17 November 1978

31st Parliament · 1st Session

The PRESIDENT (Senator the Hon. Condor Laucke) took the chair at 10 a.m., and read prayers.

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Indexation of Pensions

Senator COLSTON:

-I present the following petition from 41 citizens of Australia:

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

We, the undersigned citizens of the Commonwealth of Australia by this our humble Petition respectfully showeth:

That the decision of the Australian Government to depart from its 1 975 election promise, a promise re-affirmed during the 1977 election campaign, that pensions would be increased twice-yearly in line with increases in the CPI, will seriously add to the economic burdens now borne by those citizens who are wholly or mainly dependent on their pensions.

Your petitioners are impelled by this fact to call upon the Australian Government as a matter of urgency to review the abovementioned decision, and to determineThat pensions will be increased twice yearly in line with rises in the CPI as promised by the Prime Minister in his 1975 policy speech.

Your petitioners, as in duty bound, will every pray.

Petition received and read.

Indirect Taxation

Senator MISSEN:

-On behalf of Senator Hamer I present the following petition from 2 1 citizens of Australia:

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

The Petition of the undersigned respectfully showeth:

That there have been indications that a value added tax or a retail turnover tax is being considered as a means of collecting revenue.

Your Petitioners most humbly pray that the Senate, in Parliament assembled, should-

Take such action as it can to prevent such a tax being introduced because such a tax will increase the administrative burden already existing on small businesses and because it will further increase costs and add to inflation.

And your Petitioners, as in duty bound, will ever pray.

Petition received.


The Clerk:

– Petitions have been lodged for presentation as follows:

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 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.

  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 $8m 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 Lewis. Petition received.

ACT Termination of Pregnancy Ordinance

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

The petition of the undersigned respectfully showeth:

That the Termination of Pregnancy Ordinance (No. 16 of 1978) has the effect of prohibiting the operation of private abortion clinics in the ACT.

Your petitioners therefore humbly pray that Honourable Senators should vote to:

  1. 1 ) retain this Ordinance, and
  2. ) reject any move to disallow this Ordinance since its disallowance would enable private abortion clinics to operate in the ACT.

And your petitioners as in duty bound will ever pray, by Senator Rocher (3 petitions). Petitions received.

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Notice of Motion

South Australia

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

That the Senate request the Government to take the action necessary to acquire the land known at 1 March 1978 as the Aboriginal Settlements of Aurukun and Mornington Island and place it in perpetuity in Land Trusts appointed by the traditional Aboriginal owners of the land.

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Senator WRIEDT:

– My question is addressed to the Minister representing the Minister for Foreign Affairs. On 24 October the Minister told the Senate that the United Nations Secretariat was reviewing the size and composition of the proposed peace keeping force for Namibia to which Australia has been asked to contribute. I ask the Minister. Was there a formal invitation to the Australian Government to contribute to that force? What contribution was sought from the Australian Government? Did the Government recently consider the request? If so, what decision did it reach?

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

– I shall answer within my own sphere of knowledge and then refer the question to my colleague, the Minister for Foreign Affairs, for additional information. It is true that some work has been done in the United Nations on preparations for providing a peacekeeping force in Namibia or South West Africa. As I understand it, no formal invitation- in the true sense of that word- has been made in a specific sense. I could be wrong. Rather there has been a probing and an opening up of thought from various nations as to what might be. I will check that precisely. My understanding is that no specific proposal has been made in terms of the composition of a force with the thought that a particular nation might provide the field forces, another the logistic forces, and another the communication forces; but rather that nations have been asked to reflect upon what might be their contributions, if any. I think that is about where the situation lies at the moment. The Government has taken note of the situation and is deliberating on it. No decision has been made by the Commonwealth Government as yet and I think there has been no formal pressure on it from the United Nations so to do. But if I can provide further information I will let Senator Wriedt know.

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Senator ROCHER:

– My question is directed to the Minister representing the Treasurer. In the light of the Treasurer’s commitment to ensuring that the supply of finance for housing is maintained, can the Minister inform the Senate of the present situation with respect to this matter which is of vital concern to the building industry and to the entire Australian community?

Senator CARRICK:

-I take it that Senator Rocher is referring to the Budget Speech of the Treasurer in which he stated that the Government had been careful to ensure that its policy of monetary restraint does not unduly restrict the supply of finance for housing. The Treasurer stated:

In addition, to facilitate the provision of housing finance, the regulations relating to savings banks subject to the Banking Act are under urgent review. To expand savings banks’ capacity to lend for housing in 1978-79, the proportion of savings bank deposits required to be held in public securities and liquid assets will be reduced from 43 to 40 per cent.

As a longer term measure, the present method of controlling the investment of savings banks’ funds is being reviewed with the intention of giving them more flexibility in determining the composition of their assets.

This was the Treasurer’s commitment. I make it clear that, in the wake of the Budget announcement of a reduction to 40 per cent in the prescribed asset ratio of nationally operating savings banks, the Australia and New Zealand Banking Group Ltd has embarked on a major nationwide campaign advertising the increased availability of housing loan funds. Lending for housing on a seasonally adjusted basis by the major lenders- that is, the savings and trading banks and permanent building societies- rose strongly in September. For the three months to September, the figure was 11.8 per cent higher than in the preceding three months and 19.4 per cent higher than in the March quarter. In seasonally adjusted terms, lending by savings banks reached a new record level in September while trading bank lending was at the highest monthly level since mid- 1 973. One of the preconditions for attracting more applications for housing loans would be a movement downwards of interest rates from their higher peak. The Government has been able to achieve a climate in which there has been a movement downwards in general interest rates. The Government expects with some confidence that that will be reflected also in housing interest rates in the future. That will be a major contribution.

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Senator BUTTON:

– My question is directed to the Minister for Education. I refer him to a front page article in the Canberra Times this morning relating to numeracy and literacy tests which the Confederation of Australian Industry in the Australian Capital Territory intends to provide for school leaving students intending to enter industry. If I may, I seek an opinion from the Minister about the desirability of this course from the point of view of his Department particularly as, in a sense, it is discriminatory between those school leavers intending to enter private industry and those who are not. Is the Minister satisfied that the evidence of literacy and numeracy levels justifies this sort of departure in respect of a section of the school leavers?

Senator CARRICK:

– I read the article with considerable interest, as Senator Button will have done and, as with him, a number of questions came to mind. The very first thing is that I hope that no educational authority wilT become defensive about this. We should approach this with open minds and ask ourselves why it is that a significant proportion of the consumers of education- that is, the private employers- feel that the tests we are providing and the information we are providing from them by way of certificates are not adequate for the private employers to evaluate the qualifications of the students concerned. In the Australian Capital Territory a major experiment has been undertaken in the change of examination systems and the change of certification. It is early days. None of us can say whether what is being done is right or wrong.

What we can say is that, quite apart from education for human fulfilment, one of the major requirements is that education for vocation must contain the necessary quality that what we are doing is acceptable to the marke. outside, whether it is the Public Service or private industry. I do not believe that it is discriminatory for any section of the community to say: ‘We will need to test the quality of the product before we employ it’. Indeed, in the past universities and colleges have applied their own entrance examinations. Over a period of years the Public Service Board has applied its own tests. I regard it as a valuable situation in which now the educators in the Territory, including myself as the responsible Minister, must go back to our drawing boards and see where the rights and wrongs, the strengths and the weaknesses, of the system exist.

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– My question is directed to the Minister representing the Treasurer and refers to a plea in today’s Press for a review of the $2 figure as the basic figure for gifts to charity which are allowable as tax deductions. Will the Minister give consideration to this, bearing in mind the value of $2 now compared with its value in 1936 when the figure was first set? If a review is undertaken, will the Government review also the policy relating to eligible organisations, taking into account the passage of time and new community trends, and seek to provide an incentive for organisations in a wider sphere than at present to help themselves and to depend less on government grants for financial development?

Senator CARRICK:

-Like Senator Davidson, I read an article in the media in which it was suggested, I think by a leading charity organisation, that the Government should raise the minimum level of donation that attracts tax deductibility from $2 to, I think, $50. One can understand the argument about the value of money. I can also understand the interests of charity organisations, in that if we raised the level of deductibility that might also attract to a charity a higher base level of donations. Of course, one can sympathise with the voluntary organisations which do so much with so little and which depend on charity. It may well be that the present level of deductibility of $2 is too low. I personally would not want to set a figure which described what ought to be a particular minimum below $2 in terms of gifts. It ought to be possible for everybody at every household door in a door-knock appeal to make a donation within their limits. That must be considered. Nevertheless, the question is important. I will refer it to the Treasurer and seek his comment.


-I wish to ask a supplementary question. In replying, the Minister did not refer to my question about a review of the policy relating to eligible organisations which, I think, is an important factor.

Senator CARRICK:

-I apologise for that; I failed to make a note of it. One of the real difficulties of Treasurers, Treasuries and, indeed, Cabinets, is to make decisions as to what organisations should be admitted to the tax deductibility list and what organisations should be omitted. It is a very difficult decision and a very expensive one also for revenue. I will refer it to the Treasurer and ask him to peruse it and make a comment on it.

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Senator WRIEDT:

– My question is directed to the Leader of the Government in the Senate and follows a question asked earlier concerning finance for housing. Is he aware that page 5 1 of Budget Paper No. 1 shows that Commonwealth payments for housing have declined from $548m in the first Budget of this Government to $363m this year? That is a decline of about $180m, of which $144m will occur this year. Is it the Government’s intention that this trend is to continue? Assuming that to be the case, would it mean that in two or three years’ time the Commonwealth will not be making payments for housing at all? If this is the case, is it the Government’s intention, as indicated in his earlier answer, to pass the total burden of providing for housing in Australia to the private sector?

Senator CARRICK:

– I do not have page SI with me, but I accept sight unseen Senator Wriedt ‘s interpretation of the figures. The fact is that any movement in the sum total of moneys that are directly Commonwealth moneys into housing must be taken as only one of the contributing factors to the overall pool of money for housing. Senator Wriedt will not have escaped noticing that in my previous reply I indicated a very substantial upturn in the total volume of money going into housing. No doubt he is referring primarily to money that goes through the Federal-State relationship to the more disadvantaged section. As he may well know, there has been renegotiation of the Federal-State Housing Agreement in which the proportion of money given to the States has been re-allocated so that the figure in itself, as a naked figure does not tell the whole picture.

No government can comment upon future Budgets and what may be decided. It is not the Government’s intention to relinquish responsibility for housing in Australia. Indeed, I do not tire of reminding the Senate that it was governments of our philosophy that made threequarters of the Australian community capable of being home owners. It is our eminent desire to return this country, in its economic status, to a situation where an average weekly wage earner can buy a home and where those who are more disadvantaged can also be adequately housed with dignity.

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Senator SCOTT:

– Has the Minister representing the Minister for Employment and Industrial Relations noted a report in yesterday’s Press of a call by the Secretary of the Western Australian Electrical Trades Union, Mr Gilbert, for ‘a radical restructuring of the working week’? Mr Gilbert emphasised the need to discuss the elimination of weekend penalty rates, a general re-thinking of the five-day week concept and an examination of voluntary or early retirement schemes. The restructuring also may include, he suggests, the removal of the one-day sickie by giving people time off to go to the bank or the doctor or to buy a car. As this appears to me to be a basic contribution to increasing employment and productivity across the board, in particular in tourist, service, educational and research areas, and is, I believe, in line with Government thinking, I ask: Will the Minister undertake that the Government will follow up this encouraging trade union attitude? Further, even though many penalty rates were consent awards, would the Minister not agree that the demands of the current technological revolution make their contribution to productivity and employment a negative one?

Senator DURACK:
Attorney-General · WESTERN AUSTRALIA · LP

-My attention has been drawn to the statement by the Secretary of the Western Australian Electrical Trades Union in which he calls for a restructuring of the working week. The attention of the Minister for Employment and Industrial Relations, Mr Street, also has been drawn to it. In fact, he answered a question on that matter in another place the other day. Perhaps I should refer Senator Scott to the answer that the Minister gave. However, in answer to some of the questions raised by Senator Scott, I can say that penalty rates certainly are causing increasing concern, not least amongst those who are seeking jobs. They usually result from an award or determination of an industrial tribunal. These are usually consent awards. The position is that the union movement so far has shown little interest in changing the present system. Therefore, the attitude expressed by Mr Gilbert of the Western Australian Electrical Trades Union is a very welcome sign indeed. Penalty rates certainly are having an inhibiting effect on the creation of new jobs because of the extra cost involved. The position is, as I have said, that the matter is really within the hands of the union movement and the employers, as to their attitude to these matters and the question of encouraging the creation of new jobs. The Government certainly will maintain a close interest in this question. It welcomes the attitude expressed by Mr Gilbert and will seek to encourage a more promising and more positive attitude to this whole question.

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Senator COLSTON:

-I direct a question to the Minister representing the Minister for Post and Telecommunications. He would be well aware of the fact that in many rural areas telephone subscribers do not have access to subscriber trunk dialling facilities. I ask: Will the new economy rate, which will apply after 26 November to STD calls made between 9 p.m. and 8 a.m. every day, also apply to booked long distance calls? If not, will the Government consider requesting Telecom Australia to introduce the equivalent reductions for booked long distance calls made from areas where STD is not available?

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

– I have no information as to whether or not the concession or the proposed economy rate will apply to booked calls. It is quite possible that it will not, because of the different cost structure of booked calls. In any event, I will refer the question to the Minister and seek a reply for the honourable senator.

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Senator WATSON:

-My question is directed to you, Mr President. As this chamber is a States House as well as a House of review -

Senator WATSON:

– … will you give consideration to the acquisition and display in this chamber of a flag from each State and the Northern Territory in addition to the Australian flag?


– The matter of a display of flags in this chamber has been one for discussion in the past. We have the national emblem behind the chair. I have given the matter consideration and have not, to this point, decided to make any variation concerning the presence in this place of that sort of thing.

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Senator GRIMES:

-I ask the Minister representing the Minister for Employment and Industrial Relations: What plans are there for the continued funding of National Employment and Training scheme programs directed at retraining unemployed women? In particular, I ask about the future of Tasmanian programs. Will they continue to receive funding when the present courses finish in December?

Senator DURACK:

– The Government, of course, has provided in the present Budget a considerable increase in funds for its various manpower programs. It has a very firm commitment to the NEAT scheme. I cannot speak specifically of the particular programs to which Senator Grimes referred as taking place in Tasmania. I will refer the question to the Minister and endeavour to get an early answer for the honourable senator in relation to that specific question.

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Senator MISSEN:

– My question, to the Minister representing the Minister for Foreign Affairs, refers to the threat that the United Nations Educational Scientific and Cultural Organisation Draft Declaration on the Mass Media poses to the freedom of the world’s Press. I ask the Minister: What position will the Commonwealth Government adopt at the forthcoming UNESCO general conference to ensure that the more unacceptable sections of the draft, which sanction government interference in the activities of the mass media, are amended?

Senator CARRICK:

– The Government, and I as Minister partially responsible, are acutely sensitive to this problem. The Government will certainly take a role to endeavour to ensure the appropriate modification of any resolution on this matter. The Government is conscious that we should not end up with a resolution that results in the restriction of freedom of expression. We will act in that regard. I just remind the Senateperhaps I do not need to to do so- that in UNESCO we have quite a number of emerging countries which, over the years, have not had the valuable experience of freedom of the media that we have. If they now appear to be taking a more restricted view I think that their initial approach deserves our sympathetic understanding, if not our full support. We will certainly be aiming to modify the declaration referred to.

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– Is the Minister representing the Treasurer aware that the levying of sales tax on equipment or toys that aid in the development of mentally or physically handicapped children places a heavy financial burden on the parents of those children? Will the Government consider waiving sales tax on such equipment and toys, when purchased upon the recommendation of a doctor, having in mind that the educative nature of the equipment or toy is essential for the development of the child?

Senator CARRICK:

– Quite a number of matters come into this human-understanding situation, in the determination of whether or not we should waive sales tax, for example on reading equipment for the blind and things of that nature which are helpful to handicapped persons. I know that the Treasurer and officers of the Department of the Treasury have scratched their heads on it. This is another such example, with the same humanitarian interest. I will bring the matter to the attention of the Treasurer and see what can be done.

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– I direct my question to the Minister for Science. One of the hazards to the climate of Australia’s north is the approach of the annual cyclone season. From experience and constant modification, Australia has evolved a good system for early warning of cyclone activity. However, in view of the vast amount of coastline subject to devastation by cyclones, has Australia any research programs planned or operating with the object of moderating a cyclone’s potential for destruction or for defusing these phenomena when life and property in our towns are threatened? If other nations have programs of cyclone research operating, is the Minister aware what practical progress is being made by them? Are there any practical techniques in use at the present time for combating cyclones?

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

-So far as I am aware, no experiments have been carried out in Australia on moderating cyclones. The honourable senator will be aware that through the activities of the Bureau of Meteorology a system of early warning of cyclone activity has been evolved. Indeed, on 31 October this year, I commissioned a further weather watch radar which perhaps gives us some confidence of further technical ability in Australia to alert communities to the approach of hazardous weather. I understand that there are practical problems in defusing cyclones although in recent months I have had discussions with people from the United States who are in charge of what is known as the United States Storm Fury Project. Over a number of years, they have taken well-equipped aircraft into cyclones and have attempted by seeding certain areas of the cyclones with silver iodide to evaluate the modification in either the volume of rain or the speed of winds experienced by a community which is placed in a hazardous situation by a cyclone. Australia will be benefited next year by this team coming to Australia. It will carry out no weather modification so far as I know but it will be attempting to do computer models of cyclones in this country. Of course, we have a different sixmonthly cyclone season from the United States and tins will enlarge world information about the extent of cyclones and perhaps lead to an ability to moderate cyclones in future years. Australia is playing a part and certainly the expensive equipment that is required for this research and which is available to the United States will add to our information here.

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Senator MELZER:

– My question is directed to the Minister representing the Minister for National Development. I refer to the Press statement of the Minister for National Development announcing the formation of the Division of Environmental Science within the Australian Atomic Energy Commission. If the proposed work into the treatment and disposal of radioactive wastes only just begun, is original research being done or is the Division to develop further overseas practices? Is the Division to investigate specifically the treatment and disposal of waste in Australian territory?

Senator DURACK:

-I will refer that question to the Minister for National Development in order to obtain a fully detailed reply for Senator Melzer.

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Senator LAJOVIC:

– Has the attention of the Minister representing the Minister for Foreign Affairs been drawn to the recently released New Zealand Defence White Paper and in particular to the reference to the importance and growing effectiveness of Australian-New Zealand defence co-operation? What is Australia ‘s attitude to this matter?

Senator CARRICK:

– The Government has noted the defence review in New Zealand and has noted in particular how closely the strategic concepts of both countries are related. Of course it believes, as does the New Zealand Government, that close co-operation between both countries is a central feature of our international policies. In recent years there have been increased efforts on both sides to strengthen the close defence co-operation which has traditionally existed between us. Indeed, in March 1976 Prime Minister Muldoon and Mr Fraser agreed on the need to develop and improve defence cooperation between New Zealand and Australia. The two Defence Ministers met in April 1977 and most recently in August of this year to review progress in defence co-operation matters. One of the very pleasing features in the whole range of co-operation between New Zealand and Australia is that on virtually every ministerial council in Australia one finds either from time to time or semi-permanently, a New Zealand Minister. For example, I am happy to say, the New Zealand Minister for Education and his Director-General meet, as very welcome observers, always when the Australian Education Council meets. I think this is a first-class indication of our co-operation.

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Senator PRIMMER:

-Has the Minister representing the Prime Minister seen the report from the Australian Taxpayers Association which sets out the income of the average taxpayer under the Hayden Budget in 1975 and the comparable figures for this year? Do not the Taxpayers Association figures show that contrary to the Prime Minister’s claim that taxpayers are now better off than in 1975, spending power for that group- that is, the average taxpayer- is down by more than $7.50 week?

Senator CARRICK:

– I have not seen the report. I will seek it out and I will ask the Treasurer if he might comment on the second part of the question.

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Senator WALTERS:

– My question is directed to the Leader of the Government in the Senate. It follows from the derision of the Opposition when Senator Watson stated that this chamber was a House of review. Can the Minister say whether it is a fact that the Health Insurance Bill reviewed and amended by this Senate was returned to the House of Representatives for concurrence only last week or perhaps the week before- at least in the very recent past? Can the Minister say how many Bills have been reviewed and amended in this place and returned to the House of Representatives?

Senator CARRICK:

-As to the first part of Senator Walters’ question, it is a fact. I do not have the actual figures of the Bills reviewed but I will seek them out. It seems extraordinary that the Labor senators who showed derision at the idea that this is a House of review and a States House should find any reason for their own existence here. Indeed, the general public from day to day has the same dilemma in that problem. May I say that if the function of this chamber is not to review and review satisfactorily, and is not to provide a balance as between the States, then its existence is hard to justify -

Senator Evans:

– Exactly.

Senator CARRICK:

– I wonder how many of the Labor Party senators will agree with Senator Evans because Senator Evans has within him, both congenitally and politically, a self-destruct mechanism. As a non-lawyer may I say that without prejudice.

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Senator TATE:

– My question is directed to the Minister representing the Treasurer. It follows a line of questioning initiated by Senator Missen and taken up by Senator Wriedt yesterday. Is the Government seriously considering the imposition of a retail tax or value added tax on ordinary food and clothing throughout Australia? I ask Senator Carrick whether he has noted this comment of the Treasurer as reported in the Laurie Oakes Report of 4 October:

One of the obvious disadvantages of it -

That is, the retail taxis that it can fall more severely on low income earners, certainly in those areas where the effective choice is in theory only. You don’t really have an option about buying clothing, do you?

Is it a fact that anticipated problems have been so significant as to cause the national governments of Japan, the United States and Switzerland to reject proposals for broad based taxing of consumption? Does the Minister agree that to impose such a tax within Australia at the present moment would be inflationary and inequitable in its impact on pensioners and low income earners?

Senator CARRICK:

– The Treasurer has put this matter in perspective. He has indicated that the Taxation Office and the Treasury, along with many others, have been examining, as various people have done from the Asprey Committee onwards, indirect taxation and alternative methods of taxation. The fact is that the Premiers themselves have been interested in looking at alternative methods of taxation. The concept of a particular tax investigation does not mean that there is any commitment of the Government to it; nor does it mean that it would be an additional tax. It means that within the framework of taxation one may take aboard a particular tax and put down another. That is said without any indication that the Government intends to do anything of the kind.

It would be fair to say that an indirect tax as such is classically regarded as regressive in that it impinges upon all, irrespective of income, and that income tax itself is progressive in that it is related to earnings. Throughout history, not only in Australia but throughout the world, people have found ways of so arranging their personally earned income as to reduce the impact of their payment.

Senator Walsh:

– Set up family trusts.

Senator CARRICK:

-Senator Walsh has more information than I. He has no doubt consulted his deputy leader, Mr Bowen, on family trusts. I am grateful to him for the interjection. I am still waiting for Senator Evans to tell me what he regards as a bona fide family trust and what he regards as a bad one. I re-issue the invitation to him. It will be interesting to see what he says. Throughout the world a dilemma has occurred because no longer can anyone say with accuracy that the imposition of personal income tax will be in itself a progressive tax. There are so many chances of avoidance.

Senator Evans:

-Mr President, I seek leave to make a statement.


– Order! I will call the honourable senator when I wish to.

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Senator ARCHER:

– I direct a question to the Minister representing the Minister for Primary Industry. Is it correct that the Australian Meat and Livestock Corporation is varying the terms and conditions under which it offers sponsorship to carcass competitions? If so, what qualities are being encouraged? Do these qualities coincide with overseas as well as domestic preferences, requirements and trends?

Senator WEBSTER:

– I am advised that the Australian Meat and Livestock Corporation recently resolved that it would provide funds for sponsorship of on-hoof and carcass competitions conducted by agricultural societies only on the basis that all breeds and crosses are eligible for entry in the competition and that classes relating to specific market requirements are established, that is the domestic trade steer Japan pasture fed class. Agricultural societies have been advised of the decision. I understand that many of the carcass competitions conducted by agricultural societies already meet these requirements. In these cases it would seem that no significant variation is required.

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Senator McLAREN:

– I direct a question to the Minister for Administrative Services. He will recall that during Estimates Committee E hearings many questions were asked in respect of the remuneration and facilities provided to Mr Harry M. Miller. I refer the Minister to his answer to a question which I asked and which appears on page 1 8 1 of the Hansard report of 12 October of the proceedings of Senate Estimates Committee E in which he stated that the Government had appointed Mr Miller as a special adviser in relation to preparations for the celebration of the Australian Bicentenary in 1988 and had also provided him with a staff of two persons. I now ask the Minister What other facilities have been provided to Mr Miller, such as office space, telephones, telexes, official travel and the use of Commonwealth cars? What was the cost of these facilities in 1977-78 and what will be the cost in 1978-79? What measures have been taken by the Government to ensure that these costs are specifically related to the Bicentenary planning and are not connected with Mr Miller’s other extensive Government positions or his private interests?

Senator CHANEY:

– I think that that is clearly a question which should more appropriately be put on notice and I invite the honourable senator to do so.

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Senator ELSTOB:

-Has the Minister representing the Minister for Transport seen a report in today’s Australian newspaper stating that Qantas Airways Ltd will be banned from flying to the United States unless Continential Airlines Inc. is allowed to land in Australia and that the Federal Government has decided to back down on its opposition to the Continental Airlines application to fly to Australia? I also ask the Minister: If this report is correct, who does he think is running this country? Is it the Australian Government or foreign investors?

Senator CHANEY:

– I have not seen the report. I do not know whether it is correct. I can assure the honourable senator that the Government is running the country.

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Senator YOUNG:

-I ask the Minister for Science: As the Australian Government is required to give a certificate relating to the various constituents of wine and liquor exported from Australia, is any similar certificate required by the Australian Government when importing liquor or when imported spirit is bottled upon its arrival in Australia?

Senator WEBSTER:

– I am unable to state accurately the requirement for imported liquor. I imagine that a certificate is required. Perhaps it would be appropriate for me to refer that part of the question to the Minister for Business and Consumer Affairs. I am aware that the Australian Government Analytical Laboratories from time to time do take analyses of various consumer products. Over the past months they have been taking samples from certain imported liquor in the New South Wales area. My understanding is that currently they are taking a number of samples of various brands of low priced Scotch whisky. Testing at the Sydney laboratory has indicated negative results regarding any impurities. I also understand that, from 780 samples that were examined by the New South Wales regional laboratory of the Australian Government Analytical Laboratories during August, about 60 per cent were found to contain added methanol.

Senator Young:

– Is this whisky?

Senator WEBSTER:

– I understand that it is whisky. I am not certain when a spirit is branded whisky. As I understand it, that is a quite serious matter and I think that type of sampling will continue.

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Senator SIBRAA:

– My question is directed to the Minister for Administrative Services. Is it correct that the Prime Minister’s official car, a Mercedes Benz which was purchased for the former Prime Minister, Mr Whitlam, for approximately $9,500, will be sold for a figure in excess of $25,000? Will the Minister take this type of saving into account when official vehicles are purchased for use in Australia and at our overseas posts?

Senator CHANEY:

– I assume that the question relates to other questions I have received lately in answer to which I have indicated that the matter of the provision of cars for use at overseas posts is under examination. I can say to Senator Sibraa that the resale value of cars is an important factor which must be taken into account in assessing what sorts of vehicles should be bought.

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Senator LEWIS:

– Is the Minister representing the Minister for Foreign Affairs aware that tomorrow is the 60th anniversary of the declaration of independence of the free and democratic republic of Latvia following the First World War? Is the Minister aware that Latvia is a small, proud nation of two million people with their own language, a centuries old culture of their own and a history of independence in excess of 800 years? Is the Minister aware that the nation has been occupied by the Soviet Union for 33 years? Does the Minister appreciate how Australians would feel it this country had been occupied by the Japanese since 1942 and were still being occupied by the Japanese? On this 60th anniversary of the independence of Latvia, will the Government register a further protest with the occupying country, the Union of Soviet Socialist Republics?

Senator CARRICK:

-I am aware that tomorrow is the 60th anniversary of Latvian independence. Not only the people of Latvia and the many excellent citizens of Australia who derive from that country, but also all migrants and all Australians will be considering with concern the sequence of history that Senator Lewis has accurately stated. We all will remember how the recognition of sovereignty of the three Baltic states came about during the Whitlam years. We all will remember with regret that action was taken gratuitously by the then Australian Government which was utterly unnecessary, which in fact was a tremendous spiritual slap in the face for these people and which gave to those people who had been put behind the Iron Curtain a sense of total frustration. It is the goal of Australia’s Government and its people to ensure that people who are behind iron curtains should have those barriers removed. We will work in every way practicable to restore freedom in the world. Whether the Government intends to make a formal protest is a matter for my colleague in the other place and I will refer the matter to him.

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Senator WRIEDT:

-My question is directed to Senator Carrick and follows the question that was just asked. Is it not a fact that the independent state of Goa was occupied by the military forces of India in the early 1960s? Is it also not a fact that Timor was occupied by Indonesian military forces in the last three to four years and that Tibet was also militarily occupied by the Chinese in the early 1960s? Is it not true that this Government recognises the sovereignty over each of those occupied territories of the countries that occupy them?

Senator CARRICK:

– I was not aware that the Commonwealth Government had given de jure recognition to Indonesian sovereignty in Timor.

Senator Wriedt:

– De facto.

Senator CARRICK:

– We see immediately abandonment of ground and the abdication of argument. I was not aware of the de facto recognition of Indonesian sovereignty in Timor. Am I to understand from what Senator Wriedt is saying that the Australian Labor Party recognises that in fact Latvia, Lithuania and Estonia are Russian territory today because they have been taken by military force? That follows from his remarks. The Commonwealth Government has never accepted that that should be so.

Senator WRIEDT:

– I ask a supplementary question in order to put the Minister straight. Is he aware that the attitude of the Australian Labor Party towards the Baltic states is no more than de facto recognition, in exactly the same way as this Government’s policy is de facto recognition of Indonesian sovereignty over Timor, Indonesian sovereignty over Goa and Chinese sovereignty over Tibet?

Senator CARRICK:

– Not only am I unaware of that; the proposition is also utterly untrue. The Whitlam Government sent the Australian Ambassador stationed in Moscow deliberately and gratuitously into the Baltic countries in order to say gratuitously that the Whitlam Government acknowledged the sovereignty of Russia over those three states. I simply say that no gratuitous gesture against freedom of such magnitude has ever been made by any other government in Australia; nor would I hope that it would be made again. I hope that this will be well remembered tomorrow.

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Senator TOWNLEY:

-Did the Minister representing the Minister for Post and Telecommunications notice an article in the Sydney Press that indicated that the one-millionth subscriber in Sydney was given three phones at zero rental? Will the Minister say under what provision the Australian Telecommunications Commission is able to remit such a rental in those kinds of cases? Will he indicate to the Senate what number of subscribers will be necessary in all the dialling areas throughout Australia before a free phone rental will be granted, with particular reference to the 09 area and the 002 area? In other words, why should subscribers in Sydney be at an advantage to subscribers in the rest of Australia?

Senator CHANEY:

- Senator Townley is playing on my chauvinistic instincts like a harp when he asks why we should not have such a concession in the 09 area. Like him, I can only say: Why should we not have such a concession in the 09 area? I must say that if the subscribers of Australia -

Senator Button:

– Give us a giggle again.

Senator CHANEY:

– I was about to say that if the subscribers of Australia had been listening to Senator Townley in the past, I do not think that any of them would accept three phones, whether they are free of rental or otherwise. It seems to me that they are carrying a heavy potential cost burden for telephone charges for the number of calls they make or that the Australian Telecommunications Commission says that they make. In any event, this is a matter which is in the discretion of Telecom. I will send the matter to the Minister for Post and Telecommunications. He might be able to obtain a reply from Telecom. Obviously this is a marketing matter; Telecom, like the Australian Postal Commission, is engaged in rather more marketing than was the old Post Office. No doubt this is a means of getting quickly to the second million telephones in the Sydney area.

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– My question is directed to the Minister representing the Minister for Employment and Industrial Relations and refers to the reported statement of the Minister for

Employment and Industrial Relations that penalty rates were causing increasing concern and were inhibiting the creation of new jobs, particularly part time ones. My question refers also to the Minister’s indication that the Government would help employers if they pushed for a reexamination of penalty rates. I ask the Minister: Before the Minister for Employment and Industrial Relations jumped in with that undertaking, what guarantees did he obtain from the employers that they would protect current full time jobs and current permanent part time jobs; and what guarantees did he obtain from the employers that they would accept their social responsibilities in ensuring that service industries are preserved for permanent jobs and will not degenerate into casual and moonlighting-type industries?

Senator DURACK:

– The Minister for Employment and Industrial Relations is well aware of the great sensitivity of this area. He and the Government generally are very concerned about penalty rates and their effect on employment. Indeed, I think it is perfectly obvious that there is loss of work as a result of penalty rates, apart altogether from the inhibiting effect they have on creating new jobs.

The Minister has said- I answered a question earlier today on his behalf to this effect- that he hopes that the unions and the employers will take a new attitude in relation to this matter. It is not a question of the Minister, the Government or indeed employers imposing anything on the unions and workers in this matter in the way Senator Harradine seems to have interpreted it. Senator Harradine asked whether the Minister received guarantees and so on. The matter has not reached the stage where any such action could be taken. What the Minister is saying is that the Government will encourage both unions and employers to take a new attitude to this subject. In the past, awards have come about in most cases by consent. We are now certainly stuck with the penalty rates under those awards. What the Minister is saying is that he hopes there will be a new attitude by both employers and unions to this matter. It is a matter which can be resolved either by agreement or by a decision of the Commonwealth Conciliation and Arbitration Commission. It is not something that can be imposed by the Government, even if it wanted to.


