15 September 1980

31st Parliament · 1st Session

The PRESIDENT (Senator the Hon. Sir Condor Laucke) took the chair at 10.30 a.m., and read prayers.

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Senator CARRICK:
Vice-President of the Executive Council · New South WalesLeader of the Government in the Senate · LP

– I have to inform honourable senators that the AttorneyGeneral (Senator Durack) will be absent during Question Time this day; he will be back afterwards. Any questions which normally would be directed to the Attorney-Generalshould be directed to me. If such questions require further answer we will arrange for the Attorney to respond tomorrow,

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

National Women’s Advisory Council

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

That the National Women’s Advisory Council has not been democratically elected by the women of Australia;

That the National Women’s Advisory Council is not representative of the women of Australia;

That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on them.

Your petitioners therefore pray:

That the National Women’s Advisory Council be abolished to ensure that Australian women have equal opportunity with Australian men of having issues of concern to them considered, debated and voted on by their Parliamentary representative without intervention and interference by an unrepresentative “Advisory Council”

And your petitioners as in duty bound will ever pray, by Senators Chipp, Peter Baume and Lewis. Petitions received.

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Notice of Motion

Senator McLAREN (South Australia- I give notice that, on the next day of sitting, I shall move:

That the Senate as a States’ House expresses its grave concern at -

The failure of the Tonkin Liberal Government in South Australia to honour an Election Promise to provide increased employment opportunities for unemployed persons;

that the latest ABS figures show South Australia with the highest number of unemployed persons in

Australia with a State total of 47,100-7.9 per cent of the work force- and the alarming increase of 1,300 to 1 6,300 in the 1 5 to 1 9 year age bracket.

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Notice of Motion

Senator McLAREN:
South Australia

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

That the Senate views with grave concern the continued refusal of the Prime Minister, Mr Fraser, to answer repeated calls from Senator McLaren for information-

1 ) As to whether he has provided the previous GovernorGeneral with a free telephone service between Great Britain and Australia;

if he has what has been the overall cost to the Australian taxpayer.

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Senator BUTTON:

– My question is directed to the Minister for Aboriginal Affairs. I refer to an article which appeared on the front page of the Melbourne Age on Saturday under the heading Fraser offers blacks forest’ in which it is suggested that the Prime Minister has offered 1,000 hectares at a place called Framlingham in the Western District of Victoria to the Aboriginal community. I ask: Is it not a fact that the land in question is Crown land vested in the State of Victoria? The Labor Party Opposition in Victoria has consistently pursued a private member’s Bill in an effort to get this land appropriated to the Aboriginal people of that community. What is the precise nature of the undertaking which the Prime Minister has given in respect of land which is not his? Will the Minister table the undertaking given to the Aboriginal community?

Senator CHANEY:
Minister for Aboriginal Affairs · WESTERN AUSTRALIA · LP

– The matter of the Framlingham Forest has, I understand, been in dispute for some time. Certainly there have been a lot of reports in the newspapers recently about blocking of roads and so on by Aboriginal groups which have been laying claim to the area. The matter is of some concern to the Commonwealth, although Senator Button correctly says that State land is involved. I had some discussions with the Prime Minister about it and about the approaches which might be adopted. Thereafter I do not have first hand knowledge of what happened.

I understand that the Prime Minister had some discussion with the Premier of Victoria. I understand, from the Prime Minister, that he met representatives of the Aboriginal group on, I think, Friday last and that he put certain possibilities to the group which seemed to be acceptable. As I understand it, the arrangement draws on the example of some arrangements which have been entered into in the Northern Territory where Aboriginal interests have been involved in land which is also of interest to the general community. I mention Kakadu National Park. I gather that the Prime Minister and the Premier are in broad agreement that this sort of approach would be appropriate, and that is the nature of the suggestion that was made to the Framlingham Aboriginal community. It is my understanding that the agreement has yet to be put in final form. I will find out what there is in writing and will make it available to the Senate. 1 am sorry 1 am not aware of what action Mr Wilkes has taken or what stance he has adopted. I am sure that the Opposition in Victoria would have adopted some stance, but that has not been a matter which has exercised my judgment or interest in the matter.

Senator BUTTON:

– I wish to ask a supplementary question. Could it be that the Prime Minister was merely seeking a post facto reason for his receiving the B’nai B’rith medal for humanitarian activities?


– Order! I call Senator Hamer.

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Senator HAMER:

– Is the Minister for Aboriginal Affairs aware that there is a growing feeling in the community that, while sympathising with the objective, Aboriginal sacred site claims are getting out of hand? Has the Minister had many examples, such as the one given by Senator Messner last Friday, of vague and previously unmentioned sacred site claims being produced as soon as a major industrial development project is announced? While accepting the very great difficulty of codifying the claims of Aboriginal sacred sites in a way that fits European-style bureaucracy, does the Minister not see merit in setting an early cut-off date for sacred site claims and that any claims not lodged in precise and identifiable terms by that date should not be considered unless there are exceptional circumstances?

Senator CHANEY:

– The suggestion made by the honourable senator in his question has a superficial appeal, but I think in practical terms it probably would be very difficult to implement. The problem of vague and previously unmentioned claims is raised very often, lt is not a problem which I think is of any significance in what I call traditional areas or the areas where Aboriginals maintain a traditional association with land. There can be a problem of identification because the communities in general have not been running around talking about the areas that they regard as being of significance. They regard that as their private business.

It is worth noting that the sorts of arrangements which are being fostered in South Australia at the moment and which are also being pursued in Western Australia following that example, involve a great deal of trust being shown by mining interests to Aboriginal interests. In South Australia the mining companies seem to be proceeding on the basis that they will indicate their proposals to the relevant Aboriginal community and give the community an opportunity to point out where those proposals might cut across Aboriginal interests. That seems to be working very successfully. The same sort of thing is happening in Western Australia. I do not believe that there is a major problem. At the same time I think that, to the extent possible, sites of significance should be mapped in advance so that Aboriginals are not faced with the accusation that they are creating sites for the purpose of impeding or gaining some profit from mineral development. So in principle I would say that it would be a good thing if, as the Western Australian Government proposed, there was a stepping up of the mapping of areas of significance to Aboriginals.

Quite different problems, I think, arise in the south-east corner of Australia where, for many generations, there has been a break between the Aboriginal community and the traditional association with land. I think that in that corner governments have to face a number of possibilities. One is that there are sites of archaeological significance. The second is that there are sites which might be of some general cultural significance. Places like Wybalena on Flinders Island in Bass Strait may not have any significance in traditional terms but the fact that it is the place at which the last of the Aboriginal community of Tasmania were gathered together and where the bulk of them died makes it a place of considerable historic and social significance in Australia and, no doubt, a place of great emotional significance to Aboriginals. That sort of area needs to be preserved as well as areas which might have a significance of the sort I have mentioned.

With respect to areas of significance to living Aboriginals - the sort of area which has been in dispute at Noonkanbah - I would have thought that there was little room for that sort of interest to be evident in south-east Australia. I think that any claims to sites of that sort simply need to be examined very carefully by people who are qualified to do so. In general, I think it is true to say that those communities have lost the traditional beliefs which make such areas ones of spiritual significance. I do not think we need have enormous difficulties in this matter. Obviously, we should be careful in our approach so that we pick up the various areas of sensitivity that I have mentioned. I doubt whether it would be possible to do a once and for all exercise which cut off the possibility of any future dispute in absolute terms.

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Senator GRIMES:

– I ask the Minister for Social Security whether her attention was drawn to the statement by the Minister for Special Trade Representations, Mr Sinclair, on television at the weekend that the young unemployed in this country are, in fact, the great tax avoiders because they take part in the cash economy and that this justifies the payment to them of their low benefit. The Minister also claimed that they are better off now because of this than they were many years ago. Has the Minister any evidence to support this claim? Is this the real reason why the Government has paid such a low benefit to the young unemployed in recent years? If it is, why has not the Minister herself, in answer to many questions in this place, given that as the reason? Has the Minister for Special Trade Representations made that statement off the top of his head?


I have not seen the text of the statement made by the Minister for Special Trade Representations which was referred to by Senator Grimes but I am aware that some comments were made on a program at the weekend. My Department is not aware of the concealment of income by those who claim unemployment benefit; otherwise, the full unemployment benefit would not be paid to those people. If I understand the context in which the term is used it was not a significant reason why decisions had been made regarding the level of unemployment benefit. I draw attention to the changes which were made in the recent Budget which will be of assistance in allowing further areas of free income to be received without loss of benefit to unemployment beneficiaries.

Perhaps we should look at the attitude of people with regard to the payment of unemployment benefit. It is understood that the unemployment benefit is paid to those who are seeking work and who are not able to find work available to them. As I said, I do not know the context in which the words were used at the weekend. If they were used to draw attention to those who are engaged in business and who make cash payments for which they do not account, that is one thing. But in response to the question by Senator Grimes, I have to say that we are not aware of instances in which people are in receipt of income which they have not disclosed; otherwise, steps would be taken to reduce the unemployment benefit accordingly.

Senator GRIMES:

– I wish to ask a supplementary question to seek to clarify what the Minister has said. Does what the Minister said mean that she disagrees with the views of Mr Sinclair–

Senator Walters:

– She said she had not seen them.

Senator GRIMES:

Senator Walters apparently wishes to join other Government senators who indicate their support for Mr Sinclair. Mr Sinclair’s views are that the unemployed in the community are the great tax avoiders and because of their tax avoidance the unemployed do not need any further benefits.


As I said, 1 have not seen the text of the statement and I am not aware whether it was the unemployment beneficiaries who were the tax avoiders, or whether it was those operating in businesses on a cash economy basis and not disclosing their receipts and payments because those transactions are made in cash. If I see the comments perhaps I will be able to interpret more clearly what was said.

I am rather interested in the change of attitude of the Australian Labor Party at present to unemployment beneficiaries from that which it held when in government. During an address in Adelaide in November 1974, Mr Clyde Cameron said that a new tough line would be taken with people who would not accept offers of reasonable employment. While he did not believe that there were very many bludgers in the community, he considers that to have any was to have too many. No new action appears to have been taken at this time. However, in April 1975 new procedures were announced jointly by Cameron and Hayden. Included in the new procedures was an alteration in the method of handling income statements. It was announced also that more field officers would be employed in the Department of Social Security to ensure that people who were receiving benefits were legitimately entitled to them. That was the attitude taken in 1974 and 1975, when the present Opposition was in government. I commend to honourable senators opposite the attitude that those who are legitimately entitled to unemployment benefits should receive them and those who are not legitimately entitled to them should not.”

Senator Grimes:

– 1 wish to raise a point of order. In view of the fact that the Minister claims she had not seen the text of the statement and was not given prior warning of the question, I ask that she table the document from which she was clearly reading when answering the question.


I would be very happy to table those comments. It is an extract from Australian Social Security Today, by T. H. Kewley. The extract is taken from page 1 35, and I would be very happy to have it tabled.

Senator Cavanagh:

Mr President, I wish to raise a point of order. The request was for the tabling of the document from which the Minister read. Standing Orders point out that an honourable senator can request the tabling of a document from which something has been read. I want to know whether the extract concerning Mr Cameron’s speech has been tabled, or the document as requested.

Senator Dame MARGARET GUILFOYLEI have tabled the document from which I read, which is an extract from Mr Kewley’s recent book. I have quoted from a reprint of an extract from the book.

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– I ask the Minister representing the Treasurer whether it is a fact that Franklin Mint Pty Ltd sells collections of different kinds and that one collection presently being offered is entitled ‘Bird coins of the world’. Does this collection promise subscribers ‘mintfresh immaculate specimen of a genuine monetary coin bearing the image of one of the world’s most interesting birds . . . from each country of the world that issues such coins’? Is it a fact that some Australian coins illustrate birds- I have a 10c coin in my hand, and it does - and, if that is so, is it possible that Franklin Mint might be offering to subscribers two Australian coins for the price of $15? If, for example, the Australian 10c piece is being used in the collection, what is the Government’s attitude to the selling of Australian currency by an organisation like Franklin Mint at grossly inflated prices? Can the Minister advise the Senate whether all currency control restrictions are being observed by Franklin Mint in the offer and sale of a collection such as this?

Senator CARRICK:

– I understand that Franklin Mint Pty Ltd earlier this year sought subscription to what is called a ‘Bird coins of the world’ series. I do not know whether the Australian 10c coin is included in the series. However, there are no restrictions on coin dealers in Australia selling Australian coins for numismatic purposes at prices appreciably above the face value of the coins. As the series contains coins from other countries, I mention that no restriction is placed on the import of foreign currency coins to Australia for numismatic or other purposes. Nevertheless, as Senator Baume raised some further interesting questions, I will refer them to the Treasurer for examination.

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– I preface my question to the Leader of the Government in the Senate by saying that the late Ben Chifley stated that the most despicable thing that one can do in government is to make a promise that one knows one cannot keep. As we have been wandering down memory lane this morning, I take the Government’s mind back to 1975, when the Prime Minister said in the Liberal Party’s 1 975 election campaign speech:

We will encourage people’s initiative and expertise not batter them into the ground with punishing taxes.

How does the Leader of the Government in the Senate reconcile that statement with the fact that this year the oil levy, a Fraser Government tax, will return an estimated $3, 157m to the Federal Government and that total taxes represent a record 24.6 per cent of gross national product?

Senator CARRICK:

– Quite clearly, the promise that we would encourage initiative and expertise has been kept. The fact is that now, Australia, through the skills and initiative of its workers, in terms of inflation has been able to place itself in the lower bracket of countries in the trading world. So we have kept very faithfully the promise we made in the election campaign. Indeed, the whole key to the success of people in their jobs and in their living standards is that Australia should be able to trade competitively outwards into the world. At this moment our rate of inflation is some 3 per cent to 4 per cent below the average of the member countries of the Organisation for Economic Co-operation and Development and our trading partners. So in fact we have kept that promise.

It comes strangely from the Australian Labor Party to talk about the oil levy and the size of the oil levy when Mr Keating is on record as having said that the Labor Party’s resources tax on oil would yield more than the oil levy. Everyone knows what that would mean: That would mean that it would stop exploration and synthetic fuel production and it would put up the price of oil in Australia. That comes strangely from a Labor Party whose total promises, now amounting to some hundreds of promises, would cost an additional $2,000m or more in the coming year, which would drive up the inflation rate and drive up the level of taxation and indirect charges. It comes very strangely indeed from such a party to ask about a Government which has succeeded so well.

Senator Grimes:

– You are as big a phoney as Robinson.


– Order, Senator Grimes! lt is unparliamentary to refer to a Minister as a phoney.

Senator Grimes:

– I am sorry. I said that the Minister was as big a phoney as Mr Robinson, Mr President.


– You used the word phoney’. Withdraw it.

Senator Grimes:

– I withdraw; he is not as big a phoney as Mr Robinson.


– Order! You must place no qualification on your withdrawal. Withdraw.

Senator Button:

– With respect, Mr President, that is a total withdrawal. There is no qualification, as you just said.


– Order! Senator Grimes, withdraw.

Senator GRIMES:

– I suppose that for peace and in the interests of the health of the Minister, I had better withdraw.

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Senator WATSON:

– I direct a question to the Minister representing the Minister for Trade and Resources and preface it by stating that I might have a minimum interest in this matter. Is the Minister aware that a certain Bermuda resident company whose shares are listed on an Australian stock exchange has not paid to its Australian shareholders any ordinary dividends out of Australian earnings despite massive earnings from Australian royalties? I refer to Weeks Petroleum Ltd and subsidiaries which, between 1974 and 1978, received $US35,1 59,000 from Australian royalties and expect to receive a further $333,500,000 gross revenue from Bass Strait. Is the Minister aware that in 1978 Weeks Petroleum earned $US55,034,000 after taxes and that the company is applying these sums principally to adding to oil and gas interests, in other parts of the world and is claiming deductions against this Australian income; and at the same time, it has not paid dividends to Australian shareholders, who in turn would have paid Australian tax on their shareholding income?

Senator CARRICK:

– I am not aware of the information as put forward by Senator Watson. It is interesting information. I will draw the attention of–

Senator Georges:

– I am surprised you do not know of it.

Senator CARRICK:

– Now that the interjections have ceased, I indicate that I will draw the attention of the Treasurer and the Minister for Trade and Resources to the information and ask them to examine it.

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– The signature tune of my question is credibility. I direct my question to the Leader of the Government in the Senate and refer to a pledge - I emphasise that it was a pledge - the Prime Minister gave in August to the Duke of Edinburgh that he would lean on the British Phosphate Commission to provide an adequate habitat at Christmas Island for the booby bird. Does the fact that the Prime Minister has not honoured that promise mean another form of repudiation of a well known conservationist? Speaking to the Leader of the Government in the Senate as a fellow New South Welshman, can we enlist the aid of the New South Wales Premier so that the formula of the Nadgee fauna reserve at Eden can be applied to help the Prime Minister keep good faith with Buckingham Palace?

Senator CARRICK:

– If there is one quite outstanding characteristic that can be claimed with absolute accuracy of the Prime Minister of this country it is that his practical attitudes towards the conservation of flora and fauna are unprecendented and unchallenged. His work with regard to whales showed world leadership. Indeed he has taken very considerable criticism from some because of his attitude towards Fraser Island. The Prime Minister as a man and a leader is second to none in his credibility and performance in terms of conservation and the preservation of flora and fauna. I acknowledge Senator Mulvihills sincere interest in this matter. I am not certain of the situation at this moment with regard to the booby bird and the British Phosphate Commission. I will certainly take it up and examine it to see what has been done and what can be done. As to the latter part of the honourable senator’s question, the Government needs no help, lt is the front runner in conservation.


– I wish to ask a supplementary question. Will the Leader of the Government in the Senate confirm that when the Senate had a debate on whales Senator Button and I had to discipline verbally the 1 5 rebels opposite who tried to sabotage the legislation?

Senator CARRICK:

– I confirm that Senator Mulvihill has had a sincere and vigorous interest in the preservation of whales, as indeed has the overwhelming majority of the members of the Government parties. Because the Government parties have had that interest in the conservation of whales, so the Government of Australia has taken the initiative for their preservation.

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Senator JESSOP:

– I refer the Minister representing the Prime Minister to the recent Press statement that the Soviet Union has warned the Australian Government that there is a risk of Australia becoming a nuclear target if United States bombers are allowed to use Australian bases. Has the Government received any official communique on the matter? If not, has the Government had an opportunity to examine the full text of an article which appeared in the Russian official newsagency, Tass? Is it customary for foreign countries to interfere with the domestic policies of Australia? Is the Minister in a position to indicate the Australian Government’s attitude to this threat. Can the Minister say whether there is any similarity between the Russian statement and the Australian Labor Party’s attitude towards Australia’s defence policy? Am I correct in assuming that the Russian statement, coming so soon after the election announcement, is designed to support the ALP?

Senator Georges:

– There is to be an election on 1 8 October incidentally, as you might be aware.

Senator CARRICK:

– I can understand Senator Georges’ apprehension in that knowledge. Following the electoral results in New South Wales last Saturday he should have further apprehension. I have been asked a series of some six questions by Senator Jessop.

Senator Ryan:

– How are you to know what was intended, within the terms of your portfolio?


– Order please! Honourable senators will cease interjecting. There have been too many interjections.

Senator CARRICK:

– Again, Opposition senators are tender, of course, because their viewpoint is ambivalent on this matter. There has been no official communication of any kind from the Soviet Government to the Australian Government on this matter.

Senator Georges:

– That should be the end of the answer.

Senator CARRICK:

– The Press reports are based on a commentary from the official Soviet news agency Tass. Again, I can understand the desire of Senator Georges that no further information be given. At this stage the Government has not seen the full text of the Tass article. There was a similar Tass commentary about a month ago, and there may well have been others. The Government is giving consideration to the United States request for B52 staging through Australia. The Government has invited the United States to consider use of Cockburn Sound for base porting or home porting. The suggested B52 staging or use of Cockburn Sound by the United States stems for the staging implications for Australian and the Western world of the Soviet invasion of Afghanistan and the need to contain Soviet military expansionism.

The Government proceeds from the conviction that effective deterrence offers the best prospect of avoiding aggression and thereby maintaining peace. The B52 staging or the home porting of United States Navy ships in Australia would not of itself involve Australia in any nuclear war between the super-powers. I would have thought that, in the knowledge that the USA is the profound influence for maintaining peace in this world, we would have a bipartisan situation in this regard. I find nevertheless that the statements by Labor Party spokesmen differ vitally on this matter.

Senator McLaren:

– Under Standing Order 363 I ask that the document the Minister quoted from be tabled.

Senator CARRICK:

– I am very happy to table it.

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Senator BUTTON:

– I refer the Minister for Social Security to the question asked of her earlier today by Senator Grimes relating to the remarks made by Mr Sinclair on the Four Corners program at the weekend. I remind the Minister that in her answer she said that she had no detailed knowledge of Mr Sinclair’s remarks. I now ask the Minister whether it is a fact that the document she has tabled in answer to Senator Grimes’ request that it be tabled is headed ‘Possible Parliamentary Question’ and reads:

Subject: Unemployment benefit administration - Sinclair’s remarks.

Suggested reply: I have not seen the text of his remarks.

It also states that an extract from a recently published book by Mr Kewley illustrates the hyprocisy of current Labor leadership. I ask the Minister: Is it a fact that at Question Time she prefers to remain in ignorance in relation to her ministerial responsibilities rather than give an honest answer to the question. Secondly, was this answer prepared by her personal staff or a member of the Australian Public Service?

Senator Dame MARGARET GUILFOYLEI am glad that Senator Button read what was on the piece of paper because anyone looking at the antics of the Opposition may have thought that there was something else on the piece of paper. The piece of paper that was tabled said, as I have stated, that I had not seen the text of Mr Sinclair’s remarks. That was stated by me and that is what was on the piece of paper that was tabled. I have not seen the text of Mr Sinclair’s remarks. 1 understand that he made some comments with regard to this matter on a program at the weekend. I stated that in answer to the question by Senator Grimes. I do not allow myself to remain in ignorance at Question Time. That is why my staff prepared the answer that was given. It was known to my staff that comments had been made on the Four Corners program. At the time of questions my staff had not had a text of what was said. I thought I admitted that very frankly and honestly in answer to Senator Grimes. I said I knew that some comments had been made. I also thought that I answered the question rather charitably until the second question, the supplementary question, was asked.

Senator Walsh:

– You did not bother to ask Sinclair.

Senator Dame MARGARET GUILFOYLEIn answer to the supplementary question I pointed out the ambivalence of the Opposition on these matters.

Senator Walsh:

– Why did you not ask George Sinclair?


– Order! Senator Walsh, you will cease interjecting. If it happens again I shall have no option but to name you. It is persistent interjection. The authority of the Chair is at stake.

Senator Dame MARGARET GUILFOYLEI have nothing further to say except that the question gave me an opportunity to point out what was the present Opposition’s view when in government; that is an acceptance of responsibility in public accountability for expenditure. I commend that as being the only way in which these matters are able to be dealt with by those who are responsible for the expenditure of large sums of money. In answer to the second part of Senator Button’s question I say that the piece of paper that has been tabled was prepared in my personal office.

Senator BUTTON:

- Mr President, I wish to ask a supplementary question. I now ask the Minister: How long does she intend to remain in ignorance of Mr Sinclair’s remarks? Will she be prepared to answer questions about them later in this Question Time?


I doubt whether there will be any opportunity in this Question Time for me to make any comments. I do not know whether any further comment is required.

Senator Gietzelt:

– You either accept or repudiate his lousy remarks.


I do not know in detail what the remarks were. I do not know whether I will have anything further to say because I have stated the basis on which unemployment benefits are paid. They are paid in accordance with the Act. I have referred to the increases in allowable income which do not change the unemployment benefit that is paid. I do not know whether there will be any further remarks that can be made. However, I assume that the Opposition has such a great interest in this matter that further questions will be forthcoming.

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Senator TOWNLEY:

– I preface my question to the Minister representing the Treasurer by saying that no doubt he remembers that over a period I have asked questions about the possible minting of certain coins other than the ones we have, particularly silver dollars and coins of that kind. I must say that I am pleased to see that at last the Government has decided to issue coins other than those we have had for many years. I now ask: Will the Government consider redesigning all the present Australian coins and making them a smaller and more sensible size? Will it also consider the issuing of both $ 1 and $5 coins?

Senator CARRICK:

– I have been aware over the years of Senator Townley’s keen interest in the minting and design of coins. Indeed, this is a matter of some significance to the people of Australia. A considerable number of people take a keen interest as collectors and also have a practical interest in the coins. 1 will draw the attention of the Treasurer to the substance of Senator Townley’s suggestion that a review should be made of the designing of coins and perhaps the issuing of coins of particular denominations.

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Senator ELSTOB:

– My question is directed to the Leader of the Government in the Senate. The Australian Bureau of Statistics has released figures which show that exports to the Soviet Union to April of the last financial year amounted to a record $77 1.9m compared with $2 14.7m for the same period in the previous year. In view of these figures, the Government’s tacit acceptance of Russia’s processing of Australian uranium and the Government’s continual recognition of the worst communist government in history - the Pol Pot regime- I ask the Minister: What has brought about this change of heart towards communist countries?

Senator CARRICK:

– The terms of trade with Soviet Russia have not changed. The terms of trade are those which were outlined during the earlier months of the Afghanistan incident. The terms of trade observe the practice that we shall not trade with Russia in strategic war materials or defence materials. There has been no change at all. There is nothing of significance in the processing of uranium. If one considers this matter quite apart from the controls that the International Atomic Energy Agency has over the whole of the movement of uranium throughout the world, one will realise that it would be nonsense to try to suggest by innuendo to the Australian people that the addition of further supplies of raw uranium would add to the defence stocks of Russia. The tragedy for the world is that at this moment Soviet Russia is awash with sufficient uranium and plutonium to wipe out the world many times over. The addition of any further radioactive material available to Russia is of no consequence. Nevertheless, the control of all fissionable material which comes from Australia will be monitored completely in its movement throughout the world. It will be used for peacetime purposes only. The matter of the Pol Pot regime has been raised. It, like the present Kampuchean regime, was and is quite outrageous in its brutality and bloody murder. We have not in any way ever supported it. We have always condemned it, and therefore there is no change at all. We are the consistent ones because we have recognised the true impact of Russia’s move into Afghanistan. This, of course, is very well known to the Islamic people of the Middle East.

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Senator MISSEN:

– I refer to the Leader of the Government in the Senate to the radio statement made this weekend and reported in the Australian today by Mr Bill Hartley, a senior delegate from Victoria to the Federal Australian Labor Party Conference and a national spokesman for the socialist left. In his statement Mr Hartley confirmed that the socialist left had regained ‘de facto control of the branch, especially in the areas of the policy committees’. Will the Minister tell the Senate whether this alarming situation constitutes any risk to the Australian economy and/or to the international standing and foreign policy commitments of the Australian nation?

Senator Grimes:

– I raise a point of order. Now that the question has been completed, I ask: How does the matter referred to by Senator Missen fall into the category of the leader’s portfolio?

Senator MISSEN:

– I certainly would argue that it is very much within the policy and the actions of the Government. This matter, which, has occurred in the major State of Victoria, may be trivial, but 1 do not think it is. If it is not trivial, does it have any impact on the Australian economy and on our foreign affairs commitments? The question is very relevant to foreign affairs and to economic conduct in this country. It is very relevant, therefore, to know whether any risk is involved.

Senator Cavanagh:

– I wish to speak to the point of order. The question is not in accordance with many standing orders. Firstly, if a question is based on a newspaper article, a questioner must verify its accuracy. Can the honourable senator verify that Mr Hartley said what is reported in the Australian today? Secondly, the question is hypothetical. It referred to what would happen if something else happened. How can a Minister know what will happen if something mentioned in the Australian actually does happen? It is only an alleged statement referring to something which is not Australian Labor Party policy at present. How can the Minister state what is to happen if Labor alters its policy and puts into operation that altered policy, which is the suggestion in the Australian?


– There is no point of order. The fact is that the replies given by Ministers are to be within the responsibilities, as they see them, of their ministries. I call the Minister.

Senator CARRICK:

Mr President, any activity within Australia’s political parties which shows a significant shift to a left extremism must be of very considerable worry to Australia. Australia’s good name overseas must be somewhat challenged and put in jeopardy if it is thought that a political party carrying that kind of philosophy might have some chance of coming to government. It is therefore in truth very proper for Senator Missen to draw attention to what has happened in Victoria.

But, of course, Senator Missen would know that the former president of the Australian Council of Trade Unions and the former federal president of the ALP pointed this out previously when, he described Mr Hayden’s deal with the Left, to use his words, as a ‘dereliction of leadership’ and claimed that Mr Hayden went to water. He then went on to say that Mr Hayden was gutless. In other words, the person who today is leaning on one elbow of Mr Hayden in a pretence–

Senator Cavanagh:

Mr President, I raise a point of order. The question asked what will be the effect on Australia if certain things happen. What Mr Hayden said in the past is not a statement of what the effect on Australia will be. You have permitted the question to be asked. You should ask the Minister to reply to the question asked.


– The Minister will reply in his own way. I call Senator Carrick.

Senator Georges:

Mr President, if the Minister is going to answer the question in his own way, I raise a further point of order. I recall that you disciplined Senator McLaren for using the words, Lies, lies, lies’ when referring to the Government policy on taxation and its failure to keep its promises. The words used were: ‘Lies, lies, lies’. You ruled that Senator McLaren could not use those words, which had already been used by another person, because they were unparliamentary. Senator Carrick used the word ‘gutless’ concerning Mr Hayden, suggesting that the word had been used by someone else. My point is that if Senator McLaren was out of order in saying: Lies, lies, lies’, Senator Carrick is out of order in using the word ‘gutless’. I ask him to withdraw it.

Senator Carrick:

Mr President, I wish to speak to the point of order. I did not say that Mr Hayden was gutless. I said that Mr Hawke told delegates outside the conference that he regarded Mr Hayden as gutless and that he no longer had any regard for him. It is quite in order to quote what someone else has said.


– Order! I have ruled in the past that if words used in this chamber arc out of order because they ure unparliamentary when spoken by an honourable senator, by the same token such words when quoted by an honourable senator must have the same injunction applied to them. I will object to the reading into the record of any unparliamentary words, as I did in the case of Senator McLaren. Words that ure unparliamentary must nol be quoted in the Senate even if they have been used by somebody else.

Senator Teague:

Mr President, on a point of order, I would submit that the word ‘lies’ hus to do with the truth or otherwise of a statement.

The PRESIDENT Order! I have ruled on the matter. I call the Minister.

Senator McLaren:

Mr President, I raise a point of order. I remind you that when you requested me to withdraw those words that I quoted from a newspaper article and I refused, you named me and a motion was moved for my suspension from the chamber. I was suspended from this Parliament for one day. In fairness, I think that you ought to ask Senator Carrick to withdraw. Otherwise he ought to be named and suspended, as I was.

Senator CARRICK:

– I was not aware that I could not read out those words. If they are, in fact, offensive to a ruling of this Senate, of course I acknowledge that they should not be read into Hansard and I happily withdraw them. I was asked whether a movement in the extreme philosophy of a State, by a party–

Senator Keeffe:

Mr President, I raise a point of order in the same way and against the same Minister as I have had to do on several previous occasions when the Minister has filibustered in his replies to prevent other people asking questions. I realise that at the moment he has his back to the political wall and he is in a serious political situation. I have a question on another confidential document which blew off the back of a bus. If the Minister is going to carry on like this, I will not have an opportunity to ask my question. If I do not get an opportunity, I propose to give the information I have to the Press without the privilege of Parliament.

Senator CARRICK:

– May I suggest that if Senator Keeffe has any difficulty at all in asking his question today we extend Question Time to allow him to do so. We could not escape the unfolding of this exciting saga. If this country were threatened by the prospect of a government that has left wing tendencies, it would do great harm to Australia’s image overseas and great harm in the long run to our living standards. Senator Missen ‘s question is very pertinent to the reality of today and to the situation which has occurred in the second largest State in Australia - Victoria where, beyond any doubt, the left wing has captured the Labor Party.

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-ls the Minister representing the Minister for Veterans’ Affairs aware of the continuing disquiet amongst veterans of the war in Vietnam concerning the Government’s altitude towards their health and that of their families? ls he also aware that, almost six months after the establishment of the study by the Commonwealth Institute of Health, that study has not yet commenced? Does the Government intend using the limitation of actions Act to stop

Vietnam veterans initiating legal action through the Vietnam Veterans Action Association to seek compensation? In view of the inordinate delay, will the Government now reconsider its decision and set up an independent judicial inquiry along the line demanded by the Vietnam veterans themselves and many Returned Services League sub-branches?


I have no information from the Minister for Veterans’ Affairs on this matter. I will refer the matter to him to see whether I can get some early advice for Senator Gietzelt.

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Senator NEAL:

– My question is directed to the Minister representing the Minister for Foreign Affairs. Will the Minister comment on the importance to Australia for the ANZUS alliance and the implications for Australia of the suggested adoption of a position of non-alignment, as advocated recently by a spokesman for the Labor Party in Victoria?

Senator CARRICK:

– I have not seen any such statement from any section of the Labor Party in Victoria. I could not believe that any members of a political party putting itself forward for election as the government of Australia would advocate setting aside membership of the ANZUS alliance. The ANZUS alliance is a co-operative alliance between the United States of America, Australia and New Zealand and is the fulcrum for the long term peace and safety of Australia. An overwhelming number of people in Australia would support that. The people would rightly reject any political party or any people who came forward advocating that we abandon the ANZUS alliance.

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Senator COLSTON:

– I direct my question to the Minister representing the Minister for Transport, although I realise that some responsibility may lie within the area of primary industry. Has the Government investigated claims that Ansett Airlines of Australia has been using foreign-produced sugar on its internal Australian flights? If so, what have been the results of those investigations? What action is to be taken against Ansett if the claims are proved to be correct?

Senator CHANEY:

– I have no information on the matter, but I have some recollection of its having been raised in the past. I will have to ask the Minister for Transport whether he has any current information on the matter raised.

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– I refer the Leader of the Government in the Senate to reports in today’s Australian that Australian coal reserves have assumed a new importance as an energy source following a scientific breakthrough in Japan. Has the Minister or the Government received any advice or information on this development? Are studies being undertaken in Australian scientific institutions to develop low-cost high-efficiency production of hydrogen? If so, does the Minister expect any early reports on the likely effects of this development on Australia’s energy supplies?

Senator CARRICK:

– I saw the report. 1 do not have any detailed expert scientific evidence before me, although I am seeking it. I believe, in this world where alternatives to oil are being sought with great vigour, there will be claims from time to time of all sorts of new breakthroughs on the frontiers of energy and all sorts of claims that any such breakthrough would render unnecessary, or only partially necessary, the use of other kinds of energy. My own view, based on the advice tendered to me, is that there will be an urgent need for huge volumes of coal to be used in and exported from Australia in the immediate years ahead to replace oil quickly. There will be a need for vast amounts of uranium to go to countries where the peacetime use of nuclear energy will be necessary if living standards and political stability are to be maintained. I will seek information as to the scientific validity of the report and let the honourable senator know.

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Senator McLAREN:

– I remind the Minister representing the Treasurer that in the year ending September 1975, the last full year of the Labor Government, the consumer price index increased by 12.1 per cent, that in the most recent full year ending June 1980 it increased by 10.7 per cent and that it has been forecast by the Treasurer to go even higher. How does the Government reconcile the small 1.4 per cent reduction in inflation with its continued boasting about inflation control?

Senator CARRICK:

– The Government looks to the December quarter, the last quarter of the Whitlam Government, as an indicator of what would have happened had the Whitlam Government stayed in power. Inflation at that time was running at about 5.6 per cent, which is double, or more, the rate today. The Government needs no other proof that its anti-inflation policies are succeeding superlatively when they are compared with the collapse of the economic policies of the Whitlam Government.

Senator McLAREN:

- Mr President, I ask a supplementary question. That is not an answer to the question I asked the Minister. I asked him to answer in relation to the full 12 months, not in relation to a quarter. The Minister conveniently multiplied the December quarter figure by four. He well knows that this Government was in office and he is only presupposing. I ask: How does the Minister reconcile the small 1.4 per cent reduction in inflation with the Government’s continued boasting about inflation control?

Senator CARRICK:

– The fact is that the 5.6 per cent trend in the December quarter was agreed by experts to be the likely trend to the year ahead had the Whitlam Government remained in power. In the period of the Whitlam Government Australia was in the top quarter of countries affected by inflation and was costed out of its ability to trade. One hundred and fifty thousand people were swept out of manufacturing industry in a few months because of such costs. Today we have reversed that situation. We are in a better trading position externally than we have been in for 1 0 years. There is no need for us to do other than to reveal the situation to justify the enormous success of our policies.

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Senator BONNER:

– I ask the Minister for Aboriginal Affairs: Is it not a fact that there is a new awakening and a tremendous resurgence within detribalised Aborigines to recapture our culture, which has been almost destroyed by the ignorance of the non-Aborigine, hence the search for identity through areas of spiritual significance and land, which will give us a base to regain dignity and pride in our Aboriginality? I ask further: Will the Minister support our endeavours in this regard?

Senator CHANEY:

– As Senator Bonner has said, I think it is true to say that there is an awakening and resurgence of Aboriginality and pride in Aboriginality among people who for many generations perhaps, have lost close contact with traditional Aboriginal culture. The renewed interest in their origins and in their background is something which can play an important part in restoring the pride and self-respect of many people and in ensuring that they are able to lead better and more dignified lives in the Australian community. So in general, I support that move among Aboriginal people. I think it is something which could be very beneficial.

In practical terms, it is important to distinguish between the situations of those people who have maintained a living connection with Aboriginal culture and those people who are interested in recapturing it or restoring it for various reasons. The sort of provision which has been made with respect to land rights in the Northern Territory, and which is in the process of being made in South Australia, is peculiarly appropriate to those people who have maintained a living connection. I believe that it is destructive for Aboriginal people who have lost that connection to try to base their claims on exactly the same propositions. Instead, one needs to look at things such as the Aboriginal Development Commission. One needs to look at the approach put forward by bodies such as the joint select committee of the New South Wales Parliament, which has recently reported, and has made suggestions which I think are very relevant to the sorts of points that have been made by Senator Bonner. The same sort of approach as has been adopted recently in Tasmania, following the inquiry there, is relevant to those people. In Victoria, one needs to look to the Tasmanian and New South Wales examples to see the direction in which one might want to go.

I have expressed concern before in the Senate about the possible destructive effects of people who do not have that immediate traditional association seeking to claim it in circumstances which are likely to throw doubt on the claims of people in the remoter parts of Australia who have maintained the living connection. I am concerned about that.

Senator Georges:

– Why should that be?

Senator CHANEY:

– Because it leads to a degree of scepticism which is quite damaging. We have all heard talk of travelling sacred sites and all the rest of it. Those sorts of statements reflect a degree of scepticism in the community, and I do not wish to add to that. There are very large Aboriginal communities to whom their continuing association with land is of fundamental importance, and I think that needs to be acknowledged and preserved. For the Aboriginal people who have lost that, we have to seek new and different mechanisms to acknowledge their special place in the Australian community.

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Senator KEEFFE:

– I ask the Minister for Aboriginal Affairs: Is he aware of a confidential report compiled in his Department which evaluated funds approved by the Department of Aboriginal Affairs to the Queensland Department of Aboriginal and Islander Advancement and other State departments from 1968 to 1979? Can the Minister advise whether the document has been examined by him? Can he also advise why it and a number of other documents dealing with other matters in 1979 have not been made public? Is it a fact that the document, which is critical of the Department of Aboriginal and Islander Advancement, has not been made public because it would be politically embarrassing to both the Federal and Queensland governments? Further, will the Minister undertake to table the document before Parliament rises for the election?

Senator CHANEY:

– I am not familiar with the document to which the honourable senator has referred. That is not to say that I have not seen it. I have seen a great number of documents over the last couple of years. The description he gave of it does not strike any chord in my memory. As to what documents might fall off the backs of trucks, which I think is the expression the honourable senator is concerned to use, I find the ability of the honourable senator to come across documents in doubtful circumstances something which causes me neither distress nor surprise. If people choose to leak documents to the honourable senator that is their business. If the honourable senator cares to see me about the document I will give him my opinion as to whether it should be released.

Documents which are critical of the policies in Aboriginal affairs would not be confined to documents relating to the Queensland State Government. Plenty of programs instituted by the Government which the honourable senator supported and by the Government which I support have not achieved the results which we sought to achieve. There may be many bits of paper we could release which would refer to failures in Aboriginal affairs policy. I think the scene is littered with them. I am reminded of Senator Cavanagh ‘s comments about the disaster that he came across when he took over the Aboriginal Affairs portfolio. Quite frankly, I think this nitpicking criticism does not get us very far.

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Discussion of Matter of Public Importance


– I have received a letter from Senator Chipp proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The increasing foreign ownership and control of key sectors of the Australian economy.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by Sessional Order having risen in their places -

Senator CHIPP:
Leader of the Australian Democrats · Victoria

– I thank the Senate for its support. The Australian Democrats are gravely concerned at the high level of overseas ownership and control of key sectors of the Australian economy. I will give some figures to indicate the level of control. The source of the figures is the United Nations publication ‘Trans National Corporations in World Development, New York 1978’. These are the figures on foreign control or ownership of industrial sectors in Australia: Fifty-five per cent of mining; 36 per cent of manufacturing; 48 per cent of the service industries; 62 per cent of chemicals, coal, rubber and petroleum; 46 per cent of fabricated metal products, machinery and equipment; 44 per cent of the basic metal industries; and even the food, beverages and tobacco sectors are 29 per cent overseas controlled.

I apologise for giving 1 978 figures which are not official Australian figures. I am informed that the Australian Bureau of Statistics, for some extraordinary reason, no longer keeps these sorts of figures, lt is rather depressing to note that among the Western industrialised countries Australia is second only to Canada in its extent of foreign ownership. Australia is much more foreign controlled than, for example, Great Britain, France, Germany, Austria and the Scandinavian countries. It can be seen from a detailed breakdown of the figures I have given that the level of foreign control is particularly distressing in certain key sectors. For example, the Australian motor vehicle industry is 100 per cent foreign controlled. Oil refining operations are 91 per cent foreign controlled. Oil exploration activities are 74 per cent foreign controlled. Tin production is 81 per cent foreign controlled. The mineral sands industry is 62 per cent foreign controlled. Less startling but still significant are the following: Advertising in Australia is 51 per cent foreign controlled; 45 per cent of general insurance and 41 per cent of finance companies are foreign controlled.

Let me deal with the proportion of company income payable overseas, that is, the money that is going out of Australia each year in the form of dividends, thus affecting our balance of payments. According to Press statement No. 35 issued this year by the Treasurer (Mr Howard), and quoted in the interim report of the Campbell Committee of Inquiry into the Australian Financial System, in 1977-78 - three years ago - profits and dividends payable abroad totalled $15 billion, which represented 33.7 per cent of the total company income in Australia after tax. What does that mean in plain language? It means, in simple language, that after 1977-78 about one-third of the total income earned by companies in Australia was repatriated overseas by foreign companies. One would assume that the figure - it amounts to about S 1 i billion - which must make a massive impact on our balance of payments situation, would be worse in the current financial year.

I will quote an unofficial estimate of Crough, Wheelwright and Wilshire who estimate that up to 55 per cent of total company income in Australia now is repatriated overseas each year. This high level of foreign ownership exists in spite of a so-called Government policy on foreign investment, which calls for Australian equity of 75 per cent in uranium projects and 50 per cent in other natural resource projects. In spite of these guidelines, during the last financial year, only six out of 1,052 applications for foreign takeovers were refused by the Government; that is less than one per cent of applications for foreign ownership were refused. In fact the concept of 50 per cent Australian ownership is becoming quite meaningless.

Another example is in today’s Australian Financial Review. We read of the approval granted by the Government for the takeover of the Koongarra uranium deposits in the Northern Territory by one Canadian owned company from another. The Treasurer announced the approval on condition that the Australian equity requirement - 75 per cent in the case of uranium - is met. However, the Australian Financial Review states:

If the company finds major problems in achieving this result it may be allowed to go ahead with only 50 per cent local equity.

It is a well-known fact that the Australian equity guidelines are waived as often as necessary to achieve the present Government’s policy of development at all costs. Maybe one should say ‘development at any cost’. In this context the boast of the Prime Minister (Mr Malcolm Fraser) made in his weekend electorate chat that $29m of investment is either under way or about to begin may not be the good news for Australia that he intended it to be or that he purports it to be.

Senator Lewis:

– That is $29 billion, not $29m.

Senator CHIPP:

– I thank Senator Lewis for the correction. That makes it worse. Another example is the case of the Yeelirrie uranium project. The usual reason for waiving Australian equity is that the project is necessary for the national interest and sufficient Australian equity is not available. I am not being silly about foreign investment. I will concede that there are certain projects- such as high risk projects, projects for which we do not have the expertise for which it may be necessary to attract foreign capital. I am not silly enough to believe that we can finance our whole development through funds raised from within Australia. What I am saying is that it is quite frightening to see the rate at which foreign ownership of Australian companies, Australian equities, is increasing.

What is a solution to this problem? Let us look, for example, at exploration. We all know that many Australians are not terribly keen on risking money in high risk capital in these ventures. I can remember when the Australian motor car was first mooted in Australia, lt was very difficult to get Australians to invest in that industry because they said it would not be a goer. Before General Motors-Holden’s Ltd came here, Lord Nuffield said, after surveying the Australian market, that the project could not possibly be viable. I know the difficulties and I think that we have to look for some solution. I was fascinated when reading a book written a couple of years ago by Shann Turnbull, a brilliant young economist who is a consultant with the Australian Institute of Directors, which can hardly be accused of being a leftwing radical group. His proposal was that we acknowledge the need to attract overseas investment and encourage the foreign company where we cannot get Australian capital. He took the case of oil exploration. He suggested that we should encourage foreign investment in Australia, even give some form of tax incentive or part tax holiday for a period of up to, say, 10 years so that capital can be recouped and a reasonable profit can be made. He suggested that after that time we should force the overseas company to divest itself gradually of some of its assets, some of its equity, to Australian people. He gave the oil industry as an example of a foreign owned industry which could well be sold back to Australian consumers. The mechanical device he gave was that anybody who bought petrol at a petrol pump would get a number of coupons. When the Australian consumer had enough coupons he would be entitled to buy back the shares of the foreign owned company and gradually restore Australian ownership to the consumers, lt is a challenging thought and one which, to my knowledge, has not been taken up by any political party or government in this country, lt is a thought which I commend for consideration.

