House of Representatives
17 August 1971

27th Parliament · 2nd Session

  1. House of Representatives
  2. 27th Parliament
  3. 1971

Mr SPEAKER (Hon. Sir William Aston) took the chair at 3 p.m., and read prayers.

page 3

PETITIONS

Contraceptives

Mr HOWSON:
Minister for Environment, Aborigines and the Arts · CASEY, VICTORIA · LP

– I present the following petition:

To the. Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth of Australia respectfully showeth:

That the sales tax on all forms of contraceptive devices is 271/4 pet cent. (Sales Tax Exemptions and Classifications Act 1935-1967). Also that there is customs duty of up to 471/2 per cent on some contraceptive devices.

And that thisis an unfair imposition on the human rights of all people who wish to prevent unwanted pregnancies. And furthermore that this imposition discriminates particularly against people on tow incomes.

Your petitioners therefore humbly pray that the sales tax on all forms of contraceptive devices be removed, so as to bring these items into line with other necessities such as food, upon which there is no sales tax. Also that customs duties be removed, and that all contraceptive devices be placed on the national health scheme pharmaceutical benefits list

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

Petition received.

Contraceptives

Dr SOLOMON:
DENISON, TASMANIA

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth of Australia respectfully showeth:

That the sales tax on all forms of contraceptive devices is 271/2 per cent. (Sales Tax Exemptions and Classifications Act 1935-1967). Also that there is customs duty of up to 471/2 per cent on some contraceptive devices.

And that this is an unfair imposition on the human rights of all people who wish to prevent unwanted pregnancies. And furthermore that this imposition discriminates particularly against people on low incomes.

Your petitioners therefore humbly pray that the sales tax on all forms of contraceptive devices be removed, so as to bring these items into line with other necessities such as food, upon which there is no sales tax. Also that customs duties be removed, and (hat all contraceptive devices be placed on the national health scheme pharmaceutical benefits list.

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

Petition received.

Chemical Agents of Warfare

Mr LUCOCK:
LYNE, NEW SOUTH WALES

-I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives, in Parliament assembled. The humble petition of 10 electors of the Commonwealth of Australia respectfully showeth: 1. that the United Nations General Assembly Resolution 2603 XXIV A (December 1969) declares that the Geneva Protocol of 1925, which Australia has ratified, prohibits the use in international armed conflict of any chemical agents of warfare - chemical substances whether gaseous, liquid ‘or solid - employed for their direct toxic effects on man, animals or plants;

that the World Health Organisation Report (January 1970) confirms the above definition of chemical agents of warfare;

that the Australian Government does not accept this definition, but holds that the Geneva Protocol does not prevent the use in war of certain toxic chemical substances in the form of herbicides, defoliants and ‘riot control’ agents.

Your petitioners therefore humbly pray -

that the Parliament take note of the consensus of international political, scientific and humanitarian opinion; and

that Honourable Members urge upon the Government the desirability of revising its interpretation of the Geneva Protocol, and declaring that it regards all chemical substances employed for their toxic’ effects on man, animals or plants as being included in the prohibitions laid down by that Protocol.

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

Petition received.

Chemical Agents of Warfare

Mr DRURY:
RYAN, QUEENSLAND

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament Assembled. The humble petition of electors of the Commonwealth of Australia respectfully showeth:

that the United Nations General Assembly Resolution 2603 XXIV A (December 1969) declares that the Geneva Protocol of 192S, which Australia has ratified, prohibits the use in international armed conflict of any chemical agents of warfare - chemical substances whether gaseous, liquid or solid - employed for their direct toxic effects on man, animals or plants;

that the World Health Organisation Report (January 1970) confirms the above definition of chemical agents of warfare;

that the Australian Government does not accept this definition, but holds that the Geneva Protocol does not prevent the use in war of certain toxic chemical substances in the form of herbicides, defoliants and ‘riot control’ agents.

Your petitioners therefore humbly pray:

that the Parliament take note of the consensus of international political, scientific and humanitarian opinion; and

that Honourable Members urge upon the Government the desirability of revising its interpretation of the Geneva Protocol, and declaring that it regards all chemical substances employed for their toxic effects on man, animals or plants as being included in the prohibitions laid down by that Protocol.

And your petitioners as in duty bound will ever pray.

Petition received.

Chemical Agents of Warfare

Mr DOBIE:
COOK, NEW SOUTH WALES

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament Assembled. The humble petition of 4 electors of the Commonwealth of Australia respectfully showeth:

that the United Nations General Assembly Resolution 2603 XXIV A (December 1969) declares that the Geneva Protocol of 1925, which Australia has ratified, prohibits the use in international armed conflict of any chemical agents of warfare - chemical substances whether gaseous, liquid or solid - employed for their direct toxic effects on man, animals or plants;

that the World Health Organisation Report (January 1970) confirms the above definition of chemical agents of warfare;

that the Australian Government does not accept this definition, but holds that the Geneva Protocol does not prevent the use in war of certain toxic chemical substances in the form of herbicides, defoliants and ‘riotcontrol’ agents.

Your petitioners therefore humbly pray:

that the Parliament take note of the consensus of international political, scientific and humanitarian opinion; and

that Honourable Members urge upon the Government the desirability of . revising its interpretation of the Geneya Protocol, and declaring that it regards all chemical substances employed for their toxic effects on man, animals or plants as being included in the prohibitions laid down by that Protocol.

And your petitioners as in duty bound will ever pray.

Petition received.

Chemical Agents of Warfare

Dr SOLOMON:

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of electors of the Commonwealth of Australia respectfully showeth -

that the United Nations General Assembly Resolution 2603 XXIV A (December 1969) declares that the Geneva Protocol of 1925, which Australia has ratified, prohibits the use in international armed conflict of any chemical agents of warfare - chemical substances whether gaseous, liquid or solid - employed for their direct toxic effects on man, animals or plants;

that the World Health . Organisation Report (January 1970) confirms the above definition of chemical agents of warfare;

that the Australian Government does not accept this definition, but holds that the Geneva Protocol doss not prevent the use in war of certain toxic chemical substances in the form of herbicides, defoliants and ‘riotcontrol’ agents.

Your petitioners therefore humbly pray -

  1. that the Parliament take note of the consensus of international political, scientific and humanitarian opinion; and
  2. that Honourable Members urge upon the Government the desirability of revising its interpretation of the Geneva Protocol, and declaring that it regards all chemical substances employed for their toxic effects on man, animals or plants as being included in the prohibitions laid down by that Protocol.

And your petitioners as in duty bound will ever pray.

Petition received

Education

Mr DOBIE:
COOK, NEW SOUTH WALES · LP

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully sheweth -

Whereas

  1. the Commonwealth Parliament has acted to remove some inadequacies in the Australian eduction system.
  2. a major inadequacy at present in Australian education is the lack of equal education opportunity for all.
  3. 200,000 students from universities, colleges of advanced education and other tertiary institutions, and their parents suffer severe penalty from inadequacies in the Income Tax Assessment Act 1936-1968.
  4. Australia cannot afford to hinder the education of these 200,000 Australians.

Your petitioners request that your honourable House make legal provision for -

  1. The allowance of personal education expenses as a deduction from income for tax purposes.
  2. Removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students.
  3. Increase in theamount of deduction allowable for tertiary education expenses.

  4. Increase in the maintenance allowance for students.

    1. Exemption of non-bonded scholarships, for part-time students from income tax. And your petitioners, as in duty bound, wilt ever pray.

Petition received.

Education

Mr DRURY:

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully sheweth -

Whereas

  1. the Commonwealth Parliament has acted to remove some inadequacies in the Australian education system.
  2. a major inadequacy at present in Australian education is the lack of equal education oportunity for all.
  3. 200,000 students from universities, colleges of advanced education and other tertiary institutions, and their parents suffer severe penalty from inadequacies inbe Income Tax Assessment Act 1936-1968.
  4. Australia cannot afford to hinder the education of these 200,000 Australians.

Your petitioners request that your honourable House make legal provision for -

  1. The allowance of personal education expenses as a deduction from income for tax purposes.
  2. Removal of the present age limit in respect of the deduction for education expenses and the maintenance allowance for students.
  3. Increase in the amount of deduction allowable for tertiary education expenses.
  4. Increase in the maintenance allowance for students.
  5. Exemption of non-bonded scholarships, for part-time students from income tax.

And your petitioners, as in duly bound, will ever pray.

Petition received.

Broadcasting and Television

MrDOBIE -I present the following petition:

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The petition of the undersigned showeth:

  1. That the Australian people both in Metropolitan and Rural areas should have the best of television programmes available to them and that television as a powerful means of communication should not be in the control of too few hands.
  2. The increased quota for Australian dramatic productions should not be imposed by the Australian Broadcasting Control Board at the expense of Australian professional variety or Australian documentary or educational programmes, but directed more towards cutting down expenditure on the purchase of imported productions, thus effecting a considerable saving in Australia’s overseas balance of payments.
  3. The Australian Parliament has a responsibility to encourage the development of our National identity, character and heritage and the promulgation, for the sake of our children, of an adequate picture of Australia, her standards, morals and way of life, particularly through the media of Radio and Television, which is in the immediate control of the Australian Government.
  4. Until constructive and positive action is taken by the Australian Government to promote Australian culture and protect the employment and professional standards of Australian writers, artists and producers in Australia itself there is little likelihood of stopping the flow of Australian talent from Australia to other countries.
  5. The Australian Broadcasting Control Board must insist that its new quota standards of Australian dramatic content on television are rigidly imposed and enforced on all commercial television stations.

Your petitioners most humbly pray that the House of Representatives, in Parliament assembled, should -

Cause the Australian Government to recognise the right of Australian professional people engaged in the creative and performing arts to further develop their skills and talents in Australia, and to be protected from overseas programmes in a way that will encourage an Australian Television and Radio industry that can reflect and contribute to our identity and growth as a Nation.

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

Petition received and read.

Wool

Mr KATTER:
KENNEDY, QUEENSLAND

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the residents of the State of Queensland respectfully showeth:

That unless the Australian Government place a statutory reserve price, at no less than the basic cost of production, on the sale of wool, the operation of the Wool Commission and the Rural Reconstruction Board will be of no long term benefit.

That the drastic economic conditions of the wool industry have a direct bearing on the small businessmen in towns in wool areas and consideration should be given to them sharing in the $30m wool grant.

That the wool industry by collaborating with manufacturers of other fibres should raise and maintain the general level of prices for all fibres therefore stimulating demand.

Your petitioners therefore humbly pray that:

The Government set a statutory reserve price on the sale of- wool, assist small businessmen in towns in wool areas and encourage collaboration between the wool industry and manufacturers of other fibres in order to stimulate demand for wool.

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

Petition received.

Overseas Aid

Mr HAMER:
ISAACS, VICTORIA

– I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of certain residents of Victoria respectfully showeth:

Earlier this year, in its efforts to reduce expenditure, the Federal Government proposed cuts in foreign aid, particularly in regard to developing countries. While we have no doubt that economies’ are necessary, we hope this step will be reconsidered and that some solution be found which will not adversely affect the underprivileged, whether in Australia or overseas.

Your petitioners therefore humbly pray that our foreign aid will, as soon as possible, be increased to at least one per cent of the gross national product.

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

Petition received.

Education

Mr LLOYD:
MURRAY, VICTORIA

-I present the following petition:

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of citizens of the Commonwealth respectfully sheweth:

Whereas -

It is desired to draw attention to the urgent need for increased aid to Independent Schools as the present grant is totally inadequate.

Your petitioners request that your honourable House make legal provision for an inquiry into increasing State aid to Independent Schools.

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

Petition received.

page 6

MINISTERIAL ARRANGEMENTS

Mr McMAHON:
Prime Minister · Lowe · LP

– Mr Speaker, I desire to inform the House of certain Ministerial changes and arrangements since the House last met. Senator the Honourable Sir Kenneth Anderson has been appointed Minister for Health.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– How does Packer like him?

Mr McMAHON:

– The Honourable N. H. Bowen, Q.C., has been appointed Minister for Foreign Affairs.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– How is he with Packer?

Mr SPEAKER:

– Order! The honourable member for Hindmarsh will cease interjecting.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– You had better watch, too.

Mr SPEAKER:

– The honourable member for Hindmarsh will withdraw that interjection.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Yes, Sir. I was referring to Packer, not you.

Mr SPEAKER:

– Order! The honourable member for Hindmarsh will withdraw the statement.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I did withdraw it and tried to explain.

Mr McMAHON:

– The Honourable David Fairbairn, D.F.C., has been appointed Minister for Defence. Mr Fairbairn will, for the time being, continue to hold the portfolio of Education and Science. Senator the HonourableI. J. Greenwood, Q.C., has been appointed Attorney-General. The Honourable Peter Howson has been appointed Minister for the Environment, Aborigines and the Arts and MinisterinCharge of Tourist Activities. Mr Garland has been appointed Minister for Supply. Also since the House last met, the Minister for Customs and Excise (Mr Chipp) has been appointed Deputy Leader of the House and Minister assisting the Minister for National Development; and the Minister for the Army (Mr Peacock) has been appointed Minister assisting the Treasurer.

Mr Speaker, 1 turn now to representation in the other chamber. The -Minister for Defence will continue to be represented in , the Senate by Senator Sir Kenneth Anderson, and the Minister for Foreign Affairs by Senator Wright who will also continue to represent the Minister for Education and Science. The Minister for Health will continue to be represented in this House by Dr Forbes, and the AttorneyGeneral will be represented by Mr N. H. Bowen. The . Minister- for- Supply . will be represented in the Senate by Senator Drake-Brockman, the Minister for the Environment, Aborigines and the Arts will be represented by Senator Greenwood, and Senator Cotton will represent the MinisterinCharge of Tourist Activities.

Sir, whilst I am on my feet I want to put this proposal to the Leader of the Opposition (Mr Whitlam): We know that he is anxious to bring on a censure motion, and we are willing to give him the maximum of assistance to permit him to bring on that censure motion immediately. Accordingly, if it is his wish, then we are prepared to move for the suspension of Standing Orders so that the censure motion can be brought on immediately and it will continue until shortly before 6 p.m. tonight.

page 7

QUESTION

THE CABINET

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

-I ask the Prime Min ister a question. The right honourable gentleman will recall the form of the Executive Councillor’s oath, which he himself has taken many times, in particular the phrase I will not directly or indirectly reveal such matters as shall be debated in Council and committed to my secrecy.I askhim whether he recalls very recent statements: By the right honourable member for Higgins that one of the problems of Cabinet in recent years has been the problem of keeping things under wraps; by the honourable member for Wentworth that the whole business of Cabinet has been subject to an enormous number of leaks and the whole place has become something like a sieve; and by the honourable member for Berowra that he hud his own ideas about the source of Cabinet leaks.I ask: Do these statements by three recent Ministers testify to constant and serious breaches of Cabinet oaths of secrecy? Has he discussed the allegations with these ex-Ministers, and what steps will he take to discover those colleagues who have broken their oaths?

Mr McMAHON:
LP

– This is an extraordinary question to be asked by the Leader of the Opposition. He referred to the Executive Councillor’s oath. This has got nothing whatsoever to do with the Cabinet secrecy. That is a convention and is not the result of swearing the oath for the Executive Council. If he looks at it he will see what the consequences are. But if he wants to know the conventions relating to the Cabinet I draw , his attention, first of all,., to Halsbury’s ‘Laws ofEngland’, 3rd Edition, Volume 7, at page 354, and also to Sir Ivor Jennings’ ‘Cabinet Government’, 3rd Edition, where it is. made abundantly clear that there is no oath of secrecy relating to the Cabinet itself. There is a convention, and that convention usually is observed.

page 7

QUESTION

EMPLOYMENT AND UNEMPLOYMENT

Mr BURY:
WENTWORTH, NEW SOUTH WALES

-I address to the Minister for Labour and National Service a question concerning the employment of married women at Broken Hill. (Honourable members interjecting) -

Mr SPEAKER:

– Order! The House will come to order. I would remind < honourable members that often complaints are made at the end of question time to the effect that sufficient time has not been available for questions to be asked.I assure the House that if this joviality continues there will be fewer questions asked’ I therefore ask the House to observe the Standing Orders.

Mr BURY:

– I now ask the Minister for Labour and National Service: Is the employment of all married women at Broken Hill still effectively regulated outside the law by the agents of the big Labor majority on the Barrier Industrial Council applying antediluvian trade union prejudices? Is this mode of procedure approved by the President and executive of the Australian Council of Trade Unions?

Mr LYNCH:
Minister for Labour and National Service · FLINDERS, VICTORIA · LP

– The honourable gentleman does, of course, have a great depth of experience in industrial matters, and notwithstanding the mirth which the question has generated in the Opposition benches, it is fair to say that what the honourable gentleman is doing is drawing attention to one of the extreme examples of the excess of union power in Australia.

Mr Grassby:

– That is an attack on Broken Hill.

Mr LYNCH:

– I might say to the honourable member for Riverina, who himself has recently also drawn attention to those excesses by public statement, that this is in every way a matter which the honourable gentleman ought to raise in the House and it is a proper matter for concern because the situation, as honourable members on the other side would be well aware, is that Broken Hill is a closed town and indeed is an example of the excess to which union power can run in this country. So far as the specific point which has been raised by the honourable gentleman is concerned, my understanding is that it is the policy of the Barrier Industrial Council, which has been applied with some few exceptions, that no married woman can work in that town if there is a single woman available for the job. It will be, I hope, self-evident to some honourable members opposite that this is a very serious infringement of the right of people to work. That that situation does obtain under the control of the Barrier Industrial Council is certainly a matter for regret by members on this side of the House and, I would hope, by some of the more responsible elements on the other side of the House. So far as the final point raised by the honourable gentleman in relation to the policy of the Australian Council of Trade Unions is concerned, I am not specifically aware of what the ACTU policy is in relation to Broken Hill but my very clear understanding is that the

ACTU has placed no conditions upon the right of married women in this country to work. The principle to be followed ought to be that of recruiting the best person for the job available.

page 8

QUESTION

DEFENCE

Mr BARNARD:
BASS, TASMANIA

– My question is addressed to the Prime Minister. Was he correctly reported as threatening the former Minister for Defence: ‘If you won’t cut the defence vote I’ll get someone who will’? Did the Brisbane ‘Telegraph’ report on 3rd June that consideration would soon be given to reducing the size of the Army? Did the ‘Sydney Morning Herald* report on 30th July that Australian troops would be out of Vietnam by Christmas and did the Melbourne ‘Sun’ report on 4th August that national service would be cut by 6 months? Can he say whether these disclosures were inspired as part of a systematic campaign to exact acceptance of a cut in the defence vote which the former Minister regarded as contrary to the national interest? If so, will he say from which members of his Ministry the leaks originated and what action has been taken against them?

Mr MCMAHON:
LP

– As to the first part of the question, it is false to say that I made that statement in the Cabinet. Usually I do not like making any statement about what occurs in Cabinet but in order to show how inaccurate the honourable gentleman is I. can immediately contradict that. The second point that I want to put to him is that I have no evidence whatsoever that these leaks came from any Cabinet source. Of course, statements have been made but because they are made it does not necessarily follow that they have come from Cabinet. They could have come from departmental or other sources. I am not one of those who is prepared to suggest, by innuendo or the creation of a false impression, that some members of the Cabinet or of the Ministry are responsible for these leaks. I have no evidence whatsoever that they came from Cabinet sources and consequently I have made no effort to ask any Minister whether he was responsible for them.

page 8

QUESTION

THE PARLIAMENT

Mr JARMAN:
DEAKIN, VICTORIA

– I address a question to the Leader of the House. Bearing in mind that Bills tend to pile up towards the end of a session will the Leader of the House inform members of what steps the Government is taking to have Bills prepared early in the session for consideration by the Parliament? Will the Minister indicate to the House how many Bills are at present ready for presentation to the House?