– I wish to ask a supplementary question. My question was not answered. The Minister for Employment and Industrial Relations specifically stated that he would help employers. My question was: What guarantees did the Minister obtain from those employers that they would not exploit the resultant situation by casualising and moonlighting service industries?

Senator DURACK:

– As I said, I did not answer that specific question because I did not think it really arose. As Senator Harradine is pressing it, I will specifically refer it to the Minister for Employment and Industrial Relations.

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Senator PUPLICK:

– My question is directed to the Leader of the Government in the Senate. He will be aware that the report of the Royal Commission on Human Relationships has been a public document for some length of time and that it is in fact a major, challenging and controversial document. Equally he will be aware that it has not been subject to detailed parliamentary analysis. Will he undertake to make time available early in the next session for this Senate to discuss the report in some detail?

Senator CARRICK:

– All honourable senators will be aware that the report of the Royal Commission on Human Relationships was in fact listed as an Order of the Day in this Senate. It is to be found as item 3 in the Orders of the Day of the Senate. The fact is that consideration of the document, which is a very large one, is a continuing matter. A group of Commonwealth departments is looking at individual recommendations to see which recommendations can be implemented within the context of existing policies. Three-monthly meetings are held by these departments to monitor the follow-up of this procedure. Many parts of the report would be dependent on State powers and State actions and are not the direct responsibility of the Commonwealth. I stress that point. In the other place in the autumn session the Minister for Home Affairs is likely to make a statement on progress. I will see what can be done in the autumn session to facilitate debate on this matter.

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Senator McINTOSH:

– I direct my question to the Minister representing the Minister for Immigration and Ethnic Affairs. I refer to recent Press reports which in effect state that the Indonesian Government is unhappy with the whole idea of Timorese families being reunited with family’ members living here in Australia. Why is the Indonesian Government reneging on family reunions? What does the Government plan to do about it?

Minister for Social Security · NEW SOUTH WALES · LP

– I am not aware of the Press release or statement referred to by Senator Mcintosh. It is well known that the Australian Government consistently has said that it places a very high priority on family reunions in this instance. I will have checked the statement referred to by Senator Mcintosh and see whether there is a response from the Minister for Immigration and Ethnic Affairs on that matter.

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Senator CARRICK:

-Senator Wriedt has sought supplementary information in response to a series of questions he has asked on the purchase of three naval frigates, and particularly the cost structure. I advise that the operation and nature of a fixed price incentive contract may be described as follows: At the outset of the contract the parties negotiate a target cost, a target profit, a ceiling price and a formula for establishing the relationship between price at completion and profit at completion. It is the application of this formula which provides profit incentive to the contractor. Within the pricing ceiling, the incentive formula provides for the Government and contractor to share responsibility for costs greater or less than target. If the negotiated final costs are less than target costs, the formula provides for a profit greater than the target profit. Conversely, should the final cost exceed target cost, then the formula produces a final profit less than the target profit; indeed, a net loss results if final costs exceed the ceiling price. The ceiling price in the contract is the negotiated price beyond which the shipbuilder is responsible for all costs incurred.

Within the shipbuilder’s contract, the basis for adjustment for escalation is as follows:

  1. Escalation in direct material costs is calculated on changes in the Index of Steel Vessel Contracts, sometimes called the Material Index, furnished by the Bureau of Labor Statistics of the United States Department of Labor.
  2. Escalation in direct labour and overhead costs is calculated on changes in the Indexes of Change in Straight Time Average Hourly Earnings for Selected Shipyards for Steel Vessel Construction and All Regions, sometimes called the Labor Index, furnished by the same Bureau.

As to Senator Wriedt ‘s final question- whether the cost of the ships will be determined by reference to the average costs of all the FFGs built by Todd Pacific- the answer is no. The cost of the Royal Australian Navy ships will be determined by the labour, material and services costs incurred in the construction of our vessels.

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Senator CARRICK:

– Let me now refer very briefly to Senator Missen ‘s question on the United Nations Educational, Scientific and Cultural Organisation draft declaration on the mass media. I am advised that, while the present draft text of the proposed UNESCO declaration on the mass media is an improvement over the earlier version which Australia found unacceptable at the last session of the UNESCO General Conference in November 1976, it still contains unacceptable provisions. These could imply a need for government interference in media activities and thereby diminish the freedom of media to operate in a way which we consider essential to the very basis of a free society. For these reasons Australia will not support adoption of the existing text.

Despite our inability to accept the current draft, we have been actively consulting with our Western partners for several months in an attempt to work out amendments which would protect the principle and practice of a free, extensive and responsible flow of information, and to erase any suggestions of government control of the media. Our view is that the international community should have access to the widest possible range of opinion and news on national and international developments. We will continue to play our part at the current UNESCO General Conference in efforts to secure a draft text which might command consensus agreement by member states.

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Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP

– by leave- I wish to make a personal explanation. My attention has been drawn to a report in the Australian newspaper of 17 November- that is today- which is headed ‘ABC accused of racial bias’. The report refers to a question asked of me yesterday by Senator Ryan about the complaint by a Ms Chung in relation to an allegation of racial discrimination by the Australian Broadcasting Commission. Senator Ryan asked whether I was satisfied with the decision of the Commission. Alternatively, she may have meant the Minister whom I represent in this chamber. In the answer I was very careful to make no judgment on the particular case. I referred to the fact that there was an avenue available, namely, the Racial Discrimination Act. The inference from the headline and what follows is that I am the one who is accusing the ABC of racial bias. Quite clearly, that is something which, on my access to the facts, I am not able or prepared to do. I therefore dissociate myself from the headline. For the information of honourable senators let me say that in fact I am advised that the complainant concerned has laid a complaint with the Commissioner for Community Relations and that that complaint is being considered by him. That, in my view, is the proper avenue to be followed in the matter.

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Senator DURACK (Western AustraliaAttorneyGeneral) Pursuant to section 43 of the Criminology Research Act 1971, I present the report of the Criminology Research Council for the year ended 30 June 1 978.

Senator GEORGES:

-by leave- I move:

I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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Senator DURACK (Western AustraliaAttorneyGeneral) Pursuant to section 21 of the River Murray Waters Act 1915, 1 present the report of the River Murray Commission for the year ended 30 June 1 978.

Senator McLAREN:
South Australia

– by leave- I move:

I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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Minister for Social Security · Victoria · LP

– For the information of honourable senators, I present a review of the activities of the Department of Immigration and Ethnic Affairs for the year ended 30 June 1 978.

New South Wales

– by leave- I move:

I seek leave to continue my remarks later.

Leave granted; debate adjourned.

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Ministerial Statement

Senator CARRICK:
New South WalesLeader of the Government in the Senate · LP

– by leave- Mr President, on Tuesday I referred to the legislative program for the remaining days of the sittings. It seemed to be generally agreed that the program could be completed without the need for further sitting days after Friday, 24 November. Honourable senators are aware, of course, that progress throughout this week has not been good. It became necessary to move to have Government Business take precedence over General Business after 8 p.m. yesterday evening. There would now appear to be real doubt that all necessary legislation will be adequately considered by 24 November. Consequently, I suggest that honourable senators should not enter into commitments for the week beginning 27 November although we will in fact make every effort to achieve our aim.

In order to assist in monitoring progress, I am circulating for the information of honourable senators a list of the Bills that the Government expects to have debated in the Senate before the Budget sittings are finished. May I say that whilst the number of Bills looks formidable they can be taken in groups and treated cognately to ease the burden. There may be one other Bill, but that would be about the dimension of the task. The purpose of the ministerial statement is simply to put before the Senate at this stage, with full good will, the program that we have before us.

Senator Georges:

– What is the other Bill?

Senator CARRICK:

-I will seek that information and let honourable senators know, but lest there be any mystery, I point out that it may be a Customs BUI.

Senator Douglas McClelland:

– If we have to come back during the last week of the month, are you suggesting that we do so on Monday 27 November?

Senator CARRICK:

-We would have discussions between the two parties on that. I would want to conform to the best arrangements possible and would think that if we were to come back for a day it would be likely in the nature of the Senate to become two days. It is possible therefore that, if it is thought that another two days would be needed they would be the Tuesday and Wednesday.

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Senator MISSEN:

-I seek leave to make a statement in relation to the three notices of motion standing in my name for the disallowance of regulations and by-laws.

Leave granted.

Senator MISSEN:

-These three notices of motion were given as a result of inquiries by the Senate Standing Committee on Regulations and Ordinances. In each case the notices of motion were given when the time for giving notice was about to expire, to allow the Committee time to conclude its inquiries.

The first notice of motion relates to regulation 4 of the Historic Shipwrecks Regulations. The Committee considered that this regulation unduly trespassed upon the rights and liberties of the citizen by not providing the defence of reasonable excuse or some other similar safeguard in relation to the offences under the regulation. The Committee’s opinion on the regulations was fully set out in its sixty-third report, tabled on 24 October 1978, and I invite honourable senators to read that report. The regulation provides that it is an offence, punishable by a fine of $1,000 or imprisonment for one year, or both, to bring into a protected zone, declared for the purpose of protecting a historic shipwreck, any equipment for diving, salvage or recovery operations or any explosives, instruments or tools the use of which would be likely to damage a historic shipwreck, or to trawl, dive or engage in any underwater activity in a protected zone, or to moor or use ships within a protected zone. The Committee considered that a person might enter a protected zone- and it was noted that there is no provision for marking the zones in any wayunknowingly, or by accident, or for the purpose of assisting vessels or persons in difficulties in a protected zone. In these and similar circumstances a person charged with entering a protected zone contrary to the regulation ought to be entitled to an acquittal by the court, and the court ought to be able to take these matters into consideration.

The Committee noted that the Historic Shipwrecks Act does contain certain defences to prosecutions under the regulations, but the Committee did not consider that those defences covered the circumstances with which the Committee was concerned. In correspondence with the Committee the Minister for Home Affairs (Mr Ellicott) raised a legal doubt whether the regulations could add to the defences provided in the Act. This matter is fully set out in the Committee ‘s report. The Committee has now received from the Minister for Home Affairs an undertaking that the regulation will be amended as soon as possible to overcome the objections raised by the Committee, and that to remove any doubt about the validity of the amended regulation an appropriate amendment of the Act will be sought. The Committee has agreed to accept this undertaking and not to proceed with its recommendation that the regulation be disallowed.

The second notice of motion relates to a provision in the Schools Commission regulations. This provision conferred upon the Minister for Education a discretion to determine transfer allowances for members of the Schools Commission. The Committee could not see any reason for this discretion, as allowances of this kind are normally paid in accordance with entitlements established by objective criteria. The Minister for Education (Senator Carrick) has agreed with the Committee that the discretion is unnecessary and has given an undertaking that the regulations will be amended so as to remove that discretion. The Committee accepts that assurance.

The third notice of motion relates to a provision added to the Telecommunications (General) By-laws. This provision is to the effect that where the Telecommunications Commission is of the opinion that a telex installation is being excessively used the Commission may require the subscriber to install an additional service or to cancel the existing service. The Committee considered that this power, vested in the Commission, which effects the rights of subscribers, ought to be subject to some form of review. At the instigation of the Minister for Post and Telecommunications (Mr Staley), the Telecommunications Commission has now amended the bylaws so that the Commission’s decisions under this provision will be subject to review by the Administrative Appeals Tribunal. The Committee considers that this amendment properly safeguards the rights of subscribers.

In view of the action taken by the responsible Ministers and the decisions of the Committee in relation to these matters, I now withdraw notices of motion 1, 2 and 3 standing in my name under Business of the Senate. The Committee appreciates the co-operation extended to it by the responsible Ministers in relation to these matters.

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Bill received from the House of Representatives.

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

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

Second Reading

Senator CARRICK:
New South WalesMinister for Education · LP

– I move:

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

Leave granted.

The speech read as follows-

The purpose of this Bill is to authorise a contribution by Australia of an amount up to $A96.82m towards the second replenishment of the resources of the Asian Development Fund.

Honourable senators will know that Australia has been and continues to be a strong and active supporter of the Asian Development Bank which is highly regarded as an efficient and effective mechanism for channelling aid to developing countries in our own geographic region. The prime role of the Bank, which was established in 1966, is to assist in the economic development of its developing member countries and to foster economic and social growth and co-operation in the Asian and Pacific regions. It does this by lending funds, promoting investment and providing technical assistance on a scale that developed countries could not achieve bilaterally.

Since its establishment the Bank has lent about $US4 billion for projects covering all the major sectors of economic development with emphasis on the development of infrastructure facilities in the transport and communications, industry and electric power sectors as well as projects for agriculture, education, water supply and urban development.

The Bank’s lending activities are divided into ordinary and special operations. Ordinary operations are financed on the basis of the Bank’s capital resources and its borrowings on the international capital market at commercial or near commercial terms. Special operations involve loans made on highly concessional terms to the Bank’s poorest and least developed member countries and are funded from the Asian Development Fund.

The Asian Development Fund was established in 1974 to provide for the systematic mobilisation of resources for concessional lending to the Bank’s poorest and least developed countries. In this respect the Asian Development Fund can be likened to the World Bank Group’s soft lending affiliate, the International Development Association, although the obvious distinction is that the latter extends development assistance on a global basis while the activities of the

Asian Development Fund are concentrated in the Asian and Pacific regions.

Australia played a leading and positive role in the establishment and subsequent growth of the Asian Development Fund. Australia contributed the equivalent of $A18m, or about 5 per cent, towards the mobilisation of the initial resources of the Fund totalling some $US500m. Under the first replenishment of the Fund’s resources Australia maintained the level of its percentage share by contributing $A30.7m of the total replenishment amount of $US809m for concessional lending operations during the threeyear period 1976-78. It is expected that funds available to the Bank under the first replenishment of the Asian Development Fund will be fully committed by the end of 1978.

During the past 12 months a series of meetings were held by donor member countries of the Bank to consider a proposal by Bank management for a second replenishment target of $US2.15m billion for the four-year period 1979-82. The Bank’s case for such a substantial increase, which was supported by a number of donors including Australia, was based primarily on the following grounds:

Firstly, if the Bank were to provide meaningful assistance to its poorer and less developed member countries, a substantially larger concessional lending program would be required in the next few years than in the past;

Secondly, a significant expansion was justified by the particular responsibility which, as a regional bank, the Bank owed to its developing member countries;

Thirdly, the need for the Bank to increase the size of its concessional lending program through the Fund relative to its ordinary lending program; and

Finally, the Bank submitted that a four-year lending program in lieu of the previous three year cycle would be appropriate as it would assist in forward planning by donor countries and the Bank while reducing some of the problems of implementation experienced in the past.

At a final meeting of donor member countries in Vienna during April 1978, these principles were generally accepted and agreement was reached on a basic target of $US2 billion against which Australia’s 5.14 per cent basic share will be $A90.1m. In addition, a number of donor countries have pledged supplementary contributions and Australia has undertaken to contribute 5.14 per cent of these contributions up to a maximum total contribution of 5.14 per cent of SUS2.15 billion, i.e., $A96.82m. Specific amounts to be contributed by the various donor member countries are set out in the following tables which specify the basic contributions and supplementary contributions in tables I and II, respectively.

Honourable senators will see from the tables that Australia’s overall commitment at this stage is $A93,394,073. However, in accordance with our pledge, any further additional supplementary contributions to the second replenishment that may be made by other donors will increase the amount of Australia’s supplementary contribution. For this reason, the Bill provides for payment by Australia of an amount up to the maximum of $A96,8 19,695. This amount will not be subject to future adjustments in exchange rates.

In accordance with past practice with respect to similar contributions to the Fund and the International Development Association, it is intended to exercise the option to lodge nonnegotiable, non-interest bearing promissory notes encashable on demand as and when funds are actually required for loan disbursements. This will limit the impact on the Budget in the next year or so, as encashment of these notes will not begin before 1979-80.

The Bank has a most important role to play in continuing to foster economic and social development in the region of immediate interest to Australia. It is government policy to give high priority to the Asian and Pacific region in its foreign policies and to co-operate fully with multilateral agencies in the region such as the Asian Development Bank. Continued Australian support for the Asian Development Fund is therefore clearly in Australia’s national interest. This Bill provides an opportunity for honourable senators once again to demonstrate their bipartisan support for the Asian Development Bank and its Asian Development Fund as an effective and efficient development finance institution and our willingness to provide the poorest developing countries in our region with highly concessional assistance through this organisation. I commend the Bill to honourable senators.

Debate (on motion of Senator Mcintosh) adjourned.

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(Nos 1 to 9) 1978

First Readings

Debate resumed from 9 November, on motion by Senator Carrick:

That the Bills be now read a first time.

Northern Territory

– I take this opportunity on the first reading of a money Bill to bring briefly to the attention of the Senate a matter which has been of concern to me for many years. This concern has been freshened by a recent trip I had to Central Australia where I travelled quite a distance down the Stuart Highway, and also by discussions with officers of the police force who sought me out to bring this matter to my attention and by later discussions which I have had with other officers who reinforced what he told me. I am referring to the sale of secondhand vehicles to Aboriginals in the Northern Territory. I make the point quite specifically that my concern is only with Aboriginals within this particular debate. I am concerned only with the sale of secondhand vehicles, mainly motor cars and motor trucks. There are some problems dealing with the sale of secondhand vehicles in the Northern Territory to other than Aboriginal people but this is not my concern at the moment. I understand this will be dealt with by an Ordinance which is being brought into the Northern Territory Legislative Assembly.

I raise the matter here because of my concern with Aboriginal people and this problem they face and because it is of concern to us as a Federal Parliament and of course to the Minister for Aboriginal Affairs (Mr Viner). It may be that the Senate or the Minister himself may care either to bring down legislation which will deal with this matter or more likely will give advice and will co-operate with whoever brings down the legislation in the Northern Territory Legislative Assembly.

I want to look fairly briefly- I do not want to hold up the Senate- at three areas. One is the area of roadworthiness of the vehicles being sold. I am thinking here of two aspects; the first is unroadworthiness that might lead to accidents; in other words, defects which perhaps might be considered minor at the time of sale. We think here of defects in the braking system, in the steering system or perhaps with the lights. I mention lights because one of the factors brought to my attention by a police officer was that a couple of weeks prior to his talking to me there had been an accident in which five Aboriginal people had been killed. This accident had been brought about basically by a defect in the lighting system of the vehicle. I look further at the roadworthiness in the non-reliability of the vehicle. In other words, say, a major mechanical defect or perhaps as our teenage children may say ‘a vehicle which is clapped out’ because these vehicles also are sold to Aboriginal people. So there are those two aspects of roadworthiness.

I look next at the area of the price charged in relation to the value of the vehicle. I then look at the need for some legislation to cover conditions of sale, and I will bring to the attention of the Senate some information on the legislation which exists in the States. I will look at the matter of financing not only the cost but the method of financing and I will look again at the value of the vehicle and at the roadworthiness of it to be covered by legislation.

Senator Sheil:

– Does it not come under trade practices legislation now?


– I believe when we look at the notes we will find that the Northern Territory is not covered in this way, but that will be my purpose of having material included in Hansard which I will seek to do later in the speech. We need legislation to enable the police to take cars off the road. I understand that at the moment there is nothing in the legislation of the Northern Territory which enables the police to do this. The reason for this legislation is that the Aboriginal people are being- to use a colloquial phrase- ‘ripped off’ by dealers and others in the Northern Territory, and, perhaps more importantly, because of the accidents which are resulting from the sale of these unroadworthy vehicles.

What is the present situation? Why do I see this as a problem in the Northern Territory?

What evidence do I have? I have to admit that I do not have a great deal of evidence in terms of statistical data. I wanted to raise this matter this week and I have not been able to collect statistics relating to the numbers of accidents and so on. This information may be required later. I certainly see its collection as a project in which I will be willing to co-operate. Most of the information I have is more or less anecdotal. Anyone who has been to the Northern Territory in the last 10 years and has driven down the Stuart Highway or on some of the roads out to the settlements or the communities will see the same terrible story. The highway is littered with the wrecks of motor vehicles. There are literally hundreds of these abandoned off the roads, particularly those leaving the major centres and leading out into the communities.

Some of these wrecks are the result of accidents. The vehicles are burnt out or have been in an accident. We are not to know whether this was caused because of a defect in the vehicle or for some other reason. Many- I would say most- are there as the result of a major breakdown. They are vehicles which would not go any further. The Aboriginal people had to leave them on the side of the road. The cynics will say that Aboriginal people are poor drivers and poor mechanics. They will bring out the old hoary stories that Aboriginal people simply put petrol into a car and forget about water and oil. From my fairly wide experience in the Northern Territory- I think I could draw on the support of my colleague Senator Kilgariff, in regard to this matter if he were in the chamber- such statements demonstrate the ignorance of the people who make that sort of comment.

Senator Peter Baume:

– That is the way I run my car. I put petrol in it and forget about everything else.


– I think some others are the same. The Aboriginal people generally are good drivers. Those who have learnt to drive drive carefully and well. They seem to have a sympathy with the vehicle. This has been my experience of having been driven many thousands of miles by Aboriginal drivers. One seldom sees amongst Aboriginal people irresponsible behaviour when driving or fast driving. One might compare them with a teenage group of white people who tend to go in for this sort of behaviour. Very few Aboriginals will drive under the influence of drink. Again, a comparison might be made with some of our European drivers. I suggest that fewer Aboriginal drivers per thousand drive under the influence of drink than is the case with the white drivers in our community.

This is my experience. I am sure that my opinion is shared by a number of others who come from the Territory.

I look secondly at the comment that Aboriginals are poor mechanics. Again I have to deny this. It has been my experience that generally those Aboriginals who have vehicles themself or drive for a company are good natural mechanics. I remember a situation at Groote Eylandt many years ago when Groote Eylandt Mining Co. Pty Ltd was still employing Aboriginal people. One of the drivers of a D9, a large earth moving vehicle, came in to say that his D9 had a defective radiator which had to be replaced. He was what some people would have called an unsophisticated Aboriginal. He certainly had no training in mechanics. He had been driving the vehicle for a short time only. The mechanic was busy and did not do anything about it. Some time later he found that the Aboriginal driver had removed the defective radiator and replaced it with a new one. The comment made by the mechanic to me was: ‘This is a job that an apprentice is his second year of training would find extemely difficult.’

I use that as one example. There are many others of Aboriginals who have become mechanics and who have done very good work. I have mentioned in this place before the Aboriginal who went out on a boat with an outboard motor the propellor of which fell off. He spent a couple of days fashioning a new propellor even with an inside thread. He fitted this to the outboard motor and came back. I know that these are isolated examples, but they can be duplicated many times. It has been my experience that the Aboriginal has the ability to conceptualise perhaps more than the European and become a good mechanic. The third criticism people make is that Aboriginals cannot look after their vehicles. They simply put petrol in and forget about all the other things. Senator Baume made a comment in this regard. Perhaps some Aboriginals do this. Certainly I do not think that this is the case any more than in the rest of the community.

Senator Peter Baume:

– That is the point I was making.


-Exactly. Many of the vehicles to which I am drawing attention collapse- I use that word carefully- when they are driven away from the yards and back to the community. I suggest it is not as a result of these three things that we see these vehicles littering the highway. It is the result of Aboriginal people being sold ‘bombs’- in the jargon of young people- by dealers and others. I stress this point here now although it is common knowledge among the people of the Northern Territory. For many years this has been a matter of concern to all of those who have had some contact with Aboriginal people. The Department of Aboriginal Affairs and before that the Welfare Branch used to offer to provide a mechanic to check a vehicle before it was bought. The Aboriginal people have been counselled to be particularly careful. They have been told to contact the Automobile Association of the Northern Territory- our road organisation- or to get a mechanic to look at a vehicle before they buy it.

Of course the problem is that Aboriginal people, like so many others, are anxious to have a car. As honourable senators would know they have long distances to travel and a car gives them freedom to move between their communities and the Centre. Of course, there is also a certain status symbol for an Aboriginal to have a car, as there is for our other people. The Northern Territory Police are aware of the problem. I have before me a statement made by an officer from the transport branch, who obviously must remain anonymous. He stated:

We’re aware of what is going on but we can’t do a thing about it. The dealers bring up loads of second hand bombs from Adelaide, that would never be re-registered in South Australia in a fit. They still have a few months of rego on them, and of course you can drive a car for a few months with South Australian plates. The dealers flog these off to the Aboriginals. I tell you, its a b- disgrace.

The selling of the bombs and the money which the Aboriginals lose is bad enough but I am also concerned about the dealers selling vehicles at well above their price. I have a couple of statements before me which I think are important to relate as they show the experience that some people have of vehicles being sold well above their value. The following statement was made by an officer of the Department of Aboriginal Affairs. It states:

These dealers see the Aborigines coming and say to them, How much have you got to spend?’ and that’s the price of the car. The Aboriginals say, ‘I’ve got $1,000’ and then the dealer says, ‘I’ve got just the car for you ‘.

An officer from the Central Aboriginal Legal Aid Office had this comment to make:

We’ve set up a white person to price a car, and he’s been quoted $500. Then we’ve sent in an Aboriginal with a $ 1 ,500 cheque in his hand and lo and behold, that selfsame car is now priced at $ 1 ,500.

The police have made the same comments over the years. The man who brought to me the original complaint that I mentioned earlier in my speech told me that only in the previous two weeks he had seen a vehicle for which an Aboriginal was charged $1,000. He said that in his opinion- he was a Sergeant of Police with some experience in these matters- the car was not worth more than $150. The disturbing thing about that particular sale was that the vehicle was sold by a school teacher working in an Aboriginal community. I make the point that the action by that person would have been an extremely isolated case in that dedicated band of teachers who work in Aboriginal communities. This draws attention to the need in any legislation that may be drafted or in any comments that we make, to legislate for dealers as well as for individuals. I see a need for legislation to cover roadworthiness, the condition of the vehicle at the time of the sale and the value of the vehicle. After all, the old ‘buyer beware’ situation that perhaps the rest of the community is aware of, does not apply to many Aboriginal people. He has difficulty in assessing the value of a vehicle. He does not have the background that some of us have and, let us face it, we are taken down often enough. He usually does not have this background to enable him to put a fair price on a vehicle. We need legislation to enable the police to put a vehicle off the road if it is defective.

I look now at the situation in the States and in the Australian Capital Territory. I have before me a document produced by the Law and Government Group of the Legislative Research Service entitled ‘State and Territory Legislation Governing the Sale of Second Hand Cars’. This is a particularly valuable document. It is not very long and to save time I seek leave to have it incorporated in Hansard.

Leave granted.

The document read as follows-


Private Sale

There is no legislation in any of the States or Territories governing specifically the private sale of second hand motor cars. In all such cases however, these sales will be generally governed by the respective Sale of Goods legislation. The cover and protection afforded to buyers by this legislation is extremely limited.

In a contract of sale, the legislation provides that there will be an implied condition that the goods (cars) are of merchantable quality if they are sold ‘by description’ by a person who normally deals in the sale of those goods.’ The term ‘by description’ does not have a clear meaning as it is not defined in any of the Acts; however, it is fairly clear that this provision only applies to manufacturers or retailers of goods who are in the business of selling those goods. 1 NSW Sale of Goods Act s. 19 (2); WA Sale of Goods Act s. 14 (ii); Vic. Goods Act s. 19 (b); Tas Sale of Goods Act s. 19 (b); Qld Sale of Goods Act s. 17 (2); ACT Sale of Goods Ordinances. 19 (4); SA Sale of Goods Acts. 14(1).

The only recourse then for a buyer of a motor car in a private sale is to the terms of the contract of sale which may or may not include warranties as to the fitness or condition of the car.

Sales by Motor Car Dealers Queensland

Sales by dealers in this State are governed by the Auctioneers and Agents Act 1971.

Section 58 provides that the dealer must give the purchaser of any car at the time or purchase, a roadworthy certificate.

The Act does not provide for any compulsory warranty periods.

There is some protection for innocent buyers of 1 bombs ‘ in section 57 which requires the dealer to give the purchaser a written notice setting out among other things:

the make, type model and date of manufacture of vehicle;

the name and address of the previous owner; and

the engine and chassis number.

Section 56 provides that every dealer must allow the registrar, deputy registrar, an assistant registrar of motor vehicles, or an inspector or member of the police force to enter his premises at all reasonable hours to examine any second hand cars.


The sale of second hand cars by dealers in this State is governed by the Motor Dealers Act 1 974.

The Act does not provide for the issue of roadworthy certificates; however it does make provision for compulsory warranties against defects. For used cars, the warranty is (s.27):

5,000 km or 2 months where the cash price is S 1 ,000 or more; and

3,000 km or 2 months where the cash price is less than $1,000.

Warranties do not apply to inter alia:

tyres, batteries or prescribed accessories;

b ) incidental or accidental damage after sale; or

misuse or negligence on the part of the driver.

As in Queensland, extra protection is provided for innocent purchasers in the form of a requirement that dealers must display a notice on each car detailing particulars about the car.

Section 23 allows a member of the police force, a consumer protection inspector, a person authorised by the Commissioner for Consumer Affairs or the Commissioner for Motor Transport to inspect a dealer’s register, a register outlining details of all the dealer’s sales, purchases and exchanges.


The Motor Car Traders Act 1973 governs all sales of second hand cars by dealers.

The Act makes no provision for roadworthy certificates, however it does provide for compulsory warranties. For used cars, the warranties are (s. 4 1 ):

5,000 km or 3 months where the cash price is $2,000 or more; and

3,000 km or 2 months where the cash price is less than $2,000.

However, no statutory warranties apply to a car sold for under $1, 000 (s. 41 (3)(e)).

An innocent buyer is further protected by section 40 which requires the dealer to display a notice on each car setting out the relevant particulars; these particulars are similar in content to the NSW provisions.

Section 26 (7) provides that a member of the police force may request a dealer to produce his Purchases Book and any car he has in his possession.

South Australia

Sale of second hand cars by dealers is governed by the Second Hand Motor Vehicles Act 1971.

The Act contains no provisions relating to roadworthy certificates; however it does provide for compulsory warranties against defects. For used cars the warranties are:

5,000 km or 3 months where the cash price is over $1,000; and

3,000 km or 2 months where the cash price is less than $1,000.

However, no warranties apply to cars sold for under $500.

In addition the buyer is further protected by section 23 (3) which provides that all cars offered for sale must carry a notice stating-

the dealer ‘s name and address;

the cash price;

the name of the last private owner;

d ) the mileage at the time he sold it; and

the car’s model and the year of registration.

The Act makes no reference to any functions of the police or the registration authorities.

Western Australia

The sale of second hand cars by dealers is regulated by the Motor Vehicle Dealers Act 1973.

Section 40 provides that a dealer commits an offence if he sells a vehicle without the requisite certificate of roadworthiness. In addition the Act lays down compulsory warranties for second hand cars namely:

5,000 km or 3 months where the cash price is over $1,000; and

3,000 km or 2 months where the cash price is less than $1,000.

These warranties do not apply to vehicles sold for less than $500.

Section 33 (3) provides additional protection in that it requires certain particulars, similar to those in South Australia, to be attached to the vehicle prior to sale.

Section 25 empowers any member of the police force, an officer of the Department of Motor Vehicles or a traffic inspector to inspect the dealers register outlining his sales, purchases and exchanges. In addition, section 28 empowers these officers above to prohibit the sale of a vehicle where it is found to be unfit for sale.


There is no statute in Tasmania dealing specifically with the sale of second hand motor cars by dealers. However, such dealers are generally regulated by the Second-Hand Dealers Act 1 905. This Act contains no provisions relating to warranties or roadworthy certificates. However section 8 does permit a duly authorised police officer to inspect the book, required by the Act, recording all purchases and sales.


Sale of second hand motor vehicles by dealers is regulated by the Sale of Motor Vehicles Ordinance 1977.

There are no provisions governing certificates of roadworthiness; however, the Ordinance does provide for compulsory warranties namely:

5,000 km or 3 months where the cash price is more than $1,500; and

3,000 km or 2 months where the cash price is less than $ 1 ,500 but more than $ 1 ,000.

In other words, no warranty applies to vehicles sold for under $ 1 ,000. However, in this case section 2 1 requires the dealer to endorse among other things, a statement to the notice (discussed below) that the dealer is not obliged to repair defects in the vehicle and give a copy to the purchaser.

Section 20 requires the dealer to attach a notice to each car offered for sale detailing certain particulars about the car.

An inspector of the Registrar of Motor Vehicle Dealers is empowered under section 76 to inspect all books, documents and vehicles at a dealer’s premises.

Law & Government Group Legislative Research Service 14 November 1978


– I thank you, Mr Deputy President, and the Senate. In considering the most appropriate legislation for the Northern Territory I think we can look at what happens in the rest of Australia. When we consider the legislation we might use in relation to roadworthiness, there seem to be two approaches we can take. One is to say: ‘Every vehicle sold must be registered and must carry a warranty’. This is the approach that is followed in a number of States. For example, for a vehicle worth $1,000 there must be a three-month warranty, for a vehicle sold for $5,000 there must be a six-month warranty and so on. There is a possibility that that is the sort of legislation that would suit. The alternative is that we require every vehicle being sold to carry a certificate of roadworthiness so that before a vehicle can be sold it must have displayed on the front windscreen or in some appropriate place a certificate of roadworthiness. I favour the use of such a certificate but I have no strong feelings about this. I am prepared to accept either of these alternatives as long as the vehicle is safe to drive and has some reliability. In other words, it is going to last some time if the buyer pays a reasonable amount of money for it.

