget documents and the basis upon which this legislation is being considered by the Parliament, one finds that it is that section of the community that owns so little of the wealth that is contributing the greatest proportion of taxes to the Government.

No legislation that this Government has put before the Houses of Parliament has stated that 22 per cent, 46 per cent or 60 per cent of those people who own the personal wealth shall pay taxes commensurate with their stake in the wealth sectors of our country. Yet that should be the basis on which any reasonable and decent government brings forth taxation propositions. Of course whilst I give some credit to the attempts of the Treasurer, Mr Howard, to close some of the tax loopholes and tax avoidance schemes, the facts are that a lot of the resources of this country are employed in an attempt to defraud all of Australia by the utilisation of tax avoidance schemes.

One only has to pick up newspapers and journals that deal almost exclusively with financial matters to find advertisements every week advising companies and individuals who are in the top brackets. But people who are covered by the pay-as-you-earn system cannot avoid paying their tax. It was rather amusing to hear Senator Messner say that people have availed themselves of a lump sum payment for their holiday pay as a tax avoidance scheme. We all know that those people who have the wealth in this country, those people who are in the top echelons of business and investment, are the ones who put their affairs in the hands of lawyers and accountants in order to avoid their taxation responsibilities.

The Leader of the Opposition, Mr Hayden, endeavoured to show in the House of Representatives that a resource tax would bring in $ 1 50m, a tax on windfall gains of the oil companies could bring in $340m, a capital gains tax on those people who make such gains over and above $200,000 could raise $300m, a tax on the highest level of personal income could raise another $200m and that closing exery tax avoidance scheme, whether it be family trusts or otherwise, and taking punitive measures against those people who persist in this form of avoidance would bring in $100m. That would represent a total of $ 1,490m. What does this Government do? In these Bills it seeks not to tax the wealthy, not to tax those people who are able to pay, but in fact it sets about raising $ 1 , 1 40m by direct and indirect taxation. That of course means that it is taxing the lower and middle income groups, the groups that any government that is worth its salt should set about to help and assist rather than to hinder in the way in which taxation systems operate.

One would hope that Government senators would really take the step that is available to them and, on the basis of the cases that have been placed before the Senate on this occasion, exercise some sense of responsibility and some sense of review and refuse to endorse the Government’s propositions which are inequitable, unfair and unsatisfactory from the point of view of those people whom we all claim to represent.

Senator ARCHER:
Tasmania

– I wish to speak only very briefly on this matter. I do not claim to be an expert on taxation measures any more than practically everybody in the community. In that regard I think we all claim to have an involvement and some degree of expertise when it comes to our own tax at any rate, or in what we believe other people ought to be paying. In my mind and I think in the minds of every taxpayer the main requirement is that taxation should be fair and that it should be spread equally. If we look back and see the way in which inevitably over a number of years there has been a taxation creep we see also that it has led to different people trying to avoid paying their fair share. Every time over the last many years that the Government has changed the taxation law in any way, all sorts of additional ways of evading tax have been created by people who should be paying it but who try to avoid it. A wide variety of schemes have been tried by all sorts of people. All this is done for one purpose and that is so that the taxpayer can seize an advantage at the expense of another taxpayer. It is not a matter whether the taxation system is right or wrong; it is how taxpayers can move away from the position where they should be paying tax. Quite clearly this Government has decided to strive for tax equality, to eliminate lurks that have crept in and to ensure that a reasonable tax is shared by more people.

Over the last few weeks I have had the opportunity to visit many of the mines and several factories in Tasmania and in most of these places I have chosen to discuss the Budget and some of the various taxation measures with the people in these places. As I stand before the Senate night I can say that I have not had one objection from any worker in any mine or factory I have visited in the last few weeks about the taxing of holiday pay. I feel sorry for those who have been caught up by this provision- there are some who have been and we have heard of them here tonightbut they represent a tiny minority of the taxpaying public.

Let us consider those who are not in the position of having their holiday- pay taxed in the way proposed under this legislation. Let us consider the vast majority of workers who have to take their holidays on an annual basis. They do not have a choice. They work either on an annual shut-down basis or in the sort of job where the conditions of employment are that employees have to take their holidays. These people represent the vast majority. What is their position? I do not think that we should have the vast majority of the wage earning people subsidising a minority of people who in many cases are the higher wages earners and have an opportunity to juggle their holidays on a basis that will be advantageous to them. There has been a certain amount of publicity in the Press in recent weeks of isolated cases. I remember one case where a certain gentleman got a cheque for $46,000 for long service and holiday pay not taken and on five per cent of this amount he would pay tax. However, the average worker in the mines and factories I have visited around Tasmania in the last few weeks would have paid the normal rate of tax on every cent of such a payment.

The workers to whom I have been speaking appreciate that the curbing of inflation and interest rates is the biggest bonus they can have. In the mines and factories they know that their jobs depend entirely on export sales, that export sales depend on price comparability with other countries, that price depends on cost stability at home and that costs depend on inflation. This evening while I have been listening to Opposition senators speaking in this debate I have not learned very much because I have not heard one worthwhile point to cause me to believe that there is anything unjust or undesirable about the taxation legislation we are debating. We have to consider whether we want our industries working. This is what it gets back to. If we want to have our industries working and want to have the people who are currently working in these industries continuing to work in them, we have to work towards national stability. We have to consider our international situation and how we line up with the other members of the international trading community.

We have seen over the last few years that in times of instability the first thing that happens is that export competitive items become noncompetitive and the people working in these industries are put out of work. I think that it would be fair to say that in Tasmania now the mines are doing well and the farmers are doing far better than they have done for some years. I also believe that it is fair to say that the position of most manufacturing industries is improving. I am not saying that this trend is universal by any means yet but, generally, things are far better than they have been for some years. If this is indicative of the situation around Australia, we will find that greater prosperity brings greater profit and that greater profit yields more taxation. We then will be able to spread the benefits of taxation more evenly amongst the needy. I trust that the temporary tax that has been imposed this year will, by the time it finishes at the end of June, have put a lot of industries into such a profitable situation that the burden of tax will be shifted into the industrial sector temporarily. My big aim is to see that tax generally is reduced to a level where incentive is again restored.

I have seen a lot of pensioners lately and have presented several petitions to the chamber. I have not had a discussion with one pensioner who has not agreed that inflation has been the biggest destroyer of the pension in the last 10 years. I have not had a discussion with one pensioner who would prefer to have a half-yearly, a quarterly or even a monthly pension determination ahead of retaining the current level of stability in the rate of inflation. All pensioners will be far better off knowing that interest rates are falling, that prices are stable, that rents are secure and that their savings are intact. When we compare the situation that exists now following the 1978 Budget with what it has been over the last five years, every pensioner in Australia should be very thankful that we are not in a position where, as somebody put it, we are seeing destruction by this insidious rate of inflation. While all this is happening, the Opposition is still preaching that we should spend and increase the rate of inflation. I do not understand how it can see that course as a reasonable alternative. I support the legislation.