Why is there a shortage of Australian investment funds? Perhaps our taxation system is to blame. The other day, I, along with a few others, was shocked at Senator MacGibbon’s proposition that all taxes on dividends should be exempt. Perhaps that proposition is a little extreme. It would benefit only a few people in Australia. But I make the point that double taxation is affecting the small investor in Australia today. For example, company dividends are paid on 46 per cent of after tax profits, so the income is 46c in the dollar for a start. When in the hands of individuals, dividends are taxed at up to 61c in the dollar. The average figure of the maximum tax payable on dividends by a small investor can be as high as 79c in the dollar. Australia has the highest double tax rate in the world. The United Kingdom, West Germany, France and Singapore already have some form of credit system for individual dividend income to assist the small investors. Excluding any benefits, it is estimated that the maximum cost to revenue, if some form of relief were given, would be $300m.

This system would encourage Australian individuals to invest in Australia, reduce takeovers and foreign investment, direct investment into Australian industry rather than non-productive items, such as speculative shares and encourage companies to seek Australian equity rather than borrowings. This could be done either by reducing the overall company tax on dividends or reducing tax on dividends to the small investor. My suggestion does not go anywhere near that of Senator MacGibbon who says that tax on dividends should be abolished. My suggestion is that we should reduce the tax on dividends to the small investor so that he can deduct the tax paid by the company and pay only the margin between his additional tax on dividends and the company tax of 46c in the dollar. That proposition would not be inherently costly and I believe it would encourage the small investor to invest his funds in worthwhile Australian ventures.

I mention now the advantages enjoyed by foreign companies in Australia. They are quite extraordinary. Much publicity has recently been given to the tax avoidance scandal. For the very wealthy, tax paying has become almost voluntary. They can get out of most of it if they so choose. The tax avoidance industry in Australia is growing. We know that many of our cleverest lawyers and accountants are engaged in it full time. On the international scene the opportunities for tax avoidance and tax minimisation are infinitely greater. The tax avoidance industry is also becoming multinational. For some incredible reason which I cannot understand, eight giant United States accounting firms, which do the books of the largest companies that operate in Australia, are engaged full time in trying to minimise the tax paid by multinationals to the Australian Government.

Overseas tax havens are part of the problem. I refer to the Caribbean islands, Nassau and in the Bahamas and Pacific islands such as Vanuatu which was formerly the New Hebrides. A major problem is the transnational corporation with operations in many countries. By internal transfer pricing it can and does arrange to show most profit in countries with the lowest taxation. For example, a multinational company in Australia that has another branch in a low tax country simply invoices its products to that subsidiary. Therefore, the Australian branch of the multinational or transnational company shows virtually no profit at all and escapes tax almost entirely.

Neither the Australian Government nor any other national government can get adequate information on what is going on. There is no relationship between the tax paid in Australia and the real income earned by the companies in Australia. For example, in 1978 Alcoa of Australia Ltd sold alumina to its United States parent company at $108 a tonne at a time when the world price was between $130 and $150 a tonne. One can see clearly that that is manifestly a tax avoidance scheme. Clearly, this reduced the profits, and therefore the tax liability, of the Australian subsidiary. I get very angry when I read about things like that. We now have various State governments - particularly the Victorian Government - bending over backwards to subsidise the activities of, for example, Alcoa, as I will demonstrate in a moment. Yet, this impoverished multinational, after making massive profits in Australia, by its internal invoice system can escape almost totally paying Australian taxation. So that company is on a very good thing. The Australian taxpayer is subsidising it and, into the gargain, it is paying very little tax.

The Fitzgerald report on the Contribution of the Mining Industry to Australian Welfare in 1974 concluded that government assistance to the mining industry in Australia- which I remind honourable senators is essentially foreign owned - substantially exceeded the taxes paid by the mining industry. When I hear the Minister for National Development and Energy, Senator Carrick, and other Government Ministers saying how wonderful the mining boom will be, and when I hear Mr Fraser saying how wonderful it is that $29 billion is being spent on mining, I wonder to what extent Australia will benefit if the subsidies we are paying to these companies exceed the taxes they pay.

Favoured treatment is given to big foreign companies by the various States, which auction their favours as they bid against one another. I find it almost disgusting that each State government and each petty little State Premier peddle their wares to the multinationals, trying to offer them the best deal while the taxpayers subsidise those companies. The favours take the form of cheap electricity, low rates and the provision of an infrastructure. This problem is compounded by the lack of an overall national energy policy. It confounds me that Australia, in this time of its development, does not have a national energy policy. In fact, it has eight policies. It has a so-called Federal energy policy, six different State energy policies and another energy policy dictated by the multinationals in foreign boardrooms.

I believe that this country is in desperate need of a bipartisan approach from all political parties to go to the Australian people and change the Constitution so that the Federal Government can propose a national energy policy for Australia. Alcoa - that impoverished multinational United States company I mentioned before- will pay only 1 .4c a kilowatt for electricity at its proposed plant at Portland, whereas the cost of electricity to the farmer next door pumping water out of his well is 1 5c a kilowatt. The average domestic user pays 3ic a kilowatt. Where is the justice?

Senator Teague:

– Did you say 1.4c against 15c?

Senator CHIPP:

– That is what the farmer next door pays. Maybe I have quoted an extreme case. The domestic user in Melbourne pays 3±c a kilowatt and Alcoa is paying 1.4c a kilowatt. This means that almost a 25 per cent subsidy is being provided to Alcoa by every electricity user in Victoria. The Victorian Government has given Alcoa a 50-year right to the equivalent of 20 per cent of Victoria’s present power capacity. I remind honourable senators that this right has been given to a multinational company that will pour fluoride all over the beautiful town of Portland. No proper environmental study has been carried out. Also, the plant will be capital intensive, employing at best 1 ,200 people. Yet, we are bending over backwards, asking Australians to subsidise this kind of foreign ownership. That means that in future new power generation projects in Victoria may have to be devoted almost entirely to Alcoa’s needs.

Other States also are notably generous to aluminium smelters. In New South Wales, the domestic tariff is 3.26c; the charge to smelters is 1.2c. In Queensland, the domestic tariff is 4.5c; the charge to smelters is 1.8c. In Tasmania, the domestic tariff is 2.5c; the charge to smelters is 0.7c. In those and many other ways, the Federal and State governments are encouraging increased foreign control of Australian industry. At the same time, the Australian investor is positively discouraged by the tax system from providing the increased

Australian equity which the Australian Democrats would like to see. I thank the Senate for giving me the opportunity to raise this matter of public importance.

Senator LEWIS:

– On Monday, 8 September 1980, the Canberra Times published an editorial headed: ‘Battle for the Senate’. In that editorial, the Canberra Times referred to the Australian Democrats having sets of attitudes and platitudes instead of firm, detailed policies. With all due respect to Senator Chipp, he confirmed again today that that is the approach of the Australian Democrats to politics in this country. The Australian Democrats adopt attitudes which are based on emotion and frequently are based on what they believe will be popular.

Senator Bonner:

– They are unreal.

Senator LEWIS:

– As my colleague Senator Bonner said, those attitudes are unreal. With all due respect, perhaps they appeal to unthinking people in the community, but they contain no detailed analysis of what the job of running this country is all about. I quote from that editorial the part which relates to the Australian Democrats, as I feel it should be included in the Hansard record. I remind honourable senators that this was published in the Canberra Times, which could not be said to be a pro-Government newspaper in any respect. Referring to votes in the Senate, the editorial states: . . the Government is particularly keen to sell the message that positive rather than protest votes should be cast. The Government has a fair point. The Democrats have done little to impress voters or to suggest they should have the responsibility of holding the balance of power. They have sets of attitudes and platitudes instead of firm, detailed policies - they must do a great deal more work before they can be regarded as a genuine alternative. At most they can be regarded as a convenient place to park No. 1 votes for the House of Reps–

That is for the House of Representatives, not for the Senate - (by disenchanted voters from both sides), thus registering indignation in such a manner that it can be assessed but with very little chance of a balance-of-power situation arising. But in the Senate, under the proportional representation system of counting votes, the Democrats can and very likely will create a nuisance situation, inimical to the interests of government.

That is what the Australian Democrats are hoping to do. I hope that the voters of Australia will recognise that that is what they should not allow them to do. I acknowledge that today Senator Chipp spoke with all the quiet dignity that this subject requires. He did not appear on the surface to become emotional, except on one occasion; but in fact the very subject is emotional. As many as 15 years ago, in 1965, the Committee of Economic Inquiry presented a very important report, commonly called the Vernon report. That

Committee reported that much of the fear that extensive overseas investment causes a loss of autonomy was rooted in simple nationalism, deeply felt but often irrational. That, of course, is exactly why Senator Chipp raised this subject today - five weeks before the election. He realises that the sense of nationalism and pride that we all have in Australia is an emotive matter. Of course, the very subject is clouded by this emotive nonsense and this attempt to pull upon the heartstrings of the people of Australia.

Let there be no doubt: We care about the people of Australia and it is our desire to make Australia great. We are deeply concerned about the numbers of jobs that are involved in these industries. If we were not to encourage the development of Australia, then thousands and thousands of jobs would be lost to the people of Australia. In fact, if we were to try to implement some of the heartstring desires which Senator Chipp presented to the Senate today there would not be the slightest doubt that thousands and thousands of Australians who are working today and are very well paid would be out of work; they would be out of work as a result of that emotional analysis of the subject instead of an in-depth analysis of the subject.

Senator Chipp even acknowledged at one stage that without overseas investment there would be a loss of technology and a loss of managerial expertise. He did not talk about the loss of tax revenue. What he talked about was a confusing situation in which he suggested that somehow or other overseas companies investing in Australia are avoiding the payment of tax. Of course, tax avoidance is a subject of enormous concern in Australia at the present moment, but the enormous concern is that Australians are avoiding tax. If Senator Chipp had involved himself in a proper investigation of this matter he would have found that the Foreign Investment Review Board frequently requires mining companies, when they put forward their proposals, to come to an agreement with the Australian Taxation Office about the basic selling price of their product before the Board will recommend approval of their scheme.

Senator Chipp’s suggestion that overseas companies are able to avoid payment of tax in some way- again he appealed to this emotive aspect- is again a simple analysis based on an apparent situation without any attempt to find out by an in-depth study what is the situation in regard to the mining industry. To suggest that the increasing foreign ownership of the Australian economy takes the control of these companies away from the people of Australia- this is an important factor- simply is not true. After all, that is vitally important. We must have risk capital - by that I mean capital invested by people who are prepared to risk losing itinvested in Australia if we are to develop Australia and to open up the opportunities in regard to our mining interests and our manufacturing interests.

The Government’s policy is set out quite clearly in Liberal Party material. Government policy aims to encourage foreign investment which, firstly, recognises the needs and aspirations of Australians. That is the first proposition. Secondly, the Government wishes to encourage foreign investment which assists in developing Australia and raising individual living standards. Thirdly, its policy is to encourage foreign investment which is in harmony with Australia’s interests. Fourthly, it is to encourage foreign investment which assists in increasing Australia’s access to modern technology and managerial skills. We need modern technology and we need managerial skills. Frequently we need them from overseas sources because we are unable to supply them ourselves. Government policy is to encourage foreign investment which assists in extending commercial ties which offer access to new markets. I draw the Senate’s attention to that matter. Occasionally, in fact not infrequently, when a commercial tie is involved in an Australian investment it opens up new markets for us overseas.

Finally, the Government believes in foreign investment which provides, wherever practicable, for Australians to participate with foreign investors in major projects. The Government has given the Foreign Investment Review Board very extensive directions and encouragement in implementing these policies. As Senator Chipp acknowledged, the fundamental objective of the Government’s policy and of the recommendations coming forward from the Foreign Investment Review Board is that new natural resource development should have at least 50 per cent Australian equity and joint Australian-foreign control. New uranium developments are expected to have at least 75 per cent Australian equity and should be Australian controlled. In cases where 75 per cent Australian equity is clearly unobtainable, alternative proposals will be considered where there is a minimum of at least 50 per cent Australian equity and Australian participants have a major role in determining the policy of the project.

I have mentioned that there are cases where 75 per cent Australian equity is clearly unobtainable. We need to be looking at the enormous amount of investment that is going on in Australia. The Rundle shale oil project, which is to start in 1982, involves in just phase one an expenditure of $300m, and over 2,000 jobs will be involved in the project. Senator Chipp seems to think that that is something that is not desperately important and that in some way or other we can allow this sort of development to pass without going on with it or that somehow the moneys will be found. It may be that the honourable senator should follow the Australian Labor Party’s proposal. The Labor Party is proposing to find that money and the other, I hope, $29 billion out of the Australian taxpayers’ pockets. That is the Australian Labor Party’s policy in relation to foreign investment.

Let us look at other projects. In regard to the Mt Arthur North coking and steaming coal project, another $400m will be invested. At Hail Creek, over a period of 10 years from 1979 an amount of $700m will be invested. As to the Nebo-Bowen Basin development, for the five years from 1980 another $700m will be invested. As I interjected while Senator Chipp was speaking, at the present moment $29 billion is coming from investments in our mining and manufacturing industries in Australia. Apparently, these are to pass by the way. Again, let us look at some of the facts provided in relation to the Foreign Investment Review Board in an answer to a question on notice on 5 March 1980. The answer states:

It appears that, of sixty new natural resources development projects for which the go-ahead has been announced or for which final feasibility studies are being undertaken:

there are fourteen projects which are wholly Australian owned, or predominantly Australian owned . . .

there are thirty-five projects that are being jointly undertaken by foreign and Australian interests . . .

there are eleven projects–

That is, only 1 1 out of the 60 - which are, at this stage, predominantly or wholly foreign owned, but, in u number of cases, increased Australian participation in terms of the Government’s foreign investment policy will be required before they can proceed to full operation.

If we consider the issue of control, there seems to be some objection to the fact that the Foreign Investment Review Board is not knocking back a lot of these applications. Let us examine that proposition because, on the surface, people see a few rejections and say: ‘You see, they are nol being rejected’. Lcl us look at the other things Firstly, many of the proposals ure in fuel withdrawn by the parties once it becomes clear to them that the project is likely to be rejected. Secondly, many of the proposals which would otherwise have been rejected are approved after modification on the suggestion of the Foreign Investment Review

Board. Some of the proposals are approved subject to certain conditions which are designed to remove the possible disadvantages and to meet Government policy requirements.

The fact that few proposals are rejected, in fact, strongly suggests that prospective foreign investors are well aware of foreign investment guidelines and comply with them. In fact, a booklet is produced entitled Your Investment in Australia - A Guide for Investors 1979-80. That booklet sets out in detail the foreign investment policy and procedures. Anyone from overseas who intends to invest in Australia would certainly give that booklet detailed examination to make sure that his proposal came within the tines of that guide. No doubt there are many investors who would consider investing in Australia but when they look at that booklet they decide that they will not even bother to try because they know that their proposal would be rejected. The Foreign Investment Review Board’s examination of proposals is far from perfunctory. There is a detailed examination to make sure that the proposals meet the requirements of the foreign investment policy, that the proposals are not contrary to the national interest and that any possible disadvantages are more than offset by the advantages. Frequently the Board calls for additional information from the parties and subjects them to certain conditions or makes them modify their proposal in some way.

Despite Senator Chipp’s disparaging remarks, let there be no doubt that we are proud of the development which is now going on in Australia- $29,000m worth. I have a breakup of that estimate of $29,000m. As at May 1980, $9.69 billion was the anticipated total cost for proposed projects in the manufacturing industries of Australia. As at the same date, $19.23 billion was the anticipated aggregate cost for proposed mining projects at the committed and final feasibility stages. I have a further breakup of the figures: It is expected that $7.49 billion will be invested in oil and gas, $7.08 billion in coal, S4.76 billion in aluminium, $3.55 billion in other base metals, $1.61 billion in iron ore, and billions of dollars more in u number of other industries, making u total of $28.92 billion- nearly $29 billion. Aluminium and aluminium bauxite projects worth a further $6.4 billion are at the preliminary study stage.

The Federal Government and the LiberalCountry Party supporters of the Federal Government are proud of these developments. We see $29 billion worth of investment in the pipeline us being a magnificent result when one looks at the dreadful situation that existed in 1975. If there were to be any thought in the minds of the people of Australia of going back to a Labor Party government, a consideration of what would happen to these projects and the enormous loss of jobs, investment and development that would result would surely change their minds. This is a wealthy country, and will be a wealthy country. Direct government involvement is proposed by the Labor Party. Risk capital is to be provided by the Australian taxpayers. In effect, what the Labor Party proposes would mean a nationalisation of these industries, and we know where that ends up. Multinational companies enable Australia to gain much needed development capital, access to new technology and expert managerial skills. The important point is the control of these companies, not where their money comes from.

New South Wales

Senator Lewis’s pathetic contribution to this very important debate fails to present the Government’s defence. He failed even to deal with the subject matter of the increasing foreign ownership and control of key sectors of the Australian economy and spent half his time seeking to denigrate the proponents of this matter of public importance, not applying himself to the matter of the debate. He claimed, of course, that our motivation was an appeal to emotionalism, ignoring the fact that in October 1975 Mr Fraser announced with a great fanfare his foreign investment policy, which commenced with these words:

A Liberal National Country Party government will take strong measures to ensure that Australians have maximum control and ownership of our natural resources and industries.

As I shall seek to show, that is another of the 91 broken promises of the Fraser Government. What a joke the Fraser Government has made of the policy, for rather than maximising Australian ownership and control, the Fraser Government’s policy has been designed to maximise foreign ownership and foreign investment, regardless of the degree of Australia’s involvement. Senator Lewis used as a reference the report of the Vernon Committee of Economic Inquiry of 1965, ignoring the experiences of the last 1 5 years and ignoring the experiences and the report of the Senate Select Committee on Foreign Ownership and Control which presented its report to the Senate on 25 October 1972. The Government tries to trot out the old chatchery that we hear raised on the eve of every election, namely, that there is a lot of foreign investment money in the pipeline. It ignores the fact that the Australian Industries Development Association has drawn attention to the fact that that is an illusion. Arvi Parbo from the Western Mining Corporation Ltd, has drawn attention to the fact that these are purely projections and have no relationship to the economic conditions of today.

Just how great is the foreign contribution to the economy? An increasing proportion of foreign investment in Australia is financed not by foreign funds but by regained profits of foreign companies operating in Australia. I give as evidence the answer to a question put by Mr Willis to the Treasurer (Mr Howard) on 19 August 1980, which I think Government senators would concede to be fairly relevant. It shows that, in the period 1978-79, $l,849m was the income payable abroad on foreign investments for enterprises in Australia and the total net inflow of foreign investment for enterprises in Australia and the total net inflow of foreign investment for enterprises in Australia was only $ 1,965m, making a difference of actual capital inflow of only $1 16m. So much for Senator Lewis’s suggestion that it is the great inflow of foreign capital as such as that is in fact part of the stimulation which the Australian economy needs and relies upon.

Retained profit of foreign companies is counted as direct foreign investment by this Government, firstly by the Australian Bureau of Statistics, on the assumption that it will be reinvested in Australia. In fact, undistributed income, as a proportion of total foreign investment, has risen very considerably in recent years. For example, on average it comprised 27.8 per cent between 1968-69 and 1972-73 but had climbed to 51.8 per cent on average by 1973-74. Of course, it is impossible to get more precise figures on the current situation, having regard to the fact that under this Government nearly 30 Australia Bureau of Statistics personnel who worked on foreign investment statistics have been removed at the direction of the Fraser Government from carrying out that important review. In the period from 1973 to 1 977, only 35 per cent of total so-called foreign investment came from overseas; the rest was generated inside Australia either through local profits or on the local capital market. As we well know, the demand for funds in the Australian capital market is the principal factor that is increasing interest rates in Australia and making it well nigh impossible for ordinary Australians and the 40,000 small businesses in Australia to qualify for home loans and for overdraft accommodation. In its report the Foreign Investment Review Board stated:

Funds raised from the Australian capital market and from internal reserves of foreign-controlled companies operating in Australia have become a particularly significant part of total investment by foreign interests in Australia in the 1970s.

The money comes from our own profits generated in Australia. The report continued:

Of the net increases in funds employed in that year by these enterprises, more than half were derived from Australian sources. It is estimated that in the eight years between 1969 and 1977 total Australian loans to those enterprises increased fivefold.

Of course, that is why we on this side of the House are concerned about what is happening to the Australian economy.

Let us look at the role of the FIRB in regulating foreign investment. The briefest examination shows that the Board is clearly in slavery to foreign capital. In fact, the FIRB is now pursuing an anti-patriotic position. From its commencement of operations in April 1976 until March 1980, the FIRB examined 4,816 foreign investment proposals, of which only 38 were rejected - that is, one in every 130. So much for its carrying out its review and control functions. Of these proposals examined by that organisation at the behest of the Government, 3,507 related to takeovers of existing Australian businesses and of those takeover applications only 20 were rejected. The FIRB, at the behest of the Fraser Government, has to be seen as a welcoming committee rather than as fulfilling its functions set by the Australian Government of critically examining foreign investment proposals to ensure that they benefit the Australian people. The FIRB is, in fact, thumbing its nose at the parliament of this country and at the national interest.

Perhaps the greatest corporate giveaway in this area is in taxation. The ability of multinational corporations to evade taxation is well known, yet the Government does absolutely nothing to curb this great getaway by foreign companies. Ridiculous decisions are handed down by the High Court. I refer, for example, to its decision over Alcoa of Australia Ltds evading its taxation responsibilities. Of course, as we know, tax evasion by the multinational corporate sector of our country is to the tune of thousands of millions of dollars and necessitates governments taxing low and middle income earners and small businesses in this country. As the report of the Organisation for Economic Co-operation and Development shows, a massive transfer pricing scheme to evade taxation is taking place in all of the developing countries. Foreign capital, contrary to what Senator Lewis has said and Senator Maunsell will say, is actually sucking Australia dry of important scarce capital resources. In every year since 1972-73 Australia has had a net outflow of capital. Repatriated profits have exceeded new investment. Over that period the net loss of capital has been $ 1,933m.

This is the benefit that Senator Lewis and the Fraser Government suggest foreign investment represents to the Australian economy. Income payable abroad, expressed as a percentage of all company income, according to the figures of the Treasurer (Mr Howard), has hit an all time high of 35.6 per cent. Because of the lack of information provided by the same Treasurer, Senator Chipp may well be right in saying that the figure has been estimated by economists concerned about foreign investment to have risen to nearly 55 per cent. At the same time, the contribution of foreign investment- the inflow of funds - has been bumping along at only 17.6 per cent. However, profit rates of overseas companies are running at over double the rate for Australian companies. I again refer to the question the honourable member for Gellibrand, Mr Willis, asked Mr Howard. The reply showed that in 1974-75 Australian companies average rate of profit was 5.7 per cent, whereas that of overseas companies was 9.3 per cent. In 1977-78 the profits of Australian companies averaged 6.6 per cent and those overseas companies averaged 15.5 per cent.

The Australian Labor Party is concerned about this issue and the Parliament as a whole also should be concerned. Labor’s attitude to this question is that it will re-establish the foreign investment section of the Australian Bureau of Statistics so that the government and the public will be reliably informed about the degree of foreign ownership and control of our industries. Surely that is the patriotic thing to do and is what ought to be done to protect our industries, our jobs and our economy. Labor regards such knowledge as fundamentally important and it deplores the Fraser Government’s perverted sense of priorities, which was demonstrated by its abolition of such statistical collections while retaining a far less significant statistical series about the number of hatcheries, fishing expeditions and fowl born in Australia- all unimportant things compared with the importance of foreign ownership.

The Foreign Investment Review Board will be required to advise the Government on foreign investment proposals, including takeovers and equity investment applications. However, the Board will be given strict instructions and stronger guidelines, making possible more rigorous evaluation of the economic and social benefits and the costs of proposals. As well, the functions of the Board will be widened to include the monitoring of the activities of transnational corporations in Australia. To ensure a broader view of the costs and benefits of foreign investment, the membership of the Board will be expanded to include a wider representation of interested groups, notably relevant government departments, trade unions and consumer groups.

Foreign investment proposals will be screened on a case by case basis. To gain approval, applicants will need to demonstrate that significant economic and social benefits will accrue to Australia. Those benefits will need to be, for example, the introduction of desirable new technology and expertise to see whether it is in Australia’s interests to have such new funds, whether the funds will increase employment and exports - surely that is important and is accepted as part of our national interest; the expansion of the taxable capacity and base in this country so that we do not need to have this enormous tax on petrol and people on low income; and the broadening of Australia’s industry base and the degree of competition. These will be the guidelines that a Labor government will introduce after 18 October 1980.

We will also be preparing a national economic and social strategy to which a new Labor government will be committed. This will provide the overall frame work for the evaluation of proposals for investment from overseas. This national strategy will assist in clarifying the areas of inanity, as Senator Lewis sees the position, where investment would or would not be most welcome. It will also provide the overall economic context in which the desirable volume of such investment can be assessed. If it is suggested that foreign investment is the only matter that ought to be considered, why do other countries have tremendous capital accumulations and tremendous capital investment funds? I instance the United States where there is high inflation and high unemployment. There are matters which prompt the Opposition to support this matter. We applaud the fact that the Senate has been given an opportunity to debate such an important issue.


– An election must be fairly close because this very emotional issue seems to be trotted out before every election. At this stage I should like to reply to some of the matters raised by Senator Chipp, because 1 believe the record has to be put straight. First of all, he remarked that Noranda Australia Ltd, when it sold it shares to a Canadian company, was allowed to retain only 50 per cent Australian equity. The uranium situation has been known for a long lime. Some companies have 100 per cent Australian equity. The rules are that a company must have 75 per cent Australian equity but, if it makes every effort to reach 75 per cent Australian equity and cannot do so, it can reduce its Australian equity to 50 per cent. Why are there not companies with 75 per cent or 100 per cent Australian equity today? The reason is the attitude of the Opposition to uranium mining in this country which is undermining the confidence of the Australian investor.

Senator Chipp spoke about profits being expatriated, as did Senator Gietzelt. Senator Gietzelt compared the profits being expatriated with the investment coming into the country. He should not have compared those two things. We should be comparing the export income earned by those companies with the expatriation of profits. Then we would find that the expatriation of profits is a very small part of the income earned overseas by those companies, particularly in the mining industry. If those companies were not developing many of our mining industries because we seem unable to get sufficient Australian capital, we would not be expatriating $ 1,500m a year and we would not be receiving the billions of dollars of income which results from the efforts of those companies. Senator Chipp also said that the big aluminium companies were being subsidised by the generating plants of Australia. One must understand the breakup of the cost of generating electricity in this country. I do not know what it is in Victoria or New South Wales, but I know that in Queensland and Western Australia the breakup of costs is as follows: Between 60 per cent and 70 per cent for reticulation, power lines and so on; 30 per cent for the power-house, which has to be built to cope with above peak demand; and 10 per cent for fuel. In Western Australia and Queensland the ratio of average hourly consumption during the day to peak consumption is about one to three. If peak consumption in Queensland and Western Australia is 15,000 units, average hourly consumption during the day would be about 5,000 units and a power-house with a capacity of about 20,000 units would have to be built to cope with peak demand. During off-peak hours, particularly between 10 o’clock at night and 6 o’clock in the morning, demand is down to about 1 ,000 or 2,000 units. If the 24-hours-a-day users of electricity, such as the aluminium smelting plants, were to use electricity during those times the use of electricity could probably be doubled or trebled for a 5 per cent increase in the cost of generation. If electricity were costed properly, every householder who had a meter would pay rent on it as his share of the 60 per cent of generative costs which provide the means of transmission. Only 40 per cent of the cost would be related actually to the cost of generating electricity. This is done to some extent in the Postal and Telecommunications Department where everyone pays a rental because of the cost of transmission lines. The aluminium refineries that are getting electricity at a lower cost are, in fact, subsidising other beneficiaries, particularly lower usage people, because of the costs of transmission lines and the fact that they use very little electricity.

Senator CHIPP:

– What an extraordinary thing to say!


– It is a fact of life. One could go to any electricity generating authority and one would be told the same thing. Most of these power houses are developed very close to a refinery or smelter.

Of course, there is no cost of transmission once the line reaches the outskirts of the smelter. Then it is the responsibility of the smelter owner to transmit power throughout the development. Although these people may be getting their electricity at a reduced price, they are assisting the rest of the community in bringing down the power costs.

Senator Mason:

– Should not everybody else near the power station also have a reduced tariff? What about the other users? What about ordinary Australian users?


– The cost of reticulation is carried by everybody.

Senator Mason:

– Except the multinationals - that is what you are saying.


– No. I am just saying that the cost is carried by everyone, lt does not matter whether one person uses a little electricity. Today everybody and every generating authority share the cost of transmission lines in the amount that they pay for the electricity that they use. Otherwise people out in the bush would be paying tremendous amounts even if they did not use electricity.

I mentioned also that some companies may be selling to parent companies overseas at less than the world market value. Most people in the mining industry know that long term contracts are the order of the day. I do not think many mining ventures in Australia do not have long term contracts organised before their ventures are started. If world prices come down or spot market prices come down, those mining ventures gain. If spot market prices go up, they lose. We saw the example particularly of the sugar industry that has long term contracts around the world. When the world market price was at $600 a tonne it negotiated contracts. When the world market price dropped to $90 a tonne the Japanese and many other people wanted to renegotiate contracts. We have had the experience of signing long term contracts when prices have been low and those prices have gone up. An export review group looks at all these mining contracts that are drawn up and if any of these contracts are considered to be too low these people step in and do something about it. That has been done wilh coal and iron ore contracts.

Senator Lewis briefly mentioned the Rundle shale oil deposit. That is a typical example of why we need overseas capital in Australia. He mentioned $300m as a starting point for a pilot plant. It must be the most costly pilot plant in Australian history. Once Rundle have fully developed the resources and a maximum production of something like 200,000 barrels a day is reached, the investment will be something like $ 10,000m. If we were looking for Australian investment in that project I do not think anyone in Australia - Senator Chipp included - would want less than 15 per cent return on risk capital of that nature. When we are looking at $ 1 0,000m we are looking at something like $H billion of profit that has to be made in order that the shareholders can get their dividends. If that were the case I would imagine either Rundle would not be a goer and would not be viable or else the Australian taxpayers or the Australian motorists would have to foot the bill to subsidise that company. The Exxon Corporation is putting up all the money for the development of the Rundle project in return for half the oil that will come out of it. The other half, with no development investment, will be available to those Australians who invest in the two companies. What better foreign investment deal could one find than that? If Rundle is not a goer we will be worried not about the repatriation of capital to Exxon, which would not occur for some years anyway, but about the fuel bill we will face when we have to import oil. That bill would run into many billions of dollars over a period of years.

I remind the Senate of the history of Mount Isa Mines Ltd which was developed by an American company in conjunction with Australian companies. For many years Mount Isa Mines ran at a loss and all the Australian partners disappeared from the scene. The American company continued for some 20 years without showing a profit. Gradually it become profitable and gradually Australian equity returned. Today the Australian equity in Mount Isa Mines is a little under 50 per cent and the American equity is a little over 50 per cent. Australian investors are getting a fair share of the profits for Mount Isa Mines because of the world boom in minerals such as silver, lead and zinc. The sorts of companies we have in Queensland are not only of State importance but also of national importance. Without them Australia would not be able to develop its resources. I believe that in the future Queensland will be the No. 1 State as a result of these great developments, and Australia as a nation will benefit too. The mining industries are the only ones that are doing anything about decentralisation in this country by developing the remote and arid areas. If one thing is needed in this country today it is certainly decentralisation.

I believe that what the Government has been doing since it came into office has not been very different from what the Labor Party did in its three years in Government, except that we have encouraged resource development and given the companies a fair go. The Labor Party did not do much about those companies. The economy of the nation went to pieces when Labor stopped them from exploring for oil and developing our resources. I believe that this Government has a good record, and the prospects for the future under this Government are good. Even Mr Wran is planning to use $ 1 8 billion of overseas capital to develop resources in New South Wales, which is the highest level of expenditure of any State in Australia in this sort of development. Even he recognises that we need overseas capital and that Australia will benefit as a result. I now move:

That the business of the day be called on.

Question resolved in the affirmative.

page 970


Senator MISSEN:

– I bring up the sixty-ninth report of the Senate Standing Committee on Regulations and Ordinances relating to legislation considered by the Committee during this year.

Ordered that the report be printed.

Senator MISSEN:

– by leave - The report sets out for the information of the Senate the Committee’s consideration of a number of pieces of legislation since its last general report in November 1979. As in past years, the Committee has not had occasion to recommend to the Senate the disallowance of any legislation because of undertakings given by Ministers in relation to legislation queried by the Committee. In accordance with its established practice, the Committee will keep these undertakings under review to ensure that they are carried out. There is one particular matter in the report to which I would like to draw attention. I will quote the relevant paragraph:

With the approval of Mr President and Mr Speaker, and with the support of the Commonwealth Parliamentary Association, the Committee will be holding in Parliament House later this year a conference of parliamentary committees involved in the scrutiny of delegated legislation in Parliaments which belong to the Association. The Committee hopes that this conference will lead to a valuable exchange of ideas on the parliamentary control of delegated legislation, and a greater appreciation of the importance of that control. The Committee plans to present to the Parliament the proceedings and major documents of the conference.

Members of the Committee are looking forward very much to this conference, which will be opened in this chamber on 29 September and will continue for most of that week. The GovernorGeneral has graciously consented to open the conference. We appreciate very much his interest, which we know is genuine, and we look forward to his address. Visitors will be coming from Great Britain, Canada, India, and a number of other Commonwealth countries. We hope that, despite the forthcoming election commitments of honourable senators over the period of the conference, as many senators as possible will be present at some if not all, of the conference. We hope to give to our overseas visitors a very warm welcome. After all, this is the first time this area of delegated legislation will be considered at such a conference. The Senate Committee, being the oldest in the Commonwealth involved with this subject, is fortunate in being the host to the conference. I therefore hope that there will be great public interest, in addition to the interest of my Senate colleagues, in the week’s events.

page 970


Estimates Committee E

Senator ARCHER:

– by leave- I table additional information received by Estimates Committee E and 1 seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Estimates Committee A

South Australia

– by leave - On behalf of Senator Young, the Chairman of Estimates Committee A, I table additional information received by the Committee and seek leave for it to be incorporated in the Hansard record of Committee A’s proceedings.

Leave granted.

Senator McLAREN:
South Australia

– by leave- I will not keep the Senate for very long. In the adjournment debate last week I had occasion to raise the fact that honourable senators were not provided with some information. It has come to my attention that some public servants feel that I was severely criticising the staff of Estimates Committee A. I think people who are prepared to read the Hansard record of the debate will see that at no stage did I level any criticism at the staff of the Committee. As a matter of fact, I congratulated the staff and drew to the Senate’s attention the onerous work load that has been placed upon the staff of Senate standing committees by having to service Estimates committees. I want it clearly understood that at no stage was I criticising the staff of Estimates Committee A. I was criticising the Minister in charge because the answers had not been provided, and some of my further inquiries revealed that no answers can be provided to members of the Committee until the answers have been vetted by the Minister in charge. That is one of the reasons why I was critical. My criticism was not levelld at the members of the staff. I have great faith in the staff who service this Committee because they also service a standing committee of which I am a member.

Estimates Committee B

Senator RAE:

– by leave- I table additional information which has been received by Estimates Committee B and I seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Senator RAE:

– I also lay on the table the report obtained by the Commonwealth Legal Aid Commission from its consultants, Peat Marwick Mitchell Services, management consultants of Sydney, dated June 1 980 and relating to a comparison of the costs of legal aid. I seek leave to make a brief statement in relation to that.

Leave granted.

Senator RAE:

– During the proceedings of Estimates Committee B, both last year and again recently, concern was expressed in relation to the very high cost of the provision of legal aid services in the Australian Capital Territory. In relation to that the Chairman of the Commonwealth Legal Aid Commission, Mr Justice Else-Mitchell, gave evidence to the Committee which suggested the need for an investigation into what could be done to overcome the problem. Mr Sharkey of the Australian Capital Territory Legal Aid Commission gave evidence of some steps which have been taken in an endeavour to reduce the rather significant expense which is being incurred in relation to the provision of legal aid in the Australian Capital Territory. From memory- I do not have the details before me- it works out at approximately four times the per capita expenditure for the remainder of Australia.

At the time of tabling this report which has been obtained from the management consultants engaged by the Commonwealth Legal Aid Commission, I indicate that it is a document which will be available now to those members of the Committee who have expressed some interest in this question as well as to honourable senators and others who may be concerned. At the same time, as a matter of fairness, I draw attention to the information in the document from the Law Society of the Australian Capital Territory which I tabled earlier. It puts the view which it wishes to put in relation to the cost of legal aid in this Territory.

I summarise by saying that now considerably more information is available in relation to this matter than appears in the Hansard transcript of the proceedings of the Committee. It has become available through Mr Justice Else-Mitchell of the Commonwealth Legal Aid Commission providing a copy of the report on the investigation which was conducted by his consultants as well as through the Law Society of the Australian Capital Territory.

Estimates Committee C

Senator WALTERS:

– by leave- I table additional information received by Estimates Committee C and seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Estimates Committee D

Senator TOWNLEY:

– by leave - I table additional information received by Estimates Committee D and seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

Estimates Committee F

Senator MESSNER:
South Australia

– by leave- On behalf of Senator Kilgariff I tabled additional information received by Estimates Committee F and seek leave for it to be incorporated in the Hansard record of the Committee’s proceedings.

Leave granted.

page 972



Senator GEORGES:

– by leave - As we now rapidly approach the completion of business for this Parliament, I notice that the program which has been placed before us indicates that for a variety of reasons we may not sit on Friday. Will the Government give some assurance that we will receive and have an opportunity to comment on the pending reports of the Joint Committee of Public Accounts, especially the report which concerns the overpayment of pharmacists to the extent of some $235m? I believe that the report is ready for presentation. lt becomes urgent that this report be brought down because of further comment by the Auditor-General that the Department of Primary Industry has made to beef producers incorrect payments totalling more than Sim, again through some miscalculation. That Sim overpayment seems to relate to only six months. Because of the intense interest in these matters and the failure of certain programs to pay recipients properly according to the requirements of the Government it is necessary that the report be tabled so that we can clear this matter up before we go to an election.

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

– by leave - I do not know the progress of the Joint Committee of Public Accounts report that Senator Georges refers to. I will have a look at the matter and if anything practical can be done within the time left to us I will give it consideration.

page 972


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

– by leave - As foreshadowed in the statement I made last Tuesday concerning the Government’s legislative program, I have again made available to honourable senators a draft program listing the legislation that it is proposed to pass through the Senate this week. The program is one thai should be comfortably accommodated each day and, given reasonable progress, the Senate should be able to rise in good order on Thursday evening.

page 972


(No. 2) 1980

Assent reported.

Sitting suspended from 12.58 to 2.15 p.m.

page 972


First Reading

Debate resumed from 1 2 September, on motion by Senator Carrick:

That the Bill be now read a first time.

Senator MacGIBBON:

– I would like to use the opportunity that the Appropriation Bill (No. 1 ) gives me to talk about a matter for which we will make considerable appropriations over the years to come. I refer to the new tactical fighter, a matter on which I spoke in this chamber early this year. We are now approaching the decision time on this project. The program was set out by the Government at the start of the year. The selection process has proceeded through its committees on schedule. It is a reasonable expectation that some time in the near future an announcement will be made on the program. It is a very important program to Australia. Obviously, in money terms, it will be the biggest contract that this country will have ever entered into. From a defence point of view it is of major importance to us. In a very large way it will govern the capacity we have to deter and to resist enemies and to defend our freedom and our land.

Australia is a rich and isolated country in a world which is becoming increasingly unstable. Not only will this decision affect our capacity to defend this land in the immediate future but also, to a very large extent, the choice of aircraft we make will govern the response we can make and our capacity to make that response through the next 20 years. Given the present international portents, we may well have to use these aircraft in a way in which we have not used aircraft or weapons in the defence forces in the years since the cessation of the Second World War. lt is hoped that the deterrent factor of these aircraft will be sufficient, but they may well have to be used seriously for defence. Therefore, it is crucial for this country that we make the right choice in the selection of the aircraft.

Senator Georges:

– Who will be the enemy?

Senator MacGIBBON I will nol go into technical details of the two aircraft because I did so at some length and in some depth earlier in the year. 1 am sure Senator Georges will remember the lime. I make two points about the decision. Firstly, the Press has canvassed the idea that we do nol need to make tt decision now, Secondly, some people have cavilled at the concept of buying 75 in one block. Unquestionably we need lo make the decision now because the present fighter that we have, the Mirage, is obsolescent, lt has a major maintenance problem and it is wearing out. Even if the program goes ahead as outlined earlier in the year and the decision is made, we will not get the first of the new tactical fighter force aircraft until November 1983. Deliveries will then take place at the rate of one a month until about 1990 when the purchase of 75 will be completed. In rough terms it will be something like 1985 at the earliest before we get those aircraft into squadron service if the decision to purchase is made in the immediate future. That means at least another five years’ use will have to be obtained out of the Mirages which are the only aircraft we have in the fighter role.

If we have to run the Mirages beyond that date we will be in for vast expenditure. Not only do they have a poor weapons system but also it will cost in excess of Sim per aircraft just to keep them flying. On top of that the aircraft will be very maintenance intensive. It will take a lot of manpower and lot of money from the Royal Australian Air Force to keep them flying. There is a pressing need for something to be done there. Senator Georges asked: ‘Who will be the enemy?’ One of the techniques used by the Russians is what is known in the jargon of the time as vertical envelopment. Vertical envelopment was used in Afghanistan. An airborne insertion of Russian troops into Kabul and several other airfields, linking up and driving back to the border, was the basic pattern for the taking of Afghanistan, lt was a re-run of what the Russians did in Czechoslovakia some years previously during one of the Czechoslovak risings. Defence against that sort of insertion is an adequate air arm to guarantee air superiority while it is going on.

I exercise my privilege as a private member and as an old airman to state frankly my personal views, using a proper forum, that is the Parliament, to do so. First of all, I will comment on the Australian industry participation program. The purpose of this program is to provide skills and essential spare parts in Australia and, most importantly, to keep a large portion, 30 per cent of the purchase money, within this country. I was not well informed about this program at first, but the deeper I went into it the more admiration I acquired for the Public Service and the way in which the program has been designed, lt is an excellent program which has very considerable benefit for Australia. Quite simply, we jumped two generations of technology by this one move, and at very little cost to the Australian people. Honourable senators will all recognise that expenditure within Australia on industrial research and development, as a Senate committee report showed last year, is at a very low level. Without being unduly simplistic about it, for about $200m more than the cost of the program, roughly about 1 0 per cent extra, we will get the latest technology in a wide range of electronic and metallurgical fields. That is very good value for money.

The key to the actual selection of the aircraft lies in the speech by the Minister for Defence (Mr Killen) in the House of Representatives. He said:

Operational capabilities must be the prime determinant in deciding which aircraft Australia should ultimately acquire.

The key words there are ‘operational capabilities’; in other words, what the aeroplane will actually do. Backing up this statement, the Chief of the Defence Force Staff, Admiral Sir Anthony Synnot, in the Pacific Defence Reporter in September 1980, stated:

The aircraft selected will need to meet our particular strategic and military requirements. The roles we see for these aircraft are air defence, maritime strike, interdiction and tactical air support.

I refer briefly to some general characteristics of the two aircraft under consideration and relate them to the Minister’s statement. It helps to go back to the original design concept of both air craft. I deal first with the older aircraft, the FI 6, which was designed as a simple, dog-fighting aircraft of minimal cost but which used high technology and which was armed with short range infra-red weapons only. It grew out of the attacks on the United States Air Force in Vietnam by MiG 17s which were limited by being armed only with infra-red weapons. The whole concept is compatible with the short range, dog-fighting mode. The radar fit is compatible with it and the aeroplane was built down to a scale to provide for this need.

The ground attack capacity of the aeroplane was a secondary function, but it turned out to be quite good in this mode. It carries a good bomb load over an effective distance. But it is esentially a fine weather, daylight aircraft both in the airtoair fighting role and in the air-to-ground or airtosurface attack mode. On a day like today in Canberra many aeroplanes would get past it if it had to operate in the sky above us. Most importantly, this aeroplane was designed never to stand alone, and no air force has bought it to stand alone. It was part of the high-low mix concept for a big air force, lt was built to operate with the McDonnell Douglas FI 5 which would provide the target acquisition and the tactical intercept control and defend the FI 6 if the attacking aircraft were equipped with medium range weapons.

The F 1 8 came later. It was the first aircraft ever built from the outset for both air superiority and air-to-surface modes. It has a full weapons fit, including a medium range missile which is a standard fighting weapon and has been over the last 20 years. It is an all-weather aircraft both in the surface attack and in the air-to-air mode. It needs no modification at present to satisfy the operational requirements of the Royal Australian Air Force.

The air frames of both aircraft do have problems, but the nature of those problems is quite different. The principal defect with the FI 8 is a slow rate of roll arising from a lack of authority in its control surfaces and some wing flexibility. It incorporates new technology in Service aircraft in the bonding of graphite epoxy structures to metal. This is a technique that has been used, probably for 30 years, with civil aircraft. Having had some experience in materiel science, I can say that the technique of epoxy bonding is not new and is well proven. There are really no grounds for conservative questions about the integrity of the bond strength and long life of bond strengths when the bonds are properly fabricated. On the other hand, the FI 6 is a very small aeroplane and one of its problems is its aft centre of gravity which limits the angle of attack at which the aeroplane can fly. There are proposals to increase the horizontal tailplane by 30 per cent to give the aircraft better control in some parts of the flight envelope, but that is a major engineering exercise. So far as I am aware, there has been no authorisation of funds for this program.