We should look at the legislation needed to cover the price factor and to prevent vehicles being sold well above their value. I appreciate that this is a more difficult matter on which to legislate but I raise the issue because it is related to the particular problem of the Aboriginal people. I have mentioned already the difficulty that some of them have in being able to say that a certain vehicle is worth $500, $ 1,500 or $3,000. I know that I will be called paternalistic for making these comments and no doubt some people will criticise me for it, but I think it is important that we do not see Aboriginal people having their money ripped off them. After all, nothing can be lost by having some legislation requiring a value range to be placed on a vehicle. Surely an assessor could say that a certain vehicle could be sold at a price ranging between $1,000 and $1,500 or whatever. That sounds awfully naive. But in the Northern Territory we have a situation which requires simple straightforward solutions. Perhaps such legislation might be enacted in cooperation with the Automobile Association of the Northern Territory so that a person could simply put a car in, have it valued and that, plus whatever reasonable commission is due to the seller for making the transaction, would be the price. The seller is entitled to his commission. No one denies that. I think any reputable dealer or private person would not object to that sort of situation. Certainly I know that if I were selling a car to anyone I would be happy to say: ‘Put it in, have it assessed by the Automobile Association or by an authorised dealer and the value placed upon it can be the price of the vehicle’. I do not see any complaints being made except by the unscrupulous seller.

I turn to the unsafe vehicles on the road and the possibility of the police being able to take them off. There are many of them. My information about this situation comes from the Police Department. It says that there is nothing it can do about the matter. Some sort of legislation is necessary to enable the Police Department to take off the road in the Northern Territory a vehicle which is not safe. This is not my area. I cannot say how the legislation ought to be drafted. I simply draw attention to the need for it. It should not be difficult to study the States situation and select the sort of legislation which might be appropriate. I make my reason for suggesting this legislation quite clear. It is simply to get those cars which are a danger taken off the road, in order to try to reduce some of the carnage which we have on the roads. I envisage a situation where a vehicle, which is so defective that it cannot be driven safely, can be taken off the road. A further criticism that could be made is that I have spoken only of the Aboriginal people but I make no apology for doing so. I believe that a special situation exists for Aboriginal people and this requires special treatment. If legislation can be enacted to cover all, I will be quite happy about that, but I am putting the case for 25 per cent of the population in the Northern Territory. A suggestion was made in a newspaper of recent date that more Aboriginal people would buy cars. An article which appeared in the Northern Territory News on 1 9 October states:

President of the Territory Automobile Association, AANT, believes the Association should be prepared for the time when Territory Aborigines will form a significant sector of the car-owning community.

The President, Captain Tom Milner, said under existing circumstances where the majority of Aborigines live a segregated existence on isolated communities, few were among the driving public. He predicted that with future development and ‘as mining royalties begin to flow’ many Aborigines would become vehicle owners.

Further in the article he said:

The AANT must be prepared to advise and guide this potential new field of membership.

I stress that. He said that the AANT must be prepared to advise and guide. I commend the AANT for the attitude that it is taking. I suggest that we need to take steps to prevent the fatalities that I have mentioned and to prevent the rip-offs by unscrupulous people. I suggest that the Commonwealth Government might take the initiative on this point in consultation with the Northern Territory Government. If it does this it will be satisfying a great need. Credit would be due to it for such action of which it could be justly proud. Some people have suggested that courses should be conducted to enable Aboriginal people to assess the value of cars, to train them to maintain their vehicles and to carry out repairs. These are all good proposals and action is being taken on them at present; nevertheless it is necessary that legislation be introduced as a first step. In the time available to me in the Senate today I have only drawn attention to the problem. The matter is now up to the Government. I commend the proposals to it.

Senator PUPLICK:
New South Wales

– I speak in this first reading debate to make some remarks about the newest of Australia’s mineral discoveries, that is, diamonds. I think this is probably the first occasion on which the Parliament has had a chance to turn its mind to this new development. Everybody would know that diamonds have had a fascination for people since the days when Alexander the Great first saw them in India. Not many of them remain from antiquity. Despite the fact that their name derives from a Greek word ‘adamas’ meaning invincible, one suspects that this is because the very distinguished Roman Pliny the Elder told people that the way to tell whether a stone was a diamond was to put it on an anvil and hit it with a hammer. So, very few diamonds remain from antiquity.

Given the limited time available to me today it is not my purpose to make remarks about the famous stones that undoubtedly have preoccupied the historians and people who like to speculate about them. As I shall be talking about diamond weights and sizes in Australia, I should perhaps mention that the largest diamond yet discovered was the Cullinan Diamond which when found was some 3,126 carats. That is, it weighed 1 V> lb. Other notable diamonds of great weight and value are: The Jonker, the KohiNoor, the Daryn-i-Noor, the Orloff, the Regent and the Braganza diamonds. They all have fascinating histories. As honourable senators know, diamonds do not have to have the colourless appearance that is seen in the traditional diamond. Diamonds may be blue such as the Hope Diamond, amber such as the Earth Star, pink such as the Conde, straw such as the Tiffany, or, indeed, they may be yellow or black.

In Australia diamonds have been discovered in two particular types of deposits. One type is alluvial and is found mainly in dried up river beds. Some very large diamonds have been found in such areas elsewhere in the world. Such a diamond weighing more than 750 carats was found in Sierra Leone. Diamonds are formed in geological formations in the earth later known as kimberlite pipes at depths of more than 100 kilometres where temperatures are in excess of 800 degrees centigrade and the pressure is more than 35 Kilobars- that is, more than half a million pounds per square inch. The diamonds are erupted to the surface in these geological formations called kimberlite pipes. Not all of these pipes are diamondiferous. In fact, of the thousand or so known pipes in the world only about one per cent bears diamonds. Even in South Africa only three per cent or four per cent of the pipes bears diamonds and all of South Africa’s diamonds are derived from six principal pipes.

It is not surprising that similar areas have now been identified in Western Australia. In fact the Kimberley region in Australia bears its name because the early prospectors in that area recognised the similarity to the Kimberley area of South Africa where diamonds had been known to be found for some time. Between the Fitzroy and Lennard River area in Western Australia there are lamproite pipes, which are akin to kimberlite pipes, which have been identified for a considerable time. As far back as 1 969 diamond recoveries were made in that area. Emeritus Professor Rex Tregilas, Professor of Geology at the University of Western Australia, has maintained for well over 40 years that diamonds are likely to be found in Western Australia. In 1969 he had a hand in writing a prospectus for Stellar Mining

NL, the first diamond mining operation of its kind.

Diamonds may be not only gem diamonds, but also industrial diamonds. The production of these varies from scene to scene. In countries such as Zaire, 90 per cent of all diamonds found are of industrial quality whereas in South West Africa 95 per cent is of gem quality. There have been notable experiments to produce diamonds artificially and despite the claims of people such as Hannay in Glasgow and Moissan in France in the 1880s and 1890s it really was not until after Bridgman at Harvard had pioneered the physics of high pressure technology that the General Electric company in 1955 first produced small industrial diamonds and in 1970 the first artificial gem diamond. Diamonds came only from India until 1725 when they were found in Brazil. The South African diamond industry did not start until 1866-67. South Africa now accounts for 80 per cent of world diamond production. The Vilyuysk River area of the Soviet Union now produces about 16 per cent of the world total. Discoveries there did not occur until 1955. Diamonds are now found all over the world. There is a notable mine in Murfreesboro in Arkansas and mines in Zaire, Ghana, Namibia, Guyana, Venezuela, Sierra Leone and many other places.

It is generally not known that in the period from about 1897 to 1904, coinciding with the period of the Boer War, Australia was already a major producer of diamonds. Substantial numbers of diamonds were found in the Copeton area near Inverell, at Ballina, Bingara, Uralla, Bathurst, in the Lachlan River area, Mudgee and Turon in New South Wales and continued to be found and prospected for until 1910. However, with the re-emergence of South African diamonds after 1910, production of Australian diamonds by 1920 had all but finished. In an interesting book by Ion Idriess, The DiamondStone of Destiny, it is stated that prospectors in Australia thought that these things that they were finding in the river beds were pieces of quartz or glass or whatever. They used them for scratching their initials on their iron picks and shovels and then gave them to their children to play with, and they disappeared thereafter.

In the 1960s, however, in New South Wales the Audimco company started serious prospecting in the Copeton and Inverell areas partly in association with Mount Isa Mines Ltd and partly in association with the Belgian diamond house Sibeka and with Hambros Bank. They are still producing. A mining industry review in about 1976 indicated that Australia imported 98,600 carats of diamonds valued in excess of $ 15m, a large number of which- some $4.6m worthwere re-exported. These came to Australia mainly from Israel, Belgium, Luxembourg, South Africa and India.

During the course of the last year or so, diamond prices have been forced up by a number of devices. There has been a genuine shortage of diamonds caused by major flooding in the Kimberley area. In 1976 world production of diamonds was 10.S million carats. In 1977 it had risen to only 10.8 million carats. Even by 1980, the best expectation is an increase to 14.8 million carats.

Another factor forcing up diamond prices has been that De Beers, the major South African company, operating in a unique situation through the Central Selling Organisation which is an arm of its own company, Diamond Purchasing and Trading Corporation, and in fact controls something like 85 per cent of all world diamond sales. Even the Soviet Union sells through the Central Selling Organisation. In the last year or so, De Beers has deliberately sought to drive up prices- it imposed a 34!6 per cent increase in 1977 and a 40 per cent increase in rough diamond prices this year- while at the same time to reduce the number of diamonds available for sale. For instance in its December 1977 sightings it cut supplies back by about 50 per cent.

It is also true that some countries are hoarding diamonds, probably as a hedge against international inflation- for instance, Israel. Tel Aviv is one of the four major diamond centres of the world. In 1974 Israel imported 5,568 rough carats and re-exported 2,467 carats but in 1977 Israel imported 11,213 carats but re-exported only 3,356 carats. So, despite the fact that new mines are being opened up at Letseng la Terai, at Lelthakane, at Finsch and at Orapa, and old mines are being re-opened at places like Kaingnaas, Langhoote and Jwaneng, it is not expected that large numbers of diamonds will be available to fit the world boom that is going on at the moment. A carat- that is, 200 milligrams- well polished and of top quality, in 1977 fetched about $7,000. By the end of that year it fetched about $10,000 and at present it would fetch about $18,000. Elizabeth Taylor’s 69.42 carat diamond, bought for $lm, is now on the market for $4m and, as a real indication of free enterprise, it also costs $2,500 to inspect it even if a person is a prospective buyer. At a recent Manhattan sale, for instance, a 136 carat stone went for $7m.

I want to turn precisely to what has been going on in the Kimberley area and to the consortium that is working there now, commonly known as the Ashton consortium. In November 1975 Conzinc Riotinto of Australia Limited first evidenced some interest in buying into a consortium and indicated a preparedness to spend something like $1.5m to buy a 30 per cent share. In the long run CRA in fact ended up spending a little more than that and bought a 35 per cent share of a consortium which was then called the Kalumburu consortium. It consisted of Tanganyika Holdings Limited, which was the manager and was a subsidiary of the British Tanganyika Concession; A.O. (Australia) Proprietary Limited, which was owned by London Tin, 7 1 per cent of which is owned by the Malaysian Government and 29 per cent by De Beers; Sibeka, the Belgian bankers; Jennings Mining, an off-shoot of the A.V. Jennings organisation; and a local company by the name of Northern Mining Corporation N.L. In February 1976 CRA acquired 35 per cent of this consortium, 1 5 per cent went to the other four major holders and 5 per cent to the Northern Mining Corporation.

I will not take the Senate through the ups and downs of the rearrangements of that consortium. I simply say that both Tanganyika and Sibeka sold out a substantial part of their holdings and Jennings- I am sure to its lasting regret- sold out all of its holdings. So the new consortium which emerged, known as the Ashton consortium, consisted initially of 52.6 per cent controlled by CRA, 27 per cent controlled by A.O (Australia), 8.4 per cent by Tanganyika Holdings, 7 per cent by Sibeka and 5 per cent by Northern Mining. What has been found in the area? I will not seek to take the Senate in detail through the stages at which diamond finds were made, but rather will seek leave to incorporate in Hansard extracts from five of the CRA reports to the stock exchange, which detail progressively the number of diamond finds, the quality of the finds and CRA’s comments upon them. Mr Deputy President, I seek leave for that incorporation.

Leave granted.

The documents read as follows-


On 6 September, 1978 the company released the following report:

The Ashton Joint Venture has an established quarterly reporting procedure. However this report has been prepared by the Manager earlier than planned at the request of two Joint Venturers which have made or announced plans to make share offers. It is intended to continue the quarterly reporting procedure in the future and the next report will cover the quarter ending 30 September, 1978.

Drilling Program:

The Ashton Joint Venture report of 13 July gave a progress report on the program being conducted to define the number and surface extent of Kimberlite pipes discovered in 1977 in the southern pan of the Kimberley Region. The program of shallow rotary drilling and geological mapping has now been completed. This work has confirmed 26 pipes containing Kimberlitic material with a total surface area of approximately 599 hectares. An extensive bulk sampling program is now required to disclose which, if any, of these Kimberlitic intrusions may contain potentially economic concentrations of diamonds.

Sampling Program:

The July report indicated that the commissioning of a processing plant would commence treatment of surface samples in August. Start up operations commenced as planned on 1 August and operating rates were gradually increased during the month.

The first phase of the testing program involves taking samples of approximately 100 cubic metres from the surface of each hectare of those pipes judged to be of potentially economic size. By 2 September approximately 1,918 cubic metres of material had been tested from near surface trenches. About 173 carats of diamonds were recovered from these samples. The extent to which diamonds of gem quality may be included is not known. The largest stone recovered to date weighs approximately 3.3 carats.

It is emphasised that this first phase testing can only serve to define barren or potentially economic pipes or areas within pipes as a basis for larger scale bulk testing in the event of significant concentrations of diamonds being recovered. The early results described above are taken from limited quantities of near surface material and should not be construed as necessarily representative of yield or grade potential of the Kimberlitic occurrences as a whole. Sampling of near surface material can be unreliable because of dilution or enrichment of this zone. Reliable results can only be determined by deeper and larger scale tests than are currently scheduled’.


The Ashton Joint Venture is beneficially owned in the fol lowing proportions:

A CRA subsidiary is manager of the project.


The interim progress report on 6 September reported that the current program of shallow rotary driling and geological mapping had been completed. This work confirmed 26 pipes containing kimberlitic material with an overall surface area of approximately 599 hectares. Geological investigations aimed at the discovery of additional kimberlitic intrusions are continuing.


The interim progress report stated that sampling operations commenced as planned on I August and that operating rates were gradually increased during the month. The early part of the testing program was aimed primarily at commissioning the plant and establishing suitable operating practices. During commissioning samples were treated mainly from one pipe.

As sampling operations stabilised the testing program was put on a scout sampling basis whereby only a few samples are processed from each of a number of pipes. The purpose of this scout sampling, which is continuing, is to develop a ranking of pipes. The ranking will determine the sequence in which material from pipes will be tested on a closer pattern with surface samples taken nominally at 100 cubic metres per hectare.

During August and September 250.175 carats of diamonds were recovered from 47 samples containing approximately 4,888 cubic metres. Recoveries from each trench varied widely and some samples treated were barren. The largest stone recovered to date weighs approximately 5.7 carats.

Ashton Joint Venture: The participants in the Ashton Joint Venture (‘Joint Venturers’) and their respective beneficial interests are:

CRA Explorations Pty Ltd is manager of the project. 1977 Results: During 1977 the Diamond Exploration was extended over greater areas of the Kimberley Region resulting in the discovery of many additional prospects containing Kimberlite-like material. These range in size from small dyke-like bodies to broad features with a maximum area of 50 hectares. Some of these prospects are probably pipes and preliminary tests indicate some to be diamond bearing. However, these tests were of small quantities of material insufficient in size to justify any estimates of diamond content or quality. It is not possible to judge from these results whether diamonds will be found in commercial quantities. 1 978 Program: Some of the prospects are covered by overburden and during 1978 it is planned to initially conduct a drilling program to confirm the extent of the prospects and to define the nature and range of Kimberlite-like material present. Having defined the surface extent of the major prospects, the only way in which an indication of diamond quality and quantity can be obtained is by extensive bulk sampling. This requires the establishment of a processing plant to treat large samples of material taken from each prospect.

A processing plant is being constructed and will be established in the Kimberleys around mid year. It will comprise a pre-processing plant to crush, screen and scrub the Kimberlite-like materials, a heavy media separation plant to float off unwanted material and a sorting area to extract any diamonds from the concentrated heavy minerals. It is also planned to continue exploration for additional prospects during 1978. The estimated level of expenditure for exploration and bulk sampling during 1 978 is around $6m. 13 July 1978:

Ashton Joint Venture progress for quarter ended 30 June, 1978:

As explained in the first quarterly report, regional exploration located three separate areas with Kimberlitic instrusions in the Northern, Eastern, and Southern parts of the Kimberley Region. The Kimberlitic intrusions range in size from narrow dyke-like bodies to large circular structures, which, on the evidence of surface examination, are believed to be pipes. Preliminary sampling carried out in late 1977 has shown some of these bodies to be diamond bearing and some are expected to be barren. However, because of the inherently low concentration of diamonds in kimberlite the volume of sample material so far processed from the bodies found to contain diamonds is insufficient to enable any forecasts of grades or diamond value to be made at this stage. Consequently, one of these groups of kimberlite has now been selected for further testing: Meanwhile exploration activity is continuing in other parts of the Kimberleys.


In the first six months of 1 978 expenditure on diamond exploration and evaluation by the participants in the Ashton joint Venture (in which wholly owned CRA subsidiaries have a 52.6 per cent interest) was $2m bringing the total expenditure of the Ashton Joint Venture to 30 June, 1 978 on exploration for diamonds in the Kimberley region of Western Australia to $6m- $5m on exploration and $ 1 m towards building a bulk sampling plant.

Shallow exploration drilling to 30 June confirmed the presence of 12 pipes with an aggregate total surface area of at least 280 hectares in the cluster located about 130 kilometres east of Derby. This work is continuing to define additional prospects. Preliminary sampling tests at the end of 1 977 had shown at least some of these bodies to contain diamonds but the samples collected were too small to allow any assessment of diamond content or quality.

Consequently a bulk sampling plant, designed to process about 60 tonnes per hour of kimberlite has been erected on the site. The plant comprises crushing, scrubbing, heavy media separation and concentrate processing sections. The plant will initially treat samples of approximately 100 cubic metres each spaced at 100 to 200 metre intervals over the pipes that have been shown to be of possible economic dimensions. The planned program of 100 cubic metre samples is a preliminary phase only. It is emphasised that larger samples will be needed before potentially economic deposits can be properly assessed.

Senator PUPLICK:

-However, the situation that applies at the moment is this: In a report in the Canberra Times of 7 November the venture indicated that to date it had found 3,285 diamonds in its testing. One pipe, being one pipe that had been particularly examined, had produced a total of 966 diamonds. Two diamonds have been mentioned in a particular comment to the stock exchange, one diamond at 5.7 carats and one at 4.9 carats. In other words, they are very large and very expensive stones. The area in which CRA and the Ashton consortium are prospecting contains, as I have said, some 26 identifiable diamond pipes, which cover an area which at this stage appears to be about 1 14 hectares. That is an extraordinarily large area because areas which are normally covered by these pipes are extremely small. For instance, in the Transvaal the area covers only 34 hectares and the Orapa mine which is in Botswana and is the largest diamond-producing mine in the world, only 100 hectares. So here is an area in the Kimberleys, which is considerably larger, in terms of its surface area for the production of diamonds, than the largest operating diamond mines in the world. As I said, there are also 26 pipes there, only half of which so far have been tested. Yet from that half that have been tested already more than 3,000 stones have been produced.

It is not surprising that the stock market has reacted to this in a particular fashion. In fact, in the past year or so newspaper articles on this have been quite numerous. One of my purposes in rising today is to say that not only have the articles been numerous, but I believe they also have been fuelling a situation in which investors ought to be taking a slightly more jaundiced view about where they are investing their money. For instance, on 13 June 1978 the Australian Financial Review carried an article headed ‘The Scramble for Diamonds in WA with a subheading of ‘Son of Poseidon’. I query that. It is certainly true that articles headed ‘An Outbreak of Diamond Fever’ and ‘Diamonds au go-go’ and all the rest are bringing about popular speculation on an area that needs somewhat more careful consideration. On 5 September this year the London Financial Times made some remarks about CRA and its exploration. It quoted remarks made by Sir Roderick Carnegie in what I think was a very important statement, indicating that the company itself is not attempting to fuel too many of these speculative ventures. When asked by the Financial Times about how the diamond search was going, he replied:

Ask me after another five years and $ 1 5m.

I think that attention ought to be paid to that. The article in the London Financial Times went on to state:

Stockbrokers are reminded of the past. It seemed inconceivable that people who had been so shaken by the Poseidon boom-and-bust seven years ago would, so soon afterwards, once again be swept to a renewed enthusiasm. Only the terminology, of course, has changed. The jargon now is of diamoniferous kimberlites, of indicator mineralsmeaning pyrope garnite and pierotlmenite- that turn an ordinary volcanic plug into a kimberlite with the potential for carrying diamonds.

The article continued:

The basic pattern is nothing new: a commodity is found in a remote area. The more exotic the commodity, the more esoteric its technology, and the more remote from civilisation the pegging, the greater the area of uncertainty, and the greater the element of speculation.

I want to raise two matters which are particularly related to the current situation. One is that I believe that the field in the Kimberleys, by all reliable indications, could be a discovery of enormous value and enormous potential. But I believe that it is not something that people should regard as a ‘get rich quick’ overnight investment. It is not like finding that one has $1,000 on Arwon. People who are prepared to study the matter and to take it seriously should not attempt to drag other people into making a large amount of speculative investment.

However, it is not surprising that some months ago it was announced that there would be an Ashton float and that part of the holdings of A.O. (Australia) were to be put on the market. When Ashton was floated, the 28 million ordinary shares at 50c a share, were fully subscribed before the matter got onto the exchange on 9 November. The 50c shares went up straight away to 86c and, after the day’s trading, something like 10 per cent of the shares of the company had changed hands. Apart from the distinguished individuals who are investors in this, we find that the AMP Society has got 275,000 shares; Burns Philp Securities, 100,000; Chamber of Manufacturers Insurance, 100,000; Gas and Fuel Corporation Super Fund, 75,000; NRMA Funds Management, 50,000; Victorian State Electricity Commission, 50,000; Perpetual Executors and Trustees, 75,000; Prudential Assurance, 100,000; CML Assurance 320,000; and the AIDC, 50,000.

Senator Button:

– And Mrs Hamer.

Senator PUPLICK:

-Yes. The list contains many distinguished names including Dame Mabel Coles, Lady Helen Cutler, Lady Parbo, Sir Ian McLennan, Sir James Vernon, Sir Donald Hibberd, Sir Kenneth Humphreys, Sir Ian Potter, Mr Allan Coates, Mr Eric Avery, Mr George MacKay and Mr Ray Eabry and, certainly, as Senator Button said, the wives of some fairly distinguished people, including the wife of the Governor of New South Wales.

Senator Missen:

– But not a Labor senator?

Senator PUPLICK:

– Labor senators have not been noted in the past for their enthusiasm to invest in Australia other than in words. The second point that I want to raise is that there is a potential for some considerable conflict between the diamond explorers in the Kimberleys and the rights of the Aboriginal people in that area. A large part of this area potentially falls within the land traditionally occupied by the Oombulgurri people. The Western Australian Government has, I think, been a little insensitive in indicating the extent to which it was prepared to change its Mining Act so that control over entry into Aboriginal areas was removed from the control of the Commissioner for Aboriginal Affairs and put in the hands of the Minister. There are a large number of companies, including Dampier which is an offshoot of BHP and Stockdale which is an offshoot of De Beers, which have been looking to move into these areas against the wishes of the traditional Aboriginal people.

It may well be that one of the responsibilities of this Federal Parliament will be to keep an eye on the extent to which local State legislation will act to the prejudice of local Aboriginal people. There are already some 5 10 objections to mining activities and permits lodged by people from the Nookenbah station and the Aboriginal pastoral property associated with that. Some of the companies, CRA, Carr Boyd, Amax, Scamander and Metals Exploration which are undertaking activities to which the Aboriginal people have some objection, I believe need to be looked at closely. I believe, as I said, that the Federal Parliament cannot be insensitive to the fact that the Aboriginal people in that area have certain rights which must be protected. They ought to be protected, in the first instance, by the Western Australian State Government but failing that, they may well have to be protected by somebody else.

In the last couple of weeks there has been some criticism, I think somewhat unjustified, of the way in which CRA has made its reports to the exchange. There has been some criticism that CRA has not provided the amount of information in its reports that was required by people in order to make a soundly based investment. CRA and the Ashton consortium has responded, I believe, by entering into negotiations with the exchange and altering the way in which it intends to make its reports in future. For instance, some of the unanswered questions which have now been answered were: How many pipes have been tested? We know in fact that half of the 26 pipes have been tested. Did any of the pipes fail to yield diamonds? We do not know that. What was the result of the testing from each pipe? Honourable senators will see in the Bulletin this week that the specific details of the testing of pipe A of the consortium’s holdings are reported in some detail. I think this is a significant advance. The type of material from which the stones have been found and the quality of the 5.7 carat stone were reported at an earlier stage.

The amount of material that the consortium has gone through in looking for its diamonds has, I think, again been particularly encouraging. We have a situation in which the rate of recovery that is reported is already fairly high by world standards. In September this year, it was reported that 1 73 carats had been found in 1 ,9 1 8 cubic metres- that is 4,000 tonnes or 0.0 1 carats per tonne. The international figures make an interesting comparison. For instance, the Let.seng mine, which is a very profitable mine, has carats per tonne of 0.03. One of the major De Beers mines has 0.18 carats per tonne. The Orapa mine, which I have already mentioned, has 0.67; the Finsch has 0.66; and Lelthakane has 0.32. Even by world standards, we find a situation that applies in the Kimberleys at the moment to be this: There are undoubtedly major finds; they cover an enormous area which is potentially as large as any area currently being investigated; the quality of stone and the numbers of stones appear to be very encouraging; there is considerable amount of public investment in that; and the rate of recovery is reasonably high by world standards.

As I said, my desire to bring this matter before the Senate is simply to reinforce those two points. Here is something that I believe is a significant, useful and valuable investment in Australia. It is the first occasion on which there has been a public float in the mining and extractive sector since Weeks Petroleum went on the market in 1972. 1 believe that it is exciting and encouraging, but I believe that small investors should not regard this as a get-rich quick scheme or be seduced by a lot of comment- whether it be by the cover of the Bulletin, the cover story in Newsweek or speculation in the Sunday papers- into rushing off and investing small amounts of money in the hope that they will get rich quick overnight because I do not believe they will. This is a long-term investment for those seriously interested in a major new industry. The Senate should be aware that we may well be faced with a conflict between the rights of the traditional Aboriginal people in the area, the mining companies and the Western Australian Government. That may be a matter that will come before the Senate at some time in the future. With those remarks I hope that the Senate will be able to exercise its continuing oversight in an area of some considerable importance, potential excitement, and I believe an area of great profit and benefit to Australia in the future.

Senator Georges:

- Senator Puplick quoted from a document which is of great interest if one recalls the Comalco preferential issue of some years ago which caused quite a debate in this place. I would ask that Senator Puplick table the document from which he read, the shareholdings in that Ashton float.

Senator PUPLICK:

– I quoted from a report in the Australian Financial Review of 10 November 1978. I am prepared to table it or make it available, whatever the honourable senator requires. It is a newspaper cutting and I seek leave to table it.

Leave granted.

Senator KEEFFE:

– I want to contribute to this debate by making a number of references to the abolition of the Aboriginal and Torres Strait Islander Housing Panel Incorporated and to some of the reasons behind it. Firstly, I want to make a comment on an editorial which appeared in yesterday’s edition of the Sydney Sun. Some criticism was made of the activities of the leader of my party when he tried to expose certain matters in another place. The editorial states:

There is little doubt that the Prime Minister, Mr Fraser, is uncomfortable under the pressure of attack on his Primary Industry Minister, Mr Sinclair.

His team, when in Opposition, dished it out ruthlessly to Labor ministers.

There is a crude political justice in the counter-attack.

But Mr Hayden is out of place with his campaign of innuendo and selective evidence taken from a NSW inquiry into Mr Sinclair’s financial affairs.

He is wasting Parliament’s time. He is prejudicing the outcome of possible legal action.

Matters of this nature raised in either House of this Parliament are not a trial by the Parliament. I submit that the editorial is an attempt to intimidate members of the Opposition from raising matters of very serious public importance. I hope that there will be no continuation of that sort of pressure.

The matter on which I speak has been raised in another place by a number of my colleagues, including Mr Wallis of South Australia, Dr Everingham, the shadow Minister for Aboriginal Affairs, Mr Jones and Mr Holding of Victoria and Mr Kerin of New South Wales. Also on a previous occasion I raised the matter in this chamber. I suggested that there was a necessity for a proper public inquiry into the activities of both the Prime Minister (Mr Malcolm Fraser) and the Minister for Aboriginal Affairs (Mr Viner) in relation to Stawell Timber Industries Proprietary Limited. On 15 August 1978- to put everything into the correct perspective and the right chronological order- Mr Viner wrote to Mr Stanley, who at that time was the Chairman of the Aboriginal and Torres Strait Islander Housing Panel Incorporated. The letter read as follows:

I am writing to inform you of my decision to cease the Commonwealth’s financial assistance to the Aboriginal and Torres Strait Islander Housing Panel.

This decision has been reached after careful consideration of the priorities of all Aboriginal programs within the financial resources made available by the Government for Aboriginal advancement in the 1978-79 financial year. I have also taken into account a Government decision that available expertise in the field in which the Panel is operating should be utilised.

I have therefore decided not to continue Commonwealth financial assistance to the Panel beyond 30 September 1978. I realise, of course, that the Panel may wish to continue under independent sponsorship and, if this is feasible, I would be pleased to see the relationship between my Department and the Panel continue.

In any event, I see the need for an early meeting between the Panel and officers of the Depanment to determine the extent of Commonwealth support required to 30 September 1 978, and future action in respect of Panel assets financed by Commonwealth grant. Should the Panel cease operations, I shall have the necessary financial arrangements made to enable the activities of the Panel’s architect in Alice Springs to be continued under the auspices of an Aboriginal organisation.

In view of my decision, I must stress that the Aboriginal and Torres Strait Islander Housing Panel should not, after the date of this letter, enter into any commitments whatever in the expectation of Commonwealth financial support. Financing this financial year will be strictly confined to meeting ongoing costs to 30 September 1978 and liabilities properly existing prior to the date of this letter.

The letter was signed by Mr R. I. Viner. The letter was replied to on 22 August 1978. The reply was in very great detail and was signed by Mr Stanley, the Chairman of the Panel. I want to quote three paragraphs which I think are of relevance. Mr Stanley said; . . the Panel:

  1. was informed by the Acting Secretary of your Depanment in March of this year that your Depanment would be making a modestly increased bid of $196,000 for the Panel’s operating expenses for 1978-79;
  2. in June 1978 received a supplementary grant of $ 1 9,000 for operating expenses for 1 977-78, and;
  3. was advised on 30 June, 1978, by the Secretary that the Depanment has approved continuation of the Panel’s activities at the 1977-78 level of funding during the Supply Period up to the end of November, 1978’.

I submit that the Panel was closed down because firstly it had objected to preferential treatment being given to Stawell Timber Industries. Amongst the criticisms that the Panel made was the high prices-this has been verified by other people- which were being charged for the construction of homes and which consistently went 10 per cent to 15 per cent above prices asked anywhere else. There was criticism by the Panel of the shoddy work in some of the buildings constructed by Stawell Timber Industries. Finally, it was obvious that a number of people associated with this construction company were friends of the Prime Minister. I will expand on that later in this debate.

I believe as a result of the replies that have been given in another place, that it is obvious that the Prime Minister has now endeavoured to unload himself of any political or other responsibility. He has passed it on to the Minister for Aboriginal Affairs, who is in a most uncomfortable situation. Earlier today my Whip, in consultation with the Minister and the President, arranged for the incorporation in Hansard of a number of documents. I now seek the incorporation of that letter from Mr Stanley.

Leave granted.

The document read as follows-


With representation from The Royal Australian Institute of Architects The National Aboriginal Consultative Committee 22nd August, 1978

The Honourable R. I. Viner, M.P., Minister for Aboriginal Affairs, Parliament House, Canberra, ACT 24 Kembla Street, Fyshwick. ACT 2609 (P.O. Box 408) Telephone (062) 80 6003

Dear Mr Viner,

I received your letter dated 15th August, 1978, today, informing me of your decision to cease financial assistance to the Housing Panel. I trust I can assume that your decision is of recent origin, as the Panel:

was informed by the Acting Secretary of your Depanment in March of this year that your Depanment would be making a modestly increased bid of $196,000 for the Panel’s operating expenses for 1978-79;

in June 1978 received a supplementary grant of $ 1 9,000 for operating expenses for 1 977-78, and;

was advised on 30th June, 1978, by the Secretary that the Depanment has approved continuation of the Panel’s activities at the 1977-78 level of funding during the Supply Period up to the end of November, 1978’.

I am aware that there has for long been opposition to the Panel on the pan of a small number of people which is of a general nature and has never been articulated into specific, substantiated criticism. Much of this opposition is based on a lack of appreciation of the Panel’s important function in your Department’s programmes, and an ignorance of the Panel ‘s substantial achievements in the past two years.