Senator McLAREN:
South Australia

– I have a few remarks to make on these taxation Bills. I commence by reminding the Senate once again of the many statements made in this chamber by honourable senators on the Government side that they look upon this chamber as a House of review. We heard tonight Senator Rocher in his maiden speech say that this is a House of review and that he hoped that the powers of this House could be strengthened. Yet what is the situation with regard to these Bills? They were rushed into the House of Representatives yesterday, guillotined through the other place, brought into this chamber at a moment’s notice last night and today we are expected to debate and pass them. So where is this chamber acting as a House of review?

The Government’s actions give the direct lie to honourable senators opposite who so frequently stand in their places and say that this is a House of review. I have to repeat again that it is not a House of review. It is a rubber stamp when the Liberal Party is in government, and a House of frustration when the Australian Labor Party is in government, as we witnessed in 1975 and in early 1974 when honourable senators opposite then sitting on this side of the House went on strike and refused to pass budgetary measures, including taxation measures. Yet they have the audacity to come in here again and again and say that this is a House of review. I wonder how they can sleep straight in bed at night, when they make these statements. They know darned well that they are the most untruthful statements that any person could make. They are no more concerned about this place being a House of review now than they have ever been.

We heard Senator Martin here tonight, in answer to interjections from Senator McAuliffe asking what action she will take on some of the measures embodied in these taxation Bills, say: Oh, people can read my speech’. I interjected to say: ‘Yes, but words from the Liberal Party mean nothing; it is the votes that count’. Senator Martin will be hard put when she goes out and talks to the wage earner earning up to $300 a week who, I suppose, will get one of the worst shocks of his life when he gets his first pay next month and finds that he is up for an increase in taxation, not of VA per cent as the Budget says but in reality of 8.3 per cent, according to the tables that have been compiled by our shadow Treasurer. Yet Senator Martin said that the words that she has spoken will be enough to salve the anger of people who find themselves in this predicament. Of course, she will have to live up to the way she votes on these Bills when they are put to the test in this House. Words will not mean a thing. I also interjected and said that when a Liberal government was in office from 1970 to late 1972 it imposed a wine excise. Its members used to go around the countryside in the grape growing areas and say to their constituents that it was a terrible impost. Yet every time the matter of the wine excise was raised in this Parliament they voted for it. So honourable senators opposite talk with two tongues- one when they are out in the electorate and the other when they are here.

Senator Archer, who has just sat down, said that he has spoken to many wage earners and not one of them has raised any objection to the tax they will have to pay on accrued holiday pay. But, of course, Senator Archer would well know that those workers to whom he has spoken would not yet be aware that they will have to pay 33’/£ per cent on their accrued holiday pay on cessation of employment. Very few of them would have been put in that position since 15 August and therefore they are not yet aware of what they will be faced with, just as the ordinary taxpayer is not yet aware of what he is to be faced with after these Bills become law. Taxpayers will have to pay the increased taxation from the first pay packet they receive in November. I think Senator Archer had his tongue in his cheek when he said that he had spoken to many pensioners who had said to him that they would rather see the rate of inflation come down than get twice-yearly increases in their pensions. That is a lot of baloney, if ever there was any. Petitions are presented to this Parliament daily on behalf of pensioners and electors in this country complaining about the savage imposts by way of taxation and other measures in this Budget.

Pensioners know full well, as does every housewife, that whilst the Government claims that it has brought inflation down prices have not come down on the ordinary, everyday commodities that the housewife has to buy. Practically every week, when my wife goes to a grocer shop, a chemist shop or wherever she goes to buy the necessities for the week’s living, lc, 2c or 3c has been added to the prices of items. One can peel off the little price labels to see that underneath the price was 2c less last week than it is this week. The pensioners know that too. The Government can play around with figures and say that it has brought inflation down. Even if it is right in saying that it has brought it down, at what great expense has it been to the work force of this nation? Every month unemployment is increasing and people cannot find jobs anywhere to sustain themselves. They have to go cap in hand to apply for social service benefits in order to live a miserable existence. Yet we have Senator Archer saying that nobody has complained to him.

He might be like many other Liberal members of Parliament I know. They are never accessible to members of the work force and other people who have complaints to make; they are away doing a second job. They might be doctors, businessmen or optometrists. They are busy earning a second income. They might be farmers. We have plenty of farmers in the other place who are busy working on their farms. They are being paid by the electors, through taxation, to look after the interests of the electors; but they are never accessible to these people who want to lodge complaints. Senator Archer must have had his tongue in his cheek when he said tonight that he has never had complaints from people in industry, workers or pensioners as to the effects this Budget will have on them. The Prime Minister’s policy speech on 2 1 November last year, under the heading ‘Taxation Reform’, staled:

From February 1st, further tax cuts will come in for every Australian wage and salary earner. This year alone, the person on average earnings will be saving $6 a week from these two reforms. From February 1st more than 225,000 low income earners will cease to pay any tax at all.

That is the promise that the Prime Minister made. I heard Senator Walsh make reference today to the full page advertisements that appeared in the newspapers, with a hand holding a fistful of $5 notes, hoodwinking the people into believing that that was what was in for them, that that was what they could expect to gain by way of tax cuts if they returned the Fraser Government. The Government even set up a telephone answering service so that people who had some queries as to how much they would save if the Fraser Government were returned with its taxation policies could ring up and talk to some anonymous person on the telephone who would tell them what was in it for them. But I have not heard of any telephone service operating now so that people can find out how much more tax they will have to pay after 1 November.

Why is the Government not honest? Why does it not conduct this sort of service? It was prepared to do it to hoodwink the electors. Why is it not prepared now to tell them the truth? Why is it bringing in this measure and hurrying it through the Parliament without allowing it to be debated properly in the other place and here? It wants to get it through with the flick of a finger. It does not want public debate on it. Why is the Government not honest enough to inform the people who will be hit very hard? As I pointed out, anyone on an income of up to $300 a week will have a taxation increase of 8.3 per cent. Yet the Prime Minister promised in his policy speech that 225,000 workers on low incomes would be $6 a week better off. Of course we know that now, after the Budget has been introduced and when we have these taxation measures before us, that that is completely untrue. Because Senator Walsh in the eyes of the Government had the audacity here last week to use the word ‘untruth’ in another form, he was suspended from the Senate. Of course he was only saying the truth. These Budget measures give the complete lie to what was promised by Mr Fraser. But I am sure that the electors -

Senator Peter Baume:

- Mr Acting Deputy President, I believe that the honourable senator used an unparliamentary word then.

Senator Grimes:

– On the point of order, Mr Acting Deputy President: Senator McLaren did not use that word in relation to any individual in this House or in any other House of parliament. He used the term ‘it gives the lie’. That is not unparliamentary.

Senator Peter Baume:

– Is that what he said?

Senator Grimes:

– Yes.

Senator Peter Baume:

– Okay. I am happy.

Senator McLAREN:

– I can see that Senator Baume is very touchy on this matter. If he had any conscience at all he would be opposing these measures. But, of course, as Senator McAuliffe said to Senator Martin: ‘You are in bondage’. It is all very well for the Liberals to say that they are not happy with what is embodied in the Bills, but they are going to vote for them.

Senator Mcintosh:

– This is a House of review.