Mr SWARTZ:
Minister for National Development · DARLING DOWNS, QUEENSLAND · LP

– I am delighted to be able to answer this question because at the moment 19 Bills are ready for presentation to the House. A substantial job has been done in this regard by the Legislation and Programming Committee under the chairmanship of my colleague the Minister for Foreign Affairs. This achievement indicates the work that has been done over the last few months in trying to evolve a policy of administration which will solve a problem that has worried Parliaments throughout the world for many years. The Prime Minister initiated the appointment of a committee of senior representatives of the Public Service to prepare a report and to advise the Legislation and Programming Committee in relation to this matter. A lot of other investigation has been made by officers in various departments and a tremendous amount of co-operation has been received on all sides.

I am indeed happy to report to the House on behalf of my colleague and his Committee that at this point of time, the first day of the sittings of this session, we have ready for presentation 19 Bills of which 12 are outside the Budget and 7 are related to the Budget. In addition many other Bills, some associated with the Budget and others with other matters, will be ready for presentation to the House in a short time. This situation will assist the orderly conduct of the business of the House during the current sittings. As the Prime Minister has already announced, a terminal date will be determined after which time Bills may not be introduced. I assure the House that everything possible is being done to create in this Parliament a situation which will be the envy of most Parliaments.

page 9

QUESTION

CABINET DECISIONS

Mr WHITLAM:

– I preface my question to the Prime Minister by reminding him of the precedent set by the British Chancellor of the Exchequer in 1947 when he resigned voluntarily for prematurely dis closing Budget information. The Prime Minister will by now be aware that on 23rd July following a Cabinet meeting on the previous day there were reports in a number of Australian newspapers that his Government had decided to subsidise wool prices to 36c a lb. He will have noticed that this information was followed with a rally on the stock exchange in the share prices of pastoral companies which had been showing a consistent decline. What steps will the Prime Minister take to investigate the leaks in this case which provided fuel for stock exchange speculation?

Mr McMAHON:
LP

– I am not prepared at this moment to say what is likely to be contained in the Budget but as a matter of sheer common sense I ask the honourable gentleman: Does he think that any members of the Cabinet would want to have this information made available prematurely, knowing that the great advantage to the Government and for the Government parties would be its effective presentation in the House at Budget time together with all the other measures that we are taking? I think there is pretty good reason for thinking that if there were any disclosure I do not admit for one moment that there was - it did not come from a Cabinet source.

page 9

QUESTION

MEAT EXPORTS

Mr CORBETT:
MARANOA, QUEENSLAND

– I ask the Minister for Trade and Industry: Is it a fact that meat imports to the United States of America are virtually under quota due to the existing legislation which can trigger off quotas if specified amounts of imports of meat are exceeded? If so, what action is being taken by the Government to ensure that as far as possible meat exports from Australia to the United States of America are not subjected to the 10 per cent surcharge imposed by the Government of the United States on imports?

Mr ANTHONY:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · CP

– I think we are all very concerned about the announcement by President Nixon about putting a surcharge on imports into the United States of America. Fortunately for Australia, about 70 per cent of our exports to that country go there under some sort of quota arrangement, either a voluntary arrangement or a fixed quota. There is a voluntary arrangement for meat, but it could become a fixed quota arrangement should the trigger ..mechanism be brought into play. We do not have ali the information we would like about the 10 per cent surcharge on exports to the United States.

Specific reference has been made to meat. No surcharge will be imposed on meat. When I refer to meat I am referring to beef, veal, mutton and goat on which the voluntary restraints operate. Unfortunately, lamb and processed meats do not enter ‘ the United States under those arrangements. It is therefore expected that the 10 per cent surcharge, will apply to lamb and processed meats. The actual value of meat going to the United States under these arrangements which will not have the disability imposed upon it is about $2 15m. That is very fortunate for the meat industry.

page 10

QUESTION

THE CABINET

Mr BARNARD:

– 1 address a further question to the Prime Minister. Does he recall bis predecessor announcing in ‘ reply to my question on 28th August 1968 that negotiations on Australian participation in overseas shipping were to be initiated by the former Minister for Trade and Industry? Does he recall that this announcement was anticipated by Mr Alan Reid in the Daily Telegraph’ of the same date7 Can he say from which Minister Mr Reid received exhaustive details of the decision on this matter’ taken by Cabinet only a’- day earlier? Does be feel that Mr Reid’s debt for this and other favours has now been paid in full?

Mr McMAHON:
LP

– I .have no recollection of the honourable gentleman’s question in 1968 and I have no wish to remember it.

page 10

QUESTION

DEFENCE PAY

Mr JESS:
LA TROBE, VICTORIA

– The Minister for Defence will remember that last year I asked bis predecessor for a revision of the pay scale for senior Citizen Military Forces officers. I was given an assurance in October of last year that Ibis decision had been made. Can he tell me whether anything has taken place yet and, If not, when it will?

Mr FAIRBAIRN:
Minister for Defence · FARRER, NEW SOUTH WALES · LP

– Yes, the honourable gentleman is right. A decision was made in October of last year as a result of a recommendation from the defence committee dealing with pay and conditions of service. lt was announced that there would be an increase in pay for certain senior Citizen - Military Forces officers. Unfortunately there was considerable difficulty in getting these regulations drafted, I understand, because of great pressure upon the parliamentary draftsmen. That position has been rectified. The regulations, were promulgated towards the end of July and the amount of payment can now be made, lt will be made next Friday. It was stated at the time the announcement was made that payment would be retrospective. It will be retrospective to 1st July 1969.

page 10

QUESTION

NEWSPAPER ARTICLE

Mr WHITLAM:

– I ask the Prime Minister a question. When did the right honourable gentleman’ first learn that the ‘Sunday Australian’’ on 8th August .would contain an article by the then Minister for Defence refuting Mr Alan Reid’s account of Cabinet decisions during the Minister’s period as Prime Minister? What steps did the right honourable gentleman take to get in touch with the former Minister about the propriety of such a publication before the publication in fact took place?

Mr McMAHON:
LP

– 1 was informed, 1 believe, at approximately 4.30 p.m. on the Saturday - that the publication would take place. A representative- of the ‘Sunday Australian’, who I believe was in Adelaide specifically for this purpose, offered to supply to me some of the details of the statement. [ read them. I took no action whatsoever as I knew that by- that time the article would be in print. But in any event I did not regard it as one of those occasions on which there’ could have been any intervention by me. It was obviously too late.

page 10

QUESTION

PEOPLE’S REPUBLIC OF CHINA

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– My question is: addressed to the Minister for Foreign Affairs. In view of recent events bearingon Australia’s relations . with the People’s Republic of China, can the Minister say whether an opportunity will be provided during the current session for members to debate this matter?

Mr N H Bowen:
PARRAMATTA, NEW SOUTH WALES · LP

-I am very much aware of the interest - of honourable mem-‘ bers in the subject of our relations with the People’s Republic of China and in the enormous gulf that exists between the

Government and the Opposition on this matter of policy. I hope to give an early opportunity to the House to debate this matter. If the Leader of the Opposition persists in his reluctance to bring on his censure motion, of which he has not informed the House but of which he has informed the Press, I hope to make a foreign affairs statement tomorrow and enable this House to debate matters of some importance.

page 11

QUESTION

NEWSPAPER ARTICLE

Mr BARNARD:

– I ask the Prime Minister a question. When did he first become aware of the contents of the article written by the right honourable member for Higgins for the ‘Sunday Australian’ of 8th August? How soon did he come to the conclusion that the article breached the basic principles of Cabinet solidarity and unity? Is it a fact that he did not get in touch with his colleague, who was still his deputy, until the following Thursday? Why did he take so long to act in defence of the principle of Cabinet solidarity and unity?

Mr McMAHON:
LP

– The first question 1 have already answered. The second one is my business, and I am not prepared under any circumstances to convey the information to anyone, including the honourable gentleman who has just asked the question.

page 11

QUESTION

DARWIN SEWERAGE SCHEME

Mr CALDER:
NORTHERN TERRITORY

– My question is addressed to the Minister for the Interior. In view of the concern being expressed by the Darwin City Corporation and notable residents in Darwin about the proposed Darwin central sewerage scheme and also in view of my own strong disquiet about the matter, will the Minister assure the House that adequate measures will be taken to prevent further pollution of the Darwin harbour? Will the Minister agree to a further reference to the Public Works Committee?

Mr HUNT:
Minister for the Interior · GWYDIR, NEW SOUTH WALES · CP

– There has been some misunderstanding about the proposed central sewerage scheme for Darwin. Firstly, I think the House must be aware that this scheme was considered at great length and recommended by the Public Works Committee after hearing evidence for and against the proposal. But since then there has been a considerable amount of criticism from the Darwin City Corporation and other groups and individuals in Darwin. I and my ministerial colleagues arranged for experts to go to Darwin and discuss with various officials in Darwin the principles relating to the proposal. The fears that have been expressed have not been allayed despite the fact that I have given the assurance that in the event that pollution should occur in the harbour I would take the proposal back to the Government for consideration.

I also wish to make this point clear: It is proposed to discharge the macerated sewage not into Darwin Harbour but at a point 8,000 feet feet out from East Point into a depth of 10 fathoms. But because of the continuing public concern I have arranged for the officers of the Departments of Works, Health and the Interior to confer and to bring to me a report on this and alternative but more costly proposals for treatment works. The honourable member for the Northern Territory has been concerned about this matter and has been in constant touch with me and I now inform him and other honourable members that I have no objection at all to the matter being referred back to the Public Works Committee under section 18 (6.) of the Public Works Committee Act if this is the wish of the House. mcmahon ministry

Mr WHITLAM:

– I ask the Prime Minister a question. What statements or subjects in the first article in the ‘Sunday Australian’ by the right honourable member for Higgins does he assert breached the principle of Cabinet solidarity and unity?

Mr McMAHON:
LP

– I have read all of the articles and 1 want to make it plain here beyond any doubt at all that I am not prepared to state publicly and I am not prepared to state to the Leader of the Opposition exactly which parts of the article I felt offended the rules that I mentioned. I have made a public statement on this matter and I have set out in that public statement the reasons for the action. I stand on that statement. I will make no further comments whatsoever about it.

NABARLEK URANIUM deposits

Mr BUCHANAN:
MCMILLAN, VICTORIA

– My question is directed to the Minister for National Development. Following recent statements by

Queensland Mines Lid substantially downgrading its first estimates of uranium oxide in the Nabarlek deposit, can the Minister indicate the overall position now regarding the uranium deposits in the Northern Territory?

Mr SWARTZ:
LP

– I have noted in the Press that the Senate Select Committee on Securities and Exchange has indicated that it will be undertaking an investigation of certain matters relating to statements by the Chairman of Queensland Mines Ltd and therefore under those circumstances I would not like to deal in detail with that individual matter. However, I should like to make it clear that when figures are submitted to me by any outside organisation I will not accept them unless they are proven. This has applied always and I have stated that before in this House. Figures that have been given to rae by various organisations are in many cases estimates which have to be proven and I and my Department will accept figures only after the completion of drilling operations, when survey evidence can be produced to show that these statements are of proven fact. I say that because sometimes there is an inference that the figures which are quoted by some companies are confirmed by my Department and accepted as proven figures. This is not so. We must have direct survey evidence for any figures that we accept.

The second point which 1 think is of vital importance to Australia - I stand by my previous statement- - is that the uranium province in the Northern Territory is a significant one by world standards. There are more operations going on in that province area than those conducted by Queensland Mines Ltd. Perhaps it could be judged from some of the statements in the Press that the statement of Queensland Mines Ltd referred to the whole of the province. That is not so, and I should like te put the record right at this time. Queensland Mines Ltd still has an enormous amount of survey work to carry out in other areas. Of course, other companies such as Peko-Wallsend Ltd, E Z Industries Ltd, Noranda Australia Ltd and the Pan Continental organisation are operating and exploring in that region. In addition, the Bureau of Mineral Resources in my Department has carried out some work, in some cases in conjunction with those other operators. The Bureau has arrived at a figure that 1 accept. It has stated that it can substantiate the known quantity of uranium oxide, U308 or yellow coke - call it what you like - in the province of the Northern Territory as amounting to at least 100,000 tons. 1 quoted that figure only fairly recently in Japan. 1 would not like the international Press to pick up anything resulting from reports that have appeared following a statement by one company which would affect our credibility overseas in relation to the future development of this uranium province. Honourable members opposite are interjecting, but this is a most important matter because it relates to a vitally important industry for Australia. I am sure that the Opposition realises that. I conclude by saying that other opportunities exist in Australia for finding substantial deposits of uranium. Already in South Australia, there are indications from the exploration work that has taken place that further deposits will be established and will ultimately be proven. I can only repeat that in the future Australia will be a major world producerin the uranium field. The significance of that is obvious. mcmahon ministry

Mr BARNARD:

– i ask a question of the Prime Minister. Can he recollect any statement by either the first Minister tor Defence, whom he appointed, or the first Minister for Foreign Affairs, whom he appointed, which did not represent the policy of his Government? If he can recollect any such statement, will he identify it?

Mr McMAHON:

– It is obvious that the Opposition is attempting to concentrate on me to obtain from me some statement that it hopes to use in a censure motion. I gave the Opposition the opportunity to move a censure motion before the commencement of question time and the Opposition did not have the courage to do so. In other words, at a later stage honourable members opposite want to interrupt the business of the House to stop us carrying on with the constructive work that we have been doing. I would have thought that the Deputy Leader of the Opposition had far more common sense and savvy than to ask a question of this kind in the House.

page 13

QUESTION

TRADE UNIONS

Mr ERWIN:
BALLAARAT, VICTORIA

– Has the attention of the Minister for Labour and National Service been drawn to a recent statement accusing trade unions of using 19th century methods to achieve reforms? Can the Minister inform the House of his opinion and whether he believes the statement to be correct?

Mr Webb:

– 1 rise to order. Is the honourable member in order in asking the Minister for an opinion?

Mr SPEAKER:

-Order! The honourable member also asked whether the statement was correct.

Mr LYNCH:
LP

- Mr Speaker, I can recall seeing in recent weeks a statement which would be consistent with that put forward in this House by the honourable member for Ballaarat and as I recall it the statement came directly from the honourable member for Riverina, who-

Mr Grassby:

– Mr Speaker, I rise on a point of order. My point of order is this: As I understood the question, the honourable member for Ballaarat was asking for information as to what was involved in a statement which was made by, apparently, myself. If he wishes to have the information I will make it available, but under the forms of the House is it a proper question to direct to the Minister for Labour and National Service who is not, to my knowledge, the member for Riverina.

Mr SPEAKER:

-Order! The honourable member for Riverina will not debate the question.

Mr LYNCH:

– This must be one of the few occasions in this House on which the honourable gentleman opposite wants to bask in anonymity. I can refresh-

Mr McMahon:

– Say it again - he did not understand what you meant.

Mr LYNCH:

– The phrase that was used was ‘to bask in anonymity’. Of course, the honourable gentleman would not want to be reminded of the statement that he made and which in fact was consistent with other statements that have been made by the honourable member for Eden-Monaro and the honourable member for Robertson who in part or in whole have expressed concern at the increasing involvement in this country by trade unions in political matters. That is certainly a matter of concern to members on this side of the House and I am sure it is a matter of concern to the Australian community, because I believe that the community at large is sick and tired of the extent to which unions are becoming involved in what are essentially political issues.

In reply to the question posed by the honourable member for Ballaarat, I would say that there are very many good reasons why trade unions should not continue with the use of the strike weapon for political purposes. In the first place they seek to usurp the role and the function of democratically elected government. In the second place those tactics are divisive of the trade union movement in Australia. In the third place they constitute interference with the normal political persuasions of the particular unionists involved, many of whom have views quite inconsistent with those which are dictated to them by those who control their un;on affairs.

Finally, activities of this type damage the community generally and the cost is very high indeed. Mr Speaker, trade unions in this country are an accepted part of our democratic fabric and they have a major role to play over the whole of the industrial relations scene. But certainly it is time for trade unionists and trade unions at large to stand up on this issue and bring back to the trade union movement the image for which at one time it was distinguished.

Mcmahon ministry

Mr WHITLAM:

– I ask the Prime Minister a question. Did the right honourable gentleman tell a number of journalists between the 27th and 30th of last month that the then Minister for Foreign Affairs, the honourable member for Wentworth, was about to be dismissed from the Cabinet because of his ill health?

Mr McMahon:

– No, I did not.

Mr WHITLAM:

– Well, then, did the right honourable gentleman at a dinner of his old school on Friday 30th July at which he was guest of honour - the Chief Justice of New South Wales and a couple of hundred other distinguished citizens were present - volunteer the statement that there was no truth in reports that the

Minister was to be dismissed? Did the right honourable gentleman, however, announce the dismissal of the Minister on Sunday 1st August?

Mr McMAHON:
LP

- Mr Speaker, I hoped that on the resumption of this Parliament the Opposition, and particularly the Leader and the Deputy Leader of the Opposition, would realise that we wanted to avoid scavenging for information and trying to destroy people’s reputations. We hoped that in this, a Budget session-

Mr Uren:

– Why do you not give us the information?

Mr SPEAKER:

– Order! The honourable member for Reid will cease interjecting.

Mr McMAHON:

– Let him go on; he cannot help it

Mr SPEAKER:

– I am sorry, I will not let him go on.

Mr MCMAHON:

– We hoped that the Budget session would be devoted to constructive measures for the development of this country and that a maximum contribution would be made to the quality of life, social services and health services. In my belief the people are sick and tired of personalities, and this shows just how undignified-

Mr SPEAKER:

-Order! The House will come to order. There are one or two members in the far corner whom presently I will request individually to restrain themselves.

Mr McMAHON:

– As to the 2 questions asked by the honourable gentleman, the answer to the first is no, I did not make any such statement because I had no evidence on which I could make such a statement. The reply to the second question is that at the dinner which was given to me by my old school no such statement as that mentioned by the honourable gentleman was made. If he had wished, he could have come to the meeting at St Paul’s College. He did not come; he preferred to be in China rather than in Australia among his own people. The second question clearly illustrates that he will listen to anyone. Only recently 1 have read an article published by a former secretary nf his, Mr Wyndham, and if anyone wants to get a very good estimate of what a former friend and colleague of his thinks of him, I advise that person to read the article. One of the inferences to be drawn from it is that one does not take a great deal of notice of anything the Leader of the Opposition says.

page 14

QUESTION

RIVER MURRAY SALINITY REPORT

Mr TURNBULL:
MALLEE, VICTORIA

– My question to the Minister for National Development relates to the River Murray salinity report. Will the Minister state what procedure is being taken to have the recommendations contained in the report implemented? As much of the work entailed will be in the Mallee electorate will the Minister visit that area in order to explain the project and hear at first hand suggestions from those most concerned?