It is important to remember that the Panel ‘s principal concern is with remote Aborigines. These are people whose traditional modes of adaptedness and behaviour are so different from Europeans ‘ that they remain inscrutable to all but a select few. Housing, in our sense of the word, played no pan in their traditional environment. Houses now do, but to be successful, they must reflect the behavioural and organizational modes of particular Aboriginal groups. There are endless examples of expensive housing schemes which have failed simply because they paid no attention to the basic principles of a group’s social organization. As you know, one of the principal functions of the Panel was to blend the expertise of Aborigines, anthropologists and architects to develop housing schemes which would be uniquely suited to the special needs of Aborigines living in isolated areas.

At a time when, in the recent Budget, you have significantly increased the allocation for Aboriginal housing, you also propose to remove the only research and development organization in this field. The only certainty in such an action is that you are gambling taxpayers’ money on the improbability that people with no experience whatsoever in the field of understanding behavioural modes foreign to them will individually stumble on the right relationship between housing and its proper form and setting in a remote Aboriginal community.

In this respect I would remind you of the Hay Report’s comments on the Housing Panel: ‘. . . no group other than the Panel is presently capable of doing this necessary (underlining mine) innovatory and research work on Aboriginal housing’ and ‘the Panel has the skills, which probably no one else possesses, to develop designs for general use . . .’. Since the Hay Report was written the Panel has significantly augmented its already considerable expertise and techniques, a fact which is generally well known among important Aboriginal groups. For example, I enclose a copy of a letter from the Northern Land Council to Queensland Mines which amply demonstrates the latter point.

I have already mentioned the Panel’s substantial achievements in the past two years. The Panel is the only organization in Australia which has consistently designed and had constructed successful housing schemes for remote Aborigines. Initially, the thrust of our approach was to identify those locations where housing was a clearly identified, demonstrated and urgent need, and start our research and development programms in these locations. That is why, initially, we focussed on Aborigines living in or near an urban environment, on the empirical evidence that they had elected to live and work in close contact with the European dominated market economy. Alice Springs town camps and Mr Margaret, which in 1976 could be regarded as a satellite suburb of Laverton, Western Australia, were the Housing Panel’s first projects. The first prototype designs were completed by November 1976, have since been built, and are now being occupied most successfully by the Aborigines for whom they were designed.

By developing prototypes where a demonstrable need existed, the Panel could be sure that, when it assessed a prototype, it could evaluate it in terms of the specific requirements for housing and the behavioural modes of the Aborigines concerned. The information obtained from these projects could then be applied to the more difficult remote situations where Aboriginal requirements were radically different from the conventional European. The Panel also expected that, by locating the first prototypes in or near an urban centre, they would come to the attention of many more Aborigines (visitors to the town) than they would if they were located in a remote location. In this way, they were likely to excite comment and, in doing this, yield insights into what other Aborigines thought about them. This expectation has amply been justified.

The experience gained from these initial projects has been invaluable to the Panel’s subsequent work in remote locations such as Aurukun and its outstations, Laura, Roper River and its outstations, Peppimenarti, Parada, Uluru and Waite Creek. Of course, the experience has also been important to the successful continuation by the Panel of your Department’s multi-million dollar building programme in Alice Springs.

As I have already mentioned in this letter, the Panel is the only organization in Australia which has had a consistent record of success with the Aboriginal housing schemes it has developed. Not only that, but the houses themselves, all of which have been constructed in remote locations, have been built most economically, at an average cost of S3 1 ,830 per house, as I pointed out to you in a letter dated 8th August, 1978. These costs appear significantly less than the average of costs of housing associations generally. I would also remind you that the houses built by the Panel are prototypes and their cost is therefore inflated for this reason.

By the criterion of cost per unit, the Panel ‘s programme is clearly excellent. By another commercial criterion, its performance can hardly be faulted. In 1977-78 the Panel was responsible for design, documentation, engineering computations and details and superintendence of capital works programmes to the value of Sl.S million. Detailed documentation for contracts to be let to the value of $800,000 was also completed. At current professional scales the value of this work to a professional office would be of the order of $ 1 92,500, which, if you add the Panel ‘s travel and accommodation costs for 1977-78 of $31,000, gives a total of the order of $223,500 which could be recovered had it been done by a professional office. The Panel’s budget for 1977-78 was only $ 1 74,000. As you know, the Department of Construction charges professional fees to Aboriginal associations and I can only assume that the difference between the fees the Panel could charge and its annual budget, if the work has been performed by the Department of Construction, would be lost to Aborigines.

During 1977-78, the Panel also completed the greater portion of the detailed work for the $ 1 .564m 1978-79 capital programme in Alice Springs town camps, the value of which you do not acknowledge in your letter, though I note in your post Budget press releases you make particular reference to the programme. When you add the value of the practical work the Panel has done during 1977-78 on town plans for Peppimenarti, Aurukun and the Alice Springs town camps, the processing of leasehold applications in Alice Springs and Tennant Creek, and the assistance the Panel gives communities in the preparation of budgets and other documentation required by your Department, all of which would be charged by a professional office, the Panel can be seen to be more than covering its operating costs in the commercial market and, in addition, still performs an impressive research and development function, the cost of which could not fairly be recovered from individual communities and which I will discuss later.

I must assume that the available expertise to which you refer in your letter of 15th August, 1978, is possessed by the Department of Construction. The Department of Construction, rightly, has an enviable reputation in the conventional field of engineering and construction. In such a specialized area as remote Aboriginal housing, the techniques necessary to fulfil a role simply would not develop or flourish in a huge national organisation like the Department of Construction. We are in a position directly to compare the work of the Department of Construction in this field with that of the Housing Panel. In doing this, I do not intend in any way to criticize the Department of Construction as a whole. I merely want to illustrate the extraordinary difficulties the normal professional would face in this difficult field:

At Aurukun, which, as you know, has its own sawmill, the Department of Construction in December 1 976 designed (DC drawing AC 77/ 1, 77/2, 77/3, 77/4) a concrete block house (the cement and probably the aggregate for the blocks would have had to be transported from Cairns, together with the bricklayers to lay them) without ceilings or an insulated roof, without internal or external doors or flyscreens (not even to bedrooms or bathroom), without power points, without verandahs and without toilet, which, it was estimated, would cost $36,700 to erect. One other feature was notable. The shower recess not only had no door, but had no window. Instead, some concrete blocks were simply left out of the wall at a height of 1.4m. Consequently, any passer-by could look right into the shower.

In contrast, the Panel designed a amber house, the scantlings and other timber for which could be provided by the sawmill and which could be (and now is) built by local Aboriginal carpenters, which contained all the attributes the Department of Construction ‘s design lacked and many more as well, and the first three of which were built for an average cost of $37,000. The Aurukun community decided which design it considered more suitable. It rejected the Depanment of Construction’s design and built the Panel’s;

At Wiluna, Western Australia, the Department of Construction has designed a one-room, unserviced hut with verandah around two walls (a floor plan (DC drawing WA78/S2/A1 ) of which I enclose). In plan and form it is no different from the Stage I transitional housing of the 1960s, abandoned examples of which you can see in almost every Aboriginal reserve and settlement in Australia. Construction of 12 of these huts was commenced in August 1977 under Department of Construction supervision. Not one has yet been completed. There seems no conceivable reason why Aborigines would, having rejected similar huts in the 1960s, accept them in 1978.

At Mt Margaret, to the south of Wiluna, for a closely related tribal group, the Panel designed a number of prototypes, all of which had the amenities a person would expect to find in a house. Construction of five prototypes was commenced in November 1977 and all are now occupied with evident satisfaction;

In Arnhem Land, for the greater part of 1977-78, a number of Aboriginal Housing Associations whose technical consultants were the Department of Construction, were unable to build anything simply because their technical consultants never visited them. If the Department of Construction did have available personnel, they did not travel eastwards.

At Roper River in Arnhem Land, the Panel has designed an extremely innovative house, three prototypes of which are now substantially complete. With the Panel’s assistance, the Ngukurr Township Association has also constructed a number of temporary shelters and has commenced work on appropriate dwellings in support of its recent homeland centre movements;

At Areyonga, slightly to the west of Alice Springs, the Department of Construction has designed a house (a photograph of which I enclose) which Dr H. C. Coombs, in a letter to you, has described as unlikely to be successful and destined for what he calls the ‘museum of failed’ house designs which already exists at Areyonga. From the enclosed photograph, I am sure you will agree with Dr Coombs ‘s verdict.

In Alice Springs, the Panel has developed a total programme which includes a number of activities of a community development nature, which has transformed the town camps from places of helplessness and futility to environments where people have rediscovered their identities and are developing their communities confidently for the future. I enclose a photograph of Mt Nancy camp now and one of an ablution block designed and built by the Panel. You can see ho* favourably the buildings compare with the Department of Construction house at Areyonga.

The Housing Panel is a unique organization. It was set up by your Department. As you know, it has a majority of Aboriginal men and women, all of whom play a prominent part in directing and advising our small staff. We also have five Europeans on the Panel, three of whom, Drs H. C. Coombs, L. A. Hiatt and Diane Bell, are social scientists of no small reputation and experience. The other two Europeans are representatives of the Royal Australian Institute of Architects and provide invaluable technical support to the Panel’s architects. In fact, the Panel is an excellently balanced forum of expertise which is always available to our staff. I do, however, emphasize that this is an Aboriginal body which, in terms of priorities, acts for the interests of Aborigines throughout Australia.

The three architects on our staff have now developed considerable expertise in a field which requires a complex blend of anthropological and technical skills. They are all talented and committed and, in this field, have no equal in the country. Our director has a combination of management and anthropological experience. A chartered accountant and former management consultant, he also has a Ph.D. in anthropology.

You mention that you took the decision to disband the Panel having taken into account a Government decision that available expertise in the field in which the Panel is operating should be utilized. If there was one post doctoral social anthropologist in your Department (and, for that matter, in the Department of Construction), I might consider that there might be some available expertise. Unfortunately, there isn’t. Nor to my knowledge is there anyone approaching the equivalent business experience of our director which explains the efficiency of the Panel and makes one wonder if your Department has an aversion to talent.

The fact of the matter is that the Department of Construction, the only other organisation in which the expertise might exist, simply has not recourse to the well rounded body of experience available to the Panel. That is why, if the Panel is disbanded, there should be considerable cause for concern that moneys granted by the Government to remote Aboriginal communities will be expended on inappropriate buildings which, in the short term, will be abandoned or destroyed. On the other hand, guided by the Panel ‘s expanding research experience, there is no doubt that the Department of Construction could play a very important role in building in remote Aboriginal communities.

Let me briefly illustrate the kind of area in which the Depanment of Construction would simply be out of its depth. During a recent visit to Aurukun, the Panel’s director remarked the number of times trees were referred to as soandso’s tree. With his anthropological experience he sought to determine if these references denoted some kind of ownership. Eventually, he ascertained that the references denoted an ownership of a very special kind. Customarily, at binh, a person’s afterbirth was buried beside a young sapling as part of a complex custom called Kuuten, and the growing tree then came to represent the physical health and spiritual wellbeing of that individual. If the tree withered and died, so, too, would the individual. As many of the trees were in a part of Aurukun which, according to the town plan prepared by the Queensland State Department of Works, was to be cleared, the director mapped all the Kuuten trees and identified those trees at risk to the Aurukun community. Not surprisingly, this resulted in the community asking the Panel to revise the Aurukun town plan.

The Depanment of Construction, in this field, has one further weakness. Unlike the Housing Panel, it has found it difficult to find and keep staff committed to designing for Aboriginal groups. For example, during 1977-78, in both Darwin and Alice Springs, there have been three different architects responsible for the Department’s Aboriginal portfolio and, at times, there have been none. We Aborigines like to develop a relationship with one person.

The Housing Panel is also active in a number of other fields. It has an active shelter program. The first to be developed was the Goorawin, which Senator Peter Baume, when he was on the Senate Standing Committee on Social Environment, described as a ‘most promising development’.

For your information, I enclose a photograph taken earlier this year and sent to us by Aboriginal Hostels, of a Goorawin still in use in Fitzroy Crossing. Its condition is still excellent and it is clear that in terms of cost effectiveness, it is a considerable improvement on tents, which last for no longer than a year in the tropical north.

Other shelters have been developed this year. For example, the Maymuru was described by your Queensland office as being ‘very suitable for use in places like Aurukun, Mornington Island, et cetera’.

The Panel also writes a number of reports, both for your Department and for a wider audience. On 19 May 1978, just six weeks before the year’s end and the decision to terminate the operations of the Panel, Mr Hay had the following to say about the Panel ‘s reports:

The Panel’s reports are of considerable assistance in the ongoing work of the Department . . . We also regard the reports as a valuable contribution to the growing stock of expert advice and reliable information on Aboriginal Affairs. This sort of information is essential (italics mine) both to our work and to the efforts of the many others- including, of course, Aboriginal people- involved in Aboriginal development.’

The Panel, at present, has a number of reports near completion. I would like to draw your attention to two of them. Your department has asked, in the most general terms, the Panel to prepare a report on industrialized housing. On IS March 1978, the Panel submitted a portion of this report to your Department in order to determine the level of information which the Department regarded as desirable in a final report. Since that date, despite numerous protestations by officers of your Depanment that a meeting should be held in the near future, no action has been taken. Completion of the final report is simply awaiting the information your Department agreed was required but has not yet provided.

In May, 1978, the Panel was requested by the Queensland Regional Office of your Depanment to prepare a report on the Torres Strait Islands. As arranged by your regional office, the Panel’s director visited the Torres Straits last month. From houses which have cost the Commonwealth $74,000 each on Darnley and Murray Islands, to the components of a complete house being simply left on the beach for over three years at Stephen Island and still no work being done on them, to an uncompleted (and totally unnecessary) airstrip terminal on Yorke Island (all, I might add, monitored by the Depanment of Construction), to a sea wall on Saibai Island which has already crumbled within a year of being completed, to a water system on Boigu Island which necessitates each householder having to travel to Papua New Guinea twice a week between August and October to draw drinking water and wash clothing, the performance of the Commonwealth has not been impressive. The director’s visit clearly aroused the curiosity of the Islanders. He has already verbally reported to your Brisbane office on the major problem areas and outlined some promising initiatives which might be taken. His report will not now be completed and an opportunity to develop a coherent plan consistent with Islander aspriations will be lost.

The fact that your Depanment initiates new projects for the Panel in one month and disbands the Panel early in the next also suggests that the latter decision was taken suddenly. It was done without any evaluation of the Panel’s activities. Such an evaluation was proposed by your Depanment in June 1978, received the Panel ‘s enthusiastic support and was planned to commence in August and be completed by the end of the month. From the Panel’s point of view, the evaluation was welcome, for it would have established once and for all the significant role it has played and is playing in your Department’s housing programmes despite its small size and modest budget.

The Aboriginal groups for which the Panel has worked have, without exception, praised our work. The three regional offices (Darwin, Queensland and Alice Springs) in whose area the Panel has worked have been more than satisfied with our assistance. It has resulted, without exception, in successful housing programmes which have not occurred with regularity elsewhere. The Panel’s success encourages a constant stream of enquiries from remote Aboriginal groups. For example, only yesterday, we received enquiries from two different Northern Territory groups, copies of the letters from which I enclose. Further, as you know, both your Queensland and Darwin regional offices were, until August 15th, 1978, actively exploring ways to increase the Panel’s activities in their regions. Such actions do not suggest an organisation which has failed.

Finally, the Panel is an Aboriginal directed organisation. It is also a representative one. Our members have been nominated by the National Aboriginal Conference, the Central Land Council, Centralian Legal Aid, Central Australian Aboriginal Congress, the Northern Land Council and Tangatjira Association (the Alice Springs town campers’ association). Two members represent remote communities in which the Panel has worked, those in Northern Queensland and the Eastern Goldfields. Our staff members consider that they have a strong responsiblity to the Aboriginal communities for whom they work. They are also responsible to an Aboriginal controlled Panel which, in turn, has responsibilities to your Depanment. There is no comparable organisation representing remote Aboriginal interests in the housing field in the way the Panel does. The alternative you propose, the Depanment of Construction, cannot quite obviously, first of all, represent Aboriginal interests. One only has to remind you of the situation at Papunya, N.T., where it required a fortuitous visit by the Prime Minister to set in motion the completion of a number of houses which had remained uncompleted for a number of years for reasons only the Depanment of Construction can give. In terms of your professed policy of Aboriginal self-management, your decision to cease funding the only Aboriginal organization undertaking a research and development role in housing remote Aborigines throughout Australia appears to be a denial of the rights of Aborigines to decide their own priorities and the ways they want to give expression to them and, thus, practice self-management.

I have written this letter on the assumption that, because the Panel does not actively seek self-publicity, you might not be aware of the substantial role the Panel plays in your Department ‘s programmes, its cost effectiveness by any criteria, and its importance both to your Depanment and, more importantly, to the advancement of Aboriginal and Islander peoples.

As you know, the Aboriginal members of the Panel have, since February of this year, been trying without success, to obtain a meeting with you (Mr Liddle ‘s telephone call of 24 February, 1978, followed by our director’s letters of 1st March and 26th April, followed by my telephone call of 29th June). I hope that on reading this letter, at least, you will consent to meet with myself and the Panel’s director, preferably before Thursday of this week.

Yours sincerly J. Stanley Chairman cc: Mr D. O. Hay Mr. J. P. M. Long

Senator KEEFFE:

– As I mentioned in a previous debate when the Panel was established I was critical of some aspects of it. I say quite frankly that over a period of time the Panel has done a tremendous job. I think that we have to look at it on the basis of its association with the construction of worthwhile homes for Aboriginal people in various parts of this country.

Evidence would appear to indicate that Stawell Timber Industries has secured at least $ 1 m worth of contracts; in fact, the figure may be $2m. It appears that the great majority of these contracts, if not all of them, have never gone to tender. Treasury regulation 52, which provides for firm checks on spending, apparently does not apply to the purchase of Aboriginal assets. I think that this is a very drastic thing and should be examined very closely. Competitive tender is still required because of the provisions of the Department of Aboriginal Affairs departmental regulation 232, which states:

Copies of tenders or quotations must be submitted to the Department as a prerequisite to the release of money and this applies when the purchase of an asset exceeds $5,000.

We want to ascertain a little more of the background of Stawell Timber Industries. It is a company which is based in the Prime Minister’s electorate and which employs between 150 and 200 people at various times. The company is at present in liquidation; but, as is normal practice, it is continuing operations on the basis that a receiver has been appointed. The company was advertised for sale in the Australian of 26-27 August 1978. The company has been in serious financial difficulty for at least the last three years.

Company representatives met privately with the Prime Minister, Mr Fraser, both in Canberra and in his electorate. Supposedly in view of the employees engaged by the company, members of the Stawell Town Council also have met with the Prime Minister in an effort to save the jobs involved. According to some people at the Department of Aboriginal Affairs, Mr Fraser met with representatives of the company around July or August of this year and he then instructed his staff to set up a meeting between Mr Viner and Stawell Timber Industries. There is some doubt about the actual date on which this meeting took place, but it was somewhere between midAugust and mid-September 1977. Prior to this the company had undertaken quite a deal of Aboriginal Housing Association work. Every one of its projects had been criticised, but for some reason, especially whenever the Department of Construction was involved in granting contracts, Stawell Timber Industries succeeded in gaining the contracts. It appears that there has been some collusion, as I will endeavour to point out in detail shortly, between the Department of Construction, the two Ministers I have named and the company.

Senator Peter Baume:

– I raise a point of order. I believe that the honourable senator has stated that there appears to have been some collusion involving members of the other place. I believe that that is not in accordance with Standing Order 418.

Senator KEEFFE:

– I will withdraw the word collusion’. I have only a limited time in which to speak. I will say that there has been close cooperation between the two Ministers and the organisations to which I have referred. Stawell Timber Industries also gained several contracts through its agent in Darwin, a Mr Ah Toy. Mr Ah Toy recently was appointed to the Government’s Aboriginal Employment and Development Committee. He has had a long but intermittent association with Aboriginal affairs. If any inquiry is to be held, Mr Ah Toy should be one of the chief witnesses.

Further points that I want to make include the following: According to the Department of Aboriginal Affairs, Mr Fraser took his proposal to Cabinet. He had, according to what the company stated, offered Stawell Timber Industries Pty Ltd some form of guarantee to help the company out. There is documentary evidence which I shall reveal in a few moments. Apparently Mr Viner objected to giving STI favourable treatment. Perhaps he did this in the light of massive criticism he was receiving about STI constructions being totally unsuitable. But he was told that a Cabinet decision had been reached and apparently he had no option but to go ahead and be present at the meeting. I am advised that present at the meeting was the Stawell Timber Industries managing director, Mr Lindsay Browne, who is also the Liberal Party State delegate for the electorate of Wannon which, of course, is the Prime Minister’s electorate. He is a prominent fund raiser for the Liberal Party. Others present were Mr Viner and Mr John Stern, who was then the director of Aboriginal housing programming in the Department of Aboriginal Affairs. At that meeting Mr Stern was instructed to provide Mr Browne with a list of names and addresses of every Aboriginal Housing Association in Australia, detailing their building requirements. Mr Stern began asking questions. He was transferred to the land rights section of the Department of Aboriginal Affairs under Mr Malone. The result of the meeting and acquisition of the list was the sending of a letter to each Aboriginal housing association about building requirements. In the letter, Stawell Timber Industries posed as a firm favoured by the Government because of its record in construction of Aboriginal housing. The firm dealt directly with each Aboriginal housing association and so avoided going to competitive tender. Mr Viner has, in fact, been warned continually about the unsuitability of STI constructions. The Aboriginal and Torres Strait Islander Housing Panel warned Mr Viner on numerous occasions at meetings with the Department of Aboriginal Affairs. Although sections of the Department of Construction have cooperated with STI since 1976, recently the Department has been highly critical of” ST] homes.

In New South Wales STI has built all Aboriginal housing association homes except for those of one association. The list is slightly understated but it was provided by STI so this is understandable. Even when STI has had to go to tender, it has inevitably got the contract. The company has its own forestry division in Victoria. It usually precuts the timber and transports it to the site. Although its letter states that the Aboriginal association may carry out the construction itself, usually the company has done the construction as well.

The company in Victoria gained contracts in the Northern Territory and hauled timber at a cost to the Aboriginal housing associations, all the way to the Territory and often to islands off the coast of the Territory. It even wrote its letter to the Aurukun community although it is common knowledge that that community runs its own timber mill. When Stawell Timber Industries did not get the contract, it called the Aboriginal housing panel and made serious and false allegations about the company that did. It has been estimated by the Aboriginal and Torres Strait Islander Housing Panel that the company charged approximately 10 per cent more than did other builders, and other witnesses have told me that in fact the figure could be as high as IS per cent. It has also been said that the quality of its work is only about 50 per cent of what it should be.

In one example in Queensland where tenders were called by the housing association concerned, for cost submission to DAA, a firm from Perth bid a price that was 20 per cent below that of STI yet mysteriously STI gained the contract. On that occasion four firms had quotes below that of STI. It is further estimated that between 35 and 40 per cent of STI income comes from Aboriginal housing construction. There is one more angle to the story. There have been claims that the Department of Construction acquired housing plans from Petersen Bros., a firm in Darwin, and gave them to STI. Stawell Timber Industries then adapted the plans to its building system and began constructing houses using the Petersen design. In other words, the Department of Construction stole designs to help STI, which obviously was incapable of producing the type of house design required by Aboriginals in the Northern Territory. This particular matter goes right back to about eight years ago.

Senator Webster:

- Mr Deputy President, I raise a point of order. I wonder whether Senator Keeffe could identify the source of the document from which he has quoted? Would he be kind enough, in accordance with the provisions of Standing Order 364, to lay the document on the table.

Senator KEEFFE:

– I will be quite happy to do that. It is a collection of matters that I have taken out of a whole list of documents. It has been compiled for my own use and it represents my own briefing notes so that I will not keep honourable senators here for two hours. The document is available. If the Minister seeks its incorporation, it can be incorporated too.

Senator Webster:

– I wondered whether you will lay it on the table, Senator, so that we can look at it, please.

Senator KEEFFE:

– I will do so as soon as I have finished my speech. Amongst the other documents is a further collection- and I hope that this does not upset the Minister- of points that have been included. This is consistent with what I have already said. I seek the incorporation of that document and of the document headed ‘Additional Material to the Report on Welfare Department’. There is nothing obscene about either document except, of course, the political facts that I am making.

Senator Webster:

– The Minister who was at the table prior to my being here has apparently seen the documents. The Government has no objection to their being incorporated.

Leave granted.

The documents read as follows-

Early January 4th 1972, Margaret Bain, John McNeil, Pastor Paul Albrecht and Rev. Jim Downing, met with Mr Sam Calder, MHR for the NT. We acquainted him with our disturbance at the treatment Mr McNeil seemed to be getting from the Department of Social Welfare and in particular Mr Jack Cook, Assistant Director, Southern, in Mr McNeil’s efforts on behalf of Aputula Social Club, Finke. Mr McNeil was seeking the right to tender for the sale of the Aputula designed house to Welfare settlements.

Some reasonable idea of the market was necessary to back up Aputula Social Club application for a grant to set up a factory to produce modular housing at Finke for sale to Aboriginal communities. About June of 1971, Mr Giese, Assistant Administrator, Welfare, had called to see Mr McNeil, had expressed approval of the house and the project, and verbally promised $ 1 for $ 1 from Aboriginal Benefits Trust

Fund to match any contribution by Office of Aboriginal Affairs.

The all-Aboriginal Social Club at Finke, Aputula, was very pleased at the news, as there is little possibility for the development of other employment prospects at Finke, and employment is simply not available for most of the men. When acquainted with evidence of Pastor Albrecht at obstructive tactics by Mr Jack Cook at Jay Creek, where the Aboriginal Council and people had strongly requested the Aputula house after seeing a demonstration model in Alice Springs, and after calling Mr McNeil to the Settlement with Mr Jim Lester as interpreter, the Finke men decided to write to Mr Calder. They did so in Pitjantjatjara, (copy and translation attached).

Mr Calder took the matter up with Mr Alan O’Brien, Deputy Administrator. Finally it was given to the Department of Social Welfare itself to investigate. A Mr Harold Jennings of the Mobile Works Force was sent from Darwin. He was, or had been, a building inspector and assessed the project on its merits from that viewpoint. He went to Finke and viewed the Aputula house, and talked with and questioned the people through Mr Jim Lester as interpreter.

He returned to make his report and we in Alice Springs heard nothing else from the authorities.

In the meantime the apparently preferential treatment given to Stawell Timber Industries by Mr Cook continued. This was reported by both Pastor Albrecht and the Jay Creek Council. Pastor Albrecht was during this time Chairman of the Jay Creek Progress Association. In a taped interview in Pitjantjatjara with the Jay Creek Council, I got strong corroborative evidence, not only of a complete ignoring by Mr Cook of their repeated requests for the Aputula house, but also of a strong presentation of the Stawell house plans to them on those occasions. On two occasions the people reported that he told them the Aputula house was no good, it had no toilets or showers, in fan he said ‘It’s got nothing’. On one of those occasions he was with Mr Smith, the Stawell representative, who is reported to have said the same kind of thing, including the fact that it had no stove, or tables and chairs, etc. The Aputula plan in fact did have toilets and showers, and there was no attempt to suggest that the other items could easily be included in that house. The people themselves saw and expressed that possibility in the interview with me.

The Council members told Pastor Paul on one occasion that Mr Smith of STI had told them that if they did not accept Stawell houses that would be the finish, they would get no more money for houses. Mr McNeil was not asked to tender. The people were shown no other house by Mr Cook except Stawell, and as the Council members said, ‘Mr Cook spoke very strongly and we didn’t know what to do, so we said, “Oh alright, have that one” ‘. The contract was apparently signed by Mr Cook under his blanket authority, and plans for five Stawell houses submitted to authorities here for approval to be built at Jay Creek.

It was also reported to us by the manager of one settlement social club, and the Superintendent of another settlement, that Mr Cook had put strong pressure on them. We understand that other contracts have been signed for Stawell houses or work on other settlements without the people being asked or tenders called.

As this action if unchecked would spell the ruin of the Aputula factory project and its employment opportunities, and as we had heard nothing from the authorities, it was decided by Albrecht, Downing, and Reece Baptist pastor, who had sat in on the discussion because of his concern over a serious matter at Warrabri settlement, that Downing should contact Mr John Ballard, First Assistant Secretary, Department of the Interior. This was done on March 22nd. He was acquainted of our concern at what was happening- or not happening- at the possible wreckage of the Aputula project, of the idea of Welfare Department investigating its own malpractices, strong rumours of which latter were spelt out in detail. We also told him of a report which McNeil and Downing had seen, and which the writer, a public servant, intended to make to the Easter Conference of the Federal Council for the Advancement of Aborigines and Torres Strait Islanders. We stated that we were amazed at the amount of information the writer and a group which he said he represented had about Finke and Jay Creek and the Aputula housing issue, plus several other issues of a somewhat scandalous nature. He claimed to have documentary evidence of this.

While John McNeil asked him to withold this information because we were having it investigated, there was no guarantee that we could exercise any control over this group. Therefore we told Mr Ballard we were not satisfied with the current progress, and rather than have the Federal Council blow up the issue with its likely emotional and political cross currents and distortions, we would publicly blow up the issue ourselves before Easter, unless we could have some guarantee of adequate action being taken, and preferably a ministerial announcement about the same.

Mr Ballard promised to do all he could to see that something satisfactory was done. Within an hour Mr O’Brien, Deputy Administrator, NT had phoned to say he had been approached to act in the matter and would send a Mr John McDonald to interview people and to make a report back to him personally. He asked for the truth and for every cooperation, which we promised. He was asked about the safety of public servants who might be persuaded to talk to Mr McDonald. He said they would be perfectly safe, as this was a personal report to him and would not go near Welfare. In fact if we or McDonald thought anyone was witholding information, we were to inform him and he would see that they told the truth or faced the consequences.

On the same day I received a call from Sergeant Jackson of the fraud squad. He said he had heard I had a tape of an interview with Aboriginal councillors and would like to hear it. He listened to the tape and said it was not of much help to him. He then asked what I knew of the Papunya social club and the strong rumours of fraud linked with it. He said he had known of the situation for months and wished to get hold of the books but he got no co-operation from Mr Cook, who told him the social clubs were private bodies run by Aboriginal groups and nothing to do with the Welfare Depanment. He had asked the Superintendent to come in and see him, but he was obviously avoiding him. He had heard that $60,000 was involved and had three names associated with it. He also heard on good evidence that after enquiries were made an amount appeared back in the account, said to be $21,000, and said vaguely to be repayment of a loan made by the social club.

I told Sergeant Jackson I had heard the same strong rumours, and in fact that a person at Papunya told me that a certain woman was made secretary-treasurer. A decision was made to do a weekly check of the takings and she noticed after that that the takings suddenly rose by more than $500 a week, even on off pay weeks. It was also noticed that the Canteen was not stocking adequate food for the people. Stocks had run very low, and this was said to be causing the Aboriginal people some hardship, as the kitchen had been closed some time previously. The secretary-treasurer is said to have reported this to the Superintendent on more than one occasion, but got no satisfaction, and nothing seemed to be done.

A new Superintendent took over when the previous one was promoted to District Welfare Officer. He took one look at the books and put them into the hands of a firm of auditors and fired the canteen manager. I gave the Sergeant the name of the woman who attempted to point out the state of the books. I also mentioned the fact that a Mr McDonald was arriving next day to look into some of these matters for the Deputy Administrator. He asked me to tell Mr McDonald he would like to speak to him.

The same night I learnt from a reliable source that the Superintendent who had put the books into the hands of the auditors, and sacked the social club manager, was given a hiding by his boss and two others who were thought to be implicated in the drain of funds. His boss was the previous superintendent.

On March 23rd, Mr John McDonald interviewed Pastor Paul Albrecht, Pastor Laurie Reece, Rev. Jim Downing, and two members of the Welfare Southern Division staff. He was informed of our concern about Aputula Social Club, and the apparent favour of a private company- Stawell Timber Industries- over an Aboriginal enterprise- Aputula- and at the pressure and malpractice which had accompanied this, and at the apparent cynical rejection of the wishes of the Jay Creek people and Council, and the destructive effects of this upon the people and their hopes and self respect. We spoke too of reported strenuous efforts to force the Warrabri Aboriginal Co-op to fold up and become a Social Club under Welfare. The Co-op employs a few Aborigines and only one European, the manager. This Co-op seems very successful and has far more Aboriginal involvement and authority than any Welfare Department social club, which in practice, and despite earlier official claims, are in actual fact run and dominated by European staff.

It is reported to me by staff members at Warrabri about six months ago that tremendous pressure was being put on the manager of the co-operative to wind it up and make it a Welfare Department social club. The pressure was said to come from Mr Giese, and the two informants said that the Superintendent, Mr John Rutter, had openly told staff that he had been placed there to ‘crack’ the co-operative and bring it under Welfare. Mr Reece gave more recent information to Mr McDonald about this. He had been to Warrabri this month, and was told by the manager that he was told by Welfare representatives that as signatory for the co-op he had power to sign it over to Welfare as a social club, and if he did so the Aborigines would take a long time to find out, and in any case would not understand the legal processes, also they would guarantee him twice the wages he was receiving currently. He also showed a report made on the co-op by Mr Ted Evans for Welfare in January 1970 in which he expressed indignation at the suggestion by Pastor Reece that strong moves were being made by Welfare staff members to join the co-op and take it over to make it a Welfare Social Club once again, and because of the comments made about this the directors at the time voted not to extend membership until further notice. Here, only two years later the strength of Welfare pressure to make the co-op into a social club once again are being attested by two staff members and manager of the co-op. It is strongly rumoured, and could be easily checked, that in 1966 or 1967 a manager hastily left the social club’s employ and a sum of money could not be accounted for. At the time Mr Greatprex was said to have been called in as auditor.