Senator McLAREN:

– It is supposed to be a House of review; but, as I have explained many times and again tonight, it is not a House of review when the Liberal Party is in government. My words were that this Budget gives the lie to the promises made by the Prime Minister during the last election campaign when he told the people that he would reduce taxation. What he actually did was reduce it for a few months. Now he has put on another impost. There is not only the impost on the weekly wages, as has been talked about; there also is the savage impost on people who have worked in industries where there is no superannuation scheme. Many of them nearing the eve of their retirement do not take their annual leave so that they will have a little nest egg when they retire. I think Senator Evans gave a perfect illustration in what workers employed on the Dartmouth Dam will have to hand over to this Government because of the impost of these taxation Bills.

The other case to which I wish to refer relates to a person who has not had an opportunity to join a superannuation scheme. Such a person in the last two or three years of his employment, knowing that he will retire whether on a Service pension at 60 years of age or on an age pension at 65 years of age, has endeavoured not to take his annual leave for three years so that on retirement he will receive three months’ pay which he will collect in one lump sum. Perhaps he will take his wife for a holiday, something which he has never been able to afford. Perhaps he will buy a refrigerator or put the money towards a new car for his retirement. What will happen? Will he get his three months’ pay because of these taxation measures? What will he end up with? He will end up with about two months’ pay. This Government has its greedy hand out. We saw in its election promise the Government handing out $5 notes. This Budget shows that the Government has its hand out taking money away from the people who can least afford it.

Senator Grimes:

– Retrospective taxation.

Senator McLAREN:

– I have no objection to retrospective taxation if the Government is getting into the wealthy people who can well afford to pay, but I think it is very despicable when the Government gets into the people on the lowest scales of income.

What about the young couples who were hoodwinked by this Government not only at the last election but also at the 1975 election when it promised to give them assistance in buying a new home? The Government told them that certain interest paid on home loans would be tax deductible. The scheme was in operation for a while. What does this Budget do to young couples who have purchased and furnished a home because of the undertaking given by this Government that certain interest on home loans would be tax deductible? The Treasurer (Mr Howard) in this horrible Budget- much stronger words than that could be used- under the heading of ‘Home Loan Interest Deductibility’ stated:

The contribution of this scheme to home purchase has not been matched by its cost to revenue.

Accordingly, interest on home loans that accrues on or after 1 November 1978 will no longer be allowable as an income tax deduction; there will be a saving to revenue of $3m in 1 978-79 and $3 1 m in a full year.

This Government no doubt convinced many young people to vote for it because it was going to give this concession. Now the Government will rip off the concession to the tune of $3 lm in a full year. No doubt many of these young people who went to the polls in New South Wales last Saturday have been made aware of this impost. That is why the Liberal Party in New South Wales was decimated. It was torn asunder. Not only did the electors tear the members of the Party asunder but now we see that they are fighting amongst themselves.

I saw a cartoon in a newspaper today which depicted a board with all the Liberals standing around with knives wanting to know whose turn it was to be leader next. They were throwing daggers. They were all frightened to show their hand because one of their mates might put a dagger through their chest. They are in absolute disarray. A lot of credit for the massive win has gone to Mr Wran. I do not detract from that. I would say that a lot of the support for Mr Wran was brought about by Mr Fraser. He helped us no end. The week before last in several speeches I implored people like Senator Messner not to unload Mr Fraser yet because he was too big an asset to the Labor Party. How true my words have proved to be. How true they were last Saturday in New South Wales. What a wonderful asset Mr Fraser is. Please keep him for another 12 months. He is turning the voters away from the Liberal Party in their hundreds of thousands.

The taxation measures contained in these Bills which will be passed tonight or tomorrow will have a big impact on the by-election in Ballarat on the 28th of this month. Mr Hamer, I am sure, will be wishing that he was not a blood relation of Mr Fraser after what Mr Fraser is doing to him. Mr Hamer will be in desperate straits. The writing is on the wall. It will not be long before we see another State Labor Government. Let us have a look at the money that this Government is ripping off those who can ill afford it. I want to refer to the anticipated revenue from the changed provisions concerning annual leave and long service payments. The Budget states:

The change to the taxation payments for unused annual leave entitlements is estimated to produce a gain to revenue of $70m in 1978-79 and $1 10m in a full year; reflecting the long phasing-in arrangements that are proposed, the change in respect of the taxation of long service leave payments is estimated to result in a revenue gain of $6m in 1 978-79.

In 1978-79, in respect of annual leave entitlements, the Government will grab $70m off the people who can least afford it. The Government will take a further $6m from those entitled to long service leave payments.

Honourable senators opposite say that they are part of an honest government. Honest is right. We will see how honest they are when they vote on these measures. If they are really honest in what they have said in this Parliament they will oppose these measures. They cannot get up and say that they are not happy with what the Government has done and then vote for this legislation. Mr Giles, the honourable member for Wakefield, when talking about the brandy excise, said that back benchers have no say; they are not contacted by Ministers; and they have no idea what their party will do in regard to the Budget measures. Of course that is completely different from the Labor Party. Every back bench member of the Labor Party, through its committees, has a hand in what the party does when in office. No measure is brought into the Budget unless members are well aware of it. The Liberals admit that they are kept completely in the dark.

Another matter that I want to mention refers to the manipulation, or however we wish to describe it, of the health insurance levy. Honourable senators should cast their minds back to when the Labor Party was in government and when it brought the Medibank legislation in amidst a great deal of hostility from the Australian Medical Association which had lobbyists running around this Parliament. We had a job to move around the place. One of the lobbyists still comes here every week. He was on the payroll of the AMA. He is an ex-Liberal member of Federal Parliament. We see him haunting the place. At the dme the lobbyists were running to and fro daily talking to the then members of the Opposition and convincing them what a terrible thing Medibank was going to be.

When the legislation came in here the then Opposition which had the numbers with the support of the Democratic Labor Party thought that it had played a master stroke when it deleted that portion of the legislation which sought to impose a 1.35 per cent levy on personal income tax to fund Medibank. The then members of the Opposition knocked back the levy and then thought that the legislation would be lost. What did we do? We accepted what had been done. When the Liberals sent us to the people Mr Fraser made another one of his promises that he has glibly broken that he would not interfere with Medibank. At the first opportunity what did the Government do? It amended the Act and imposed a 2 te per cent levy- 0.75 per cent more than what we had intended in the first place and which the then Opposition had knocked off. This Government then repudiated its election promises and imposed a levy of Vh per cent. Now it has seen fit to mutilate the whole legislation again. It has the community at large in utter confusion. People do not know where they are going; they just do not know what to do.

I have been contacted by a constituent of mine. I will not mention his name as it would not be fair to do so. I will quote from a letter I received from the constituent who has felt the impact of the Government’s meddling with Medibank in conjunction with the Taxation Office. The letter reads:

I am writing to you as a constituent, regarding my Income Tax assessment for the year ended 30 June 1978.

I am facing a most obnoxious taxation situation. I have received correspondence from the Australian Taxation Office, Adelaide, dated 18 August 1978, informing me that I am responsible for my wife’s Health Insurance Levy since she opted to stay in Medibank Standard. Further, I am told, I have to pay in addition a Health Insurance Levy of $ ISO for myself, even though I have receipts from Medibank Private indicating that I paid out $190.40 in the 1977-78 financial year for health cover.

My wife and I were married on 29th July 1977, and have now received an unpleasant delayed wedding present from the Australian Government to the tune of $490.40 for a year’s health insurance, simply because my wife chose to continue her membership of Medibank Standard when she married, and I continued in Medibank Private as a single contributor.