Mr SWARTZ:
LP

– Some time ago the River Murray Commission undertook a survey and the report was finalised some months ago. As is known, the River Murray system is the most important river system in Australia and with the development of conservation schemes and increased irrigation it is essential that a complete study be made and a full understanding be had of the salinity problem. The report is extensive. 1 am sure that the honourable member has seen it. It would probably take him a few weeks to read. The report involves a tremendous amount of technical work, and additional study is required. At present the report is under study by the various governments concerned and by th.e River Murray Commission. ‘ Several discussions already have been held in relation to the report but at the moment I am unable to indicate when some final recommendations will be available for consideration by the 3 State governments and the Commonwealth Government. One point in relation to this matter is that the South Australian Government has already produced a document, part of which is based on the report. However, until the report is finally studied hy all the governments concerned and recommendations are made and considered hy the governments it will not be possible to indicate what action will be taken. This may be some months yet. In regard to the other point about visiting the particular area, 1 will see whether that can’ be done in the future, and certainly I will contact the honourable member regarding it.

page 15

PERSONAL EXPLANATIONS

Mr GRASSBY:
Riverina

– I wish to make a personal explanation, Mr Speaker.

Mr SPEAKER:

– Does the honourable member claim to have been misrepresented?

Mr GRASSBY:

– Yes, I was misrepresented on two occasions during question time by the Minister for Labour and National Service (Mr Lynch). In reply to the honourable member for Wentworth (Mr Bury), the Minister for Labour and National Service referred to me and to recent comments by me on industrial matters. He implied in the answer to that question that I had criticised the Barrier Industrial Council and labour-management relations in Broken Hill. I want to place on record that this was a serious misrepresentation. I have never at any time criticised the Barrier Industrial Council or labour-management relations in Broken Hill. In fact, I have made no public references to Broken Hill at all. Indeed, 1 have always regarded Broken Hill as an outstanding example of responsible industrial organisation, and I resent and reject the Minister’s attack on Broken Hill unionists and industries.

I was further misrepresented by the Minister for Labour and National Service in his reply to the honourable member for Ballaarat (Mr Erwin). In the second answer the Minister made a complete misinterpretation of my comments on trade union activism in political affairs. I did the exact opposite to what he claimed. I made a plea for trade unions and trade unionists to be more politically active, not less so. I suggested that they should become more interested in the politics of the nation and of the Parliament than they were in the 19th century, and I commend that to everyone in the nation, particularly at this time.

Mr FITZPATRICK:
Darling

– I believe that the Barrier Industrial Council has been misrepresented.

Mr SPEAKER:

-Order! Does the honourable member claim to have been misrepresented?

Mr FITZPATRICK:

– Yes. As a past Secretary of the Barrier Industrial Council, firstly, I think that the Minister for Labour and National Service (Mr Lynch) misled the House when he spoke about the number of married women who are employed at Broken Hill.

Mr SPEAKER:

-Order! The honourable member must show where he has been personally misrepresented; he cannot debate the question.

Mr FITZPATRICK:

– I will obey the law. I will ask for an opportunity to speak tomorrow night in the adjournment debate.

Mr ALLAN FRASER:
Monaro · EDEN-MONARO, NEW SOUTH WALES · ALP

– I wish to make a personal explanation. I have been misrepresented by the Minister for Labour and National Service (Mr Lynch). Far from objecting to trade unions taking an active part and an active interest in politics, I have always welcomed and encouraged this. I have made no statement different from that. The Minister’s statement is due to his temperamental failure to distinguish between violence and democratic processes.

page 15

SUSPENSION OF STANDING ORDERS

Mr WHITLAM:
Leader of the Opposition · Werriwa

– I move:

It is not technically a no confidence motion, but I take it that the Prime Minister will agree to the motion.

Mr McMahon:

– Yes, I will. We agree to the suspension of Standing Orders-

Mr WHITLAM:

– So that I can move this motion?

Mr McMahon:

– Yes, we will agree to the suspension of Standing Orders now, providing it is explicitly understood that the Budget will come on at 8 o’clock; and, consequently, shortly before. 6 o’clock we will take action to ensure that the debate is terminated.

Mr WHITLAM:

– I move, in accordance with the resolution of the House, that Standing Orders be suspended without qualification other than for my moving this motion.

Mr SPEAKER:

– Just before you do (his I must put the question to the House. The question is:

That the suspension of Standing Orders be agreed to in order to allow the Leader of the Opposition to move his motion.

Question resolved in the affirmative.

page 16

QUESTION

THE PRIME MINISTER

Mr WHITLAM:
Leader of the Opposition · Werriwa

– I move:

There are 2 preliminary things I want to say. The first is that this is not strictly a no confidence motion, nor in fact has the Prime Minister (Mr McMahon) accepted it as such, it would have been futile to move a no confidence motion because the many Ministers who have been displaced by the right honourable gentleman have all stated that they will not vote in favour of a no confidence motion. It will be noticed that the motion incorporates the sentiments of those honourable and right honourable gentlemen. Accordingly I would imagine it would be open to them to support this motion because it incorporates the matters upon which they have gone on record in all the mass media. 1 also point out thai I was entitled to move this motion to suspend Standing Orders at any time. 1 chose to do so after question time. I believe that not only honourable members but also the public and the media have had an exceptional opportunity of studying the form of the present Prime Minister where he knew that his answers could only be refuted by a Minister - a colleague - breaking his oath or his honourable understanding or where he knew that his answer could only be refuted by a journalist breaking the ethics of his profession. Then he spoke like a trouper. He was very prepared to deny any allegation. He knew that no honourable man could come forward and refute his answer.

Where, however, it was possible for people to know what was said he was very scrupulous in not giving a straight answer. It is true that he tried to conceal the issue on some occasions. For instance, he knew quite well that I was referring to a speech he made at the Old Sydneians dinner on ‘ 30th July. This was during the week when there were many rumours that the honourable member for Wentworth (Mr Bury), the former Foreign Minister, would be relieved of his post and yet the right honourable gentleman volunteered the statement that there was no truth in these rumours. There were 200 gentlemen at this dinner. They will know, . they will have their knowledge reinforced by today’s question time that the right honourable gentleman will say anything to suit his purposes, because he did state that there was no truth in these rumors. There are scores of men in this chamber who know that he was spreading that rumour before and that the rumour was correct. He deliberately tried to obscure the issue by referring to a dinner a week before - 23rd July - a dinner of the old university college which he, and I somewhat later, attended. That was before the execution had been determined for the Foreign Minister, lt was before there were any rumours on the subject at all.

Furthermore, he then imported an expression of opinion apparently expressed by a gentleman whom he said I had had as my secretary. I never had the particular gentleman as my secretary He is an employee of one Maxwell Newton, and for this purpose I will quote what Mr Maxwell Newton said under his signature in the Canberra ‘Sunday Post’ of 2 days ago He said: lt mus: have taken a . tremendous personal effort for Billy- referring to the right honourable gentleman - to screw himself up to suck Gorton. In the past Billy has always got other people - -myself Alan Reid, Sir Frank Packer. Warwick Fairfax and many others - to stab his enemies for him while Billy waited in the background until the crisis which others precipitated came to a solution.

Now, Sir. the important thing that faces this country and which can be resolved by members of this chamber is that this country has been held up to ridicule by the actions of the right honourable gentleman in the 5 months that he has held the top post in this country.

The events of last March were still a matter of sufficient wonder, perplexity and amusement in the whole of our region when J traversed it a few weeks ago, bur what is the position now? Last Friday the London ‘Times’ published an article on the events in the McMahon Administration. We have this extraordinary situation where the Deputy Leader of the Liberal Party, the third man in the governmental heirarchy, the Minister for Defence, the previous Prime Minister, a man who was better known than his colleagues in our region, has been summarily dismissed although the article which he was writing, asserted to be in breach of Cabinet solidarity and unity, was in the Prime Minister’s hands at 4.30 the afternoon before it was made available to the public. It was not appropriate to speak to the right honourable gentleman. Of course, like everybody the Prime Minister was able to see it fresh on the Sunday but he did not move till the Thursday. He stood back while a public scandal and hue and cry were aroused against his Deputy and’ throughout that time - through all those days; Saturday, Sunday, Monday, Tuesday, Wednesday and Thursday - they were at arm’s length. A man who is ever ready to resort to the telephone did not use that magic instrument for 6 days to speak to his deputy.

Then the other victim - less conspicuous but nevertheless chosen by the ‘ right honourable gentleman- nol chosen as a Minister because he was the Deputy Leader of his Party and therefore had to be in the Ministry but chosen b> him as Foreign Minister, his own selection - was dismissed in this humiliating way. As far as Australia is concerned overseas can there be more striking examples of how we must stand? In the course of these few months the Minister for Defence and the Minister for’ Foreign Affairs have both been dismissed.

On the second last day that this Parliament sal in the previous sessional period the right honourable gentleman similarly faced a motion criticising him, a motion of no confidence. After one of the longest winter recesses in the history of the Parliament he yet again is under censure. No Prime Minister in the history of federation has had this experience. Both these motions - the motion of 5th May and this one - have this in common: They spring directly from the conduct of the Prime Minister. Of course, the “rime Minister will say these matters are matters of personality. The fact is that when he was given by my Deputy tlie opportunity to deny that there had been any breaches of policy by the right honourable member for

Higgins (Mr Gorton) and the Honourable member for Wentworth in their posts of Defence and Foreign Affairs he just slid away from the question. He does not suggest that the Ministers who were dismissed were dismissed because they had at any time misstated the policy of his government. He just does not like them. It is a matter of personality that they were sacked. It is worth recalling the words of my no confidence motion moved last May:

The Prime Minister lacks the confidence of this House in that he has broken undertakings to keep the public informed of what the Government is doing and has been responsible for suppressing debate in the House on what the Government is doing.

The House will recall that the whole tenor of the debate which then ensued was about the question of the trust that could be put in the Prime Minister and the undertaking he gives, and basically this present debate must be about that same question, the question whether one can trust this Prime Minister. 1 wish to put to the House 2’ propositions. This is a Prime Minister who has not the trust of his own Party and who has not and cannot have the trust of this House. It was an exquisite experience to watch the former Ministers - Ministers whom he has dismissed - looking at him when he gave his answers this afternoon and to see the intensity, to use as neutral a term as one can properly use on this occasion, that they showed as they listened to his replies.

Mr Gorton:

– lt is so hard to hear from this far away.

Mr WHITLAM:

– I will concede that the right honourable gentleman’s expression, indicated incomprehension. Consequent to these 2 propositions and more important than either of them is a third proposi tion - that he has not and cannot have the trust of this nation and is totally unfit to be the leader of this nation. I do not expect honourable members opposite to accept my opinions on these matters. Today they have, for the first time for 7 years, amongst them on their back bench - a back bench which, if I may say so, is the most remarkable and distinguished that this Parliament has seen - one whose words they may think merit deep consideration. It is true that I can quote from newspapers, radio and television the comments by the right honourable member for Higgins, the honourable member for Berowra (Mr Hughes) and the honourable member for Moreton (Mr Killen) but I will content myself with the usually non-polemic comments of the honourable member for Went worth (Mr Bury) who said on 11th August that as far as the Liberal Party as a whole goes:

I think the real difficulty of the Liberal Party at the moment is to produce an acceptable, satis factory leader. One who carries general conviction and is trusted by the majority of the Party. The honourable member for Wentworth had special reasons for making this statement. Those of us who know him know very well that he is almost the last man in this House who would walk out of a post, who would talk out of turn or out of spleen or out of a sense of vindictiveness but he does know, as we all know, 2 facts about his dismissal as Minister for Foreign Affairs. The first is that for several days before his dismissal the Prime Minister was trying to condition the Press - not just the journalists upstairs but their proprietors and editors in Sydney and Melbourne - to the view that the honourable member for Wentworth was a sick man and consequently unable adequately to fulfil his duties. The former Minister went out of his way to deny this allegation. It gives me great pleasure to say that I have never seen him looking so hale; nor have I read comments in which he has shown so much spirit. The second matter of which he is aware, because he represents a great number who were there, is the statement that the Prime Minister made at his old boys’ dinner about him. His dismissal was only the overture; it was the prelude to what was to happen in the ensuing fortnight.

Everyone now knows the full significance of the article which appeared in the ‘Daily Telegraph’ on Monday, 2nd August and which read:

Further changes in coming months are expected to affect the Defence Minister, Mr Gorton . . . His removal to London - . . would clear the way for the re-entry into Cabinet of Mr Malcolm Fraser whose reinstatement could be difficult while Mr Gorton remains in the Ministry.

Few of us are now in any doubt about the relationship between the Prime Minister and the ‘Daily Telegraph*. There is no doubt in my mind that this was an inspired story - inspired by the Prime Minister. The right honourable member for Higgins - the right honourable John Grey Gorton, Companion of Honour, Privy Councillor, former Minister for the Navy, former Minister for Education and Science, former Prime Minister, former Minister for Defence, former Leader of the Liberal Party, former Deputy Leader of the Liberal Party - should have seen the portent and should have recognised the ominous sign. What we now know is that the Prime Minister and the organisation which contributed so largely to his being Prime Minister had given the ultimate thumbs down sign. It was only a matter of time and opportunity. The right honourable member for Higgins himself provided the opportunity. He did the unconscionable thing. He did what every politician in England, the United States and Australia has an acknowledged right to do. He wrote an article, or in this case undertook to write a series of articles in his own name and in his case in his own defence. It is absurd and monstrous to suggest that this in itself was in some way a breach of ethics. It has even been put around by the Prime Minister’s agents that there was some special impropriety in the case of the right honourable member for Higgins because he accepted some payment for his articles. It is in fact the most common practice in the world and I myself have adopted it from time to time and will continue to do so on every suitable occasion. As the right honourable member for Higgins has pointed out, Deakin himself - a name not to be mentioned in this House without summoning up the ideas of integrity and propriety - was writing articles throughout the whole of his political career, including the years of his great prime ministership.

The Prime Minister himself wrote an article only a few months ago which appeared in the Melbourne ‘Sun’, in defence of apartheid and racially selected sporting tours. I assume that he was paid as I was by that organisation for an article in the contrary sense. So let us have none of this hyprocrisy that there was something improper in the action of the right honourable member for Higgins in writing his articles. The key to the whole matter is not what was in the first article but the reaction of the Prime Minister to it. He did nothing on the whole of the late afternoon and the night before the article appeared in the newspaper. He did nothing between that Sunday and the following Thursday. He was spending the time with his great friend, Mr Eric Robinson, President of the Queensland Branch of the Liberal Party, on the Isle of Capri at Surfers Paradise. There are 100 businessmen and journalists around Australia who could give evidence that they received calls from the Prime Minister at that time. Some were asked for advice;, some were asked for help. The advice sought was how to get rid of John Gorton. The help sought was how to pour a bucket on him; There are around this country dozens of men- great Liberal supporters - who have been appalled by the spectacle of a man in this top position so demeaning himself and his position-. They are the men who will not be contributing to the Liberal Party funds for the next election, whenever it comes. But he. was determined,- like other Little- Caesars, to destroy the right honourable member for Higgins and he sat there on the Isle of Capri plotting his destruction - Tiberius with a telephone.

But on Monday 9th August, a firm clear political event occurred. Sir Frank Packer agreed to be interviewed by the Australian Broadcasting Commission. At any time this would have been one of the most extraordinary coups in Australian journalism - the avowed enemy of the ABC agreeing to appear on the very sort of programme to whose destruction ‘ his organisation is most committed. The programme was ‘P.M.’, the radio version of This Day Tonight’. On that programme Sir Frank Packer was asked:

There has been a suggestion that it isn’t quite the correct thing for Mr Gorton, who ls still in the Cabinet, to be discussing contemporary political issues like he ls.

Sir Frank Packer replied: r quite agree that be shouldn’t be doing that and

I think he is’ a great embarrassment to Mr McMahon in the Cabinet.

Sir Frank Packer further said:

I hove no doubt there is squabbling in the Cabinet and in my view Mr McMahon ought to get rid of Mr Gorton out of the Cabinet - not because of his ability but because of their, inability to gel along.

Sir Frank Packer was asked:

What do you think he should do with him?

He replied:

Oh well - retire him to the back benches. -

In the words of the right honourable member for Higgins the Prime Minister was given his riding instructions and again in the words of the former Prime Minister from the horse’s mouth*. Of course the Prime Minister would assert that Sir Frank Packer’s advice and his own decision were wholly coincidental. There is not one honourable member in this House who would believe it. All of us here know very well, and the public outside is becoming increasingly aware of, the sinister relationship between the Prime Minister and Sir Frank Packer. We have the evidence that Consolidated Press itself gave ostensibly in its own defence only last Sunday in a full page apologia headed The Telegraph and Mr Gorton’, sub-headed ‘Setting the Record Straight’ in the following words:

Australian Consolidated Press gave Mr Gorton consistent support throughout his prime minis,tership. The company’s papers supported Mr Goc- - ton at the time of the leadership struggle after the death of Mr Holt. At this time Sir Frank Packer was abroad, but was kept in touch with affairs over the telephone by his Editor-in-Chief, Mr D. McNicoll. Sir Frank was informed by Mr McNicoll that there seemed little likelihood of Mr. McMahon’s being elected leader and that Mr Gorton was favourably regarded. Sir Frank asked Mr McNicoll to speak to Mr Gorton and inquire whether, if he became leader, he would retain Mr McMahon in the Treasury. Mr McNicoll had a private conversation with Mr Gorton at the home’ of Mr W. C. Wentworth and explained the situation to ohn. Mr Gorton said that he admired Mr. McMahon’s ability and capacity for hard work, and that if he (Mr Gorton) got the leadership there was no reason to think he would not do what he could to put Mr McMahon in the ‘ Treasury. Mr McNicoll reported this to Sir Frank Packer in Acapulco The Telegraph organisation then gave strong support to Mr Gorton for tha’ leadership.

What this statement asserts, of course, is that Consolidated Press nominated its candidate for the Treasurership of the Commonwealth of Australia. (Extension of time granted) One could hardly have a more frightening example of outside influence - influence not just inferred, not just implied, not just suspected, but influence real; ostensible, actual, blatant, at the highest level of affairs. The agent of a newspaper proprietor nominated who would be Treasurer of this country.

Sir Frank Packer has justified himself by saying that he admires the present Prime Minister. I am sure he does. What he has not said and what perhaps explains a great deal about his sponsorship, protection and promotion of the Prime Minister is the long association in business and politics which the 2 gentlemen have had. It has been a relationship which has extended over nearly 40 years. I do not condemn it. I think one must pay tribute to the mutual loyalty and fidelity which these gentlemen have shown to each other. It has been a long and fruitful association. In 1932 Frank Packer still had his way to make, even though he was the vigorous son of a forceful father, and in that year he formed a company - “his first company. He called it Sydney Newspapers Pty Ltd’. It was incorporated on 8th November 1932. It is a moving experience to read in the original copy of the memorandum and articles of association listing the people ‘who are desirous of being formed into a company*, that amongst the names of investors who paid their pound is one William McMahon, student, University of Sydney, and a lady’s name, presumably that of a relative. It was that company which helped to lay the foundations of the present Packer empire.

Those who have a sense of history and symmetry may find .some satisfaction in knowing that that company formed so long ago - nearly 40 years ago- still survives and, since 3rd March 1955, has been registered in the Australian Capital Territory. If one looks up the phone book one can see that the name of that company, to which William McMahon, student, so long ago paid his simple pound as an original shareholder, is now listed with the most prestigious address - Parliament House. Its resident manager is listed as: Mr Alan Reid, 7 Hunter Street, Yarralumla.

There are very great and pressing reasons why we must have an election now. The honourable member for Wentworth has already spoken about the untrustworthiness of the Prime Minister as Leader of the Liberal Party. There will undoubtedly be various reasons given why we cannot have an election now. Let me state forthwith that Supply has been voted until the end of November. We can very readily, if we wish, this week enact any improvements in social services or any grants of rural relief, and there does not then have to be another election until June 1974 when elections for the 2 Houses could be synchronised and when, as my

Party certainly would do, the people could be asked at a referendum to see that all future elections were synchronised.