In view of that strong rumour, and of Welfare’s official statements about encouraging Aboriginal responsibility and participation in such co-operative ventures, it is very hard to understand the apparent vigour with which they seem to be attacking a successful Aboriginal controlled venture.

It is hard also to understand a statement in Mr Evan’s 1970 report in commenting on Mr Reece ‘s claim that the board, on which he as chairman had no vote, only acted on consensus of opinion, he said that this was in direct conflict with the concept of democratic rule which was rule by majority opinion, and further that this proved (?) that Pastor Reece was dominating and manipulating the Aboriginal members of the Board. There are people with a deep knowledge of Aboriginal culture and practice and thinking, who could point out that this procedure is thoroughly Aboriginal. Pastor Paul Albrecht attests this fact, and several Aboriginal men have outlined this to me as the way in which they operate, and not as we try to force them to do with so-called democratic’ procedures.

Mr McDonald had a further conservation with Downing and Reece on March 24th. He said he had talked with Sergeant Jackson of the Fraud squad, and I understand also to the Internal Audit men who were in town and showing a vital interest in these matters. Mr McNeil also had interviews with Mr McDonald, the internal audit men, and Sergeant Jackson, and a member of the Commonwealth Police.

At about this time we heard that a plane had been chartered by Welfare to go to Ayers Rock with the projects officer, Mr Smith of Stawell Timber Industries, picking up Mr David Hewitt of the Docker River Social Club on the way, and also taking a Health Department Officer to give approval for work to begin on the proposed ‘Aboriginal Enterprise’ service station to be built there. We understand that Stawell Timber Industries already have plans submitted for approval for this venture, though no tenders have been called, and in spite of present investigations and queries regarding the whole operations of S.T.I, and its relationship with Welfare.

We understand the plane went to the Rock on 28 March. It is disturbing to learn that Stawell already have plans in for approval for this project when less than a week before Mr David Hewitt called in on his return from Darwin and told me that he thought the Docker River Social Club would get the contract for the Ayers Rock service station. He said that the BP company had approved of their having it, but this was yet to be confirmed.

It will be in reports by Mr McDonald and others, but it should have been said that Stawell Timber Industries made application to Aboriginal Benefits Trust Fund, or intended to, for funds to establish an Aboriginal Housing Factory at Amoonguna Settlement, where houses would be produced for all Aboriginal settlements under licence to Stawell. The Welfare Department had full knowledge of submissions to OAA and foreshadowed to ABTF on behalf of Aputula Social Club for a factory at Finke to produce modular housing for Aboriginal communities, and to provide employment for the economically very depressed community at Finke.

The proposed application and venture by Stawell was told to Pastor Albrecht by Mr Jack Cook, Assistant Director, Welfare, at the very time when Pastor Albrecht was trying to convey to Mr Cook that the Jay Creek Council wanted to go to Alice Springs and view the Aputula Display house built there, and was getting only evasion from Mr Cook. At about the same time Mr David Hewitt came to Alice Springs and told Mr McNeil that he was not interested in the Aputula house at Docker River, as they were going to have Stawell houses. They were going to have a factory at Amoonguna to produce the houses under licence to Stawell. All the social clubs were going to buy shares in the Amoonguna factory, he said, and he was then on his way to Stawell headquarters in Victoria to arrange details of the scheme. Neither people nor Superintendent at Docker River appear to have had this discussed with them, or to have been shown the Stawell house of the present plan.

The plan of the house proposed by Stawell is almost identical with that designed by the Finke people themselves and known as the Aputula house. We believe that this plan is quite different from those first proposed by Stawell for Aborigines, and that this plan appeared only after Mr McNeil had been asked by Mr Cook for a plan of the Aputula house and had later found his plan in Mr Cook’s office with a Stawell Timber Industries stamp on it. He has not been willing to trust the man with any more plans or specifications since.

Shortly after this a few Alice Springs people reported to Mr McNeil that Mr Smith of Stawell had stated around town that McNeil and Aputula Social Club had stolen a plan which Stawell had patented five years ago. Solicitors letters were sent to Stawell by Mr McNeil and by Mr Neville Gaze, consulting engineer from Adelaide who has voluntarily given his services to this project. Mr McNeil’s solicitor received a phoned apology from Stawell Headquarters and the advice that Mr Smith was only an agent for them and had no authority to make such statements. Mr Gaze is said to have received a letter assuring him that he had infringed no patents of Stawell. Mr Bill James, Housing Officer seconded to South Australian Depanment of Aboriginal Affairs visited Finke and saw the Aputula house. He interviewed Mr Cook who showed him a core board building material in relation to Stawell houses. Mr James said that this was the same material as he had seen in the wall panels of the Aputula house. We believe it can be shown that Stawell Timber Industries began here with timber frames and fibro-cement construction, with a different plan from Aputula, and no plans for a housing factory, and that all these things appear to have been leaked to them by Mr Cook.

Mr McDonald met with me on 27 March. He said that there seemed to be three or four areas needing investigating, and that these could be dealt with directly. One was the matter of Aputula housing, on which an expert feasibility study has been completed by W. D. Scott and Co, for OAA, and the matter of Jay Creek housing and the whole operation of Stawell Timber Industries and the relationship of this company with Welfare. Their contracts should be examined to see if they are valid, and whether they can be stopped. Also, the whole matter of Mr Cook’s blanket authority to sign such contracts and the fact that no tenders seem to have been called, nor have the people been consulted or shown other firm ‘s products, as far as the evidence shows.

Secondly, the whole matter of Welfare social clubs and their structure should be examined. At best they seem to be European dominated, at worst open invitations to unscrupulous persons to misappropriate funds. The structure should be altered to make for proper Aboriginal involvement and to remove the present glaring weaknesses. He was told by Welfare personnel of strong pressure by a district officer, exPapunya superintendent to make Superintendents of settlements the President of social clubs on their settlements, and in one case where the superintendent resisted this, to make him become a voting member at least.

Thirdly, the matter of grave draining off of funds of social clubs should be thoroughly investigated, and any appropriate action taken.

Fourthly the matter of Warrabri co-operative should be examined, and the motive for trying to force it to become a social club under the control of Welfare.

He said also that he could see that the real problem was a basic conflict in philosophies between our group and the Welfare Depanment. He said his background was in sociology, and it was evident in this conversation that he, at least, understood both our deep concern for what we believe is the rapid and pressurised destruction of the Aboriginal people and their hopes by an authoritarian approach which ignores social work principles; and also of the apparent lip service paid to consultation with no intention of giving the people any decision-making authority, except of a trivial lond for which they have no motivation; and of the cynical ignoring of the Aboriginal people’s clearly stated wishes as in the case of the Jay Creek Council.

He asked for a copy of the ANZAAS paper by Downing, which he said he thought had a very definite bearing on the present situation.

In his report Mr McDonald stated that Rev. Downing seemed the prime mover in the meeting arranged with Albrecht, Reece and Welfare personnel, and that he controlled or chaired that meeting, which seems a fair statement of the situation. He did examine each of the group about being pressurised by other members. We think this is not a factor, but that our concern has grown out of the deep involvement of each of the group with Aboriginal people and their expressed concerns, and out of the frustrations and anguish which was felt because of the attitudes expressed by key Welfare Depanment personnel and action taken by them.

We stated that we would do our best to see that this matter was not blown up at the FCAATSI conference in Alice Springs and were able to ensure that this did not occur.

However, three related matters coming to our knowledge made us decide that the Depanment of the Interior, and the NTA despite very swift and commendable efforts to investigate our concerns and to promise to change some procedures to remove temptations to exploit, and opportunities to manipulate, were not in fact going to be in a position to ensure that all matters concerned would be thoroughly investigated and appropriate action carried out, or that long entrenched and oppressive authority of a manipulatory kind would not go on exerting its influence. We refer to the fact that Mr Cook would still be the authority to choose tenders even where these were called. He would still be in the key position to exert his oppressive authority over the officers under him and to ensure that a certain aggressive philosophy was operative in the field. Some staff whom we consider imaginative, concerned and good types have at times expressed to us this frustration and fear the victimisation if they do not follow the party line’.

The events which finally triggered our action were:

The application of STI to the Health Depanment for approval of plans for the Ayers Rock service station project. These are for a manager’s residence, a single flat, a married flat, and a store building. The timing of this shows continued collusion between Mr Cook and Stawell Timber Industries in that the plans must have been prepared before ever the contract was granted to Docker River Social Club and without any tenders being called. This also at a time when the Jay Creek and Aputula complaints were being pushed against the Depanment.

The calling for tenders for contracts worth Slum including, we understand, a number of demountable houses for settlements throughout the Territory, including three at Jay Creek. In the light of the OAA’s and the Minister’s statements on Aboriginal involvement, employment, and responsible advancement, this is hard to credit. In 1967 $600,000 was spent on housing and some other works, on Papunya and Yuendumu, where adequate employment is not available for the large populations. This work was carried out by outside contractors with minimal Aboriginal involvement. The people almost completely rejected the houses, and the project has received considerable criticism. A previous Minister told us that was an awful mistake which the government would not make again. It is apparently about to do so.

We have heard that the Fraud Squad has been frustrated in efforts to examine the Papunya Social Club situation because of an order said to come from Mr Giese in the last week that Welfare staff were not to answer any queries, or show any books. We understand that the social club books, which have recently been audited in Alice Springs, have been sent south Tor audit’. We fear that these books may disappear as other books and records are rumoured to have done in the past. All of these additional factors made us decide that only a Royal Commission would open up what appears to have been covered up and become entrenched over many years.


Jay Creek. 3rd or 4th April Jack Cook went out to Jay Creek, the people informed Pastor Albrecht. He met with the Council and said, ‘I believe you think I’m a bad man’. They said, ‘ No, we don ‘t think you are a bad man, but you do bad things all the time ‘. They spelled out how unhappy they were about his bulldozing of Stawell houses on them when they said all along that they wanted Aputula houses.

One man, Damien said, ‘You just walk right over our ideas all the time. You never listen to us or do what we want. You do what you want to do every time. When you walk right over our ideas all the time, that’s how you crush us down’.

They said to Ken Livingstone, Superintendent, ‘You were at the meeting when Maxie Smith (Stawell) told us if we didn’t take his houses we wouldn’t get any more money for housing. You know he said that, because you were there’. We understand there was no denial of this.

Then Mr Jack Cook said, ‘Look, what about giving Maxie a go. If you give him a fair go this time, you’ll get your chance next time’. The people said, ‘Alright, well try you out’.

Materials for the houses have been delivered to Jay Creek. On 18th or 19th April, it is alleged that government trucks were used to cart gravel for the Stawell housing project. Aboriginal labourers on training allowance were used. The young man in charge was said to have suddenly received an order to cease operations.

Contracts with Stawell when Jack Cook was chairman of the Jay Creek Progress Association include $500 for a small job at Standley Chasm, described as an ‘exorbitant price ‘.

In connection with a girls’ hostel approved and funded by ABTF at Jay Creek, a manager’s house was built, also a flat for the man in charge of the trail rides.

Septic tank and absorption trench work was carried out using government moulds, materials, and Aboriginal labour paid by training allowance. The consequent bill from Stawell for $1,200 was considered exorbitant and the Progress Association asked for detailed statements. To date it is believed that Mr Smith of Stawell has been able to document less than $400 of that account.

We believe that ABTF have no documentation of these extra works, but of the hostel building only.

An account of $1,000 for extensions to the trail boss’s flat was believed to be work undertaken on the understanding that Stawell would get the housing contract and recoup from that. We believe this account is still unpaid.

There are no minutes on the books authorising any of this expenditure by Mr Cook is said to claim it was approved when he was chairman of the Association, and Mr Herbie Adams was manager. Why then was this kind of action and expenditure not documented?

Names could be supplied of persons who could verify some of these matters. One person overheard a conversation between Mr Cook and another person. Mr Cook said, They’ll have Stawell houses at Jay Creek, or nothing*.

Papunya. During all the financial troubles of the Social Club, a payment of $10,000 was made in April 1971 from ABTF for the building of a small motel. Notice of the grant was received in November 1 970. The original plan was for the social club to put $20,000 to this amount for the motel, but they had a large deficit.

The Superintendent (Mr Warren Smith) wished to have this money paid over to the Papunya Tourist Development Association. He was queried as to the membership of this body, as the treasurer apparently said she had not heard of it before. He eventually named Mr Jack Cook, Mr Warren Smith, Mr Tony Barker, and Mr Laurie Lumsden, and ‘several Aborigines’, but could not supply names of these. This body was not in fact incorporated until August 1971.

Then the manager and some committee members wanted the $10,000 paid into the general funds. This was resisted, and a special account opened. Later, a small motel was built, we understand the builder was Stawell Industries. Sewerage was put in and government septic tank moulds were loaned, government materials used, and training allowance labour provided. The subsequent account of $600 was strongly criticised on the committee as excessive.

It is reported that the Papunya Tourist Development Association is building a dam and Mr Cook persuaded a reluctant superintendent, Mr Owens, to pay contractors out of the social club account on the promise of a later refund from ABTF.

It seems that the amount hastily paid back into the social club after it was known that the fraud squad was enquiring, was not $21,000 as rumoured, but an amount of $9,000 which was paid in over two weeks canteen trading while the treasurer was not available. The treasurer had great difficulty securing the books from the manager, and even greater difficulty securing the calling of a meeting. Months elapsed with meetings called, despite requests.

A person dealing with Tiwa Tours reports that the account at 1970 had only one signature, that of Mr Jack Cook, ‘in the interest of easy operation ‘.

Docker River. Our concern about the restrictive and hasty nature of the granting of the service station contract to Stawell are already stated. We believe that an advance deposit of $1,000 has been paid by the social club to Stawell. This is not normal practice with building contractors, and we have serious doubts as to how much the social club is actually consulted and makes these sort of decisions.

Warrabri. Warrabri Building Society employs a building supervisor at $100 a week and extras. He lives in a caravan, and the advertisement for the job is said to have promised him tenancy of the first house built. He did no house building for many weeks, and is now supervising the erection of Stawell houses. We understand his wages are covered by a grant from the ABTF. Our query is this- why has a private company been brought into this picture to add to costs and drain off profit benefit when a tradesman has been appointed on good money to supervise Aborigines in building?

Social Club. This is said to have gone broke three times in 12 months. In view of the successful co-operative operating why is this persisted with? Is it fulfilment of the threat in Mr Ted Evans report of January 1970 to use the social club to compete with the co-operative to force it to comply with Welfare’s wishes? How does it recover from such financial plunges? Is it bailed out with ABTF money?

It is also reported that the club has complied for an allowance for the woman manager’s wage as a trainer of Aborigines. It seems that this does come within approved categories relating to wages for staff. If granted will Missions and other bodies be able to secure the same grant?

Hooker Creek. In 1970-71 a Welfare employee transferred to a job with the Social Club. He drove the club truck to Darwin for supplies. When trapped in Darwin by the wet he was instructed to take on contract trucking on behalf of the social club. It is claimed that he did a lot of running around, but produced little return and billed the social club for these trips. Staff members on the social club committee wanted him sacked. The superintendent would say, ‘Oh, he ‘s alright, give him a chance’. Finally, he had to sack him, but by this time the social club was said to be several thousand dollars in debt. No other action was taken. The driver’s name was Bade Wykes or Wyatt.

Senator KEEFFE:

– I thank the Senate. They are all straightforward documents. There is nothing wrong with them. The next reference I want to make is to a number of paragraphs which represent a continuation of the complaints that have been made concerning construction by STL I draw attention to rule 2.3.2 of the Department of Aboriginal Affairs, which reads:

Wherever practicable tenders should be invited when the purchase price of an asset is expected to exceed $5,000. Copies of tenders must be submitted to the Department as a prerequisite to the release of money.

All of the Stawell Timber Industries Proprietary Limited houses were provided without the company having to submit a competitive tender. Other companies have also supplied New South Wales housing associations directly, but only to a very limited degree. Clearly, Mr Viner’s Department, advised in this instance by the Department of Construction, which is responsible for the administration of the Grants-in-Aid program for Aboriginal organisations, has been seriously neglectful. It has permitted contracts to be awarded to builders without first calling tenders. This is also clearly open to abuse, especially as there is evidence that Stawell Timber Industries is prepared to offer inducements to people arranging contracts for it.

Mr Viner’s directive to his Department in 1977, to supply STI with the names and addresses of all housing associations with housing requirements for the year 1977-78- enabling STI to deal directly with each association- is difficult to reconcile with his requirement that in such matters tenders must be called before a contract is awarded. In a sale situation closing the sale becomes virtually impossible if a company, having interested an Aboriginal customer in his product, has then to require the customer to seek tenders from competitors. One can imagine the quality of the consultation process with an Aboriginal group if numerous housing manufacturers are able to compete in selling directly to each Aboriginal organisation. I seek leave to incorporate the next two pages of that document.

Senator Webster:

– Again, I have not seen the document. It appears to be so voluminous that I doubt whether incorporation would be appropriate, but I understand that the Minister who was here prior to me- this is from the information that I have from the Government Whip- has seen the documents and we offer no objection to their incorporation.

Senator Peter Baume:

– Could we clear up whether that is one of the documents that we saw. Of course, if it is, we have already agreed to its incorporation.

Senator Webster:

– How do we know?

Senator Georges:

– The Government either grants leave or it does not. I showed the documents to the Government side. The matters were cleared so that we could save ourselves some debating time. Surely we are not going to get into a dispute over it now, having gone through those arrangements. I would think that the Minister for Science (Senator Webster) need not make explanations to clear himself. One of his colleagues has already agreed that leave should be given. He ought not to qualify it.

Senator Webster:

- Senator Georges will recognise that it was within my competence to make the comment. I have not seen the document. The senator who wishes to table the document has not identified it. It should be headed in a way that will enable it to be recognised. I understand that it was included in a bundle of documents which he had given to the Government Whip.

Senator Georges:

– Is there no trust in the place? If there is no trust in the place, we had better go back to reading everything into the record.

Senator Webster:

– The documents which were originally shown to me and which it was sought to table included materia] which Hansard would not have been able to incorporate. The documents included photographs of buildings and all sorts of things. I imagine that the Opposition would say that, of course, it did not wish those to be incorporated. In order to get the matter clear, I contend that the honourable senator should identify the document that he is wishing to have incorporated. He should identify the heading on the document and we on this side would know then that that is the document that he was given leave to incorporate.

The DEPUTY PRESIDENT- The Minister has indicated that there is no objection to the incorporation. So I will allow the document to be incorporated.

Senator KEEFFE:

– I realise that diagrams and photographs cannot be incorporated but in order to separate the documents that were to be incorporated I would have had to break up my rile and, for the purpose of future use, I wanted to keep the file intact. However, I respect the fact that the Minister for Science (Senator Webster) now wants me to read out the headings of the documents and I will do so. I say again that the Minister for Aboriginal Affairs in relation to other companies did the right thing. He received a letter- this is the heading, Mr Minister- from Terence Daly and Loffi, architects and town planning consultants of Chatswood, New South Wales, saying that they were interested in tendering for the construction of Aboriginal homes. That letter was replied to on Department of Aboriginal Affairs letterhead by Mr R. J. Angel, the Acting Assistant Secretary of the Operations Management Branch. His letter was followed by another letter from Mr Beadman, the Acting Senior Private Secretary. Modules of Australia and New Zealand Pty Ltd also wrote to the Minister seeking the opportunity to do some contracting and that letter was signed by Mr Werner, the managing director. It was acknowledged in a letter written by Mr Angel and a further letter was forwarded to Terence Daly and Loffi by Mr Beadman. There was also a letter from the Royal Australian Institute of Architects. That was the way in which the Department ought to have carried out its business, and apparently it did carry out its business in that way until Stawell Timber Industries Pty Ltd received preferential treatment. I seek leave to have those letters, which have been examined, incorporated in Hansard.

Leave granted.

The letters read as follows-

Terence Daly & Loffi Architects Town Planning Consultant 412 3099 56 Neridah St, Chatswood 2067 20th October 1976

Robert I. Viner, Esq., M.P., Minister for Aboriginal Affairs, Parliament House, Canberra, A.C.T. 2600.

Dear Mr Minister,

I have been carrying out work amongst the aborigines for a number of years and, prior to that, carried out work in New Guinea for Missions in connection with hospitals, churches, bakeries, housing and other facilities.

Over the past three years I have been a constant visitor to the Northern Territory, Bourke, Moree, etc., and it became apparent that costs of building houses in remoter areas are such that very few houses are being completed within a reasonable time or at a reasonable cost.

Following visits to Katherine, Port Keats and the Daly River area we saw the need for some form of housing which would permit the development of a nucleus which would contain the necessary hygiene and washing facilities, which could be carried by land, sea or air to these remote places, and then the local inhabitants could add the extra simple accommodation required.

The basic solution we have placed before the missionary authorities, and which they consider good enough to have a prototype made, consists of a transportable unit prefabricated in capital cities in materials which are substantially indestructible and pre-finished ready for erection on simple foundations. The unit we have planned contains a W.C. compartment; a small area with stainless steel tub for washing children and clothes, the tub being sufficiently large for both purposes; a shower cubicle, and a kitchenette unit containing stainless steel sink, basic shelving, with space available for a refrigerator and a future electric stove. The unit would be pre-wired electrically and would contain the meter box with leads for electricity for the additional rooms to be built locally. All the plumbing and drainage would be completed within the transportable unit and it would only be necessary to build a septic tank or connect to sewerage if such is available.

Presently we have prices for this unit ranging from $5,000.00 to $6,500.00 and further analysis and research is being carried out in an attempt to increase the quality of the amenity and decrease the cost.

We believe that the unit could be delivered anywhere in Australia for approximately another $ 1 ,000.00.

From our economic analysis of the costs of work in the Northern Territory carried out by the aborigines, we believe that a total house suitable for a family could be built for approximately $ 1 0,000.00 including the connection to services.

The writer is leaving for London tomorrow, but would appreciate an appointment with you in Canberra at your convenience following his return in late November. One of the reasons for the visit overseas is a study of new materials, particularly the prefabrication foam industry and developments in the autonomous house.

Yours sincerely, Terence Daly & Loffi

Department of Aboriginal Affairs M.L.C. Tower Building, Phillip, A.C.T. 2606 P.O. Box 17, Woden, A.C.T. 2606 Telephone: 89 1222 Telex: 6247 1 In reply please quote: 72/833 18 November 1976

Dear Dr Heppell,

Lely Modular Building Method

The Minister has received a letter dated 20 October 1 976 from Modules of Australia and New Zealand Pty Ltd of 1 75 Lawrence Street, Wodonga, drawing attention to a modular building method for which the Company holds sole Australian rights.

I am forwarding to you a copy of the Company’s letter to the Minister and a copy of the Minister’s reply to enable you to follow up the Company’s offer to provide detailed information, if you consider it appropriate.

Yours sincerely, (R. J. Angel) A/Assistant Secretary Operations Management Branch

Dr M. Heppell, Director,

Aboriginal & Torres Strait Islander Housing Panel Incorporated, 24 Kembla Street, Fyshwick, A.C.T. 2609

Dated 2 November 1 976

Dear Mr Werner,

Thank you for your recent letter concerning the use of the modular building method to provide housing and employment for Aboriginals.

The Minister has asked me to pass your letter to the Aboriginal and Torres Strait Islander Housing Panel, which is a body set up to evaluate the alternate building methods and material utilisation in Aboriginal and Islander communities, from tribal, desert-type situations to tropical and urban situations. In the event that your proposals are considered to have application in building programs funded by the Depanment of Aboriginal Affairs, the Housing Panel will be in the best position to advise communities of your services.

Your interest in this matter is appreciated.

Yours sincerely, (R. J. BEADMAN Acting Senior Private Secretary

Mr A. J.Werner,

Managing Director,

Modules of Australia and NZ Pty Ltd, 1 75 Lawrence Street,

Wodonga, Vic. 3690


Registered Office: 175 Lawrence Street, Wodonga, Vic, Auustralia

Office: 277 Tulla Street, Albury, N.S.W. 2640

October 20, 1976

The Honourable R. I. Viner, Minister of Aboriginal Affairs, Parliament House, Canberra A.C.T.

Dear Minister,

With great interest we have noted, that the main trust of the Federal’s Government policy in Aboriginal Affairs is aimed at Education; Employment and the provision of housing.

From comments made, the impression is gained, that a much greater reliance is now being placed upon the actual involvement of Aboriginals in the construction and erection of dwellings, which should be suited to their particular way of life; able to withstand a much greater degree of abuse than can be absorbed by conventional structures; having an economic life far in excess of that may be expected of standard housing and providing permanent barriers against heat and dampness penetration.

No doubt you and your Depanment has been approached by various building companies able and willing to undertake standard house-construction on your behalf.

Our Company has acquired the sole Australian right to use the technical data and information contained in the Australian Letters of Patent nos. 405914; 260091; 259976; 52542/73; 47097/72 and 50155/72 and manufacturing and erection Know-How from the owners of these Patents:- -Lely Zug AG. of Zug, Switzerland.

This advanced building method has the interest of a number of Public Housing Authorities and a first proto-type has been manufactured ibr the Housing Commission Victoria and was placed at 47 Trudewind Road, Wodonga Vic. and officially opened by the Honorable Digby Crazier, Minister for State Development and Decentralization.

We are now having discussions with the Authorities regarding the manufacture of a large number of dwellings.

The Modular building method employed, proved over more than a decade in Europe, Japan and the U.S.A., has a number of features which, in our opinion, are extremely suited for being used in the manufacture of housing for Aboriginals and allows the participation of unskilled and semiskilled workers.

We wish to point out, that our Company is not seeking any contracts for Aboriginal Housing from your Depanment, but like to be given an opportunity to meet with you and your Senior Officers concerned with the provision of Housing, in order that we may inform you in detail on the Lely Building Method and explore ways and means for making available to your Depanment the right to use this Patented Method; to provide technical assistance at points of manufacture and to assist with the training of Aboriginal Workers in the manufacturing processes.

We are of the opinion, that the use of our building method will enable you to construct a much greater number of lasting, quality dwellings with the funds set aside for this purpose, than is possible with conventional construction means.

Therefore we are hopeful, that you can give this matter early consideration and look forward to receive your invitation to meet.

In the meantime, we remain. very truly yours, A. J. WERNER Managing-Director DEPARTMENT OF ABORIGINAL AFFAIRS

M.L.C. Tower Building, PHILLIP A.C.T. 2606 P.O. Box 1 7, WODEN, A.C.T. 2606 Telephone: 89 1222 Telex: 6247 1 In reply please quote: 72/833 18 November 1976

Dear Dr Heppell,

Design of Prefabricated House Nucleus

The Minister has received a letter dated 20 October 1976, from Terence Daly and Loffi, Architects of 56 Neridah Street, Chatswood, N.S.W. drawing attention to the possible use by Aboriginals of a transportable, prefabricated, essential services nucleus that the company is developing for use in ‘remote-area’ houses.

I am forwarding to you a copy of the firms letter to the Minister and a copy of the Ministers reply to enable you to investigate the firms developmental work, if you consider it appropriate.

Yours sincerely, (R. J. Angel) A/Assistant Secretary Operations Management Branch

Dr M. Heppell,

Director, Aboriginal & Torres Strait Islander

Housing Panel Incorporated, 24 Kembla Street, Fyshwick, A.C.T. 2609 2 November 1976

Dear Mr Daly,

Thank you for your recent letter concerning the provision of housing for Aboriginals.

The Minister has asked me to pass your letter to the Aboriginal and Torres Strait Islander Housing Panel, which is a body set up to evaluate the alternate building methods and material utilisation in Aboriginal and Islander communities, from tribal, desert-type situations to tropical and urban situations. In the event that your proposals are considered to have application in building programs funded by the Depanment of Aboriginal Affairs, the Housing Panel will be in the best position to advise communities of your services.

Your interest in this matter is appreciated.

Yours sincerely, (R. J. BEADMAN Acting Senior Private Secretary

Mr T. A. Daly, Terence Daly & Loffi 56 Neridah Street, Chatswood, NSW 2067


Mugga Way, Red Hill, ACT P.O. Box 373, Manuka ACT 2603 Australia Telephone: (062)731548 Cables: Archroyal, Manuka

0/3.16 DB/JC

28 August 1978

Dr M. Heppell

Aboriginal and Torres Strait

Islander Housing Panel Box 408

Fyshwick, ACT 2609

Dear Dr Heppell,

Professional Fees for Aboriginal Housing

I have examined the basis for your notional computation of fees for professional architectural services which could be recovered were the Panel to charge for services as would a normal architectural practice.

The scale you have followed has tended to be at the lower end of the fee scale recommended by the Royal Australian Institute of Architects and I ‘ve therefore concluded that the level of notional fees you have computed for the given range of projects is modest.

Yours sincerely, DONALD BAILEY Executive Director

Senator KEEFFE:

-On 23 September 1977, Stawell Timber Industries Proprietary Limited wrote to the Aurukun Community at Cape York and said:

This letter is the result of a meeting in Canberra between our Managing Director and the Minister for Aboriginal Affairs, Mr Viner, who agreed, because of our performance throughout Australia in the field of Aboriginal housing, to supply our firm with a list of Aboriginal Housing Societies with housing requirements this year. We believe that our type of modular housing could be of particular interest to you in solving your immediate housing problems. Using our modular system, a three-bedroom home can be completely erected by a three-man crew in one week.

I have not sought the incorporation of this document but eight or 10 minutes would be saved if the Minister had no objection to its incorporation. It goes on in a similar trend and is signed by the managing director of Stawell Timber Industries Proprietary Limited. I seek leave to have it incorporated in Hansard.

Leave granted.

The letter read as follows-


Aurukun Community, via CAIRNS, NTH QLD.

23rd September, 1977

Dear Sir,

This letter is the result of a meeting in Canberra between our Managing Director and the Minister for Aboriginal Affairs, Mr Viner, who agreed, because of our performance throughout Australia in the field of Aboriginal housing, to supply our firm with a list of Aboriginal Housing Societies with housing requirements this year. We believe that our type of modular housing could be of particular interest to you in solving your immediate housing problems. Using our modular system, a three bedroom home can be completely erected by a three man crew in one week.

Basically our system includes sole plates, stumps, bearers and joists, and flooring as you would put down conventionally. Our walls, consisting of 1200mm panels, complete with draw strings for electrical and internal plumbing, are then fixed to the floor with a top plate binding the tops of the panels together. A 1 200mm ceiling panel is then placed on top of the walls to form the ceiling rafter situation of the conventional building. Pole walls, once again formed and sheeted panels, are then placed along the top of the ceiling panels, and the G.C.I, formed over the top of the pole walls. All cupboards are pre-made to suit the size of the stove, hot water etc., and are quickly and easily fixed after the roof is on.

We are at present building for Aboriginal Housing Societies in the Northern Territory at Hooker Creeek, Oenpelli, Bamyili, Bathurst Island, Melville Island and Croker Island. Since our first contact in February of this year with the D.A.A. of N.S. W., we have built at Menindee, Weilmoringle, Goodooga, Bourke, Quambone, Gulargambone and Walgett.

Aboriginal involvement in these building programs appears to be of great importance, to the extent that, other than our supplying a Supervisor for the first house, erection is now being completed by most Societies themselves in the Northern Territory.

Present plans include two, three, four, five and six bedrooms, with special plans for the Darwin area. We have also developed one and two roomed units which are attracting a great deal of interest to most areas.

Our plans can be modified in almost any way to suit your requirements, or we can build to your own plan. A number of Societies have been putting down their own concrete slabs, and building our homes on these.

Our houses conform with Victorian U.B.R., and are accepted by all financial organisations such as War Service, Banks, etc., and are as erected for Victorian Housing Commission, and the N.S.W. Aboriginal associations. The Darwin area houses include pressure treatment and cyclone proofing as are required to meet their area regulations.

Please advise us by telephone or post of your requirements, and we will forward to you suggested plans with accompanying photographs. Our prices will be complete on site ready for you to erect, and should you require erection, we can give you a price on any chosen units in a couple of days.

After preliminary discussions, we will call on site to meet you, inspect building sites, and complete the necessary paper work.

Looking forward to meeting you in the near future.

Yours faithfully, Stawell Timber Industries Pty Ltd (Sgd) Kevin A. Illig

Senator KEEFFE:

-I also seek leave to have incorporated in Hansard a list of Aboriginal homes, including those in New South Wales. The list has been examined. I also seek leave to have incorporated the rules governing the provision and use of grants to communities and organisations which set out the way in which Aboriginal grant money may be used.

Leave granted.

The documents read as follows-

Minister for Aboriginal Affairs Canberra, ACT 2600



Government grants provided through my Department to Aboriginal communities and organisations are made from public moneys and this imposes upon me and my Department a responsibility to account to the Government and the Federal Parliament for their use. Aboriginal organisations have a similar responsibility to account for the use of public moneys. These rules have been drawn up to help meet those responsibilities.

The rules are based on Finance Regulations and Government decisions concerning the use of public moneys and on my Department’s responsibility for administration of the grants in aid to Aboriginal organisations. It is essential that all organisations establish accounting systems and control procedures that will meet the general requirements of my Department and the specific conditions of particular grants.

Grants are made to help provide services to meet demonstrated needs within communities and to help with their social and economic development; they are not welfare payments. I hope that through the responsible management of grants organisations will become more selfsufficient and better able to deal on an equal footing with commercial lending and business firms.