Further, my wife has had the Health Insurance Levy taken from her fortnightly pay after changing her name, as her paymaster himself apparently did not Know of the possibility of individuals being made to pay double for health cover when they married.

Making a person responsible for his or her spouse’s health cover must be confusing for many newly-married couples, particularly those who married in 1977-78. We are now being told at the end of the Income Year that, while spouses are independent for Income purposes and can submit separate tax forms, they are not when it comes to Health- even when they have no dependent children. However, if both partners take out private cover, they can pay separately and the one is not responsible for the other.

The trap which has been sprung for my wife and I- and from what I have learned from Taxation enquiries, for numbers of other newly-married couples- appears to hinge on the definition of the word ‘dependants’ in the Health Insurance Levy section of the Income Tax form.

I now find at the end of the Income Year in which I married, and after paying $190.40 to Medibank Private, that husbands and wives living together are defined as ‘dependent upon each other’, and that as he therefore has a ‘dependent’, the husband must pay the Family Rate under the Health Insurance Levy. The Income Tax office, has quoted Section 25 1 R ( 1A) and S25 IV (2) of the Act to me to justify its actions.

What is distressing about this legislation is that the literature on the health insurance changeover of 1.10.76 does not warn couples marrying of the dangers of paying double for health cover. It is not good enough to learn of the law at the end of the Income Year, when a large sum of money has been paid out to a private health fund.

I have in front of me the booklet issued in August 1976 by the Department of Health on the eve of the changeover to the Levy system, bearing the title ‘How to choose the health insurance cover that’s right for you’. Nowhere does the booklet tell a person that his spouse is his ‘dependent’ for Health Insurance Levy purposes. All through the booklet, the subject is skirted around. While there is a Table on pages 14 and 15 headed ‘Husband and Wife’, nowhere is it stated that the one is the ‘dependant’ of the other, and that the Husband and Wife’ example is what they must pay in the actual case.

The Australian Taxation Office appears to argue that legally people are held to know their obligations under the Income Tax Act. However, in the confused circumstances of the 1976 changeover in health insurance, this seems unreasonable particularly as a booklet such as the above was issued in order to reduce confusion and ‘explain’ people’s obligations.

What appears to have happened is that in removing Medibank, a particularly unfair anomaly has been created and has gone uncautioned in the official literature supposedly guiding people ‘s health insurance decisions.

Surely, if the people have been trapped but can show they have contributed to a health fund, they should be able to have the Levy refunded (or health contributions refunded).

I have raised this matter with you, Senator, because I believe I have been placed in an unjust situation. I would be most grateful if you could make representations to the appropriate Minister on my behalf to have the situation rectified.

If something can be done, this most unpleasant delayed wedding present can be lifted from an apparently significant number of couples who married during 1 977-78.

I wrote to the Minister about this matter last month but as yet I have not yet received a reply. I think it bears out what I said earlier that the way that this Government has meddled with Medibank has created no end of confusion in the minds of the people who deserve to have the best medical cover that they can get. I do not make any apologies when I say that I think that the Health Insurance Act that the Labor Government brought into being was the best health cover that could be obtained for any person living in this country. But because the present Government is subservient to the private health funds and the Australian Medical Association it has tinkered with health insurance until it is a system now which reeks of utter confusion. Furthermore, as I said earlier, it is another promise that the Government has repudiated. It gave a solemn promise to the electors in 1975 that it would not interfere with Medibank. I think we have now seen two or perhaps three changes to the system since this Government came into office. I forecast that it will not be long- perhaps six months or less- before the Government makes another change to Medibank and further confused the people of this country who need to have decent medical cover. The Budget, particularly the taxation measures which we are discussing tonight and the health insurance measures should not have been introduced in view of the promises that the Government made to the electors.

I conclude by saying to honourable senators opposite who have stood and criticised these taxation measures tonight that I look forward to them taking remedial action in this Senate and joining with the Labor Party- the Opposition- in opposing the measures. If they do not join us they will go down in history, as some of their colleagues did in years gone by, as saying one thing in the electorate, having their words and speeches recorded in Hansard and then, as the record will show, voting in the opposite way to what they had been preaching, not only outside the Parliament but also inside this Parliament.

Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP

– in reply- This has been a long and quite interesting debate. There have even been some points of emotion. I think the high emotional points have been those where the Opposition evidenced conversion to a low tax stance. It does appear that at least a number of members of the Opposition suddenly have become converts to the idea that people should be taxed less. I suspect that if that news filters out into the community it will be regarded as very good news indeed. But the fact is that a number of Opposition senators have mounted an attack on the Government mainly on the basis that it has, in this Budget, chosen to increase personal income tax on a temporary basis by one and a half per cent. That has been attacked as a going back on election promises which related to the lowering of taxation. Quite frankly, I find it a little ludicrous to hear out of the mouths of honourable senators opposite complaints about the levels of taxation under this Government when the statistics are so clear that tax collections under their own government increased so mightily. These facts are well known and well established. I will put some statistics before the Senate shortly to demonstrate that fact.

The Labor Government made no promises at all in this area because its performance was one of stealth. The Whitlam Government chose to increase the take of income tax simply by taking advantage of the dramatic increase in the rate of inflation. Again, that is not a matter of argument; that is a matter of fact. It seems highly unlikely that the Labor Party would have gone out to the community promising to increase taxation through inflation. Its silence on the subject does the Labor Party no credit at all. The fact of the matter is that it did nothing to introduce tax indexation which would have reduced the increase of taxes on Australian citizens. It simply stood back and took the benefit of the vastly increased income tax collections during those years.

The record of the present Government is clear. It is also clear that the Government regrets that it has to introduce even a temporary surcharge of this nature. It regrets it because it is committed to lower taxation. But the facts again are clear. In the first year of this Government, full tax indexation was introduced at a cost to revenue of $990m. In the following year the cost of full indexation and the reform of the rate scale was