But the really serious thing for us as a nation is that the Prime Minister is untrustworthy as the leader of this nation. On 1 1th July the Prime Minister said:

China has served the Liberal Party well and will continue to serve it well.

One could hardly conceive a more wicked, irresponsible, outrageous statement, than that the relations of this country with a nation comprising a quarter of the world’s population should be seen simply and solely in terms of the domestic advantage of the Liberal Party. This is a recipe for national disaster. It highlights and epitomises the real evil of the continuance of the present Government under its present leadership. The Liberal Party is not an evil party. It is a great party. It is part of the great democratic framework and structure of this nation. British democracy depends on the 2-party system, and the . 2 parties, which must be healthy if we are to have parliamentary democracy in this country, are the Labor Party and the Liberal Party. The health of the Liberal Party and its survival as the representative of the great, real and legitimate conservative forces in our country is essential for the survival of parliamentary democracy in this country. I want to see the Liberal Party survive. It is the legitimate representative of valuable conservatism just as much as we are the legitimate representative of progress and change. But what appals me and what 1 assure this House will, if not challenged, destroy the Liberal Party as assuredly as it will damage parliamentary democracy is the vested interest that this Government under its present Leader believes it has in things bad and evil for this country. Up to the events of a fortnight ago everyone knew that the present Prime Minister wanted an early election. He was pressing for it. He particularly wanted that election to take place round about November - in, as he said, the second week of November which he thought would be about the time of the first test match between Australia and South Africa. He was thinking of an election in the framework of great violence, bitterness and disruption in our community. He wanted these things to occur. He wanted a very evil thing to happen in our nation, to our people, to the social fabric of our country. He wants it. He is pressing for it.

Until a week ago he- was pressuring Sir Donald Bradman, in whose hands the decision lies because the Australian Cricket Board of Control is evenly divided on the matter, to have this test, not in the interests of cricket, clearly against the interests of Australia, clearly against the sense of unity and good will that we have in Australia, but in the interests, as he sees them, of the Liberal Party. 1 hope that the Liberal Party is greater than this. I cannot believe that the Liberal Party - Sir Robert Menzies’ Liberal Party” - would have a bar of deliberately dividing this country in this way, on this issue. Yet this is what this Prime Minister is planning to do. He has a vested interest in industrial disruption, with all its loss economically and socially and indeed spiritually in this country. Yet he courts it. He wants it.

We have reached this incredible stage where a government has a vested interest in the bad that can happen in a. country aud has actively and openly encouraged the bad to happen. There is no future for such a government. There is no future for a nation governed by such a government. There are men on the other side who know very well and who feel very deeply the truth of what 1 am now saying. An extraordinary chain of events put the present right honourable gentleman into office as Prime Minister. It was a dreadful mistake. It was a mistake imperilling this nation. To recover the consequences of that mistake would not destroy the great Liberal Party. If we must take a partisan point of view, I find the words of the honourable member for Wentworth unexceptional.

I am sure that if the Opposition were in power for a short while there would be a terrific reaction. As it got to work and applied its policies there would be a teriffic reaction against it which would have the effect of building up the then Opposition. Opposition really works best when there is something people really feel violently about and really feel they must oppose. This would certainly have a tonic effect on the people who support our viewpoint but are not so keen on us from a personal angle. (Extension of time granted)

That is the attitude expressed in the mass media by the honourable member for

Wentworth, an honourable gentleman who has been a Minister for 10 years. But so have they all been Ministers of great experience. The former Deputy Leader of the Liberal Party, the former Minister for Defence, the former Prime Minister, has held office continuously for nearly 13 years in this country. The other Ministers whom the present Prime Minister has dismissed are men of considerable skill, as anybody in this chamber would acknowledge and as anybody knowing the courts would also acknowledge. What these men have said in public is the view of increasing numbers of Liberal supporters in this country. They know quite well that under this Prime Minister their Party as well as this country is going from bad to worse, and they realise that the only way to sweep out the men of the past, to sweep out the ideas of the past, is for them to go into opposition.

I put it that there are men in this chamber on the Government side who realise that to have an election now. for the Opposition to become the Government and for the Liberal Party to go into opposition, is the best chance of having a proper cohesive government in this country. I put it to them that if they vote for this motion they will not destroy the Liberal Party but rather they will give it a lease of life. I want it to have a new lease of life because 1 recognise the significance to our community and our nation of the other partner in our 2-party system of government. 1 beg them to save the Liberal Party, but further and more important is the fact that this country cannot do well if we continue upon our present course. We cannot continue with a Government which desires disaster. I ask honourable members opposite to consider this: If you vote for this motion, I most firmly believe that you will help to save not only the Liberal Party but also Australia.

Mr SPEAKER:

-Is the motion seconded?

Mr Barnard:

– 1 second the motion and reserve my right to speak.

Mr McMAHON:
Prime Minister · Lowe · LP

– On another occasion I described the Leader of the Opposition (Mr Whitlam) as an extraordinarily feline person. I have no wish to change my views after today. 1 have every intention of trying to deal with the facts, and I want to mention the constructive actions that have been taken by this Government, whether it has been Jed by the right honourable member for Higgins (Mr Gorton) or by myself. I want to mention what we are doing to ensure the greatness of this country. I have no intention to degenerate into personalities in the way that the Leader of the Opposition, this feline person, has done.

Let me mention one or two facts. Not one of the statements that the honourable gentleman made about me is true in substance. Let me deal first of all with the question of my association with Sir Frank Packer over 40 years. It is true that on 8th November 1932 or somewhere about that time I did sign the memorandum and articles of association of his company. I was then an articled clerk in Allen, Allen and Hemsley. I had never met Frank Packer; I had never met his associates. I did not know who he was. The men to whom I was clerking. Sir Norman Cowper and Mr Arthur Hemsley, asked me to sign the document. Of course I signed it. Any person with a knowledge of law and a knowledge of the way companies are formed would have done exactly as I did.

Secondly, the Leader of the Opposition referred to the statement relating to the so called payment for the articles that had been written by the right honourable member for Higgins. I did not ask the right honourable member whether he was being paid. For a fact, I did not think he was. But I see no reason in the world why I should ask him, particularly after I had read the article. It was no business of mine. If people want to ask him, he can be asked and I am sure he will give the kind of answer that he feels appropriate to be given.

The honourable gentleman also referred to the fact that in some article in the Daily Telegraph’ there was a forecast of some further action to be taken. I will give the author of that article complete liberty to state positively, without any recrimination from me, whether he had discussed this matter with me or had let me know that the article was to be written. No member of the ‘Daily Telegraph’ contacted me prior to the publication of the article, and in fact I had not talked to Mr Alan

Reid for at least 3 weeks prior to that, and I have not spoken to him since his return from Fiji. This is the kind of rumour and nastiness that are inherent in the mind of the honourable gentleman. I intend for the rest to ignore them completely and to get on with the job of governing this country and doing the best we can to contribute to its greatness.

The Leader of the Opposition referred to the fact that during the last session he also moved a censure motion on me. He has lost no time for a second one although we wanted to give him more time for his censure motion. I repeat that he is not only showing his inherent nastiness but is also attempting to obstruct the business of this House and is trying to prevent us from getting on with the constructive work of government. This is the device of a man and a party with nothing to offer and a great deal to be ashamed of. When the Minister for Foreign Affairs (Mr N. H. Bowen) brings forward his paper on foreign affairs, I for one will participate in the debate, and I believe that I will be able to show not only that the Leader of the Opposition is dangerous to the security of this country but that wherever he went on his recent overseas trip he created an impression which was bad for Australia and which brought him into ridicule. I believe that in every country he visited be left a most unfavourable, even bad, impression.

Mr Sherry:

– I raise a point of order. The Prime Minister has just referred to the Leader of the Opposition being a danger to this country. This is impugning the character and the responsibility of the Leader of the Opposition and I ask the Prime Minister to withdraw the remark.

Mr SPEAKER:

-Order! I do not think that the Prime Minister at any stage impugned the personal character of the Leader of the Opposition. I think the honourable member is perhaps confused as to the substance of the Prime Minister’s remarks about security.

Mr Sherry:

– Mr Speaker, with . all due respect to your ruling, if the Prime Minister has referred to the Leader of the Opposition as being a security risk, this is certainly in my view a reflection on the character of the Leader of the Opposition and i ask the Prime Minister to withdraw the remark.

Mr SPEAKER:

– Order! Of course 1 have not a verbatim note of what the Prime Minister said,, but from listening to him 1 do not think that he said that the Leader of the Opposition was a security risk.

Mr McMAHON:

– This is the device of a man and a party with nothing to offer and a great deal to be ashamed of. It is the attitude of a party that has been conditioned by 22 years on the Opposition benches to think only destructively. “Obviously it has no mind for constructive contributions to the work of Parliament and it has no stomach, as I said before, for facts, lt prefers to perform by innuendo, suspicion and false statement. Let this be known: We in the Liberal-Country Party Government want to get on with the real business of government. We believe that Australia is a country with a tremendous future. We know that the people are sound at heart and we know that they are sensible, lt is our task to represent them here in this Parliament, and we mast not be diverted from that task by tawdry personal issues raised by the Opposition. We must take initiatives in nation building on their behalf. We are doing that and we will continue to do it.

The Leader of the Opposition is upset because I have made some ministerial changes. . What has this to do with him? This is the business of the Government, and we do not want him interfering with what are exclusively our affairs. He has plenty to do trying to get his own Party into shape - and, if I can go a stage further, in coming to terms with the President of the Australian Council of Trade Unions, who keeps rocking the boatwith his excursions into what should be the Labor Parly’s exclusive preserves. It has been said - and I repeat this againthai I am influenced by the Press. I have been in Parliament a long time. I have held a great number of portfolios - more. I . think, than any other person in the House. 1 make up my own mind what I personally should do in the interests of the nation, not in the interests of anyone else. Of course. I listen to advice from my colleagues in the Ministry, in the Cabinet and in my Party. I have consultations with industry. 1 meet the Press and I meet th, people. But of this honourable members may be sure: I have never taken and will never take any action designed to please the Press people. I suppose that I have had more quarrels with them than has any other person in this House. Of course, on many occasions they have been in praise of me. If we look over the long term. I think the criticism has been pretty strong too. But who in this .House has not gone through exactly the same experiences?

The second point that is referred to by the Leader of the Opposition is that nf leadership. I and my former colleague know - we are probably the only 2 in this House who do know - that it carries very great responsibilities. But 1 want to ask’ this question: What leadership does the honourable member for Werriwa give to his Party today? This is the man who incited young men inducted for national service ro refuse to serve in Vietnam when it was their duty to do so. This is the man who approved the attempt by some unions to interfere with the legitimate trade of this country. This is the man who gave tacit support to the left wing unions and the professional dissenters during the recent rugby tour. This is the man who went tq China to play party politics with wheat and finished up by being a total advocate for the policy of a foreign power - the greatest Communist power in Asia.

The Budget that the Treasurer (Mr Snedden) will bring down tonight involves a motion of real substance. The motion before the House this afternoon has none. The Budget presents fiscal policy and an explanation of monetary policy for Australia for the whole of 1971-72. It is therefore a paramount importance and should be treated accordingly, lt is right, 1 know, for the Leader of the Opposition to talk about unity arid good government. We talk about it. But we talk about it because we know what it means and we know the contribution we will be able to make. They are. 1 believe, the qualities that a well ordered country needs and that, I believe, Australia is getting in full measure from the Liberal-Country Part)’ Government.

Let me remind honourable members of the performance of- my Government in recent months, lt has been here just on 5 months and in that time it has brought down a solid list of domestic legislation. It has broken completely new ground in foreign affairs. It has tackled a range of problems, not of its own making, including inflation and the fall in the price of wool, which are pressing heavily on the country today. 1 believe that they will be dealt with effectively, providing we can have continuity and steadiness in government. I believe, too, that it is of importance to make the federal system of government work effectively. That great spirit of free enterprise which has served Australia so well through all its history should not be stifled by controls and directions from Canberra.

I have said that we believe in cooperation as the basis for unity. In 5 months we have established, I believe, a new relationship with the States. What we did, in addition, was to give them a general growth tax. We gave them payroll tax which was designed to stop them from coming to Canberra cap in hand and begging us to give them increasing access to funds. I emphasise that what we have done all this while is to continue the development of this country and we have also - this will be reflected in the Budget tonight - developed policies which are directed at reducing inflationary pressures because inflation is one of our greatest problems. Success here is the basis on which we can successfully plan for the future.

We must contain and, I believe, we must reverse the serious escalation of costs and prices. We have begun investigations as to how arbitration procedures might be improved. We have done this to give greater emphasis in wage decisions to the economic consequences of the Commonwealth Conciliation and Arbitration Commission’s awards. We have also investigated what broader measures we might take to bring about the needed restraints in wage increases and in wage costs. We have come to grips with the crisis in some of our rural industries, particularly in the case of wool. Already, we have adopted reconstruction and special aid policies in order to assist them. We have reduced the migrant intake to contain costs and to allow a greater concentration on personal quality. We have passed legislation controlling resale price maintenance and we are reviewing the Trade Practices Act so that we can strengthen it and encourage much more vigorous competition.

On the advice of the Tariff Board the Government also has accepted the need for a systematic review of tariffs and this is proceeding. My Government has also reviewed important aspects of social welfare. We have done so because we consider it a prime duty to do more for the needy and the neglected. We want to clean out the pockets of poverty wherever they appear. The effective development of an adequate social welfare system, to which I have pledged my Government, depends heavily on a good working arrangement between the Commonwealth and the States. That is another reason why our new understanding with the States is so important.

In March we gave pensioners a supplementary increase. We did so because we thought social justice demanded a rise to offset the sharp increase in living costs which was causing unexpected hardship. We also secured a satisfactory arrangement with the Australian Medical Association about fees to make the revised medical benefits scheme operate effectively, and we overhauled hospital insurance benefits to give a more extensive cover to fund members. So many of these activities bear on the quality of life which must be of increasing concern to everyone in Australia. We are, after all, searching for a quality of life which will be better than the one that we have today. This is the end objective of all our efforts, because the quality of life is just about everything that belongs to and relates to man. It is his place in the environment - the good he does, how he lives with his neighbours and the measures of his contentment - but at the same time we must preserve our freedoms and our civil liberties. (Extension of time granted) We must tackle the congestion and pollution of our cities. Now, having said that, I turn briefly to our record in foreign affairs. The Minister for Foreign Affairs will deal with the subject in detail later - I hope tomorrow but at the latest on Thursday.

Mr Daly:

– Mr Speaker, I take a point of order. My point of order is that this is all very interesting, but what does it have to do with the motion?

Mr SPEAKER:

-Order! There is no substance in the point of order.

Mr McMAHON:

– What does the socalled censure motion have to do with the House? As I said, the Foreign Minister will deal with the subject later. In the past 5 months we have made considerable progress with the prospect of getting our troops home from Vietnam as the operation there winds down. You will recall, Sir, that 1 announced further withdrawals at the end of March. I will state the Government’s policy in the House this week. We have completed new appraisals of our relations with Japan, Russia and China. These appraisals took place over a year or more but they have brought us to new decisions in respect of all 3 countries in the last few months. 1 will not repeat them now. They speak well for our future in the international community.

Our aid programmes particularly in the Asian and the Pacific region continue at a high level. We have also made progress with the 5-power defence arrangements for Malaysia-Singapore and we have become a member of the Organisation for Economic Co-operation and Development. What contribution has the Opposition made to national progress? Absolutely none. Indeed, by its actions and its abstentions it has aggravated the problems of the day. The Labor Party has encouraged a contempt for law and order and the rights of individual citizens. A clear example can be seen on the industrial scene and the increase in political strikes. We have had a rash of industrial strikes and stoppages which last year cost the work force nearly S31m in wages. The loss to the nation in output and the consequent effect on prices is enormous. We must not forget that the number of man days lost by individual disputes has gone up 2i times in the last 3 years. Now, I want the House to answer this question: What has the Leader of the Opposition done about this? The answer is positive - nothing at all. In all of this he has been silent, and by his silence he has given consent. He has stood by helplessly while his authority has been eroded and his bailiwick invaded by Mr Bob Hawke, the President of the Australian Council of Trade Unions, another leader who is causing responsible people in the trade union movement a great deal of activity. Another question 1 want to pose is this: Who is really speaking for Labor? It is not a question of who runs the country; it is a question of who runs the Labor Party.

Mr Jacobi:

– Ask Frank Packer.

Mr McMAHON:

– He would give the same answer on this occasion because he cannot decide, as no-one else can decide, who is running the trade union movement. I want to say more about the Leader of the Opposition, but I think it best to leave to the judgment of the House what it thinks about his censure motion, and him. 1 believe that answer will be given before 6 o’clock tonight.

Let me return to the overseas visit by the Leader of the Opposition. He went on a disastrous - I use the word deliberately - visit to Peking after he had given his tacit support to protests against the South African football tour. In China he conceded every single point the Chinese made to him, and he did so in public. This was a disservice to Australia without any precedent. His performance is written into the record for all to read and for history to see. More will be said about China in the foreign affairs debate this session, but let me say just this: I believe his visit compromised discussions which the Australian Wheat Board was just about to begin with the Chinese when he announced his intention to go to China. I believe he compromised the first moves we were making through diplomatic channels to open up a dialogue with China. As a result of some cocktail gossip with a foreign representative in China, he caused more havoc than any man could have caused either in Australia or in any other part of the world. I believe it is the first time in Australia’s history that a Leader of the Opposition has been the total advocate for another country’s cause. I believe it is also the first time that any Australian political leader has presumed to tell other countries how they should run their business, and he did so publicly. He discredited the President of the United States of America by telling him he would be kicked out. He told Japan that it should cancel its treaties. Later when I have an opportunity to speak in the foreign affairs debate I will disclose more of his tactics and more of the mischief he has caused.

I have visited every State in Australia - some several times - in the last few months. I have seen great progress in national development wherever I have been. As I went around I became aware that many people are deeply troubled by some of . the’ trends developing in Australia today. They are concerned with the increase in industrial disputes and lawlessness. They are concerned about the issue 01 law and order. They want to retain their right to dissent, but they do nol want their civil liberties interfered with by mass protests or professionally promoted demonstrations. They do not want their right of choice within the law interfered with. They expect their parliamentarians to take note oi these issues and to give them a lead. This, I believe, my Government is doing and is doing with strength.

May [ now return to the principles relating 10 constitutional law and practice? So much doubt has been cast these days on the Cabinet system that I felt it would be appropriate for me to make some statement about it. Of course, it is the Opposition’s policy to cheapen and denigrate Cabinet. But 1 have another attitude altogether, and a far belter one. I affirm my faith In the principle of Cabinet government. It is central to my own Administration. lt is the ‘ practice which best suits the executive in our democratic parliamentary system. It must work effectively, whether as a Cabinet, as a ministry or through the system of committees which has recently been reconstructed, it parliamentary democracy is to be sustained. My concern as Prime Minister relates to policy. Cabinet is the proper instrument for the development of that policy. A change in party leadership and Ministers does not invalidate the Government’s authority, lt has noi done so in the past and it does not do so now. It is the coalition Government of the Liberal Party and the Country Party which the people put back into office less than 2 years ago. (Extension of time granted) It is the coalition Government thai I lead, and its authority continues in forcelt has operated and will continue to operate with due respect to law and with due respect to process in the area of the Cabinet system, in the relationship with the Slate* and with the electorate.