There is a big difference in the engines. The FI 6 is a single engined aircraft. This can be compared with the twin engine design of the F 1 8. The engine in the FI 6 is a brilliant design. It is right on the limits of available technology. Unfortunately, it has a record of unreliability because of blade failure and stall stagnation. It is not true to say that it is a new engine because it has been flying since 1972 in the Fi 5 aircraft. In that case, a twin engined installation is used. I do not doubt that in time the engine will become more maintainable and more reliable, but the fact remains that because of its design it will always be very expensive to maintain and will have a relatively low time between overhauls for a turbo-jet engine. On the other hand, the General Electric 404 engine in the FI 8 is conservatively designed and has a very impressive flight trial record. It promises to give a very long time between overhauls and a low operational cost.

Senator Cavanagh:

Mr President, I raise a point of order. Will you rule whether Senator MacGibbon is in breach of Standing Order 406? He is reading a speech to the Senate.

Senator MacGIBBON:

– That is, with respect to Senator Cavanagh, a load of nonsense. I have not read the speech; I am well aware of Standing Order 406. It is not often that I speak in this place, but when I do I prepare my notes beforehand and have some aides-memoire before me so that I do not unnecessarily waste time of the Senate.


– Order! There is no point of order. I call Senator MacGibbon.

Senator MacGIBBON:

– The important thing about the installation in the FI 8 is not only that it is a conservative and reliable engine but also that it is a twin engined installation. I wish to quote Brigadier-General Charles Yeager, who was the United States Air Force director of flight safety before his retirement. On a program shown on Australian television on 6 July this year, he said:

Engine caused accidents were six times greater in single engined than in multi engined aircraft.

That is very important to Australia. We want to run this fleet for 25 to 30 years. The attrition rate of a single engined aircraft is very high.

The radar fit of the aircraft is the heart of the matter. A major part of my speech in the early part of this year was involved with the technology of that, and I do not propose to repeat it. The point I make is that the standard by which all air to air radars are judged is the radar in the FI 8. That applies for the surface attack modes as well. Basically, it is a very powerful set; that gives the radar its range. The signal returns go through a computer, a programmable signal processor. The software programs give the radar its great flexibility. On the other hand, the FI 6 radar is basically built for a limited range and a limited task. It is an excellent radar for what it is meant to do, but it has a limited range and a limited number of functions. Any improvements would require major engineering. Two weeks ago, $25m was allocated to Westinghouse to do a prototype update for the installation of a programmable signal processor and a dual mode transmitter. I am sure that that company will come up with a very good radar; but basically the laws of physics apply, whatever the company. Given the small antenna size and the small fuselage of the F 1 6, it will never have the performance of the Hughes AN-APG 65 that is fitted to the FI 8. That is really the crux of the matter.

Along with the consideration of the radar fit one has to consider the weapons, because the two work as a system hand in hand. The standard air to air fighting weapon since the early 1960s has been the medium range air to air missile which once operated to a distance of about 10 nautical miles. The distance has increased for the latest generation of weapons to 25 nautical miles. The Mirage aircraft, which we have had for a long while and which are fitted with Matra 530 weapons provide this capacity. The FI 8 is fitted with the AIM7F, which is the current generation medium range weapon. The FI 6 does not have this facility and it is not a simple matter to fit a medium range weapon to it. The weapon has to be carried somewhere - perhaps on a wing pylon which will have a drag penalty - and the radar fit has to be brought up the standard required.

In summary, the FI 6 is a very good little aeroplane when it is part of a large air force, but it does not have the requirements that the RAAF needs at present. It does not have a beyond visual range capacity and an all weather capacity. Although there are proposals to rectify all these things, they must be seen in that light; they are paper proposals. The development, engineering, fitting and proving of them takes us down the line three, four or five years. It is impossible to know what will come out of it. If we go down that path the assessment program so far will have been wasted. We might as well take an F5G aircraft, which is also a paper aeroplane, or the Mirage 2000 or Mirage 4000 aircraft. Anyone who looks at the matter judiciously will have to say that the only acceptable aircraft at present is the FI 8.

Two other factors must be considered. The first is cost and the second is growth potential. The Government has made budgetary allocations for the years ahead. This purchase has been foreseen for many years. But there is a great deal of misapprehension in the Press about the prices being quoted for the two aircraft. That is understandable because a variety of prices are quoted for aircraft. There is a fly-away cost, which is the basic cost of the airframe, engine and avionics; a procurement cost, which is the fly-away cost plus the immediate spares and ground support; a program cost, which is the cost for the procurement plus a research and development component; and a life cycle costs, which is what it costs to buy the aeroplane, fuel and weapons and to keep the aircraft in service and pay for the manpower to operate it through however long it is run. The life cycle cost is the only cost which concerns a national government. On the basis of the life cycle cost, the FI 8 aircraft is the same price as or cheaper than the FI 6. The difference comes from the rate of attrition, which we will not know until the aircraft go into service.

The second factor is the capacity for growth. We will use this aeroplane over 20 or 25 years and no one can foresee what changes in armaments and electronics will come along in that time, lt is essential that this aeroplane can go through major modifications and still be useful to us. There is plenty of room for growth in the FI 8 but at the moment the FI 6 is right on its limits. It has no capacity for major redesign. The Aviation Week and

Space Technology, an American technical magazine, on 21 July this year put out a serious proposal, with drawings, for the F16XL which provided for a new double delta wing and two fuselage station inserts to give the aircraft, among other things, more space and a greater range. It is not being unkind to the F 1 6 to say that it is rather like a sausage; a lot of sausage meat stuck into a very tight sausage skin. It does not have the capacity to grow and develop through the years without major engineering changes.

I can see that the Government requires some courage to make a decision at this time because neither of the aircraft is fully developed. In that sense, neither of the aircraft is fully proven. But I think it is a reasonable assumption to judge the companies on their performance records as engineers.

Two companies stand pre-eminent in the aviation world. The Boeing company is recognised as the standard for engineering excellence and engineering performance in the civil airline and transport field. In the military aviation field, McDonnell Douglas stands alone. From the Phantom I through to the Voodoo, the Banshee, the Phantom F4, which was the most famous jet fighter built, the F 1 5, which is now the top state of the art pure fighter, and the FI 8, the company has a record of achievement and performance that no other company can match.

Senator Georges:

– Who produced the Fill?

Senator MacGIBBON:

– General Dynamics did- the organisation that is producing the FI 6. The only possible justification I can see for buying the FI 6 is if someone makes a case for a lower operational requirement; in other words, if someone makes the case that at the present time no aircraft in the region has a higher capacity than the basic day weather capacity of the F 1 6. 1 do not believe that that is a valid assumption.

Ever since 1945 the Russians have shown an ability to transfer aircraft and aircrew around the world at short notice. In talking about transferring aircraft and aircrew, we are not talking about a period of six months or six weeks; we are talking about a period of less than 24 hours with in-flight refuelling. The Russian pattern in this is quite clear. In Indonesia at confrontation, in Egypt in the wars in the Middle East, in Vietnam and Korea, they showed a readiness to put Russian aircrew into aircraft, irrespective of the nationality signs painted on the side of the fuselage. So it is not valid to look at the matter on a regional basis when making an assessment of the needs for air power.

That brings me to a lesson in history. In 1937 the Royal Australian Air Force found itself in a position of wanting a fighter aircraft. A decision was made to build that aircraft in Australia. The aircraft selected was the NA33, which was developed to become the Wirraway. In 1937 the RAAF had an opportunity to buy the Spitfire, the Hurricane and any one of a dozen United States designs which later became famous in the Second World War. Those aircraft included the Lockheed Lightning, which was the preferred aircraft used by General Kenny’s United States Fifth Air Force in the south-west Pacific area. We passed all of those over because we perceived that the threat facing Australia in 1937 was far less than the potential of those aircraft which we could have bought.

In December 1 94 1 we had seven front line squadrons of fighters. Every one of those seven squadrons was equipped with Wirraways. At the time we had no other aircraft in Australia with that capacity. Sir Edward Ellington, Marshal of the Royal Air Force reported to the Royal Australian Air Force before the War that they were inadequate for the task. Yet they were the aircraft we had to defend this country, our territory and our people in 1941 . We paid a very tragic price for that. How many aircrew - pilots and gunners - died in Wirraways? How many more died in Hudsons and Catalinas? Hudsons were used to provide the air cover and support for the Catalinas which should have been provided by fighters but which could not be provided by Wirraways. How many people, members of the Army and civilians, were killed on the ground because the essential air superiority could not be maintained in New Guinea, Darwin and Broome? Those aircraft probably were a significant factor in the military strategies for the Japanese proceeding beyond the oil fields of the Dutch East Indies, as they were then. They saw that we could mount no threat against the Zeros and other aircraft they had at the time.

We in this chamber might differ on the priorities we place on the assignment of capital towards the Australian armed forces, but I do not believe that one honourable senator here would want any member of the Australian armed forces, if called upon to fight a war, to fight with less than an equal chance with respect to equipment. I believe that if we delay this decision we will be in a situation parallel to the situation which existed in 1937 and 1938. 1 do not believe that the decision can be deferred. I do not believe that a decision to accept an aeroplane with less than the operational capacity defined by the Minister is a prudent or supportable move.

Senator Cavanagh:

Mr President, before I move a motion to this effect, I ask whether Senator MacGibbon is prepared to table the copious notes from which he read.


– Order! Senator Cavanagh, I have been listening to Senator MacGibbon’s speech. He has a lot of expertise in the area he covered. His remarks were highly detailed, but I do not think he had a document in front of him when he spoke; rather, he had his notes. Therefore, I do not think your suggestion is valid at this time.

Senator Cavanagh:

– Obviously they were prepared by an aviation company.


– Order! I have ruled on the matter.

Senator COLSTON:

– In some respects, after the previous speech I will be coming back to earth because I want to speak about coastal surveillance in Australia. I will outline some of the difficulties we face in Australia and how the Government may be being defrauded at the moment by some coastal surveillance activities which are being undertaken. As we all know, Australia faces an enormous task in patrolling its coastline. We have a coastline of about 1 2,000 miles in length and a maritime area of about two and a half million square miles. Some people have contended that because we have such an enormous coastline and maritime area the task is too big to have 100 per cent surveillance. On the other hand, there is no reason to use the enormity of the task as an excuse for not providing effective protection for Australia. We all know that effective surveillance is very important. One important aspect, of course, is the military aspect and another is providing security for our country. As well as that, surveillance is necessary to protect against illegal migrant entry, the illicit entry of drugs, smuggling and the transmission of disease.

Some honourable senators may recall that the issue of coastal surveillance was explored extensively in the Royal Commission of Inquiry into Drugs. Obviously, the prime interest of that inquiry was the need for effective coastal surveillance to prevent illicit entry of drugs. After exhaustive research, the inquiry concluded that the present coastal surveillance was inadequate. I give a couple of examples of how ineffective coastal surveillance has been. Earlier this year shipwrecked Taiwanese fishermen on northern beaches were not discovered until they wandered into a settlement in the area. A dramatic illustration of the inadequate nature of coastal surveillance was given in evidence to the Royal Commission. It was of special interest to me because it indicated that coastal surveillance was so inadequate that a Taiwanese fishing boat entered the Brisbane River and ended up very close to where I live.

Senator Grimes:

– It even got past Breakfast Creek?

Senator COLSTON:

– Yes, it went past Breakfast Creek. I outline what the Royal Commission of Inquiry into Drugs said:

A Taiwanese fishing boat went up the Brisbane River just some months ago. lt went past the quarantine station, lt went past the Navy and the Customs offices and it went past the Water Police Station, but was sighted up the river and that is when the alarm went up. lt was stopped near the Toowong reach.

The Toowong reach is about 20 to 25 kilometres from the mouth of the Brisbane River. The Taiwanese vessel got up the river that far. If it had gone another five kilometres the Taiwanese fishermen would have been able to step out and have afternoon tea at my home.

Senator Mulvihill:

– We will have to do a Churchill and fight them on the beaches.

Senator COLSTON:

– It was not quite on the beach; it was further up the river than that. During the Royal Commission hearing, the question was asked:

Where was it going?

The answer was: lt had sailed right around the top from Darwin, and using a school book atlas, fished all the way on the maps that he had in his atlas showing good fishing spots, and they lived on board. It took them about three months.

Despite the fact that we chuckle about the incident at the moment, it is a serious matter when our coastal surveillance is so poor that a vessel such as that can be 25 kilometres up the Brisbane River before it is stopped. Another good illustration of the lack of effectiveness was the number of Vietnamese boats which arrived in Australia undetected even though they were trying desperately to be seen. They had signs ‘SOS Vietnamese refugees’ painted across their decks.

I should like to have look at where the responsibility lies for coastal surveillance. Several departments are involved in the present coastal surveillance system including the Department of Defence, the Department of Primary Industry and the Bureau of Customs. The Minister for Transport (Mr Hunt) is the Government’s spokesman on the nature and adequacy of civil coastal surveillance. In June 1978, the Minister for Transport announced new Government policy covering coastal surveillance of the north Australian coastline. One of the new measures announced was the use of private companies to perform aerial surveillance. The current allocation of contracts is as follows: Executive Airlines Pty Ltd, Northern Airlines, Bush Pilots Airways Ltd, Reprographics Pty Ltd and Trans-West Air Charter Pty Ltd. These are the firms that have contracts to perform coastal surveillance for the Australian Government at the moment. Transwest Air Charter Pty Ltd is a foreign-owned company. Even though it is foreign owned, it is responsible for 3,200 kilometres of coastline. I mentioned earlier that I thought that the Australian Government might be being defrauded in some respects in relation to the coastal surveillance that is being carried out at the moment, lt has been seen not only by the comments that I have made this afternoon but also by many previous comments that the present surveillance system is ineffective. Why is this so? Perhaps at least part of the reason relates to the performance of charter companies entrusted with the protection of our northern coastline.

Certain allegations have been made to me concerning these companies. These allegations are serious enough for me to bring them before this Parliament. The allegations were made to me by a former employee of one of those charter companies. In relation to coastal surveillance, this former employee claims, amongst many other things: first, that log books are falsified; secondly, pilots are inclined to avoid certain areas which they should survey and, therefore, are plainly shortchanging the authorities; thirdly, some operators are using the surveillance flight times to train their own pilots and to make up their hours which is done to the detriment of actual survillance; fourthly, there is no effort to patrol the coastline in its entirety; and, fifthly, public servants such as those in the Bureau of Customs and the Department of Primary Industry are deterred from flying in smaller aircraft en route to other centres in the Gulf and the Cape because they are an apparent embarrassment. The person who spoke to me about these matters suggests that observers should be government employees, not employees of the air charter companies. This seems to be an obvious and necessary step. If these observers were government employees, they would be able to see quite plainly whether the surveillance was being carried out in the way that the charter companies were supposed to carry them out.

Obviously, from the comments that have been made to me, the Government is being shortchanged. Not only is the Government being short changed but also the people of Australia are being shortchanged because the surveillance of our coastline is not being carried out as we expect it should be carried out. It is futile for the Government to speak of upgrading our defence when it seems to be placing such a low priority on an integral part of our national security. I suggest that the Government should look closely into our system of coastal surveillance. I suggest also that measures be taken to ensure that the Government is not defrauded in its efforts to carry out coastal surveillance.

Northern Territory

– I take the opportunity on the first reading of the Appropriation Bill (No. 1) 1980-81 to raise three interrelating matters which deal with the philosophy behind the Appropriation Bill. I will talk in general about government policies in three years. I think it is appropriate to do that on the first reading of the Bill rather than on the second reading of the Bill because 1 wish to speak in broad terms. The three matters I wish to discuss are grants for children’s service unemployment and the reunification of families from East Timor. As is my custom and I believe my role I will look at these matters in terms of the Northern Territory. I will highlight the effect of Government policy and, hence, the philosophy in those areas, quoting individual cases to make my point.

I move first to the general area of grants to children’s services. Honourable senators will notice in the Budget Papers that the allocation for this year is $69m which is the same as the allocation for last year. It is the same figure, of course, as that granted by the Labor Government in 1 975. Inflation means that the people have since suffered a loss of 56 per cent in value if the needs have remained the same. My contention is that in this area in particular, as in all areas of government spending, we should respond to needs. I well recall that the Minister for Social Security (Senator Dame Margaret Guilfoyle) talked of needs when she said:

This Budget is for those most in need.

Obviously at the back of the Minister’s mind was the thought that the Government should meet needs. I wonder, though, whether our concept of needs is the same as the Minister’s concept. The Minister appeared to believe that quadriplegics should not automatically get the pension.

Senator Dame Margaret Guilfoyle:

– That is not true.


– From my reading of the situation, I think that the Minister took the advice of Mr Hulme, Q.C., who said: ..

Very few people are so handicapped as to be totally incapacitated for work.

Senator Dame Margaret Guilfoyle:

– That is not what you just said.


– Be that as it may. I accept that quadriplegics can be trained for work and it is certainly desirable that they be trained. That comment is hardly relevant in the area of high unemployment. One can imagine the ludicrous and cruel situation of a quadriplegic being wheeled into a Commonwealth Employment Service office once a fortnight, amongst the queues of able-bodied men and women, to indicate that he is trying to find work. It seems to me that this is a callous disregard of the needs and feelings of quadriplegics.

Let us look at whether the Government is meeting the need in a changed situation. The changed situation I suggest is that the policies of the present Government have put a burden of tax on those least able to pay. The Government has created a situation in which more people require assistance. I believe that the Government has a responsibility to meet those needs. I want to examine one case in particular - no doubt it could be duplicated in many places throughout Australia. I wish to talk about family day care in Darwin. The present situation in Darwin is that 300 places are funded and Darwin family day care centres look after 416 children. In other words, they look after 1 16 children more than they receive funds for. I understand that the normal arrangement is that, when the group reaches 75 to 80 places above the funding level, the suggestion is made that another centre be established. The need for this third centre has been seen by officers of the Department of Social Security, including Mrs Coleman. The Department also sees the need for advisory staff to assist parents, to assist the minders and to assist others involved. No action has been taken on this third centre. The reason given is that it has low priority. One must assume that it has low priority within the funds available. In other words, insufficient funds are available.

I have made the point in this place many times that Darwin has special needs. Only those people who have been there and who have had a look at the place can appreciate this. I appeal again for further funding in this special case. Let me just quickly go through some of the reasons that have been put to me for the Darwin family care centres needing more funding. In the Northern Territory and in Darwin in particular there is a lack of relatives and extended families to provide care. Down south quite often there are grandmothers, aunts and others to whom the children can go. We know that in the Northern Territory the population is such that there are not the grandmothers and the aunts to do these jobs. The second reason is the high cost of living, including the high cost of rental housing. Of course, the natural corollary is that if we have a high cost of living, including rent, either the husband has to out and look for a second job or the wife has to go out and look for a job so that there is sufficient money to cover household expenses. I think it is a fallacy of the present Government to suggest that many women go out to work because they particularly want to. Some do, but in many cases in Darwin, particularly where there are families with younger children, the women go out to work because they need to. Present child care facilities do not have vacancies. In fact, a short time ago 82 children were on the waiting list of the child care facilities. The only alternative to this, of course, is the family day care centres.

I have mentioned before the high percentage of young families in Darwin. Eighty-five per cent of the population is under 35 years of age. The age distribution graph shows a bulge for those people in the 0 to 5 years and 19 to 25 years groups. Obviously, this will mean more young families and more children. Family day care centres cater for shift work and emergency care. The one institution that was operated by the Government, known as Dundas House, has closed; so the family day care unit is being approached for 24-hour care for up to 28 days. This is a responsibility not only of the Northern Territory Government but also of the Department of Social Security. With the increasing number of refugees and migrant parents learning English, family day care is called upon to provide child care. Eighty-two children from single parent families are in care at the moment. The Northern Territory has the highest percentage of benefit recipients, such as those on supporting parents’ benefits or widows’ pensions, from the Department of Social Security in Australia. I put it that it is the responsibility of the Department of Social Security to meet these needs. It is the responsibility of this Government, through the Department, in consultation, of course, as the Minister has always done, with the Government’s colleagues in the Legislative Assembly. I put it to them that the present situation is that these needs are not being met. I ask the Minister to look at the special case.

I move now to the area of the unemployed. The broad issues here have been most competently covered by my colleague Senator Grimes. Let me just remind the Senate of some of the features to which he drew attention. I mention only three of them; he mentioned many more. I look, firstly, at the area of the unemployed without dependants. We all know, of course, that this benefit has been frozen since 1978. The increase of $2 a week is niggardly and, as the Melbourne Age described it, derisory. Senator Grimes made the point that the people in this group are $10.65 a week worse off than pensioners. Since many of these people are middle-aged they have the same needs as the pensioners. I look, secondly, at the group under 1 8 years. I understand from the figures available that there are 57,000 of these people in Australia. These people are to be kept of $36 a week, a figure unchanged since 1975. Of course, as has been pointed out by other speakers this means that the benefit has lost 63 per cent of its value because of the rate of inflation since that time. The figure of $959m in Appropriation Bill (No. 1 ) is based on a weekly drop of 6,300 beneficiaries. Since the Treasurer (Mr Howard) predicts that unemployment will rise, either we are seeing a fiddling of the books to make the case look good or we will expect tougher measures against the unemployed.

Those who saw the Four Corners program on Saturday night - I do not mind giving the Australian Broadcasting Commission a plug - will recall the rationalisation that Mr Sinclair made that things are not a bad as they seem, that the unemployed, particularly this group, the younger unemployed, can always pick up a few dollars in what he called the cash economy. He was suggesting, of course, that people would go out and get a few dollars from an employer who did not bother to keep books. In other words, a person could go to work for a hotel and get $20 a week and neither the employer nor the employee needed to bother to record this. We are getting a suggestion that both groups are being encouraged to break the law; it is not tax avoidance in the large sense that we are so worried about. Nevertheless it seems an incredible comment for a Minister to make - we do not have to worry about these people too much because they can always get out and make a few dollars in what he called the cash economy situation.

Senator Walsh:

– Who said they were tax avoiders?


- Mr Sinclair made that statement. I ask whether the allowance in the Budget is adequate to meet the needs of the people. I have to say that from the Northern Territory’s point of view it appears not to be the case.

Let me give the case for the Northern Territory. In June 1980, the proportion of unemployed people in the work force was 10.26 per cent. The proportion of the work force that was in receipt of unemployment benefit was 6.06 per cent. If the 10.26 per cent is a complete figure, if it does include all the unemployed in the Northern Territory, the figure is scandalous. The situation is even worse if we recall, of course, that it is not the complete picture. Many Aboriginals are not enrolled for the benefit, particularly those in the outlying areas. One must ask whether a shortage of staff causes them not to be enrolled. I am not looking here at the Community Development Employment Project figures. They are not added, although the money comes from the same bin. Let me make the point that I am not knocking the CDEP. I have been a keen supporter of the scheme. I mentioned the need for such a scheme, I think, in my first speech here in 1976, when no such scheme was operating. I see it as appropriate. Nevertheless, if we are to look at the situation of the unemployed we must keep those figures in mind. In the Northern Territory a large number of migrants are not enrolled. The Asian families, particularly, look after their own people who are unemployed. The Government is quite happy to accept that the families look after their unemployed and those who need assistance but it is not prepared to accept its responsibilities in the immigration area. 1 will come to that matter later. Married women are not enrolled; they should be. As I indicated earlier, they are required to work. They are not working through choice of finding something to do. They are working because they need the money on account of the high cost of living. The high cost of living obviously, if we continue the argument, is the result of the Government’s policies, particularly the petrol pricing policy, in the Northern Territory.

I will not go over the effect of unemployment on young people. I think this has been canvassed many times. I have referred to the work done by the Australian Council of Social Service, the Young Men’s Christian Association, the Brotherhood of St Laurence, and so on. I will not canvass again the disastrous effects of unemployment on young Aboriginal people. In the Northern Territory we can see the total disruption of some communities by alcohol. It is agreed by most of those who have looked at the situation that alcohol is often taken because of the person’s low esteem. A person will drink just to get drunk, not for the pleasure of drinking. A person will drink because of his or her low esteem or because of some of these other factors which cause such a person to feel ‘shame’ in the Aboriginal sense of the word.

We know that one of the major causes of this low esteem of the individual is the fact that he or she is not employed. We have a Budget policy in this area, as in so many others; but I see it as part of the overall policy. The Northern Territory has had a contractionary policy over the past five years. We have had a decrease in public sector spending. Of course, this has had its effect both directly and indirectly through the multiplier.

I look in this last section of my contribution to two areas in the general field of immigration and ethnic affairs. 1 look, firstly, at the loans to voluntary agencies for refugee settlement assistance and then at maintenance of the unattached refugee children. In 1979-80, $400,000 was made available for refugee settlement assistance and nothing was made available in 1980-81. In 1979-80 no money was made available for unattached children, but in 1980-81 there is an amount of $470,000. It may well be that there has been a movement within the vote. I have no evidence of it. Obviously we cannot attend all the meetings of the Senate Estimates committees to find out. On first sight, looking through the documents, it is disturbing. Does the fact that there is no loan money mean that there is no assistance? I think that you, Mr Deputy President, would support my view that a loan should not be made to voluntary agencies; a straight grant should be made.

It is strange how the Government seems to prefer most of this activity to be in the voluntary sector. It wants to see assistance given through cake stalls and chicken raffles. The thought seems to pervade many Government supporters that it is somehow good for members of a community to work together to raise money for these causes. That may well be, but unfortunately it is so often the widow’s mite that contributes, and it is almost always the same small group which does the work. I fully support government assistance to these groups. Obviously, if government assistance is given the time of the agencies is not wasted on fund raising and is more profitably spent in doing the work they set themselves up to do. The burden then will be shared among all the taxpayers provided that the tax policies are fair. I hope that the Minister can assure the Senate that assistance has not been withdrawn.

The area of maintenance of refugee children begs the question: How many parents of these children are overseas? Would it not be more appropriate to bring the parents to Australia rather than maintain the children here? I do not want to hear any nonsense about sending the children back to their parents. If they are refugees, they are refugees for a good reason. They are here because of the unacceptable conditions in their own country. We do not want to say: ‘All right, we will send the children back to East Timor to be with their parents’. That brings me to the whole question of the reunification of families, and I will take my example from East Timor because of its relevance to the Northern Territory and because it is a particular interest of mine. I have raised this matter many times before, and of course so have other senators. It is the subject of volumes of correspondence with the Minister for Immigration and Ethnic Affairs (Mr Macphee). I have to say, in fairness to the former Minister, that I have had some very good responses to the appeals 1 have put to him. I have to say also that unfortunately the situation has tightened up over the last 1 2 months.

Today I want to look particularly at the inappropriateness of the device- I can call it nothing else but a device- of saying that the person being sponsored ‘must be the last remaining’. In other words, he must be the last remaining member of the family not living in Australia. I will demonstrate the problem with one case, and no doubt this could be duplicated many times throughout the rest of Australia. It is one of many. I make a call to the Minister for some sort of flexibility in this arrangement. In doing so I restate my plea, which I have made many times, for the recognition of refugee status for people from East Timor.

Let us go very quickly over the situation in that sad province. Since 1 974 East Timor has experienced, firstly, internal conflict to gain independence and majority rule and, secondly, invasion by Indonesia, which involved a war and all the atrocities that go with war. Since the invasion East Timor has suffered continued unrest, subjugation and disruption of the entire community. There appears to be discrimination - I have been given this information by many people and by correspondents from Timor - against those Timorese people who are of Chinese extraction. I can put forward reasons for this, but perhaps it would not be appropriate to do so. The other matter which is associated with the continued unrest following the Indonesian invasion is the corruption of the officials who work for the Indonesian Government in East Timor. We all know of the high cost associated with what might be called normal migration. A set figure is payable to get out of Timor and into Jakarta and another set figure is payable to get from Jakarta to Australia. I draw attention also to the reluctance of Indonesia to allow migration out of the country, whether it is from East Timor, which Indonesia regards as part of the country, or any other part of Indonesia. It certainly does not want to see too many people coming out of East Timor and commenting on the situation there.

Before we consider the situation of the last remaining member, we have to remind ourselves that after the disruption in 1974 - the invasion and the war- people from East Timor were scattered all over the world- some in Portugal, some in Macau, some in Timor and some in Indonesia. It is understandable that families would be broken up in this way by war. Let me illustrate the inappropriateness of this device of the last remaining member by referring to the case of the Sin family, a Chinese ethnic group in Timor. The person to whom I should like to refer is Sin Kui Va, a man who, since he became naturalised, is known in Australia as John Sin. He entered Australia as a refugee in 1976. He became naturalised, married and worked very hard to raise the bribe money to get many members of his family out of Timor. It was the pleasure of my office to be able to give some assistance, and I give credit to the assistance given by the Minister of the day, particularly in a number of cases which were fairly difficult. I will not go through the frustrations and the problems associated with the case, but eventually, one or two at a time, John Sin managed to get the members of his family to Australia.

The present situation in his family is this: A father of 77 years of age is living in Australia; a mother of 62 is living in Australia; a brother of 36 is single and living in Taiwan; a sister of 35 is married and living in Timor; a sister of 30 is married and living in Macau; a brother of 40 is married and living in Australia; John Sin is 24, married and living in Australia; a brother of 20 is married and living in Australia; a sister of 18 is single and living in Australia; and a sister of 16 is single and also living in Australia. To sum up, the father the mother and five children, with the families of those who are married, are living in Australia. The single brother who is living in Macau wants to join the family and the sister who is married and living in Timor wants to join the family. The sister in Macau does not want to come to Australia, and that is understandable because she has settled down with her husband in Macau. They have a business and they are living there quite happily. The emphasis in the application has been on the brother because the brother is a single man of 36 years of age who is separated and living completely apart from his family. He is needed here not only to be with his family but also to help support the aged parents. I wonder whether the Minister really appreciates the solidarity of Chinese families and the way in which they help one another. I think this is a key element in the whole matter of reunification.

The reasons given for the refusal of the application were, firstly, that there is a sister in Macau, yet it is quite clear - it has been indicated in correspondence - that the sister does not want to come; and secondly, that there is a brother in Taiwan. The correspondence also made some reference to an adopted sister in Timor, but that is not so. It was the misunderstanding of an original letter. The so-called adopted sister is the daughter of a former employee, an indigenous Timorese, and there is no relation to the family. The family simply looked after the child, now a young woman, when both parents died. The question might be raised as to why the sister in Macau is not interested while the sister in Timor is, although I do not think that we need to develop that point too much. We understand that the situation in Timor is such that people do not want to live there. They want to get out, and they see themselves as refugees in the land of their adoption. I have already mentioned the discrimination against the Chinese, and evidence of this could be produced. It has been my wish that the Minister and his officers could see the situation for themselves - not by going on a guided tour, such as the Americans who came back with that extraordinary report were given, but in a way that would enable them to make a real assessment. I am sure that if they did this it would overcome the callous disregard of the officers - I am sure it is only the officers and not the Minister - to these people. Certainly, I am not allowed to go to Timor. I have tried many times and I have read in this place some of the replies I have received.

I have no objection to attacking the country the Government calls our friendly neighbour, a country the Government is quite prepared to supply with arms and assistance, a country we seem to be committed to appeasing; but I will not do so. The only reason I am not doing this is that I think it may cause some deterioration in the situation of the refugees. I do not want any further cutbacks in the numbers of refugees allowed to come here. We all recall that originally 2,500 people indicated that they wanted to come and pleaded to come here. Only a handful of those people have been allowed to come. I do not want to exacerbate this discrimination any further. My concern is with those involved. My wish is to see reunification of the family. The present Government talks about reunification but it does not practise it. It is to the eternal shame and discredit of Australia that we have treated the Timorese people as we have. There is no need for me to go over the ground that Senator Primmer, Senator

Kilgariff and Senator Missen - in other words, honourable senators from both sides of the chamber - have covered in the comments that they have made about these people.

I cannot understand why there has not been a stronger call from the Returned Services League and from other ex-service bodies. In fact, one is drawn to the cynical conclusion that probably the people in East Timor would be better off if the Indonesian Government were communist. There is a saying in Darwin - cynical, nevertheless it is said - that it is all right if you come from Vietnam or if you wear red bikinis; you can get in. I plead with the Minister to get the facts, to understand the plight of the East Timorese, to see them as the real refugees that they are and to assist in their reunification. All refugees, of course, merit our support; but I believe that separated families have a special case. I call on the Minister to respond sympathetically, not just to the individual case that I am raising, because I do it purely by way of illustration, but in the framing of his guidelines. Surely, the reunification of families - people - is more important than the appeasing of Indonesia and the lure of the oil fields.

Senator CHIPP:
Leader of the Australian Democrats · Victoria

– I take the opportunity of speaking on the Appropriation Bill to discuss several matters. Firstly, I want to speak about the thrust of the economic policy of the present Government and, secondly, I want to refer to the violation of human rights that is taking place throughout the world today and what Australia could do about that. I was interested to hear Senator Robertson give a very fair, and I think proper, expose of some alienations of human rights that are being conducted today very close to our borders. Thirdly, I wish to deal with some of the injustices that are being suffered now by people in rural Australia.

The Australian Democrats believe that the present economic thrust of the Government is going in entirely the wrong direction. We believe generally in the quantity of money theory, which I suppose is another way of describing the theory of the monetarists. This Government seems to have an obsession of the monetarists. The quantity of money theory which I learnt in fifth form economics is as valid today as it was then. It simply states that if the supply of goods and services is equal to the demand for goods and services, and if money is injected into that kind of economy there is too much money chasing too few goods, and the result is spiralling prices and further inflation. I do not know whether anybody in his right mind today would believe that there is any form of equilibrium between the demand for goods and services and the supply of them. There is a massive gap presently. For example, we have something like 15 per cent of our material resources unemployed and 1 1 per cent of our human resources unemployed. We very strongly believe that this gap could be closed if an injection of funds into the economy in selected industries, such as the housing industry, were made. I have read a brilliant critique of the present economic thrust of the Government from the Melbournebased Institute of Applied Economic and Social Research, released in the name of its Director, Dr D. S. Ironmonger. You will remember, Mr Acting Deputy President, that this was the body that Professor Henderson headed with great distinction for some time, a person in whom Mr Fraser, the Prime Minister, placed so much credence in many ways. This Institute, probably one of the most highly respected in the country, said:

The present budget, like its four predecessors from 1976 to 1979 is based on the economic argument that the only way to provide for growth in jobs is via the route of fighting inflation first. This argument is not supported by most economists of repute.

That is a rather devastating statement, coming from such a distinguished body. It says that the economic policies of the Government are going in the wrong direction, and that most economists of repute would agree with that. The Institute went on:

Economists of repute would support the view that it is feasible to tackle both problems simultaneously.

That is inflation and unemployment.

This is what the government has refused to do. Indeed the government has pursued policies which are contradictory. The best example of this is the crude oil levy which has accelerated inflation by several per cent (at least 2 per cent in the couple of years) in the name of reducing inflation. An extremely circuitous and fragile argument is required to support the government’s reasoning. It’s supposed to go something like this: the crude oil levy whilst putting up petrol prices 80 per cent, and the cost of living by a couple of per cent, reduces the budget deficit; this is supposed to reduce the growth of the money supply (other things being equal, which they never are); this is supposed to limit the funds available to business so they can resist the demands of labour for extra wages and so keep down wage costs and hence wages. But the damage has already been done. Costs and prices have already been inflated directly by the oil tax. One can accept conservation arguments which indicate a need for a shift in relative prices but it needs to be appreciated that this can be achieved without increasing the average level of prices or increasing the average tax burden.

The Institute concluded:

The contradictions of the current government strategy must be eliminated. A coherent policy is needed which will tackle the problems of the economy directly. Holding back price, wage and tax rises to reduce inflation; creating jobs to reduce unemployment. Such policies are available to the government. And such policies are being successfully pursued by a number of governments throughout the world right now. I need only cite the cases of Austria, Germany, Singapore and

Japan to make the point. It is not good enough for an Austraiian treasurer to say we are doing as well or just better than the OECD average. Australia’s resources of people, of institutions and of natural resources mean that we should be doing very much better than any OECD average.

I believe we have allowed Ministers to get away for too long in this Parliament with saying: Although unemployment is bad and inflation is bad, we are about average with the OECD’. As Dr Ironmonger makes the point, we should be doing a hell of a lot better than the OECD countries.

I move on to the violation of human rights that is taking place in the world today. I admire many of the speeches from both sides of the Senate chamber which condemn these violations of human rights. Such speeches should be made in the Parliament on this question. Quite often, I am sure, most Australians, even members of parliament, do no appreciate the kinds of freedoms, that we can enjoy in Australia, or the kind of hideous savagery that is going on in many parts of the world today. For that reason alone, we members of parliament, who are supposed to lead thought in this nation, ought to be speaking even more on these violations of human rights in various countries so as possibly to stir public opinion.

I am prompted to speak out by a number of current events which make this a most topical and urgent subject. I also want to emphasise the constructive actions which the Australian Government could take or which it could encourage other semi-official bodies to take. As we know, violations of human rights occur in all parts of the world and in countries with all types of political ideologies - communist states, right wing military dictatorships, and even, I am sorry to say, parliamentary democracies. They occur in the affluent nations, the poverty-stricken nations, the wellestablished nations and the newly-independent nations. Therefore, if we are to be credible in Australia we must avoid a selective indignation. In passing, I pay a great tribute to the Amnesty International group of the Parliament in which politicians of all parties get together in a non-partisan way.

I should like to refer to some recent events. First, I refer to South Korea. At this time a leading South Korean dissident, Mr Kim Dae Jung, is on trial on several capital charges of sedition, along with 23 other defendents. Mr Kim in fact stood as a presidential candidate against the late President Park in 1971, and came near to winning. For his trouble, he was arrested and gaoled. Perhaps we may infer that if the election had been fair he could have won. A great number of observers say that if corruption had not been perpetrated by the late President Park Mr Kim would have been President today.

In 1 973, while living in exile in Japan, he was in fact kidnapped by the Central Intelligence Agency of South Korea and forcibly returned to South Korea to be imprisoned. We should remember that South Korea is a country with which Australian Ministers profess to have friendly relations. It is a country which we claim as a friend. It is a country to which some time ago we were trying to sell our uranium. I think it is wise to remember the sort of double standards that we sometimes adopt in this country.

Mr Kim was expected to stand as the Opposition candidate in the presidential election promised for next year. He has made consistent efforts to oppose the regime of President Park and his successors through non-violent, constitutional and legal means. He possibly represents the best hope for peaceful political change in South Korea. Grave fears are now being held for his safety, especially since the new martial law authorities are clamping down on the last vestiges of Press freedom in Korea. Recently over 300 socalled ‘unreliable’ journalists have been sacked and 1 72 periodicals have been closed down. Censorship is particularly thorough in regard to political trials. Statements by Mr Kim and other defendants have been unreported or misreported in the Korean media. I believe that the Australian Government should make the strongest representations to the South Korean Government, calling for a fair trial for Mr Kim and the others and for the restoration of civil rights in general.

Sometimes the activities of the Minister for Foreign Affairs (Mr Peacock) mystify me. I, and I believe Senator Mcintosh and Senator Wriedt, have asked Senator Carrick what action the Australian Government has taken over Mr Kim Dae Jung. We have received the reply that the Australian Government has made known through diplomatic channels our objections to the imprisonment without trial of Mr Kim. However, when Senator Wriedt and I asked specifically whether the Minister for Foreign Affairs would make a public condemnation of the actions of the South Korean Government we received no replies. As I have said, that lack of reaction mystifies me.

Paradoxically, we see some of the same human rights violations in the case of Poland. In both Poland and South Korea workers have demanded the right to organise themselves into independent trade unions, free of government control; the right to choose their own union leaders; and the right to strike and take other actions to improve their pay and working conditions. Other key issues are freedom of the Press and the rights of citizens to express dissent and criticism of the government without risking arbitrary arrest. Of course, the greatest danger in the case of Poland is outside intervention. The Soviet Union has made for itself an unenviable reputation for suppressing the rights of its neighbours and allies, as well as of its own citizens, to solve its problems. We can witness the callous invasions of Hungary, Czechoslovakia and Afghanistan and the annexation of the Latvian states. Currently it appears that the Polish workers have won considerable concessions. I hope that these will be implemented and that the Soviet Union will not intervene in any way.

I refer to Latin America. A few weeks ago I and other Victorian senators were asked to intercede for a group of political prisoners in Uruguay, ten of whom are believed to be in immediate danger of death. One of these prisoners has relations in Melbourne. They and other Latin Americans have been demonstrating and holding a hunger strike in the hope that publicity will save the prisoners from their fate. I, and I believe other senators, have already requested the Minister for Foreign Affairs to make the strongest representation to the Government of Uruguay. The Minister has replied. I thought the reply was rather pathetic. I refer to the section headed ‘Uruguay: Plan Trelew’. That is a monstrous plan. The Minister stated:

The Ambassador–

That is our Ambassador in Uruguay - has now reported that there appears to be no evidence to substantiate these allegations and that the Uruguayan authorities have flatly denied the existence of such plans as ‘Plan Trelew’.

The Minister and the Government seem to be satisfied with the reassurance from these bestial people who now govern Uruguay. It passes my comprehension how the Government can have countless examples from people coming to Australia who have information that their relatives, for a crime no greater than holding a different political belief, are to be killed by fellow prisoners, whose only crime is again to hold certain political beliefs, and then be so naive as to say: ‘We have been told by the Government of Uruguay that everything is all right, so that is the end of that’. What value can we attach to a flat denial by the Uruguayan Government? Surely we could not expect it to admit that it was engaged in a criminal conspiracy to murder prisoners.

What other steps have been taken to investigate this matter? Sometimes I wonder how hypocritical we are in Australia to believe some little jumped up charge d’affaires in Canberra - living in luxury in our own country and telling lies about the injustices that are being perpetrated in his own country - and to give him diplomatic immunity. I think we are gutless. If that word is unparliamentary I will withdraw it, but I will not do so unless you force me, Mr Acting Deputy President. We act like gutless wonders in allowing these petty dictators to remain in Australia, to live in luxury, and to deal out their lying propaganda while men, women and children in their own countries are being tortured and put to death for no crime other than holding a different political belief.

There are strong similarities between the situations in a number of Latin American countries all of which, I might add, have ambassadors or embassies in Australia to which we give diplomatic immunity. In fact there is known to be a close collaboration between the military and security authorities, both on the methods of repression and torture and in identifying dissidents who flee from one country to another. In other words, all the murderous little despots of South America get together in a club to help each other mete out violations of human rights to innocent citizens. Brazil set the pattern in the 1960s, to be followed by Chile, and more recently, Argentina and Uruguay, which seem already to have surpassed the others in brutality. In the last few months Bolivia has joined this infamous club after a military takeover. For the sake of recording these examples in Hansard, and knowing that my speech is being broadcast, I will now give the Senate some examples of the brutal torture and inhuman acts of these monsters against their innocent citizens. 1 do it not to be sensationalistic but because one thing that we find has some impact on these dictators, these murderers, these torturers, is public opinion. If, by reading this into the Hansard record or by broadcasting it on air, I can at least get some Australian citizens to join Amnesty International, to join their local church protest about this matter, to join any form of citizen movement and write letters to the various ambassadors or charges d’affaires of these Latin American murderers in our country, I believe it will be doing some good. I have before me a document from Amnesty International. It is horrific. It states:

A suspect is arrested, often by unidentified persons, and taken away in an unmarked car. Suspects include members of political parties, trade unionists, students, academics, even secondary school pupils. But they also include people with no political activity whatever, who may be relatives or friends of other suspects. Often a whole family is taken, and babies and young children have disappeared without trace. The authorities usually deny all knowledge of the arrest, and the suspect is held in secret in one of the prisons and camps. What happens there 1 will illustrate by quoting a testimony from Amnesty International’s special report on the secret detention centres in Argentina.

For the first hour they would apply the “picana” (cattle prod) to us, without asking any questions. The purpose of this was, as they put it, “to soften you up, and so that we’ll understand one another”. They went on like this for hours. They applied it to the head, armpits, sexual organs, anus, groin, mouth and all the sensitive parts of the body. From time to time they threw water over us or washed us, “to cool your body down so that you’ll be sensitive again”.

Between sessions of the “picana”, they would use the “submarino”, (holding our heads under water), hang us up by our feet, hit us on the sexual organs, beat us with chains, put salt in our wounds and use any other method that occurred to them.

There was no limit to the torture, lt could last for one, two, five or ten days.

I find the next part to be quite sickening. It reads:

Everything was done under the supervision of a doctor, who checked our blood-pressure and reflexes: ‘We’re not going to let you die before time. We’ve got all the time in the world, and this will go on indefinitely’. That is exactly how it was, because when we were on the verge of death they would stop and let us be revived. The doctor injected serum and vitamins and when we had more or less recovered they began to torture us again.

Let me give some other examples. There are unfortunately too many cases to discuss in detail. I refer to the forcible annexation of an unwilling nation or ethnic group by a large and powerful nation. This description applies to the Baltic states when they were re-incorporated by Russia at the end of World War II after a few decades of independence. Their culture is being submerged by immigration from other parts of the Soviet Union and by prohibition of many expressions of religious and national feeling. We may compare the more recent case of East Timor where the Indonesian annexation has caused the death of at least one-fifth of the population and reduced nearly half the remainder to the condition of refugees in camps and resettlement areas. Those people are totally destitute and dependent on aid handouts. Ironically, Indonesia recently announced that Timor was designated as underpopulated for internal migration from the overcrowded central islands. This will mean that the displaced Timorese will lose their land and never be able to resettle it.

Only a few miles north of Poland, in the Sovietoccupied Baltic states of Estonia, Latvia and Lithuania, any semblance of human rights has ceased to exist. I refer to the magnificent report of the Joint Committee on Foreign Affairs and Defence regarding human rights in the Soviet Union which was tabled some time ago and to which the Minister for Foreign Affairs has still to respond. I apologise to the Minister for Social Security (Senator Dame Margaret Guilfoyle) for not paying her the courtesy of showing her the two short paragraphs- 4.19 and 4.20- from the report of the Senate Standing Committee on Foreign Affairs and Defence which I seek leave to incorporate in Hansard.