INCOME TAX-TABLE COMPARING THE TAX PAYABLE ON SELECTED INCOMES FROM 1952-53 INCOME YEAR FOR A TAXPAYER WITH DEPENDENT WIFE Income Tax Payable on Selected Incomes for the year ended 30 June (S) $ 1,370m. In 1978-79 there will be half indexation and rate scale reform which will cost us about $700m. In fact there is a massive decrease in the amount of tax which would have been collected but for the reforms of this Government. The fact that it has been found necessary to impose a one and a half per cent increase for the current financial year is a simple demonstration of what the Government has always asserted is one of the benefits of taxation. If a government wishes to collect more revenue it has to go before the Australian people and increase the tax rate. It does not increase the tax rate simply by taking advantage of inflation. It is also clear that even taking into account the temporary increase of one and a half per cent, all taxpayers will still pay lower tax for 1978-79 compared with what they would have paid on the same income in the previous tax year. I have here two tables prepared by the Australian Taxation Office which set out figures which are instructive. The first table compares the tax payable on selected incomes from 19S2-S3 for a taxpayer with a dependent wife. The second table shows the same comparison for a taxpayer without dependants. I seek leave to incorporate those tables in *Hansard* because they set out quite simply the taxation record of this Government. Leave granted. Income 1973 1974 1975 1976 1977 1978 1979 1,200........ 1,500........ 60.12 60.12 2,000........ 114.37 114.37 2,500........ 191.69 191.69 4.40 3,000........ 283.35 283.35 74.40 3,500........ 389.42 389.42 174.40 4,000........ 510.74 510.74 274.40 4,500........ 649.50 649.50 404.40 135.00 5,000........ 801.00 801.00 534.40 270.00 81.80 5,500........ 962.58 962.58 694.40 445.00 216.80 47.94 6,000........ 1,129.95 1,129.95 854.40 620.00 379.80 193.37 108.84 7,000........ 1,492.14 1,492.14 1,234.40 970.00 729.80 518.45 443.84 8,000........ 1,879.86 1,879.86 1,659.84 1,320.00 1,079.80 855.94 778.84 9,000........ 2,290.94 2,290.94 2,125.28 1,670.00 1,429.80 1,193.43 1,113.84 10,000........ 2,728.17 2,728.17 2,605.28 2,020.00 1,779.80 1,530.92 1,448.84 11,000........ 3,195.25 3,195.25 3,110.72 2,470.00 2,129.80 1,868.41 1,783.84 12,000........ 3,677.25 3,677.25 3,630.72 2,920.00 2,549.80 2,205.90 2,218.84 13,000........ 4,199.95 4,199.95 4,169.80 3,370.00 2,999.80 2,570.68 2,453.84 14,000........ 4,745.95 4,745.95 4,719.80 3,820.00 3,449.80 2,966.47 2,788.84 15,000........ 5,291.95 5,291.95 5,269.80 4,270.00 3,899.80 3,362.26 3,123.84 20,000........ 8,229.20 8,229.20 8,201.60 7,020.00 6,454.80 5,644.80 5,273.72 25,000........ 11,415.74 11,415.74 11,387.04 10,020.00 9,324.80 8,207.15 7,648.72 Income 1973 1974 1975 1976 1977 1978 1979 50,000........ 27,675.91 27,675.91 27,676.12 26,270.00 25,412.30 23,340.92 21,873.48 100,000........ 61,025.91 61,025.91 61,176.12 58,770.00 57,912.30 54,798.42 52,623.48 Tax threshhold..... 1,041 1,041 2,105 4,001 4,698 5,336 5,676 INCOME TAX-TABLE COMPARING THE TAX PAYABLE ON SELECTED INCOMES FROM 1952-53 INCOME YEAR FOR A TAXPAYER WITHOUT DEPENDANTS Income Tax Payable on Selected Incomes for the year ended 30 June ($) {: .speaker-EF4} ##### Senator CHANEY: -The tables also indicate another substantial reform which has been effected by this Government- that is, the increase in the level of the tax threshold. This has had the effect of exempting a large number of taxpayers and, most importandy, very low income tax payers from paying any tax at all. In 1979 we have a tax threshold of $5,676 for a man with a dependent wife. So low income earners and those who are dependent on social security payments and benefits of that nature, the people for whom **Senator McLaren** properly expressed concern, who have an income below $5,676 for man and wife pay no tax at all. For a single person, if the income received is under $3,894, no tax is paid. This is a very substantial increase in the tax threshold which applied under Labor. Once again it can be written ofT by the Opposition now as being irrelevant, but I would suggest that it is of very great relevance to the taxpayers concerned. There is another matter to which I wish to refer and that is the way personal income tax collections in this country have increased over recent years. I have another table which has been prepared by the Australian Taxation Office which sets out the amount of income collected from 1968-69 to 1978-79. It then proceeds to adjust these figures in constant terms and sets out the percentage change in the amount of income tax collected year by year. That is a very instructive table. If one looks at it, one will find that during those halcyon days of the Labor Government when our newly converted low tax people were in office- most of those who I see before me now were sitting opposite me in the Government benches at that time- in 1973-74 in constant terms there was a 20 per cent in income tax collections. We find that in constant terms in 1974-75 there was a 19.9 per cent increase in income tax collections. What is the position this year, the year in which they are so bitterly complaining about what this Government has done? This year there will be a minus 0.3 per cent change- I repeat, minus 0.3. The fact is that since this Government has been in office the rate of income tax has been controlled through indexation. That fact is that ordinary income tax earners have been able to maintain the same proportion of their earnings and there has not been the tax increase which was in effect under Labor. I seek leave to incorporate that table in *Hansard.* {: .speaker-KTZ} ##### Senator McLaren: **- Mr President,** before leave is granted I ask the Minister whether the senator in charge on this side of the House has seen the table? {: .speaker-EF4} ##### Senator CHANEY: -- Yes. The tables were shown to **Senator Grimes** and he agreed to their incorporation. {: .speaker-KTZ} ##### Senator McLaren: -- I do not object but every time we want to incorporate something that procedure is followed. {: .speaker-EF4} ##### Senator CHANEY: -That is the procedure. I showed the tables to **Senator Grimes** and he indicated that he had no objection to their being incorporated. Leave granted. *The table read as follows-* >PERSONAL INCOME TAX COLLECTIONS > >Collections of PA YE and other individuals income tax less PA YE refunds (Statement No. 6 attached to the Budget Speech). > >Budget Paper 9 and Australian National Accounts, 1976-77. > >Budget estimate of collections. Deflator assumes a 7.0 per cent increase in line with the discussion in Statement No. 2 attached to the Budget Speech. {: .speaker-EF4} ##### Senator CHANEY: -Thank you, **Mr President.** The main point of attack upon this Bill was made by **Senator Walsh** who said that the main issue was this 1 *Vi* per cent increase in income tax in the light of the Government's commitment. The major point to be made is the point which is borne out by these tables. The burden of income tax has been reduced enormously under this Government. The surcharge is in fact a proof of the virtue of indexation that was promised by this Government. In other words the Government has had to go before the Australian people and say: 'On this occasion we need additional revenue. Therefore it is necessary for us to increase tax rates'. There has been a degree of scepticism expressed on the other side of the chamber about the period for which the surcharge or increase will apply. I can only point out to the Opposition and to the chamber that the legislation itself specifically provides that it should apply only for this year. A couple of other matters with which I wanted to deal were raised by previous speakers. Firstly, **Senator Townley** was concerned about the basis of taxing retirement payments for annual leave. He instanced a case of an employee who might retire on 1 July 1979 and receive a payment of $1,000 for unused annual leave and although receiving no other income that income year be liable to a tax of $320 as a consequence. That is a very good example of how misleading some of these hard cases can be. In fact a taxpayer in that situation would pay no tax at all in the circumstances that **Senator Townley** has outlined. If that were his only income, he would be below the tax threshold and would not be liable to income tax. {: .speaker-9V4} ##### Senator Grimes: -- What about a month later? That is a phoney argument. {: .speaker-EF4} ##### Senator CHANEY: -- The precise example given was a man who retired at the beginning of the financial year and received his money. The fact of the matter is that in the view of the Government- in