I can understand the disappointment of the Opposition that a change in leadership, and the other changes that have been made, have not brought about some reduction in our capacity to govern, our intention to govern or our right to’ govern. The motion that is before the House is, I believe, a product of that disappointment. A similar motion was moved in vain in March when I took over- as Prime Minister. I repeat that today’s motion will be in vain. I am perfectly confident that the people of Australia understand what I am saying. They understand, firstly, that they gave us authority to govern and that we still have that authority. They understand, secondly, that we are thoroughly capable to exercise that authority to their satisfaction. They understand.’ thirdly, that it would he folly to transfer this authority to another party unqualified and totally unable to discharge it effectively. 1 suspect they understand that the whole of today’s exercise by the Opposition is nothing else but humbug.

I must remind the House that we are known abroad in the great majority of countries. Despite what the Leader of the Opposition said, we have given this country great national responsibility and stable and progressive administration over a period now running into 22 years, close to a quarter of a century. This is known and respected overseas, as it is here. This administration is nol upset by changes in leadership, by ministerial re-arrangemcnts or by any statements the Leader of ihe Opposition might make. 1 want to state to you positively. Sir, that you will see evidence of unity in this Government. You will find that the Liberal Party which T lead, with the Country Party standing behind us. will give to this country the kind of government that it needs and which will take it to a very much higher destiny than we know at the moment or thai the Labor Party could ever think was realistically possible.

Mr BARNARD:
Bass

– Had the Prime Minister (Mr McMahon) been speak ing. to a Budget debate one could have understood the tenor of his speech, but the Prime Minister completely ignored the motion moved by the Leader of the Opposition (Mr Whitlam). Therefore, one should take the opportunity to repeal the motion to remind the Prime Minister and honourable members on the Government side of the House what it involves. The motion was in these terms:

That, in the opinion of this House, the Prime Minister’s methods and motives in removing his Ministers and his subservience to outside influence have destroyed trust in his Government at home and abroad.

The Prime Minister made no attempt to answer the charge that he had removed from office a former Prime Minister and former Minister for Defence, as well as a former Minister for Foreign Affairs. The Prime Minister made no attempt to justify his actions.

It should be remembered that the former Prime Minister, who was also the former Minister for Defence - I refer to the right honourable member for Higgins (Mr Gorton) - had a mandate from the people to govern this country. The present Prime Minister has no such mandate. Therefore, it is understandable that he ignored completely the charges that had been made by the Leader of the Opposition.

The Government has not stumbled into a constitutional crisis on the floor of the House. All the difficulties which now confront it are the product of a 3-month recess, one of the longest in the history of the Australian Parliament. The Government cannot claim to have had more than its legitimate share of the plain bad luck which often bedevils all political parties. Its troubles are not even in the strictest sense party troubles; that is, they do not flow from internal turmoil within either the Liberal Party or the Country Party. The present Government crisis has been produced by one simple fact - the disintegration of Cabinet government in this country. Quite obviously the traditional Westminster pattern of Cabinet government with all the conventions that have been built into the system by centuries of practice is not functioning. There are 2 reasons for this tragic disintegration of a Cabinet which under Sir Robert Menzies was monolithic. The first is that senior members of the Cabinet have not trusted each other and have worked actively to destroy each other. The second is that key portfolios in the Cabinet have been dealt round in the’ past 5 months like a series of poker hands, thereby destroying all sense of stability and continuity of policy.

The convulsions in the Cabinet in the past few weeks have been transmitted through the rest of the Ministry, through both Government parties, through the Public Service and now through the electorate. This bitter internal fighting within the Cabinet has exacted a bitter toll of a Government which is clearly at the end of its human resources. A Cabinet which is incapable of operating as a confederation of equals hammering out consensus policies is incapable of governing. The motion for the suspension of Standing Orders, which was accepted by the Prime Minister, is intended to put these matters before the House for its deliberation and its decision.

There have been various labels put on the operation of the Federal Cabinet in the past few months. The most apt and certainly the most colorful of them is the description by the honourable member for Wentworth (Mr Bury), the former Minister for Foreign Affairs, who likened Cabinet to a leaking sieve. It is not possible to state exactly when this process of decay began within this Cabinet. Certainly the seeds had been sown by the end of 1967. In his early months as Prime Minister the present right honourable member for Higgins, Mr Gorton, seemed to arrest this drift and capture the loyalty of his Cabinet. However as his term proceeded the process of erosion continued and gradually mounted. Towards the end of his tenure the leaks had accumulated into a deluge which has persisted in the 5 months the present Prime Minister has been in office.

There is little point in going through the leaks which the right honourable member for Higgins has documented, and, it seems, will continue to document since his elevation from the floor of this House to the Press Gallery. The right honourable gentleman and former Prime Minister has made it perfectly plain that he was betrayed by members of his Cabinet. Ironically this had the effect of procuring his own dismissal from Cabinet with the rather grim satisfaction of making his point in the strongest possible terms. The pity of the right honourable gentleman’s dismissal is that he was doing a reasonable job as Minister for Defence, a portfolio ideally suited to his experience and administrative capacity. Certainly during his brief time at Russell Hill there was none of the rancour and turbulence between the defence administration and the Services which marred the closing months of the term of the honourable member for Wannon (Mr Malcolm Fraser) as Defence Minister.

The right honourable member for Higgins’ handling of the Kerr Committee’s report will benefit many thousands of servicemen, although it seems important recommendations have also been shelved, lt has even been reported that the Prime Minister privately paid tribute to the way the right honourable member for Higgins was shaping in defence. But because of a political feud unparalleled in Australian political history, the right honourable member for Higgins had to go despite his acknowledged competence. This means there have been three Ministers for Defence within 5 months. It is no reflection on the present Minister to say that this unjustified reshuffling puts impossible demands on the whole defence structure. A process of reconstruction and reform of the defence structure was initiated 3 years ago by Sir Allen Fairhall who was then Minister in tandem with Sir Henry Bland who was then permanent head of the Department. This was continued by the honourable member for Wannon and presumably the member for Higgins when they occupied the defence office. Now this major reorganisation is to proceed under the new Minister.

The other important unfinished business in this Department is the reforms flowing from the recommendations of the Kerr Committee. This Committee into service pay and conditions was appointed by the honourable member for Wannon as Defence Minister. Some of the recommendations of the Committee’s interim report were accepted by the right honourable member for Higgins and are contained in the Budget. Now this whole process of improving pay and conditions has been thrown into jeopardy by the appointment of a new Minister. How can there be any stability and sense of security in such an important and sensitive area as the armed Services when this sort of ministerial hurly-burly is in train? The Kerr Committee was initiated by one Minister who should have been permitted to oversee it and supervise the introduction of its recommended reforms. At the very least his successor should have been given full scope to do this important job. Instead a third Minister comes fresh to this sensitive area at a most crucial time. Who is to say that there will not be a fourth within a couple of months? The new Minister for Defence (Mr Fairbairn) resigned once before after a difference with his then Prime Minister. There is no gainsaying that he will not do it again. The effect of these rapid changes must be to confuse the processes of reform in the defence administration and in the pay and conditions of servicemen. It will do nothing to stop the haemorrhage of officers and skilled men from the armed Services.

Another vital issue of policy affected by this constant chopping and changing is the timing of Australian withdrawal from Vietnam. This has been one of the most virulent issues in the protracted controversy about leaks from Cabinet. It was revealed in a ‘Sydney Morning Herald’ story on 30th July and never denied that the remaining two battalions would be out by Christmas. This brought forward by 4 months the expected and accepted date for liquidation of the Australian commitment. This was a blatant and quite deliberate leak; the motivation can only be guessed at. However it is common knowledge that the Prime Minister was holding this decision up his sleeve for a big grandstanding performance in this Parliament. He thought that withdrawal from Vietnam by Christmas would be a possible vote-winner. It points up the cynical calibre of this Government that it could win votes on committing troops to Vietnam and then hope to win votes by withdrawing them. In any case the Prime Minister had the ground sliced neatly from under his feet by the early release of what he assumed was a tightly kept Cabinet secret. The personal frustration this leak seems to have produced in the Prime Minister may well have hastened his aspirations to do away with his Defence Minister.

The Prime Minister already felt that the right honourable member for Higgins had pre-empted his ground by early release of the Kerr Committee report. There had also been persistent reports that the term of national service would be cut back from 2 years to 18 months. Undoubtedly these reports are true; undoubtedly they were leaked. This built in the Prime Minister’s mind the belief that the right honourable member for Higgins was white-anting him and precipitated the remarkable events of last week. It is impossible not to feel sorry for the former Prime Minister and Minister for Defence for his slip of the pen. The pretext on which his dismissal was based was an extremely flimsy one. It took the Prime Minister 5 days of constant telephoning to drum up the appropriate editorial climate for his action. Despite simulated outrage of. much of the Press and members of the Liberal Party, it is common knowledge that as late as Wednesday afternoon, the Prime Minister still had not summoned the fortitude to sack the Minister for Defence. It was a case of letting ‘I dare not wait upon I would’. He desperately wanted to get rid of the Minister for Defence but he did not think enough of his own Party would back him. He was scared the backlash would be too strong. It was not until he got back to the familiar atmosphere of Sydney among his influential cronies that his resolve stiffened sufficiently for him to do the deed.

This whole course of events is symptomatic of the malaise in the Liberal Party - the lack of trust which exists in the Cabinet to the point of blind hatred. It is proof also of the outside influences which dominate this Prime Minister, that act on him like a drug. Until he gets the nod from his great and powerful friends, the Prime Minister is incapable of action.

When he wants support he cannot even go to his own colleagues, to his own Party, he has to go to outsiders.

I have tried to trace through something of the impact of this lack of trust and the pervading presence of outside influence on Cabinet on one important sector of public policy, that is the defence of this country and the welfare of members of the forces. The same malise has afflicted the conduct of foreign affairs. The former Minister for Foreign Affairs, the member for Wentworth is just as tragic a victim of this lack of trust in the Cabinet as the right honourable member for Higgins. In some ways the member for Wentworth has b:en treated even more venemously. During the recess the member for Wentworth came under severe criticism for his handling of East Pakistan relief and China policy. This criticism may have been justified or not; the point is that the member for Wentworth had no chance of defending himself. If he had remained as Minister he would have been questioned by the Opposition in this House. This would, have allowed him to defend his actions. Alternatively he could have emulated the right honourable member for Higgins and defended himself in the Press. He decided not to do this.

This left him a defenceless victim of the indiscriminate wrath of the Prime Minister. Furthermore his dismissal was prematurely leaked presumably by one of his former colleagues in Cabinet. It has been reported that this leak took the form of an anonymous letter to a radio programme. This is the sort of example of lack of trust which is destroying the Cabinet, destroying the Government and destroying the once great Liberal Party.

The effect on the conduct of public policy has been immeasurable. I have listed the impact on defence and foreign affairs. Other important portfolios have been severely damaged by this Cabinet disintegration. The portfolios of AttorneyGeneral, Health and Education and Science have each had three Ministers in 5 months.

Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES

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

Mr ANTHONY:
Minister for Trade and Industry · Richmond · CP

– The reason for the Opposition motion is a series of events which took place over the last week or so culminating in the resignation of the right honourable member for Higgins (Mr Gorton) from his position in the Ministry and from the position of Deputy Leader of his Party. It is suggested that these events have led to a situation in which we have a Prime Minister and a government who are not fit to hold office. This is what the Labor Party wants this House and the Australian people to believe. However, it is most- noticeable on this occasion that members of the Labor Party, who normally have an obsession to bring censure motions before the House, ran from the issue today. They knew full well that the Government ranks would remain solid and that they were wasting their lime. Instead, what did they do? They lowered themselves to the lowest form of political battle - character assassination - running from Government policies, running from party policies and attacking the Prime Minister (Mr McMahon). smearing wherever they could and hoping that by denigrating his character they could lower the standard of this Government.

I heard various questions being asked at question time and I heard the speech of the Leader of the Opposition (Mr Whitlam) trying to make out that Sir Frank Packer was the villain in the whole operation. Sir Frank Packer has been quite unequivocal in his opposition to Socialist policies and Labor governments, and members of the Opposition no doubt are taking this opportunity to try to smear him also. There has been reference to talks about leaks from Cabinet. The honourable member for Wentwortb (Mr Bury) described the situation as he saw it in quite picturesque terms. The deplorable fact is that whilst Cabinet does not perhaps leak like a sieve. Cabinet matters at times do seem to drip out. This is obvious to everyone, and it is to be deplored, lt must .not be condoned for one minute, but we must accept that.it is difficult to lay the blame in any single direction. From our experience as members of this House we all know that the people who work in the Press Gallery are very skilled at obtaining information from various sources and then putting it all together to try to present a complete picture. The various sources can be any part of the enormous government machine.

I am sure that members of the Labor Party would be the first to agree that the discussions of their caucus are far from secret, No doubt if the Labor Party gol into office there would be a miracle overnight and there would never bc any leaks from a Labor Cabinet. If this debate serves no other purpose I -hope it will be a reminder to each of us in this House of the responsibilities we carry to our parties, to our colleagues in the Government, to our colleagues in the Opposition and, most important, to the nation.

On the question of the matters which arc under discussion I say only this: Both the Prime Minister and the right honourable member for Higgins over the last few weeks were placed in the most difficult and unenviable positions. 1 understand completely the action of the right honourable member for Higgins in replying to attacks made on him - in some cases quite vicious attacks - and his desire to explain and defend his position. Any red-blooded Australian subjected to the same kinds of attack would want to do, and probably would do, the same thing. He would be a most unusual man if be did- not. But I believe also that the Prime Minister, if he is to maintain the absolute principle of Cabinet responsibility and solidarity, could have taken no action other than he did.

Various points of view have been put forward on the question of what constitutes a breach of Cabinet responsibility and solidarity. My own view is that it is possible for it to be claimed that in the absence of the publication of any specific information relating to Cabinet discussion or in the absence of any attribution of points of view to particular Cabinet members there is technically no breach, but 1 believe that there does not have to be PaY specific action of this nature to constitute a breach of the vital principle involved. The action of the right honourable member for Higgins in writing for publication while a member of Cabinet, and the nature of the writing, in my view did constitute a breach of the principle. In short, I believe that both men - the right honourable member for Higgins, for reasons he has given, and the Prime Minister, for reasons he has given - were compelled to act as they did.

Now, the Labor Party, I suppose understandably, but quite detestably, in my opinion, uses the savagery of politics to capitalise on this drama. The man for whom I feel sorry in all this is the Leader of the Opposition. How frustrating it must be to be reduced to the position of having to seek power not on one’s own merits but through the difficulties of one’s opponents. It seems to be the only desperate ploy that he has left these days. Here are a man and a party who have failed time and time again to win acceptance of their policies; to win the confidence of the Australian people. The Leader of the Opposition has never been able to put forward a policy that has been backed strongly enough by the Australian people to put him and his Party into office. How galling it must be to lead a party that has been in Opposition for 22 years; how humiliating to lead a party that in 70 years of federation has been out of office for over 50 years.

Mr Cope:

– On a point of order, is the Minister aware that his Party was in opposition in New South Wales for 24 years?

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! There is no point of order.

Mr ANTHONY:

– Today we see the Leader of the Labor Party brought to a state of trying to gain power, not through his own standing or his Party’s standing or their policies, but through the passing problems of another party. What a tragedy to see the Labor Party and its Leader in this predicament of having to try to sneak into office through the back door after having failed so miserably and regularly and continually to get into office through the front door of acceptability to the Australian people. The aim of this motion by the Opposition is to create a situation which it sees as giving it a chance to govern the nation and to create divisions in the ranks of the Government by playing on personalities. What a noble and honourable way in which to try to gain control of the Treasury bench of this nation!

What does a Labor government mean. It means a socialistic, trade union dominated government, and I would find it hard to imagine a Labor government in which Mr Hawke did not play some part. But let us look at just one aspect, that of primary industry policy. This is one of the most important and most difficult areas, calling for a strong and united approach from both Government and industry. But we find the honourable member for Oxley (Mr Hayden) saying that Labor’s approach consists of ‘a loose patchwork of totally unrelated propositions’. The honourable member for Dawson (Dr Patterson) found this an incredible, untrue statement, and he said that it showed the colossal ignorance of a person who should know better. This is Labor unity. When the Australian Labor Party Conference in Launceston in June amended the rural policy report of the honourable member for Dawson, he explained this by saying that very few members of the Conference knew anything about rural matters.

Mr Foster:

– On a point of order, i cannot hear-

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! There is no point of order.

Mr Foster:

– You have not. heard my point of order yet. At least I am entitled to some respect without a laugh on your face about it.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Sturt indicated his point of order-

Mr Foster:

– No, I did not. I beg your pardon, but I have not done so.

Mr DEPUTY SPEAKER:

-Order! I think that the honourable member for Sturt indicated his point of order, but from this Chair I cannot tell the honourable member how he indicated it.

Mr Foster:

– Because you do not know what it is.

Mr DEPUTY SPEAKER:

-I suggest that the honourable member should resume his seat.

Mr Foster:

– I am sitting down. What more do you want? So much for democracy.

Mr Uren:

– Mr Deputy Speaker, are you not a member of the Australian Country Party?

Mr DEPUTY SPEAKER:

-Order! I think that the honourable member for Reid should resume his seat.

Mr ANTHONY:

– I repeat that the honourable member for Dawson explained the action of the Australian Labor Party Conference in amending his rural policy report by saying that very few members of the Conference knew anything about rural matters. I suppose that is not news to most of us.

Mr Foster:

– On a point of order. Mr Deputy Speaker, if you knew so well the point of order 1 was going to take, why do you not shut up your colleagues?

Mr DEPUTY SPEAKER:

-Order! The honourable member for Sturt will resume his seat.

Mr ANTHONY:

– By the way in which honourable members opposite are reacting one would think that we were moving a censure motion on them. I think that probably would be a good indictment of them. The comment of the honourable member for Dawson - and h makes one really feel for him - was: ‘I feel very, very sad for Labor members of Parliament holding marginal seats in country areas. How on earth are we going to explain this now*/ It is going to be very difficult.’

Mr Grassby:

– Who said that?

Mr ANTHONY:

– That was the honourable member for Dawson.

Mr Grassby:

– Can you prove that?

Mr ANTHONY:

– Yes. He said it on an Australian Broadcasting Commission programme. The action of the Australian Labor Party Federal Executive means that there will be virtually no financial assistance for the wool industry, and it means a dismantling of the wheat, dairy and other stabilisation schemes. It is a policy really to abandon rural Australia. This is the party that tries to tell us it has the policies and the people to work best for primary industry. Are there any legitimate reasons for this motion? The Leader of the Opposition said: This country has been held up to ridicule over the period that the Prime Minister has been in office.’ Let us look at the things that have happened since the Prime Minister has been in office.

Is confidence lacking because the Prime Minister has made new financial arrangements with the States, including the use of payroll tax as a growth tax? Is confidence lacking because of the tremendous amount of assistance which the Government is giving to rural industry to help it through a time of serious difficulty? ls confidence lacking because Australia, since the Prime Minister took office, has been invited to become a full member of the Organisation for Economic Co-operation and Development alongside the other major trading and industrial nations of the world? Is confidence lacking because we have begun, as we said we would, a review of the tariff? Is confidence lacking because we are making a wide review of the arbitration system? Is confidence lacking because we have legislated to control resale price maintenance? Is confidence lacking because we have been looking for ways and means of strengthening the Trade Practices Act? Is confidence laeking because we are reducing our troop commitment in Vietnam in accordance with developments there, or because of the efforts we are mak ing, through proper means, to normalise relations with the People’s Republic of China, or because we have liberalised our trading arrangements with China? ls confidence lacking because I came to an agreement in Japan recently to establish a important consultative group of Australian and Japanese Ministers to consider trade and economic matters as part of the further strengthening of our relations with Japan? Is confidence lacking because of our forward steps towards the development of New Guinea?