Leave granted.

The paragraphs read as follows - 4.19 The scattered Soviet minorities- such as the Jews, Germans and Crimean Tartars - are in a particular position in regard to the preservation of their culture. The Latvians, although not a dispersed nationality, also face problems of national identity. As the Sub-Committee heard three witnesses from Latvia, it was able to gain an impression of the difficulties faced by the Latvian population in trying to maintain their identity, and to make some comparisons with the problems faced by Soviet Jews. 4.20 Viktors Kalnins (a Latvian journalist who served a ten year sentence from 1 962 for his political agitation on behalf of Latvia) told the Sub-Committee that Russification of Latvia has reached the point where the national culture of the nation is threatened with extinction. He testified that the policy of Russification is being implemented in several ways; one of these is through the establishment by the Soviet Government of large industrial complexes in Latvia, which are geared to non-Latvian raw materials and markets. This is one pretext for bringing in a large immigrant work force which then receives preference over Latvians in the allocation of scarce accommodation. This in turn does not help to redress the low Latvian birth rate. Kalnins stated that in two factories in which he himself worked, only about 1 5% of those employed were Latvians. He said that there is a policy of not promoting Latvians to managerial positions and that ethnic Russians constitute the majority in the Communist Party of Latvia (CPL)2 see also Table 2-3.

Senator CHIPP:

– We can see not only that people in Latvia, as in other Baltic states, are threatened with a loss of human rights, as they are in Poland, but also that their very existence as a nation has come under threat by the colonising policies of the Soviet Union. We have practically eradicated colonialism in the West. Why do we not now turn to the task of abolishing the worst kind of twentieth century colonialism which exists in the Soviet empire? What can we do? We can speak up more often in international forums for the oppressed Soviet colonies. We can raise the matter with the United Nations Commission on Human Rights, of which we are a foundation member. We must remember that freedom is indivisible; we are our brother’s keeper. Let us use all the pressure we can muster as the Soviets respond only to pressure, as do all other forms of dictatorship.

Amnesty International recommends that the Australian Government should speak out much more strongly on human rights at all levels of international contact and at every possible opportunity. It points out that many nations, for example the United States of America and Holland, are much more determined to expose human rights violations than Australia. Amnesty also recommends the use of all United Nations channels, including conferences and relevant committees. One example that Amnesty points out is the forthcoming United Nations Congress on the Prevention of Crime and the Treatment of Offenders to be held in Caracas, Venezuela. This would be an excellent opportunity to press for humane treatment of all prisoners and the abolition of torture and the death penalty.

The recent report ‘Human Rights in the Soviet Union’ by the Joint Committee on Foreign Affairs and Defence also makes some constructive recommendations, to which I understand the Minister has not yet responded. The Committee refers to peer group pressure; for example, agitation by national and international medical organisations over the abuse of psychiatric treatment against dissidents in the Soviet Union. I suggest that such action by professional organisations should also be directed at doctors who collaborate with torturers in Latin America, as is the testimony from Argentina that 1 have already quoted. The Joint Committee report also recommends the setting up of a standing committee on human rights. 1 think this proposal should be carefully considered. It recommends using the United Nations Commission on Human Rights. To this end I add the United Nations Committee on Decolonisation for the cases of the Baltic states and East Timor. I point out that East Timor is on the agenda of the Committee for later this year.

One specific thing that we should do is cease our support at the United Nations for the Khmer Rouge Government of Kampuchea formerly led by Pol Pot. That Government has neither de facto possession nor moral authority following its destruction of about one-third of the population of Kampuchea. A change of policy by Australia, when the matter comes up at the United Nations in the near future, would be a positive step showing that Australia is fair dinkum about human rights.

I wonder whether we, as democratically elected members of this Parliament, should avail ourselves of the opportunity to demonstrate outside those embassies in Canberra whose countries are involved in the violation of human rights. Unfortunately there has been only one attempt to do so. It was boycotted by certain members because they feared that one member organising it was gaining political capital. I can understand that sort of reluctance, but surely the magnificent group in this Parliament which consists of members of all parties and members of the parliamentary staff - an Amnesty International group of the Parliament - could organise worthwhile, dignified demonstrations of members of parliament outside the gates and the doors of some of the embassies of the charges d’affairs and ambassadors who live in luxury in this country. I believe that that would have some impact. Some of these cowardly creatures who subscribe to torture and to imprisonment without trial are very sensitive to world opinion. I believe that if members of this Parliament demonstrated more often outside the embassies in a cohesive, non-partisan approach a message would get back to their governments more quickly than anything else. I believe that it is an avenue we ought to think about.

Finally, we should consider following the United States example of congressional hearings on human rights issues, particularly in connection with civil and military aid programs. Whatever we do, we must be aware that, the more vocal we become, the more we will invite scrutiny of our own human and civil rights record. That should make us even more sensitive about any accusations which may be made against us by people not properly responsible for their actions and which put Australia in a situation where it might earn some odium for its treatment of Aborigines.

Senator HAMER:

– One of the great worries I have about the institution of parliament and the way our Parliament is working these days, is that we seem incapable of responsibly discussing any of the long term problems facing us. God knows, we have a few. I understand that the members of the House of Representatives cannot do so as they are too busy scoring current debating points off each other, but surely we should be able to do better.

An important subject that we should be discussing is the direction of our economic development. This should not be a party issue. In fact the few sacred cows that we have been reluctant to touch have been even more fiercely defended by the Australian Labor Party. It is obvious that our enormous resources of energy which we must exploit both for our own benefit and for the wellbeing of the world economy will make a dramatic change in our whole economic structure. This problem is a piece of unfinished business which will be handed over from this Parliament to the next; almost perhaps from this generation to the next.

I should like to open up this debate now, for if we ignore it and hope it will go away, we will find ourselves in the same sort of mess as Britain has got herself into. Britain has an energy bonanza too - from North Sea oil. The consequent rise in the value of the pound sterling has done immense damage to Britain’s manufactured exports. I am not suggesting that this is the only problem with the British economy - it has plenty more - but it is a good, simple example of the sort of problem that this nation has not yet faced up to.

What sort of economy do we want in the future? Of course, there are some people who do not mind and who just want to drop out of the race. In a pluralist society, I do not think we should object, provided those people do genuinely drop out and do not gain a benefit from other people’s work without making a contribution themselves. Of course such people are basically selfish. For example, the average Australian farmer produces enough food to provide not only for himself but also for 33 other Australians and about 65 foreigners. Drop-outs on a rural commune are scratching to provide enough for themselves and be dammed to the other 98. Such people are, of course, in a tiny minority. Most of us want to contribute to and benefit from our whole social structure.

Where then should we be heading? What sort of broad economic structure do we want? Once we agree on that, at the very least we will be in a position to reject proposals that would damage our prospects of achieving them.

Therefore, I put forward the following principles which the Liberal Party firmly believes in: Firstly, we want full employment and low inflation. 1 do not think anyone would disagree with those two principles although, of course, there is plenty of scope for disagreement about how we achieve them. Secondly, we want an equitable distribution of income with fair rewards for initiative and hard work, while at the same time we must aim to provide better for the disadvantaged. The third principle follows from that. It is that we must have a growing economy. We all know the basic political rule - ‘You cannot take away from people something you have given them’. It is possible to redistribute a growing national income but in practical political terms it is impossible to redistribute a static national income. If we are to move towards achieving our social objectives we must have a growing economy. Finally, we must have security, through diversification, in our overseas trade income. What the Government must do - what this Government is doing - is to maintain an economic climate in which manufactured exports are possible.

I would like now to examine what is likely to happen to our trade in the next decade or so and the possible effects of various government actions or inactions on those four principles - full employment and low inflation, an equitable distribution of income, a growing economy and diversified exports. The Secretary to the Treasury, Mr Stone, in a recent speech, put the problem with stark clarity. His reasoning goes like this: Australia will be a substantial net importer of capital during the 1980s. I do not think people could possibly doubt that statement; but, in case they do, I suggest that they look at the investments in the pipeline and do their sums again. I continue the reasoning: If we want out balance of payments to be in rough equilibrium - I will come in a moment to the consequences of its not being so - our imports must exceed our exports to counteract the effect of the capital inflow. As our exports are certain to rise sharply in this energy hungry world, our imports must rise even more sharply. As Mr Stone put it, the more successful we prove to be at exporting, the more successful we will also have to be at importing, ls that not how it should be?

Senator Primmer:

– When are you going to do something else about it?

Senator HAMER:

– I am just coming to what we should do about it. If the honourable senator stays around he will hear. Is that not how it should be? After all, we do not export for fun. We want to get something in return so that the communtity as a whole benefits from the exports. But the problem is that an increase in imports at the necessary rate will not happen by chance. It will require deliberate and sustained Government policy. What happens if a government, buffeted by every windy pressure group, does nothing? What happens then? A country cannot for long run a capital surplus and a current account surplus with the rest of the world. If it tries to do so, one of two things will happen: Inflation will accelerate or the exchange rate will rise. If we rule out, as I am sure we all would, the inflationary option, that leaves a rise in the exchange rate as the only acceptable consequence of doing nothing to increase imports. But is it acceptable? As Britain has found out, the consequences would hit our manufacturers. The trouble is that the industries that will be hit hardest will be the efficient industries, the ones that can compete on the world market. The inefficient industries, the ones not capable of competing on the world market, will be largely unaffected, particularly as, with rising fuel costs, the tyranny of distance is working in favour of local industries. Surely this is the worst possible way to achieve a dynamic restructuring of our industry.

If industry is to remain viable, it must be dynamic to meet changing demands. Government intervention, whether by action or inaction, should surely be aimed at maximising the benefits to the community. We cannot permit our industry to ossify. If we want rising living standards we must follow policies which encourage our capital and labour resources to shift towards those activities which give us the best return. Failure to do this can mean only economic stagnation. The trouble is that to do nothing, to refuse to permit imports to rise, will push our industry in exactly the wrong direction. It would be a disastrous policy. What then is left? If we want our imports to rise, obviously we must reduce our barriers to those imports. I think most honourable senators would regard a debate on tariff policy as only marginally less undesirable than one on abortion. But as we have had several abortion debates, it is time we had a serious one on tariffs.

Senator Georges:

– Well, why don’t you initiate it?

Senator HAMER:

– I am just doing that, Senator Georges.

Senator Georges:

– lt is the wrong day for a start.

Senator HAMER:

– It is a very good day. Senator Georges may listen and learn something about tariffs. Of course, like the abortion debate, it will not win us friends. Adam Smith summed up the problem 200 years ago. He said:

The monopoly which our manufacturers have obtained against us . . . has . . . become formidable to the Government, and upon many occasions intimidates the legislature. The member of Parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction.

I do not think things have changed all that much in 200 years, although these days it is not only the manufacturing monopolists that intimidate the legislature; perhaps even more it is the employee monopolists- the trade unionists. But accepting the possibility of ‘infamous abuse and detraction’, I should like to encourage Senator Georges to participate in a serious debate on this subject. After all, when the Senate was first formed it was largely divided on tariff lines. There were the Free Traders dominated by New South Wales, the Liberal Protectionists dominated by Victoria and, on this issue, no less than three Labor parties - the Labor protectionists, the Labor free traders and the don’t knows. Of course, not even the Free Traders were pristine pure. How could they be when in the first Federal Budget of $21m, for a full year, just under 80 per cent was provided by Customs. By 1 909 the debate had been decided in favour of protection. The curious point is that it has never been resumed, despite the fact that Customs is now a trivial contributor to Federal revenue- less than 6 per cent.

In my opinion, it is high time the debate was resumed, for a reduction in trade barriers in the long term is our only sensible option. If we regard the inflation option as totally unacceptable and if we recognise that allowing the exchange rate to rise will force radical structural change in the most inefficient way possible, then a reduction in trade barriers, as a means of increasing imports, is all we have left. We have no other option. The proposition is so simple that it is in danger of being thought simplistic. But it is not. It is deeply true. One could imagine the patronising advice Australia would give to an underdeveloped country with such an obvious remedy to its economic problems. I must make it clear that I am not talking about a clumsy manoeuvre, such as the Whitlam 25 per cent tariff cut. The trouble with across-the-board reductions is the impact on both the efficient and the inefficient sectors.

The greatest growth in real income in Australia will not occur unless we concentrate on reducing the protection of the things we do worst. I do not think it will be remotely possible to achieve this reduction of protection, bearing in mind tremendous pressures from both employers and unions against any reduction in tariffs. It will not be remotely possible to achieve this through Industries Assistance Commission inquiries into individual industries. What we need is a high level body, say, Treasury and the Department of Trade and Resources, to assess what our likely export income will be in 1990 and what reduction in our trade barriers will be necessary to ensure a compensating flow of imports.

I suggest that although this would be a subject at which an expert committee would have to look, probably our tariff level overall would have to be about halved. The IAC then would have the delightful task of deciding on the necessary individual reductions in order to achieve the overall goal, concentrating first, of course, on the noncompetitive industries. If the IAC played its cards at all skilfully, it could have the industry groups fighting each other rather than the IAC. It is vital that this should be a long term, phased program and not an abrupt change. Industry is organised to deal with the vagaries of the market-place. It can calculate, though it hates to do it, the effect of inflation. It cannot deal with abrupt changes in government policy. We need a long term and, if at all possible, a bipartisan published program for the reduction of our barriers to trade.

Despite our tendency to lecture other countries on the damage done to the world economy by trade barriers, in a tariff Olympic Games Australia would head the medals table. In further tariff events Australia would win eight gold medals, two silver medals and two bronze medals, and would be unplaced in only one event. I seek leave to incorporate in Hansard a General Agreement on Tariffs and Trade document showing tariff rates for selected countries.

Leave granted.

The table read as follows-

Senator HAMER:

– I thank the Senate. However, I do not want to make too much of this. We should not be as concerned about how we appear on an international table as we should be about what is right for us. Although foreign trade barriers will, of course, affect our exports, the energy crisis has made our exports of energy and high energy content fabricated goods so essential to the rest of the world that it cannot put up effective trade barriers to them. So our exports cannot help going up. On the other hand, our imports are affected only by our own trade barriers. Other people’s trade barriers are totally irrelevant, lt is in our interests to lower our trade barriers whatever anyone else does. Of course, there will be consequences if we lower our trade barriers and encourage increased imports. Some industries will grow and some will fade. But this is happening all the time anyway. What I want to emphasise over and over again is that the consequences of doing nothing about our present trade barriers will be inflation, a rise in the value of the dollar, or both. Any of these consequences would have a much more damaging structural effect on our industry and much more damaging social consequences than a phased reduction in tariffs could possibly have.

What would be the consequences of a phased reduction in tariffs? Before I discuss these consequences, perhaps I should make three points crystal clear: Firstly, I hold no brief either for a sudden abrupt change in tariffs or, for that matter, for a prolonged period of uncertainty. We want tariff changes that are phased and predictable. Secondly, there must be an exception for key defence industries. By their very nature, these are likely to be uneconomic in peacetime. We cannot rely on market forces to keep them in existence so that they are available when needed. Thirdly, there may be a case for special protection for a new industry of key economic importance. This is the classic argument for protection. The trouble is that some of our industries which started in this way seem to have gone from infancy to senility without ever being able to do without their protection formula. Any special protection of this type would, of course, have to be for a limited time, with the time limits publicly known to the entrepreneurs involved in new industries. Turning at last–

Senator Lewis:

– What about key decentralised industries?

Senator HAMER:

– I am coming to decentralisation in just a moment.

The ACTING DEPUTY PRESIDENT (Senator Mulvihill) - Senator Lewis, please do not disrupt the speaker.

Senator HAMER:

– I will be quite happy to deal with that point, but I will deal with it in a moment when I come to it.

The ACTING DEPUTY PRESIDENT- 1 do not want any coaching from the sideline. We should have only one referee. Proceed.

Senator HAMER:

– I welcome any interjection from Senator Lewis. He is very interested in decentralised industries, and very properly so. Turning at last to the advantages of a phased reduction of our trade barriers to, say, half their present level, I point out that there will be a rise in real incomes in Australia, coupled with a diversion of our scarce resources of capital and skilled labour to the most productive areas of the economy. In other words, we will have a healthier and a more efficient economy. These advantages will not accrue if we do nothing about our trade barriers and allow either the dollar to rise or inflation to let rip. At best, then, we would have a stagnant economy - more likely, a declining one. Of course, there will be possibly adverse consequences if we lower our trade barriers. One must attempt to answer these questions that people can fairly ask: Where will alternative employment come from? Are not the most heavily protected industries the most labour intensive? Might not the manufacturing sector as a whole decline, giving a narrower base to the Australian economy? Would not the massive resource reallocation in the short term cause great unemployment and damaging social consequences? Of course, these same questions could be asked about the consequences of doing nothing about our present trade barriers. In that case the structural change will be even more dramatic and without an attractive eventual outcome.

Senator Georges:

– But there is an answer if we can get into the debate.

Senator HAMER:

– There is an answer and I am about to give it. Nevertheless, I will answer in turn those questions concerning tariff reduction. I will deal, firstly, with alternative employment. We are much more flexible in our employment than many people seem to think. During the 1970s, the equivalent of the entire Australian labour force changed jobs every four to five years. In the process many people changed both residence and occupation. For instance, in 1975- a year of substantial unemployment- of the 6.4 million people employed, about 1 .6 million left or were forced to leave their employment.

The mobility is there, but with one exception. That is the one mentioned by Senator Lewis, namely, the decentralising industrial problem. I will come to it in a moment. Although the mobility is there, will the new or expanded industries be there? The fuel crisis has totally changed the world manufacturing picture. We are one of the very few countries with cheap power and we have enormous opportunities if we direct our scarce resources of capital and skills to the new expanding areas rather than keeping them locked up in less efficient industries. Capital equipment is not, or should not be, a fixed asset. It should be replaced all the time. We should seek to help to move those replacements into the most productive areas.

An example of a potential export market is found in the recent IAC report on the Asian market which now provides about 2.7 per cent of total Australian employment. That is about 90,000 people. By 1990, exports to developing Asian economies could account for 377,000 jobs, with manufacturing jobs dependent on Asian markets rising from 35,000 to 135,000. This calculation is based on a projection of an annual rate of development of 1 1 per cent in the developing economies which, assuming that Australia can maintain its present share of the market, implies an annual growth of Australian exports to developing Asian economies of 10 per cent in real terms. This rate of growth is about three times the rate at which our exports have been growing during the 1970s. If this trend continues, the developing Asian market will contribute as much to our export trade by the end of this decade as Japan contributes now. Certainly the markets are there, if we are flexible with our scarce capital and skilled labour, bearing in mind the enormous advantage we have on the world scene of being one of the very few countries with cheap power.

The one exception about labour mobility that I mentioned earlier and Senator Lewis mentioned by interjection is where a country town has a single major industry. Frequently the workers have all their capital tied up in their homes and can find no alternative work within reasonable range. I will make three points about this issue: Firstly, decentralisation away from our unhealthy concentration in capital cities is desirable. But this is, and should remain, a matter for the States. For instance, it has worked in Victoria. The population of Melbourne is now rising at only twothirds of the rate of rural Victoria. The second point about decentralisation is that any policy which results in over-dependence on a single industry is bad decentralisation. Firms may go bust for any number of reasons which have nothing to do with government policy. Thirdly, tariffs are a very inefficient way of encouraging decentralisation. Of the tariff benefits to the clothing industry, for example, 80 per cent goes to the metropolitan areas and only 20 per cent to the country areas. This is not, for a moment, to say that there will not be hardship coming from structural readjustment. This is going on anyway, regardless of changes in tariff policy. In the clothing, footwear and textiles industries, for instance, the number of jobs has dropped by 30 per cent in the last five years even though tariffs have been increased. The trouble with providing special compensation for people displaced by structural change is identifying them and distingushing them from those displaced by other types of business failure. We would have to justify helping them rather than, say, the sick or the invalids. I think the only solution is to raise the floor level of our social welfare system - a thing that we will be able to afford if, and only if, we expand our economy.

Apart from the special problems of decentralised areas, are not the industries most likely to be damaged by the reduction of our trade barriers the labour-intensive ones? The answer is, on the whole, yes. At first sight the consequences are damaging. There is no doubt that, if imports of labour-intensive manufactures go up, more workers will be displaced in Australian labourintensive industries than will be employed in providing an equivalent level of exports. That looks bad for employment and that is as far as some simplisitic prophets of doom take the argument. But there is a good deal more to it than that. The market mechanism is much more sensitive and much more efficient than many people, including a surprising number of vocal advocates of free enterprise, seem to think. So let me pursue it a little further.

What happens to the difference between the labour cost of the exports and the local production that is lost because of the imports? It goes, of course, in profits and to the selfemployed, and about half of this in turn goes to the government in taxes. Where then will the jobs be? Some will be in export industries but not, of course, as many as the number lost in the labourintensive industries. Some will be wherever the government chooses to spend its extra money - education, defence, public transport or wherever. There will be new employment where companies and individuals choose to spend their extra income, that is, on consumption or investment. The increased consumer spending will lead to extra demand for Australian produced manufactures and services and thus generate employment. Given sensible management and sensible wage demands, the demand for labour which is lost at one end will be replaced by new demand at the other end, flowing directly and indirectly through various channels.

This analysis, which I think is fair, shows the impossibility of trying to name a particular industry which will absorb displaced workers, as is often demanded, rather unscrupulously I think, by those opposed to any change in the status quo. The workers will be absorbed in many different industries, the actual distribution being determined both by government expenditures and by market forces.

Senator Mulvihill:

– Some people over 35 years will be harder to place because of employer reservations.

Senator HAMER:

– That will certainly be so and, as I said, this is going on all the time anyway. Coming to Senator Mulvihill^ point, whether in total there will be more or fewer jobs in manufacturing industry in the future I do not know. The proportion of the work force in manufacturing industry has been falling slowly for years. It is now about 25 per cent. Employment in primary industry has halved in recent years and is now about 6 per cent of the work force. Employment in mining has risen slightly to about 2 per cent. But the main growth has been in the tertiary or service sector, which now employs about two-thirds of the work force. This is the obvious growth area for the future, though one could wish, as I have pointed out to the Senate before, that employment in some parts of this area were not inhibited by absurd minimum wages and penalty rates.

The final worry about tariff reform is the short term consequences - employment and social - of massive resource reallocation. This would certainly be a valid worry if the changes were made abruptly. That is why I propose that we set the objectives for a decade ahead and phase the reductions in gradually and predictably. I must repeat that it is pointless for us to attempt, like King Canute, to turn back the tide. This structural change is going to happen whether we want it or not. We do not have the option of staying as we are. The only options we have are to reduce our trade barriers in the long term and thus produce a healthier, expanding economy or to do nothing about our trade barriers and have the structural change forced on us either by the devastating social evil of inflation or by decimation of our efficient manufacturing industries by the effects of a rapidly rising currency. It seems to me that we have only one possible decision.

Senator Georges:

– Why don’t you resign? You have obviously failed.

Senator McLAREN:
South Australia

– The Senate is debating the motion for the first reading of the Appropriation Bill (No. 1). Having listened to Senator Hamer, I could not agree more with the remarks of Senator Georges that Senator Hamer ought to be doing everything he can to resign from the Parliament because he has been a Government senator now for three years and everything he has said in this place today has been a criticism of his own Government - what it ought to be doing in the long term to solve the economic problems of this country. Why does he not do that in his own party room? They do not listen to him.

I intend to speak on matters that are a great problem in my own State of South Australia, and they are the increasing level of unemployment and the decreasing level of home construction by the Tonkin Liberal Government. First of all I want to deal with unemployment. In South Australia a government was elected on a promise to stop the job rot. That Government had as its backstop and as its financial supporter a group of business people who were very vocal in September of last year in influencing people in South Australia to vote out of office the Corcoran Labor Government because, as they said, there was a terrible job rot. The latest figures available from the Australian Bureau of Statistics prove that in fact unemployment in South Australia is getting worse under the Liberal Government than it was under the Corcoran Labor Government. I want to quote from an article in the Adelaide Advertiser of 12 September which comments on the ABS figures for the month of August which have just been received. The Advertiser had this to say:

They– that is, the figures - confirm a worsening trend in unemployment, and the Government is conscious of the fact that the monthly figures tend to rise steadily in the second half of the year.

That is a comment on the overall Australian situation. Of course, we all know that between now and Christmas the figures will grow steadily worse; more and more people will be out of work, particularly young people.

Senator Messner:

– That is not true.

Senator McLAREN:

– Of course it is true. The figures are there. The people on the Government side do not use the Commonwealth Employment Service figures; they prefer to use the ABS figures in their calculations. As has been pointed out in this Parliament, if a person has had a job for one hour in any one week, under the ABS formula that person is classed as being employed. If a person gets $5 for an hour’s work in a week he is classed as an employed person under the formula being used by the ABS and embraced by this Government. The article in the Advertiser continued:

On a population basis, SA recorded the biggest jump in the number of unemployed in August.

Of the 5,100 national increase, 2,100 were in SA, lifting the State’s total to 47, 100.

The increase took the SA percentage of unemployed from 7.5 p.c. in July to 7.9 p.c. in August.

According to the figures, the two States with the lowest number of unemployed are States which are under a Labor government, that is, New South Wales and Tasmania; so there we have it. If a Labor government is in office in a State there are low unemployment figures; if a State has a Liberal government in office, as is the position in South Australia - a government which is breaking all the promises it made in September 1979 - the State is encumbered with the highest number of unemployed of any State. I say that that is an absolute disgrace.

Senator Messner:

– You are a disgrace.

Senator McLAREN:

Senator Messner says that 1 am a disgrace. He always criticises me when I get up in this chamber and use facts. I do not use fictitious figures; I use facts. I do not make false promises, and neither does the Labor Party. While we were in government for three years we carried out every promise we made to the electorate, with the exception of those promises on which, as you know, Mr President, we were defeated in this chamber because we did not have the numbers. As I have said, for those three years this chamber was used as a house of frustration, not as a house of review.

I refer now to the ABS figures for August 1980, which were published in Canberra at noon on 1 1 September, that is, last week. In August 1979, 45,300 people in South Australia were unemployed. What do we have 1 2 months hence, under this magnificent Tonkin Government? Some 47,100 people are unemployed.

Senator Walsh:

– It has gone up?

Senator McLAREN:

– It has gone up. The unemployment figures have gone up. These are the figures in the ABS document - conclusive proof to everybody. So in 12 months under the Tonkin Government unemployment increased from 7.6 per cent in August 1979 to 7.9 per cent now. Two sets of figures can be used, and if we look at the monthly review of the employment situation, published by the Department of Employment and Youth Affairs, for July 1980, the last figures available to us, the total number of unemployed people in South Australia in July 1979, under the Corcoran Labor Government, was 44,137 and the total number of people unemployed in July 1980, under the Tonkin Government, was 46,356. So whichever figures we look at, whether from the Department of Employment and Youth Affairs or from the ABS, they both show a steady increase in unemployment in South Australia.

Under the heading ‘Adults’, in July 1979 in South Australia, 26,296 people were without jobs and in 1980 27,948 were without jobs. In July 1979, 17,841 juniors were without jobs and in July this year the figure was 18,408. The grand total excluding school leavers, was 37,886 in July 1979, and under the Tonkin Government in July this year the figure was 41,968. There is conclusive proof, whatever formula one wants to use.

We already know from experience that Liberal members of parliament and their candidates are quite prepared to juggle figures. The other day, while I was in the electorate of Kingston in Adelaide, in which Richie Gun will be returned as soon as we have the election, I picked up a report to the electorate by the present member. On the front page of this report he said:

An improved employment situation this year also reflects this success, with worthwhile reductions in unemployment for most months of 1 979-80 compared with 1 978-79.

That statement is completely misleading. As I have quoted, and this information is published in all the documents available to us, in fact there has been a steady increase in unemployment. So uninformed people who pick up this document, when it is put in their letterboxes, will be completely fooled into thinking that what Mr Chapman says about the Government increasing–

Senator Messner:

– That has nothing to do with the number of new jobs.

Senator McLAREN:

– Never mind the number of new jobs. I will come to that later. The people will be misled into believing that the present Liberal-National Country Party Government is finding more work for people when in fact there are more unemployed people. Another thing I was most amazed to read in this document was Mr Chapman’s statement about grapes and wine. He stated:

Grapes and wine: Government response: reduction in brandy excise.

We all know that in the Budget before last this Government imposed an 83 per cent increase in brandy excise. Certainly there has been a reduction since- the Government took off about 3i per cent - but since it took office there has been an increase in brandy excise to the tune of about 78 per cent. Yet here we have a Liberal document, circulated in the electorate of Kingston, which states that this Government has reduced brandy excise. The document continued: no sales tax on wine.

Of course, it was a Labor Government which removed the sales tax on wine. The first duty undertaken by Mr Whitlam when we achieved office in 1972 was to remove the remaining amount of excise on wine. Now we have the Liberals saying that there is no sales tax on wine. In fact it is the only government which ever put a sales tax or an excise duty on wine. I could go on and quote quite a few other things from that document, but I have other matters to talk about. I want to get back to Senator Messner’s statement, by way of interjection, that the Government had created more jobs. We all recall that during the State election last year an employer group was very vocal and spent a lot of money. I refer to a report in the Australian of 12 September 1979 under the heading SA businesses spend $100,000 on anti-Labor campaign’, which states:

Urging the community to ‘stop the job-rot in our State’ the campaign noted that South Australia had fallen to just 6.2 per cent of the total of new dwelling starts over the past four years. lt based those figures on Bureau of Statistics records at the end of March.

We all know, when we look at the figures now, that the building statistics show that there has been a further reduction from 6.2 per cent to about 5.9 per cent. So the building figures are dropping rapidly under this Government, despite these misleading advertisements in the newspaper. Mr John Bannon, the present Leader of the State Opposition in South Australia, recently called on Mr Schrape, a spokesman for the South Australian Chamber of Commerce and Industry, to reintroduce the ‘stop the job-rot’ campaign because of the figures that had been published, and he revealed that the situation is getting worse. What was Mr Schrape’s reply? I heard his reply on the radio one morning, when he said that the previous campaign in September of last year had achieved its purpose. We all know that it had achieved its purpose. There was only one purpose behind it. That purpose was to bring about the defeat of the Corcoran Labor Government, irrespective of the consequences to South Australian residents as a whole. In reply to Senator Messner, I refer to one of the advertisements- this was 12 months agopublished during that campaign. It stated:

South Australia still has the highest unemployment rate in Australia!

Twelve months hence it still has the highest unemployment rate in Australia, and this advertisement referred to about 40,400 people being out of work. Now we have 47,000 people out of work in South Australia. The same advertisement states in big black type:

Compare that with the other mainland states!

I have just done that, and I pointed out that the two Labor States in Australia have the lowest rate of unemployment and the Liberal State of South Australia has the highest rate. At the bottom of the advertisement it is stated:

Stop the job-rot in our State’.

Yet when we called upon the Chamber of Commerce to reintroduce that slogan, because things are getting worse in South Australia, Mr Schrape said that they have achieved their purpose.

One other thing which is causing great concern in South Australia is the fact that one of the instigators of this campaign last year was Mr J. L. Rundle, South Australian Chamber of Commerce and Industry President. He was the instigator and the most vocal person of all in promoting this campaign. Where is Mr Rundle now? He has been appointed by Mr Tonkin as the Agent-General in London. So of course the campaign achieved its purpose. It provided a very cushy job for Mr Rundle as the Agent-General in London. That is a payout for services rendered, and of course it is par for the course with a Liberal government. When someone renders it a service to defeat a Labor government he is paid off in no uncertain terms, just as this Government paid off the exGovernorGeneral. I cannot get an answer to my questions, and I had to give a notice of motion about that today. One of the perks the GovernorGeneral has is a free telephone. The Government will not deny it, so it must be taken that that is a fact.

Since the introduction of the Budget, business people, builders and farmers have all expressed to me great concern about its effect on their viability in view of the latest unemployment figures, coupled with the building statistics in my State of South Australia, to which I have just referred. I am of the firm opinion that when the job opportunity figures are available in a few days time they could well show a further decline of around 30,000 or more in this area. There will be a decrease of 30,000 or more in job opportunities for people in this country. Those are the figures I expect to come out. Business people, particularly those in the building industry, are vitally concerned, so much so that Mr Hurford had to put out a Press release the other day. He too is receiving representations and much correspondence on this very problem. Some of the Press releases put out by our spokesman seem to find their way on to the back pages of the daily Press or they do not hit the Press at all. That bears out the theory we have always held that the daily Press supports the present Liberal Government and is not prepared to give a balanced argument. On 31 August, talking about the Budget squeeze for business, Mr Chris Hurford said:

The Budget will result in a serious contraction of finance for business in Australia.

This credit squeeze will result from three major pressures which will reduce the availability of funds for industry.

The Budget indicates that cash turnover in the economy will increase by 13-14 per cent, while the money supply growth is targetted at only 9-1 1 per cent. This indicates that a credit squeeze will be faced by industry. Leaked official documents indicate that bank interest rates will increase as a result.

There has been talk in this place in recent days about leaked documents. Some people criticise the Labor Party for using them. But government senators have short memories. During the reign of the Whitlam Government, the present Prime Minister (Mr Malcolm Fraser) tabled in Parliament a leaked document from the office of the then Treasurer, Mr Hayden. At that time he said that if any document critical of the Government came into the hands of a public servant it was his duty as a public servant to let it go to the Opposition. Government senators cannot complain when people let such documents flutter off the backs of trucks or however they come into possession of them, lt was the famous Mr Williams who was said to have provided Mr Fraser with the document at that time. It might be the same Mr Williams who is allowing these documents to float around the countryside. Mr Hurford’s Press release continued:

Secondly, there will be a 32 per cent increase in company tax payments in 1980-81. The company tax take will increase by over SI billion to $44 billion. A third of this increase is due to government policy changes - the abolition of stock valuation adjustment and the reduction of the investment allowance.

Thirdly, the Budget reveals that sales of final goods and services will be sluggish during the year. There will be virtually no growth in income from exports, and domestic consumption demand will again grow by less than 3 per cent. The sales recession will seriously inhibit the cash inflow of firms.

The combined effect of these three pressures - credit restriction, higher tax payments, and a sales recession - will be a reduction in the growth potential of most Australian industries.

Even in the year ahead, the expansion plans of Australian businessmen will be constrained by the shortage of funds. According to the background papers of the Budget, businessmen plan growth of 20 per cent in real new capital spending, but this will be reduced to only 10 per cent as a result of shortages of finance and labour.

This means that half of the investment growth potential of Australian industry will be lost due to the restrictive policies of the Fraser Government.

Senator Messner:

– He said exactly the same thing last year.

Senator McLAREN:

– The Press release continued:

While the Government claims to be a pro-growth administration, the Budget papers include an open acknowledgement that the Fraser policies will reduce growth.

The unbalanced and unplanned economic approach of the Government which provides nothing for the development of labour skills and restricts the supply of finance, is damaging the long term prospects of the economy in addition to causing unemployment in the short term.

Mr Fraser has spoken for five years of the need to establish the pre-conditions for sustainable growth. But the effects of his policies are to reduce growth. For the past five years, growth has been barely half of the OECD average, and under this Government, we can expect an equally poor record over the next five years.

As Senator Messner, who has just left the chamber, interjected, that is what Mr Hurford said last year. He was proved correct then and he will be proved correct this year if, by some misfortune, the Fraser Government is returned to office. I will delve further into the problems which exist in South Australia in the building industry. Mr Hurford has had representations from people in the building industry. I have had discussions with them too. The Corcoran Labor Government was falsely accused - I have spoken about this matter in the Parliament before - of putting a damper on the building industry. In September 1979, under the heading ‘Main Features’, the Australian Bureau of Statistics stated:

The number of dwelling units approved in South Australia in the first three months of 1 979-80 was 2,8 1 7, an increase of 749 over the same period last financial year.

Unfortunately for the Labor Party in South Australia, this document was not available until after the election. Had it been we would have proved conclusively that those ‘stop the job-rot’ advertisements which were supported by the Liberal Party were completely false. This document proves them false. The document continued:

The value of the total building approved for the same period was $159,356,000 which was $48,486,000 (43.7 per cent) higher than for the September quarter last year.

In fact, the economy under the Labor Government was on the upturn in South Australia and yet we saw advertisements saying that it was on the downturn. On average $53.35m was spent on dwelling units in South Australia each month. A similar document issued by the Australian Bureau of Statistics in April 1980 stated:

The value of total building approved for the ten months ended April 1980 was $453.0m, an increase of $76.3m (20.2 per cent ) over the corresponding period in 1 978-79.

The increase under the Labor Government in September 1979 was 43.7 per cent. The ABS figures published in April show that the monthly average was $45. 3m as against the Labor Government’s average of $53. 35m. The latest available figures are those for May of this year. They show that the number of private sector dwellings approved in May 1980 was 536, or 64 less than in April 1980 and 34 less than in May 1979. Those figures give the complete lie to the advertisements which were used in the daily Press and over the radio and television during the election campaign in South Australia to fool the electors in South Australia into believing that the economy of that State was declining under the Corcoran Labor Government. In fact, the figures now available to us give conclusive proof that the economy under Labor was on the upturn, and we are very proud of that.

I am concerned now that the Liberal Party in South Australia is spending a massive amount of money on misleading advertising. We saw the first full page advertisement in the Sunday Mail yesterday. Today there is a big advertisement in the Adelaide Advertiser which I suppose would have cost no less than $1,500 to place. There are misleading statements in the advertisements. In the short time 1 have available- I will have to use the second reading debate to continue my speech on this subject- I wish to refer to one of the statements in the Sunday Mail advertisement. I was headed: ‘We’re making this State great’. A few more words should be added to that statement, It should have read: ‘We’re making this State into one of the greatest messes it has ever been’. At the bottom of the advertisement Mr Tonkin said: Tell us what you think’. As a purchaser of the Sunday Mail and of the Adelaide Advertiser, I have been invited by Mr Tonkin to tell him what I think. In the short time available I will tell him, firstly, that I think that he is misleading the people. The first paragraph of the massive advertisement stated:

Here are what some people think: A SI 00m smallgoods company, Australian Bacon Ltd, says it has moved its headquarters to South Australia because of its confidence in the State and the Liberal Government. ‘Interstate and overseas sales from the factory would exceed $20m next year and the “additional activity” would create 200 jobs for South Australians’.

Mr A. G. Summers, Chairman of Australian Bacon Ltd, is quoted as having made that comment in the Advertiser of 29 November 1 979. But let us determine the facts, Mr Bannon, the Leader of the Opposition in South Australia, put out a Press statement on 4 November 1979 which stated:

  1. . the Premier had been returning to empty rhetoric last week when he boasted that the move of Australian Bacon Ltd headquarters to SA showed SA, under the Liberals, offered a brighter future.

Clearly the election of a State Liberal Government had nothing whatever to do with the company’s move.

The statement by Australian Bacon was quite false and it only needed a quick glance at the company’s annual report, dated July 31st 1979, to show this.

That date was some six or seven weeks before the State election.

The report stated that group administration has been established and our executive structure has been developed in Adelaide. Renovations to the company’s Mount Barker works had in fact been opened by the Labor Agriculture Minister, Mr Chatterton.

That was during the reign of a Labor government. That statement continues:

Indeed, the July report of Australian Bacon Limited to the Stock Exchange confirmed that S.A.’s economic recovery had been under way well before the election.

The Australian Bureau of Statistics figures on building approvals prove that. They prove what Mr Bannon was saying was correct and that what Mr Tonkin said last year during the election campaign, and what he repeats in the advertisement to which I have referred, is completely false. One of the other headings in this advertisement is; What we’ve achieved in 1 2 months’. The article states that death and gift duties have been abolished and that land tax has been abolished. Certainly they were abolished but the only benefactors are the wealthy people of the State. It is of no benefit at all to the average wage earner. There was undertaken an $80,000 exemption level on estate duties for an estate passed on to a spouse, but there are not too many wage earners in South Australia who have estates to the value of $80,000 to leave to their spouses. Yet the Liberal Government is claiming that this is of benefit to everybody. The abolition of land tax means nothing to wage earners. The only people who have benefitted are the wealthy.

Who is paying the piper because of that loss of revenue? As I said in this Parliament last Friday, it is the consumers of electricity and water who will make up the loss in revenue through increased electricity and water charges and increased bus fares, and the other things which the average person- the worker or the pensionerhas to pay for. They are the people who are footing the bill because of this promise of the Tonkin Government to abolish death duties and land taxes. The advertisement refers to the fact that stamp duty has been abolished on first homes up to a value of $30,000. That has not increased the incentive for people to buy homes. The ABS figures show that, in fact, there is a decrease in the construction of homes. Because of increased interest rates, introduced by this Government but which flow through to the States, many young couples cannot afford to get home loans because they cannot pay the high interest rates. That is a great problem for them. The South Australian Government talks about cuts in payroll tax to stimulate employment. Of course, ABS and Commonwealth Employment Service figures prove conclusively that the abolition of payroll tax has not stimulated employment, because the unemployment figures are increasing day by day.

Mr Tonkin talked about the introduction of competitive tendering for public works to boost private sector involvement, and the reduction of public service employment with no retrenchments. We know that the public service union in South Australia has put out a document which gives the lie to those statements, too. The document is headed ‘Australian Government Workers Association’, and refers to the fact that the Public Buildings Department and the Engineering and Water Supply Department have had 450 jobs lost and that there is a higher unemployment. It then states:

Thanks Mr Tonkin, it’s our State mate. Don’t worry Mr Tonkin your Government has a good track record so Tar. Let’s have a look (before it leaks out everywhere)

SA is still the State with the highest unemployment figures.

SA is still waiting for the 7,000 new jobs to be created.

We all know that that was one of the election advertisements. The document continues:

  1. State Government work being done by private contractors.

I have conclusive proof of that. Some of these contractors do not have the necessary equipment to do the job. They are being allowed to hire it from the State Government at very low cost. They will wear out machinery and when the Australian Labor Party gets back into office in two years time all of the government-owned machinery will be worn out and our skilled labour force will be lost. We will have a massive task of rebuilding that. The document then states:

  1. The ‘Moores’ complex still standing bare in Victoria Square.

There is more interest being paid on money borrowed to buy the Moores complex than was being paid on the money owed to the Federal Government for the Monarto project, which has been something of great benefit to the State of South Australia. Mr Tonkin has now shed that; he is trying to sell it off. The next point is:

  1. The great (could be outdated) bus system to the north east. (1986)

The people have to wait for the O’Bahn transport system to be constructed. It goes on:

  1. Reducing State Government employment by natural attrition still.
  2. Scrapping of industrial democracy in South Australia.

That is one of the things about which the present Government hangs its head. It does not want industrial democracy. The Association then goes on to say:

  1. Creating false surplus of State Government employees, (i.e. if private contractors are permitted to carry out traditional Government employees’ jobs then how can you have a surplus of State Government employees?) Over to you Mr Tonkin.

The document concludes:

Perhaps with this record continuing we could have a government who could very well be surplus in two years time at the next State elections.

The Last State Government Cared For State Government Employes and their Future.

Senator LAJOVIC:
New South Wales

– I join the debate on Appropriation Bill (No. 1) 1980 by saying firstly that all the talk by the socialists about this Government’s policy in social welfare is trying to show that the Fraser Government is not interested in the questions of social benefits and social welfare. The Budget Papers indicate that the total spending on social security and welfare in 1980-81 is estimated to be $9,890m, which is a rise of 12.4 per cent over 1979-80. This figure will account for over 27 per cent - more than one quarter - of all Commonwealth Budget outlays in 1980-81. That means that in this area the Fraser Government is spending $825m a month, or nearly $28m every day of the year. Related to personal income tax, this expenditure is equivalent to almost 60c in every dollar that is collected. I am convinced that the Australian public will be interested to find out how much money is being spent on social security and welfare. The next item about which I would like to talk is the problem of manpower training and, in particular, adult training. In the Budget Speech it is stated:

More than 430,000 Australians have been assisted by our training programs over the last four years, including some 170,000 in 1979-80.

The Government will provide $126m in 1980-81 for training programs, $23m more than was spent in 1 979-80.

I would like to discuss in a little detail the problem of the training of adults, because I feel that that is one of the problems which has been neglected in this country. Unfortunately, that is mainly because of trade union opposition to apprenticeships being extended to young adults over 18 years of age. An age limit for apprenticeships has been set in Australia and in most States there has been pressure to remove the upper age limit to enable older applicants to carry out trade training. For example, in Victoria 1,400 persons, or 13.8 per cent of the 1978 indenture intake, were 18 years or over.

The problem is that the efficiency of modern economies depends upon the continual improvement of the knowledge and skills of the labour force by means of appropriate training and retraining schemes. Workers need almost constant retraining to survive in the modern labour market. Perpetual retraining is becoming a fact of life for modern workers as old jobs disappear and new jobs develop. About 8,000 types of jobs vanished from the United States of America labour market from 1949 to 1965 due largely to the spread of automation. But at the same time more than 6,000 new types of jobs developed. Those trends are continuing today. The persons most affected by rapid changes in the work place are the older workers.

In 1974 the Committee of Inquiry into Technical and Further Education- the Kangan Committee - criticised apprenticeship courses which were structured to suit long-standing traditions rather than the changing needs of people in industry. It noted among many people concerned with apprenticeship training a slavish adherence to the belief that all trades require an identical period of theoretical and practical instruction. Furthermore, as the 15 to 19 years age group will grow more slowly in future, new apprentices will have to be drawn from among people of different ages and levels of experience.

One of the problems is deciding what we should do about the length of training. In many countries attention has been given to reducing the time needed to train individuals to full trade levels of skill. Usually this approach has involved splitting the training curricula into self-contained modules and allowing individuals undergoing training to study at their own speed. It is true that in recent years steps have been taken to cater for some of those needs by introducing the National Employment and Training System - NEAT - and technical and further education - TAFE. However, the systems used in training and educating persons for the skilled manual trades maintain their traditional antiquated approach.