Enquiries about these rules and about making applications for grants or establishing and running an organisation are welcome at any office of my Depanment.


  1. 1 Limitations on the Use of Grant Money 2.1.1 General terms and conditions which are separately laid down by the Depanment for grants for particular types of projects (such as Housing Projects or Special Work Projects) will be additional to the conditions contained in the letter notifying approval and will be set out in a separate attachment to the letter.
  2. 1 .2 Grants may not be used Tor purposes which are not covered by the approved budget without the prior approval in writing of the Minister or his delegate. 2.1.3 The Department will not accept any liability for debts or commitments incurred by organisations that are not within the approved budget for a project.
  3. 1.4 An organisation may not make a loan, advance or gift from a Commonwealth Government grant or, subject to Pan 2.4, transfer any asset purchased from a Commonwealth Government grant to any person or organisation unless specifically provided for in the terms and conditions laid down for the particular project. 2.1.5 An organisation which receives a grant from the Commonwealth Government should not use grant money to pay all or any pan of the cost of travel by any person outside Australia without the prior approval in writing of the Minister or his delegate. 2.1.6 If money provided for a particular purpose is no longer required for or is surplus to the requirements of that purpose the organisation may be required to repay to the Depanment the unexpended balance of the money already provided. 2.1.7 If money provided is not expected to be used within a reasonable time the organisation may be required to repay it to the Depanment which can release the money again when it is needed. 2.2 Invesment of Grant Money 2.2. 1 Investment of Commonwealth Government grants for the purpose of earning income is not permissable except as provided in 2.2.2. and 2.2.3. 2.2.2 Grant money may be invested if it can be progressively and completely withdrawn and used for the approved purpose within the period for which it is provided. These moneys may be invested: on deposit with the organisation’s bankers; in securities of the Commonwealth Government; in Building Societies which are Government guaranteed. 2.2.3 If acquisition of a capital asset is delayed for 2 months or more, the grant money already released to and retained by the organisation for that purpose may be invested with the prior approval of the Depanment. The Depanment may direct that the money be invested as in 2.2.2 above or that it be treated as surplus as in Pan 2.6. 2.2.4 Interest earned on investments is to be shown as income on financial statements. 2.2.5 The name of the institution s) with which the investments in 2.2.4 were placed are to be shown in financial statements. 2.3 Purchase of Assets 2.3. 1 Where an approved budget includes the purchase of an asset (whether new or second hand) which is expected to cost more than $500, details of the asset to be purchased (including specifications, projected usage, estimated life, prices, etc.) are to be supplied to the Department for approval before the money is released. Where land and/or buildings are to be purchased the Depanment will require a certified valuation from a registered valuer before approving the release of money. 2.3.2 Whenever practicable, at least three representative quotations should be obtained when the purchase price of an asset or service is expected to exceed $250 and tenders should be invited when the purchase price of an asset is expected to exceed $5,000. The purchase price will include the value of any trade-in. If a transaction includes a trade-in proposal, full details should be submitted to the Depanment. Copies of tenders or quotations must be submitted to the Depanment as a prerequisite to the release of money. 2.3.3 All assets purchased in excess of $50 in value from grant money, except for consumable goods, shall be listed in an Assets Register showing date of purchase, details of the asset and its purchase price. 2.3.4 Where any assets purchased by an organisation or provided for its use are to remain the property of the Commonwealth Government by direction of the Minister or his delegate this will be advised in the letter notifying approval and will be a condition for release of the grant. These assets will be covered by an agreement giving possession to the organisation and they should be listed in a separate inventory of Commonwealth Government assets. 2.3.5 Assets purchased with grant money may not be used as security against mortgages or other fund raising activities or encumbered in any way without the specific approval of the Minister or his delegate.
Senator KEEFFE:

– There cannot be any question that the Minister and the Department were not warned because on 7 November 1977 a telegram was sent to both Mr Viner and the Department of Aboriginal Affairs. On 2 December 1977 a meeting was held with the Department of Aboriginal Affairs and there were minutes of that meeting recorded. At that meeting, Dr Heppell expressed concern about a lack of quality control, poor liaison on the part of the suppliers, trouble experienced by the building supervisor in erecting the houses, houses not being cycloneproof and generally shipshod operations by the manufacturers. He had heard that the Minister had given permission to Stawell Timber Industries to negotiate directly with Aboriginal communities and he was concerned about the possible implications of this action. At the meeting departmental officers advised that this matter would be clarified with the Minister but, to the best of knowledge at that time, the Minister had not given Stawell Timber Industries homes any preferred status.

At a meeting of the Aboriginal Housing Panel on 23 and 24 February 1978, the Panel viewed with concern the statement by its Director that the Minister for Aboriginal Affairs had furnished Stawell Timber Industries with the names and addresses of all Aboriginal housing associations in Australia and had given Stawell Timber Industries permission to approach the associations individually. The Panel was particularly concerned with the Minister’s action in view of the adverse report prepared by Mr Martin on Stawell Timber Industries houses on Bathurst and Melville Islands. The Director was asked to pursue this matter with the Department of Aboriginal Affairs and to inform the Panel of any developments. On 14 March 1978 there was a meeting with the Department of Aboriginal Affairs- and there are prepared minutes of that meeting- at which Dr Heppell referred to his previous telex to the Minister in December and sought to bring to the Department’s attention the following comments from the Panel:

  1. . STI are the primary suppliers of housing for Aboriginal communities in NSW. Their contracts did not go to tender and the Panel feels that this should be investigated.
  2. STI was an unsuccessful tenderer for a Panel contract at Aurukun. When advised, STI rang the Panel and made allegations about the operations of the successful tenderer.
  3. An accountant to several Aboriginal communities in the NT is suspected of being a salesman for STI. The Panel considers there is a possibility of a conflict of interest, and the Panel feels that discreet inquiries should be made by the Darwin office.

It was agreed at the meeting that items 1 and 3 would be taken up with the respective regional directors. That was the promise made at that time. Incidentally, the accountant referred to in item 3 was the gentleman to whom I referred a little while ago. Because of the limitations of time, I do not propose to go into all the details, but there is another firm apart from Petersen Bros which is involved in the alleged plagiarising of plans. At a meeting with the Minister for Aboriginal Affairs in August 1977, the Department of Construction informed the Minister that the houses for Mowanjum designed by Flower and Clifton, would cost about $80,000 to build. They subsequently cost $36,000. It was said at the meeting that John Flower would confirm that information.

There was a number of other statements about that allegation. The reference was to Petersen Bros of Bundaberg which apparently has a Darwin branch which was involved in the matter as it had prepared a design for Bathurst Island which was given to Stawell Timber Industries, a competitor of Petersens. The Mowanjum design was prepared by architects Flower and Clifton of Perth- if anybody wants to check with them their telephone number is Perth 8681 55- and John Flower is willing to confirm that in his opinion his design was plagiarised. The Panel had details of both designs, and the plagiarised design subsequently has been offered to and built by the Department of Construction at Aboriginal communities in Lombardina and Beagle Bay. The Mt Margaret design was prepared by the Housing Panel and the details of the design are in the possession of the Panel. There was criticism of the Mt Margaret contructions

There are numerous other documents about which we may have to do something at a later date but at this stage I re-emphasise that at a meeting on 30 August 1976, Mr Ron Thomas, a First Assistant Secretary of the Department of Contruction, informed the Panel that Treasury regulation 52 applied to all contracts awarded in the field of Aboriginal housing. The significance of that is the apparent overriding or total ignoring of this regulation by Stawell Timber Industries. Stawell Timber Industries’ involvement in Aboriginal housing is significant in this respect because all its contracts have been issued with the direct involvement of the Department of Construction. In the latter part of 1976, Stawell Timber Industries was approached by the Darwin Regional Office of the Department of Construction to convert to its own building system a house design prepared by Petersen Bros of Bundaberg for the Bathurst Island Housing Association.

This it did and began supplying a number of Northern Territory housing associations with components to build a house which, in virtually all respects, was the same as that designed by Petersen Brothers. Petersens have copyright to all their designs, as mentioned a moment ago, and the Department of Construction acquired Petersens’ designs by dint of its privileged position of requiring all architects and companies assisting Aboriginal housing associations to submit their designs to it for checking. The Department’s request to Stawell Timber Industries therefore infringed Petersen’s copyright and was quite unethical. Since that time, working closely with the Department of Construction, STI has supplied house components to the following Northern Territory housing associations without once having to submit to a competitive tender situation: Bamyili, Croker Island, Hooker Creek, Oenpelli, Melville Island and Bathurst Island. In 1977, STI came to some arrangement with Mr Ah Toy, the professional accountant I mentioned a few moments ago who had been appointed accountant and auditor to a number of Northern Territory housing associations, whereby he acted as some kind of agent for STI. He has been witnessed promoting STI to Aboriginal housing associations for which he acted; for example, at Peppimenarti. In terms of a professional accountant’s ethics, Mr Ah Toy’s conflict of interests in this matter is highly questionable. There are other details, of course, none of which are sueable, but they are all interesting.

I summarise by saying that the picture I have painted is a sad summary of what appears to be a very close association with the Prime Minister (Mr Malcolm Fraser) and the people associated with the ownership, control and management of Stawell Timber Industries. It does appear on all the evidence that strong pressures have been exercised by the Prime Minister to enable this company to have perhaps a rescue operation carried out. It does appear that Treasury Regulations and Department of Aboriginal Affairs regulations have been broken to the extent where one must suspect something less than a legal arrangement in order to allow this building company to sell so many of its homes to Aboriginals. It does appear that taxpayers’ funds have been wasted to a very large degree because of the higher prices being charged for STI homes and because of their poor quality, many of which have gone into areas which are cyclone prone. They will not stand up to the first cyclone which comes along. I am not making any accusation that the Prime Minister or the Minister for Aboriginal Affairs (Mr Viner) got any money for themselves out of this. I am sure they did not, but they got money for their friends.

Senator Peter Baume:

- Mr President, I draw attention to Standing Order 4 1 8.


– Yes. There is a reflection, Senator Keeffe. Withdraw it.

Senator KEEFFE:

– All right, Mr President, I shall rephrase that.

Senator Peter Baume:

- Mr President, I think you asked him to withdraw it.

Senator KEEFFE:

– I will withdraw it. I do not know why Government supporters are so touchy about this because I would suggest -

Senator Peter Baume:

-The Standing Order exists.

Senator KEEFFE:

-On the evidence I have given there is a clear indication that everything is less than right so far as the deals that have been made between this timber company and two prominent Ministers, one of whom is the Prime Minister of this Government.

Senator Peter Baume:

- Mr President, I draw attention to Standing Order 418 which provides that there will be no imputation of improper motives.

Senator Cavanagh:

– I speak to the point of order. Senator Keeffe has said no more than that friends of the Prime Minister have received money. It is not an accusation.


– On the point of order, therein lies an imputation. Please withdraw, Senator Keeffe.

Senator KEEFFE:

-Mr President, I do not want to break the Standing Orders, so wherever I have offended- I am not sure that I have- I will withdraw the offensive word. I continue. This matter will not be cleaned up unless there is a judicial inquiry into the whole of the facts that I have stated here today. If there is not a judicial inquiry then there ought to be a royal commission. Not only should a government appear to be governing impartially in this country, it should also be seen to be doing that. I did not allege corruption- about which Senator Baume seems to be a little tender- what I said was that this company got an unfair advantage in a very competitive field because the principals of that company are friendly with the Prime Minister.

Senator Peter Baume:

- Mr President -


– Order! Senator Keeffe you are committing the same offence. You must not use such language.

Senator KEEFFE:

– All right, Mr President; I will change it. This company got an unfair advantage in a highly competitive field because it is friendly with this Government. Now that is not insulting anybody. I am saying these are the facts of the matter and if there is an inquiry which is open and public with wide terms of reference- in fact it does not need wide terms of reference- I am sure that it will be less than healthy politically. It is unfortunate that most of this emanates from Victoria where all the other land and housing problems arose. It all seems to be coming from the one State except on this occasion prominent members of the national Government of the country are involved. That is why the situation will continue. There ought to be a restoration of the original position of the Aboriginal Torres Strait Islander Housing Panel so that it may carry on the good work and there ought also to be a total inquiry into the company that I have nominated and all those associated with it.

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

– I acknowledge the remarks of various honourable senators. As the Senate representative of the Minister for Construction (Mr McLeay), I will draw to that Minister’s attention Senator Keeffe ‘s comments and his very severe criticism of and allegations against officers of the Department of Construction. There are Standing Orders which protect members of Parliament but regrettably there are none to protect the Public Service. I regret Senator Keeffe ‘s remarks.

Question resolved in the affirmative.

Bills read a first time.

Second Reading

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

– I move:

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

Leave granted.

The speech read as follows-

These Bills will give effect to the proposal announced in the Budget Speech to reduce the rate of sales tax on motor cars and station waggons from 21lh per cent to 15 per cent. The nine amending bills are necessary because sales tax is imposed by nine separate acts in order to meet the constitutional requirement that an act imposing taxation shall deal with only one subject of taxation. Vehicles affected by the reduction are listed in the Fifth Schedule to the Sales Tax (Exemptions and Classifications) Act. The ones more commonly used are sedans, station waggons and taxicabs

In aggregate terms this reduction in sales tax is expected to involve a revenue loss of $155 million this year. It is also significant for the individual car buyer as the price of an average family car costing around $7,000 at the 21Vi per cent rate should now be some $530 less. Once passed the new rate has effect from 16 August 1978. This accords with the normal practice under which changes in rates of sales tax take effect on the day following their introduction into parliament. A memorandum explaining the provisions of the bills in detail is being circulated for the information of honourable senators. I commend the bills to the Senate.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– The purpose of the nine Bills before the Senate at the moment is to amend the Sales Tax Acts (Nos. 1-9) 1930 to reduce the rate of sales tax on passenger motor vehicles from 21Vi per cent to 15 per cent. The Opposition supports the Bills. It believes that the reduction in the level of sales tax is an important element in increasing the demand for a range of products which have a relatively large impact on levels of employment in manufacturing industry. No matter what views are adopted towards the longer run development of the motor car industry in this country, the short-term requirements make it almost mandatory that the momentum of operations must be maintained in the motor vehicle construction industry, if for no other reason to assist processes of adjustment in the component industries.

It should also be remembered that while considerable emphasis has been placed on the employment effects in manufacturing industry, the recent case before the Industries Assistance Commission- dealing with four-wheel drive vehicles- indicated pretty clearly that the assembly and distribution areas of the motor industry are as important, or more important, than the actual manufacturing sector in sustaining levels of employment. Thus, the reduction in sales tax which applies equally to both Australian and imported vehicles will help sustain employment in the distributing section of the industry. The Opposition must regard the measure as yet another reversion of policy by the Fraser Government. If we go back throughout 1977 and early 1978, the Leader of the Opposition (Mr Hayden) and other members of the Australian Labor Party were calling for a reduction in sales tax. And if I turn to a statement by the Prime Minister (Mr Malcolm Fraser) of 3 May this year, when asked by Mr Jacobi, the Labor member for Hawker in South Australia, about the desirability of reducing sales taxation, the Prime Minister had this to say:

I believe also that the call of the Leader of the Opposition for a reduction in sales tax is designed to reduce current sales of automobiles and therefore to increase problems in the industry.

Thus it would appear that in May of this year the Prime Minister, following the precedent set by the Treasurer and the Minister for Industry and Commerce, scoffed at the proposal by the Leader of the Opposition. However, I find it difficult to believe, knowing the detailed preparations that go into the formulation of the Budget, that consideration was not being given to the proposal when the Prime Minister answered that question. It is prudent, therefore, to refer to the remarks made by the Minister for Industry and Commerce, firstly on 28 February, when he said: as I said in earlier days when I was Treasurer that a reduction is not part of Government thinking because of the impact it could have on investment in Australia and in a particular sense, in relation to Government economic policy, because of the impact it would have on the Budget deficit.

On 4 May Mr Lynch reinforced that view when he said:

Experience has shown that a reduction in sales tax on motor vehicles simply has the effect of pushing forward orders rather than creating a sustained increase in demand . . .

In addition, that experience showed that a reduction in sales tax on motor vehicles merely redirected a proportion of consumption away from other goods, such as white goods.

The Minister did not provide any documentary evidence to substantiate that claim but certainly made it clear that the Government did not regard a reduction in sales tax as a suitable means of stimulating the motor manufacturing industry in this country. To enforce that point, on the same day Mr Lynch said:

Sales tax cuts are simply not on.

What do we find now? These Bills propose that over a wide range of motor vehicles, both in the passenger and commercial field, the rate is to be reduced from 21lA per cent to 15 per cent. Of all the arguments which the Government used and which I have quoted, that reduction will not be capable of sustaining an increase in demand; secondly, it will drag expenditure away from other industries such as the manufacture of cooking stoves, refrigerators and other household appliances to the motor vehicle industry; and thirdly, it will, of course, increase the Budget deficit. The last point is significant because Mr Fraser and his two Treasurers, ever since his election in December 1975, have bestowed upon the deficit an air of holiness and its reduction has become a matter of faith rather than dealing with the whole issue as a rational element of economic policy.

The initial reaction to the reduction in sales tax after the Budget was for a substantial increase in registrations of new motor vehicles. Because a large number of vehicles had been imported within the total Australian quota under the old tariff rate, the combination of the old rate and the new sales tax probably means that in the month of September there is a large component of imported vehicles, particularly in the luxury class, in the figures for new registrations. The subsequent figures show a falling off in the rate of new registrations and, as the rates of interest for hire purchase, personal loans and lease finance remain at the 14 per cent to 22 per cent level, there is no real incentive for consumers to borrow funds to purchase new vehicles.

It is also strange that the Government has confined the sales tax reduction purely to motor vehicles. There are two points that must be made: Firstly, a reduction in sales tax on a wide range of other items may well have had a more immediate employment effect because of the smaller lead times between a consumer buying the product and the manufacturer replacing stocks. The second point is that a wider range of sales tax reductions would not have increased the Budget deficit by a very large amount. As the Government seems to have thrown out the window the significance of the Budget deficit in relation to the sales tax cut for motor vehicles, it could not argue consistently that the Budget deficit would be important for other areas.

The Opposition hopes that this measure will have some effect, but it also hopes that the Government will not use it as a means of further forestalling a sensible appraisal of the motor vehicle industry. Although I recognise that the previous Government certainly had problems in devising a suitable policy for the motor vehicle industry it is essential that some rationalisation takes place and a sensible view is adopted to the long term demand for motor vehicles in the light of the increasing problem of energy supplies. Whilst the Opposition supports these Bills, the contradiction in Government policy is a sorry reflection on this Government’s management of the Australian economy and the motor vehicle industry in particular.


– I understand that Senator Keeffe sought leave earlier for the incorporation in Hansard of a paper and that he left the incorporation until the end of his speech.

Senator Peter Baume:

– There was an exchange across the chamber in which we asked about the tabling of a document. I understand that Senator Keeffe indicated that he had no objection to such a course. By inadvertance it was not formalised at the end of his speech. At some appropriate time when Senator Keeffe is back in the chamber may he seek leave to intervene and have that document incorporated?


– Yes.

Question resolved in the affirmative.

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

Sitting suspended from 12.58 to 2.15 p.m.

page 2223


Senator KEEFFE:

-Prior to the suspension of the sitting, during the first reading debate on the Sales Tax Amendment Bills, I stated that I was prepared at the end of my speech to table a paper from which I had quoted. I handed in the paper at the conclusion of my speech but I understand that to formalise matters I should seek leave of the Senate to do so. Therefore I formally seek leave to table the document.

Leave granted.

page 2223


Second Reading

Debate resumed from 9 November, on motion by Senator Carrick:

That the Bill be now read a second time.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– The States Grants (Capital Assistance) Bill authorises the payment of capital grants to the States, being the grant component of their Loan Council program. These grants set out one third of the program of $ 1,433.8m for the current financial year. The grant component effectively means that funds provided to the States for capital works through the Loan Council are provided at a subsidised interest rate. As such, they are vital payments not only for the establishment of essential public infrastructure but also to maintain employment in a number of industries. The Opposition does not oppose the Bill, but will be moving an amendment to the motion that the Bill be read a second time to demonstrate the consequences of this Bill for the country as a whole, and of course, for the States.

The effect of the Bill can be summarised as follows: Firstly, it amounts to a substantial cut in the funds available to the States for public works. Secondly, the cut was a deliberate attempt to restrict public expenditure in Australia in the full knowledge of the consequences for public works and unemployment. Thirdly, the cuts in the program will restrict essential public activities such as the construction of schools, hospitals, housing, health facilities and other essential infrastructure, and substantially increase unemployment by further restricting jobs in the building and construction industry and a number of other industries such as building supplies, transport and the like and removing all growth in State government employment. Fourthly, the cuts have been opposed by all the States and by most groups in industry. Lastly, the cuts are based on economic theories which are quite unsound. I wish to take each of these issues separately.

In his second reading speech, the Minister for Education (Senator Carrick) sought to persuade the public that although there had been restraint in Commonwealth payments to the States, the States were still doing particularly well. In other words, what on the surface appeared to be a cut in the capital works program was really not that at all. By attempting to give this impression, it shows that the Government is not prepared, at least publicly, to face up to what it is doing. The fact is that payments to the States for capital purposes have declined in every year since this Government has been in office. I seek leave to have incorporated in Hansard an extract from Table 3 of Budget Paper No. 7 for 1978-79, setting out payments to or for the States.

Leave granted.

The table read as follows-

table is shown on page 6 of Budget Paper No. 7 and is headed ‘Funds to States for Capital Purposes’.

That table demonstrates that specific purpose payments for capital purposes were reduced by 8.5 per cent in 1976-77, 6.3 per cent in 1977-78 and 8.2 per cent in 1978-79. Those decreases in specific purpose payments more than offset increases in the general purpose capital funds during the first two years of this Liberal-National Country Party Government so that in those years, total funds for capital purposes declined by 2.9 per cent in 1976-77 and 0.9 per cent in 1977-78. 1 indicate that I will be asking the Minister at some stage during the debate on this Bill to confirm or deny the accuracy of the figures I am giving.

During those two years, objections were raised firstly by the Opposition and then by other sectors of society, that the decline in capital works both in payments to the States and on the Commonwealth’s own account, was having a detrimental effect on employment, creating serious problems in certain key industries and causing the run down in public infrastructure which would have serious consequences in the future.

This year, the Government has not only ignored that advice, but has gone further. Once again it has cut specific purpose payments for capital purposes but this year there has been no increase in general purpose capital funds. That can easily be ascertained by looking at the Budget Papers. The net result is that funds to the

States for capital purposes have declined in cash terms by 4.3 per cent which in real terms is a cut of more than 10 per cent. This cut is by far the most severe introduced by this Government. It has to be remembered that this is the third year in a row in which funds for capital purposes have been reduced. In other words, investment in public sector projects is declining rapidly. Notwithstanding the Minister’s second reading speech, those cuts are deliberate and are being made with the full knowledge of their consequences. In announcing the cuts to the States at this year’s Premiers Conference, the Treasurer (Mr Howard) made no bones about where he stood on this issue. He said:

We believe the expenditure restraint which has been exercised by the Commonwealth Government is not a burden or restraint that ought to be carried by the Commonwealth alone. It ought to be carried by all governments which account for public sector spending.

Those were the words of John Howard. Consistent with that proposition, the Government cut funds for capital works, both general purpose funds plus the major specific purpose programs such as hospitals, community health, urban public transport and welfare housing. There was no suggestion that the States were doing well. There was no attempt to explain to the States that they could take money from other areas to sustain their capital works programs. There is no point in the Minister trying to hide these facts. They are well known, they are well documented and they are well understood. Recently there has been considerable public discussion of new methods of financing infrastructure borrowings throughout Australia. Because this problem does not often get publicity, there has been an element in the discussion which suggests that something very new has taken place. In part, that impression occurs because people fail to understand the real history and nature of the proposals. Rather, they think they are something new. The understanding is not there. The Minister promoting this Bill labours under some misapprehension.

I wish to refer to some aspects of several Premiers conferences, because they are very much related to this matter. The discussions on financing additional infrastructure commenced at the Premiers Conference in February 1976. That is where the proposals first surfaced. After considerable work carried out by Commonwealth and State officials, a major report was presented to the Loan Council in June 1977. That report demonstrated that the need for financing public infrastructure had arisen because of restraint by Liberal governments on funds provided to the Loan Council. Let me take that a little further.

Under a series of Liberal governments in the late 1960s and early 1970s, investment in public infrastructure declined. This was spelt out on page 1 1 of Budget Paper No. 9 of 1975-76 in the following words:

The share of resources in the economy devoted to public capital expenditure declined from a high of 10 per cent in 1965-66 to less than 8 per cent in 1 973-74. While gross domestic product has been increasing at some 5 per cent in real terms per year, public capital investment has grown at only about 4 per cent.

That Budget Paper records that the percentage of gross domestic product spent on public capital expenditure increased again in 1974-75 to 9.2 per cent. The re-election of the present Government has meant a further dramatic decline in this form of investment. The consequences of the decline have been spelt out by the report on infrastructure financing which was put to the Loan Council in June 1977. Paragraphs 52 and 53 are pertinent. They state:

State Governments emphasise that for more than 20 years the limitations imposed by the Loan Council on total State and larger authority borrowing programs have posed specific problems for the States and their authorities in meeting essential community needs:

It continues:

The evolution of policies and programs requiring large scale financing and infrastructure by developers in recent years as outlined elsewhere in this report, is for the most part, a direct result of limitations imposed by Loan Council on State borrowings usually for the purposes of short term economic management.

Paragraph 57 states:

State governments have frequently pointed out that tight ceilings on State and semi-government borrowing programs for many years have led to a backlog of works in the States and the development of new and possibly undesirable practices to meet urgent needs.

Paragraph 58 states:

Some State governments have contended that the limitations on State authority borrowings imposed by Loan Council, have inhibited private investment in resource development by unnecessarily loading the costs of the projects.

It is important to remember that at no time during 1975 when this present Government first presented its new federalism policy was any reference whatsoever made to this infrastructure or borrowing. As the Minister for Education pointed out in this Parliament only last week, the Government now claims that the infrastructure arrangements with the States are part of the new federalism policy. We now know of course that it was not originally part of the new federalism policy. I return to the report from which I quoted. In commissioning that report, the views not only of government but also of large companies involved in major investments were sought. The companies emphasised that their cash flows in the early years were often affected by the need to repay borrowings for infrastructure purposes at high interest rates over relatively short periods. They pointed out that, in the case of many projects, they were required to provide social infrastructure as well as industrial infrastructure. Paragraph 83 of that report indicated the consequences. It states:

The greatly increased equity contribution resulting from the need to finance all infrastructure requirements is claimed to severely restrict the opportunity for Australian companies to participate in major projects and to limit the capacity of developers to invest in down-stream secondary processing.

Basically, the failure of conservative governments to invest in public infrastructure has had a number of effects: Firstly, essential services such as schools, hospitals, public transport and welfare housing are allowed to run down under Liberal governments, thus creating a significant backlog of demand. Never was this more evident than in 1973. Secondly, major industrial infrastructure is also run down, with the result that there is considerable difficulty in getting major projects off the ground. Thirdly, the effect of these changes is to result in the poorer members of the community having inferior facilities, thus exacerbating the effect of income differentials. Not only do we not get proper public investment but also do we get increased unemployment. The building and construction industry is a particularly appropriate industry to assist in the development of counter-cyclical policies. At a time of boom conditions when there are inflationary pressures on the building industry, government restraint in investment in capital works reduces these inflationary pressures. At a time of economic downturn, government can increase their investments to maintain economic stability and to obtain cheap capital works. This Government has followed the reverse practice.

At a time of economic downturn, it has restricted funds going into public investment with the result that there has been a real downturn in contracts available to the building and construction industry and to other industries connected with the process. Those industries are almost entirely in the private sector. They are major employers of labour, This is the key factor that has brought about the stagnation of the Australian building industry. The result has been a large increase in unemployment in that industry and the dismantling of efficient construction teams which probably will take years to re-develop. On top of that, the only growth in employment in recent years has been at State government level. This year’s cuts will ensure that there is no growth in employment provided by State governments with the result that further school leavers will be thrown on to the jobless market. The Commonwealth has argued that it is necessary to take steps to reduce inflation and thus produce economic recovery. The fault with that theory is that there are very few interest groups in the community who still accept the Commonwealth’s line. Certainly the State governments do not. It was inherent in the federalism policy that there would be a greater degree of consultation between the Commonwealth and the States. Consultation should be a two-way process. It involves more than putting the Commonwealth view and telling the States to like it or lump it. Unfortunately, the Commonwealth does not appear to understand that.

During a series of Premiers Conferences since early 1976, when Sir Charles Court first raised the concept of infrastructure borrowing the States have spelt out to the Commonwealth the consequences of the action that it has taken. To date the States have been correct in their predictions of higher unemployment, a downturn in development and general economic malaise. It has become almost traditional during the debate on such Bills as this that I have indicated what are the States’ views to the Commonwealth’s proposals. On this occasion once again I will give some short indication of the States’ reactions to the Commonwealth proposals. It is common knowledge that the States were stunned by the severity of the proposals put to them at this year’s Premiers Conference in June. On the first night of that Conference the parties met until late in the evening in an attempt to persuade the Commonwealth to change its mind, but without avail. I shall set out some of the arguments used by State Premiers. The Premier of New South Wales, Mr Wran, stated:

Anybody who could possibly believe that in a country in which unemployment is running as it is at almost 400,000, the States could do anything to throw tens of thousands more people on the unemployment scrapheap when their loan allocation is left exactly as it was last year, with inflation running at the rate that it is, is obviously merely using unemployment as a tool to combat inflation. I think we must go the other way. The Commonwealth’s approach is a very spiteful and cruel one to a great economic problem.

The Premier of Victoria stated:

We are faced with increased unemployment in the housing and construction industry, followed by reverberations through a number of other industries such as building supplies, sub-contractors, transport and the like. When we are all looking for recovery in Australia and when we all think we are on the verge of it, it is really difficult to see how that situation can assist that recovery and how that recovery can be assisted by this very severe blow at an industry which is already staggering. With the elimination of the hospital building program altogether and the very severe cuts in housing allocations for welfare housing and co-operative housing, it all adds up to an enormously damaging blow to the economy, as we see it.

Our friend, the Premier of Queensland, said:

You have probably made up your mind or perhaps Cabinet has made up its mind in this regard. But I tell you this: We will be back here and you will be glad to see us back here again. The States will run out of money and we will come back here because the position you have placed the States in will be too drastic for them to survive.

Senator Mulvihill:

– Who said that?

Senator WRIEDT:

-None other than Mr Bjelke-Petersen. This is what the Premier of South Australia said:

There is no way that we can sustain that son of reduction without a marked increase in unemployment in a vital sector of employment. Once we hit a low in the building industry, the lead time to recover generally in the economy will be at least two years. The effect of this will be ghastly. I can only forecast that as a result of a program of this kind, by the end of the year we will see an unemployment figure not between 6 per cent and 7 per cent but closer to 10 per cent. I cannot really believe that this is what you consider to be a satisfactory recovery for the economy.

Even Sir Charles Court, who is the only Premier who has shown the slightest interest in the federalism policy, said:

Having said that, I must say that the figures presented to us really shock me.

That is the tale of woe right around the country from every State Premier about the Commonwealth’s attitude towards the States in the area of capital programs. Sir Charles went on to point out that for the past two years the Liberal Party of Australia had been saying that the Federal Government had been deliberately creating unemployment. This is what he said:

But if you prescribe recession, you are going to get recession. I would like to know what is the attitude of the Commonwealth and what is the policy of the Commonwealth in respect of unemployment. We can only assume that a deliberate decision has been made by the Government, through its Cabinet, that some more unemployment has to be accepted as pan of the cure for getting the nation back to economic health.

The Acting Premier of Tasmania, Mr Neil Batt, pointed out the consequences for the Tasmanian building and construction industry when he said:

The impact on the Tasmanian building industry will be dramatic. It will be such that it will take us perhaps a generation to recover. It is as serious as that.

Notwithstanding all the advice the Federal Government gets to the contrary, it persists with the view that its policies are right. Indeed, so confident is the Prime Minister (Mr Malcolm Fraser) that he has been prepared to lecture a number of governments, including the United States Government, on how to handle their economies. It is a pity that none of these policies appears to be working. The falseness of the Government’s position can be demonstrated by looking at the premise on which it is based. The Government said that nothing could be done about unemployment until the rate of inflation was brought down. The Government has said repeatedly that the level of employment will commence to rise as the inflation rate falls. We now know that as the inflation rate has fallen the level of unemployment has risen and there is no prospect of that process being reversed. During the last Premiers Conference this situation was pointed out dramatically by the South Australian Minister for Mines and Energy, Mr Hugh Hudson, when he said:

At that time-

That is, the time of the great Depression- the credit squeeze was applied and pressure went down and although we had the Premiers’ plan we went down and down. By about 193 1, the liquidity of the trading banks and everyone was so great that interest rates were absolutely minimal and no-one was borrowing. There was not a demand situation.

The Government has argued that an increase in investment would lead to the creation of jobs. It instituted an investment allowance. Once again, the theory was totally unsound. The investment allowance was used to substitute labour-saving devices for labour, thus creating further unemployment. The Government has argued that public investment must be reduced to provide room for the private sector. As public investment has been reduced those parts of the private sector which relied on government contracts have gone into a decline, the effect being that the private sector has declined even more rapidly than the public sector.