Of all the urgency motions moved by the Opposition in recent years, the one that I found most interesting was the one against me. Unfortunately, 1 have not got time to explain it, but while I happened to be in New Zealand the Opposition tried to accuse me of being the reason for our lack of sales of wheat to China, because of what I had said on television. I suggest that the members of the Opposition-

Mr DEPUTY SPEAKER:

-Order! Hie Minister’s time has expired.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Mr Deputy Speaker, this afternoon we have seen the most pitiful performance from a Prime Minister that we have ever seen in this House. The Prime Minister (Mr McMahon) refused to answer questions which he could have answered quite easily. He could have told this Parliament the real reasons for the dismissal of the former Minister for Defence but he failed to do so. He simply turned what is a motion deploring the outside influence of Sir Frank Packer upon the decisions of the Prime Minister of this country into an opposition to a motion which was never moved. A motion of no confidence in the Government was the imaginary motion to which the Prime Minister (Mr McMahon) and the Minister for Trade and Industry (Mr Anthony) gave their replies. It is no wonder that not one single Government supporter bothered to congratulate tlie Prime Minister after that deplorable effort.

It seems to me that we are going to see desperate attempts made to prevent the honourable member for Moreton (Mr Killen) from speaking. His tender remarks about the state of chaos within the Liberal Party must have intrigued most of us. Instead of defending himself the Prime Minister, as i say, carried out a vicious personal attack upon the Leader of the Opposition (Mr Whitlam) in an attempt to deflect the attention of the House from the charges that the Opposition has laid against him. There is no doubt whatever that the Prime Minister was in difficulties. He did not deny, as he could easily have done, the charge that he has been trying to use the Australian Cricket Board of Control and Sir Donald Bradman to bring about a cricket tour in order to throw this country into a state of disunity in the hope that that would assist him in his campaign to retain office.

He did not deny the clear imputations levelled against him that it is he who has leaked the information to the Press and not the other Ministers against whom he is now casting aspersions. There is not any doubt at all that the present Prime Minister was the leak to the newspapers. There is not any doubt at all that this country holds the unenviable position of being the only parliamentary democracy in the world where one can find out most of the important decisions contained in the Budget a week before it is delivered. In the United Kingdom under a Labour Government when a Labour Minister, Hugh Dalton, was found to have leaked information unwittingly by dropping a chance word to a pressman he was dismissed immediately. The Prime Minister should begin emulating the British tradition by sacking himself at once because he is the person who has leaked information to Newton. I know for a positive fact that at one time he rang Newton regularly every Sunday afternoon and spoke to him for 2 hours about Budget information and about discussions within the Cabinet. If he denies that he telephoned Newton on those occasions, if he denies that he has not been in constant touch with the Press and with the proprietors of the Press over the last few days prior to getting the courage up to dismiss the right honourable member for Higgins (Mr Gorton) let him table the telephone dockets. I challenge him to table the telephone dockets and let us see to whom he spoke. I will table mine if he will table his. Is it any wonder that he took a whole week to get up the courage to dismiss the right honourable member for Higgins when it is well known that he has told his friends confidentially that he always feels uncomfortable in the presence of the right honourable gentleman and does not like him in the Cabinet? He said: ‘I feel inferior when I stand before him’. Is it any wonder when one looks at the two of them? Compare the two people. Is it any wonder that he feels inferior when he stands before the right honourable member for Higgins? Is it any wonder Mr Max Newton was able to say:

It must have taken a tremendous personal effort for Billy to screw himself up to sack Gorton. In the past Billy has always got other people - myself, Alan Reid, Sir Frank Packer. Warwick Fairfax and many others - to stab his enemies for him while Billy waited in the background until the crisis which others had precipitated came to a solution.

There are the words from Mr Max Newton himself.

Is it any wonder that Sir John McEwen vetoed Mr McMahon as Prime Minister? Can one wonder that the Country Party said: ‘We will not serve under a man who is so distrusted, a man who will betray Cabinet secrets, a man who is prepared to go to Max Newton and give him information that money could not buy from anybody else’? Is it any wonder that Max Newton was able to reap a small fortune from his teleprinter confidential information to his very select clientele of people who paid him for valuable secret Government information? Among his clients were the Mutual Life and Citizens’ Assurance Co. Ltd, General Motors-Holdens Pty Ltd, top stockbrokers and the Australia and New Zealand Banking Group Ltd. That gives an idea of the sort of people who are prepared to pay Maxwell Newtown for the information that the present Prime Minister deliberately leaked to him in his regular 2-hour talks on the telephone. If he denies that he had regular 2-hour talks with Max Newton on the telephone prior to the time when Sir John McEwen got the wind of it and refused to have him as Prime Minister, let him table telephone dockets from his office now for us to see. I know that he did.

I would like to see the telephone dockets representing the telephone calls he made from Mr Robinson’s home in Surfers Paradise while he was there plotting to get from the Country Party the seat now occupied by the Minister for External Territories (Mr Barnes). While he was plotting to get rid of the Country Party representative in McPherson he thought it would not be a bad idea to get rid of the honourable member for Moreton also. If the honourable member for Moreton loses his preselection it can be put down to the plotting of the Prime Minister and of Eric Robinson who would probably like to have the seat himself. But it will be the silliest thing the Liberal Party ever does because the moment it takes the preselection off -our friend Killen will be the moment we take the seat from the Liberal Party. There is no doubt about that. The people did not give the present Prime Minister the authority to govern this country. They gave that authority to the right honourable member for Higgins who was cut and clawed down as only a cat could do it. They certainly did not give it to Sir Frank Packer who is now governing this country. Packer’s credo is: ‘Let the people elect the Prime Minister and I will sack him if he does not do as I say.’ As Rohan Rivett put it in the Sunday Review’ recently:

The treatment of John Grey Gorton since he showed a total unwillingness to receive ‘advice’ from Sir Frank, or Sir Frank’s most trusted henchmen, has been as hard, as brilliantly destructive and often as well concealed, as any minefield in Vietnam.

Another gentle little quote about Sir Frank from the same newspaper is worth recording. This was written by none other than the editor, Richard Walsh, and one could not go much higher than that:

The life of Sir Frank Packer is that of a larrikin who almost all his life has had the kind of money that allowed him to indulge himself to the full. He is brutal in his treatment of those who cross him and power-hungry in his dealings and manipulations of men and events.

Mr Cope:

– That is why he was knighted.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– That is right, and the Liberals admit they could not have won in 1961 without him.

That may not be nattering to Sir Frank Packer but it is certainly not libellous because it is true, and now that he has become the de facto Prime Minister of Australia it is in the public interest that everybody who is ruled by this man should be able to see the real character of the non-elected dictator of the Liberal Party and of the Australian people. From now on a vote for McMahon is a vote for placing the control of the country in the hands of a multi-millionaire Press baron who will have power without responsibility, which has been the prerogative of the harlot throughout the ages.

The Prime Minister has become the Vyshinksy of Australian politics. Through Sir Frank Packer’s guiding control and at his behest the Treasurer was picked back in 1968. Packer picked the Prime Minister in 1968 and again in 1971. Packer sacked the Foreign Minister and the Defence Minister in 1971 and Packer intends to take the preselection away from the honourable member for Berowra (Mr Hughes) if he can. If the honourable member for Berowra loses his preselection that will be proof positive that what I say is correct. If he loses his preselection everybody will know that it was lost as a consequence of the inordinate pressure and power that this man Packer has over the Liberal Party. The honourable member is the best AttorneyGeneral I have seen in this Parliament, with the exception of Sir Garfield Barwick. He did not deserve the sack but he got it because he was no longer prepared to be a puppet of Packer. That is why he was dismissed. The present Prime Minister knows perfectly well that the people whom he has sacked are people who did not deserve to be sacked. The honourable member for Moreton did not deserve to be sacked when he was the Minister for the Navy. He at least was not one who was prepared to emulate his Prime Minister, who as Minister for the Navy took a post as the admiral’s gentleman on the eastern seaboard and was thus able to dictate his requirements to the admiral.

It is a great tragedy to see this once united party hacking itself to pieces at the behest of an outside person. Treachery, intrigue, villification and a smouldering hatred now pervade the Party. When we look at the sorry sordid sight that fails to grace the benches opposite one is able to understand why the Government has lost all sense of direction. It is more like a tin of worms or a bag full of cats than a Cabinet of responsible men. The end is not yet in sight. One of those how in line for the axe is the Minister for Social Services (Mr Wentworth) whom 1 admire for his courage in resisting the temptation or the invitation on television to stab his former leader in the back. I bow to him for’ his courage, lt took great courage and he has it. He deserves full credit but unfortunately his action only makes his demise all the more certain. He will be replaced by somebody like the former honourable member for Riverina, Mr Hugh Roberton, who will give the pensioners a decent serving of Liberal Party policy. The next man for the axe - perhaps it will not be in this order - is the Minister for the Army (Mr Peacock). The next man is the Minister for Immigration (Dr Forbes) and after him my good friend the Minister for Customs and Excise (Mr Chipp) although I hope I am wrong in saying this because he certainly does not deserve to be dismissed. In my opinion he is likely to be the fourth to go. They will then join on the back benches their illustrious colleagues the right honourable member for Higgins and the honourable members for Moreton, Wentworth and Berowra.

The right honourable member for Higgins and the honourable members fm Moreton and Berowra have something else in common. They all are in for the preselection axe. In case the right honourable member for Higgins thinks he is out of the pie-selection woods let me sound this word of warning. I know that the new Minister for the Environment, Aborigines and the Arts (Mr Howson) has a commission from the Prime Minister to use his influence in the Liberal Party to destroy the former Prime Minister of this country. Here you have this sordid intrigue of a Prime Minister going to one of his Ministers - perhaps this is the price of his appointment to the Cabinet - and saying Your duly now is to remove the man who used to be the Prime Minister of this country’ - a man who fought for this country in a way the present Prime Minister did not. They have plotted and planned the defeat of this man over a period of months. I only wish I could talk more about the future of these people to whom I have referred.

The Prime Minister has given a prize to everybody in the Liberal Party who has said ‘I am prepared to betray my party and vote with the opponents if a no confidence motion is moved’. They are the ones who have now been elevated to the Ministry. Let me tell the Prime Minister this: In giving this imprimateur on party treachery he is setting the pattern for his own destruction because he cannot complain if three or four other persons get up in the party room and say: ‘Unless the Prime Minister is sacked we will walk across the floor of the House and destroy him in the way he has destroyed John Grey Gorton.’ The situation has reached a very sorry state. 1 wish 1 had further time to enable me to talk about the sorry situation which now exists in the Liberal Party. We will need a strong Opposition after the next election. We will need one badly but instead we will get a disunited rabble. We want an Opposition that will be in a position to tell the Labor Government when we are wrong and when we should improve our kind of government.

Mr DEPUTY SPEAKER (Mr Lucock:

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

Mr KILLEN:
Moreton

– I understand it is the wish of the Leader of the House to dispatch this motion before dinner and accordingly I must truncate what I have to say. I turn at once to thank the honourable member for Hindmarsh (Mr Clyde Cameron) for the encomium which he directed to me. I also extend thanks on behalf of the honourable member for Berowra - (Mr Hughes). I congratulate the honourable member for Hindmarsh most warmly On his performance. I think it was one of the best George Arliss performances J have seen but I am distressed beyond measure to find that he is in such a state of acute distraction. He said: ‘My friend Killen, the poor member for Moreton.’ He did not even observe his customary intonation and pronounce my electorate as ‘Mortein’. I suppose we are all entitled to an aberration at some time. The honourable member has many remarkable accomplishments but for my part I would excuse myself from numbering amongst them that he is genuine in his endeavour to isolate the truth. I speak as one who was asked by the present Prime Minister not to serve and I suppose in the ordinary course of events one may draw the conclusion that that is good ground for resentment and good ground to nurse a measure of animus. 1 do not know whether it is a sign of incipient old age but for my part I am thoroughly convinced that in this world you can build nothing whatsoever on bitterness. lt may be that that is a bit old fashioned but that is my view. 1 would also be the last person on this side of the House to deny that there has been a disturbance within the Liberal Patty in recent months. That is a world of reality but are we- expected to go through life nursing hatreds and believing that we can build constructively and positively by saying: There goes that man, I wish him in hell.’ Is that to be the view? That is not my view and I venture to say that it is not the view of the great majority of those who sit on this side of the House. We have our differences: I do not deny this. Indeed I assert it. But at the same time I assert that there is within the corporate good will of those who serve in the Liberal Party - those who serve here in this Parliament and those who serve the Party outside - sufficient intellectual reserve to settle the problems. Our aim is to settle those problems and indeed this will be our accomplishment. 1 have said that the right honourable member for Higgins (Mr Gorton) had a right to defend himself. I have always apprehended as one of the most fundamental principles of natural justice that we hear the other side. Honourable members may disagree with it, reject it or condemn it but I believe that we must hear the other side. The right honourable member for Higgins has defended himself but he did not do it according to the wishes of the Prime Minister. That was the Prime Minister’s judgment but that is a resolution of yesterday. What of the morrow? We seek not to live in the past but to live in the future because that is where we are to spend the rest of our lives. I would maintain this view against any other.

What does this motion amount to. Curiously the Leader of the Opposition (Mr Whitlam) said that it is not a motion of censure. Not even all his well cultivated charm or the prospect of spending my days in Madrid would coax me to go over to the other side and vote with him on this motion. On that let me be quite clear. But what is the alternative? According to the Leader of the Opposition the alternative is that he is better able to lead this country. Let me say this to the honourable member: Those who would follow him would follow him only out of curiosity. The honourable gentleman says: ‘Here I am, unblemished, prepared to lead you.’ Moses in reverse. If he takes the view that his attitude is to be vindicated, that he is right and we are wrong, that he is better fitted and equipped to serve this country then let him answer such questions as these: Did he and his Party not go through the turbulence of the 36 faceless men while waiting outside the hotel? Where does the honourable gentleman stand with respect to Mr Harradine? I will defend him to the end, quoth he, and when it came to the crunch a groaning silence came over the honourable gentleman.

Would the honourable gentleman describe his relationship with the right honourable member for Melbourne (Mr Calwell) as being the entente cordiale of the South Pacific? What was it that possessed the honourable gentleman to describe his own Federal Executive as witless men? Does the honourable gentleman repudiate that? Does the honourable gentleman resile from his humiliating apology to the Federal Executive? Does the honourable gentleman take the view that he and the honourable member for Grayndler (Mr Daly) walked through the corridors close together, each trying to. outdo the other in murmuring: ‘I’m on your side.’? What of the relationship of the honourable gentleman with the honourable member for Shortland (Mr Griffiths)? Would he describe that as being an expression of splendid harmony?

One has only to recount these matters to come to the realisation that the honourable gentleman is not, as he asserts, better fitted to lead a government of this country. I say this to the Australian people: You cannot expect to get together a political party, a national party, having national ideas, standing for principles, having hundreds of thousands of members, sending them to Parliament, getting them in Parliament and expect to get out of it the one blob of conformity. That is not on. Whatever differences we may have will be settled, and they will be settled not merely to the advantage of the Liberal Party but to the advantage of the Australian people and those who will come and live in this nation.

Mr DALY:
Grayndler

- Mr Speaker -

Motion (by Mr Swartz) put:

That the question be now put.

The House divided. (Mr Speaker - Hon. Sir William Aston)

AYES: 62

NOES: 56

Majority . . 6

AYES

NOES

Question so resolved in the affirmative.

Question put:

That the motion (Mr Whitlam’s) be agreed to.

The House divided. (Mr Speaker - Hon. Sir William Aston)

AYES: 56

NOES: 62

Majority .. .. 6

AYES

NOES

Question so resolved in the negative.

Sitting suspended from 6.6 to 8 p.m.

page 37

APPROPRIATION BILL (No. 1) 1971-72

Message from the Governor-General recommending appropriation for proposed expenditure announced.

Bill presented by Mr Snedden, and read a first time.

Mr SPEAKER:

– In accordance with Budget practice, I now call on the Chairman of Committees to take the chair as Deputy Speaker.

Second Reading (Budget Speech)

Mr SNEDDEN:
treasurer · Bruce · LP

– I move:

That the Bill be now read a second time.

In doing so I present the Budget proposals.

Amongst these are important proposals to improve social service and repatriation benefits, to provide new forms of assistance for rural industries, notably wool, and to increase considerably our expenditure on defence. There will be minor tax concessions which, like the social service proposals, are oriented towards the claims of children and students.

We will also bring down measures to increase revenues and charges.

page 38

THE ECONOMY

Even more than usually the Government has this year found it necessary to shape its Budget to serve an overriding economic purpose. Australia is in the grip of inflationary pressures. The rate of increase in costs and prices is already fast and has tended to become faster. This is a serious’ condition. If allowed to develop unchecked it will cause increasing economic and social hardship to many people, add to the burdens of rural industries already depressed, disrupt developmental plans of great promise and undermine the rich possibilities of growth which our future unquestionably holds. So far as lies in our power as a government we are determined to combat this pernicious trend, slow it down and hobble it.

Until last financial year, inflation had not, for almost a decade, been a matter for serious concern with us. Through a long, unbroken phase of expansion it had usually been present in some degree but it had never gained much ground. Over the five years 1965 to 1969 average weekly earnings rose by 6.5 per cent per -year and consumer prices by 3.2 per cent per year. These were years in which our population and employment increased steadily; at no time did unemployment exceed 1.5 per cent of the work force.

These facts establish that, in this country, we can have strong, sustained economic ‘ growth and continuous full, employment of resources with only a mod erate degree of cost and price inflation. This is a vital fact, a re-assuring fact. It demonstrates that, in undertaking, to bring the current more serious form of inflation under control, the Government has not embarked upon any futile task. We accept that the Government must take the lead - this we are doing - but we must have the co-operation of the community. We would be lacking in duty to ignore our responsibility or fail to take that action which lies within our hands as a government.

In some respects, the last two financial years have gone along much as did the preceding years. If anything, . 1969-70 was somewhat above the trend - employment rose by 4 per cent and last year employment rose by 3.7 per cent - again above the trend. In both years there was a notable, further strengthening of our external payments and reserves position., This performance was achieved despite the further decline in the overall position of the rural industries, amounting to a severe slump in the case of wool. This tended to offset and mask the growth of the other sectors of the economy.

That having been said; it is in these 2 years that cost and price inflation have gathered pace. Average weekly earnings rose by 8.9 per cent in 1969-70 and by over 10 per cent last year. In the earlier year, the Consumer Price Index rose by 3.2 per cent; but last year by 4.8 per cent and by the June quarter the underlying rate of increase in prices was above 6 per cent.

The factors which have caused these increases cannot be disentangled, still less quantified. Undoubtedly, a significant part of the impetus has come from wage increases in various forms. These increases have reflected the level of demand and a willingness on the part of employers, under pressure, to pay more for labour. Apparently it has been possible to pass on increased costs, wholly or partly; in higher prices. It is probably more helpful to think of an inter-acting set of conditions than to look for a single dominating cause. But it is important to appreciate that a cost-price sequence can become a’ self-activating force so that cost increases lead to price increases and these to further cost increases.

In general, as we see the problem, there has been and still is a powerful upthrust of costs, stemming largely though not wholly from large wage claims relentlessly pursued.