my opinion that view is correct- the government does not consider that the annual leave measure is a retrospective change in the law. I have spoken to a number of people about the change which has been made. The interesting thing is that people always refer to the belief that people 's expectations have been dashed. They believe that they were proper expectations of what they thought was going to be their position in the future. Of course, any tax change affects the expectations of taxpayers. For example, when one enters into a contract for employment at a certain rate of pay one expects to get the salary and presumably one expects to be taxed on it. The fact of the matter is that the rate of tax can be varied at any time. On any proper definition of retrospectivity this is not a retrospective measure. {: .speaker-9V4} ##### Senator Grimes: -- From 5 per cent to 33 W per cent? {: .speaker-EF4} ##### Senator CHANEY: -The 5 per cent is something which in prospect might apply to a lump sum received on retirement. {: .speaker-K6F} ##### Senator Cavanagh: -- What you are saying is that people should not have any expectations while this Government is in power. {: .speaker-EF4} ##### Senator CHANEY: -- It is interesting to see the Opposition so anxious about this matter. I hope its concern in the field of taxation remains. But I have yet to hear members of the Opposition object when for example there is an adjustment to company tax which results in additional company tax being paid on the previous year's income. That is certainly in my view a genuine case of retrospectivity. {: .speaker-9V4} ##### Senator Grimes: -- We are talking about individuals who will be affected on their retirement, not companies. Don't use false arguments. {: .speaker-EF4} ##### Senator CHANEY: -- Apparently companies are immaterial to the Opposition and therefore it rejects the example. The fact is that the law is being changed with respect to future payments of income and not with respect to past payments of income. There is no ground for an argument on the basis of retrospectivity. **Mr President,** since the hour is late I do not propose to deal with the other matters which have been raised in this debate. I understand that there will be a debate in the Committee stages. That will provide an opportunity to put views. I thank those honourable senators who have supported the legislation and I commend the Bills to the Senate. Question put- That the Bills be now read a second time. The Senate divided. (The President- Senator the Hon. Condor Laucke) AYES: 32 NOES: 24 Majority...... 8 AYES Archer, B. R. Carrick, J. L. Chaney, F. M. Collard, S. J. Davidson, G. S. Durack, P. D. Guilfoyle, M. G. C Hamer, D. J. Jessop, D. S. Kilgariff, B. F. Lajovic, M. E. Laucke, C. L. Lewis, A. W.R. MacGibbon, D. J. Martin, K. J. Maunsell, C R. Messner, A. J. Bishop, R. Button, J. N. Cavanagh, J. L. Coleman, R. N. Colston, M. A. Elstob, R. C Evans, G. J. Gietzelt, A. T. Grimes, D. J. Harradine, B. Keeffe, J. B. McAuliffe, R. E. Mcintosh, G. D. Sheil, G. Bonner, N. T. Knight, J. W. Missen, A. J. Puplick, C J. G. Rae, P. E. Rocher, A. C Scott, D. B. Sim, J. P. Teague, B. C. Thomas, A. M. Townley, M. Walters, M.S. Watson, J. Webster, J. J. Withers, R. G. Young, H. W. Teller Baume, Peter McLaren, G. Mulvihill, J. A. CByrne, J. Primmer, C. G. Robertson, E. A. Ryan,S.M. Tate, M. C Walsh, P. A. Wheeldon, J. M. Wriedt, K.S. Teller Georges, G. Melzer, J. I. McClelland, Douglas Sibraa, K. W. AYES NOES Question so resolved in the affirmative. Bills read a second time. Senate adjourned at 10.55 p.m. {: .page-start } page 1253 {:#debate-43} ### ANSWERS TO QUESTIONS The following answers to questions were circuh {:#subdebate-43-0} #### Unemployment: Migrants (Question No. 634) {: #subdebate-43-0-s0 .speaker-3V4} ##### Senator Chipp: asked the Minister representing the Minister for Employment and Industrial Relations, upon notice, on 16 August 1978: {: type="1" start="1"} 0. 1 ) What is the breakdown of unemployment figures, in terms of migrant groupings, in the following Federal electorates: (a) Lalor; (b) Wills; (c) Melbourne, (d) Melbourne Ports, (e) Burke; (f) Batman; (g) Maribyrnong; (h) Gellibrand; and (i) Scullin. 1. If figures are not available for every migrant grouping, what are the figures for the major groups. {: #subdebate-43-0-s1 .speaker-8G4} ##### Senator Durack:
LP -- The Minister for Employment and Industrial Relations has provided the following answer to the honourable senator's question: {: type="1" start="1"} 0. and (2) Information on unemployment, including a breakdown into migrant groupings, is not available by Federal electorate. The only measure of migrant unemployment is published for Australia as a whole and is contained in the Australian Bureau of Statistics publication, *The Labour Force* (Catalogue No. 6203.0). In this publication, the Bureau publishes information on unemployed persons, by birthplace (6 categories) and period of arrival in Australia. {:#subdebate-43-1} #### Reports of Statutory Corporations (Question No. 728) {: #subdebate-43-1-s0 .speaker-ISW} ##### Senator Wriedt: asked the Minister representing the Minister for Foreign Affairs, upon notice, on 13 September 1978: {: type="1" start="1"} 0. 1 ) What statutory corporations have a responsibility to report through the Minister to Parliament. 1. What are the statutory requirements for those corporations to present annual audited accounts and reports to the Parliament. 2. When were the audited accounts of the annual report presented to the Minister for tabling. 3. When were the audited accounts and annual report tabled in the Parliament. 4. What are the names of the corporations the reports of which were not tabled within four months of the closing of accounts for the 1976-77 financial year or within four months of the date at which the annual accounts were finalised. 5. What reasons were given by each corporation which did not present an annual report and audited accounts within four months of 1976-77. {: #subdebate-43-1-s1 .speaker-2U4} ##### Senator Carrick:
LP -- The Foreign Minister has provided the following answer to the honourable senator's question: {: type="1" start="1"} 0. 1 ) The Australia-Japan Foundation. 1. The Foundation is required to furnish to the Minister as soon as practicable, after 30 June in each year, a report on the operations of the Foundation during the year ended on that date, together with financial statements in respect of that year. The Minister is required to cause such reports and financial statements to be laid before each House of Parliament within 15 sitting days of that House after being received by the Minister. 2. 15 May 1978. 3. 24 May 1978. 4. 5 ) The Australia-Japan Foundation. 5. No reason was given at the time for the delay in presenting the annual report and audited accounts, but it was partly due to the fact that this was the initial report of the Foundation which was established in 1976. Following audit of the financial statements, the draft report was forwarded to the Government Printer in November 1977. Responsibility for administration of the Act passed to this Department from the Depanment of the Prime Minister and Cabinet in December 1977. In February 1978 the Foundation's administrative staff were moved from Canberra to Sydney. These events contributed to a delay in printing the report, copies of which were received from the Government Printer early in May 1978. {:#subdebate-43-2} #### Reports of Statutory Corporations (Question No. 735) {: #subdebate-43-2-s0 .speaker-ISW} ##### Senator Wriedt: asked the Minister representing the Minister for Immigration and Ethnic Affairs, upon notice: {: type="1" start="1"} 0. 1 ) What statutory corporations have a responsibility to report through the Minister to Parliament. 1. What are the statutory requirements for those corporations to present annual audited accounts and reports to the Parliament. 2. When were the audited accounts of the annual report presented to the Minister for tabling. 3. When were the audited accounts and annual report tabled in the Parliament. 4. What are the names of the corporations the reports of which were not tabled within four months of the closing of accounts for the 1976-77 financial year or within four months of the date at which the annual accounts were finalised. 5. What reasons were given by each corporation which did not present an annual report and audited accounts within four months of 1976-77. {: #subdebate-43-2-s1 .speaker-C7D} ##### Senator Guilfoyle:
LP -- The Minister for Immigration and Ethnic Affairs has provided the following answer to the honourable senator's question: >There are no statutory corporations under the control of the Minister for Immigration and Ethnic Affairs. {:#subdebate-43-3} #### Minister for Primary Industry: Use of Hire Cars (Question No. 852) {: #subdebate-43-3-s0 .speaker-TJ4} ##### Senator Walsh: asked the Minister for Administrative Services, upon notices, on 27 September 1978: {: type="1" start="1"} 0. 1 ) Did the Depanment of Administrative Services or its predecessor receive accounts for debts incurred by the member for New England for the hire of cars between 2 December 1972 and 1 1 November 1975; if so, what was the name of the firm or firms which submitted any such accounts. {: type="1" start="2"} 0. Was all or part of any such accounts paid; if so, were such accounts paid from consolidated revenue or from some other source; if not: (a) were the accounts withdrawn, or does the debt remain unpaid; ( b) was any formal or informal notification received from the firm that it did not intend to recover the debt; if so, when; and (c) did the Government agree to the withdrawal of all or part of any such accounts. {: #subdebate-43-3-s1 .speaker-EF4} ##### Senator Chaney:
LP -- The answer to the honourable senator's question is as follows: {: type="1" start="1"} 0. 1 ) Yes. Avis Rent-A-Car System Pty Ltd. 1. My Department has informed me that the then Department of Services and Property paid those accounts which came within its area of responsibility. As far as my Department is aware all Avis accounts for the period in question have now been paid. I refer the honourable senator to the information provided in answer to Parliamentary Question No. 853 (Senate Hansard 27 September 1978, page 103 1). {:#subdebate-43-4} #### Minister for Primary Industry: Use of Hire Cars (Question No. 886) {: #subdebate-43-4-s0 .speaker-TJ4} ##### Senator Walsh: asked the Minister representing the Minister for Primary Industry, upon notice, on 1 1 October 1978: {: type="1" start="1"} 0. Was the amount of $1,265.90 for the Minister's personal use of hire cars supplied by Avis Rent-A-Car Systems Pty Ltd (referred to in his answer to Question No. 853, Senate *Hansard,* 27 September 1978, page 1031) paid: (a) directly to Avis; (b) to the Government; or (c) to some other party. 1. 2 ) Was it paid in cash or by cheque. 2. Did the Minister receive a receipt; if so, was there a date on the receipt; if not, has he any other record of payment. 3. Did the National Country Party reimburse the Minister for all or part of the amount in question. 4. Has the National Country Party ever reimbursed the Minister for expenditure incurred by him in hiring cars as Deputy Leader of the National Country Party, for which he did not have a parliamentary entitlement. 5. What is the nature of the 'dispute as to responsibility' referred to in the Minister's answer to Question No. 853. {: #subdebate-43-4-s1 .speaker-KAS} ##### Senator Webster:
NCP/NP -- The Minister for Primary Industry has forwarded me the following answer to your question: {: type="A" start="I"} 0. to (6) Personal cheque payments were made to Avis Rent-A-Car Systems Pty Ltd. $ 1 , 1 80.20 was contended to be within Parliamentary entitlement. **Mr Don** Baird {: #subdebate-43-4-s2 .speaker-2U4} ##### Senator Carrick:
LP -- On 22 August **Senator Mulvihill** asked **Senator Durack,** as Minister then representing the Minister for Foreign Affairs, the following question without notice: >What impediments did the United States Government place upon the Australian silver medallist in the Commonwealth Games pole vault event, Don Baird, when he went from the University of California to Edmonton? Did the fact that he is married to an American national have a bearing on his position? Are any overtones of dual nationality involved? The Acting Minister for Foreign Affairs has provided the following answers to the honourable senator's questions: >The Australian Consulate-General, San Francisco has made inquiries of the US Authorities and has been informed that those Authorities have no knowledge of any impediment having been placed on **Mr Baird** when he went from the University of California to Edmonton. > > **Mr Baird** has not contacted the Consulate-General concerning his position which, as far as the Department of Foreign Affairs is aware, was not affected either by his marriage to an American national or by considerations of dual nationality. Rhodesia: Peace Negotiations {: #subdebate-43-4-s3 .speaker-2U4} ##### Senator Carrick:
LP -On 12 September 1978 **Senator Wheeldon** asked me, as Minister representing the Minister for Foreign Affairs, the following question without notice: >I direct a question to the Minister representing the Minister for Foreign Affairs. It arises from the recent shooting down of a Rhodesian civil airliner by forces belonging to the faction of the Patriotic Front led by **Mr Joshua** Nkomo, which has claimed credit, if that is the appropriate word, for the shooting down of the plane and the massacre of the survivors; also from the statement which is reported to have been made yesterday by **Mr Nkomo** to the effect that he would not be party to any negotiations with the Salisbury Government and would accept only surrender from that Government. Would the Minister not agree that, to say the least, this would cast some doubts over the possibility of there being fruitful negotiations, or any negotiations for that matter, between the Patriotic Front and the Salisbury Government? As one of the declared purposes of the continuation of the application of sanctions since the socalled internal settlement is the desire to bring the various parties to the conference table, have these recent events caused the Government in any way to review its atutude towards sanctions? As I appreciate that the Minister probably would not be in a position to answer the question without reference to the Minister for Foreign Affairs, would he ask the Minister whether a statement could be brought down in Parliament on the earliest occasion so that members will know what our current position is with regard to these very important and dangerous matters? The Acting Minister for Foreign Affairs has provided the following answer to the honourable senator's question: >The Government has been following closely recent developments in Rhodesia. We have noted the harder statements now being made by both sides and we are much concerned at the increasing deterioration of the situation in Rhodesia. The Minister recently has expressed the Government's concern about the latest tragic incident in the war in Rhodesia. The Government has said many times that Australia is totally opposed to terrorist methods wherever and by whomsoever they are used. > >However, such grievous incidents involving innocent civilians, both black and white, are the result of the continuing conflict in Rhodesia. They can only underline the urgent need to bring an end to the conflict by the negotiation of a settlement which takes adequate account of the legitimate political aspirations of black Rhodesians to participate fully in the political processes of their country. > >The internal agreement signed at Salisbury on 3 March appeared to contain some positive elements and was at least an advance on the previous situation. It seems now that it has not achieved its principal objectives. In particular it has not brought about a ceasefire or conditions in which free and fair elections can be held. **Mr Smith** has conceded this and that the elections to have been held this year will have to be delayed. Moreover, it has not been demonstrated that the internal agreement has the support of the people of Rhodesia as a whole, which must be the ultimate test of any settlement. > >It seems unrealistic to expect a ceasefire to be effective unless the chief protagonists are involved. **Mr Smith** has acknowledged this by his recent meeting with **Mr Nkomo.** > >We have noted that **Mr Nkomo** has now said that he no longer sees the Anglo-American proposals for an all-party conference as offering a solution. That is most unfortunate. Time is running out for a peaceful settlement. It is the earnest hope of the Government that the parties can still make the compromises necessary-to bring about a peaceful settlement in the interests of all the inhabitants of an independent Zimbabwe. Meanwhile, the Government believes it would be premature at this time to consider the question of sanctions. In compliance with its obligations under the UN Security Council mandatory resolutions on Rhodesia, Australia has continued to observe sanctions. > >The Government will continue to follow closely events in Rhodesia and any implications these might have for its policy. East Timor {: #subdebate-43-4-s4 .speaker-2U4} ##### Senator Carrick:
LP -On 12 September 1978 **Senator Gietzelt** asked me, as Minister representing the Minister for Foreign Affairs, the following question without notice: >My question is directed to the Minister representing the Minister for Foreign Affairs and follows the answer that he gave to **Senator Kilgariff** about the plight of people living in East Timor. Does not the disclosure that about 12,000 East Timorese have been found to be starving and in a dangerous state of health require the urgent attention of the International Red Cross? I remind the Minister that in a reply to a question I asked of his predecessor on 8 May this year and to questions asked by **Senator Bishop** and **Senator Kilgariff** the Minister for Foreign Affairs stated: > >The Government doubts the need for a high level communication with the Indonesian Government about the International Red Cross at this time. > >Further in that reply he stated that the Government had allocated $333,000 to the Indonesian Red Cross for the purpose of humanitarian work. Is the Government satisfied that that money has been adequately spent? Further, having regard to the views of our ambassador, **Mr Critchley,** and others, of the plight of this great number of refugees, does the Government not regard the previous reply of **Mr Peacock** as being inadequate and complacent about the plight of these unfonunate people in East Timor? Again I request that consideration be given to the Australian Government requiring the presence of the International Red Cross in East Timor, having regard to the fact that in practically every other country the International Red Cross is recognised as the body to carry out work amongst refugees? The Minister for Foreign Affairs has provided the following answer to the honourable senator's questions: >The honourable senator will recall that Australia channelled funds (a total of $167,000) for relief operations in > >West and East Timor through the International Committee of the Red Cross ( ICRC) as long as that organisation was allowed to operate on the island. When the ICRC's activities ceased in December 1975, the Government made representations to the Indonesian authorities, asking that the ICRC be allowed to return to East Timor. After it became clear that the ICRC would not be permitted to return to East Timor, the Government, wishing to continue its humanitarian assistance to the area, agreed that our aid should be channelled through the Indonesian Red Cross. The Indonesian Red Cross has advised us that the Australian contributions passed to them (a total of $333,000 before my announcement on 1 4 September of a further accountable grant of $250,000) have been spent on medicines, medical supplies, relief goods, the administrative costs of distributing these items and the provision of basic medical care facilities in both rural and urban areas. Australian officials who visited East Timor in April 1977 gained the impression that humanitarian assistance was getting through to the people. > >The Australian Government is not in a position to 'require the presence' of the ICRC in East Timor. It is clearly only the Indonesian authorities who control the admission of aid agencies to that territory. South Africa: Steve Biko {: #subdebate-43-4-s5 .speaker-2U4} ##### Senator Carrick:
LP -- On 14 September 1978 **Senator Teague** asked me, representing the Minister for Foreign Affairs, the following question without notice: >Will the Australian Government continue to deplore the detention of South African citizens without charge or recourse to trial? Will the Australian Government protest to the South African Government and call for the immediate release of the Biko family and others similarly detained? The Acting Minister for Foreign Affairs has provided the following answers to the honourable senator's questions: >I can confirm that a number of members of Steve Biko 's family and several of his close friends were arrested prior to the anniversary of his death last year in security police detention. No reasons have been given for these latest detentions which apparently took place under the provisions of South Africa's security legislation. No charges have been laid and therefore no prima facie case has been adduced. > >In a statement to Parliament last year the Minister for Foreign Affairs said that Steve Biko's death in detention represented a loss to South Africa of one of its most significant political figures and of a widely respected leader of black opinion. His treatment at the hands of the South African security police, as later reported in coroner's proceedings, demonstrated a callous and brutal disregard, not only for the man himself but for the principles of moderation for which he stood. > >The Government deplores this latest series of detentions which is yet another example of the South African Government's continuing failure to communicate with those who advocate peaceful change in that country. The Government has consistently made known its view on breaches of human rights of this type in South Africa. For example, following the detention of a number of members of the YCW in South Africa, the Minister for Foreign Affairs directed his Department officially to convey to the South African Embassy here, and by the Australian Ambassador in Pretoria to the South African authorities the widespread concern which continues to be expressed in Australia at the detentions themselves and for the well-being of the detainees. While these detentions are of course a matter within South Africa's domestic jurisdiction, the Government nevertheless felt that the South > >African authorities should be made aware of the concern in Australia about this situation and others like it where people can be detained without charges being laid and held, incommunicado, indefinitely, without having to be brought to trial. If there is a prima facie case of any substance to be made against these detainees they should be formally and publicly charged, or else released without delay. > >The system of apartheid can only be sustained by repression. It thus contains within itself the seeds of its own destruction, as repression can only breed further violence. In this context the Government deplores the further acts of violence which have taken place in the last few days when South African police enforcing the pass laws which are at the heart of South Africa's apartheid policy raided a squatter settlement near Capetown, killing three people and detaining some 300 others. Incidents such as those at Capetown, and the latest detentions, serve only to exacerbate the existing racial tensions in South Africa and to undermine those forces working for peaceful change. In the end such incidents can only have disastrous consequences for South Africa. {:#subdebate-43-5} #### Government Departments: Accounting Procedures {: #subdebate-43-5-s0 .speaker-VJ4} ##### Senator Watson: asked the Minister representing the Prime Minister, upon notice, on 26 September 1978: >Will the Government give consideration to classifying costs on a functional basis where practicable in the accounts of the departments under Public Service Board control to conform with modern, accepted accounting standards. {: #subdebate-43-5-s1 .speaker-2U4} ##### Senator Carrick:
LP -- The Minister for Finance, to whom the honourable senator's question was referred, has provided the following reply: >The expenditure outlays of the Government, which, of course, originate in the accounts of all depanments, are already classified on a functional basis. I refer the honourable senator in particular to the information contained in Statement No. 3-Estimates of Outlays, 1 978-79. That Statement, which appears at pages 50-156 of 1978-79 Budget Paper No. 1, presents detailed estimates of Budget outlays in 1978-79, classified according to their primary purpose or function, and also shows comparable figures for 1976-77 and 1977-78. I also refer the honourable senator to Statement No. 6- Budget Transactions Since 1968-69, which appears at pages 185-216 of 1978-79 Budget Paper No. 1 and provides, inter alia, details of Budget transactions since 1968-69 in terms of both the functional and national accounting classifications. > >A description of the functional classification employed can be found at pages 2 1 7-224 of 1 978-79 Budget Paper No. 1 . > >I might add that consideration is being given to the possibility of the future inclusion in Budget Paper No. 4 (Estimates of Receipts and Summary of Estimated Expenditure) of a table that would relate expenditures and estimates under appropriation headings to the functional classification of outlays as shown in Statement No. 3 of Budget Paper No. 1 .

Cite as: Australia, Senate, Debates, 11 October 1978, viewed 22 October 2017, <http://historichansard.net/senate/1978/19781011_senate_31_s78/>.