It is interesting to note also that there has been a quite high percentage of drop-outs among apprentices. I refer to an answer given in 1 979 by the New South Wales Minister responsible for those matters. He said that, of 1 ,969 trade apprenticeships terminated in the previous financial year, 515 were terminated due to loss of interest, 38 were cancelled because of misconduct, 87 were terminated because of change of residence, 308 because of incapacity and 946 for other reasons.

No reason was given for the 665 other terminations. In total, 1,864 apprenticeships were cancelled in 1975. That signifies to me that there is something wrong with the preparation of the young men and women who enter training or that the selection of the apprentices is not the best. Otherwise, there would not be such a high percentage of drop-outs. I hope that some steps will be taken to solve all those problems so that our industry will have enough trained people. That is badly needed.

The next item to which I refer is immigration. The Budget Papers show that the migrant intake is expected to rise to 95,000 in 1 980-8 1 , compared with 82,000 last year. Provision is made for the entry of 30,000 people under the assisted migrant program, an increase of nearly 8,000 on the 1979-80 numbers. That means that the Fraser Government is doing what it promised to do; namely, to increase immigration, to give migrants who are in this country an opportunity to bring in their relatives and to bring in refugees who are fleeing their countries because of the political system. The next item of interest to me is the provision of $21m in 1980-81 for the new multicultural television service, which is planned to commence in October, and also for the ethnic radio services. I spoke in this chamber recently when the Broadcasting and Television Amendment Bill was debated because I fully support multilingual, multicultural television in Australia. There was then, and still is, reasonable discussion on the role of multicultural television. But, unfortunately, many voices cause me concern because I believe that they do not understand what the role of multicultural television is or ought to be. In a statement the Minister for Post and Telecommunications (Mr Staley) said: lt is, however, a matter of concern when discussion of major issues in an area as vital as broadcasting is clouded and confused by deliberate and dishonest attempts to mislead the Australian community.

That worries me because I believe the whole case has not been presented fairly in the interests of so many people who are isolated in our community because of their inability to speak the English language. I have been very disillusioned with a report of the Senate Standing Committee on Education and the Arts which was tabled in this chamber by Senator Davidson. I quote from one section of his tabling speech:

We are also not entirely satisfied that the ethnic community prefers the IMBC concept to the ABC concept for multicultural television. There was a strong element of evidence which suggested that some representatives from the ethnic communities would be prepared to support broadcasting programs on a second channel operated by a re-organised and re-structured ABC.

Further on Senator Davidson said:

We believe that the ABC has been insufficiently considered having regard to the fact that an ABC Committee of Reviewhas been established and is presently inquiring into all aspects of ABC broadcasting.

Senator Davidson continued:

The Committee would wish to see reflected in the proposed interim service, facilities to support and encourage public broadcasting and public television.

Some articles about this report have appeared in the Press. One which appeared in the Sydney Morning Herald is entitled ‘Angry reaction to ethnic tv plans’. It stated:

Ethnic organisations and the ethnic press reacted angrily yesterday to the shelving of the multicultural broadcasting legislation.

After six months of indecision, most of the ethnic press and large organisations had come to endorse the Independent Multicultural Broadcasting Corporation and, slightly more hesitantly, its designated head, Mr Bruce Gyngell.

In its edition of 24 August a Polish community newspaper stated:

The ABC’s request to administer multicultural television has brought opposition from the ethnic press, which argues that the ABC has never shown interest in ‘ethnics’ and is consequently the least qualified body for such a function.

On 21 August the Neos Kosmos newspaper quoted the President of the Melbourne Greek community, Dr Ktenas, as saying:

The ABC has never played a positive role in ethnic television and the SBS has proved inadequate. The only solution is the establishment of independent ethnic television.

It is interesting also to read what some foreign observers thought of the move to establish ethnic television in Australia. La Fiamma on 28 August reports a speech of Mr Vittorio Boni made at a convention in Toronto. He is reported as saying:

Multicultural television as envisaged in Australia is an effort totally different from any other, because it was born as a service to the public and it will provide a wide scope of transmissions. . . . The results of this phenomenon should be studied and the priority should be … to participate massively in an extremely ambitious project. This experiment will involve the majority of the Australian population–

They are the words of people who support ethnic, multicultural or multilingual television. I am sad to say that despite the support for ethnic television the Chairman of the Senate Standing Committee on Education and the Arts said:

Nowhere could we find any evidence to suggest that the ABC had been ruled out of contention because of technical considerations or that it lacked expertise.

I agree with that statement. The ABC has the expertise but it has never offered it to those who would like to see different kinds of programs presented in different languages. The report stated further:

The witness representing the Australian Ethnic Affairs Council contended that it would have been more desirable to have multicultural broadcasting reflected in the existing broadcasting structure. The witness supported the IMBC reluctantly as a second choice but would have preferred the ABC option. Since the ABC has not earlier recognised a multicultural role,–

That has been the case for 30 years- the Council supported the concept of a separate organisation so as to ensure multicultural broadcasting.

Professor Zubryzcki mentioned to me that the Australian Ethnic Affairs Council which he leads is opposed in principle to the establishment of ethnic institutions for an indefinite period but that the Council favoured them because that is the only way to present points of view, to educate and to show the new arrivals to this country how this democracy operates. In its submission the Australian Ethnic Affairs Council Ethnic Media Consultative Panel stated:

We support the establishment of the Independent and Multicultural Broadcasting Corporation (IMBC), as proposed in the Broadcasting and Television Amendment Bill 1980, and recommend that the IMBC make appropriate use of the resources, experience and expertise currently available within the Special Broadcasting Service.

Mr Vella appeared before the Committee. When Senator Ryan mentioned that the Australian Broadcasting Commission could fill the role of the IMBC, Mr Vella said:

I am rather cynical.

Senator Ryan said:

That is understandable.

Mr Vella further stated:

I am rather cynical. It is like getting on the bandwagon. I am rather cynical now that J have heard - but I have not seen - that submission. But I am given to believe now that the ABC is saying it can do the job, and much more cheaply. But I get rather cynical when I hear that having been put on the spot, so to speak, it is now trying to get on the bandwagon. So to anybody who does not wholeheartedly support multicultural broadcasting in the broader term and now comes in and asks carriage of it, I am prepared to put a few question marks regarding motives and, indeed, sentiments.

Interesting comments were made in all the submissions which came before the Committee. I wish I had more time to read them to the Senate. 1 can only say–

Senator Davidson:

– You are being very selective.

Senator LAJOVIC:

– All of those who appeared before the Committee and who were of migrant origin supported the IMBC.

Senator Robertson:

– That statement is not correct.

Senator Davidson:

– That is not so.

Senator LAJOVIC I would like to hear interjectors tell me why my statement is not correct. I should like to refer to the Press statement issued by the Ethnic Communities Council of Victoria. It stated:

The Management of the Australian Broadcasting Commission, in particular, continued its contemptible disregard for the ethnic communities in their belated bid for multicultural television. Their record during negotiations about ethnic broadcasting was bad enough.

In its submission the Ethnic Communities Council of New South Wales stated:

Our Council strongly supports the establishment of the IMBC and asks your Committee to support the passage of the proposed Bill through the Senate. Members of our Council are willing to appear before your Committee additional personal support to this submission.

So it went on. I could quote as many other people as I wished, but unfortunately I do not have the time. I would be able to put my case very forcibly because in all the submissions which I went through - 1 think I have all the submissions and I have received four huge reports - not one person of migrant origin did not support the establishment of the IMBC. I have only five minutes left. I will quote a few sentences from ‘A Report on Migrant Education Television in Australia’ which was published by the Commonwealth Department of Education. The report on page 5 states: . . it was found that while 1 2. 1 per cent of the immigrants interviewed are illiterate in their own language and therefore cannot read, and as many as 37.S per cent do not read magazines, newspapers or books in any language, 98.8 per cent regularly watch television and 91 .6 per cent regularly listen to the radio.

On page 101 , the report states:

However, it would appear that METV may be satisfying the needs of immigrants in a number of ways apart from providing language instruction; for example, the program was seen to be informative in respect of Australian life, and it is one of the few television programs which, in the case of many immigrants, can be understood reasonably well.

Further, the report slates that the potential significance of the program is in opening up the world to the most isolated group - the illiterate immigrant women. This group is considerable, as 56 per cent of this group walch this program. The fact is that an independent television service for migrants, as provided for in the proposed legislation, would cater for all those people, who because of their own cultures are confined to their homes, who have no way to learn the English language or no way to learn our way of life. They are completely isolated not only because of their not understanding English but also because of their traditions. The women are not going out to work; they are staying at home.

It is a fallacy to say that so-called ethnic, multilingual or multicultural television would not help those who are in need and who are the ones who least understand our system. They came from other countries. They are isolated here. They have no way of reading their own language newspapers and are unable to hear, see and understand our way of life.’ I feel sorry for them. I am really not in favour of what the report by the Standing Committee suggested and put down in the case of multicultural television. I feel that the Committee by its opposition has denied the needs of those people in our community who require most to be able to learn our ways, our society and our point of view.

Senator TATE:

– I will deal with a couple of matters in which I believe the Government has been totally unresponsive to the welling up of opinion within the Australian community and the electorate. The Government has not responded in a clear and decisive way to two matters about which I will talk. One matter concern the general desire in the community that tax avoiders, the tax bludgers, within our society be dealt with and that their actions be curtailed once and for all. The second matter I will deal with is the fact that as we move around the community there is expressed a great desire that Australia cease to recognise the Pol Pot regime which wracked the people and country of Kampuchea for so many years. It seems that there is a common thread between these matters. That is that the Government is so trapped in a web of technicalities that it seems unable to see beyond the next step which inevitably is one of reaction to some or other force rather than boldly striking forth in a way which the community would wish it to in both these matters.

I deal first in a general sketch only with the problem of tax avoidance in the community. I believe that here we are confronted with the real subversives in our present society. They are subversives in the sense of undermining the very fabric of Australia in at least two ways. The first is, of course, the simple measurable one. They are failing to contribute to the Federal Treasury, to the forms, therefore, of democratic government, the very society which produces the wealth and freedoms within which they live. In denying to the elected Government of this country, the very provisioning and victuals for its existence they are in that sense certainly undermining and subversive of everything that a democratic society needs and stands for. In a more subtle sense they are also subversive in the way in which they are creating disharmony within the community as a sense of inequity becomes prevalent and recognised. People are conscious of the fact that, if they pay their taxes in an ordinary honest and normal way, they are probably mugs because the tax avoiders, the tax bludgers, are getting away with hundreds of thousands, if not millions, of dollars. Any member of the community who, over the last few months, has been filling in his tax form knows that the more honest he is the more of a mug he is.

I recall very well as a young boy watching my father fill out the tax form on the kitchen table worrying himself, worrying whether he put down five, six or seven pounds for the deduction of chemist expenses for the family. That sort of honest, nowadays some would say pedantic, concern with doing the right thing by the community and one’s family is now revealed to be something that so many within our community, so many, one has to say, of the professional classes, so many unfortunately of the self employed, despise. They despise that sort of subservience to the wish of the community as expressed in its taxation laws. We have a situation where these subversives, these tax bludgers, unfortunately are being aided and abetted by, it has to be said, the non-elected bench of justices in the High Court of Australia. In the newspapers and magazines we have seen month after month under the guidance of Chief Justice Sir Garfield Barwick an interpretation of the tax laws being constantly offered which aids, benefits, comforts and abets the best efforts of the tax avoiders.

The ordinary middle class pay-as-you-earn taxpayer is bearing the greater burden proportionately as the years go on, as the tax revenue from those who can afford to pervert the best legal and accounting brains in the country becomes less and less. When I say pervert these legal and accounting brains, I do not deny that the lawyers and accountants involved are offering professional advice. It is a .national scandal and a cause for shame within our community that those tremendous talents should be diverted, or some would say, perverted, for the selfish greedy interests of those who, as I say, can afford to employ their skills as opposed to the ordinary taxpayer, the PAYE taxpayer, who does not have these avenues open to him.

In dealing with this explosive industry and its ally in the High Court, one needs, I believe, to have clear principled restatement of the position which has been adopted by this Parliament over the years and which is embodied in section 260 of the Act. lt apparently needs a clear and more precise restating. Section 260 uses words to the effect that, where a transaction is entered into in order to avoid taxation, whilst the transaction itself is legal in every respect, stands as a valid contract and has effect in the commercial world or whatever, it will have no effect against the revenue and the Commissioner of Taxation may safely ignore it when assessing taxation. In other words this Parliament, comprising the elected representatives of the community, has said that when highly artificial tax avoidance schemes are created, as against the revenue and as against this society’s very life-stream, that transaction is null and void. That is why tax avoidance is condemned by the Parliament at present.

I believe that, after a couple of years of attempts by Mr Howard to curtail this industry, we need a clearer statement of that simple position. I return to my earlier remarks. The piecemeal approach, the technical approach, the stepbystep approach and the reactive approach are just not good enough. They are not good enough because they are dealing with a scheme after the horse has bolted. Whilst the approach of the present Government is such that it is dealing fairly firmly with those schemes which it identifies, by definition it is only preventing their availability for the future and does not deal harshly enough with those who have made their millions out of manipulation of these schemes in the past. We in the Australian Labor Party say that the Treasurer (Mr Howard) should be more robust in his extension of retrospective effect to the condemnation of these schemes.

We say this - it is out of line with our general reaction against retrospective operation of laws - in harmony with the best common law and British exchequer traditions. The United Kingdom, faced with the same dilemma, has, since the Second World War, allowed retrospectivity. There is a parliament - certainly in Lord Greene, the Master of Rolls, who gave his famous judgment in this matter in the early 1950s - a judicial and parliamentary system which is very conscious of the rights of citizens but is equally conscious of the damage that can be done when those citizens play in a contest piecemeal, bit by bit, with the Government winning one round and them winning the next. That sort of undermining of the fabric of society is something which in this instance, and perhaps only in this instance, requires a more robust and vigorous use of retrospective provisions.

The net effect of the Government’s refusal to give a clear directive to the High Court, which amounts to a directive from the elected representatives to the non-elected Bench of justices, has been to create a shift in the tax burden, as I say, away from those who can best afford it. For these people tax has become an elective thing, a contribution to the society if they feel that the policies of the Government are in harmony with their own desires. There is a shift away from the payment of those who can best afford it on to the backs of those who are struggling to bring up their families, to educate their children and to create a small business or whatever - in other words, the working and middle classes. Of course, to sustain the failure of the tax avoiders to contribute to the revenue, tax rates have to be kept higher. This is the Catch 22 situation. The tax avoiders at times use as a justification for their greed the argument that tax rates are very high. Of course they have to remain high while tax avoidance is going on.

As we have seen in the Budget which has just been brought down, several hundreds of millions of dollars every year has to be notionally written off - we would otherwise obtain that money as tax revenues - because the Treasurer knows that people are not going to make their fair contribution to the revenue. The whole Australian community would support whichever party is in power after 18 October in taking this measure. I believe that Mr Willis will be the Treasurer reacting to this feeling within the community after that date. Whichever party is in power, it should know and should be confident in the knowledge that the Australian people want this tax avoidance industry dealt with and curtailed once and for all. Let us not hide behind technicalities. Let us not deal with schemes piecemeal. Being hydra-headed, they spring up as soon as we deal with them. We need a simple and clear statement of principle from this Parliament to the High Court. Then let the Court ignore us at its peril.

I turn now to another matter rather remote from that domestic concern of most families. Yet it is a fact that most Australians, in considering Australia’s recognition of the infamous Pol Pot regime, have come to a very firm conclusion which this Government is continuing to ignore. That conclusion is, of course, that the Government should not continue with its recognition of that monstrous and barbaric regime. This chamber is said to be the deliberative House of review, the place where calmly we can assess government policies and perhaps let the Government know - in a way which the House of Representatives cannot, given our Constitution - a feeling within the Australian community of which it ought to take account. Two weeks ago the National Country Party and Liberal Party senators twice prevented the Senate from expressing its view on the recognition by this Government of the Pol Pot regime. Senator Chipp for the Australian Democrats and I for the Labor Party both moved in the course of one day that the Senate take a vote on this issue. Both times Government senators, acting as Government lackeys, refused to have that vote taken.

Senator Gietzelt:

– Acting under Fraser’s direction.

Senator TATE:

– Undoubtedly they were acting under the orders of Mr Fraser. In this matter, as we know, Mr Peacock is more sensitively attuned not only to the Australian community but also, as I will point out, to the political realities of the situation in lndo-China. So much for the charade that this chamber is a House of review while the present Country Party and Liberal Party senators exercise control in this chamber. I look forward very much to the results of the election of 18 October because after July next year a more balanced majority will be able to determine the deliberations of this chamber. As to the issue itself, one wonders what deliberation, what pondering, what review is really required. The Government is accused very simply of continuing to recognise a regime which reduced its own people - at least those who managed to survive - to a sub-human cry for existence coming from faces with the glaze of death written on them year after year as this barbaric regime filled its torture chambers. That is the regime which Mr Fraser says we should continue not. only to recognise but also to lobby for in the United Nations. This is no passive acceptance of some world reality.

Our Ambassador to the United Nations is prowling around the corridors of the United Nations in New York this week seeking support for this barbaric regime’s recognition. This is the Government whose leading executioner, Kaing Kech Jeu, ordered the destruction of whole villages and groups of people, as we have been reading in the Australian Press. Mr Fraser says we must support in the United Nations this monstrous tyranny. As I say, we have the spectacle, which fills me, as an Australian, with shame, of the Australian Ambassador under clear order from Mr Fraser going around seeing which governments he can influence, perhaps because they are susceptible to Australia’s aid commitments or whatever, to support this infamous stand by our Government. The defence is always that member countries of the Association of South East Asian Nations - countries such as the Philippines, Thailand and Indonesia - must be pacified. They are countries in which generals masquerade in civilian clothes and run their governments in a way which would fill us with horror. I am not saying that it is or is not appropriate to their culture. What I am saying is that, as a democratic country, Australia should be more finely attuned to the desires of its own people than to those of a small elite running the countries to the north-west.

What we have, as I discovered during my recent attendance at Jakarta for the ASEAN interparliamentary organisation’s deliberations, is a situation in which the Australian viewpoint can be put forcibly and firmly, as it was when I was summoned with two of my colleagues, Senator Teague and Mr Carlton from another place, to the Political Committee of the ASEAN interparliamentary organisation. There I certainly pointed out why it was that opposition in this Parliament and in the community was stated as strongly as it has been. I pointed out, firstly, that we are strongly opposed to the recognition of the regime sustained by the invading and occupying forces of the Vietnamese Government. The Australian Labor Party - the Australian Democrats were at one with us two weeks ago in the debate - condemns the continued occupation of Kampuchea and supports the territorial integrity of Kampuchea, and indeed of Thailand. That stand needs to be defended by the whole body of world opinion. We therefore support the United Nations resolution which calls for a withdrawal of the Vietnamese troops to enable the people of Kampuchea to come to an act of free self-determination.

I pointed out that public opinion in Australia supported the stand of non-recognition of either the regime currently installed under the benign gaze of Hanoi or the Pol Pot regime. What is so odd or reprehensible about that when the United Kingdom, France, and the United States refuse to recognise the Pol Pot regime? What we are saying is that Prince Norodom Sihanouk, for instance, ought to be listened to when he equally vehemently condemns both the occupying Vietnamese forces and the prior Pol Pot regime. He is seeking a middle way, a neutral way, and anyone who knows that man would know that he is a compassionate, practical embodiment of the desires of his people. He is not like the princes of the noble houses of Europe whose remnants are continuing in their dissolute way. He is a practical embodiment of the desires of the Kampuchean people for a free, independent, neutral status. I believe that we in Australia ought to support people such as Prince Sihnanouk in his attempts to bring that situation about.

We are also on very dangerous ground internationally. In continuing to recognise a regime which has no support amongst the people and no territorial soverignty to be exercised, we are Hying in the face of all international law. I firmly believe that if eventually we are to reach a stage in which the world is free of conflicts between nation states, it must be because we recognise some sort of international law which binds states in their relations to one another. We cannot continue to recognise a regime such as the Pol Pot regime, which has no control over the territory of Kampuchea but simply has some raiding parties harassing the population in western Kampuchea.

Humanitarian and political reasons both coincide to require a change in Australia government policy. Mr Richard Alston, the Chairman of the Austraiian Council for Overseas Aid, and 1 believe State President of the Liberal Party in Victoria, has called passionately on the Government to change its policy in order to enable aid of a humanitarian kind to get through to the suffering people in Kampuchea. He is not a left wing trendy, he is the State President of the Liberal Party, but he knows that difficulties are being caused on the Thai-Kampuchean border because of the continued recognition of the Pol Pot regime by various countries around the world. When one asks whether our policy helps the Kampuchean people to restore some semblance of fully human life, the answer seems to be no. According to Richard Alston, it may have the effect of preventing quantities of aid from getting to them to restore them to that human life which was stripped from them by the Pol Pot regime. When one asks whether our policy helps the Kampuchean people to move towards a situation whereby they can install a government of their own choice, once again the answer is clearly no. Recognition of either the Pol Pot regime or the Heng Samrin regime gives less room for the emergence of a truly independent, neutral, national movement, perhaps under Prince Sihanouk, as I have said. It has been put more strongly by some commentators, namely, that the Vietnamese Government will feel compelled to justify its continued presence within Kampuchea so long as other governments recognise the Pol Pot regime as a ‘legitimate, alternative commander of the allegiance of the Kampuchean people’.

I believe that the Australian Government is pursuing a policy which is at the same time morally and politically bankrupt, and devoid of compassion and of common sense. As such, it offers no security for us or for our children in the years to come in this region. I ask, and I am sure the people of Australia will ask, whether this policy is the product of a temperament, the product of a perspective, the product of the sort of leadership, embodied in Malcolm Fraser as it is, which will enable this country to deal adequately in the 1980s with South East Asia and the regions to our north. I am sure that the answer will be no, and I am sure that the people will cast their votes accordingly on 1 8 October.

Senator MESSNER:
South Australia

– I wish to address my remarks to the Budget, and to the current state of the economy and the general outlook for the economy looking into the decade now called the 1980s. First of all, though, I should like to address my remarks to one or two points Senator McLaren made earlier concerning South Australia. In his usual way, Senator McLaren was very keen to justify the existence of the previous Labor Government in that State and to demonstrate that somehow things have not improved in South Australia since the advent of the Tonkin Government. Might I just put that idea to rest straight away by pointing out very clearly to Senator McLaren that the problems that were set in train under the Dunstan Government are still having their effect. They cannot be turned around in a very short period, as the Fraser Government has found since coming to power in 1975 in respect of the errors and mistakes of the Whitlam Government during its period of office.

Certainly, some of the long term effects of 10 years of Labor Government in South Australia, when industry did not grow at all, when no new factories were established, when hardly any new jobs were created outside the government sector, still have to be overcome, and 1 1 or 12 months is certainly not long enough to have turned that huge ship around. That is pointed up very clearly by the fact that unemployment in South Australia, as was rightly pointed out by Senator McLaren, has risen by some 2,000 or 3,000 in the last year.

Senator Cavanagh:

– It is the highest in Australia.

Senator MESSNER:

– Yes, it is the highest in Australia. The reason for that is that threequarters of those people have been–

Senator Cavanagh:

– Have been sacked from the Public Works Department.

Senator MESSNER:

– Disemployed as a result of retrenchments and redundancies in the motor car industry. Those figures are justifiable, and that is specifically the point. It goes to highlight the very narrow base into which the South Australian economy was allowed to fall under the 10-year reign of the Dunstan and Corcoran Labor governments.

Senator Gietzelt:

– Come off it.

Senator MESSNER:

– That is the whole point. That is specifically what occurred in South Australia during that period, with all the promises for new high technology industries the new developments that were to come. Sure, we got the Festival Theatre. Sure, we got these little odds and ends around the suburbs of Adelaide, but no new industries came to South Australia. There was no expansion in industry generally so as to widen the industrial base of the State. That is a highly relevant point to recognise. As I said, that huge ship created by ten dead-handed years of a socialist Labor Government in South Australia will take some considerable time to turn around. The Tonkin Government has set its foot in the right path. It has succeeded in attracting more confidence to the State in recent months.

Senator Gietzelt:

– Who is responsible for the motor car industry? You are suggesting State governments are, are you, Senator?

Senator MESSNER:

– It was quite possible for the Dunstan Government to change things during its period in office but it neglected to do so. That is the simple point 1 am making. If Senator Gietzelt cannot understand that, I am sorry.

Senator Gietzelt:

– But your policies are determined here in Canberra.

Senator MESSNER:

– Perhaps Senator Gietzelt wants a little more evidence of the point. What I am about to say is relevant to the situation that we find in South Australia at the moment. About three weeks ago the Leader of the Opposition, Mr Hayden, visited Port Pirie in South Australia. That is in the heart of the seat of Grey, a seat which will be won by the Liberal Party in the election on 18 October. Within that division are three rather large towns - Port Augusta, Port Pirie and Whyalla, all of which have significant levels of unemployment. Much of the future development of those towns’ employment bases depends upon the widening of their industrial bases. That means the development of alternative mining industries that are centred in that area. Of course, all of those three towns are well suited to act as service towns and as points for transport development and for the establishment of new organisations to process materials that are extracted from other mining developments in the north and the north-west. But what did Mr Hayden say when he visited Port Pirie? As a result of a statement made in the State Parliament by the Premier, Mr Tonkin, he said that uranium enrichment plants proposed for South Australia would not proceed. He went on to say:

The State Premier, … is, indulging in a little bit of fantasy, thinking that a uranium enrichment plant will be built in this State.

That shows us the degree of interest that the leader of the Australian Labor Party has in the future development of South Australia. He has no interest whatsoever. The people of Port Augusta, Port Pirie and Whyalla, where the average rate of unemployment is of the order of 1 2 per cent, are not going to be impressed by remarks from a Labor leader who says that his party will not create jobs in South Australia. The simple point is this: The Labor Party is opposed to development in South Australia of those jobs which South Australia is capable of developing now. That is the simple point that has to be told to members of the Opposition. I can see that they are screaming about it. The very existence of South Australia depends upon the development of a wider industrial base into natural resource sectors. At the moment that is available only in the uranium industry. That is the long and the short of the matter. Until the Opposition can offer some sort of alternative for broadening the industrial base, the people of South Australia will be terribly unimpressed and will continue to vote Liberal, State and Federal.

There is one very significant issue in South Australia which will be at stake in the coming election. That is that should, by some mischance, the Labor Party together with the Australian Democrats, who have a similar policy in this area, be in a position to stop uranium development in South Australia by stopping the passage of legislation in the Senate, it will be able to stop job creation in South Australia. That is the long and the short of the coming election in South Australia this year. The Labor Party and the Australian Democrats together can stop development of the uranium industry in South Australia.

Senator Gietzelt:

– We have 250,000 people coming on to the labour market a year. You are talking about 2,000.

Senator MESSNER:

- Senator Gietzelt should know that his good friend, Mr Tom Uren in the House of Representatives, time and time again, whenever he gets air time, reminds people all over Australia that he will see the ALP rescind any contracts to do with uranium mining. The Opposition cannot deny that. That is the long and the short of this argument. I will not further waste the time of the intelligent senators on this side of the chamber with that point. I now turn to one or two aspects of the general outlook for the 1980s. Let us think back over the last 10 years to set the scene for what we see before us. Let us recall December 1969. I think we can remember times of boundless optimism. We can recall that Poseidon shares were priced at, I think, $230 on the stock exchange. Everything seemed possible at that time.

Senator McLaren:

– Thousands of people lost their life savings in that.

Senator MESSNER:

– I agree with that. I am one of the supporters of action in that area.

Senator McLaren need not be disturbed about that. The point is that after 1972, with the election of the Whitlam Labor Government, many disasters befell Australia which this country is still trying to recover from. Since 1 975 we have seen a struggle by the Fraser Government to restore the relative competitiveness of Australian industry vis-a-vis the rest of the world. Perhaps I could leave the Senate with a couple of very simple statistics to highlight what occurred over that period. 1 f we take 1 972 as a base year with an index of 1 00 and taking into account wage price changes and changes in the exchange rate, we see that by 1975 our position relative to the rest of the world in terms of cost competitiveness had fallen to 83. That meant that we were 1 7 per cent worse off in terms of our ability to sell Australian-made goods on the world markets. Today, in 1980, that index is 117. By that measurement we are now 17 per cent better off than we were in 1972. That is the key issue. That position has been brought about by careful management of the economy through the devaluation of 1976 and by other measures such as improved productivity in industry and improved incentives for the export sector, all of which have stimulated activity outside Australia and created jobs in this country. These are the facts which will lead to the further development of the Australian economy, which, as we all know, is based on a very small domestic market. It is only through the expansion of our overseas markets that we will be capable of developing jobs for our unemployed.

That has been the thrust of the Fraser Government’s policy and will continue to be in the 1980s. This sets the framework for how the 1980s will be approached under a Liberal Government. That has very serious ramifications for my home State of South Australia. Quite clearly, the competitiveness of Australian industry is vital for South Australian industry. As everyone knows, there is a very high concentration of South Australian industry in the manufacture of white goods and motor cars - things which may be imported if costs change in such a way as to make it more attractive for people to import rather than to manufacture in Australia. Therefore the more effective we are in controlling costs in Australia the stronger South Australia’s economic position will be.

In addition, we have seen an inflow of capital to Australia which is based on the proposition that we are going to establish more resource based industries in this country. Clearly in the last few months there has been a marked development in this area with the inflow of capital from overseas. We are likely to see more of that in the future. We will see a development of on-processing with the use of Australia’s relatively cheap energy resources for the development of such industries. That, of course, is vital to the development of the uranium industry in South Australia based on Roxby Downs, uranium enrichment operations and the development of other uranium deposits in the area, lt is those issues which are vital for my State and which are the issues I would particularly like to bring to the attention of the Senate tonight. As a result of that scenario I believe that we can look forward to prosperity and to the development of that prosperity in the 1980s as long as we are able to control effectively the future development of costs in this country.

There are many matters outstanding which I think we need to take into account because clearly the whole scene can change in any circumstance which might arise. For instance, there may be some major upheaval overseas as a result of international developments. This would also clearly be an issue for discussion in this election campaign and it would be a matter for the decision of the people. Clearly the Fraser Government is offering leadership in dealing with these very significant problems overseas, as has been demonstrated recently in the statement of the Minister for Defence (Mr Killen). We have also seen the development of various arrangements overseas which are aimed at improving the alliance of the Australian defence forces.

Another area which is of vital concern to all of us is that of the wages explosion. At the moment we are facing a great deal of pressure from within the economy to increase wages as a result of a perceived lack of increase in line with cost of living increases. Of course that is not demonstrated and supported by the facts, as clearly there have been increases in real wages in the last five years in excess of the rate of inflation. Nevertheless, the unions see the need to press on–

Senator McLaren:

– Give us some facts. You can’t prove it.

Senator MESSNER:

– To prove one fact I cite the increase of over 2 per cent in household disposable income in the last five years. That is clearly a demonstration of the increase in real wages since 1975.

Senator Cavanagh:

– Tell us the CPI figures.

Senator MESSNER:

– lt is in excess of the consumer price index that I am talking about. Those matters are highly relevant to the future of Australia’s economic stability and it is to that matter this Government will be addressing its mind when it is returned after 1 8 October, and of course during the intervening period.

There are one or two other matters in the Budget that I shall refer to which I think highlight significantly this Government’s concern for the most needy groups in the community. When we look at page 68 of Budget Paper No. 1 , we see that the greatest increase in expenditure this year, in a Budget of some $36,000m, is nearly $1,1 00m for social security; a very significant increase of about 12 per cent. That is the highest increase in this Budget for any category. The second highest increase is in the payment to the States, which is some $805.9m. As a result of this Government’s policies the States can expect to be better off. We saw that defence expenditure increased by $533m and for health, another area of prime concern for this Government, the increase was $474.7m.

Those are the four areas of greatest growth in Government expenditure. They clearly demonstrate that the Government is concerned with getting its priorities straight. The first increase is in the Government’s area of responsibility in social security. The second increase is in its responsibility to the States. Defence, being a major issue at the moment and being certainly one of greatest concern as a result of the international situation and the changes overseas, has the third highest increase. The fourth highest increase is in health. To me that indicates that this Government is getting its priorities straight in respect of limited resources and is spending money in the proper way to ensure that its citizens are looked after as best as possible. It is clear that those things are of very great importance to the community generally.

There is one aspect of the grants to the States that I would like to mention; that is, the continued improvement in the finances of local governments, particularly in South Australia. As honourable senators would know this year there has been an increase from, I think, 1 .75 per cent to 2 per cent of personal income tax going to local government bodies. When I look at some of the amounts that have been distributed in this financial year I see that within the federal electorate of Port Adelaide - covering the councils of Salisbury, Port Adelaide and Woodville - there has been an increase from $2. 3m last financial year to over $3m this year, which is a very significant increase. This increase obviously will allow for a great deal more activity in the Port Adelaide federal electorate area as a result of the Fraser Government’s contribution to the welfare of people in that area. It also demonstrates that those councils will be able to keep rate rises down. Consequently the Fraser Government is seen to be helping in that area to ensure that householders get proper support.

I examined figures for some of the local councils in the federal electorate of Hindmarsh. I see that for the Henley and Grange councils the amount has gone up from $195,000 last year to $259,000 this year, which is a very significant increase. For the West Torrens City Council the amount has gone from $395,000 to $535,000. For the Hindmarsh council it has gone up from $142,000 to $185,000 and for the Thebarton council it has gone up from $161,000 to $218,000. These are very significant increases in direct Federal Government support for people who live in the western suburbs of Adelaide. Consequently it demonstrates the very real interest, and the importance of establishing priorities, which the Fraser Government clearly demonstrates through its actions.

Senator Gietzelt:

– All you did was to continue the Whitlam provisions.

Senator McLaren:

– It was our scheme. What are you talking about?

Senator MESSNER:

– I know that Opposition senators do not like it because they could not think up these schemes when they were in power. Since the Opposition is so interested in hearing these figures I shall mention the figures for the federal electorate of Bonython. The Elizabeth City Council had an increase from $380,000 to $517,000. The very large Tea Tree Gully City Council in the north eastern suburbs of Adelaide had an increase from $760,000 to $1,032,000, which is an enormous increase which will obviously be well appreciated by the people of metropolitan Adelaide.

Senator McLaren made the point that there was a very significant increase in the brandy excise in 1978. 1 point out that that excise was put up only so that it was in exact proportion to the excise on all other alcoholic beverages. I refer to whisky, beer, gin, rum and so on. So, South Australia was not picked out in any particular way for the imposition of the brandy excise in 1978. Following representations from Government senators and from concerned members of the House of Representatives and because of interests in South Australia, in 1979 the Federal Government decided to reduce specifically the excise on brandy. It did not reduce it in respect of whisky, run, gin or other alcoholic beverages. In other words, the Government saw the logic of supporting South Australian industry and, in particular, the South Australian wine and brandy industry. As a result of particular concern expressed by Liberal senators and members of the House of Representatives, that decision was taken; and a very important one it was for South Australian industry.

In light of all of those matters I have a very real feeling that the Budget which we have been discussing in the last few weeks will be of vital concern to the people of Australia, as they have perceived it as a sound document of very great responsibility. It sets a firm base for development in the 1980s. Let us face it, plenty of problems are ahead. We all see the rocks in the water ahead. The point is that we have to have a sound ship to sail through that water and around those rocks and to make sure that we get out on the other side. Quite clearly, the Fraser Government’s policies are designed to achieve that.

Senator McLaren:

– There have been many shipwrecks in the last five years foundering on the rocks.

Senator MESSNER:

– The biggest shipwreck of all involved that ship called Whitlam Labor that went to the rocks in 1975 never to be seen again. Quite apart from that aspect, I believe that, as long as we are prepared to address ourselves to the real problems, we are determined not to kid ourselves about what might be the perceived problems ahead, we work at the real issues of containing costs and of ensuring that development is kept up to a proper level and we are capable of controlling problems within the Conciliation and Arbitration Commission and other matters of that kind, we will be able to see quite clearly our way ahead into the 1980s and, significantly, we will be able to avoid the sorts of problems that beset us in the 1970s. It is that which will provide the base for the development of Australia for our children and for our grandchildren into the twenty-first century. It is that which we on this side of the Senate are committed to and which I know the Opposition is doing its best to undermine through its rather silly and confused policies in relation to government expenditure.

For instance, the Opposition has put forward propositions of various sorts for increased expenditure of about $2,000m which, of course, have to be borne by the taxpayer either through deficit financing or increased income tax. The Labor Party has told us that it will not increase any other taxes and that, in fact, it will look forward to a cut in personal income tax. It might be able to tell us - I do not know how it can tell us, but could it please explain to us on this side of the Senate - how it is possible to increase expenditure by some $2, 000m and at the same time to cut income tax without driving inflation and interest rates to higher levels.

Senator McLaren:

– You want to ask Mr Tonkin how he did it. He cut revenue. Now he can’t provide jobs.

Senator MESSNER:

– I see that Opposition senators are responding in the same noisy fashion and that they are not likely to have any logical answers to present to us at this stage of the game. In the light of these matters, I have no doubt at all as to the outcome of the election to be held on 18 October. We on this side of the Senate can see the firm commitment to policies which will determine the future of this country into the twenty-first century.

Sitting suspended from 6 to 8 p.m.

Senator EVANS:

– Taxation and tax avoidance are looming as major issues in this forthcoming election campaign. They are issues, moreover, on which the Government is extremely vulnerable, and the Government knows it. There are three basic problems with which it has to contend. The first is the overall level of taxation in this country which, as the Government’s own interdepartmental committee recently conceded, is the highest on record. Tax receipts have risen from $17.6 billion when the Labor Government went out of office to $32 billion in this coming financial year.

The second problem the Government has to face, apart from answering to the fact that it is the highest taxing party in government in the history of Australia, goes to the way in which the tax system operates. The Fraser Government, of course, promised tax cuts when it came into office in 1 975 and, more spectacularly, in 1977. But it reneged on those promises, first of all by slapping on a tax surcharge, and then by abandoning its promise of tax indexation. When it finally granted tax cuts not so long ago they were thoroughly derisory in their scale or dimension, amounting to no more than 90c a week or so for the average weekly earner. Clearly, a fundamental rethink of the whole tax scale as it relates to income tax burdens in this country is called for. lt is something that the Australian Labor Party specifically and clearly promised that it would undertake and that is one promise, among a number of others, of course, that will be met.

The real problem the Government faces, even more than any of those I have mentioned, is the whole question of tax evasion and tax avoidance. Tax avoidance and evasion are absolutely rampant in this country at the moment. One can almost name one’s own figure in respect of the level of tax avoidance and evasion. But perhaps the most credible figure to be advanced in recent times is that of Professor Russell Mathews who has assessed the level of tax evasion and avoidance in the community at the moment as running at something like $3 billion per annum. There are probably three different ways in which this sum accumulates. First of all, there is straight out evasion, the cash economy syndrome, indefensible in any circumstances, but a very serious phenomenon with which any government has to contend. The second kind of problem in the area of tax evasion and avoidance in tax minimisation of a kind which may or may not have a legitimate commercial or family justification depending on the circumstances. But there are many circumstances in which family trusts and all the rest are applied in a way which amounts to blatant straight-out tax avoidance.

In many ways the remaining category of tax avoidance is the easiest to deal with but it is the area in which .the Government has demonstrated least will and least capacity. This is avoidance of the grotesque, blatant, contrived kind that is involved in artificial paper schemes having no redeeming commercial or moral justification; the kind of schemes about which Senator Tate talked earlier this evening; the kind of schemes which are presently costing the community, on conservative estimates, somewhere between $500m and $ 1 ,000m per annum. This is a phenomenon essentially of the last six to eight years - particularly the last four to five years - and is perhaps the most disturbing of all the kinds of tax avoidance and evasion in the community at the moment.

The Government acknowledges the inequity of this kind of avoidance so far as ordinary payasyouearn wage and salary earners are concerned and, of course, it claims that it has been doing something about it; that its record has been second to none in this respect; that it has acted by passing appropriate legislation; and that if any problems do remain - as it acknowledges they do - it claims that those problems are intractable. That is not a proposition that the Australian Labor Party accepts. The incoming Labor government can and will do something about income tax avoidance of this blatant kind. It is true that when we, as a Labor Government, were in office little legislative action was taken specifically directed to artificial and contrived avoidance schemes of this kind. I think there were two basic reasons for that. The first was that the scale of the problem in 1972-75 just was not fully appreciated. The other reason was that the Labor Government was, of course, continually harassed and preoccupied by the systematic obstruction to its legislative and other programs by this Parliament and in particular by the hostile majority in this Senate whose villainy in this respect - and no lesser word is appropriate to describe it - has been unrivalled and unprecedented in Australian political history.

The situation in terms of the records of the respective governments is perhaps best described as follows: There was some penetration of the dike during the Labor period. Certain loopholes that did open up were not closed off when they should have been. Three or four leakages - in particular the notorious Curran scheme - did turn into fairly substantial streams of revenue loss by the end of 1975. But what has happened since the end of 1975 - since this Government came into office - is that those three or four leaks in the system have developed into three dozen or four dozen major leakages from the revenue of a magnitude which is no longer capable of being described as a mere leak or a mere stream; it has in fact become a raging torrent - and never more so than in the years 1976, 1977 and 1978 when the industry of tax avoidance really took off.

It is true - and I frankly acknowledge it - that a dozen or so legislative efforts have been made by the present Government or the present Treasurer, Mr Howard, to plug those leaks. But the reality is that, as soon as each of these artificially contrived tax avoidance schemes is identified and the particular leak in the system is plugged, others open up. As fast as, if honourable senators like, one finger is put in the dike it becomes necessary to apply other fingers and little Johnny Howard, as a unionist in Queensland described him, has long since run out of fingers and toes with which to plug the leaks in the system. The flood is becoming an avalanche of a kind that now threatens to break down the whole dike. What needs to be done accordingly is completely to rebuild the defences of the revenue and of the community as a whole against tax avoidance activity of this kind.

The basic elements in that strategy of rebuilding defences have to be, first of all, the reenactment of a section 260 of the Income Tax Assessment Act of a kind which will give the commissioner a discretion to wipe out avoidance schemes of the worst kind and in language which will be capable of surviving the treatment of the High Court that unfortunately and regularly is meted out to it. Legislation of this kind, however, seems to have been beyond the will and the capacity of this Government to enact despite all the alarms, all the diversions and all the promises of forthcoming legislation of this kind.

The other major strategy which is needed, and which is very much part of the Australian Labor

Party’s platform, is the passage in appropriate specific circumstances of fully retrospective remedial legislation of the kind for which there are ample precedents in the United Kingdom and of a kind which the courts despite their usual and quite proper reluctance to give credence to retrospective legislation have been prepared to acknowledge the utility and the virtue of, legislation of a kind which is defensible in principle and has been defended by me and others on numerous occasions and will continue to be defended. But, until we of the Labor Party come into government and get an opportunity to do these things, tax avoidance will continue to be a massive problem. Tax avoidance schemes will continue to proliferate. They will continue to amount to a colossal drain on the Treasury. There will continue to be a massive inequity in the way in which the tax system operates of a kind of which the great mass of the ordinary Australian wage and salary earners have already indicated that they have had a gutful.

To indicate the magnitude of this problem and more particularly the failure of the Government to act on it in the way that it should have acted, I draw attention tonight to one kind of scheme which has come to my notice relatively recently but which so far has received very little publicity. The scheme involves, as so many of these schemes do, the medical, profession. It is a scheme in respect of which the Government, although it has known of it at least since early 1979, has taken practically no effective action. I am talking about a scheme which has been conservatively estimated as involving sums of money of the order of $50m in the various hospitals around the country, where this scheme has become a way of life for medical practitioners, which has involved a loss to revenue over the last five years in which this scheme has been visibly operating of approximately - again on a conservative estimate- $ 15m and which, in the Australian Capital Territory, on the figures that have been made available to me, appears to involve a potential loss to revenue of the order of $250,000.

I am referring to the Private Practice Trust Funds which are presently operating on a very large scale indeed, in I understand, nearly every hospital around the country and which are certainly operating in the Australian Capital Territory. In essence, the particular arrangement that is involved in this kind of avoidance operation is as follows - I use as my model the Australian Capital Territory scheme in respect of which I do have some specific detailed information: Salaried specialists employed by the Australian Capital

Territory Health Commission in the Woden Valley and Royal Canberra hospitals have entered into an arrangement, which has been operating since 1975, whereby the private income they earn - major sums have been involved, particularly with the private insurance payouts - over and above their salaries, the private income which they earn in the exercise of their contractural right to engage in private practice in those hospitals, is paid by them or on their behalf into a private practitioners trust fund.

The amounts in question that have been paid in to these funds, particularly to the Canberra fund, are, I understand, in a range from as low as $2,000 a year to as high as $70,000 a year by each individual practitioner. The fund has been administered by a committee consisting of three representatives of those specialists together with one other person from the Canberra Hospitals Management Board. In the form in which this arrangement was originally established and, as we will see in a moment, in the form in which it appears still to be continuing to operate in practice, the money so received, so donated by these medical practitioners to this trust fund, could be paid out by the committee for the following purposes - I quote from the original trust document:

Trust funds may be used as follows -

For the payment of travel grants to officers in connection with study leave as approved by the Committee.

For the improvement of facilities for private patient work.

For the payment of subscriptions to professional associates, journals, books et cetera.

For funding research in any particular field of interest:

For payment of a bonus to salaried staff specialists by way of a special grant made annually but so as not to exceed 1 2 per cent of the annual salary of any officer in any one year;

For such other purpose as the Committee may determine with the approval of the Chairman of the Board.

What has been happening, in practice, over all those years is that the greater proportion of the monies so paid into this fund has been accumulated from year to year until such time as each particular doctor has decided to draw on the fund so accumulated for his own private purposes, in particular for taking overseas travel of the conference-junket variety. This has been working out for everyone concerned as a very nice little income averaging arrangement. In the years when the doctor is not travelling, he pays his additional income into the fund on an assumed tax free basis.