There nas also been and still is an overstrong pressure of demand in some sectors, the effects of which spill over into other areas. Over the past couple of years, expenditure has been running very high in non-residential construction and, to a lesser extent, on the purchase and installation of capital equipment. It has also been running very high in the public sector, both Commonwealth and State.

In the very big area of consumer spending there appears to have been a growing rate of increase in recent months. This is a critical area because of the massive additional call on resources there would be if consumer spending did rise more rapidly. This could be made possible by the big increase in personal disposable incomes that has occurred and by the large buildup in savings bank deposits over’ recent months. That it might happen is evidenced by a sharp growth in retail sales, at an annual rate of 12 per cent, between the recent March and June quarters. It is a development which we must have very much in mind . in assessing the economic outlook. It would be calamitous for a general demand-type inflationary pressure to be superimposed upon and exacerbate present cost pressures.

Therefore it is essential to achieve the right rate of increase in demand through the year, lt must be high enough to make possible full employment of the labour available - new labour as well as existing labour. At the same time it must not be so high as to facilitate and encourage further cost and price increases. Since, as I have said, demand .has been running too high in some sectors, this indicates the need for a degree of restraint on demand. One obvious direction in which restraint should be applied is that of public authority spending in its various forms.

page 39

THE EXPENDITURE PROBLEM

While the Budget provides for substantial increases in expenditures to meet present and high priority needs in social welfare, the rural sector and defence, the Government has nevertheless been ruthless in pruning expenditure proposals.

There are, of course, large segments of the Budget where there is relatively little scope for pruning. There are large areas - notably in our payments to the States - where expenditures are determined by formula or by formal agreement. There are other areas - notably welfare and repatriation - where rates of benefit and the number of beneficiaries determine our outlays. Again, there are strong constraints with our expenditure on defence. Taken together, payments to the States, welfare and repatriation, and defence this year constitute considerably more than twothirds of total Commonwealth expenditures. I need hardly add that a substantial increase in expenditure on many government services and activities was unavoidable because of sharply increased wages and salaries and other costs - including an extra pay-day this year.

The overall increase in our expenditures ‘ would, however, have been much larger but for a determined pruning of expenditure proposals. It may be fairly said that this year has seen the most rigorous restraints on proposals for expenditure for many years. We propose’ to continue to exercise this restraint and we have decided to limit the growth in the numbers employed full-time under the -Public Service Act to 3.1 per cent in 1971-72. To assist in controlling the growth of expenditures, we have arranged that, in future, all Commonwealth Departments will prepare for the Government’s consideration expenditure estimates for a further 2 yeaTs beyond each budget year. This will clarify the longer-term implications of individual proposals in the context of the emerging overall expenditure situation and will enable the Government to act earlier in relation to developing trends.

In terms of the conventional Budget presentation, total expenditure this year is estimated at $8,833m, an increase of $728m or 9.0 per cent. This figure does not allow for the effect on inter-year comparisons of the transfer of pay-roll tax to the States. After adjusting for that factor, the increase in expenditure would be $987m or 12.2 per cent compared “with the actual increase of 13.8 per cent in expenditures last year. The success of our restraints is seen in the more meaningful figures of the Commonwealth’s outlays in Australia. After adjustment to remove the estimated effects of the transfer of pay-roll tax to the States, our outlays in Australia are estimated to increase by 11.7 per cent compared with the actual increase of 14.9 per cent last year.

page 40

THE EXPENDITURE ESTIMATES

Defence

The Government has made an assessment of our strategic situation in the light of changes which are occurring in our international relationships.

With further improvements in the security situation in South Vietnam, and the growing capacity of that country to provide for its own defence, reductions in the Australian Force, Vietnam, have already been possible. The Prime Minister will make a statement in this Session. Arrangements for the disposition of our forces in the Malaysia/Singapore area within the Five Power arrangement are proceeding very satisfactorily.

The Defence Vote proposed is $l,252.4m. This is $117m, or 10.3 per cent, more than last year.

Some $66m of the increase is for pay and salaries. New rates recommended by the Kerr Committee for other ranks will apply as from the beginning of the next pay period, and actual payment will be made as soon as regulations are pro-, mulgated. The Minister for Defence will make a statement on the new pay structure.

Expenditure on new capital equipment and works is estimated at $227m. This is about $32m more than last year. Major equipments to be delivered this year include ten Skyhawk aircraft for the Navy, thirteen Macchi Trainer aircraft for the Navy and Air Force, twelve Light Observation Helicopters for the Army and communications equipment and armoured personnel carriers. An amount of $6.2m will be spent on the development of the Naval base at Cockburn Sound and on Learmonth Airfield on North West Cape. There will be a small increase in expenditure on defence aid programmes.

Payments to the States

I believe that recent developments have led to a significant improvement in Com monwealth-State financial arrangements. The new grants formula settled in June 1970 is increasing State revenues considerably. More recently the agreement to transfer pay-roll tax to the States has improved their capacity to raise their own revenues. We count that agreement as a major co-operative achievement between the two branches of Government. The present aim is that the transfer of this tax should take effect as from 1 September 1971. On that basis, the offsetting reductions in the States’ financial assistance grants will result in total allocations to the States from the Commonwealth Budget increasing by only an estimated §88m to $2,93 lm.

In addition, the States will receive an estimated $259m from pay-roll tax at the existing rate and a further estimated $90m if the rate is increased by t per cent as they have indicated. Thus, after allowance both for Commonwealth allocations and revenue from their new tax, the States are estimated to receive $3,280m, an increase of $43 7m or IS per cent on the comparable figure for last year.

The Commonwealth will continue to impose pay-roll tax at the rate of 2£ per cent in the Australian Capital Territory and the Northern Territory. Details of the arrangements will be given when legislation to amend the States Grants Act 1970-1971 and the Commonwealth’s pay-roll tax legislation is introduced into Parliament. There are two aspects of particular importance.

First, local government authorities will benefit by an estimated $6m this year and $8m in a full year through the Commonwealth meeting the cost of exempting the non-business activities of such authorities from pay-roll tax as from the date of transfer. This decision by the Commonwealth has been warmly welcomed by all local authorities.

Secondly, while accepting that pay-roll tax would be a useful addition to their revenue resources, the States emphasised that the full-year costs of the abnormally high wage and salary awards granted by various wage-fixing bodies to State Government employees last year would still make it very difficult for them to cope with their prospective 1971-72 budgetary situations. Accordingly, the Commonwealth agreed to pay the Stales special non-recurring revenue assistance of $40m this year as well as an amount of about $22.4m associated with the transfer of the pay-roll tax.

The allocations to the States include an amount of S860m for the State works and housing programme approved by the Loan Council. This amount, which includes an interest-free capital grant of nearly $2 10m, involves an increase of $37rn or 4.5 per cent on last year’s programme. In addition, the Commonwealth makes available to the States a wide range of capital payments for specific purposes, such as roads, education and the development of resources. These payments are estimated to increase by around 1 1 per cent to $406m. Consistent with the effort we have made right across the Budget to restrict increases in expenditure as far as possible, the increase in these specific purpose capital payments is almost entirely a result of commitments entered into prior to the current year. We shall be bringing the same attitude of rigorous restraint to all proposals for new specific purpose capital . commitments coming before us in the year ahead.

Social Welfare

Expenditure on social welfare and repatriation constitutes the largest single item of the Commonwealth’s own expenditures. Social services, repatriation benefits, health services, housing and other welfare activities will involve this year an expenditure of $2,095m. This is $268m more than last year. Of this increase, $78m represents the cost in 1971-72 of current proposals for improvements in social welfare. The full year cost is $108m. Further details are given in Statement No. 10.

page 41

AGE, INVALID, WIDOWS’ AND SERVICE PENSIONS

The Government has pursued its policy of assisting those most in need. There will be higher pensions for those who are wholly or substantially dependent on their pensions. The standard rate pension payable to single people and widows with children is to be increased by $1.25 to $17.25 a week. The married rate of pension will rise by $1.00 a week for each person to give a married couple who are both pensioners a combined maximum pension of $30.50 a week.

Pensioners now receiving pensions at the current maximum rate and those who received part of the increase of 50c a week given in April this year will receive the full increase of $1.25 or $1 a week. Pensioners who narrowly missed qualifying for any part of the April increase will receive part of the present increase so that their total income will not be less man that of maximum rate pensioners with full allowable means.

The allowance for the non-pensioner wife of an invalid pensioner and the allowance for the non-pensioner wife of an age pensioner who is permanently incapacitated or who has a dependent child, have been reviewed. The wife’s allowance will be increased by $1 to $8 a week.

Increases are also proposed in the additional pensions payable where a pensioner has dependent children. The first child will attract an increase of $2 a week and each other child $1, bringing the payment for each child in a pensioner’s care to a uniform rate of $4.50 a week.

The increases will apply, where appropriate, to rehabilitation and sheltered employment allowances, tuberculosis allowances and long-term sickness benefits. The proposed increases in the wife’s allowance and pensions for children will be extended to the dependants of those receiving unemployment and sickness benefits. Comparable increases will also be made in service pensions payable under the Repatriation legislation.

page 41

CHILD ENDOWMENT

To assist young families, endowment will be increased by 50 cents a week for each child under the age of sixteen years in excess of two in a family. The rate of payment for children under 16 years in institutions will also be increased by 50c a week.

page 41

REPATRIATION

We propose a number of improvements in Repatriation pensions and allowances.

The special rate pension payable to a totally and permanently incapacitated war pensioner will be increased by $3.50 to $42.50 a week.

The intermediate rate war pension, payable to those able to work only part-time . or intermittently, will be increased by $1.75 to $30.25 a week.

War widows’ pensions will be increased by $1.25 to $17.25 a week. The rates payable for their children will be increased by $1 for the first child and $2 for the second and each subsequent child, making the pension for each child $7 a week. The pension for a child who has lost both parents will be increased by .$2. to $14 a week. Also to be increased are the additional allowances payable to war pensioners who require an attendant and- to those who have suffered amputation of one or more limbs or the loss of an eye,

page 42

WAR SERVICE HOMES

The maximum loan under the War Service Homes Scheme will be increased from $8,000 to $9,000. Pending assent to the necessary legislation, applications for the increased loan will be accepted from eligi-bie new purchasers and borrowers. As soon as the legislation is assented to, applications will be accepted, in conformity with existing policy and within the new loan limit, for additional loans for essential extra accommodation and approved utility services. An amount of S60m has been provided, under advances for capital purposes, for War Service Home.

page 42

COMMONWEALTH HOUSING ASSISTANCE TO THE STATES

We have adopted a new approach to Commonwealth assistance to the States for housing. Under the previous CommonwealthState Housing Agreements such amounts as were nominated for housing by each State out of its annual Loan Council borrowing programmes were advanced by the Commonwealth at a rate of 1 per cent below the long-term bond rate. The States will continue to determine the amount of their annual Loan Council borrowing programmes to be allocated to housing. However, the Commonwealth will no longer make housing advances at concessional interest rates to the States but instead will offer direct grants to help the States continue to provide housing for lower’ income groups.

Subject to conditions, designed to maintain the Home Builders’ Account arrange ments, we propose, in respect of State housing activities in each year from 1971- 72 to 1975-76, a basic grant of $2.75m a year payable for a period of 30 years. Because this annual grant is cumulative, we will be committed to pay over $412m to the States during the next 34 years. We also propose a non-cumulative grant of $ 1.25m each year for the next five years as a contribution towards the cost to the States of reduced rents for families they regard as being in need of this assistance. The Commonwealth will also offer to advance all the funds to be spent by the States on building homes at the Commonwealth’s request for serving members of the Forces - thus relieving the States of the obligation to use a portion of- their housing funds for this purpose.

The Minister for Housing will elaborate on these proposals.

page 42

ROYAL FLYING DOCTOR SERVICE

There will be an increase in the operational subsidy payable to the Royal Flying Doctor Service from $180,000 per annum for the triennium just completed to a new yearly rate of $315,000 for the triennium 1971-74. In addition, the Government will continue to provide a capital grant at the same rate of $170,000 per annum as has applied for the past three years.

Education

The Commonwealth is meeting a significant share of the cost of education throughout Australia, both through the support it gives to State budgets and by direct expenditure under Commonwealth programmes.

In 1971-72 Commonwealth payments to the States for particular types of expenditure on education are expected to exceed $200m. The bulk of these payments - about SI 28m - is for universities and colleges of advanced education. This figure includes a special allocation to assist these institutions in meeting the cost of exceptional increases in non-academic salaries. In its own territories the Commonwealth expects to provide about $77m this year.

The number of advanced education scholarships will be increased from 2,500 to 4,000 awards from the beginning of 1972. There will also be 200 new awards for students in teacher education who contemplate joining the Commonwealth Teaching Service. Expenditure on the various scholarship programmes this year is estimated at $43. 7m compared with $3 8. 4m last year.

Taken as a whole, Commonwealth direct expenditure on education is estimated at almost $346m, or 14 per cent more than last year. The value to taxpayers of deductions for education expenses is estimated to be $7Sm this year.

External Aid

The estimates provide for an increase of $9m in external economic aid to developing countries including Papua New Guinea. As explained in Statement No. 8, a greater increase could conceivably emerge later in the year. Bilateral aid (excluding Papua New Guinea) will increase by 8 per cent in 1971-72. Further details are set out iri that Statement.

For the first time, Australia in 1970 exceeded the internationally accepted ‘one per cent’ target for the total flow of financial resources, both official and private, to developing countries. The probability is that we shall do so again this year. In terms of the amount of official development assistance extended to developing countries, expressed as a percentage of Gross National Product, Australia was ranked third in the world in 1970, for the fifth year in succession, by the Development Assistance Committee of OECD.

Assistance to Industry

Commonwealth assistance to industry takes a variety of forms including payments to industry, special taxation concessions, and contributions to promotion and research. Last year, Commonwealth assistance under these three heads amounted to $658m, of which payments to industry accounted for $3 17m. Details are given in Statement No. 9.

Commonwealth payments to industry are expected to total $37 lm or $54m more than last year. Export incentive payments are expected to total $53m, industrial research and development grants $13m, net expenditure by way of subsidy to shipbuilding $10m and payments of petroleum search subsidy $8.6m.

Rural industries continue to encounter serious difficulties in export markets; countries of the European Economic Community adhere to a protective Common Agricultural Policy and many other countries pursue policies aimed at agricultural self-sufficiency. There seems to be little prospect that these difficulties will ease.

In considering the amount of assistance to be provided from the Budget this year for rural industries, the Government noted that farm income in 1970-71 is estimated at about $8 10m, about $265m less than the year before’. This has had an impact not merely on the producer but on rural communities generally.

The Government has given high priority to measures aimed at giving support to farmers whose enterprises are basically viable, but who are burdened with an excessive amount of short-term .debt or whose properties could with advantage be built up to a larger size. To finance schemes of debt reconstruction and farm build-up, an amount of $4m was paid to New South Wales last year and a further $40m is provided this year for payment to the States.

Provision is also made for payment to the States of $ 11.5m under the marginal dairy farms reconstruction scheme. Payments last year were $3.lm.

Advances for capital purposes include $10m for the Commonwealth Development Bank to help finance an extension of the Bank’s operations to include loans to farmers to build up the size and operational efficiency of their farms.

In these various ways the Government has demonstrated its willingness to assist farmers to adjust to the changes that are occurring in the rural sector. For those farmers not in a position to achieve commercial viability, the Commonwealth will introduce a retraining scheme. Details will be announced by the Minister for Labour and National Service. The rural reconstructions scheme also provided for rehabilitation assistance - where this is necessary to alleviate personal hardship - to those farmers obliged to leave rural’ industry.

The Government has given particular consideration to the position of those farmers substantially dependent on their income from wool. The collapse in . wool prices during 1970 brought them to a figure as low as that ruling in 1948 when, of course, costs were much lower.

The Australian Wool Commission’s operations have had a stabilising effect on wool prices. As already announced by the Minister for Primary Industry, the Government will continue to support the Commission in its reserve price operations on the same basis as in the past season, subject to regular reports and review by the Commission on its purchases and buying limits. Last year the Commonwealth made available to the Commission $12m for working capital to finance purchases of wool and an arrangement was negotiated with the trading banks to. provide up to $34m to the Commission for this same purpose. This latter amount is not yet fully drawn. Advances for capital purposes include a further $10m to be advanced to the Commission as working capital .should this be needed.

The Budget provides, in addition, $4m against a. possible loss by the Commission and §3.7m towards the costs involved in handling wool included in the Price Averaging Plan.

The Government has decided that producers of wool should be given additional assistance this year, and will introduce a 1- year scheme of deficiency payments in respect of the 1971-72 wool clip. Deficiency payments will be a percentage of market realisations, calculated from time to time so as to ensure that, on average, growers receive for shorn wool - other than specified inferior types accounting for about 10 per cent of shorn wool - a return corresponding to a price for the whole clip of 36c a pound greasy. Under this method individual growers will retain an incentive to obtain the best possible price for their wool. The necessary legislation will be introduced by the Minister for Primary Industry as soon as practicable.

Provision is made in the Budget for expenditure of $60m under this scheme in 1971-72. Some expenditure will also be involved next year in respect of wool sold towards the end of the season. In calculating the possible total commitment, the Government has, of course, had to assume a figure for likely market proceeds from sales of wool in 1971-72. However, accu rate estimation of this figure is scarcely feasible because of the many factors that have a bearing on it and the expenditure estimate I have mentioned is subject to a considerable margin of uncertainty.

The phosphate fertilizers bounty will be extended to 31 December 1974. Expected expenditure this year is $38m.

The 1-year additional bounty on 1970- 71 butter and cheese production is to be extended to 1971-72 production at a lower rate. Expenditure on butter and cheese bounties this year is expected to be almost $40m.

A 5-year stabilisation plan for the apple and pear industry will be introduced, at an estimated cost in 1971-72 of $3m.

Payments to rural industries, details of which are given in Statement No. 9, are expected to total $275m- -that is, S65m more than last year.

The Commonwealth has assisted primary producers affected by drought by reimbursing State Governments where they are involved in substantial relief expenditures of an abnormal nature. Last year we provided nearly $14m to New South Wales and Queensland and this year we will continue to assist the Queensland Government in financing relief measures and restocking assistance.

The situation in the wine industry has been kept under close review by the Government. Having considered the report of an inter-departmental committee, we have decided not to alter the existing duty on wine. However, the problems currently affecting some growers in the industry are well recognised and will be kept under review by Commonwealth, State and industry authorities in conjunction with the Agricultural Council.

The Export Payments Insurance Corporation Act will be amended to enable a buyers’ credit scheme to help Australian exporters of capital goods. The Minister for Trade and Industry will introduce the necessary legislation.

Advances for Capital Purposes

It is estimated that advances for capital purposes will increase by $47m to $495m. Last year the increase was $83m.

The largest increase - $56m - is in the advance to Qantas to meet payments on new aircraft. This item represents a transfer to Qantas of the proceeds of drawings against certain loans raised overseas for aircraft purchases; it does not involve any domestic outlays.

The amount to be provided to the Post Office from the Budget is S255m - $8m more than last year. The remaining finance for its capital programme will be provided by the Post Office from internal resources- mainly depreciation funds.

Post Office charges were increased last year, but increases in wage and salary levels have been much larger than were expected. The full year cost of wage and salary increases awarded in 1970-71 is estimated at $77m. Were charges to be left at their existing levels, a loss of more than $30m would be incurred this year. This would require either a substantial reduction in the Post Office capital programme, and consequently in the level of services, or a provision from the Budget much larger than our overall financial position would justify. To avoid such a loss, and to help in financing the capital programme, it is proposed to raise charges to increase Post Office receipts by about $50m in 1971-72. Details will be given to the House by the Postmaster-General.