This Bill is the result of a misguided and muddle-headed philosophy. It will add to unemployment. It will increase economic stagnation. It will make recovery that much more difficult. The myth that has been perpetrated by this Government over the past two or three years that its federalism policy is working, that the States are better off now than they were up to 1975 and that payments to the States, particularly in the area of capital works, have been maintained, is a complete and utter misstatement of the facts. I challenge this Government to deny the accuracy of the figures I gave earlier in the course of this speech. If it cannot do that, it has to concede that one of the major reasons for the continuing recession in this country has been the inability of the States to maintain their capital works programs and thus to maintain the activity of the private sector in those States. On behalf of the Opposition, I move the following amendment to the motion that the Bill be now read a second time:

At end of motion, add- , but the Senate is of the opinion that the Bill -

takes no account of the Government’s responsibiility to allocate resources efficiently and equitably;

will further retard provision of infrastructure essential to the effective functioning of the economy;

3 ) will further depress the already severely depressed building and construction industry; and

will further increase unemployment’.

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

– I acknowledge the comments of the Leader of the Opposition (Senator Wriedt). The Government opposes the amendment he moved, which I understand is the same as the amendment that was moved in the House of Representatives on the motion that the State Grants (Capital Assistance) Bill be read a second time. The figures Senator Wriedt quoted related only to capital funds. If one looked at the same Table 3 from which Senator Wriedt quoted one would be able to see that in the 1978-79 financial year the States are expected to receive an 8 per cent increase in total general funds. Those funds are being provided by the Commonwealth without any strings whatsoever attached. The same table shows that in each year since this Government came to office the States have received more in general purpose funds than they received previously.

However, this Government foresees a need for a broader appraisal of this matter than Senator Wriedt has implied. I believe that the Leader of the Opposition would agree with me that the period 1973 to 1975 was characterised by rampant inflation, something to which the Leader of the Opposition failed to refer. As Senator Wriedt would agree, that is having consequent dislocating effects upon the economy. The Government’s priority has been to reduce the damage done by inflation. This has required restraint in the growth of the public sector and in curbing the Budget deficit. Contrary to Senator Wriedt ‘s statements, the States have fared relatively well in this period of financial stringency. It is also fair to say that the impact on the States of the Government’s policies is not harsh, as Senator Wriedt has implied.

Senator Wriedt:

– Do you accept my figures as being accurate? I want you to say yes or no to that. See what your advisers say about that.

Senator WEBSTER:

– As I was saying, it is also fair to say that the impact on the States is not as harsh as Senator Wriedt has implied. This is evidenced by the States’ financial positions. I thought that Senator Wriedt would have referred to that. It is well known that last year the States fared quite well, no matter what their comments might be. Their financial situations reflect this. The substantial tax concessions that they have been able to make in their Budgets over the past three years have certainly evidenced that. There is no particular argument against that statement. I am not able to verify whether each of the figures which Senator Wriedt quoted is correct, but when he quoted from tables obviously his figures were correct. The Opposition is entitled to put the construction that he put upon those figures.

Senator Wriedt made four points and one could argue about each of them. One could argue, as Senator Wriedt did, from a very negative point of view. One could argue that the Government has a responsibility to exercise restraint. Nobody in government would argue that restraint has not been required and desired by every sector in the community. In this area of State grants, certainly the States have fared no worse than any other sector of the community. The Government opposes the amendment.

Amendment negatived.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Senator WRIEDT:
Leader of the Opposition · Tasmania

– I would not have risen during the Committee stage of the debate- I am aware of the time constraints upon us- if the Minister for Science (Senator Webster) had given us a satisfactory answer at the conclusion of the debate on the second reading. It is necessary for me to ask for clarification of the sort of nonsense and half truths that have been peddled on this issue for so long by this Government. We were told by the Minister that he did not question the accuracy of the figures in my speech. No one can because they came out of the Budget Papers. They refer to capital payments. The Minister referred me to the rest of the general revenue payments that are contained in the Budget Papers. I know these figures and I think I could almost recite them in my sleep. What these figures reveal is that the general revenue payments that this Government has given to the States have been maintained at the same levels as applied under the Whitlam Government, but only because the States insisted that a guarantee be put into the formula, which was based on what we call the Whitlam formula.

The States said: ‘We will go along with stage I of your federalism policy, that is the tax sharing arrangements with the States, on condition that the general revenue payments are supported by the Whitlam formula.’ Stage I would not have been agreed to if that had not happened. That is the reason the Minister can say that general revenue grants have been maintained at the same levels maintained by the previous Government. It is only the formula that the Whitlam Government introduced that gave the States that protection and this level of general revenue grants. That is something which the Minister may have learnt in these last few minutes.

The other section of the payments to the States is capital grants. They are dealt with in two broad sections as I indicated earlier- the general purpose general capital grants with which the States can do virtually what they like and the specific purpose payments capital grants under which the States are required to spend the money for a specific purpose. Let us look at the position in 1975-76, the last Budget of the previous Government. I refer honourable senators to page 162 of Budget Paper No. 7 which refers to the general purpose capital funds to all six States. Total payments for general purpose capital funds to the States in 1975-76 were $1,291 billion. In the first year of the Liberal Government it was increased to $ 1.356 billion and in the second year, $1,433 billion. It was starting to level out then, bearing in mind that if we convert this into real terms the States were starting to lose in that financial year. In this current year, the general purpose capital funds were frozen at $1,433 billion. General purpose capital payments have been frozen and the States- no one could argue on the basis of these figures- are not doing as well as they were doing in those three years up to 1975-76.

If honourable senators refer to page 165 of Budget Paper No. 7 which deals with specific purpose capital grants one finds a much more dramatic story. That shows that in the last Budget of the Labor Government, payments totalled total $1,836 billion; in the first year of this Liberal Government the payments declined to $1.68 billion; in the second year they declined further to $1.75 billion; and this year they are down to $ 1 .45 billion. All that adds up to the fact that that capital area alone, which I was saying earlier is the key area in maintaining the capacity of the State governments to maintain their programs which are essential to the building industry and all the people in the private sector who are supplying government contracts, is where expenditure being contracted all the time. That is why we cannot get this country off its knees. It is one of the main factors that we cannot get the economy moving and reduce unemployment. For this Government to continue to argue that the States are better off under the present system is a complete myth. They are worse off.

I should like to add one last point. The Minister made reference to the fact that the rate of inflation was higher when the previous government was in office. That is quite true. There is no argument about that. If one looks at the rate of inflation in, say, 1974-75, when there was a rate of inflation of about 15 per cent or 16 per cent, one finds that we increased our total payments to the States by 53 per cent which was about three times the rate of inflation. In 1975-76, there was a 32 per cent increase. Yet, this Government in its first year in office when the rate of inflation was around 1 1 per cent, increased payments to the States by only half the rate of inflation- 5.6 per cent. In its second year, it managed to increase the payments to the States to 12 per cent which was about the rate of inflation. This year, with a rate of inflation of about 7 per cent or 8 per cent, the total increase to the States is 5 per cent. One would have to be blind drunk or plain stupid to suggest that the States are getting a better deal under this Government, on the basis of those figures which I would say are indisputable. They are the Treasurer’s own figures. One would have to be absolutely stupid to suggest that the State governments are doing better now than they were three years ago.

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

– The Leader of the Opposition (Senator Wriedt) has cited figures. I do not disagree with his figures because he took them out of tables that were presented in the Budget. Obviously they are correct. I think that Senator Wriedt originally said that he knows the figures so well that he could recite them when he is asleep. Indeed, he had the ability to recite them to us today. He suggested that the States got a level of funds which he asserted was a level set by the Whitlam Government. My understanding is that Senator Wriedt made some criticism of this Government for its level of funds. I take the point. Senator Wriedt went on to say that people do not understand. He suggested that the States should get a better deal. He suggested earlier that one would have to be absolutely stupid unless one could recognise those figures.

The Government recognises what the financial situation is. People overseas have been saying that Australia has been taking the right course over the past few years. The business community and those who are supposed to be paying the taxes in this country have been saying that even though things are not as easy as they were in relation to the handout of taxpayers’ funds that applied previously, this Government is acting responsibly. I do not think that there would be anybody in the Government who would not argue that finance is tight. I think that that is a message which the Government would be pleased to have abroad. Senator Wriedt and his colleagues made reference throughout the debate to the country being on its knees. That is totally incorrect. We certainly shared a time when we had a government in office that was busily trying to bring the country to its knees. Getting a country up and running again after that has happened is not a very easy proposition. The Government, very sensibly, has taken action to ensure that all areas of government are reasonably supported.

Senator Wriedt spent quite a deal of time looking purely at a set of figures near the billion dollar mark which, according to a graph that he wishes to use, will perhaps keep escalating at a similar rate year after year. That is not the way to run business. (Quorum formed) Mr Chairman, I have concluded my remarks.

Senator WALSH:
Western Australia

– I had not intended to speak during the Committee stage but one or two points still need to be cleared up. With reference to the general purpose payments to the States, Senator Wriedt was demonstrating that the promises of a more generous allocation of funds from the tax sharing arrangements were illusory; that in fact the States had received from that component of federal funds the pre-existing floor that was inserted by the Labor Government in, I believe, 1973. 1 am not quite certain of the date. The first stage of new federalism was sold to the States on the assertion that they would receive a significantly higher share of federal income tax and a significantly higher payment in real terms. That simply has not happened. In fact, the States’ allocation of funds under this heading has been the floor which was inserted, at the insistence of some of the more perspicacious Premiers, in 1 976 and which applied to the previous financial arrangements I believe that expires in the next financial year. Some of the States quite properly are worried about what is going to happen after that.

The other point that I wish to make with respect to the Bill is that its real purpose is to allow for an increase in public capital expenditure without the need for the Government to overtly repudiate the foundation of its economic policy for the last few years. It is a device for increasing public capital expenditure without increasing what is recorded in the accounts as the deficit. Its effect on the money supply, the level of economic activity and everything else is precisely the same as if the Commonwealth Government had borrowed the money and as if the transactions had been recorded in the national accounts and, other things being equal, had increased the deficit by exactly the amount which was borrowed.

Bill agreed to.

Bill reported without amendment; report adopted.

Third Reading

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

page 2230


Second Readings

Debate resumed from 14 November, on motion by Senator Durack:

That the Bills be now read a second time.

Senator WALSH:
Western Australia

– The purpose of these three Bills is firstly, to terminate the bounty payable on a restricted range of machine tools and introduce legislationthe main Bill being the Bounty (MetalWorking Machine Tools) Bill 1978- to arrange for payment, on a different basis, of the bounty in respect of a wider range of machine tools. The Opposition will not be opposing the measure.

The major Bill, which replaces that which will be repealed by the associated Bills, extends a bounty in respect of all machine tools manufactured in Australia. The previous legislation restricted payment to only a portion of such machine tools. The bounty payable will be one-third of what the legislation calls the factory cost, which conceptually is similar to or probably identical with, the value added principle used by economists and accountants in other areas. In addition, the legislation provides for an allowance of one-quarter of the design cost of machine tools.

The second qualification regarding the payment of the bounty is that it is to be paid only on that component of factory or design cost which is of Australian origin. In that sense it is compatible with the principle that the Industries Assistance Commission has been pushing for some time, that is the seeking of a common denominator of effective protection for the assessment of levels of protection.

The IAC, in its report on this matter, which substantially the Government is implementing, argued that extending the range of bountiable products to include all machine tools would encourage the expansion of the more efficient subsectors of the industry- those within Australia that operate at lower cost- at the expense of those that operate at higher cost. That is a reasonable expectation but, as far as I know, there is no reliable indication of the extent to which that is likely to happen. However, I think that the idea ought generally to be accepted. The level of effective protection provided is between 40 per cent and 45 per cent which is, even judged by Australian manufacturing industry standards, rather high.

The IAC suggested- and I gather that the Government has endorsed the notion- that a somewhat higher level of protection can be justified for these industries because they have some defence significance. Whatever merit that argument may have in the context of the matters under discussion, I have observed in the past that defence or a defence argument is frequently the last refuge of the high protectionist when a particular level of protection cannot be justified or rationalised on any other ground. As a general principle, the payment of protection by way of bounty instead of tariff should be endorsed because people are then more conscious of the true cost of providing protection. The degree to which people are not conscious of the cost of protection by way of tariff is revealed clearly when politicians assert simultaneously that they approve of high tariffs and of low taxes because tariffs are conceptually a particular form of taxation. They either raise revenue for governments or effectively subsidise, at the expense of final consumers, the manufacture of tariff-protected goods in Australia. So a far more honest way of providing protection is by way of bounty instead of the more common way of tariff.

The estimated cost of this legislation is $8m a year, a quite insignificant cost when compared with the total cost of protection by way of the alternative form of protection- tariffs. I expect that the Government will not significantly change the emphasis in its protection policy from tariffs to bounty because, if bounties were to replace tariffs entirely, it is obvious that they would have to be a very much higher level of direct, open and acknowledged taxation levy whereas the Prime Minister (Mr Malcolm Fraser) can continue the present system, asserting that he is a low tax Prime Minister, while simultaneously being a high tariff Prime Minister. Of course, there is a fundamental contradiction in those assertions which, unfortunately, has not been properly exposed. I do not imagine that it will be exposed because that theory has been adopted again in this legislation.

The reservation that I would like to express about the Bill is that, as I gather from a reading of clause 6, one-third of the factory cost, or value added cost, will be applied to the Australianproduced component of the items providing that Australian component exceeds 55 per cent. It is not explicitly stated but it is implied- and I think that I am correct in interpreting it in this waythat, unless the local component does exceed 55 per cent, no bounty will be payable. A similar arrangement applies to the Bounty (Agricultural Tractors) Act, the amending legislation for which was discussed in the Senate a couple of months ago. I make the point again that this is an irrational procedure which allows the payment of a significant bounty to a product which has 55 per cent local content but allows no bounty to a product which has 54 per cent local content. The incorporation of local content as a qualification to receive a bounty is consistent with the principle of effective protection expounded by the Industries Assistance Commission, but the insertion of an arbitrary cut-off point of 55 per cent or at any other level departs from that logic or principle. I have been informed that the IAC recommended the 55 per cent cut-off point but I have not today been able to obtain a copy of that IAC report. However, I request the Attorney-General (Senator Durack) when summarising the debate to clear up whether this is in fact the IAC recommendation. If it is, I am surprised because it represents quite clearly an illogical departure from the principle of effective protection which the IAC has expounded for a number of years.

I put one other query to the Minister. I refer to clause 6 sub-clause (3) (d) which in effect provides that the bounty is payable if the tool is used or sold by the manufacturer for use in Australia. I assume from that provision that machine tools produced in Australia and exported do not qualify for a bounty payment. If that is so, why has that provision been inserted in the Bill?

Senator DURACK:
Western AustraliaAttorneyGeneral · LP

– in reply- I thank the Senate for its support of the measure. Senator Walsh, for the Opposition, has raised a couple of matters which seem to me to be classical Committee-type questions. I do not mind whether I deal with them in Committee or clear them up at this point. He referred to one of the conditions on which the bounty is paid as set out in clause 6 sub-clause 3 which provides that the payment of a bounty will not be made on bountiable machines unless the bountiable proportion of the factory cost of the tool is not less than 55 per cent of the factory cost of the tool. He inquired whether that was the recommendation of the Industries Assistance Commission. The Industries Assistance Commission simply recommended the extension of the scheme and this was an element of the previous scheme. It did not comment unfavourably on that aspect and, therefore, it can be assumed that the IAC is in agreement with that provision. That is the basis on which the Government has proceeded in relation to it. The reason that payment of a bounty on export tools has not been included is that it is conceived that problems could arise in relation to the General Agreement on Tariffs and Trade.

Question resolved in the affirmative.

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

page 2232


Second Reading

Debate resumed from 14 November, on motion by Senator Chaney:

That the Bill be now read a second time.

Senator WRIEDT:
Leader of the Opposition · Tasmania

- Mr President, the original BUI which was presented to the Parliament on this matter of assistance to the Mount Lyell Mining and Railway Company, dealt only with the continuation of the payment of a subsidy by the Commonwealth in conjunction with remittances of payroll tax by the Tasmanian Government for the period 1 July this year to 30 September. Subsequently the Government introduced an amendment to the Bill which had the effect of continuing the subsidy up to 30 June 1980. The effect of this amendment is to commit the Commonwealth to pay half the sum of any payments made by Tasmania to the company for the purpose of assisting the continuation of the operations of the mine. I understand that the agreement to which this latest amendment refers is still the subject of finalisation between the Tasmanian and Commonwealth Governments and the Mount Lyell Mining Company, but we presume there will be no hitch in completing the arrangements. Naturally, the agreement which is the subject of the initial legislation is not of any great interest to us today because presumably the funds have been paid by 30 September, the mine is still in operation and the people of Queenstown and Gormanston have some sense of security for the next 18 months as a result of the proposed amendment. Hopefully, within that time the Australian economy will have recovered, prices for copper will continue to improve and the necessity to shift large numbers of people away from the west coast of Tasmania should have diminished. However, with the uncertainty still surrounding the United States dollar and the slow pace of economic recovery in the Northern Hemisphere, it would be presumptuous of us- and I dare say shortsighted- to believe that the mine’s problems will have disappeared by the early 1980s.

The Mount Lyell case poses a very good example of the serious industrial social and developmental problems which can arise from the scaling down or closure of an old established mine. I understand that it is the wide range of problems and the inherent conflicts of principle about the Australian Government assistance to the mining company which recently sharply divided the Liberal and Country Parties over this issue in respect of assistance to Mount Lyell. Understandably, there is an attitude which was recorded in the Industries Assistance Commission report of April on copper ores and concentrates that a mine is knowingly an exhaustible resource and sooner or later the ore body will be exhausted and the mine closed. As a consequence, the people employed must expect to have to move elsewhere or find employment in other industries. The view that follows from that line of argument is that no government should be asked to provide taxpayers’ funds to keep open a mine whose economics are dubious. That view was strengthened by the fact that in the copper industry Mount Isa Mines Ltd, which produces about 80 per cent of Australia’s copper, did not seek assistance. It argued that it was capable of adjusting to the fluctuations in world copper prices. It also claimed that it was capable of placing employees who might be unemployed in the copper mining section in other mining activities.

Mount Isa Mines Ltd and its copper mines are in a different position to Mount Lyell. The Mount Lyell field was discovered towards the end of the last century- in the 1880s- and mined originally as a gold mine. Subsequently, substantial copper ore reserves were found at greater depths and the mining activities were concentrated on copper. Thus the Queenstown area has been involved with mining for about 90 years, which is equalled only by the old Broken Hill fields and some of the eastern coal fields and gold mines in other parts of the country. The people living at Queenstown and Gormanston have established on the coast a deep sense of community spirit, which has been strengthened by the conditions in the area. The Industries Assistance Commission adopted the view, in its copper ores and concentrates report, and I quote:

That the personal adjustment problems which would be faced by individuals directly or indirectly affected by mine closure cannot realistically be met by policies aimed at deferring mine closure beyond the time when, in the absence of assistance, no long-term future for the mine can be seen.

But the Commission later commented, when dealing with the Mount Lyell situation:

Mount Lyell is associated with the towns of Queenstown and Gormanston which are heavily dependent on the mine for employment. Closure of Mount Lyell would not only effect employment in these towns but would also have an important effect on employment elsewhere in Tasmania, particularly in the west coast region.

In a submission which was put to the Commission by the Tasmanian Government, it was pointed out that the closure of Mount Lyell could result in approximately 2,000 additional people being unemployed. While expressing some reservations about the actual model used by the Tasmanian Government, the IAC agreed, and said:

The induced effects elsewhere in Tasmania, estimated by the Tasmanian Government, are generally indicative of the scale of the initial unemployment which could follow closure of Mount Lyell.

It is that question which is paramount in the consideration of any action taken to help Mount Lyell.

The Commission has made the point that if the Australian economy was considerably healthier, it would be possible to find alternative employment for people who might be displaced on the west coast and have to leave Queenstown and Gormanston. In what can only be interpreted as direct criticism of the Fraser Government, the Commission said:

The results of a comparative analysis could show that in terms of preventing job losses or providing new opportunities without increasing the Budget deficit, it would be better for governments to provide finance to maintain more jobs, for example, in the construction industry in a city than in the mining industry at a remote location.

The present Government has studiously avoided that course and, as a consequence, with the combination of low copper prices and alternative employment there is little option but to keep the Mount Lyell Company operational. The real concern is that the action available to the Tasmanian Government is limited. It does not have the economic power or economic resources which are available to the Federal Government to create job opportunities on a large scale. In fact the impact of the continual squeeze on the

States is evidence of the inability not only of the Tasmanian Government but of any State government to draw on reserves of finance when a crisis situation such as this develops within its own borders.

Earlier this year I suggested to the Treasurer (Mr Howard) that funds should be made available to local government for both job creation and capital works. I wrote to him making that suggestion after doing a tour of the north west coast of Tasmania and having discussions with a whole series of local government bodies. Had that course been adopted- and it looked as though the production at Mount Lyell could not be maintained at historical levels- some of the more mobile employees could have found work in the north west region of that State. The Federal Treasurer rejected that approach so the people employed at Mount Lyell must hope that copper prices recover sufficiently to warrant Mount Lyell remaining in production and maintaining its work force.

Instead of the ‘sit by and do nothing’ approach which has been adopted on so many occasions in the past, it is obvious that specific measures should be implemented by the Federal Government to ensure that alternative employment is available in north western Tasmania; that the recommendations of the Industries Assistance Commission about the provision of counsellors and other social welfare workers who might be able to assist those mine employees who feel they ought to shift are implemented; and that the Tasmanian Government is given help in assessing possible industries for the north west as well as hastening other mineral exploration work in the area.

Both the Tasmanian Government and the Australian Government are of the opinion that reasonable prospects exist for development of new resources over the longer term and that people need shift only on a temporary basis. Frequently, governments are accused of ad hoc approaches to the economic and social problems which beset areas such as the west coast of Tasmania. The scope for action is determined largely by the world demand for copper with few extraneous factors influencing employment. In these circumstances it would seem that some forward planning is reasonable and might overcome a moment of chaos if the mine is to be closed eventually. If copper prices recover significantly and the miners and their families are able to be employed temporarily in adjacent areas of the State, re-activating full scale mining operations would not be difficult.

I again take this opportunity to ask the Government to reconsider the original proposal which I put to the Treasurer earlier this year for stimulating work through federal assistance to local government. The lead times involved mean that if Mount Lyell’s future is still uncertain at the end of the period to which this legislation refers the insecurity of the people who are working for the company on the west coast would be increased. Their hopes of maintaining their homes and positions would be greatly restricted. In addition to the very complex human factors involved with this problem, aspects of the company’s structure and operations deserve attention. I do not wish to dwell on the efforts that have been made by the Mount Lyell management to increase the efficiency of the mine’s operations, but they should be recognised and applauded.

One of the most important lessons to be learned from this exercise is that the present Government does not have a clearly denned policy about the restructuring of industry whether it is primary, manufacturing or mining. The new federalism policy is making it more difficult for the States to take up the slack when these problems arise. The Tasmanian Government is hard pressed in maintaining a balanced approach to this problem and a number of other problems which have been created. It is hoped that the Federal Government will recognise the assistance needed in this form to companies and employees who find themselves in difficulties. The Opposition will not oppose the Bill. We realise that the two governments between them are providing support at present to keep the employees in their jobs. We trust that before the time arises for further assistance to be provided the combined factors of the market and the efficiency of the company will make that support unnecessary.

Senator ARCHER:

– I think that honourable senators are aware of my previous involvement in this matter. At this stage it gives me great pleasure to support the Tasmania Grant (The Mount Lyell Mining and Railway Company Limited) Amendment Bill (No. 2) 1978. 1 have spoken on the Mount Lyell matter in the chamber on several occasions in the past. I have provided various details behind the company, the town and the current position. I will not go through a tedious repetition of those details. I think it is relevant that we look at the position over the last year or so. When I looked through the previous debates I found that I had made various predictions as to what I felt was likely to happen. Fortunately, most of these are occurring more or less on line. In November 1977 when we were debating the matter, the Australian price of copper was about $1,030 a tonne. In May 1978 when we also debated the matter it was $1,200 a tonne. Since then, it has reached about $1,300 a tonne. It is currently between $ 1 ,250 and $ 1 ,300 a tonne.

I also referred to the international position at the time. I think it is fair to say that international copper prices are exactly the same now as they were then. The position is still very clouded. I think it is fair to say that the market conditions are also still improving. It gave me pleasure a couple of months ago to take a group of my colleagues to Queenstown. We had a very pleasant experience of meeting the warden and councillors, the Trades and Labour Council, union representatives, management and staff. It gave us an opportunity to consider the position from the civic point of view, from the mining point of view and from the point of view of the people of Queenstown. I said previously- I repeat it- that I cannot give too much credit to what Bruce Dilger, Russell Maher, Dick Patterson and all their associates have done to keep the town and the mine going. I do not know of a finer example of civic and industrial co-operation than exists at Mount Lyell.

Recent discussions I have had indicate that the community is still totally involved in the most creditable way possible. While we were there we spoke to the men in their work situation in the mill. We spoke to the engineers and the miners. The enthusiasm for the mine and the challenge that the employees have accepted were evident everywhere. It did a lot to assist my colleagues to understand the situation. Whether they all agree with some of the philosophical aspects of the arrangement I do not know, but at least they all came away with a far better understanding of the position than they had before. Regrettably, not all of them had enough knowledge of the situation previously. One has only to refer to the Hansard of previous debates for that statement to be borne out. I do not wish to engage in a debate on matters of ignorance or opinion, but I totally refute the comment by the honourable member for Kalgoorlie (Mr Cotter) that the mine has a life of only two years. My colleagues and I established while we were at the mine that there is development and there is stoping for at least five years. The present program is to run for 20 years. There is no reason why the program will not continue and expand.

On 29 May I referred to the efficiency, productivity and cost structure of the operation. I am pleased to say now that production at the mine is still very satisfactory. There are continuing increases in efficiency. Productivity generally is still increasing and working costs are still declining. The reserves are officially listed as being in excess of 30 million tonnes of workable ore. In nearly a century of the mine’s operation it has never had more proven reserves than it has now. The value of these reserves at today’s prices is substantially in excess of $500m. The price of copper has to be the basis of future prosperity. I have previously discussed the current figures but I think it is interesting to take some note of a comment that appeared in the Australian Financial Review on 8 November. John Edwards of the Financial Times was reported as having said:

Only half the world’s current copper mining was justified at prices of 65c a lb.

That is about $1,300 a tonne. The report continued:

A price of about 80c was needed to enable normal mining enterprises to achieve profitability; $1 to $1.20 was required to build a new fully integrated facility from mine to refinery.

However, as demand was growing steadily, a big copper shortage was likely producing a big boom in prices as in 1974.

None of us wants to see a big boom in copper prices but I think we all wish to see stability in the copper market world wide. The company, like every reliable source of information on the copper industry, is expecting the price to remain at a payable level for at least the next three or four years. I do not think that beyond that period the price is really predictable. But on the current basis of world supply and demand the next three or four years would appear to be well and truly covered. World efforts are still being made to secure stability in the price of copper. Moves have been going on now for some years to try to get co-operation from major producers in Third World countries, to regulate their supply to retain a marketable price. This situation seems to be getting closer. The general financial situation of many of those countries will make it necessary for them to enter into some sort of a scheme because they cannot continue to market copper at less than payable prices on a total national loss basis forever. Co-operation would appear to be much closer than it has been for a long time. Any of these influences on the world market situation must help Mount Lyell. At present the company would be in the bottom half of the low cost producers. It is one of the world’s low cost producers when compared with its position some years ago when it was recognised as being one of the highest cost producers.

I think it is appropriate that I make some mention of the comparison between gold mining and copper mining which was made recently by a certain member in the other chamber. It is not possible to compare the current situations of the two different mining operations. We have to remember that gold prices are the highest they have ever been in history. Any gold mine that is finding it difficult to pay on these sorts of prices certainly could have no future prospects with lower prices. On the other hand copper prices are still quite low, with every prospect of improvement. I think we all agree that if we can keep afloat a copper mine that is on the verge of profitability or has marginal profitability as is now the case with Mount Lyell, it will be only a matter of time before the market will catch up and put it into a sound and working condition.

We need the Mount Lyell mine to operate. It plays a very important part in the whole of the industrial and social status of the west and northwest coast of Tasmania. It has played a most important part in the general economics of the State. I think it is only right that we should ensure that it has an opportunity to exist as there is an improvement in the prices. I think all of us want to wish the people of Queenstown and the Mount Lyell Mining and Railway Co. Ltd every success in the future. We are very pleased that the company and the State Government have seen fit to join in this three-sided arrangement to inject funds when they are needed. I hope that the funds we are approving today will never be needed. But whilst State industries are basically State matters I think all Tasmanians genuinely appreciate what this Government has done, not only for Mount Lyell but also for Tasmania generally. We have only to look at such other items as the Antarctic base, the maritime college and the freight equalisation scheme, to name just three projects, to see the importance that this Government attaches to Tasmania. I support the approval of the facility which will make this loan available.

Senator TATE:

-This Bill carries into legislative form the Federal Government ‘s part in a tripartite agreement between it, the Tasmanian Government and the Mount Lyell Mining and Railway Co. Ltd. It requires the taxpayers of Australia to underwrite operating losses of the copper mining venture at Queenstown up to the end of 1980 and up to a limit of $3. 8m. It is fair enough to ask why this massive subsidy should be made available to a venture which depends upon buoyant world prices for a commodity which it extracts, admittedly, from fairly low grade ore, though in great quantities.

One answer could be that it is a very good risk indeed. The trend in copper prices, as Senator Archer pointed out, is favourable. Prices are improving, so much so that the chairman of the Mount Lyell Mining and Railway Co. Ltd, Mr A. C. Copeman, was able to tell the annual general meeting in Sydney- this was reported on 29 September 1978-that the Mount Lyell company was very close to its cash break even point at present copper prices and mine costs. So it would seem that very little of the promised funding from either the Federal or the Tasmanian Treasuries will be required. If it is required there is every probability that repayments will commence quite quickly from the cash flow generated by improved prices.

Whilst that particular justification for making the subsidy available is a possible factor, and no doubt was a factor in the Government coining to its decision, I believe it does less than justice to those in government who have taken this decision in the face of considerable political pressures from within the joint Party room, in the face of the Industrial Assistance Commission report which was quite firm in its conclusion that aid should be refused and in the absence of any sort of regional development policy to cope with such a situation as this. I believe that in the face of all those difficulties the Federal Government has come to a decision which must be commended. What moved governments was the realisation that what was at stake here was the whole hardworking community of Queenstown and associated industries around the west and north west coast of Tasmania. One thinks of the port of Burnie, of the North- West Acid plant, and of Tioxide. One could go on. Inter-relations are well known to all Tasmanians in this chamber and no doubt to others who are as interested. In other words, the impact could not be confined to one town. The devastation that would have been wreaked by the closure of this mine would have been Tasmania-wide with particular impact in the west and north-west region, which is perhaps the most important region in Tasmania. That situation could not be tolerated. I wish to commend the Governments involved for preventing the intolerable.

Having said all that I mention very briefly two matters which have caused me some disquiet in considering the Mount Lyell situation. I believe the matters that I will advert to are of somewhat wider concern than simply the situation at Queenstown. To what extent should people’s lives and livelihood be jeopardised by a reorganisation of the methods by which a parent company deals with its subsidiaries or other firms in which it is an influential shareholder? Honourable senators will know that Consolidated Gold Fields Australia Ltd holds a controlling interest in Mount Lyell Mining and Railway Co. Ltd. On 14 June 1975, this stood at about 56 per cent. On that day, Queenstown Investments was formed. During the year, virtually the entire Mount Lyell shareholding in an adjacent tin producer, Renison Ltd- another West Coast mine- was transferred to Queenstown Investments. Some people say that this provided many millions of dollars to Mount Lyell to enable it to continue to operate. But I put another interpretation on the matter. The Mount Lyell directors had very prudently acquired a 44 per cent holding in Renison Ltd. This holding was stripped from that company via Queenstown Investments in a way which enabled Consolidated Gold Fields Australia Ltd to acquire a controlling interest- 51 per cent- in that very profitable Renison Ltd. How profitable is that company? One has only to look at the Age of 28 September to see that the directors were able to state that Renison was paying a 50c final dividend on its 50c shares following a huge boost in profit for the second year running. Exceptionally buoyant tin prices led directors of that Tasmanian tin mining company to report a 68 per cent earnings jump to a record $ 1 7.9m in the year to 30 June.

Senator Messner:

– What were its profits like when it had to be sold?

Senator TATE:

– The latest profit compared with $ 10.7m a year earlier, which itself was three times the 1975-76 result. I agree that these profits were generated by a tremendous upsurge in tin prices. The point I am making is that at the end of the day Renison dividends were not directly available to the Mount Lyell company as they otherwise would have been to help it through its critical period. Would this help have been sufficient? I cannot say. What can be said is that without this assistance Consolidated Gold Fields is able to point to an isolated company stripped of its earning potential from profitable investments in ventures other than copper mines and to say: ‘We cannot bear continued losses. We decide to close it down’. This faces governments and communities with an intolerable situation. Further, no call was made on shareholders of Mount Lyell on the partly paid shares which formed 45 per cent of the capital of almost 30 million shares. They are only paid to 10c and carry a liability of 75c, comprising 15c capital and 60c premium. No call was made. As I said, stripped of the very profitable earning potential from Renison tin, Mount Lyell was left isolated and Consolidated Gold Fields took the decision that it ought to close down the Mount Lyell mine with all the consequences which Senators Wriedt and Archer have adverted to- an increase in unemployment in Tasmania of 2,000 people, representing an increase of 16 per cent, and the devastation of a region. This must be regarded as reprehensible.