Senator Jessop:

Mr Acting Deputy President, I raise a point of order and draw you attention to Standing Order 406. I do not know whether

Senator Evans is embarrassed by what he is saying and thus is looking down at the desk with monotonous regularity. I excused him for quoting from a document earlier, but I suggest that he is reading his speech and I ask you to draw his attention to this Standing Order.

The ACTING DEPUTY PRESIDENT (Senator Davidson) - I think Senator Evans is aware of the requirements of the Senate. 1 do not think the point of order is valid.

Senator EVANS:

– With respect, the matters in issue are of some importance to the people concerned and it is necessary to state them with some precision. I would not wish to be accused of making cavalier overstatements in respect of any of the matters of importance which I am raising here tonight. For that reason, I want to be precise in the way in which I state these basic points.

Senator Jessop:

- Mr Acting Deputy President, I take a further point of order. I suggest that you draw Senator Evans’ attention to Standing Order 406, which states that no senator shall read his speech.

Senator Gietzelt:

– You are canvassing the Acting Deputy President’s ruling.

Senator Jessop:

– I am not. I am suggesting that Senator Evans is transgressing that Standing Order.

The ACTING DEPUTY PRESIDENT- I think the point is taken. Senator Evans is aware of Standing Order 406, which simply states that no senator shall read his speech. If Senator Evans has to quote he will know the bounds of that Standing Order. I draw his attention to the strictures of Standing Order 406.

Senator EVANS:

– I have never read a speech in this place in my life and I do not propose to start now. However I have substantial notes, for the reasons I indicated. I can understand Senator Jessop’s sensitivity in hearing about these matters because his own Government has so conspicuously failed, as I will show in a moment, to do anything about them. In the years when particular doctors have been travelling and, as a result, incurring vast expense they have simply drawn out of the fund the amount they needed individually to cover those costs. Although the amount so received may itself have been taxable, of course, it could be set off in its entirety as a tax deduction. As 1 said, it is a nice little income averaging scheme - nice work if you can get it.

This cosy little arrangement that thus developed became a little less cosy, at least here in Canberra, in 1979 when the whistle was blown on the scheme from a number of different quarters, lt became apparent first of all, and legal advice was supplied to establish this, that what had apparently been set up with the intention of being a charitable trust was really nothing of the kind but simply an agency arrangement for the benefit of the participating doctors. Furthermore, in October last year the Commissioner of Taxation ruled that the amounts paid into the private practitioners fund were still to be assessed as income in the hands of the practitioners in question.

One would have thought that the matter would there have rested with the collection of the very substantial back taxes owed to the revenue from those concerned and with an appropriate number of shamed faces all round. But this was not to be, and this is the nub and the substance of what I want to say tonight. Showing a tenderness for the medical profession which we have not been accustomed to thinking of the Taxation Office as showing elsewhere, the Taxation Commissioner has in fact allowed the private practitioners trust fund, or a subsequent variation of it to continue for all practical purposes to operate unabated, operating in exactly the same way. As a foundation for what I now wish to say, I seek leave to incorporate in Hansard four letters dated respectively 10 October 1979 from the First Assistant Commissioner of Taxation to the Chairman of the Capital Territory Health Commission, a circular letter dated 5 June 1980 from Dr D. P. Dhall of the Woden Valley Hospital to the participating specialists in the scheme, a letter of 20 June 1980 from Mr Hoctor, First Assistant Commissioner of Taxation, to one of the participating specialists, and a further letter on 22 August from the Commissioner of Taxation, Mr O’Reilly, to the same participating specialist. I seek leave to incorporate those documents in Hansard.


– 1 take it that they are capable of being incorporated in Hansard!

Senator EVANS:

– In terms of their length, yes.


– Is leave granted?

Senator Chaney:

– They have not been shown to me.

Senator EVANS:

– I regret that, but the Minister for Aboriginal Affairs (Senator Chaney) is very welcome to look at them now. The substance of the present arrangements, as revealed by those documents, if Senator Chaney will give me leave to incorporate them, is roughly as follows: Firstly, the moneys standing accumulated in the fund at the time that the decision was made to regard them as being taxable are now to be treated for the tax year 1979-80 as having been made as charitable donations to the Canberra hospitals by the participating specialists. Secondly, the back taxes owed by each practitioner in respect of his or her accumulated contribution to the fund is to be equated with the amount of the donation notionally made by that practitioner in the 1979-80 financial year. In other words, the donation that has been made notionally in order to clear the fund of its present assets will result in a rebate to each practitioner precisely covering the amount owned by that practitioner for his previous years of untaxed private income.

Now comes the crunch. As another element in the new cosy arrangement which has been entered into by the Taxation Office with the medical specialists here in Canberra, the money so donated is still to be capable of being applied, and no doubt will be applied, for the individual benefit of each of the participating specialists. The purposes which the Commissioner apparently has now approved as appropriate and legitimate are described in a passage in the circular letter from Dr Dhal 1 as follows:

  1. . For the payment of travel grants to officers in connection with conference and study leave.
  2. For the improvements of hospital facilities.
  3. For funding research.
  4. For such other purposes not inconsistent with a donation to the hospital and approved by the General Hospital Superintendent.

Thus, it appears that the travel grant racket is alive and well and living in Canberra, notwithstanding the way in which this matter was supposedly resolved last year. Not only that, but also - this is the real significance of it - I understand that exactly this kind of scheme is operating in a very large number of hospitals all around Australia, apparently now with the active approval of the Commissioner of Taxation. The real shocker comes with yet a further gloss on this arrangement, a gloss which is authorised and indeed suggested by the First Assistant Commissioner of the Taxation Office, Mr Hoctor, in his letter of 10 October 1979. He said that, as a matter of his interpretation of the taxation law:

Nor would it destroy the gift if, in any year, the hospital authorities decided to pay bonuses to the specialists out of any surplus in the special fund provided, of course, that there was no understanding that the fees were paid in the first place to the hospital on condition that a bonus would be paid. The bonuses would be assessable income of the specialists.

The real question that arises when one looks once again at the elements of a cosy little income averaging scheme, set out in those documents in all its glory, is how on earth can this kind of arrangement be lawful; not just how could it be regarded as moral. Morality is the kind of language which the courts and authorities always have difficulty applying in the taxation area, however appropriate the layman or the politician might thing that language is. The real question is how on earth this kind of arrangement, with all the incidences of it which are acknowledged in those documents, can be regarded as clearly lawful, given the enactment by this Government - I readily acknowledge that it was a good piece of legislation- in 1978 of the new section 78a of the Income Tax Assessment Act. Section 78a is an anti-avoidance device of an entirely sensible kind, designed to get around abuses of the gift provisions of the taxing Act whereby notionally charitable donations were being largely fed back to the original donor in a form which allowed him not only to get the tax free benefit of the original donation but also equally to get the benefit of a very large swag of his original donation. In particular, section 78A (2) (c) provides that donors cannot get a tax benefit where ‘the donor or an associate of the donor has obtained, will obtain or may reasonably be expected to obtain any benefit, advantage, right or privilege other than the benefit of any deduction’; that is, any deduction for the donation itself.

It has been pointed out to the Taxation Commissioner, I understand in no uncertain terms, by at least one deeply unhappy and concerned Canberra practitioner - and he is not the only onewho has been worried for a long time about the operation of this scheme that this particular provision that I have quoted, section 78a, would seem to undercut completely the kinds of arrangements which are now so obviously envisaged by all the participants in the continuing scheme here in Canberra as well as everywhere else around Australia.

What has been the reaction of the Australian Taxation Office to that? In letters remarkable only for their failure to meet and persuasively to grapple with those issues both the First Assistant Commissioner, Mr Hoctor and indeed the Commissioner, Mr O’Reilly, said that the ‘gifts’ involved in these not only past but also continuing schemes are genuinely charitable gifts and no further question of law or tax practice arises for further consideration. With the consent of the Minister for Aboriginal Affairs and leave of the Senate, copies of those two letters will be incorporated in Hansard.

Where does that leave us? I believe that the situation I have outlined is one justifying, to put it at its very least, real concern by this Parliament and by the people of Australia, particularly the ordinary wage and salary earners who just do not have the kind of financial or institutional muscle, even if they had the inclination, that would enable them to have access to anything like the opportunities for tax avoidance involved in schemes of that kind. I know that at least the initial requirements of this scheme have been of concern to my colleague, Mr Ken Fry, in the other place. The matter has been of concern also to Senator Peter Baume, on the Government side of the chamber, who on 2 1 May asked a question without notice of the Minister for Social Security, Senator Dame Margaret Guilfoyle. That question finally was answered on 19 August on behalf of the relevant Minister, in terms which were utterly uninformative. He again refused to give the kind of details of the scheme which were sought by Senator Baume and to give a satisfactory explanation of its legality and, if you like, its morality in the light of provisions operating elsewhere.

To my mind, and certainly to the minds of my party, tax avoidance is an unmitigated evil, no less so when it is engaged in by the medical profession than when engaged in by anyone else. Selective sympathy appears to have been shown by the Taxation Office, lt appears to have bent over backwards to enable the practitioners participating in the scheme to escape the payments of previously accruing tax liabilities. That and the continuance of the real advantages to those practitioners of the scheme in the future, wears on its face and, indeed, would admit of no other conclusion were not the status and stature of the officers concerned as high as they are, all the signs of a manifest dereliction of duty and one which will continue to cost the community millions of dollars if it is allowed to go unchecked. I raise these matters, and this particular matter relating to the scheme, in all seriousness because of my very great concern and that of my party- indeed, that of many government members and senators - about the incidence, the scale and the operation of tax evasion and sophisticated tax avoidance in this community. If the government, both directly through legislation and administratively through its departmental officers, fails to act in respect of these matters, particularly when matters are drawn to its attention as I have tried to do tonight, the whole system, not to mention the credibility of the Government, will be in tatters.

The ACTING DEPUTY PRESIDENT (Senator Davidson)- Earlier, Senator Evans sought leave to incorporate some letters in Hansard. They have been shown to the Minister to regularise the procedure, ls leave granted?

Senator Chaney:

– Yes.

The ACTING DEPUTY PRESIDENTThere being no objection, leave is granted.

The documents read as follows-


Mr E. R. Boardman, Chairman,

Capital Territory Health Commission, P.O. Box 825, Canberra City, ACT 2601

Dear Mr Boardman,


Your Reference: C79/541

At our meeting on 6 September the income tax position of contributors to the Private Practice Trust Fund maintained by the Capital Territory Health Commission for salaried specialists employed by the Commission at Canberra public hospitals was discussed.

I confirm the advice I gave then that fees earned by the specialists under their existing right of private practice at the hospitals constitute assessable income of the specialists notwithstanding that the fees were not, in fact, received by them but were paid into the trust fund. For income tax purposes the fees are considered to have been derived by the specialists and the payment into the trust fund represents an application of the fees after derivation.

It follows that the assessable income of each specialist should have included the fees derived by him in each year from private practice since the inception of the fund less a proportionate share of expenses incurred by the trust in carrying out the terms of the trust.

I would also confirm the advice I gave that if the private practice arrangements were restructured so that the hospitals, instead of the Commission, sent out the accounts and were permitted by the specialists to retain absolutely any fees collected, i.e. the specialists having no legal claim to the amounts retained by the hospitals, the amounts so retained would constitute gifts to the hospital deductible to the specialists under section 78 ( 1 ) (a) of the Income Tax Assessment Act. The net effect of this would be that, although the fees would continue to represent assessable income of the specialists, they would be offset by the gift to the hospital.

It is important to remember that it is the essence of a gift that it is made voluntarily and not as a result of a contractual obligation to transfer the property comprising the gift in return for some compensating reward. It would not, however, violate the concept of a gift if the private practice fees were held in a special account by the hospitals or that the moneys were retained by the hospitals on the understanding that they were to be used for specific hospital purposes, e.g. expenditure on research, provision of facilities, etc. Nor would it destroy the gift if, in any year, the hospital authorities decided to pay bonuses to the specialists out of any surplus in the special fund provided, of course, that there was no understanding that the fees were paid in the first place to the hospital on condition that a bonus would be paid. The bonuses would be assessable income of the specialists.

As I understand our discussions it is contemplated that the existing Private Practice Trust Fund should be wound up. There is, however, some $220,000 in the fund which constitutes assessable income of the participating specialists. In the event that the scheme was restructured and the amount of $220,000 was paid over to the hospitals in accordance with the understanding in the preceding paragraph the amount would represent gifts to the hospitals and each specialist would be entitled to a deduction for his share of the gift.

This advice should, I hope, satisfactorily settle the matters raised in your letter of 27 August and earlier correspondence to the Commissioner. I would appreciate your advice in due course on what is resolved in relation to the funds.

Yours sincerely,


First Assistant Commissioner


5 June 1980




It has become clear that the Private Practice Trust Fund is not truly a charitable Trust but an agency. In the years since its inception, money has been allowed to accumulate. In the early years this was particularly important as Private Practice earnings were small and the accumulation was allowed in order to pay for the cost of sabbatical leave.

On advice from the First Assistant Commissioner of Taxation, Mr K. P. Hoctor it has been ruled that non-disbursed monies at the end of each tax year are assessable as income and thus this has created a taxation liability.

It has been recognised that there has not been an intention to avoid this liability and it has been acknowledged that it was the deficiencies in the original Trust Deed which created this liability. The problem has been fully discussed by both the Trustees and the ACTMOA Negotiating Committee with the Commission and with the Taxation Department and a solution has been developed by Mr K. P. Hoctor such that the taxation owing from assessable income from previous years will be equated against a donation included in the tax year, 1979-80.


Money remaining within the Private Practice Trust Fund after completion of this taxation year, 30.6.80, to be donated to a charitable institution which may be either Woden Valley or Royal Canberra Hospitals. The donation will be made on the instruction of individual Specialists to the Trustees. The donation will count within this tax year and the tax saving resulting from the donation will be offset, where applicable, against the taxation liabilities of previous years. The donation will be a net figure of the accumulated funds from each of the taxation years that a particular Specialist has participated within the Fund but the Commissioner of Taxation will be informed of the amount which accrued at the end of each taxation year. It has been emphasised that the Taxation Department will be at pains to see that no doctor is disadvantaged and in the cases where non-disbursed monies had been included in previous tax returns, the donation will result in a tax rebate. It has recommended that individual tax returns be completed as soon as possible and it has been promised that the re-assessments will be done immediately the return has been sent in.

With this letter there is a form outlining the instructions from each doctor to the Trustees to donate the balance of their monies to the charitable institution of their choice. Also, it has been asked for doctors to define the purpose for which their money is to be donated.

After the instruction has reached the Trustees, and at the completion of the taxation year the balance of the monies will be paid to the charitable institution according to the instructions of the individual doctor and the Taxation Department and the doctor will receive information about this donation.

It is intended by the Trustees to clear the Private Practice Trust Fund at the completion of this tax year and from I July 1 980 the fresh Fund will commence and be run along the same lines as in previous years. If a doctor does not wish to donate his balance, then his monies will remain in the Fund. However, the Taxation Department will be informed that this doctor has not agreed to the donation and the balance of the monies will then be assessed as income. Of course, monies can continue to be claimed by participants according to the purposes outlined in Clause 22.5 of the Terms and Conditions of Employment.

Conditions of the Donation

The money donated to a charitable institution which may be one of the two hospitals, will fulfil Clause 22.5 insofar as the purposes outlined in that Clause are consistent with the alienation of the donation. After a revision with the First Assistant Commissioner for Taxation, it has been agreed that the revised following purposes will apply.

. For the payment of travel grants to officers in connection with conference and study leave.

For the improvement of hospital facilities.

For funding research.

For such other purposes not inconsistent with a donation to the hospital and approved by the General Hospital Superintendent.

However, within these general purposes the donation can be made more specifically. However, once donated, the money will belong to the hospital (or to any other charitable institution to which the payment has been directed) and any payments must be authorised by the General Superintendent who will be required to adhere to any direction given by the donor as to the purposes to which it is to be used.

There is a legal requirement prescribed in Section 67 of the Health Commission Ordinance which ensures that donations are used solely for the purposes to which the donation was made.

Examples of specific purposes could be a donation for a research project or for a particular travel grant or for improvement of hospital facilities within a specialty. The Trustees suggest that doctors discuss the purposes of their donation fully with their own General Superintendent prior to the completion of this tax year.

The information about the solution to the taxation problem will be conveyed to the Capital Territory Health Commission and it is expected that the Commissioner will convene a special meeting in order to receive the information. The General Superintendents will also have been informed of the solution. lt is important that once a doctor has determined on the purpose for which his money is to be donated, that the Trustees be informed by a full statement on the instruction form accompanying this letter. The taxation solution will be an individual one for each doctor and hence the specific instruction to the Trustees. It is strongly recommended that taxation accountants discuss the nature of the donation and the completion of the taxation return for 1979-80 with Mr K. P. Hoctor, the First Assistant Commissioner for Taxation. Mr Hoctor is aware that this will happen and he also recommends, that this be done. It is emphasised that the reassessment of the taxation returns for the years a particular doctor has been participating in the Fund, will be completed as soon as the tax return for this year has been received.

Disbursal of Monies within this Taxation Year

It is recommended that doctors study the information provided them about the balance in the Fund up to 31.3.80 and that they keep a record of payments received during this fourth quarter in order to inform the Trustees in the last week of June of their balance within the Fund. This will enable claims to be considered against the monies in the Fund.

Yours sincerely,

A. Davies Chairman

Private Practice Trust Fund


I………………… instruct the Trustees of the Private Practice

Trust Fund to donate the balance of monies remaining in my account within the Private Practice Trust Fund after 30 June 1 980 to the organisation stated hereunder and that such donation be used as follows. 2 June 1980



REFERENCE: 4 79/3601 20 June 1980

Dr Arnold Mann, FRCS FRACS 1 8 Monaro Crescent, Red Hill, ACT 2603

Dear Dr Mann,

I refer to your letter of 1 7 June 1 980 in relation to the disposition of moneys in the Canberra Hospital Private Practice Trust Fund.

It is not open to me, and your letter recognises this, to discuss with you the income tax affairs of other taxpayers. I can only confirm my earlier advice that fees earned under the private practice arrangements represent assessable income of the specialists even though the fees were paid into the Trust Fund. If a specialist donates his interest in the Fund to either of the public hospitals in Canberra or to any other institution, gifts to which are deductible under the income tax law, a deduction for the donation would allowable in the assessment of the year in which the donation was made.

Your letter seems to suggest that amendments made to income tax law in 1 978 preclude a deduction being allowed for a donation made in the particular circumstances. This is not so. The amendments made to the income tax law in 1978 were designed to overcome specific abuses of the gift provisions. This is made clear from the Second Reading Speech of the Treasurer in introducing the measures into the Parliament. I quote from the Second Reading Speech:


The abuses of the gift provisions against which this part of the Bill is directed all have the common feature that the donor seeking a deduction for a gift to one of the funds or institutions referred to in the gift provisions of the law does not, when the reality of the situation is laid bare, really make a gift of anything like the amount or value for which a deduction is claimed. Correspondingly, the charity does not enjoy anything like the full amount or value of the ostensible gift.

Under one gift scheme the donor seeks a deduction for a $10,000 gift that is made to an institution, $1,500 of the amount coming out of his or her own funds and the balance of $8,500 being lent by the promoters of the scheme. The institution, pursuant to an overall arrangement, pays the promoters a procuration fee of 98.8 per cent of the gift, leaving it with $120 out of the $10,000. The procuration fee puts the promoters in funds not only for their $8,500 loan to the donor, but provides them with a substantial fee. In practical terms, the donor does not have to repay the $8,500 loan.

In further schemes of the same kind the gift to the charily is a note or debenture which, despite the claim for a deduction of its face value, is rendered almost worthless by subsequent, pre-arranged, changes in its terms and conditions. The charity receives cash from the sale of the note or debenture as its reduced value, and the diminution in value accrues to the donor or his associates.

Plainly, the Commissioner of Taxation is resisting claims throught these shoddy schemes for deduction, made under the law as it stands. However, as the courts may find that the nominal rather than the real gift is deductible, the Government proposes to put the matter beyond doubt in relation to gifts made after today.

I stress that the amendments will deny any deduction Tor a future gift only when made in tax avoidance circumstances of the broad kind I have just referred to. Genuine gifts made in ordinary circumstances to the funds and institutions concerned will not be affected.

A closely related exploitation of the gift provisions is also being dealt with in the Bill. This concerns practices whereby a donor gives a work of art, or money to buy a work of art, on the condition or understanding that the donor or a relative or other associate may have possession of the work. Generally, there will be no deduction for gifts of this kind made after today.’

As you will see the measures introduced in 1978 were not intended to affect genuine gifts made to authorised funds and institutions. The measures were not intended to strike at donations made in the present circumstance. I trust this will clarify the matter to you.

Yours sincerely,

P. Hoctor First Assistant Commissioner


REFERENCE: 79/3601 22 August 1980

Dr Arnold Mann, FRCS FRACS Woden Valley Hospital, P.O. Box 11, Woden, ACT 2606

Dear Dr Mann,

Since our telephone conversation of 6 August 1 980 and the receipt of your letter of 8 August 1980 1 have personally examined the income tax implications arising from the rights of private practice enjoyed by salaried specialists employed by the Capital Territory Health Commission.

There are a number of matters involved in the operation of the private practice arrangements which, as you will appreciate, are not the concern of this office. They are matters between the participating specialists and the Capital Territory Health Commission.

As far as income tax is concerned, however, I am satisfied that the advice given in this matter by First Assistant Commissioner, Mr K. P. Hoctor represents a correct application of the provisions of the Income Tax Assessment Act. In the circumstances there is nothing that I would wish to add to the advice that he has given.

Yours sincerely, (W.J. O’Reilly) Commissioner of Taxation.

Senator MISSEN:

– In speaking in this first reading debate on Appropriataion Bill (No. 1) 1980-81, I do not propose to cover the same subject as Senator Evans spoke about, although 1 too have strong views on the subject of tax avoidance, as do many other honourable senators on this side of the chamber. Contrary to Senator Evans, I believe that the Government has made an excellent effort in dealing with the devious methods adopted by many people in this community to develop tax avoidance schemes. I am sure they will continue to develop such schemes. Honourable senators on this side of the chamber likewise are concerned about the way in which these problems are tackled but we do not hold generally with the view of Senator Evans about the inability of the Government to handle the problem of tax avoidance.

The subject that I want to speak of tonight certainly concerns the Budget but does not deal so much with the collection of taxation but with certain areas of the Budget which have had too little notice from the public and which are deserving of interest and concern. The Budget will develop this community and its economy better and better. The Budget proposes steady growth. The Organisation for Economic Co-operation and Development has shown recently that there is some weakening in the world economy and world trade and internationally high interest and inflation rates. Australia is performing better than most of the developed countries. The OECD has pointed out that Australia is better placed than many OECD countries to absorb the consequence of these international, developments. This stands to the credit of the Fraser Government. In the five years since the Fraser Government has been in office we have seen steady development. I think this Budget contains many items which indicate the success of its policies.

As I said, I propose to deal primarily with three areas that are striking and important but which have not received a great deal of notice either in the media or in debates in this Parliament so far. In the first place I refer to the action of the Government with respect to the community health programs. Community health programs have been a matter of some controversy for many years. The community health centres were first developed in 1973. Since then they have continued to grow, particularly in some States. In my State of Victoria community health centres have developed substantially. J believe they are vital to the health requirements of many thousands of people. This is especially so in the northern and western suburbs of Melbourne where there are a number of well developed community health centres. Very often these centres provide the service that is needed in areas which contain a lot of high rise flats, old people, migrants and people who have difficulty in getting medical and dental attention. These centres provide a service in areas where an inadequate number of doctors and other paramedical services are available. The figures are quite striking at times. The medical profession on occasions has not gone to work in these areas. The community health centres provide a very ready service for people. They provide facilities which deal very much with the physical health of the people and a great number of additional services which the people would otherwise have to obtain at hospitals.

For a number of years, by agreement between the Commonwealth and the States, funds were provided on a fifty-fifty basis - on a dollar for dollar basis. In the middle of this the Commonwealth proposed that the States should accept a large responsibility and that, consequently, the Commonwealth’s contribution would be fixed at the same actual amount that it had been in the previous year. The States objected to this proposal. Honourable senators from both sides of this chamber made representations to the Government about this matter. Senator Neal and I made representations on behalf of Victoria. We pointed out the enormous importance of these institutions and the work which they performed. We felt the Commonwealth should continue to contribute equally with the States in the funding of these health centres. The Budget now confirms that the equal responsibility. The Budget has provided that the community health service programs should be increased. The centres will receive some $5m more and the payments will continue on a dollar for dollar basis. One must appreciate that when one talks about community health centres, there is some doubt in some people’s minds as to what they involve. They are not, as is sometimes said, merely there for the purpose of reducing admissions to hospitals, lt was pointed out in a statement which was sent to me by the East Preston Community Health Centre on the costing of these centres that the purpose of community health centres is not just to reduce admissions to hospitals. The statement also pointed out:

This is, unfortunately, a short-sighted and narrow view of the operation of a Community Health Centre. A Community Health Centre’s purpose is to improve the physical health of the population it serves. A Centre does this by exploring and utilizing non-institutional forms of care. Whilst it is possible that, for example, care for the aged in their own homes may reduce the admission to inpatient institutions, it is equally possible that it may only meet that level of demand which is currently not being satisfied by the availability of institutional beds.

There is no doubt that community health care centres cover a great deal of need in the community. There is no simplistic way of describing the work they do. In many districts they do different types of work and provide different types of services.

The position now, as shown in the Budget Papers, is a recognition by the Commonwealth of the 50-50 responsibility with the States and, in fact, represents an increase in the payment for community health facilities and services. Altogether an amount of $67. 5m will be provided this year. That represents an increase of $12. lm on 1978-79 figures. It is also evident from Budget Paper No. 7 that in Victoria expenditure on community health centres has shown an increase from $ 13m in 1979-80 to over $ 16.5m for 1980-81. I think this is indeed an encouraging development. It will give to the people who have put a great deal of time and attention into the development of the services a recognition of the most valuable service which they perform. These people are very often local councillors and local citizens who work on the centres and constitute their management boards. Of course, they desire probably more security than they have and in many cases they desire new buildings because in many cases the work is performed in very old premises. No doubt, there will be a need in the future for the further expenditure of moneys to replace many of these premises. I believe that we have in this instance a recognition that this is a responsibility which both the Commonwealth and the States should jointly maintain. I welcome that decision which appears in the Budget.

The second aspect that I will deal with tonight is the development in the Budget in regard to tax deductibility for gifts to voluntary overseas aid organisations. I read from the Budget Speech what is stated under the heading ‘Deductibility of Gifts’:

We have decided to permit tax deductibility of gifts made to certain educational institutions and voluntary overseas aid organisations.

Gifts made after tonight to certified technical and further educational institutions will be tax deductible where those gifts are for approved purposes.

In dealing specifically with the question of overseas aid organisations, the Treasurer (Mr Howard) said:

In addition to the substantial outlays made direct from the Budget for overseas aid purposes, the Government permitted tax deductions in respect of donations made in 1979-80 to the Kampuchea and East Timor appeals.

In recognition of the work performed by many of the voluntary bodies involved in the provision of overseas aid the Government has decided in principle to allow taxation deductions for gifts made to eligible non-government organisations extending assistance to approved programs and organisations in developing countries.

Eligible organisations will be determined by the Treasurer after consultation with the Minister for Foreign Affairs, who will be consulting relevant bodies including the Australian Council for Overseas Aid.

This result has come about following representations which have been made over a considerable period by quite a number of organisations and by many members of the Senate and the other House. I and others who have made these representations - and I asked a question on this subject on 16 May this year - are delighted to see that now justice will be done to organisations which are among the best ambassadors for Australia. The people who contribute moneys for the purpose of overseas charities, who want to see actual work done and who do, by paying their moneys, see actual effort made on behalf of people who are suffering in many parts of the world where poverty and disease are rife, will now have the satisfaction of knowing that this contribution is recognised by the Government. I think they are entitled to give moneys and to have tax deductibility. I think they will be encouraged more and more to give contributions in this cause.

We saw this in the case of Kampuchea where, after tax deductibility was granted, some $10m was contributed by Australian taxpayers towards the relief of the terrible conditions which were prevailing in Kampuchea. One does not know, of course, what organisations will finally be granted this tax deductibility, but one imagines that they will be those that are responsible and are doing work which can be recognised as being valuable. One of those organisations is Austcare which, after all, is Australia’s own aid organisation and which has a very fine record in this field. Community Aid Abroad is another organisation in which the work done and the effort made, whether it is in a small village in India or somewhere in Africa, is very practical work for people in need and work which will I trust be recognised be being granted deductibility. I think another worthy organisation is the organisation For Those Who Have Less. Of course, World Vision of Australia, with which Senator Bonner has had such a close connection, is an organisation which, I think, also must come closely into consideration. / wish to refer to one other organisation and a situation which arises. That is the Eritrean Relief Committee. This is an organisation of which I should declare that Senator Tate and I, as sponsors of this organisation, have perhaps a close interest in hoping that it will get very sympathetic consideration by the Treasurer in considering donations made to it. There is awkwardness in regard to the matter of aid that is being given - or not given in some cases- in East Africa. As we all know there is a considerable area of famine in east Africa. Not only is the Australian Government considering the possibility of tax deductibility but also under its aid program it gives contributions to united Nations relief organisations in this area. In Budget Paper No. 8 which is headed ‘Australia’s Overseas Development Assistance Program 1980-81’, under ‘Food Aid’, the following statement appears:

Australia’s multilateral contribution will be made as foodgrain, commodities and cash, to the value of $2 1 .9 million which will be supplied to the World Food Program . . for its global social and economic development projects. Part of Australia’s foodgrain aid (30 000 tonnes plus freight costs) will be directed through the International Emergency Food Reserve . . . established under the aegis of the WFP to enhance world food security. This reserve will be used on a bilateral and multilateral basis to help overcome unexpected food shortages resulting from droughts, floods, pests etc., in excess of normal food deficits.

Major assistance in the form of food aid is being provided for disaster relief operations in the East African region, an area suffering extreme hardship and malnutrition as a result of severe and prolonged drought. The Government has recently approved expenditure of $2 million to assist the WFP relief activities in the region. Australia has been supporting efforts to alleviate this suffering for some time. For instance, 2000 tonnes of wheat were consigned to WFP for needy areas un Uganda while 100 tonnes of baby food were supplied as emergency relief to orphanages. In recognition of the plight of Eritrean refugees, Sudan has been supplied with 2000 tonnes of wheat specifically for famine relief.

I greatly applaud that relief. I hoped it could be more, but that relief is, of course, of some assistance in an area where the suffering is immense. But there is a suggestion that perhaps we should be careful as to where our aid is going in this area. Aid is also going to Ethiopia, a country which is suffering under a communist dictatorship, a country which has promoted wars on four fronts against organisations, guerrilla operations, groups and countries like Eritrea and Somalia which want to be independent of it. Recently the Parliament was visited by Miss Valerie Browning, a nurse who has been to this area of Eritrea several times and has been subjected to, I think, a great deal of danger in the effort which she has made to see the problems which are arising. Miss Browning has come back from what is known as the Horn of Africa and has made, amongst other things, a short report which I would seek leave to have incorporated in Hansard.

Leave granted.

The document read as follows -


In light of my current visit to the Horn of Africa during June, July and August representing ACC, ACR and CAA I am deeply concerned that

there is a steep increase in refugees fleeing into Somalia; Sudan; Djbouti and increase of homeless in Eritrea, and that the refugees report that they are fleeing from the atrocities of war inside Ethiopia, and not because of the drought. Over 2 million refugees have resulted from Ethiopia’s war efforts, half of Africa’s refugees

the intensity of war in the four war zones - Ogaden: Tigray Onomo and Eritrea continues to escalate under the advancing Soviet military impact. Here I refer to Eritreans report of stock piled nerve-gas in Eritrea and the introduction of MI-24 helicopter gun ships and parachute bombs as examples

refugees report disruption of normal farming life. In southern Eritrea SO per cent of the land is not farmed because the entrances to farms are land-minded. In the Haragi regions large areas of land have been turned into military training bases - crop farmers have not planted crops for two years. Herders I spoke to said that these animals had been systematically confiscated. Napalm and phosphorous burning of crops is repeatedly used at the height of the battle

Ethiopian workers are being crippled by Ethiopian government wars. 45 per cent of workers salary is taxed, of that the ‘call of the Motherland’ and Kebele taxes are direct military taxations. A popular slogan of the government is ‘everything to the war front’ - page 33 ‘Class Struggle and the Problem in Eritrea’; Ethiopian Information Centre, Addis Ababa, 1979

In asking for famine-relief, Ethiopia has specified 9 affected provinces - Sidamo; Goma Gofa Harage; Arussi Bale; Eritrea Tigray WO”0 and Shoa. All except for Shoa and Wollo are extensively war zones.

Horage and Bale are provinces of the Ogaden war - 1 .5 million people have fled the area as refugees into Somalia

the Oromo Liberation Front is fighting in Goma Gofa; Sidomo; Arussi

Tigray is reportedly 75 per cent under the control of Tigray People’s Liberation Front, which amounts to most of the countryside

in Eritrea, the Ethiopian government is in control of towns and villages along major access roadways. The remaining countryside is under Eritrean control. An estimated 500,000 people have fled Ethiopian occupied towns and villages to live in the countryside.



Australian Council of Churches BOX C 1 99, Clarence Street Sydney, NSW 2000

Senator MISSEN:

– In that document Miss Browning sets out the hardships which the Eritreans are suffering since they were forced into a state in which they had to have a federation with Ethiopia. Subsequently the Ethiopians destroyed that federation and took over their country. For 17 years, as Senator Tate and I have described earlier in the Parliament, they have fought for their independence. The situation has become worse and is such that approximately 2.5 million people in this area are displaced from their homes. One can read at length examples of the suffering which has been inflicted on them by the Ethiopian troops, with Soviet and Cuban assistance, and of the extent to which they have been driven from their homes and had their crops destroyed. So many of them have been forced into Sudan where they are in temporary camps.

Senator Knight:

Senator, a number of members of parliament visited an Eritrean refugee camp in Sudan last year.

Senator MISSEN:

– Yes. 1 am certainly pleased to hear that that was done, lt is, I gather, getting more difficult. There are problems even with the relationship between Sudan and Ethiopia which make it more difficult for refugees. But we have given some help to Eritrean refugees, lt is obviously not enough. Quite obviously, atrocities are occurring and the risks are that poison gas will be used. That is what they and their supporters believe. 1 shall read from the report of a recent inquiry which was conducted in Italy into the situation in Eritrea. The report stated:

In May 1 979, for instance, fifty young people were arrested in Keren— that is, one of their cities- and no-one knows what happened to them.

By early 1980, the Ethiopian authorities had worked out a comprehensive system of terror, covering arbitrary arrests, killings and ‘disappearances’. The security services (who receive training from East Germans in Ethiopia) have a regular pattern of operation.

Those who are picked up by landrovers are never seen again; the police in the landrovers are known as the ‘killer squad’ and drive their victims outside Asmara or Keren, kill them and bury their bodies in mass graves.

I will not describe in considerable detail the information 1 have. The problem is there. Miss Browning has graphically shown it to us in the Parliament. The Ethiopian problem, I am told, is not so much a natural famine but a famine which is caused by their war-like activities of the Ethiopians and by the fact that people have been taken from their farms and areas which they would otherwise use to grow crops have been used as war staging areas. We have therefore to consider carefully whether we are giving sufficient aid. One suggestion I make is that we consider the question of tax deductibility for gifts to the Eritrean relief operations, which would be very helpful to the Eritreans and would enable Australians, although far away, to give some assistance to people in dire need. This is the second area of tax deductibility in which I think that the Government has made an important decision this year, a decision which will help to improve the good name of Australia and will give us the opportunity to make contributions to very worthy causes that bring relief to people in all parts of the world.

The third matter with which I wish to deal very briefly is the provision in the Budget for the Government’s environmental policies and proposals. This is a quite separate matter. Nonetheless, I think we can be very pleased that the Government has made such striking steps forward in regard to environmental matters. The

Government has a proud record in environmental matters. Over the years it has done a great deal in the environmental field, whether in relation to the Great Barrier Reef Marine Park and its development, Fraser Island, the stopping of whaling, or work in the Antarctic. This year’s Budget reflects quite striking improvements in the moneys that have been provided for the Government’s continuing policies in relation to the various institutions for which it is responsible.

One finds that the marine science and technology research grants, which were only $400,000 in the previous year, are now $2m, representing a 500 per cent increase in money terms. For the Australian Institute of Marine Science, which we founded in 1977, creating a complex near Townsville, $5. 5m is provided this year, which is an additional SI. 26m on the provision for the previous year. The provision for maintenance costs of the Great Barrier Reef Marine Park Authority has risen to $ 1. 852m, representing an increase of $750,000, or, nearly double the provision for the previous year. This is an indication that the Government is very seriously concerned to develop the Marine Park, and of course its responsibilities in that area have grown. In I think two years the staff of the Authority has more than doubled, which is very necessary for the protection and development of the park. Funds for Australian biological research studies have increased by 1 70 per cent this year.

We have also allocated over $ 18.5m for the Antarctic project, an increase from $ 12.5m provided in the previous year. Likewise, this year the Alligator Rivers Region and the Kakadu National Park, as well as the Australian National Parks and Wildlife Service generally have been allocated $5. 56m, which represents a rise of $2.36m. These important sums are to be devoted to the development of the Kakadu and Uluru, or Ayers Rock, as it is sometimes known, national parks.

I suggest that in these areas the Government has demonstrated its very great interest in the desire to see that the national assets of this country are preserved and improved. Even today we know from reports that the Great Barrier Reef has now been placed on the World Heritage List. That announcement was made today. I think therefore that the Government, without making wild promises, can say that its record of payments to be spent this coming year indicates a true appreciation of the environmental needs of this country. By its works it may be judged.

Mr President the matters which I have dealt with - community health programs, the tax deductibility for overseas organisations and the environmental programs- are important matters, and at a time when money is not too easy to come by the Government indicates its desires and the importance it places on them by its expenditure of money in their development. The Government deserves the commendation of the people for the effort it has made.

New South Wales

– The Appropriation Bill debate affords opportunity for honourable senators to traverse a wide variety of subjects, and indeed they have done that. There have been speeches today about the Fraser Government’s continued recognition of the Pol Pot regime, the Budget, free trade and protectionism, tax evasion, the economies of the States and so on. This is one of the rare opportunities we have to speak on topics of our choice to try to put our finger on what are issues that ought to be debated in the Parliament.

I want to talk about the decline in the egalitarian image that existed in this country until recent years. Over the last five years particularly, we have seen what could virtually be described as the development of two nations. We have developed an economy that shows that the concentration of wealth is becoming considerably more pronounced than it has been hitherto. Some figures show that 50 per cent of the population owns less than 8 per cent of the country’s total wealth. Other figures show a concentration of wealth in fewer and fewer hands. This is happening because of the policies being pursued by the Fraser administration in a period of great change. Rather than persons having access to wealth and to the resources of our country we are going in a different direction. This is happening not only in Australia but also on a world scale. We hear of the internationalising of capital and labour. We see the development of foreign ownership and control of natural resources in our country. We see a decline of living standards, and a decline in morality, which was so ably referred by Senator Evans when he talked of tax avoidance. The prevailing attitude that seems to be accepted by too many people in our country is that one should do the best for oneself by engaging in any form of corruption, accumulation or interference in any way that affects the interests of others. They are some of the negative features that can be seen in our society.

On the other hand I think that there are some positive developments which give hope that perhaps Australia is beginning to emerge from the dark ages in its people’s attitudes to one another. I refer particularly to the documents that have been circulated in recent times by some of the church organisations such as the Catholic Commission for Justice and Peace and to a booklet we received from the Brotherhood of St Laurence a few days ago calling for a fair deal for the unemployed. Endeavours are being made in the christian community to establish some principles and some integrity in respect of those who are worse off than others. It seems to me that we want a government that sets some decent principles and standards with respect to the problems which beset our nation and which face mankind generally.

Figures have been produced, as a result of investigations and surveys, which show that about two million people in our country live in a state of poverty and that their living standards are declining in a period in which inflation has not been checked but has been only reduced. We have a government that takes the view that social welfare is to be seen not as a means for social change but simply as an emergency safety net for the old, the poor, the sick, the indolent and the unemployed. It is seen not as a means for the redistribution of wealth but for the maintenance of present conditions. Even when we look at what the national Government has done over the last dozen years or so, we see that Federal spending on social security and welfare has gone from 1 7.3 per cent of outlays in the 1969-70 Budget, to 20.4 per cent in the first Labor Budget, and to 23 per cent in the last Labor Budget, lt increased to 26.7 per cent in the first Fraser Budget and is now 28.2 per cent. This mere acceptance of the principle of welfare payments in no way, shape or form tackles the problems that face our country.

Of course, the Fraser Government believes that simply by making a few changes here and there in welfare payments it has fulfilled its obligations to society and to the less fortunate people in our society. It fails to grapple with and to meet the challenge of the dramatic changes that are taking place in our economy in that manufacturing industry has declined by about 8 per cent to 9 per cent over the last decade or so and in the rural sector our work force has fallen over the last 25 years from 432,000 to less than 300,000. We are aware, of course, of the impact that technology, particularly imported technology, will have upon employment in not only the rural sector but also those sectors which have been hitherto the most labour intensive in our community. I refer principally to the service or tertiary sector. It is, therefore, no wonder that we have such publications as those referred to when we look at the degree of the problems, at the failure of the Government to take the community into its confidence, at the failure of the Parliament to debate these issues properly, and at the failure of the media to undertake more than a superficial examination of some of the problems that I have referred to.

The whole balance, the whole structure and the whole tradition of our country are changing very dramatically as indeed, they are changing on a world scale. I think it is the failure of governments, of parliaments and of the media to play a meaningful role in this process that has caused other groups in the community - it is pleasing to note that the Christian churches have taken such a forthright stand- to endeavour to awaken the public conscience to the degree of the problem that already exists and is developing. Whilst this latest document issued by the Catholic Commission for Justice and Peace refers to problems in our own country it refers also to problems overseas. It states:

The world today is structured for poverty. At least 800m people are ‘trapped in absolute poverty- a condition of life so characterised by malnutrition, illiteracy, disease, squalid surroundings, high infant mortality and low life expectancy as to be beneath any reasonable definition of human decency . . 800m people in absolute poverty- almost a fifth of the world’s people. In all, a total of three billion people are poor.

The Commission is referring to the World Bank report of 1978. The Catholic Commission continues:

There is something else about poverty that the World Bank Report does not mention. Poverty normally means being powerless.

To that degree we are recognising the powerlessness that exists not only on a world scale but also in our country. We are recognising the inability of the disadvantaged groups within our own society to make an impact upon political trends, political thinking, political parties and national decision making. What is evident in every section of our society is the struggle to try to bring into action the hopes and aspirations of those people at the lower end of the scale. That is what the struggle is about in Aboriginal Affairs. Aborigines are trying to establish their rights against the more powerful groups within our society. We see the struggle of the unemployed who try, in their own limited way, to bring to the attention of Ministers, governments and political parties their plight and the powerless position in which they find themselves. We see the struggle of other disadvantaged groups within our society. I refer to people who are unable on the basis of sex, religion or race to make the sort of contribution that is supposedly their right in a democratic society.

It is a recognition of these sorts of problems that has caused the Brotherhood of St Laurence to issue what it claims to be the moral challenge of unemployment. In a pamphlet which it has issued it says:

Unemployment presents the Australian nation with the biggest domestic moral challenge since the 1930 depression. No-one can say precisely how or when a satisfactory solution will be found, but it is clear that there can be no permanent solution if the moral challenge is not met.

It goes on to say:

There are encouraging signs that people are becoming concerned about the human cost of unemployment. The Brotherhood of St. Laurence is only one of an increasing number of organisations that intend to see that unemployment is made the highest priority domestic issue in this election year.

Then, of course, it goes on to express in this pamphlet its concern about unemployment reaching a figure of 460,000; about the 250,000 school leavers who come on to the labor market each year; and about unemployment not being restricted to only one class. It states that unemployment encompasses different sorts of people in different sorts of social strata in our society. It cites figures from the Australian Bureau of Statistics which show the number of unemployed in different areas. The number in the professional and technical areas is 17,500, in administrative and executive managerial positions 6,500; in clerical positions 28,000; in sales positions 23,000; in the areas of service, sport and recreation 29,000; in the farming and fishing area 20,000; and in the production process - workers, labourers and tradesmen- 100,000. Some 163,000 people had no full time occupation recorded over the previous two years. The Brotherhood of St Laurence draws attention to the attitude that has been accentuated by the establishment forces in our country which, since 1976, have tried to stigmatise people out of work as being dole bludgers. It is conceded in this pamphlet that although the usage of that term is not as common now as it was, nevertheless it has had the effect of intimidating people who have been out of work. Many people still say most of these people are dodging work. That ignores the position as outlined in an interesting article on the front page of the Sydney Morning Herald a week or so ago in which it was reported that hundreds turned up at a building site in the western suburbs of Sydney to apply for a job as a tradesman.

The pamphlet also states that inflation hurts everyone but that those most seriously affected by inflation are the 7 per cent of people who are unemployed, those who have been bearing the brunt of the Government’s anti-inflationary policies on behalf of the whole of the community while those in work have suffered only minor losses by comparison. The pamphlet of the Brotherhood states:

One criticism that can be fairly levelled at the present Federal Government is that it has paid too little attention to the human tragedies that its anti-inflationary policies have produced. The tendency has been to speak of the unemployed as economic factors as though eating and clothing themselves and caring for their children and their elderly somehow did not concern the unemployed as it does the rest of the community.

All of those matters are of great concern to the Australian community. We need a government that is concerned about what is happening to our country. We need a government of great compassion. We need a government of great flexibility. We need a government of integrity and honesty. We need a government that will take the community into its confidence in order that the problems facing this country can be adequately debated and understood in the Australian community. To that extent, the Fraser Government has failed miserably in its endeavours to grapple with the problems and to provide solutions. Whilst it is true that the rate of inflation has decreased, inflation is now increasing again. This Government claims that it has inflation under control but we know that that is no longer the position. We know that unemployment has risen by more than 150,000 over the last three years. We know that interest rates are rising. We know that the number of bankruptcies is increasing at a greater rate than is recognised by this Government.

On Saturday morning when I happened to call into a shop to make a purchase a small businessman talked to me about the restrictive trade practices in the market place today and the price discrimination policies which are being pursued to the extent that the small trader is completely disadvantaged compared with the major retailer. This Government, through its application of the provisions of the Acts covering the Trade Practices Commission and the Prices Justification Tribunal has deliberately restricted the activities of those organisations and has deliberately reduced their work forces so as to render them less effective at a time when the small shopkeeper can tell us what is really happening in the market place. Company after company is being taken over by the bigger companies and restrictive trade practices are occurring every day in respect of small business sector purchases.

The threat of a close-down by the 1 2,000 service station proprietors who have waited two years for the introduction of the Fife package with which to take on the petroleum companies and to give them some equity to protect the goodwill and potential of their businesses achieved a result only last week because the Government was frightened of the political backlash if it did not proceed with the measures to protect their interests. Whilst we might say from time to time that the small business sector is an important part of the Australian economic scene, it must be said that, even though it employs the greatest number of people in this country, it is a sector that is declining in real terms and in effective political power. That process is proceeding apace because of this Government’s attitude to the development of the corporate sector. This Government does absolutely nothing to curb foreign investment which has facilitated the takeover of hundreds and thousands of small Australian companies. The only group of companies exempted from the takeovers by foreign companies are those with capital and assets of $2m. But it is those small companies that are heading the list of bankruptcies.

In the few moments left to me, I refer to the attitude that the conservatives take in this country towards any movement for social change or any movement towards a more progressive attitude by governments. We are aware that in 1973, when the Whitlam Government first came to office, the then Opposition, the Liberal and National Country parties deliberately set out to sabotage the work of the Whitlam administration and used this very place, the Senate, to achieve that objective, thus bringing about the first double dissolution in 1974. We are aware of all that took place during 1 974 and 1 975 when the established forces refused to allow a government with a majority in the lower House to carry out its electoral program. We are aware of the part that Mr Fraser played in a conspiracy to bringdown the Whitlam Government - a conspiracy with the GovernorGeneral of the day, Sir John Kerr.

Of course we are aware that in the 1974 and 1977 Senate elections steps were taken to try to circumvent the electoral will of the Australian people. Steps were taken to ensure abnormally large nominations so as to confuse the electors in the double dissolution of the 1974 election. Based upon that experience the Whitlam Government brought in legislation which was designed to simplify the whole process of voting. The entrenched conservative majority in the Senate refused to simplify the electoral processes. Because of the size of and the number of candidates on the ballot paper, many people voted informal and their votes were to no effect. The Senate took an intransigent position towards simplifying the electoral process. The consequence of that was that many people, who wanted to cast a valid vote, were denied that right because due to their background - I will leave it at that level- they were unable to completely fill in a ballot paper involving 70 or 80 names without making a mistake.

Of course there is evidence that that process will probably take place again.

Worse than that is a decision taken by the Australian Electoral Office to refuse persons the right of mass enrolment of new votes. I find it indefensible and unacceptable that steps should be taken which perpetuate the situation that developed in the Western Australian State elections both last year and three years previously. The Liberal Party took specific steps to try to disfranchise, intimidate and use long-neglected regulations in the Electoral Act of that State in order to disadvantage Aboriginal voters. We know of the legal steps that were taken to overcome that problem and how the Court Government itself took the extraordinary steps of trying to tighten up the law to make it impossible for Aborigines to be properly enrolled. Because of the good judgment and courage of one or two of that Government’s members that legislation was defeated.

Let us look at the situation in respect of the forthcoming election. From 1 January 1978 until 30 June 1980, 125,294 adults were naturalised in our country. Based on my experience in local government, it does not follow that, because of the mere naturalisation process, a person is automatically enrolled as you well know, Mr Acting Deputy President. Similarly, since December 1977, 750,000 young people have become eligible to be placed on the electoral roll. This makes a total in round figures of almost 900,000 potential new voters. Whilst I can see that the Australian Electoral Office has, in fact, taken some steps to try to enrol those who are eligible to be enrolled, it appears that this Government has connived, contrived or conspired to prevent persons taking those steps. It is the right and obligation of the Government to see that all eligible persons are properly enrolled for the purpose of voting in the 1980 Federal election.

I find it distasteful that, in a number of cases, the Electoral Office has refused to issue enrolment cards except on an individual basis. Cases have been brought to my attention in which steps have been taken at high schools and universities to enrol young people who have become eligible by virtue of their having reached the age of 1 8 years. The Electoral Office has said that it is under instructions not to issue enrolment cards en masse but only to individuals.

Senator Puplick:

– Is this only in New South Wales?


– It is happening right throughout Australia which means, of course, that there has been an Executive decision. A decision has been made by the Fraser Government, recognising that people of migrant background are more likely to be Labor voters. Therefore, no steps are being taken concisely and effectively to have those people placed on the electoral roll. Similarly, because young people are better educated and better able to see through the superficiality of the Fraser Government and all its erroneous policies - on all the evidence available to us at least 60 to 70 per cent of them would vote Labor - steps are being taken to place obstacles in the way of those people being properly enrolled to vote in the election set down for 18 October 1980. We still have this obstinacy, this means by which the due processes of democracy are in some way or other impeded as a result of actions taken by the conservative forces in our country. It matters not whether the action is bringing down two double dissolutions in the space of two years, whether it is taking steps which stop the effective enrolment of people or whether it is the use of the parliamentary forms for the purpose of trying to belittle candidates and policies as we have seen taking place in the Senate from time to time. They are all designed to create confusion in the public mind, to create a situation where the conservatives can continue to rule. Of course, they believe they they were born to rule.

Fortunately, as I have said, in Christian communities and in the community at large there is a realisation that the Fraser Government does not represent the basic interests of the decent, average Australian, that the Fraser Government’s specific promises - some 90 of them to which the Leader of the Opposition (Mr Hayden) had drawn attention - have not been honoured since they were made in 1975 and again in 1977. These are the factors that the Australian people will be pondering in less than a month’s time. The Opposition is confident that the good sense and the good will of the Australian people will be expressed on that occasion. They know that this is one of the most vital elections in Australia’s history, beset as we are by tremendous changes in the international scene and in our economy, all of which require a government that can adequately represent the interests of Australia.

Senator PUPLICK:
New South Wales

– I commence my remarks in the debate on this year’s Budget by returning to a subject which I have raised on several occasions in the Senate over the last couple of years. I refer to the issue of the funding of research in Australia. I want to start by congratulating the Government and the Minister for Science and the Environment (Mr Thomson) in particular for the great advances which have been made in the provision of research funding in the 1980-81 Budget. Honourable senators who have had a chance to study the Science Statement brought down some months ago by the Minister for Science and the Environment will know that some 1 9 Commonwealth departments are engaged in the provision of funds for research. Some of these have fairly small allocations and some have very large allocations. I want to mention three departments at this stage, and also some of the evidence of research fund allocations that have been made in this year’s Budget.

The first area to which I turn is the provision of funds under the National Health and Medical Research Council’s area of responsibility, that is, the provision of research funds in Australia for significant projects of medical research. In 1979-80 the expenditure under the Budget on medical research in Australia was some $14m. This has been increased in 1980-81 to $18m, or an increase of more than 30 per cent in the course of one year, which has provided an enormous boost to the amount of scientific and medical research being carried out in Australia, and in particular in Australia’s universities and notable centres of learning such as the Walter and Eliza Hall Institute of Medical Research and the Howard Florey Institute of Experimental Physiology and Medicine. I think that the representations which have been made by senators and members, not only on the Opposition side but also throughout the Parliament, for increases in medical research funding have borne considerable fruits in this Budget.

From that I turn to the Department of Productivity and the grants made under the Industrial Research and Developments Incentive Act. In 1979-80 the total expenditure on commencement grants was in the vicinity of $7m, and the 1980-81 Budget appropriates $I0m. Last year the expenditure on project grants was $22.9m and the 1980-81 Budget appropriates $37. 4m. The public interest projects expenditure in 1979-80 was around $4m and the appropriation in the 1980-81 Budget is around $5m. Each of those represent a significant increase in the amount of money available for scientific and industrial research and development. The expenditure also has consequences which flow through in terms of employment of post-graduate students and research workers, in terms of improvements in community and individual health care, and also in terms of the position of small business, the export competitiveness of our industries and many other things as well.

I turn specifically to the allocations made for various programs within the Department of Science and the Environment. I draw attention to the fact that marine science in this year’s Budget is provided with nearly $7. 5m for various research projects. The marine science and technology research grants have been raised from $400,000 to $2m. That is a very significant increase in the amount of money provided. The Australian Institute of Marine Science in Townsville is to be provided with something like $5. 5m for its continuing expenditure. Last year the Great Barrier Reef Marine Park Authority was provided with $750,000; this year it is to be provided with $ 1.85m. Again, a very substantial and significant increase has been made. The Australian Biological Resources Study, which last year was allocated $411,000, this year is to be allocated $1,111,000. That represents a 170 per cent increase in the course of simply one year. The amount allocated to Australia’s Antarctic research program is to go up from $ 12.76m to $1 8.68m, again a substantial increase.

Amounts are allocated also for the Biological Investigation of Marine Antarctic Systems and Stocks program, the BIOMASS study, in the Southern Ocean, for rebuilding and refitting equipment in our stations in the Antarctic and for taking the first steps towards acquiring an Australian ship to serve the Antarctic stations and to conduct marine research. A sum of $7.1 m is provided for the protection of the environment in the Alligator Rivers Region. A sum of $3. 6m, compared with $1.9m, is allocated to the Office of the Supervising Scientist. We can look at the allocation for the Australian National Parks and Wildlife Service, one of the most distinguished parks and wildlife services anywhere in the world and something which, under its Director, Professor Ovington, is a great credit to this Government and this nation. In 1979-80 its expenditure was a little over $2. 3m. In this year’s Budget it has been appropriated $2.9m.

One could go on and refer to a number of what look like smaller projects but which nevertheless are very significant. An amount of $25,000 is provided in response to the Australian Academy of Science report on recombinant DNA technology and for the establishment of a secretariat to monitor genetic engineering undertakings in Australia. A sum of $60,000 is provided for the measurement of atmospheric lead levels on a statistically sound basis so that we can get an idea of precisely what the problem in that area is. For the Commonwealth Scientific and Industrial Research Organisation, which of course is an umbrella organisation providing an enormous amount of research work in Australia, the appropriation was a little over $157m in 1979-80. Its appropriation for this year is well over $170m. In fact it is an increase of $13.175m.

They are all examples simply of the increase in finance undertakings by this Government in the field of science and the environment. If we survey the record of the Fraser Administration since 1975, as a start we would have to list the following: The protection and preservation of Fraser Island, the establishment of the Kakadu National Park, the establishment and the management plan for that park and the Uluru Park, the proclamation of the Capricornia section of the Great Barrier Reef Marine Park, and the recently announced decision of the Government to include the Great Barrier Reef on the World Heritage List. I seek leave to have incorporated in Hansard a statement issued on Sunday, 1 4 September 1 980, by the Prime Minister (Mr Malcolm Fraser), announcing the formal decision to have the Great Barrier Reef Marine Park placed on the World Heritage List.

Leave granted.

The Statement read as follows -


The Prime Minister, Mr Malcolm Fraser and the Premier of Queensland, Mr Joh Bjelke-Petersen today announced the nomination of the Great Barrier Reef for inclusion on the World Heritage List.

The World Heritage List, a list of cultural and natural wonders of the contemporary world, is being compiled under the auspices of the United Nations Educational, Scientific and Cultural Organisation, pursuant to the Convention concerning the Protection of the World Cultural and Natural Heritage. The aim of this Convention is to ensure, as far as possible, the proper identification, protection, conservation, presentation and rehabilitation of the world’s unique and irreplacable heritage.

Mr Fraser and Mr Bjelke-Petersen noted that the Great Barrier Reef clearly met the criteria for the inclusion of nautral properties on the World Heritage List. These criteria require the Great Barrier Reef to satisfy one or more of the following conditions: be an outstanding example representing the major stages on the earth’s evolutionary history; be an outstanding example representing significant ongoing geological processes, biological evolution and man’s interaction with the natural environment; contains unique, rare or superlative natural phenomena, formations and features or areas of exceptional natural beauty; or be the habitat where populations of rare or endangered species of plants and animals still survive.

The Great Barrier Reef also satisfies the ‘integrity’ requirement - that is, it is large enough to contain and show the necessary inter-related and inter-dependant elements to enable viability and self-perpetuation of the process or species involved.

The Prime Minister and the Premier stated that the joint authority exercised through the Commonwealth Great Barrier Reef Marine Park Act is perfectly adequate to satisfy the obligations of the Convention. This legislation, in conjunction with the Commonwealth/Queensland Great Barrier Reef Ministerial Council which is responsible for the co-ordination and development of policies in relation to the Barrier Reef at the Ministerial level, is such that no further mechanism for planning or control is contemplated.

Mr Fraser and Mr Bjelke-Petersen agreed that the nomination of the Great Barrier Reef was a further and significant step in the international recognition of the Reef as a unique and irreplacable part of the world’s heritage. They are confident that the nomination will be accepted and that the Great Barrier Reef will join the unique inventory which now includes such wonders as the Yellowstone and Everglades National Parks and the Grand Canyon.

In conclusion, both the Premier and the Prime Minister stated that their joint announcement of the nomination served to emphasise the co-operative arrangements and responsibilities which the Commonwealth and Queensland Governments have established for the protection and conservation of the Great Barrier Reef.

Senator PUPLICK:

– Enormous steps have been taken by the Fraser Administration to bring about a complete ban on whaling activities and to convert Australia from a nation actively participating in the whaling trade to one of the leaders of the international anti-whaling movement. The Fraser Administration has taken the decision to update and expand our representation at the so-called CITES Convention, the Convention on International Trade in Endangered Species. The Government and the responsible Minister have made a determination to appoint a representative of a non-government organisation to be present at the next meeting of the CITES Convention to take place next February in New Delhi and to update the CITES Convention in terms of Australian domestic law. A decision has been made to ask the World Wildlife Fund to establish a branch in Australia and to provide it with a sum of $50,000 for each of the three years of the program.

The Fraser Government took the decision to become party to the Washington conservation agreement for the preservation of Antarctic seals and to become party to the convention on the protection of wetlands of international significance. It signed an agreement with Japan on the protection of migratory birds. Recently in Canberra the Government - the Fraser Government - played a leading role and become party to the convention on the conservation of Antarctic marine living natural resources. Mr Jacobi from the other place and I had the great honour on behalf of the Parliament to be two of the signatories to the final document that was issued by that international convention. The ratification took place just the other day in one of the Senate committee rooms when the final document was signed on behalf of the

Government by the Minister for Foreign Affairs (Mr Peacock) and the Minister for Science and the Environment (Mr Thomson). The record of the Government in terms of science and the environment has been particularly significant not only in this Budget but also in the whole of its five years of administration.

I turn now to discuss the question of the provision of assistance to Australia’s handicapped and disabled persons in the last five years. Before doing so, I seek leave to incorporate in Hansard a document which I have had prepared. It lists the changes in provision for services and benefits for the handicapped and disabled over the last five years.

Leave granted.


Overall assistance to the handicapped has risen from $469m in 1975-76 to an estimated $ 1,060m in 1980-81- a rise of 126 per cent. This rise reflects increased spending on allowances to assist handicapped children and invalid pensions, expansion of the Commonwealth Rehabilitation Service and increased support for handicapped persons facilities.

Handicapped childs allowance was increased from SIO a week to $15 a week (or $65 a month) in 1976, and will be further increased to $73 a month in November 1980. Total spending on this allowance has increased from $85.m in 1 975-76 to an estimated $30.3m in 1 980-8 1 .

In November 1977 the eligibility for handicapped childs allowance was extended to substantially handicapped children where a family suffers financial hardship.

The special needs of handicapped students were recognised by the Government in 1978 when it extended the eligibility for handicapped childs allowance to cover students over 16 and under 25 who do not receive an invalid pension.

Federal Government spending on invalid pensions increased from $406m in 1975-76 to $796m in 1979-80, and is expected to increase to $936m in 1980-81 .

There has been a significant increase in expenditure for the Commonwealth Rehabilitation Service which provides a comprehensive program of medical, social, educational and vocational rehabilitation. In 1979-80, $20m was spent on this program; in the current financial year $24m has been allocated. In 1975-76, $ 1 1.8m was spent on the Commonwealth Rehabilitation Service.

Eligibility criteria for the Commonwealth Rehabilitation Service were widened in November 1977 to enable ‘freeofcharge’ treatment and training to be offered to all classes of disabled people of working age. Among new groups able to be assisted free or charge are disabled housewives, especially those whose disability affects the earning capacity of the breadwinner or threatens family stability.

In the year ended June 1980, 5,489 people were accepted for rehabilitation (a record number and an increase of 20 per cent over the previous year). Nearly, 1,650 rehabilitees were placed in open, part time and sheltered employment.

Facilities available under the Commonwealth Rehabilitation Service have been expanded in the last 3 years:

A combined Commonwealth/State Government Rehabilitation Centre in Hobart is due to commence operation during the current financial year, and further facilities are planned for Newcastle and the western suburbs of Melbourne.

Two additional Work Preparation Centres for mildly intellectually handicapped people will be established, one each in Sydney and Melbourne. This will enable assistance to be provided for an additional 200 mildly intellectually handicapped young people each year.

Some $1 56.5m has been spent under the handicapped persons welfare program in the four Fraser Government Budgets. (This compares with $28.4m in the financial years 1972-73 to 1974-75). A further three year program was introduced from 1 July 1980 under the handicapped persons welfare program. Some $ 1 55m is estimated to be spent on approved projects over the next three years.

The Government also announced in December 1 979 its decision to provide funds for upgrading the effectiveness and quality of services under the handicapped persons welfare program. This upgrading will begin in 1980-81 with an amount of $300,000.

The benefit paid to organisations conducting approved residential accommodation for handicapped children was increased from $3.50 to $5.00 a day in November 1 976.

The level of compensation payable for Commonwealth employees and seamen has been increased. From 1 September 1980 the maximum lump sum payable will rise from $28,000 to $32,500 and the level of weekly payments will rise from $90 to $105.

One million dollars has been committed by the Commonwealth to assist in the establishment of the Child Accident Prevention Foundation.

Funds amounting to $0.9m have been allocated in 1980-81 for the national response to the International Year of Disabled Persons (publicity, community information, etc.). In addition, Ministers are reviewing their programs to ensure greater responsiveness to the disabled.

Senator PUPLICK:

– I thank the Senate. The record will show, for instance, that overall assistance to the handicapped has risen from $469m in 1975-76 to an estimated $ 1,060m in 1980-81- a rise of 1 26 per cent. The handicapped child’s allowance was increased from $10 a week to $15 a week in 1976 and will now be further increased to $73 a month, from $65 a month, in November 1980. In November 1977 the eligibility for handicapped child’s allowance was extended. The special needs of handicapped students were recognised by the Government in 1978 when it extended the eligibility for the handicapped child’s allowance to cover students over 1 6 and under 25 years of age who do not receive an invalid pension. Spending on invalid pensions increased from $406m in 1975-76 to $796m in 1979-80 and is expected to increase to $963m in 1 980-8 1 .

There have been very considerable increases in the provision of money for Commonwealth rehabilitation services. The eligibility criteria for rehabilitation service training have been widened.

The number of people accepted into the rehabilitation services has been substantially increased. Facilities have been increased in places such as Hobart. Additional work preparation centres have been provided in Sydney and Melbourne. An amount of $ 156.5m was spent under the handicapped persons welfare program in the four Fraser Government Budgets. This compares with $28.4m in the financial years 1972-73 to 1974-75. In other words, in the period of the Whitlam Government $28.4m was spent on the welfare of handicapped persons compared with $ 156.5m provided by the Fraser Budgets. Funds have been provided for upgrading the effectiveness and the quality of services. Benefits to organisations conducting approved residential accommodation for handicapped children have increased from $3.50 to $5 a day. There have been changes in the level of compensation. The amount of $lm has been committed by the Commonwealth to assist the establishment of a child accident prevention foundation. Sums of money, almost $lm, have been allocated in 1 980-8 1 for the national response to the International Year of Disabled Persons. Again, all of these examples are evidence of the work which the Government has been doing in terms of its support for Australia’s handicapped and disabled persons.

I turn finally at this stage to make some remarks about the assistance provided by Fraser governments over a period of years to small business in Australia. The first and most crucial aspect, of course, has been the reduction in the rate of inflation. Whichever way one wishes to measure it, whether it is by simply extrapolating from the December 1972 quarter consumer price index figures or whether it is by accepting the figures that were given earlier today by a Labor senator at Question Time, one can see that there has been a significant reduction in the rate of inflation in Australia. This has improved the competitiveness of Australian industry and in particular it has improved our competitiveness so far as the general average for the Organisation for Economic Co-operation and Development countries is concerned. That is of enormous benefit to small businesses.

The export expansion grants and export market development grants scheme has been expanded. Last year the export expansion grants were $170m and the development grants were $45m. Industrial research and development funding has gone up 1 34 per cent in the past two years. The expenditure for productivity improvement programs has gone up by 65 per cent in the last year. The Commonwealth Development Bank charter has been extended to include all business.

In the 1 2 months since the charter was expanded the Bank’s non-rural lending activities expanded by 93 per cent. Death and gift duties have been abolished. The investment allowance was introduced. The retention allowance for private companies was increased from 50 per cent to 70 per cent. In terms of our expanding tourist industry travel accommodation has attracted a 2.5 per cent depreciation allowance.

The Government has committed itself by legislation to buying Australian produced products. Trading in industry and commercial programs has been boosted. There has been increased assistance for Commonwealth funded small business programs to help small business owner-managers develop skills. The sales tax exemption was raised substantially from $1,000 to $12,000. Annual sales tax liability exemptions increased from $100 to $250. The Small Business Advisory Council was established. The Bureau of Industry Economics was asked to study the problem of small business. The national awards scheme in recognition of the achievements of small business was established last year. In this year’s Budget, as honourable senators would know, tax deductibility for up to $1,200 was provided for contributions by small businessmen to superannuation funds. Again, all of those measures showed a substantial attempt by this Government to improve the standard of small businesses. We will see the further legislative attempts and legislative success of this Government in protecting the small business operator when we come to discuss the Government’s new retail petroleum marketing legislation later this week.

I will now compare this record with the sort of activities to which people in my State of New South Wales have been subjected in the comparable period of five or so years during the administration of the State Labor Government. I turn firstly to the question of development in the Hunter Valley of New South Wales. As honourable senators would know, the plans of the New South Wales Government provide for the turning of the Hunter Valley - one of the most beautiful and picturesque parts of New South Wales - into another black Ruhr Valley. It is expected that the development of coal and aluminium and the changing nature of development in the Hunter Valley will bring about a situation which, in the course of the next couple of years if not checked, will lead to the destruction of the Hunter as we know it. It will certainly lead to the destruction of the vineyards of the Hunter and to the destruction of the stud horse properties in the Hunter. It will lead to the destruction of the market gardens and the commercial flower growing operations in the

Hunter. Mr Murray Wilcox, the President of the Australian Conservation Foundation, was mentioned in the Sydney Morning Herald of 2 June 1980. He was reported to have appeared on the Australian Broadcasting Commission radio program Guest of Honour. The report stated:

Calling Tor caution in allowing development of the aluminium industry, he said the Federal Government should launch an independent inquiry into the aluminium industry.

As honourable senators would know, at the urging of honourable senators on this side, my colleague, Senator Thomas, as Chairman of the Senate Standing Committee on National Resources, has taken up this matter. His Committee has been given a reference by the Senate to study the development of the aluminium industry in Australia and its demands for electricity and power. The State Labor Party Government has sought to attract to the Hunter Valley those much maligned multinationals. When our socialist friend and colleague, Senator Gietzelt, was speaking here earlier today he perhaps unburdened himself somewhat about the frenetic attempts of the Wran Labor Government to attract Aluminium Pechiney Australia Pty Ltd in consultation with the Colonial Sugar Refining Co. Ltd and Alumax Pty Ltd in consultation with Broken Hill Pty Co. Ltd to establish and operate aluminium smelters at Farley and Tomago in the Hunter Valley of New South Wales. At that stage he would have found himself at odds with his State colleagues about the role of the multinational developers in Australia.

Basically, we have a situation in which the environmentalists in New South Wales have clearly demonstrated the levels of fluoride emission for the planned two new aluminium smelters at Farley arid Tomago and the existing one that is already in operation in the Hunter. In addition, to supply them with the amount of electricity needed will require the development of at least two new coal-fired power stations, with all their attendant environmental emissions and problems. The water which they will use will be taken out of the Hunter and put back into the river at a considerably increased temperature, again wrecking environmental damage upon the Hunter Valley. Also several thousand new truck movements a day are expected through the Valley.

The New South Wales Labor Government has sought to disguise and hide all these things from the people by a swift of hand process whereby environmental legislation, supposed to have effect as at 1 September, had been held up by it. Although the legislation was passed some time ago amid great roaring and trumpeting on the part of the

State Government, it was proclaimed only as of 1 September. When one asks why it was proclaimed only as of 1 September, the answer is so that the two aluminium consortiums in question could lodge their development applications on 26 August and, as a result, have them dealt with under the provisions of the New South Wales Local Government Act which provides no recourse for third parties to intervene in the hearings or to appeal against the decisions of the local government bodies. It was done in order in circumvent all of the requirements of environmental impact statements which otherwise would be regarded as a prerequisite before these projects were developed.

Senator Peter Baume:

– The Wran Government.

Senator PUPLICK:

– The is precisely right. That action was taken by the State Labor Government and by Mr Wran in particular who has taken into his portfolio particular care for the development or rather, the destruction of the Hunter Valley. Representations were made by me to Mr Thomson, the Minister for Science and the Environment, asking him whether, in fact, there was not some way in which the Federal Government could be satisfied in terms of its environmental legislation that these developments conform to that legislation. I was delighted to receive a letter dated 8 September 1980 which I will seek to have incorporated in Hansard. In that letter the Minister for Science and the Environment informs me that following consultations with the Treasurer he has directed the preparation and submission of environmental impact statements on each of the two smelter proposals in accordance with the administrative procedures of the Environment Protection (Impact of Proposals) Act, something, which arises as a result of their foreign investment content which the Treasurer has to approve. The letter goes on to state:

The impact statement will examine fluoride emissions and their predicted distribution, the pollution abatement measures proposed and the effect of smelter operations on vegetation and land use, including an assessment of the possible effects on vineyards in the region.

I seek leave to incorporate in Hansard the full text of the letter.

Leave granted.

The letter read as follows-


Parliament House, Canberra, ACT 2600 8 September 1980

Dear Senator Puplick,

Thank you for your letter of 18 July 1980, enclosing information you have received from the vignerons of the

Hunter Valley of New South Wales concerning the environmental impacts associated with the establishment of aluminium smelters in the lower Hunter Valley.

Aluminium Pechiney Australia Pty Ltd/CSR and Alumax Pty Ltd/BHP propose to establish and operate aluminium smelters at Farley and Tomago in the Hunter Valley of NSW. Both proposals are subject to the approval of the Treasurer under Commonwealth foreign investment policy and, as a result, fall within the ambit of the Environmental Protection (Impact of Proposals) Act.

Following consultations with the Treasurer, I have directed the preparation and submission of environmental impact statements (EIS) on each of the two smelter proposals in accordance with the Administrative Procedures of the Impact of Proposals Act. The assessment of these EIS’s will be undertaken in conjunction with the NSW environmental authorities so that a single EIS in each case will be prepared to satisfy the requirements of the Commonwealth and State Governments.

The impact statements will examine fluoride emissions and their predicted distribution, the pollution abatement measures proposed and the effect of smelter operation on vegetation and land use, including an assessment of the possible effect on vineyards in the region.

I have forwarded a copy of your letter and the attachments to my Department so that the matters raised can be taken into account in the assessment of these proposals.

Yours sincerely, David Thomson

Senator C. Puplick, Senator for NSW, Commonwealth Parliament Offices, Commonwealth Government Centre, Chifley Square, Sydney, NSW 2000.

Senator PUPLICK:

– I pay tribute to the work of the vignerons, people such as Murray Robson and Murray Tyrrell, who have been assiduous in drawing this matter to the attention of the public in New South Wales. I turn to a second example of the way in which the Wran Labor Government operates.

In the Sunday Telegraph of 1 4 September, that is only last Sunday, an article appeared dealing with an Aboriginal company which set up a $100,000 kangaroo meat processing plant at Nyngan in western New South Wales. In order to complete the work of this plant it needs what is called a fauna dealer kangaroo wholesaler’s licence. The chairman of that operation, a Mr Keith Saunders, a well-known and respected man in the district, was reported in the Sunday Telegraph as saying:

Mr Wran wrote to us on January 14 saying we would get a fauna dealer (kangaroo) wholesaler licence.

While they (Labor) were campaigning in Castlereagh–

That refers to a by-election held not so long ago covering the Nyngan area in New South Wales- we were told that if we got the Aboriginal vote for Labor the government would back us in other ways as well.

Well, we got them the black vote; they won by only a couple of hundred votes. And now we are told that the licence will be tendered for. There are 60 tenderers for it.

If it goes to tender we won’t have a chance in hell. People with ten times as much mmney as we’ve got are bound to get it. I understand there is only one licence left in NSW.

To demonstrate the basis of the claim that that group had been told that it would be looked after by the State Government, I have here a letter signed, not by Mr Wran, I admit, but by Mr K. G. Booth, the Acting Minister for Planning and environment, dated 14 January 1980, sent to Mr Gordon, who has a connection with this at Dubbo. In relation to advice which he has received from the Assistant Director, Wildlife, National Parks and Wildlife Service, he said: . . he had decided to issue your group with the appropriate licences under the provisions of the National Parks and Wildlife Act, 1974 . . .

I seek leave to have Mr Booth’s letter incorporated in Hansard.

Leave granted.

The document read as follows - 14 January 1980

Mr S. Gordon, 95 Bourke Street, Dubbo, NSW 2830

Dear Mr Gordon,

Reference is made to your letter of 26 October 1979, concerning your desire to obtain a Fauna Dealer (Kangaroo) Wholesaler Licence.

The Director of the National Parks and Wildlife Service has advised me that, as a result of discussions you and your associates have had with the Service’s Assistant Director (Wildlife) which confirmed the technical competence of your group in relation to kangaroo harvesting, he has decided to issue your group with the appropriate licences under the provisions of the National Parks and Wildlife Act, 1974, to enable it to become involved in the kangaroo industry. The licences of course, will be subject to agreement on operating strategies, location and suitability of facilities and arrangements for marketing of products.

In this respect, I understand that liaison between your group and the Service is continuing and that no significant difficulties are envisaged in bringing the matter to a satisfactory conclusion.

Yours faithfully,


Acting Minister for Planning and Environment

Senator PUPLICK:

– I thank the Senate. Here is a clear example of promises being made to an Aboriginal co-operative group, which, if it gets off the ground, will be the largest Aboriginal private enterprise operation in Australia, on the basis of a letter from a State Minister dated 14 January and a promise that if it rounded up the Aboriginal vote for the Castlereagh election, it would be all right; it would be looked after. The vote was rounded up and delivered, the seat was narrowly won. Here this group finds that, instead of getting a licence, the licence goes out to tender and that there were more than 60 tenders. How was it to compete with the great companies which are currently involved in the meat processing business throughout New South Wales? Now people in that group, like the people of the Hunter Valley, have come to learn, at their considerable cost, what the operation of the New South Wales State Labor Government is.

Lest it be thought that this condemnation comes only from one side, let me indicate to honourable senators the condemnation of the civil liberties attitudes of the Wran Government in a document entitled ‘Freedom of Information, Report of the Senate Standing Committee on Constitutional and Legal Affairs’. In paragraphs 5.8 and 5.9 of this report, one will find a ringing indictment of the civil liberties attitudes of the New South Wales Government. Lest it be thought simply that Senator Missen, Senator Hamer and I, as the Liberal members, signed this document, let me remind honourable senators that Senator Tate, Senator Evans and indeed Senator Keeffe were also signatories to this document. This document is a most damning indictment of the New South Wales Government and its behaviour over the provisions of the Evidence Amendment Act 1979 in which the New South Wales State Government sought to overturn the decision of the High Court in the case of Sankey v. Whitlam, providing that in certain judicial proceedings the courts and not the Ministers should determine who should have access to documents, indeed whether the court itself should be entitled to look at documents which were relevant to the decision of justice as far as an individual citizen was concerned. When Senator Evans complains about the Government’s response to the Freedom of Information report and complains about the attitude on conclusive ministerial certificates, he remains strikingly silent about the condemnation which he signed of the backsliding by the Wran State Labor Government on the issue of civil liberties in New South Wales as far as access to documents is concerned. Paragraphs 5.8 and 5.9 of the Freedom of Information Report of the Senate Standing Committee, so that honourable senators and others will be able to see the full text of the Senate’s condemnation of the behaviour of the Wran Government, I seek to have incorporated in Hansard.

Leave granted.

The document read as follows- 5.8 It will be readily apparent to any student of administrative law that these provisions do far more than overturn the effect of the decision in the Sankey case. Before their enactment it was still acknowledged that a court had a discretion to order the production of any document, although judicial statements had been made to the effect that the discretion should be used only in exceptional circumstances in relation to certain categories of documents, State papers being one example.5 The Evidence (Amendment) Act, 1979 (N.S.W.) abolishes that discretion altogether. It restores to the courts the illusory power conferred upon them by the decision of the House of Lords in 1942 in Duncan v. Cammell Laird & Co. Ltd6 to rubber stamp any claim to privilege made by a minister. Indeed, the Act retires the N.S.W. courts to a role that they have never previously accepted, as the ruling of the House of Lords had always been resisted in Australia in relation to class claims, both by the Privy Council and by the N.S.W. Supreme Court.7 5.9 We see no merit in the New South Wales approach and would not in any circumstances wish to see that approach followed by the Commonwealth. We have been impressed in fact by the public reaction, which has been a swift and intense in its condemnation of this Act’ as it was in praise of the High Court’s decision in the Sankey case. Accordingly, in the remainder of this chapter we will discuss briefly the provisions of the Freedom of Information Bill that we have reconsidered in the light of the High Court judgment. The discussion is little more than a prelude to later chapters in which each of those provisions is discussed in more detail. A fuller discussion of the implications of the Sankey case for freedom of information is also contained in a staff paper prepared by a consultant to this Committee, and which was published in the Transcript of Evidence at pages 1 727- 1 740.

Senator PUPLICK:

– I thank the Senate. We are therefore able to make a fairly quick comparison within the course of a short period between the sorts of attitudes that have been adopted by the Fraser Administration on a number of fronts. Looking at its record in terms of science and environment, a record which stands comparison not only with any government in Australia at the moment but indeed stands comparison with a five-year record of any government in the history of Federation in Australia, we are able to note the assistance provided to the needy, to the handicapped and to the disabled. We are able to look at the assistance provided to the small business sector. We know that we will have further evidence of that later in the week when we discuss the retail petrol marketing legislation.

One is able, as a result, to compare this with the sorts of attitudes that I have been talking about on the part of the New South Wales State Government in terms of the utter disregard of the environment and conservation issues as far as the pollution of the beautiful Hunter Valley in New South Wales is concerned - that is, hand-in-glove conspiracy with multinational companies to pollute and to destroy the Hunter- despite all the railings that go on from honourable senators opposite about protecting the environment and about the wickedness of multinational companies. We are able to contrast it with the attitude - I have not had time to talk about the Summary Offences Act m New South Wales or the amendments to the Public Service Act in New South Wales - for honourable senators opposite railing about civil liberties questions.

When the record of the government of which they make so much or its leader Mr Wran who is to be dragged into this campaign to prop up and to cover up for the failures of Mr Hayden is examined in terms of things like conservation and the environment, the rights and requests of the people in the Hunter Valley, the protection of civil liberties seen in the Evidence Amendment Act and the Summary Offences Act in New South Wales and the callous double-crossing of an Aboriginal community in Nyngan in New South Wales, one is able to make quite clear comparisons. As the three-ringed circus of the Australian Labor Party’s electoral troika, Mr Hayden, Mr Hawke and Mr Wran- the failed leader, the heir apparent and the heir presumptive - go trundling around the countryside in the course of the next couple of weeks, people in New South Wales will have a chance to judge who has performed and who has not.

Senator EVANS (Victoria)- Mr President, I wish to make a personal explanation.


– Do you claim to have been misrepresented? If so, you may proceed.

Senator EVANS:

- Senator Puplick, in the course of his speech, suggested that I was somewhat selective in my indignation in respect of the matters in report of the Freedom of Information Bill and had not taken the occasion that he thought might have been appropriate to draw attention to the isolated one or two paragraphs in it in the course of which the Senate Standing Committee on Constitutional and Legal Affairs unanimously agreed that it was proper to make some criticism of particular legislation of the New South Wales Government. Might I say that unlike the pusillanimous, contemptible nonsense that Senator Puplick so often peddles in this place, I am totally consistent in my condemnation of breaches of civil liberty, whoever they happen to be perpetrated by and whenever they happen to be perpetrated. I resent the imputation as to my consistency and integrity in these matters. I also resent the pathetic partisan use to which a highly serious minded report was put in the course of Senator Puplick’s contribution tonight.

Senator Douglas McClelland:

– If there is one thing that I suggest Senator Puplick should not talk about in this Senate, it is the alleged broken promises of the New South Wales Labor Government. All the broken promises about which he spoke pale very much into insignificance in comparison with the long list and multiplicity of broken promises of the Fraser Government. I refer to the broken promise that unemployment would be reduced by

February 1978 and would continue to fall, the broken promise to reduce inflation to a single digit figure, the broken promise to reduce taxation, the broken promise about interest rates, the broken promise about petrol prices in country areas and so on. If time were at my disposal I could spend half an hour setting out seriatim the number of matters that Mr Fraser has undertaken to perform on behalf of the Australian people, the fulfilment of which the Australian people are yet awaiting.

Senator Evans has taken the opportunity to say that his attitude was misrepresented by Senator Puplick when he spoke about the Freedom of Information Bill and the attitude of the New South Wales Government towards the provision of information to the public. I would have thought that that too, would be one of the last things that Senator Puplick would mention. Day after day, or certainly week after week, I have heard Senator Missen ask questions in this chamber of the Attorney-General (Senator Durack) as to what action the Fraser Government intended taking to introduce another Freedom of Information Bill after the Government had received and sat on for about 10 months the report of the Senate Standing Committee on Consititutional and Legal Affairs on the Freedom of Information Bill. I think it was only last week that the AttorneyGeneral, Senator Durack, said that the Government had given consideration to many of the matters that had been debated and reported on by the Senate Standing Committee on Consititutional and Legal Affairs and that, in short, the Government certainly did not intend doing anything about introducing such legislation to this session. All I can suggest to Senator Puplick is that if people want to live in glass houses they should not throw too many stones around because their own windows are likely to get broken.

Senator Puplick mentioned the subject of smelters in the Hunter Valley region, and I know that there is quite a controversy about the establishment of smelters there. It was a decision that was taken after much deliberation by the New South Wales Labor Government. It was fully debated and discussed in public on the floor of the New South Wales Australian Labor Party Conference at the Sydney Town Hall last June at which about 1 ,200 delegates were present. That decision received the support of the New South Wales ALP conference. I remind Senator Puplick that if he wants to blow his bags in this place about the attitude of the New South Wales Government to smelters in the Hunter Valley, there is before the Senate Standing Committee on National Resources a proposal for an inquiry into the development of the bauxite, alumina and aluminium industries, with particular reference to their requirements for energy, labour, capital and infrastructure. When that proposal was mooted by Senator Thomas, if my recollection is correct, it was declared to be a formal matter and there was not opposition to it. The Labor Party in this Senate supported the establishment of such an inquiry.

If people have any evidence to present on the question of the establishment or infrastructure of the aluminium industry and if they want to refer particularly to smelters in the Hunter Valley district, they are at liberty to present their views to this all-party Senate Standing Committee, comprising members of the Labor Party, the Liberal Party and the National Country Party. From past practices and procedures of Senate committees with which I have been associated, I think that they will get a very fair hearing indeed. Senator Puplick mentioned people like Mr Tyrrell and others, who naturally are interested in seeing that smelters are not established in the Hunter Valley, and he congratulated them on the attitude they have taken to bring this matter to the attention of the people of New South Wales. I can tell the honourable senator that so far as I am concerned, as a senator representing New South Wales, not one of those gentlemen has ever been in touch with me, either by seeking an interview to discuss the matter with me or by writing to me to state his case on the subject. Senator Baume shakes his head.

Senator Peter Baume:

– That is terrible.

Senator Douglas McClelland:

– I should have thought that if they wanted to state their case, as apparently they have already stated it to Senator Puplick and to Senator Baume- and to have it considered, they would have put their case to us too. They have not been to me, as a senator representing their State, and I dare say that my colleagues on this side of the House who are from New South Wales would say the same thing. I do not say that in a vexatious sort of way. I suggest to those people that if they want to be heard and not be considered to be acting in a politically partisan fashion, they should be prepared to seek an interview with us. I am quite happy to open my door to them at any time.

Having made those brief comments in reply to some of the matters raised by Senator Puplick, the first thing I want to say is that ail these matters are being debated on the first reading of a money Bill. There must be some confusion in the minds of many people listening. The Budget debate has taken place in this chamber on only one evening, namely, 28 August, when the Leader of the Opposition, Senator Wriedt, and the Deputy Leader of the Opposition, Senator Button, spoke. The debate was then adjourned and has not proceeded since. If we peruse the Senate Notice Paper we see at page 2 that Government Business, Order of the Day No. 20, is:

Budgetary Measures, Ministerial Statement: Adjourned debate (from 24 May 1979).

The Government does not appear to want to discuss, or to allow a debate to take place on, the Budget Papers. I suggest the reason that so many honourable senators are seeking to speak on the first reading of the Appropriation Bills, is the uncertainty that exists in this chamber as to whether, with the Parliament going into recess on Thursday or Friday of this week, honourable senators will get a chance to air their views on the Budget that was introduced by the Treasurer, Mr Howard, on 19 August last or whether the Estimates debate, with the Senate sitting as a Committee of the Whole, will be gagged and guillotined as the Supplementary Estimates debate was guillotined by the Government last May.

I hope that in the next Parliament, whichever side wins the election, there will be a tidying up of the procedural arrangements of the Senate. Frankly, the Government’s management of the business of the Sente this session has been nothing short of incompetent. Indeed, I would say it has been nothing short of appalling. In the very day that the Parliament resumed for the Budget session on 19 August there was presented to every honourable senator a program showing that we would be sitting for two weeks and that in the third week would be going back to our various States to attend to electoral matters. But within two days of the sitting of the Parliament we were told that the week in which we would not be sitting, namely, the third week, would be taken up by meetings of Senate Estimates committees. In that week we dealt with the consideratiion of Estimates. Last Friday we were called upon to sit. Today we are sitting on a Monday, which is quite unusual, and we might be sitting again next Friday. I do not know whether the Government thought it was foxing by issuing, on the day that Parliament resumed, a statement saying one thing and then, on a daily basis, amending it and making other arrangements. If it was foxing, it did not gain anything but the appearance of inefficiency and the creation of confusion in the minds of Government supporters.

Senator Tate:

– A dictatorial mentality.

Senator Douglas McClelland:

– As my colleague Senator Tate interjects, it showed a dictatorial mentality. As I say, whichever side wins the next election, I hope that some arrangements will be made whereby members of the Senate and the public at large generally know what arrangements are made for the sittings of the Parliament. I take advantage of the debate on the first reading of the Appropriation Bill (No. 1) particularly to make one or two remarks on the subject of small businesses. I noted that Senator Puplick mentioned all the things that he claimed the Government had done. He made, of course, a false assertion, if I might put it that way, that there had been a reduction by the Fraser Government in the rate of inflation. He mentined export expansion development grants, industrial research and development funding, the implementation of productivity programs and the extension of the Commonwealth Development Bank charter. He mentioned death and gift duties being abolished, an investment allowance being established, a retention allowance being increased from 50 per cent to 70 per cent, travel and accommodation arrangements attracting a 2.5 per cent depreciation allowance and a number of other matters such as training programs, sales tax exemptions and so on.

The simple fact - as was pointed out in the debate on this Bill last Friday - despite all things the Government claims in relation to small businesses is that in 1 975, under the Whitlam Labor Government, there were about 2,000 small business bankruptcies each year. Today, under this Government, irrespective of what it says it has done, bankruptcies of small businesses are running at the rate of 5,000 a year. If that rate continues to increase as it is increasing, and because the small business community employs such a large section of the Australian people, the problem is one not only for small businessmen and small businesses but also for those who are employed by them. I have said already that in 1 977 the rate of bankruptcies of small businesses was of the order of about 2,000. In 1980, under the policies pursued by the Fraser Government, the rate is about 5,000. In short, if the things that the Fraser Government has done have been to the benefit of small businesses it has not done sufficient in that area. If the things that have been done are adding to the number of bankruptcies - the number certainly is increasing- then the Government has to have another look at the nation’s problem. Despite all the Government rhetoric it is a matter of concern not only to the small business sector of the community but also to the workers and employees of small businesses.

Senator Tate:

– The highest since the Depression?

Senator Douglas McClelland:

– As my colleague, Senator Tate has interjected, it is the highest number of bankruptcies recorded in this country since the time of the Great Depression of the 1930s- nearly 50 years ago. In October 1977 a ministerial statement on the subject of small business finance was made by the Government about four or five weeks before the federal election. Senator Cotton was then the Minister for Industry and Commerce. At least that statement gave us opportunity to debate the matter. In 1977 we were told by Senator Cotton, representing the Government, that excluding primary production some 350,000 enterprises were regarded as being in the small business category; that is over 90 per cent of the total of all businesses. Those 350,000 enterprises employed about 30 per cent of the labour force - around two million people.