In my maiden speech, I made this point and I restate it with as much conviction as I did then: This Parliament expressly requires the Industries Assistance Commission to have regard to the regional, economic and social consequences- especially the unemployment consequences- of any report it hands down. No private corporation ought to be able to do less when making a decision as to the best use of shareholders funds. This chamber should be investigating ways of making that social dimension an operative part of directors’ obligations’. Since I spoke on this subject, I have been pleased to discover a White Paper published by the United Kingdom Government in July this year which goes some of the way in this regard. I seek leave to incorporate in Hansard certain draft clauses of a proposed United Kingdom Companies Act which have the effect of introducing a duty on directors to have regard to the interests of employees as well as shareholders in carrying out their functions. It also reverses the rule in the Park v. Daily News case so that it will be lawful for a company to make provision for employees and former employees when closing down the whole or any part of its business. I seek leave to incorporate in Hansard draft clauses 46 and 64.

Leave granted.

The clauses read as follows- 46.- ( 1 ) The matters to which the directors of a company are to have regard in the performance of their functions shall include the interests of the company’s employees generally, as well as the interests of its members.

  1. Where in any proceedings it falls to a court to determine whether a director of a company is in breach of his duty to have regard, in the performance of his functions, to the interests of the company’s members, the court shall take into account the fact that the director is also required to comply with the duty imposed by this section. 64.- ( 1 ) The powers of a company shall, if they would not otherwise do so, be deemed to include power to make the following provision for the benefit of persons employed or formerly employed by the company or any of its subsidiaries, that is to say, provision in connection with the cessation or the transfer to any person of the whole or part of the undertaking of that company or that subsidiary.
  2. Sub-section ( I ) above relates only to the capacity of a company as a body corporate and is without prejudice to any provision in a company’s memorandum or articles requiring any exercise of the power mentioned in that sub-section to be approved by the company in general meeting or otherwise prescribing the manner in which that power is to be exercised.
Senator TATE:

– I thank the Senate. Those clauses merely attempt to import into company law directors’ social obligations towards employees. They are to have a lawful duty to consider much more than the interests of shareholders. Given the brief time available to me I do not pursue that point now.

I turn, now to a matter of equal concern to me, namely, the attitude taken to this Bill by some members of the coalition parties in the House of Representatives. It is unfortunate that an impression was given in that place that somehow Tasmania once again is seeking to be parasitic on the Australian body politic. I know that Senator Rocher, who will follow me, will not be taking that line in his speech. I simply say very firmly indeed that that attitude perpetuates a vicious myth which seriously disadvantages Tasmania when it comes to arrangements that emanate from this Parliament or city. It is utterly untrue that the richer States subsidise Tasmania. On the contrary, Tasmanians have contributed massively for many years to the economic health of this nation for very small return.

Mainlanders may be said to be parasitic on Tasmania. For example, Tasmania’s exports in the year ended 30 June 1977 were $828 per head of population. This compares with a mere $551 per head for New South Wales and $589 per head for Victoria. I could go on and on to give other examples. The fact is that we in Tasmania are producers, not consumers, of wealth. Tasmania was never a mendicant State for any reason to do with our productivity or enterprise. This has been forced on us by certain federal arrangements. We provide overseas earnings for Australia but then we have to pay for manufactured products from the heavily protected manufacturing industries of the south east mainland. Our standard of living in Tasmania would skyrocket if we imported manufactured products with earnings from our exports. We have decided not to do so because we recognise that we are part of a federation with various States requiring various types of employment base. In the south east mainland, manufacturing industry is required; in Tasmania, as part of the Federal deal, we require support from other States for our mining and primary industries.

Let us not forget that Tasmanians are also contributors to Federal revenue. We contribute in ways which are masked, which allow other mainland States to take advantage of our contributions. I shall explain. Tax on income earned in Tasmania, for example, may be collected and credited in another State where a firm is operating in Tasmania but has its head office in, say, Melbourne or Sydney. In purchasing goods originating on the mainland or overseas, Tasmanian consumers pay excise or customs duty which is incorporated in the price of the goods. But the actual excise payment of course is credited and paid into another State. These facts are rarely acknowledged which I bring to the attention of honourable sentors to show the ways in which we contribute to Federal revenue. It is not asking too much that at a time of crisis- with a guarantee of repayment given an ascending level of copper prices- that the Federal Treasury help Queenstown through this monetary crisis in its long and successful history.

Senator ROCHER:
Western Australia

-The Tasmanian Grant (The Mount Lyell Mining and Railway Company Limited) Amendment Bill (No. 2) calls for a commitment of approximately $1.8m with an upper limit of $3. 8m, which is the potential commitment as a result of this measure. Added to previous schemes of support, which I understand total $4.4m, the grand total of support funds may well prove to be something like $8.2m, or almost certainly $6.2m, at 30 June 1980. Senator Tate made short reference to remarks passed in another place by my colleagues, the honourable member for Moore (Mr Hyde) and the honourable member for Kalgoorlie (Mr Cotter), and seemed to express a point of view which suggested that they had been derogatory of Tasmania. My reading of the Hansard record of those proceedings on 7 November suggests to me that they were arguing the principle. Certainly there was nothing in anything I read or anything I heard while I was there which would support the contention of my colleague from Tasmania.

Probably 1 alone among honourable senators worked in Queenstown for approximately one year of my life on projects which were concerned directly with the mining operation. They involved the renewal of the water line, building machinery sheds and general floatation installations. So I have a great understanding of and a great affection for the people of Tasmania, particularly for those of Queenstown and Gormanston. Having said that, perhaps it would be easier now for me, as I believe others in the lower House did recently; that is, to express my reservations about the principles involved in this measure, rather than in the actual measure itself, and to what it might lead. I place on record that if such a measure is proposed again I certainly will have to consider my attitude to it. At this stage I reserve my position along those lines.

This measure is interventionist in the extreme. It is interventionist in a way which is not normal. It has the distinction of favouring the operations of one company- not an industry but one separate trading entity. That fact, coupled with matters that Senator Tate raised, on which I also would like to comment, leave an unpleasant taste in one’s mouth. The Mount Lyell Mining and Railway Company Limited produces copper and, with its by-products of gold and silver, it competes with producers of those commodities who are operating in other areas of Australia. By means of this Bill, the Mount Lyell company will enjoy the use of funds, interest free, which facility is not extended to those companies with which it is in competition. This gives an unfair trading advantage to the Mount Lyell company. Should we not be considering also compensating those miners who operate in that field and who have to compete with the Mount Lyell company? Should we not give them the same advantage? Of course, we cannot do that because the funds do not extend that far.

Senator Tate mentioned that the Mount Lyell company managed to separate the operations of Renison Ltd, a profitable tin mine, and I understand also Bellambi Coal Co. Ltd from the operation involving Mount Lyell. I understand that both those companies are extremely profitable operations. Consolidated Gold Fields Australia Ltd has other operators in its stable. It has heavy investments in Goldsworthy Mining Ltd in Western Australia. I guess that, given the situation in which that company finds itself, in the not too distant future it could well be able to advance with some justification a similar case. Are we going to be in a position to help Goldsworthy Mining if it makes an approach, as has been speculated upon on different occasions? Are we going to be able to help the Greenvale nickel mining project, which would involve providing massive support?

Protectionism, as I have always understood it, was allowed to exist and to some extent was encouraged to exist because it served the purpose of making jobs and raising revenue. The proposal under discussion is simply an exercise in maintaining jobs and, in the course of so doing, depleting revenue. It has some of the features of a giant Regional Employment Development scheme and some of the arguments against that scheme could well be applied here. I urge honourable senators who may be interested in the subject to read the speech made in another place by the honourable member for Moore and to read the questions he raised. I repeat, they are recorded in the House of Representatives Hansard dated 7 November.

I wonder whether we are approaching this matter from the right angle. I think it has been established that there is a high percentage of home ownership among the people in Queenstown and, presumably, in Gormanston. Any relocation which might be required will involve these people in costs which are not normally associated with the closing of a mining town. I wonder whether we should not really be looking at spending money on retraining, relocation and rehousing the people. If it is not contemplated to do these things all at once, perhaps we should be planning now to do them because it is by no means sure that, even with the concessions offered by this legislation, the Mount Lyell mine will continue after 1980. Despite what my colleague, Senator Archer, might have said or might have thought, I understand that it is by no means certain that copper prices will reach heights which will enable a continuation of the operations.

I think that the Bill is supportable only for its humanitarian considerations and for the benefit it will provide to the people of Queenstown and Gormanston. Perhaps in addition to spending in the areas of retraining, relocation and rehousing, we should be examining ways and means by which we can allow this company to find its own level of trading and, if it is unable to call on its shareholders, to suffer the normal effects which the market applies. The proposition can be justified on humanitarian grounds, although, I remain concerned that we may be putting off the day when we have to come to grips with the long term reality. I feel that we should be preparing for that day.


-The Senate has a stack of about 40 Bills to deal with between now and this time next week. That does not permit me to analyse the statements made by Senator Rocher. I have no doubt that the Minister for Science (Senator Webster) on behalf of the Government will deal with these matters, as he sees fit, in his response to the debate. However, I want to advert to the fact that, as a number of other senators have mentioned, the future does look promising. Not the least promising feature of this Bill is that the promise of funds expires on 30 June 1980. That will be a promising year indeed. It will be the year of the State elections in Tasmania and, presumably, it will be the year of the Federal elections.

Senator Lewis:

– Your time is up.


– I am told that my time is up. I support the legislation.

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

– I thank honourable senators from both sides for their contribution to the debate. Obviously I cannot comment on all the statements that have been made because of the limited time available to me. However, I have a note here to which I would like to refer. The Leader of the Opposition (Senator Wriedt) mentioned that he believed that grants had been provided to the Mount Lyell Mining and Railway Co. Ltd in respect of the period 1 July to 30 September 1978. I am advised that the Commonwealth, of course, provides grants to Tasmania, not to Mount Lyell. The Bill of course, seeks authority for Commonwealth grants to Tasmania in respect of Mount Lyell for the period 1 July to 30 September 1978 and the 21 -month period from 1 October 1978 to 30 June 1980.

Senator Tate mentioned that the Mount Lyell directors in 1975 decided to sell Mount Lyell ‘s interest in Renison Tin. The sale was made, in essence, to Mount Lyell shareholders, including Consolidated Gold Fields Australia Ltd, Mount Lyell ‘s parent company. Whilst there may be speculation about the motivation of Mount Lyell ‘s action, the company has indicated that the funds received from the sale were required to fund Mount Lyell ‘s cash deficit at that time. Renison shares were sold at their original market price. To go beyond the stated views of the Mount Lyell directors is perhaps to impute motivations based on speculation. The comments made both by Senator Rocher and Senator Archer have been noted. I think that the Senator should now proceed to vote on the Bill.

Question resolved in the affirmative.

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

page 2239


Second Reading

Debate resumed from 14 November, on motion by Senator Chaney:

That the Bill be now read a second time.

New South Wales

– I trust that this legislation will excite the same amount of response and interest as the Bill with which we have just dealt because it is of importance not only to Tasmania but also to all the States. The States Grants (Roads) Amendment Bill seeks to amend the States Grants (Roads)

Act 1977 to provide that an additional $33m be paid to the States in 1978-79 and in 1979-80 for the purposes of road works programs. Under the principal Act, $475m was appropriated to the States for each of the three years 1977-78 to 1979-80. It was decided then that the grants for the 1978-79 and 1979-80 periods would be adjusted upwards in line with the price movement so that the value of the grants in real terms would be maintained at the level of the original legislation in 1977.

This Bill is said to implement the first of the two required annual indexation adjustments, by providing for a 6.9 per cent increase over the grant provided in 1977-78, based on a forecast of the price movement in the 1978-79 period. The principal Act also sets down that annual quotas for expenditure by each State be met from its own resources. These quotas represent the minimum amounts of expenditure required from State sources but, of course, each State is encouraged to and is generally free to allocate its quotas amongst the various road works categories according to its priorities. For example, we have the national highways, the national commercial roads, rural arterial roads and so on. The Bill implements the Government’s decision that State expenditure quotas for 1978-79 should be increased by the same percentage as the Commonwealth grants.

The Opposition does not oppose the Bill, but the debate does offer us an opportunity to have a look at the Fraser Government’s record as regards road construction and the road transport industry generally. I believe it affords an opportunity for the Senate, certainly for the Opposition, to chip away at the myth that the deficit has to be cut at all costs, to chip away at the inadequate philosophy that this Government is pursuing in its economic program and to chip away at the unacceptable theory that the deficit has to be reduced or the economy will not get going again. What seems to be ignored by the Government in its general cut-back of funds- whether for roads, housing or the States- is that a large proportion of the money that is allocated to the States, particularly as it applies to the roads program, is in fact spent in the private sector. I have been told by my colleague the Minister for Public Works and Deputy Premier of New South Wales that considerably more than half- about two-thirds- of the money allocated by his Department is in fact spent in the private sector. When we talk about improving the private sector we ought to see that the allocation of funds to the States, whether for housing, roads or general public works, does have its response in the private sector.

Several points need to be examined. Will the annual indexation grant provided for in this Bill be sufficient to maintain in real terms for the 1978-79 period the level of funding made available in 1977-78? Presumably the adjustment for which the Bill provides is being made on the basis of the forecast rise in 1978-79 of the national accounts implicit price deflator for private investment in other building and construction areas, as was foreshadowed when the principal Act was introduced in September of last year. But then we suggest that if one uses a different indicator of the inflation rate, it is clear that this will not maintain the real level of grants to the States for road construction and maintenance.

The Budget for 1978-79 revealed the difficulty that the Government encounters when forward estimates have to be made. For example, the Institute of Applied Economic and Social Research of the University of Melbourne forecast recently that the consumer price index could be expected currently to increase by 8 per cent. Commonwealth funding for roads would then decline by one per cent in real terms. We concede that in the area of economics it is rather difficult to make forecasts. We are appreciative of the fact that if we got half a dozen economists in a room we would probably get half a dozen different forecasts. Nevertheless, forecasts must be made and perhaps it might be better to index grants to the rate of inflation as measured in the consumer price index or perhaps some other formula could be adopted.

What one must ask in respect of Commonwealth funding for roads under the provisions of this Bill is: Will the real money be available? I submit for the consideration of the Senate that it will not, that there will in fact be a decline in real terms of at least one per cent. The evidence from New South Wales suggests that road maintenance and building costs have increased at a rate faster than has the consumer price index. For example, the report of the Commissioner for Main Roads for 1977-78, which was presented in the New South Wales Parliament as recently as Wednesday of this week, reveals that in the last five years road maintenance and building costs have risen by 109 per cent when compared with an increase of 82 per cent in the consumer price index. So one is entitled to say that the formula that is being followed by the Commonwealth Government does not adequately take this increase into consideration.

How can the Government possibly claim that the real level of Commonwealth funding for roads is being maintained by this Bill when the indexation figure of 6.9 per cent is below the independently predicted rise for the CPI for 1978-79 and when it is probable that road building and maintenance costs have increased at a faster rate than has the CPI itself. One would have thought that the Government would have been a little more generous in its allocation of funds to the States for road construction. After all, as a result of current Budget decisions petrol prices have been increased by a massive 16c per gallon, which will mean that $772m will be extracted from motorists, operator-drivers and owners of motor vehicles in this country.

One would have thought that this would have been a most opportune time for the Government to provide additional funds for roads, but no such increase has been granted. In fact, it is likely that in real terms the fund will decline marginally as I have suggested. The Bill merely maintains the totally inadequate level of road funding provided in the principal Act. We had plenty to say about that- in fact there were considerable misgivings- when the measure was considered last year. There are, of course, considerable misgivings about it on the part of the States.

Last year, the reduction in real terms in road funding provided by the Commonwealth, as measured in terms of the CPI, was of the order of four per cent. This year a further reduction of one per cent has been made. In 1975-76-1 think it is important to examine the relative decline that has taken place- the share of gross domestic product that went to road construction and maintenance amounted to 0.612 per cent. That was the last year of the Labor Government’s term of office. In 1976-77 the allocation dropped to 0.538 per cent. In 1975-76, again the year of the Hayden Budget, road grants, as a proportion of total Federal Government Budget outlay, amounted to 1 .99 per cent, lt is estimated that for 1978-79, as provided for in this legislation, that figure will drop to 1 .76 per cent.

It is obvious that the Budget decision to increase the price of petrol by 16 cents per gallon is not part of any consideration of these issues. Certainly it is not part of any overall energy conservation strategy. If it were, one would have expected that the Government would be spending more money on roads because better road surfaces provide better fuel economy for motor vehicles; vehicles move more quickly, with more efficiency, and there is less delay. But this Government has not increased the allocation to the States for road construction and maintenance in real terms. As we have seen, it is attempting only to maintain the inadequate level of funding that exists at present, to maintain the status quo. There is reason to doubt that the Government is serious even in that objective.

If the petrol price increase was part of any energy conservation strategy one might have expected the revenue gained from that measure to have been directed to the upgrading and extension of public transport services. Funding in real terms for urban public transport in the 1978-79 Budget represents a fall of 46 per cent over the level of funding in 1976-77. This is despite a survey which was published in the Sydney Morning Herald of 12 September 1978 which showed very clearly the need for more involvement of Federal funds in the area of transport, both public and private. It is clear that the Government is not genuine in its claim that fuel prices have gone up in order to assist in conserving fuel and to enable greater exploration activities to take place. It is clear also that this Government regards Australian motorists and those engaged in the motor transport industry purely and simply as a source of revenue. They provide a milking cow for the Government. There is no doubt that motorists and the motoring industry are being exploited unmercifully by the Federal Government.

That this is the true position becomes even more evident when one considers that the overseas record shows that where a pricing mechanism has been used in an attempt to ration the use of petroleum products it has failed. Many people in this country do not have a choice about using a motor car. They have to use a car because there is no other means of transport. That is particularly evident in the fast growing outer suburbs of our major cities. All these people simply have to bear the extra costs that this Government has imposed upon them in this Budget. Any first-year economics undergraduate will say that the demand for petroleum products is a classic example of a high price inelastic demand. Raising the price will bring only a marginal reduction in demand. We are entitled to say that the Fraser Government, by constraining the amount of Federal funds for roads, is trying to shift the burden of funding for road construction and maintenance to the States. That is what this legislation seeks to do. It seeks to force the States into a position where they will have to increase their motor vehicle registration charges and taxes and motor vehicle driving licence fees. This is the outcome of the Government’s current policy. It is no wonder the States are reacting to it and are no longer enthusiastic about the Government’s socalled co-operative federalism policies.

To date the States have been able to resist the aim of the Federal Government. As a result of great efforts, the States have boosted their expenditure in excess of the quotas prescribed in the road legislation. For example, in 1976-77 New South Wales exceeded its quota by 46 per cent, Victoria by 8 per cent, Queensland by 60 per cent, South Australia by 44 per cent, Western Australia by 40 per cent and Tasmania by 134 per cent. Tasmania headed the list even in that respect. One wonders how long this effort can continue in the face of real reductions generally in Federal funding to the States. The States are trying, genuinely, to pull their weight. They are not being assisted by the penny-pinching policies of the Federal Government, despite the fact that the Federal Government, as I said earlier, has increased revenue from petrol tax of some $772m.

Mr Nixon then went overseas. There is much evidence to indicate that he is out of touch with the views of the various State road transport authorities and of the Ministers in the various State parliaments. He attacked the States for what he calls their annual bleat about the need for more Federal road funds. We had an interesting debate here yesterday in which my colleagues, Senator Bishop and Senator McLaren, and even honourable senators on the Government side, indicated that more funds are essential. However, I think we became bogged down then because we could not agree on a formula, although we all agree on the principle that more funds should be available for road construction. Mr Nixon, the Federal Minister who is piloting this legislation through the Parliament, said, to use the words that he used, that the States’ ‘repeated whinging’ about road maintenance charges had always ‘amazed’ him. If that is a typical expression of the federalism policy, it seems to me that Mr Nixon is falling down in implementing even the Government’s inept policies in that respect. He certainly shows that he has no understanding of the areas of responsibility that exist in the States.

If this behaviour is indicative of his earlier record, it is little wonder that the States decided in July 1978- and that is not so long ago- to have nothing more to do with Mr Nixon. Mr Nixon said that he was pleased to be by-passed by the States when State Ministers met in Darwin to say something about the attitude that he was adopting. He said that he was quite happy to let the States have their discussions with the Prime Minister (Mr Malcolm Fraser) and take the matter out of his hands. It may be that he cannot win the battle in the Cabinet room to get adequate funds. I do not know whether that is his fault or the fault of the Prime Minister. Certainly there is unanimity among the States that they want a larger share of the petrol tax, particularly in a year in which tax collections have gone up so dramatically. They want a larger share of those tax collections so that they can fulfil their responsibilities to provide a better road system in their States.

Time will not permit me to deal with all the comments that have been made by the various State Ministers. A meeting was held in Darwin and the report that appeared in the Courier-Mail following that meeting read:

The decision to take the issue out of Mr Nixon’s hands followed a heated 90-minute debate yesterday at the 23rd meeting of the Australian Transport Advisory Council being held in Darwin.

The meeting decided that future battles for extra road funding would be fought out between the Prime Minister and the State Premiers.

Of course, when there is such unanimity among the States one would expect- and I heard one honourable senator on the Government side say today that this is a States’ House- that a little more pressure would be exerted by Government senators to see that the Government accepts its responsibilities, that the Senate acts as a State House, and that when these decisions are made it expresses to the Government the view that it wants adequate funds made available to put into effect the road programs of the States. We are aware that in every State there is a great lag in road construction. A great need exists to upgrade our main road system and our secondary road system as well as our rural road system. In those circumstances we believe that a responsibility falls on the Government to listen to the voice of the States, to listen to the views of the Senate and to accept its own responsibilities.

In conclusion, I point out that in yesterday’s Daily Mirror we had reported a most unusual statement coming from the Opposition Parties in the New South Wales Parliament. They are, of course, the counterparts of the Government Parties here. The newspaper report stated that the Opposition spokesman for roads, Mr Bruce Cowan, would open a campaign next month to get more Government funds invested in roads. The report went on to quote Mr Cowan as saying:

The motorist is lining the Federal Government’s coffers with millions of dollars but getting little in return . . .

Every time he puts 40 litres of petrol into his car, he contributes $4 to the Federal Government in tax.

And S3 of that goes into consolidated revenue while the road system remains congested and grossly inefficient.

The President of the National Roads and Motorists Association is quoted as saying that it was a massive and unfair contribution to general spending. Of course, he was referring to the motoring industry. The Opposition will not oppose the BUI because any money is better than none. But it does make a plea for the voice of the States and the voice of the Opposition to be heeded somewhere within the Government so that ultimately sufficient funds will be made available to the States to enable them to carry out their responsibilities.

Debate interrupted.

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– Order! It being 4.30 p.m., under Sessional Order, I put the question:

That the Senate do now adjourn.

Senator BISHOP:
South Australia

– On Wednesday, 15 November, I put to Senator Chaney in his capacity as Minister representing the Minister for Industry and Commerce a number of questions relating to Whyalla. My questions related in particular to the need for replies to the honourable senators and honourable members who had made representations about employment opportunities. I drew to the Minister’s attention a report which appeared in the Adelaide Advertiser of Tuesday, 14 November. In replying to my question about that article, Senator Chaney repeated what appeared in the Press report. Perhaps I should read it quickly. I will not take too much time. I am trying to clear up some misunderstandings on the issue. The article in the Advertiser reads:

The Labor MP for Whyalla, Mr Max Brown, said yesterday the town was experiencing severe social problems with unemployment the major concern.

The article went on to say : he believed the Community Welfare Department in Adelaide had encouraged and advised people to take advantage of the cheap Whyalla housing.

In replying to me yesterday Senator Chaney quoted that article. I have been in touch with Mr Max Brown, MP. He states that he did not make those remarks. What he did say was that Whyalla was experiencing severe social problems with unemployment the major concern. Following my question and the reply given, I got in touch with Mr Payne, the Minister of Community Welfare in Adelaide. I have from him a longish reply to the matters raised in the Adelaide Advertiser and the matters we discussed in the Senate. I shall read two paragraphs from that statement and then ask that the document be incorporated in Hansard. It has been shown to the Minister for Administrative Services (Senator Chaney). The important pans of Mr Payne ‘s reply to me are as follows:

The Department for Community Welfare in Adelaide does not encourage people to move to Whyalla to take advantage of low rental housing. However, equally when people in contact with the Department list a lack of adequate housing as one of the problems facing them, the Department does not conceal the fact that housing may be available at fairly short notice at Whyalla through the Housing Trust.

Social workers would also point out however that there was a serious unemployment situation in Whyalla and that people moving there might be separating themselves from contact with families and friends.

It would be unrealistic to expect either DCW or the Housing Trust to discriminate actively against such people as deserted wives, widows and unemployed families and say: Oh, there’s low rental housing available at Whyalla but you can’t go there because there’s too many of your type of people there already’.

Mr Payne then goes on to report on the activities dealing with the social problem. I seek leave to incorporate that statement in Hansard.

Leave granted.

The document read as follows-


The Department for Community Welfare in Adelaide does not encourage people to move to Whyalla to take advantage of low rental housing. However, equally when people in contact with the Department list a lack of adequate housing as one of the problems facing them, the Department does not conceal the fact that housing may be available at fairly short notice at Whyalla through the Housing Trust.

Social workers would also point out however that there was a serious unemployment situation in Whyalla and that people moving there might be separating themselves from contact with families and friends.

It would be unrealistic to expect either the Department of Community Welfare or the Housing Trust to discriminate actively against such people as deserted wives, widows and unemployed families and say: ‘Oh, there’s low rental housing available at Whyalla, but you can’t go there because there ‘s too many of your type of people there already ‘.

Obviously, people must make their own choices about where they want to live after considering the pros and cons.

It cannot be denied however, that the number of people in the categories I have already mentioned is growing in Whyalla. Some of this increase is due undoubtedly to internal factors (due to marriage breakdown et cetera) but a substantial percentage is due to people moving into Whyalla.

The most important issue then becomes the availability of support services within the city.

As the Advertiser article pointed out, the Whyalla counselling service is among the agencies attempting to meet this need and this shows once again the value of voluntary welfare agencies and the contribution they make around the State.

The Department of Community Welfare office at Whyalla has the highest staff ratio to population of any country district office in the State. The ratio is one staff member to each 3,900 population . . . compared with a ratio of 1 to 7,200 in the Adelaide metropolitan area generally.

Certainly the workload is heavy but it is as well to remember that it was a Federal Government decision which led to the closure of the shipbuilding industry at Whyalla and it is from that act that the city’s present problems stem.

The Advertiser article also pointed out that the number of unemployed juveniles appearing before the courts had increased. I would have thought it was self evident that if the rale of unemployment among young people increased . . . then a greater percentage of the young people appearing before the courts would be unemployed.

It is interesting to compare the juvenile offending figures in Whyalla during 1976-77 and those for the latest year, 1977-78. The 1976-77 figures showed that the appearance rate for Whyalla was considerably higher than for the State as a whole. However, in 1977-78 the number of appearances before juvenile aid panels was 108, a drop of 61 on the previous year. The number of appearances before juvenile courts also dropped from 1 74 in 1 976-77 to 1 50 last financial year.

The offending rate for Whyalla last year was approximately the same as for the whole State.

Senator CHANEY:
Western AustraliaMinister for Administrative Services · LP

– I think it is useful to have the additional information which Senator Bishop has put before the Senate because it indicates that, for whatever reason, there may well be a developing social problem in Whyalla. I would like to make it clear also- I think Senator Bishop did say this in his comments- that when I quoted from that article I did so very much in the sense of simply attributing the words to the article. Of course, I accept the explanation which has been given by Senator Bishop.

Question resolved in the affirmative. Senate adjourned at 4.34 p.m.

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The following answers to questions were circulated:

Prime Minister: Statutory Corporations (Question No. 720)

Senator Wriedt:

asked the Minister representing the Prime Minister, upon notice, on 12 September 1978:

  1. 1 ) What statutory corporations have a responsibility to report through the Prime Minister to Parliament.
  2. What are the statutory requirements for those corporations to present annual audited accounts and reports to the Parliament.
  3. When were the audited accounts of the annual report presented to the Prime Minister for tabling.
  4. When were the audited accounts and annual report tabled in the Parliament.
  5. 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.
  6. What reasons were given by each corporation which did not present an annual report and audited accounts within four months of 1 976-77.
Senator Carrick:

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

  1. to (6) None of the statutory authorities within my portfolio has been established as a ‘body corporate’ and none is required to present annual audited accounts.

Income Equalisation Deposits Trust Account (Question No. 784)

Senator Walsh:

asked the Minister representing the Treasurer, upon notice, on 14 September 1978:

  1. 1 ) What has been the balance of the Income Equalisation Trust Account at the end of each month since its establishment.
  2. What total deposits have been made in the Income Equalisation Trust Account since its establishment.
  3. What ‘expenses of borrowing’ costs have been incurred by the Commonwealth, and paid in accordance with section 6 of the Loan (Income Equalisation Deposits) Act 1976.
  4. To what purpose have these funds been put.
  5. 5 ) How much interest has been paid.
Senator Carrick:

– The Treasurer has provided the following answer to the honourable senator’s question:

  1. The balance of the Income Equalisation Deposits Trust Account at the end of each month since its establishment has been as follows:
  1. Payments into the Income Equalisation Deposits Trust Account have totalled $90.8m to end September 1978.
  2. The following costs have been incurred to end September 1 978 by the Commonwealth and paid in accordance with section 6 of the Loan (Income Equalisation Deposits) Act 1976:

Publicity, Printing, Stationery and Reserve Bank Registries’ Expenses Associated with Income Equalisation Deposits

  1. To date, the net proceeds from Income Equalisation Deposits have formed pan of the general funds available to the Government from, inter alia, net proceeds of loans raised in Australia. As announced in the Budget Speech, the Government has offered to assist the recently established Primary Industry Bank of Australia by investing with it funds from the Income Equalisation Deposits Trust Account. An amount of $30m is to be made available at an initial interest rate of 5 per cent per annum. Actual drawdowns through the course of 1978-79 and beyond will be related to the Bank’s needs.
  2. The following interest has been paid on income equalisation deposits to end September 1978:

Retail Turnover Tax (Question No. 929)

Senator Mason:

asked the Minister representing the Treasurer, upon notice, on 19 October 1978:

  1. 1 ) Are Australian taxation offices at present undertaking an investigation into proposals to implement a retail turnover tax or value-added tax; if so, do the terms of reference for such inquiries include: (a) services as well as goods; (b) food; and (c) footwear, textiles and clothing.
  2. Will the investigation assess what effect such taxes would be likely to have on inflation, especially of food prices, and a possible further depression of Australian manufacturing and retail sales.
Senator Carrick:

– The Treasurer has provided the following answer to the honourable senator’s question:

  1. 1 ) The Commissioner of Taxation is carrying out an investigation into the practical aspects of a broad-based indirect tax collected at the retail level. The purpose of the investigation is to obtain information needed for the Government’s review of the Commonwealth system of indirect taxation which is being undertaken as part of an examination of the incidence and equity of the present burden of taxation. No specific terms of reference have been set requiring the Commissioner’s inquiries to cover services or particular classes of goods but full information on all classes of goods and services would be essential to the proper consideration of any broad-based indirect tax.
  2. In considering possible changes to the indirect tax system, the Government will take into account the likely effect that any changes proposed may have on the community at large or on particular sections of the community. If the Government should propose to move towards the introduction of a new broad-based indirect tax, a paper outlining the proposed scheme would be published for public consideration and comment.

Social Security Documents (Question No. 954)

Senator Colston:

asked the Minister for Social Security, upon notice, on 25 October 1 978:

  1. Did a report in the Sunday Sun, 22 October 1978, claim that confidential Social Security documents were being dumped at Inala, Queensland, in a hessian litter bag, accessible to the public.
  2. Has the matter been investigated. If so, what are the results of the investigation.
Senator Guilfoyle:

– The answer to the honourable senator’s question is as follows:

  1. Yes.
  2. ) The matter has been thoroughly investigated.

The reporter responsible for the article when contacted by the Department could not provide any further information on this matter. It therefore could not be established that any of the material mentioned in the newspaper article originated from the Department of Social Security.

The documents described in the report were apparently from the Queensland Department of Children’s Services which is located in the same centre.

Nevertheless, as a result of a review of disposal procedures undertaken following the newspaper article, all metropolitan offices of the Department in Brisbane will now send their waste paper to the Head Office in Brisbane where it will be shredded before disposal. Arrangements already exist in all other Queensland offices for the destruction of confidential material under supervision.

George Sinclair Estate (Question No. 957)

Senator Walsh:

asked the Minister representing the Treasurer, upon notice, on 25 October 1978:

Has the Commissioner of Taxation applied for a grant of probate of the estate of the late George Sinclair of Lindfield, New South Wales.

Senator Carrick:

– The answer to the honourable senator’s question is as follows:

The Commissioner of Taxation has advised that at no time in the course of his official duties has he applied for a grant of probate of a deceased estate or had his officers do so.

Parliamentary Question No. 784 (Question No. 962)

Senator Walsh:

asked the Minister representing the Treasurer, upon notice, on 26 October 1978:

When can I expect an answer to Question No. 784.

Senator Carrick:

– The Treasurer has provided the following answer to the honourable senator’s question:

The answer to Question No. 784 is contained in today’s Hansard.

Cite as: Australia, Senate, Debates, 17 November 1978, viewed 22 October 2017, <>.