We were told also in 1977 that a number of things had been done by the Government. Indeed, the things that Senator Cotton said had been done by the Government were virtually the same things that Senator Puplick mentioned tonight. Yet the situation has been deteriorating. For instance, the Government decided that the Commonwealth Development Bank of Australia would be able to provide equity finance to small business. In 1977 the Government said that the activities of the Australian Industry Development Corporation in respect of small businesses were to be extended. In 1977 the Government said that the Reserve Bank of Australia had been advised that it was Government policy that adequate finance should be made available to small business and that no arbitrary limits should be placed on such finance. A number of other matters were enunciated by Senator Cotton, the then Minister for Industry and Commerce. Among other things Senator Cotton said, as recorded at page 1 374 of the Senate Hansard for 1 3 October 1977:

The Government also will be taking other initiatives within its own areas of responsibility to ensure that all elements in the Commonwealth Government machinery are fully aware of small business requirements and that the possible impact of various government measures upon the small business community is taken into account.

He wenton to say:

All Government Ministers have been asked to ensure that their departments take action to pay all accounts promptly; the Government is aware of difficulties which can be created for small business if delays occur in the payment of Commonwealth accounts.

That was three years ago. Last Friday a Government supporter, Senator Knight, who represents the Australian Capital Territory, asked this question:

Is the Minister representing the Prime Minister aware that a number of business in Canberra and elsewhere have faced problems because of delays by Commonwealth departments and authorities in paying their accounts? As this can have a serious detrimental effect on business, particularly small businesses, will the Minister examine this matter to assess whether government accounting procedures can be completed more rapidly and to deal with any other problems preventing the prompt payment of accounts to businesses by the Government particularly in Canberra where so many businesses are involved in dealing with the Government agencies?

Three years ago in October 1977 the then Minister Senator Cotton said:

All Government Ministers have been asked to ensure that their departments take action to pay all accounts promptly; the Government is aware of difficulties which can be created for small business if delays occur in the payment of Commonwealth accounts.

Now, practically three years to the day, a Government senator is complaining in this chamber that in Canberra, the seat of government in Australia, the Government has failed to live up to that undertaking to small business. In the same ministerial statement the then Minister, Senator Cotton, as is recorded at page 1375 of the Senate Hansard for 1 3 October 1 977, said:

The effects of inflation upon small business are disastrous; directly or indirectly its effects are experienced in a lack of orders and demand for goods and services, in higher interest rates, in adding to the difficulty of planning and investing on a confident basis, in a worsening of cost structures and the financial position of firms and so on. Inflation shortens everyone’s time - horizons and destroys confidence.

The achievements of this Government in putting the economy on the road to economic recovery are thus highly relevant in this context. Small business is very much dependent on general economic growth and prosperity, and investment and consumption expenditure. As these continue to improve, the Government believes some of the problems of particular concern to small businesses at the moment will be overcome.

Senator Gietzelt:

– Who said that malarky?

Senator DOUGLAS MCCLELLANDSenator Cotton, the then Minister for Industry and Commerce, in a ministerial statement to Parliament in October 1977 about six weeks before the election. We will see what small business thinks of that. On 2 September 1980, two years and 1 1 months after that ministerial statement, Mr Perman, the executive secretary of the Australian Association of Independent Business, went on record as having said that ‘bankruptcies in the small business sector were at their highest level since the Great Depression and the signs were that the trend would get worse’. He said:

I don’t think the Government generally realises the importance the small business community plays in the economy.

It employs 42 per cent of the workforce, which is more than that employed by big business.

Mr Perman said the Government has neglected small business in last month’s Budget and small business were now disillusioned with the Liberal Party.

Small businessmen may be tempted to vote for somebody else unless people promise some sort of action to help small business.

I put it to the Senate that it is not only small businesses and the small businessmen who are concerned about the lack of interest or the lack of sufficient initiatives on the part of the Government to get them over their dilemma and out of their problem, it is also the concern of the work force of the Australian community. As General Motors-Holden’s Limited closed its plant at Pagewood and put hundreds of employees out of work in New South Wales so too many small businesses that fed off General Motors-Holden’s were likewise affected by such a dramatic and drastic decision. The Government must take more interest in the affairs that go on in this nation than it has to date if it is to overcome this problem about which we have heard.

We know the statements that were made in the Government’s policy speech three years ago. What has happened to small businesses and to unemployment? The single digit inflation that the Government promised by July 1979 has not come about. The 5 per cent inflation rate that was promised in 1979 is about 1 1 per cent in 1 980. The unemployment that was to fall in February 1978 and continue to fall, has worsened and the stage was reached last month where another 16,000 people were put out of work because of the policies of this Government. The interest rates that were to drop, according to the Prime Minister (Mr Malcom Fraser), by 2 per cent in two years in fact, have reached their highest peak and are likely to go up further in the event, by mischance, of this Government being returned to office. Taxation rates are exorbitant. Every Australian, including small businessmen, regard the taxation rates which are now imposed upon them as a great rip-off.

Small businessmen, particularly those in country towns, will tell honourable senators today that one of the great problems affecting their cost structure is the present petrol pricing policy of this Government. Only yesterday I was in Young in the west of New South Wales. A great number of people complained to me about the petrol pricing policy of this Government and its discrimination against country people, rural workers, farmers and businessmen in country districts. It is only axiomatic that those people who live away from the large coastal and commercial cities have much longer transport hauls. Their cost structure is likewise affected and they particularly are feeling the pinch of the present Federal Government’s petrol pricing policy.

I want to draw the attention of the Senate to the recent unemployment figures published by the Australian Bureau of Statistics which were released at noon last Thursday, 1 1 September. According to the Bureau’s figures, in August 1980 the estimated number of unemployed persons looking for full time work was 331,200. This represents 5.9 per cent of the full time labour force. The number of persons aged 15-19 years looking for their first full time job- people who had never worked before but who were looking for a job - was 46,200 and an estimated 59,300 persons were looking for part time work, representing 5.5 per cent of the part time labour force.

It is all very well for Senator Puplick, representing New South Wales in the Parliament, to make complaints and criticisms of the New South Wales Labor Government. I merely turn to page 4 of the statistical figures provided by the Australian Bureau of Statistics on the subject of unemployment. In New South Wales, despite the closing of General Motors-Holden’s Ltd at Pagewood - a decision that could not be affected or influenced one way or the other by the New South Wales Government as much as it tried, with the New South Wales Minister for Decentralisation going to Detroit to try to get in touch with the American people who made the decision - the unemployment rate was only 5.4 per cent of the work force.

Senator Jessop:

– Why was the swing in the byelection 10 per cent towards the Liberals?

Senator Douglas McClelland:

– I have a minute and a half in which to speak and I will not be deluded by Senator Jessop. In Tasmania, the unemployment rate was 5.3 per cent of the work force. Both those States have Labor governments. Let us look at the States which have nonLabor governments. In Victoria, the unemployment rate was 5.8 per cent of the work force. In Queensland it was 6 per cent of the work force. In South Australia, which has had a Liberal Government for 1 2 months, it has risen from 7.6 per cent to 7.9 per cent of the work force. In Western Australia it is 6.1 per cent of the work force. The two States that have the lowest rate of unemployment are the two Labor States. But for the policies that have been practised and implemented by the Labor governments of New South Wales and Tasmania, the unemployment rate in Australia would be much higher than it is under this drastic Fraser Government. I have raised these matters on the first reading of a money Bill bacause I doubt whether the Government will give me or my colleagues an opportunity to debate further the Budget papers. I hope that, when the decision of the Australian people is made on 1 8 October, they will take into consideration all the matters that I have enuciated.

Senator MASON:
New South Wales

– 1 am very pleased to hear Senator Puplick raise the question of the Hunter Valley. As a senator for New South Wales I am concerned and interested in that area myself. I am afraid I have news for Senator Douglas McClelland. The people of the Hunter Valley are very concerned about the aluminium smelters. They have talked to me in no uncertain manner on that subject. They are also very concerned about the Eraring open-cut coal mine, another environmental hazard to be inflicted on that beautiful area on the banks of Lake Macquarie, I think quite wrongly.

A point for the Labor Party to take note of is that because the Hunter Valley seats are though to be safe Labor seats it should not be believed that the people in that area will tolerate anything at all in the way of over-pollution and overindustrialisation of that beautiful Valley. My view on that subject is a strong one and it is the view of the Australian Democrats. It may be very pleasant to have one spoonful of sugar in coffee or tea but it does not follow that four spoonfuls are four times as nice. To have one aluminium smelter, or perhaps two, might be industrial development of an adequate nature but to have four is overdoing things.

There again, I have news for Sentor Puplick. I understand, from a source which I regard as very reliable in the planning area of Newcastle, that this matter is currently being given a rethink. Happily, I do not think that there will be four aluminium smelters in the Hunter Valley.

Senator Peter Baume:

Senator Puplick indicated that a Commonwealth environmental impact statement will be made.

Senator MASON:

– I have a point to make on that too, Senator Baume. We see, with approval, that a Commonwealth environmental impact statement is to be made. I do hope that it is not just a mere coincidence that the only development project of this kind is to receive that sort of investigation happens to be in a Labor State. It is reasonable to say that there is a political element in this. I will believe the Government’s credibility in that matter when I see it bring forward environmental impact statements or talk about the need for them in other projects in certain other States. When we sit in this Parliament next year, I shall remind Senator Baume of that and see what sort of progress has been made.

I rise in this debate to discuss unemployment. I recall that at about this time last year I talked about this matter. I might have chosen to speak on plenty of subjects of concern in the community, but I chose to speak on this matter again because I think it is one of the most important submerged issues in our society. It is the one thing of which we can feel ashamed nationally and internationally. We are a prosperous, developed and modern country and yet we allow this continuing social scourge to continue in our society. Senator Gietzelt mentioned this. Whatever differences there are between his point of view and mine - I suspect they might be considerable - on many aspects of the subject of unemployment we would agree. I dislike the euphemism structural unemployment’, which sounds like, and indeed is, the jargon of economists. Let us not hide behind phrases of that kind. Unemployment is a social cancer from which we are all suffering now to some degree, and may soon suffer more even if we are not yet aware of it.

It is not possible for a country to have close on half a million people not gainfully employed and to have its industries running down, and continue to be a healthy society. We have that problem right smack in front of us. I have a sense of deja vu and a certain sense of despair because very little has changed in the time since I spoke on this subject. Many other senators have spoken on it, too. It appears to be an area in which the Government does not want, for some reason, to do anything, whereas it would seem that there are many things that it could do. We still have this unhappy army of half a million people who can look to the future only with despair. Each unemployed person represents his or her own personal tragedy, and the younger those people are the worse it is for them because their own self-respect and morale are involved. One should have a necessary sense of being needed in the community, of having some place in it, and to take that away from a person is one of the worst things that could be done. It is the right of the citizens of a society to expect the people who are governing them to take these problems into account and to do something about them. It makes me, and the Australian Democrats, very angry to see this situation continue. We are convinced that it is not necessary.

This morning Senator Chipp spoke in the Senate on a matter of public importance and demonstrated very eloquently and adequately the huge rip-off of this country by multinational companies, the increasing degree of foreign ownership and the vast amounts of money which are being exported. Against that background we have in this country a growing economic disproportion. There are now at least two classes in this country, including the very rich and the very poor. The Catholic Commission for Justice and Peace has pointed out its anger and concern at a situation in which it believes a million people in this country are in poverty. This is an indictment which I believe no honest and decent Australian can face up to and look at honestly and not feel that something ought to be done about it. The many decent Australians I have talked to believe something should be done about it. They cannot see quite what it is, but they have a deep sense of frustration that the Government apparently has not been able to do anything.

Why cannot it do something about the position? That, to the Australian Democrats, is very intriguing. It would seem to us that it should be the first business of government in Australia now to seek areas of work in our society which could be expanded. We do not believe people should be trained for areas of industry which at present have high unemployment rates and in which there appears to be very little prospect of increase in gainful employment for the time being. The only way the economy can be got going again is to seek areas in which there can be expansion. The Australian Democrats see this in the two or three areas. Earlier today the Australian Democrats were accused of being idealists and vague in our policies. Far from it. We have specific suggestions to make in regard to specific areas about which we believe the Government should do something. We have said this before, but we never get a reply. It intrigues me more than anything else that the Government will listen to arguments and agree that they are rational, but as the weeks, months and years drag on nothing is done, lt is the motivation for doing nothing, the Government’s reasons for not really wanting to cope with this problem of unemployment, which intrigues me. I think many members of the Australian public must also be wondering very much about it.

One idea which I think the Government might look at - one will find there are other sections of society which are bringing it forward, as well as the Australian Democrats- is something like Roosevelt’s civilian conservation corps. That was an idea of the 1930s, part of the New Deal that dragged America out of the depths of its depression. Young people were given the opportunity, purely as volunteers, to go into areas of work which were provided by government and which at the same time were represented, especially to young people, as areas of patriotism, and indeed they were. They were tasks in the area of conservation which the country needed done urgently. At that stage huge areas of America’s farmland had been devastated by over-production and erosion. The civilian conservation corps worked on and, virtually right up to the beginning of World War II, employed millions of people to cope with that kind of problem. Young people were given work, training, and a place to live. They were paid and were given a sense of value in life again.

In my reading on this scheme I was impressed with the speed with which Roosevelt got it moving. He put it up one month, 1 think in April 1931. In the following month the legislation was put through. He had a director appointed, and that director came to Roosevelt and said: ‘Mr President, we can’t get this going for some six or seven months’. Roosevelt just said quietly to him ‘You have to have the first plans going next month’, and indeed, that was done. That is the sort of leadership and initiative from government that this country needs now. For the sake of this country, I hope that we can find it soon. I think the people of this country hope so too.

The second area which we feel could be explored far more, and it is being explored energetically in other countries- -we are not without overseas examples - is the adoption of a joint approach to energy and unemployment. We have talked in this debate about the Hunter Valley. The difficulty with aluminium smelters is that they are capital intensive. It really does worry me to see the Wran Government in New South Wales engaging in this discreditable sort of reverse auction to get aluminium smelters are any price in with the States are engaging. It is an indication of the degree of our failure as a nation that this sort of discreditable reverse auction esists and that the States cannot get together, as do the people of Japan and other such countries with reasonable patriotism, and show a common face toward multinationals. They do not necessarily have to say that we do not want multinationals. They could merely say: ‘As a united country and not as a set of banana States, all vying for your money on any terms, we will do a deal with you people’. Not a great deal of labour is employed in aluminium smelters. The reading I have done indicates to me that automation and robotisation in those industries, as in others, will increase in the next decade rather than do otherwise. So those few thousand people who are employed in aluminium smelters in the Hunter, probably already having been thrown out of jobs on the vineyards and farms, will find themselves out of a job again in a few years as those aluminium smelters become mechanised.

There are enormous opportunities for expansion in the energy field. We feel that there are two areas which in other parts of the world have been shown to produce huge results. One is the production of the fuel alcohols as supplements to petrol as a motor spirit and eventually possibly as a replacement for petrol altogether. Already this year in Brazil a quarter of a million cars which will run solely on fuel alcohol produced from growing plants are coming off the production line. That has been done under an intelligent government program which has been pushed ahead with government assistance and in co-operation with private enterprise. We suggest that such a program should be introduced here over a period of years.

Senator Tate:

– Plus slave labour.

Senator MASON:

– No, I would not entirely agree with that. If Senator Tate were to examine that industry he would see that it is rathermore enlightened than some. But Senator Tate’s point, valid though it may be, does not destroy the point that it is reasonable to establish in Australia an industry which could provide employment, not as slave labour but on reasonable terms, which also could help us with the energy problem. Private enterprise research in this area conducted by Fielder Gillespie, Biotechnology, and other organisations is commendably advanced, but the Government contribution to that area has been absolutely woeful. It is tragic that less than one per cent of what is collected from the fuel oil levy is going into energy replacement. It is also possible to produce from natural gas, at low cost and with only a two-year lead time, a fuel alcohol similar to that produced in Brazil. 1 refer to methanol, which our neighbours in New Zealand are producing at the Maui gas field.

I noticed in this morning’s Sydney Morning Herald, I think it was, a description of further advances made in that field. It refers to a Swedish design for floating factories which in fact can be put on a gas field, and instead of gas from an offshore well being wasted it can be turned into methanol and used as a fuel supplement. Australia has vast amounts of natural gas on the North West Shelf. At present huge quantities are due to be exported. I would be the last to say that we should be dogs in the manger and that we should not allow anybody else access to our energy. I would have thought - the Australian Democrats believe this-that some of it should be kept for our own use to help to run our cars, buses, trucks and agricultural machinery in the future. At a capital cost of $258m and with a lead time of two years we can produce enough methanol to provide M 1 5- that is, a 1 5 per cent methanol additive- for our petrol in this country at a lower price than the present landed cost of Middle East crude. I keep saying in the Senate that once Australians really get on to that thought and understand it they will realise the great con that is being pulled on them and will understand that if we did develop this industry and use methanol as an additive petrol it would be cheaper in two years time, not more expensive. Surely that is what we all want.

I agree very much with Sir Mark Oliphant’s thoughts that we should have a gas line from the North West Shelf to join the Moomba line because the Moomba field is not inexhaustible. In another decade we will be in trouble there. Let us consider that possibility. It would fit in with the methanol refinery concept quite well. These seem to be much more practical and rational alternatives than the Rundle shale oil project. The Rundle shale project may produce eventually but the best information I can obtain is that there is no likelihood of large scale production from Rundle before 1995. If anybody would like to challenge me privately on that I will show him documentary evidence which indicates that 1 995 is the date on which we can expect large scale production. There is no doubt about that. The Prime Minister (Mr Malcolm Fraser) in an energy statement a week or two ago - when it was introduced in the Senate I was not allowed to comment on it- said that as the supply of Bass Strait crude reduces Rundle shale oil will take up that shortfall. That worries me deeply. Anybody who likes to read the statement will find it written there. That worries me intensely. After all in 1980 the output of Bass Strait crude oil is dropping. Where have the 10 years of crisis gone? I would like to feel that the Prime Minister of this country understood that there is a gap of a decade and that somehow we have to provide oil during that period.

The Government has to stop saying ‘Rundle, Rundle’ all the time. The Prime Minister is losing credibility over this matter. More and more Australians understand now that it will take five years to carry out a feasibility study. Shale is not being developed anywhere in the world and the process for extracting the oil is by no means definite. I have hopes for it, as any other person would have. Anything that can help us in the future is good. It is wrong that the Australian public should be misinformed about this matter. When a man with the authority of the Prime Minister says that Rundle will take up where Bass Strait leaves off I can only say that perhaps those who are advising him are not advising him correctly or those who are writing his speeches have not done their homework sufficiently. There will be a gap. That gap in energy supplies is a matter of great seriousness for this country. In ethanol and methanol production alone, judging by the experience of other countries, probably 100,000 new jobs could be created in this country over the next three years.

Another industry that could be vastly developed is solar water heating. Well known technology with which most people are already familiar could be used. The main problem for the roof top collectors of solar energy is the high initial cost but in other parts of the world- I instance California, of which 1 have made a special study and the Government of which has been good enough to send me all the relevant material - it has been found that it is much cheaper to give very generous tax refunds on solar installations than to build new power stations that will use fossil fuels. Hence, in California, the buyer of a solar system gets three-quarters of his money back in the form of tax rebates. That has led already to a huge increase in employment because the installation of these devices, and to some extent their manufacture, is labour intensive. That is what Australia needs at the moment. We need something that will give jobs to people and will cut back our demands for energy at the same time. The Australian Democrats are in close touch with the Californian organisation running the Solarca plan, as it is called. We are confident that it could also be introduced effectively in Australia. On the Californian experience - California is a State not dissimilar to Australia; a little larger in population but similar in many respects- it would lead to a very rapid expansion of the solar industry. On a regional basis we would get these things in every town, every suburb and every city of Australia. That would accommodate perhaps as many as 50,000 more workers a year.

We would like to see the small businessmen trained as young people to get the chance to do a job of their own. These creative practical policies provide a two-pronged attack on energy and unemployment. My dilemma is: If a small party like the Australian Democrats with our staff of six people - because that is all we have to do research and other things for us, such as establishing the party, fighting elections and other things - can see these possibilities, why can not the Government see them if it wants to1? Why should not the Government do something about it? Why could it not at least do a study of it?

Senator Mulvihill:

– Lack of vision.

Senator MASON:

– I am wondering whether it is that. It seems to be a question of wrong priorities. Where is the money going to? We seem to have money for these vast building projects. We can put, I predict, what will be close on a billion dollars into the new and permanent Parliament House. All honourable senators are in it; the Labor Party as well. The Labor Party wants the new Parliament House just as much as the Government does. Yet the Opposition knows damn well that that money could be spent much more effectively and much more sensibly on something that would get a few more young people into work. The people on the Labor side of the House should be ashamed for supporting that white elephant that will go up on that hill. Honourable senators should give that some thought. Again, there are other enormous building projects going on. I should not just invite the Opposition senators; their friends on the other side of the House are just as bad on that question.

We are worried about the future. We are worried about a future which is dictated by these weird priorities. Money is spent on buildings, on satellites and on all sorts of things. Money is spent on useless aircraft carriers. One aircraft carrier, as any strategist will tell one, will not be worth a tinker’s cuss to anybody. Maybe if the Government had three carriers or the moral guts to say that it will order three and get them the Government might be doing something. But for the Government to say it will do something with one aircraft carrier is merely to waste another $ 1,000m that could be usefully used. If we are to have that sort of future where will it lead us?

Another aspect is the mineral boom. It seems that this mineral boom will be uncontrolled. The Government tells us one figure one day and another on another day. A great deal more money might be spent on minerals. That would create a massive wave of inflation which would be exceedingly difficult to control. Based on historical precedent in other countries, where I believe we should look, this would destroy huge areas of our manufacturing industry. This is already being perceived by the industry. Honourable senators should look at papers by members of manufacturing industry to see what they have been writing recently on this subject. Inflation will price our farmers off world markets. These are consequences which, I believe, we must not tolerate in this country. I would have hoped by now for a reasonable, rational statement from the Government on how it proposes to deal with that matter because it will come; there is no avoiding it. This mineral bonanza is not a kind of lottery prize that will save Australia from its problems. We need balanced, rational development which will not only be capital intensive but also labour intensive. We need more incentives for Australian business.

There is one piece of Australian Democrats policy. Let us see how honourable senators like it.

Try it on for size. The first $1,000 in dividends in an Australian publicly registered company by an Australian taxpayer should be free of tax- not dividends from a multinational company but from an Australian company. Honourable senators should try that on for size and think of what it might do for some of our businesses. I suggest that that is something the Australian Democrats would introduce very quickly. It would persuade Australians to take some action. Honourable senators have all been talking about it. I hear people saying in the House week after week, year after year that Australians should invest in their own industry. By that simple mechanism alone we might go a long way towards doing that.

Senator Tate:

– A worthy idea.

Senator MASON:

– Well, there we are. The other thing we need is a complete new deal in industrial relations. We need fewer unions - I think honourable senators on this side of the House must understand that that is necessary. We need one set of industrial law. I like Neville Wran’s idea. The Australian Democrats like Neville Wran’s idea of there being one set of industrial law in the country which is run by the Commonwealth and a great deal less confrontation between bosses and workers. This can be done; it is being done by the man who will be the second Australian Democrat senator for Victoria in the Senate next year. I will welcome him then as Senator John Siddons. He is one of Australia’s most successful businessmen. He runs an Australian trans-national company, Sidchrome and Ramset Fasteners (Aust) Pty Ltd and a host of other companies. Also, he was given the James N. Kirby award a couple of years ago for his brilliant work on industrial democracy. He is regarded not only as an expert, an academic, on that subject, but also as a man who has put his own company on the line. He has said to his middle ground executives: ‘We will have independent work groups, and if you do not like it go and get a job elsewhere’. He has workers on the boards of his companies, an intelligent system for profit sharing and trains a quota of quadriplegics and paraplegics every year.

This man has the answer, believe you me. His companies are prosperous. He does not have trouble with his workers. He has solved the problem of motivation. Productivity is the missing element in the economic equation of this country. This man, through his own example and by laying his own business on the line, has demonstrated that the problem can be solved. I have no hesitation whatsoever in urging the people of

Australia to vote for him next year as an Australian Democrat senator for Victoria. Indeed, I am quite confident that that will happen.

For two years we have been putting matters such as this to the Government. We have had some small results. Some things have happened; but it has been much too little much too late. We doubt the Government’s sincerity to some extent because of that. If the Australian people were to give the balance of power in the Senate to the Australian Democrats next year I would give them a pledge that we would be in a position to insist that some of these common-sense steps I have discussed would be taken. I give fair notice now in the Senate that if it is the wisdom of the people to give us that responsibility we will insist that steps are taken to get this country out of its economic doldrums. We have the people in our party to show how it can be done.

Question resolved in the affirmative.

Bill read a first time.

Second Reading

Minister for Social Security · Victoria · LP

(10.52)- 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 appropriate amounts required for expenditure in 1980-81 from the Consolidated Revenue Fund other than those amounts provided by special appropriation and those included in Appropriation Bill (No. 2) 1980-81. The expenditure program of the Government was outlined in the Budget Speech. The amounts sought for each department are shown in detail in Schedule 2 to the Bill and total $10,324,087,000; an amount of $125,000,000 is also included in the Bill for the Advance to the Minister for Finance.

This Bill seeks authority for the Minister for Finance to issue $6,202,188,000, the balance of $4,246,899,000 having already been authorised by the Supply Act (No. 1) 1980-81. Clause 5 of the Bill also provides a special appropriation of the Consolidated Revenue Fund from which the Minister for Finance may issue amounts payable in respect of increases in salaries and payments in the nature of salary arising out of awards, orders or determinations made under or in accordance with a law. Honourable senators will be aware in this regard that a bulk allowance has been included in the overall Budget figuring for prospective increases during the year in wages and salaries of Service personnel and other employees included under the defence function - $110m - and other Public Service employees- $ 125m. Those bulk provisions are not, however, appropriated in advance of any increases being awarded.

The Schedule to this Bill is the same as that contained in the document ‘Particulars of Proposed Expenditure for the Service of the Year Ending on 30 June 1981’ which was referred to the Senate Estimates committees on 26 August 1980 for examination and report. I commend the Bill to honourable senators.

Senator Dame MARGARET GUILFOYLEI suggest that we have a cognate debate on Appropriation Bill (No. 1) and Appropriation Bill (No. 2). Is that course satisfactory to the Opposition?

Senator BUTTON:

– The Opposition agrees to debate Appropriation Bill (No. 1) and Appropriation Bill (No. 2) together. I wish to move an amendment with respect to the Bills and also to make some comments of a general nature about the Government’s economic strategy after five years. The criticisms I have which are implicit in the second reading amendment go to that whole question of the economic strategy of the Fraser Government. The economic strategy of the Fraser Government has gone wrong in almost every respect when one considers that the Prime Minister (Mr Malcolm Fraser) said at the beginning of 1979 that the year 1979 would reveal the fruits of the Fraser Government’s policies. Tonight I want to examine those fruits and to discuss in the general context the poor economic management of the preceding five years.

When one talks about economic management of the affairs of a country one is entitled to ask the question: Economic management for whom? If we are talking about economic management for foreign investors in Australia, for tax avoiders and for the most wealthy section of the Australian community, the fruits of the Fraser Government’s policies in the last five years have been quite successful. The government came to power on the sort of promise that it would be a government for all Australians, as any government in fact should because that is what government is about. It can be seen that the economic management of the Fraser Government has not been in the interests of all Australians at all but in the interests of a very limited and small section of the Australian community of the type to which I referred a minute or two ago.

It is frequently said by Ministers in this placeparticularly by the garrulous Senator Carrick at

Question Time - when they are trying to defend the economic management of the Fraser Government that everything the Fraser Government has done has been somehow justified by things that happened five or six years ago in the period of the Labor Government. If it is suggested to Senator Carrick that this Government has an abysmal economic record in relation to one issue, he says: Oh yes, but if you go back six years you will see that the others were as bad, and that justifies us being awful economic managers’.

It is like a driver being arrested on a charge of drunk driving saying, ‘Just a minute; my grandfather was arrested on a charge of drunk driving and he got off. Therefore, I can drink and drive as much as I like.’ That is the morality of the position which is put by Senator Carrick day after day in the Senate, and it is the morality of an Australian society which is in a downward spiral of performance at the level of government. Anything is justified in the present by what happened in the past. It is a most abysmal morality on which any government could embark. Apart from that the arguments on some of the particulars which some of the protagonists of that point of view would seek to put are not even true. It is no alibi for being a bad government in 1980 to say: ‘In our view there was a bad government once before.’ That is what is being said.

The whole question of economic management should be dealt with in a debate about the facts relating to those sorts of issues. Those are some of the things which emerge as consequences of the second reading stage amendment which I intend to move on behalf of the Opposition. More than ever before in its history, this country, after five years of the grandiosity, of this sort of Fraserism which is the 1970s equivalent of what used to be called sukamoism, to justify all sorts of appalling management at home by solving the problems of the world overseas - by taking an overseas trip every 10 weeks to justify the gross deficiencies of government at home - has been left in a desperate need for a government which will recognise our position in international affairs as being that of a medium to small level country which should not aspire too high in terms of the influence it will exert in the world. Above all, it should be a country which aspires to fulfil the hopes and aspirations of this society in terms of it being a cohesive one, in terms of it being a antipodean Western civilisation which can provide a good and equitable standard of living for its people. It should be an example to the countries nearby. It should relate to the countries which surround us in terms of their economic development and so on, not as s sort of big brother but as an adviser and a friend. It should have its own position as a government and a country in proper perspective.

More than anything else, we need in this country now a government which is compassionately concerned with the notion of a more equitable society, with a more free society, with one which is an example to our neighbours, rather than a society which is divided bitterly, which has no promise or aspiration for the future because it has no vision and is not concerned about the sort of crass inequities which exist within a society such as this. That is why the election is important. It will give the opportunity to the Australian people to change to a government which will be concerned about those sorts of things, as distinct from a government which has five years of chronic failure behind it.

Debate interrupted.

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– Order! It being 1 1 p.m., in accordance with the sessional order relating to the adjournment of the Senate, I put the question:

That the Senate do now adjourn.

Question resolved in the negative.

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Second Reading

Debate resumed.

Senator BUTTON:

– I move:

Those are the particulars of the case against the 1980 Budget of the Fraser Government. It is a Budget which is divisive. It is a great document in one way only. It documents five years of failure in respect of all the promises and all the rhetoric of the Fraser Government about economic management.

In contrast to the rhetoric which is frequently talked by Government Ministers, I turn to some of the particulars which we have mentioned in this amendment as being evidence of the failure of the economic management and strategy of the Fraser Government. The first particular is that we have a rate of economic growth per capita less than half that of the average rate for all other Organisation for Economic Co-operation and Development countries. Let me draw attention to that in the following terms: In the year 1979-80, gross domestic product in Australia rose by 2.2 per cent. That is below the average for the past four years. Gross domestic product minus exports actually fell in 1979-80 by 0.3 per cent, or approximately 1.5 per cent on a per capita basis. In the perid 1975-76 to 1979-80, the years of the Fraser Government, the average real growth in GDP was 2.4 per cent per annum on a per capita basis. The average rate of growth per capita for OECD countries over the same period was 3 per cent. It was not a very good performance, one might say, in terms of what was promised.

As I recall it, we were promised a 6 per cent growth rate in the event of a Fraser Government coming to power in 1975. Compared with other countries - comparable countries with comparable economies - the Australian performance in the last few years has been appallingly bad. If one compares Australia’s performance with that of particular overseas countries - I think it is important to do so. I think one illustrates well the size of the problem which has existed for many years of conservative government in Australia. Let us take for example, a comparison with a country such as Sweden. I wish to quote from a book entitled Last Quarter, written by a former Australian diplomat Mr Malcolm Booker, part of which deals with the performance of Australia in contrast with Sweden. He had this to say about Australia’s performance in terms of economic growth:

The contrast with a country like Sweden is instructive. It has a population of eight and a quarter million, compared to about fourteen million. It has only one important mineral - iron ore - compared with our huge resources of fuels and minerals. We have an area of nearly eight million square kilometres while the Swedes have about half a million, less than 10% of which is arable land. They have no oil, coal or natural gas. Their only important national resource is timber.

Notwithstanding this relatively poor endowment, Sweden’s standard of living, measured in national income per head, is the highest in the world. Why is this? The main reason is that in the past 30 years the Swedes have consistently developed their industry to keep it in the foreline of technology. They produce and export supersonic aircraft, the most advanced electronic equipment, nuclear power generators, computers and highly sophisticated electronic products.

He deals with Sweden’s engineering industry and states:

In the field of economic relations, we have belatedly become concerned about the high tariffs we maintain on low technology goods produced by our Asian neighbours, without realising that many of them are now passing levels of technology higher than our own; they produce not only shirts more cheaply that we can, but also cars, electronic equipment and engineering products. The question for the future is not so much whether they will have access to our small market, but whether we will be excluded from their vast one.

I mention that in the context of the appalling record of this Government. Mr Booker took the last 30 years for his comparison between Australia and Sweden. I simply draw attention to the fact that Australia for 27 of those 30 years has been under conservative governments which have declined to plan, which have produced a range of ad hoc economic theories from time to time and which have missed golden opportunities over many years in terms of the sorts of things Mr Booker was talking about. We have a very real problem not only in relation to the last three years but also in relation to the last 30 years or so of government in Australia in terms of our gross domestic product and the increase in that compared with the increases in other countries, lt is a record of Australia slipping behind, losing its grip and is one which all Australians ought to be concerned about.

The second matter that we mention in the amendment is a substantial increase in the level of unemployment durig the five years of the Fraser Government. Of course there are all sorts of discussions about the promises on the level of unemployment which have been made on numerous occasions by the Government when it has been seeking office in an election. Apparently the Fraser Government regards unemployment as important. Time and again is has promised that it will fix unemployment and time and again in making that promise, it must have considered unemployment as being important, and it must have considered the grave social implications that unemployment would have for Australia. It also must have considered that it was important socially that something be done about reducing unemployment and it must have considered that the unemployed were entitled to relatively compassionate treatment from a society as wealthy as this. If the Fraser Government regarded all those things as important prior to previous elections why does it not regard them as important now? I am sure that it will in the next three weeks when it makes all sorts of promises on what will be done about unemployment, ls there any more reason for believing those promises rather than the promises that were given in the past?

Last Thursday the Australian Bureau of Statistics released the figures on unemployment in Australia. According to the Bureau’s very extraordinary method of calculating the number of unemployed- that is to say, people who have not done any work in the previous week because if they have done an hour’s work they are excluded from the figures - 390,500 people were unemployed in Australia; an increase of 16,700 over the previous year. The Bureau’s figures show that 22 people are now registered with the Commonwealth Employment Service for every job vacancy available and 34 young people are registered for every job vacancy. Over 160,00 more people are unemployed today than there were four years ago.

If one looks at the latest issue of Business Review one sees a prediction from the management consultants, W. D. Scott and Co. Pty Ltd, that unemployment in 1982-83 will reach 9.5 per cent of the work force. The consultants expect very slow economic growth because of the slowdown in the expansion of aggregate demand. They say that the brakes are being applied to demand by the resurgence of inflation and by recession. Capital inflow is forecast to reach certain figure compared with last year. The management consultants, W. D. Scott and Co., say that in 1982-83 unemployment will reach 9.5 per cent of the Australian work force; that is, one in every 10 Australian workers will be out of a job. Of course, that prediction is made on the assumption, or guess, that the Fraser Government will be re-elected. The second particular of the amendment that the Opposition has moved to the motion for the second reading of Appropriation Bill (No. 1 ) relates to the very important matter of unemployment. We criticise the Fraser Government on a number of grounds in relation to its economic performance - a miserable performance if ever there was one. Firstly, we criticise it for the rate of economic growth, which is miserable by OECD standards. The OECD standards are used to make comparisons with other things. They ought to be used in that regard as well. Secondly, we criticise it for a substantial increase in the level of unemployment after the people of Australia had been repeatedly promised a reduction in the level of unemployment. The third particular of the amendment relates to interest rates. In November and December 1 977, immediately prior to the last election, the Prime Minister said:

Interest rates have begun to fall, and they will keep falling.

That was said on 21 November 1977, prior to the last election. Six days later he said: 1 am confident, with my Government’s policies continuing, that falls in important interest rates could add up to a total of 2 per cent within 1 2 months.

That was said in November 1977. A week later, in the course of the same election campaign when promises were being made, he hardened up his forecast. At an election rally in Melbourne he predicted a 2 per cent fall in interest rates during the year 1978. He added:

This is a target that can and will be achieved.

What would he know about that? How would he know, on the basis of his economic performance, that it was a target that could and would be achieved? A few days after that, in an electorate broadcast, he said:

Mr Hayden challenges the Government’s expectations of a 2 per cent reduction in interest rates over the next 12 months. Mr Hayden says it cannot be done.

We can now ask ourselves: Who is the best performer in terms of economic management and prediction - the Prime Minister or Mr Hayden? Mr Hayden was described as a jonah because he said that it could not be done. Mr Fraser, of course, said that it could be done. The reality of the situation is that during the term of the Fraser Government interest rates have reached a level which is 2 per cent higher than when the Prime Minister promised to make them 2 per cent lower. Interest rates on bank housing loans, instead of falling by 2 per cent, are at least 0.75 per cent higher than they were in December 1 977. The Hill Samuel report on banking and capital markets for September 1980 stated:

During the last few weeks, three official documents had been released, the implications of which indicate that during 1980-81 there will be a squeeze on the availability of credit and an increase in interest rates across the board.

The three documents referred to were the Budget, the report of the interdepartmental committee advising the Government on economic strategy, and the annual report of the Reserve Bank of Australia. One might say they are pretty impressive documents. The IDC, of course, indicated that it would be desirable for interest rates to rise in 1980-81.

What is the Fraser Government promising this time? In 1977, in respect of an issue of great concern to the Australian people, to the thousands upon thousands of Australians struggling to buy houses and to the thousands and thousands of young people trying to buy their first house, the undertaking was given that interest rates would fall by 2 per cent. Instead interest rates have risen by 2 per cent. What are we to believe in 1980? What will be said by the Prime Minister in 1980? Will he say that interest rates will fall or will he go the other way perhaps with the Reserve Bank of Australia, the IDC and Hill Samuel and say that interest rates will go up by 2 per cent? There is no way that he will do the latter. Of course, that is because there is an election in the offing.

On each of the issues which are particulars of the amendment moved by the Opposition to the motion for the second reading of Appropriation Bill (No. 1) there is a shocking dichotomy between promise and performance - performance by the Fraser Government in terms of economic management. The fourth particular deals with the rate of inflation, which is substantially higher than it was at the time of the last election in 1977, when the present Minister for Finance, Mr Eric Robinson, was talking about reducing the rate of inflation to 5 per cent. Instead we now have a rate on inflation which is steadily increasing.

I have dealt already with interest rates. On the rate of inflation I simply say that it is presently running at 10.7 per cent. If one extrapolates the information in the Budget, by the end of this financial year it will probably be between 12 per cent and 13 per cent. At the time of the 1977 election when the Fraser Government was returned to power, asking for a second go after two years of economic mismanagement, it was said that the rate of inflation was 9.3 per cent. Nearly 3 years later it is currently 10.7 per cent and rising. What does that mean in terms of economic management performance for a government which has said right from the beginning and has consistently repeated that its first fight is against inflation rather than dealing with unemployment, a priority with which we do not agree? Is it still the first fight of this Government? It is losing that fight and it is doing even worse in relation to unemployment. It has an appalling record in terms of the overall management of the Australian economy. What arc we to be told now about what the Fraser Government will do in 1981 about inflation?

Fifthly, the amendment deals with taxation, which has been the subject matter of considerable discussion in the Senate and elsewhere in the last few days. There is much evidence in the Budget documents about the increases in inflation which have taken place under the Fraser Government. One does not have to look to the Budget documents. One just has to ask the average Australian about the increases in taxation which have affected his pocket every week as this Government has continued its shonky way towards total mismanagement of the Australian economy. As revealed by the Budget documents, there has been a 31 per cent increase in taxation in the five years of Fraser government.

Add to income tax the imposition of the petrol tax and it makes a total Fraser tax of enormous proportions for the average income earner in this country. This Government has increased income tax by 31 per cent and has imposed a petrol taxtotally regressive tax - which bears on the poorer section of the community, as does the income tax which has developed under this Government. The interdepartmental committee advising this Government made the point that the burden has shifted from the wealthier taxpayers, many of whom do not pay tax at all at this stage of their careers, to the pay-as-you-earn taxpayer. A vast burden has been imposed in shifting the taxation responsibility to the PAYE taxpayer, the average Australian taxpayer. If he is married with two children, he now needs about $16 more a week to meet the additional tax burden which is imposed on him by the Fraser Government. This, of course, has led to a decline in living standards, which is the sixth item referred to in the amendment which has been moved by the Opposition.

Not only has there been a decline in living standards, which again is well documented and which has affected those on lowest incomes most, but also there has been intensified social division and conflict because of the inequitable distribution of income and wealth under the Fraser Government. The greatest example of this arises in the field of taxation. On the one hand, the burden of taxation is being shifted to the lower and middle income wage earners. The ones affected most are those people on incomes of between $9,000 and $1 3,000. On the other hand, at the top of the scale very wealthy income earners are avoiding paying income tax altogether.

This Government has prevaricated on and messed about in dealing with this problem. It is not just a problem, as Professor Russell Mathews has pointed out, of collecting anything up to $2 billion in taxation revenue owing; it is a question of morality as to the way the system of government has developed under the Fraser Government. In the years 1977 and 1978 the tax avoidance industry really took off in this country. It became the only growth industry under Malcom Fraser. It happened in 1977 and in 1978 and it was to the benefit of a small section of the community which of course meant that the lower and middle income earners have had to pay more taxation which is the gross inequity referred to in paragraph (e) of the Opposition’s amendment which I have moved.

Senator DURACK:
Attorney-General · Western AustraliaAttorneyGeneral · LP

– The amendment moved by the Opposition to the motion for the second reading of Appropriation Bill (No. 1 ) calls for the adoption of an alternative economic strategy by the Government. We have heard a great deal about this alternative economic strategy in recent days. It seems to involve an enormous increase in Government expenditure and there have been suggestions that it would be able to reduce taxation. It is a totally irresponsible strategy for the economic management of this country. Clearly it would result in higher levels of inflation and higher interest rates or inevitably higher taxation. But more importantly it would completely frustrate and destroy the future prospects of development of which we now see clear evidence. The Government utterly rejects the amendment and trusts that the Bill be given a second reading by the Senate.

Question put:

That the words proposed to be added (Senator Button’s amendment) be added.

The Senate divided. (The President- Senator the Hon. Sir Condor Laucke)

AYES: 20

NOES: 28

Majority……. 8



Question so resolved in the negative.

Original question resolved in the affirmative.

Bill read a second time.

Motion (by Senator Durack) agreed to:

That consideration of the Bill in the Committee of the Whole be made an order of the day for the next day of sitting.

Senate adjourned at 1 1.30 p.m.

page 1045


The following papers were presented, pursuant to statute:

Australian Bureau of Statistics Act- Proposal No. 7 of 1 980- Surveys of Handicapped Persons, February-May 1 98 1 .

Customs Tariff - Orders 1980- Developing Countries - Nos. 4 and5.

page 1046


The following answers to questions were circulated:

Cocos Island Quarantine Station (Question No. 2825)

Senator Archer:

asked the Minister representing the Minister for Heath, upon notice, on 14 May 1980:

  1. Will the Cocos Island quarantine station be in operation within twelve months from May 1980; if so, (a) when will procedural details of the operation of the station be released; (b) when will details be made available as to predetermination of eligibility to use the facility; (c) who, or what body, will determine access priorities, and (d) when will details of fees and length of quarantine be made available.
  2. Will the Minister for Health make a full statement on this subject as a matter of urgency.
Senator Dame Margaret Guilfoyle:

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

  1. 1 ) The construction of the quarantine station on the Cocos (Keeling) Islands is proceeding on schedule and is due for completion in April 1981. lt will be fully staffed and operational by June 1981:

    1. Broad procedural details have been made available by my Department during the past twelve months to Breed Societies and interested parties. Detailed procedures will be released progressively as they are completed;
    2. Eligibility to use the facility will be based on animal health requirements currently being prepared. Initially the station will only be available for importations of cattle and pigs from countries with established disease status such as European countries, the United States of America and Canada. On completion of the Australian National Animal Health Laboratory in 1984, a wider range of animals from countries of higher disease risk will be able to be imported.
    3. Arrangements for the establishment of an Advisory Committee on Animal Import Priorities have been finalised and I expect to make an announcement shortly. This Committee will assess all applications for space in the station and advise me of priorities on the basis of the national interest.
    4. Details of the fees to be charged are currently being prepared by my Department and will be made available as soon as possible. They will be based on the re covery of operational costs only from importers. The length of stay in quarantine will vary depending on the species of animal and the country of origin. However announcement have already been made on cattle from Western Europe (five months in quarantine) and cattle from the United States and Canada (three months in quarantine).
  2. I will be making a statement covering the matters raised by the honourable senator in the near future. A number of statements have been made by press release throughout the duration of the project.

Trade with France (Question No. 3019)

Senator Walsh:

asked the Minister representing the Minister for Trade and Resources, upon notice, on 20 August 1980:

  1. What has the total value of exports from France to Australia been in each of the past five years.
  2. What proportion of total French exports has this been in each of these years.
  3. What has been the total value of Australian exports to France in each of these years.
  4. What proportion of total Australian exports have exports to France been during each of these years.
Senator Carrick:

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

Cite as: Australia, Senate, Debates, 15 September 1980, viewed 22 October 2017, <>.