A further capital payment of $12. 5m is to be made this year to the Australian Industry Development. Corporation. The payment made last year was $25m. There are substantial reductions also in various other advances, including those for the Snowy Mountains Hydro-Electric Authority and the Australian National Airlines Commission.

Other Capital Works and Services

Expenditure on other capital works and services is estimated to be S262m, an increase of $22m.

There will be an additional $9m for new hospital construction in the Northern Territory and the Australian Capital Territory, and an additional $4m towards construction of the new standard-gauge line between Port Augusta and Whyalla.

Departmental Running Expenses

Departmental running costs are estimated, at current levels of salaries and costs, to increase by $84m, or 15 per cent. This large increase is in part explained by the additional public service pay-day in 1971- 72 which takes $16m and in part by the full-year effect of salary increases awarded last year. The Government is concerned about the rate of growth of departmental expenditure and has taken action to curtail it. It is proposed to initiate within the Government a review of the existing functions and activities of departments. It is not expected that this review, which will of necessity be spread over some months, will lead to substantial additional economies in the current financial year. In the longer term, however, the Goverment aims to achieve further economies which should ensure that the rate of increase in departmental expenditure is restricted to the absolute minimum consistent with the execution of Commonwealth functions of vital importance to the national -welfare.

Other Expenditures

page 45

SUPPORT FOR THE PERFORM ING ARTS

Grants in support of the performing arts will be increased to $4.5m. Details to be announced by the Minister for the Environment, Aborigines and the Arts will show increased funds for further, development of the Australian Opera Company and Orchestra.

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ABORIGINAL ADVANCEMENT

An amount of $14.35m will be available for expenditure from the Aboriginal Advancement Trust Account mainly for special programmes of housing, health and education. This is an increase of $3.1m or 28 per cent. Grants to the States will be increased by 31 per cent to $9.2m and expenditure on study and secondary grants for the education of Aboriginal children is expected to increase by - 52 per cent to $3.8m.

In addition, expenditure on Aboriginal advancement by or on behalf of the Northern Territory Administration is expected to amount to more than SI 6m.

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RETIREMENT PENSIONS AND ALLOWANCES

Existing Commonwealth Superannuation Fund and Defence Forces Retirement Benefits Fund pensions, which were last increased in 1967, will again be increased by the notional salary method, using salary and pension entitlement levels ruling on 30 June 1971.

The estimated cost of the increases is $ 11.5m this year, but the net cost, to the Budget is estimated at $6.2m because a large part of the cost will be met by the Post Office and other authorities outside the Budget.

A comparable adjustment of existing pensions payable under the Parliamentary Retiring Allowances Act will also be made at an estimated cost of $78,000 this year.

The notional salary method is complex and experience has shown that it generates anomalies and inequities between pensioners. The Government proposes to examine simpler and more equitable methods of adjustment with a view to future application on a regular basis. .

page 46

THE BUDGET STRATEGY

We see it as a critically important objective of our policy to combat the inflationary forces now running in our economy, and it is against this objective that 1 now come to explain the strategy of this Budget and our decision to raise additional revenues.

Although cost increases and the price increases which follow them may be due, in the first instance, to increases in wages and other cost elements, they are without doubt stimulated and made possible by conditions of strong demand for resources. Hence, if resistance to such cost increases is to be stiffened, as it must be, there has to be a sufficient degree of restraint on potential demand for resources, particularly in those sectors where it is obviously running too high. -

The chief instruments available to the Government and its related authorities are the annual Budget, the. effects of which are spread over the ensuing year, and monetary measures taken by the Reserve Bank in collaboration with the Government.

I said earlier, one of the most expansive sectors of demand has been public sector expenditure, of which Commonwealth expenditure comprises - a large share. Obviously, therefore; we had to make this our first target, and I have described the steps we have taken to slow down the rate of increase in this source of demand.

Since there will still be, within Australia, a considerable increase in Commonwealth spending, it must at least be offset by an increase in Commonwealth domestic receipts from taxation and other sources of revenue. But if, as we believe, there is need to apply a wider restraint than this and exert a steadying influence on the upward course of demand in the economy, the rise in these receipts should more than cover the increase in expenditures. In other words, there has to be a larger surplus of domestic receipts over domestic- expenditures. The practical question is how much larger this surplus ought to be.

After considering this question in depth the Government reached the view that it should seek a somewhat larger domestic surplus than the $550m envisaged in the 1970-71 Budget. Because subsequent events added heavily to our expenditures and our revenues were adversely affected by the Senate rejection of our legislation on the States’ receipts duty, the domestic surplus last year proved to be $460m. We see this, however, as an adventitious result, hardly to be taken as a guide for what should be sought in 1971-72.

For some time there has been a prospect that monetary liquidity would rise excessively. This has been due principally to the rapid build-up of our overseas reserves which in turn has been due to excellent results on our external trading account and the sustained high level of capital inflow. The effect is to add to the financial resources available to people and institutions within Australia over and above those derived from domestic sources. Obviously this must operate to facilitate higher levels of expenditure at a time when these are already high.

Achievement of a domestic surplus, by which more is withdrawn in revenues than is put forth in expenditures within Australia, works against this tendency for liquidity to rise to excess. Net sales of securities to the public, together with monetary measures such as restraints on bank lending, operate in the same direction. In the prevailing and foreseen economic conditions, it will be necessary to maintain a restrictive monetary policy and, as was the case last year, to encourage sales of government - securities. The relationship between the Budget and monetary conditions is discussed in some detail in Statement No. 3.

From what we see now, the influences tending to produce excess liquidity could continue strongly in 1971-72. This provides a further reason for seeking to achieve a large domestic surplus. The figure we have decided upon is $630m, which is S80m more than the amount for which we budgeted last year.

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THE REVENUE ESTIMATES

Before allowing for revenue measures which I will discuss later, it is estimated that total receipts this year would be $8,654m, an increase of $624m, or 7.8 per cent. However, if adjusted to allow for the transfer of pay-roll tax to the States, the figure comparable with , actual receipts last year would be $8,913m, an increase of 11 per cent. The basis of these revenue estimates is discussed in Statement No. 5.

Because of cost increases, we are proposing to increase some charges. Governments are not immune to cost increases and users of government services - rather than the general taxpayer - should be required to meet these costs. However, to achieve a domestic surplus of $630m it is necessary for us to seek additional tax revenue in this financial year of $157m.

Taxation Measures

To decide upon the particular taxes by which this additional revenue would be raised proved to be a matter of some difficulty. In the present context the object of any tax increase is to moderate development of demand and that can be done either by taxes on incomes or by taxes on spending - that is, taxes levied on commodities. The latter form of taxation has the drawback that it adds to prices. Taxes on incomes are more likely to be free from this consequence although it is sometimes argued that company tax increases eventually find their way into prices. On balance, the Government has decided to seek the major part of the additional revenue it needs in 1971-72 from taxes on certain company income and on personal incomes and the lesser part from increases in customs and excise duties on petroleum products and tobacco products. Our proposals are accordingly as follows.

Company Tax

At present, the first $10,000 of a company’s taxable income is generally taxed at a lower Tate than the balance. We have concluded that the present concessional rates are no longer warranted. In reaching this conclusion we have been mindful not only of revenue requirements but also of the fact that the rates were adopted in circumstances largely different from those now prevailing and that, in some instances, these provisions have been the basis of tax minimising schemes by some taxpayers. We therefore consider this change as a move not merely producing additional revenue, but also as one towards a sounder and more equitable system of company tax. We propose that the rates applied to the first $10,000 of taxable income, including shadingin and special rates, be. increased by 5c in the dollar. Friendly Society Dispensaries - which have a uniform rate of 37± per cent - will not be affected. The general public company rate of 47£ per cent will therefore apply to the whole of the income of public companies other than income taxed at special rates. For private companies the rate on the first $10,000 of taxable income will be 37± per cent and the rate on the balance will remain at 421 per cent. These changes, which will apply to incomes of companies .for the income year 1970-71, are estimated to yield $24m this year.

A consequential change will be made to the rate on the first $10,000 of 1971-72 investment income of a superannuation fund that does not invest a sufficient proportion of its assets in public securities, as these funds are taxed at the same rates as mutual income of a life insurance company.

Personal Income Taxation

It is proposed to raise a large part of the balance of our revenue requirements through the personal income tax rather than add further to sales tax. Accordingly, we propose to increase the 2i per cent levy to 5 per cent. This increase is estimated to yield $68m this year. The new scale of tax instalment deductions from wages and salaries will operate from 1 October 1971.

The levy will not apply to tax calculated under the age allowance. Consequently the upper limits of the shading-in ranges of the age allowance will increase. Apart from that, it is not proposed to change the agc allowance.

It is proposed to liberalise certain deductions allowed to personal income taxpayers. The deductions in question relate to education, a matter to which we attach great importance, and to child adoption expenses. We propose that the maximum deduction allowable for education expenses of a dependent full-time student child be increased from $300 to $400 per annum. We also propose that education expenses will be allowable deductions in respect of such students under 25 years instead of under 21 as at present. Consistently with that, we shall increase to 25 years the agc at which a student ceases to qualify as a dependant for purposes of the dependant’s allowance. Finally, it is proposed that a deduction be allowed for legal expenses and court costs of the kind normally incurred by a taxpayer in adopting a child. It is estimated that the cost to revenue of these concessions will be $405,000 this year and $6,350,000 in a full year.

Customs and Excise Duties

We shall need to raise more revenue than will be yielded by the measures 1 have just mentioned. Accordingly, we propose to increase the rates of customs and excise duties on cigarettes and cigars by 50c per lb and on manufactured tobacco by 25c per lb. It is estimated that these increases will yield $21m this year.

We also propose to increase by 2c a gallon the customs and excise duties on motor spirit, automotive distillate used in road vehicles operating on public roads, aviation turbine fuel and aviation gasoline. These changes are estimated to yield $43 m this year.

For some years there have been exemptions from excise for coal tar and coke oven distillates produced as a by-product in the process of converting coal to coke. The Government is satisfied that the circumstances giving rise to the exemption no longer have force, and has decided to remove this exemption where these distillates are used as substitutes for or in admixture with motor spirit. It has also been decided to remove the current excise exemption for condensate produced from natural casing head gas when it is used in admixture with motor spirit in internal combustion engines. These changes .are estimated to save the revenue $1.3m in 1971-72.

The’ net effect of the various taxation proposals I have just outlined will be to increase revenues this year by $ 1 57m.

As promised when the investment allowance for manufacturing plant and equipment was suspended, the Government has given further thought to the transitional provisions but has decided against amendment of the legislation.

Miscellaneous Charges

Listeners* and viewers’ licences

Listeners’ and viewers’ licence fees were last increased in October 1968. Since then, the gap between receipts from licence fees and expenditure in providing and maintaining the National Broadcasting and Television Service has increased because of mounting wage costs, extension of television to lesser-populated country areas and development of programme services. lt is proposed to increase licence fees, other than the special rates payable by pensioners, to yield Slim in 1971-72. Fur,ther details will be provided by the PostmasterGeneral. light dues

To help meet the rising costs of providing marine navigation aids, it is proposed to increase light dues - that is, charges to shipping for the use of these facilities - from 20 cents to 22 cents per net registered ton per quarter. The increased charges will apply from 1 October 1971 and are estimated to yield $480,000 this year. pharmaceutical benefits- patient charge

The Government has for some tune been greatly concerned at the mounting cost of the Pharmaceutical Benefits Scheme. The charge payable by patients has been 50 cents since the charge was adopted in 1960. In that year the cost of the Scheme was $49m; last year it was $160m. A charge of 50 cents, appropriate eleven years ago, cannot be regarded as appropriate today. Accordingly, the Government proposes to introduce legislation to increase the charge to one dollar. As a result of this change it is estimated that

Commonwealth expenditure this year under the Pharmaceutical Benefits arrangements will be reduced by about $16m. Pensioners and their dependants enrolled in the Pensioner Medical Service, who are entitled to free pharmaceutical benefits, will continue to be exempt from any charge. Special arrangements will be made for those persons enrolled in the Subsidised Health Insurance Scheme to continue to receive pharmaceutical benefits for the present contribution of 50 cents for each prescription.

page 49

AIR NAVIGATION CHARGES

In recent years there have been annual increases in rates of air navigation charges in accordance with the Government’s policy that the air transport industry should progressively meet a greater proportion of the costs of airports and airway facilities. A Working Group of departmental officers and airline representatives will shortly complete a report, in which the airlines are making submissions concerning the costs they should meet. A decision on air navigation charges will be taken by the Government after consideration of the report.

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CONCLUSION

Fiscal action can exercise a pervasive effect, but the Government’s capacity to deal directly with inflationary pressures arising primarily from cost ‘ pressures is more limited. We have already taken some action in areas where we have power to do so and the Government has under active study various other aspects of the problem of excessive cost increases. I might mention, in this budget context, that the Government is considering what might be done by way of strengthening the arbitration system and, in particular, bringing more to the forefront the economic consequences of decisions which are taken within that system. When these studies have been completed, we will consider whether further measures should be taken to cope with the problem of excessive cost and price increases.

I must refer to the escalating level of industrial unrest. Working days lost through industrial disputes in the first five months of 1971 topped the high rate of last year by nearly 25 per cent. In the past three years the annual loss of working days has been 1.1m, 2.0m and 2.4m. But it is not the direct losses of production and wages from this rising tide of militancy which are so disturbing as the fact that confrontations in industry are often resolved only at the cost of grossly inflationary wage settlements. The real costs to the community of the stimulus to inflation which such settlements provide dwarf, I venture to suggest, the direct losses from prolonged stoppages. If the inflationary trend is to be contained, a halt will have to be called to this process.

I need hardly add that the Government will do all it can, by persuasion and example, to encourage those in the private sector who make decisions directly affecting wages and other costs, profits, and ultimately prices, to have at all times in the forefront of their consideration the broad national interest. Let mc say too that we are very conscious of the problems posed for manufacturers and other businesses by inflationary tendencies and other economic trends.

In striving to restrain the forces of inflation, the Government has been concerned to ensure that this Budget does not contribute to a situation- where demand pressures might be superimposed upon cost pressures. There may be some who believe that we should have taken that risk and allowed demand to have its head. At least in the short term, this would have been the easier and perhaps the more popular course. But in our view it would not have been the right way nor the responsible way. We will be keeping the whole situation under very close review throughout the year so as to make any adjustments in policy which might prove to be necessary.

As it is, we believe the Budget will not discourage the real growth of the economy. Given the anticipated growth in productive capacity, there should be scope for growth in the demands of the private sector. There is scope for a real lift in the standard of living which should be shared by many who would otherwise be the undefended victims of inflation and the self-seeking of stronger, more aggressive groups.

On its own, the Budget cannot, of course, ensure that the nations’ objectives are achieved. But this Budget, concerned as it is with the high national objectives of social welfare, economic strength and national security, provides the essential framework for the attainment of these national goals.

Debate (on motion by Mr Whitlam) adjourned.

page 50

STATEMENT No. 1- SUMMARY OF THE 1971-72 BUDGET

The Economic Context

The 1971-72 Budget has been framed in a context of rapidly increasing costs and prices, a relatively tight labour market and the prospect of increased pressures on resources in the year ahead. Gross national product at constant prices increased less rapidly in 1970-71 than in the preceding year, but is expected to grow somewhat faster in 1971-72. *1970-71* Estimates of the main components of gross national product and gross national expenditure in 1970-71 are given in detail in the document 'National Income and Expenditure 1970- 71 presented with the Budget Papers. In terms of constant prices, the estimates show that gross national product increased in 1970-71 by 3.9 per cent, with non-farm product increasing by 4.4 per cent, and farm product declining by 1.2 per cent. Gross national expenditure increased by 2.8 per cent at constant prices. Of its main components, personal consumption expenditure is estimated to have increased by 2.7 per cent, private capital expenditure by 5 . 0 per cent, and public sector spending (current and capital) by 2 . 2 per cent. In current prices, the main changes in 1970-71 from 1969-70 shown by the estimates are:- o an increase of 9.7 per cent in gross national product, comprising an increase of 11 . 4 per cent in the gross value of non-farm product and a decrease of 12.0 per cent in the gross value of farm product; o an increase of 9 . 7 per cent in gross national expenditure, including increases of 8 . 9 per cent in personal consumption, 2 . 1 per cent in private gross fixed investment in housing, 15.6 per cent in other private gross fixed investment and 11.0 per cent in public expenditure on goods and services; o moderate growth in both imports and exports, although in the outcome there was an excess of exports over imports of goods and services of $10 million compared with an excess of exports over imports of $4 million in 1969-70. Also in 1970-71:- *o* there was a sharp acceleration in the rate of increase of money wages and prices, especially in the second half of the year; o although the labour market tended to ease over much of the year, the total movement was relatively small. *1971- 72* In 1971-72, gross national product at constant prices seems likely, on present indications, to increase by something over 5 per cent; an increase similar to the average in recent years. Average employment in 1971-72 is expected to increase by a little under 3 per cent; the rise in non-farm productivity may be about 2.5 per cent. There is, of course, considerable uncertainty at this stage of the season about the likely movement in farm output but this forecast assumes a moderate increase. Demand is expected to accelerate in 1971-72. In particular, a faster growth of consumer spending is likely, given a delayed impetus by the strong recent growth in money incomes and in savings. Gross private investment on dwellings should rise considerably faster than in 1970-71, and, despite moderating influences in some, areas, other private investment should continue to grow overall. The financial position of the State sector will doubtless permit a very strong growth in expenditures to continue in that sector. The rate of increase in average weekly earnings continued in 1970-71 the accelerating trend evident in recent years. A more moderate trend has been assumed in 1971-72. Nevertheless, the increase of 9 per cent assumed for the purpose of estimating pay-as-you-earn tax collections is a very large- one reflecting, to a large extent, the fact that average weekly earnings are *already* well above their *average* level in 1970-71. In the light of this economic assessment the Budget sets out to provide for increases in essential expenditures whilst restraining the growth in the Commonwealth's total domestic outlays. At the same time it aims, by raising additional revenues, to guard against the development of undue demand pressures *Budget Estimates in National Accounts Terms* The estimates in national accounts terms are set out in detail in Statement No. 2 and further reference is made there to their economic implications. They are also discussed further in the Supplement to the Treasury Information Bulletin which accompanies the Budget documents. The following table provides a summary of the main Budget aggregates in national accounts form. Notable aspects are:- The growth in domestic outlays is estimated to be 8.4 per cent in 1971-72 (11.7 per cent adjusted) compared with 14.9 per cent in 1970-71. A reduction in the rate of growth of Commonwealth outlays in Australia has, of course, been a prime objective of Government policy, lt is estimated that the Commonwealth's domestic expenditure on goods and services will increase by 12.2 per cent compared with an increase of 14.3 per cent in 1970-71. An estimated increase of 13. 1 per cent in Commonwealth outlays overseas contrasts with the outcome in 1970-71 when the Commonwealth's overseas outlays were virtually stable. In view of trie strength of Australia's external reserves, this rapid growth in overseas outlays gives no cause for concern from the point of view of externa] balance. An increase of 7.5 per cent in receipts before taking account of the proposed revenue measures and 9.6 per cent when allowance is made for those revenue measures which are estimated to yield $168 million in 1971-72. When adjusted to remove the effect of the pay-roll tax transfer the estimated increase is 12.8 per cent. The revenue measures announced will, of course, have a restraining effect on demand in Australia and should contribute to growth in estimated revenues in 1971-72 which both in absolute and relative terms exceeds the growth in domestic outlays with the result that the Budget, domestic surplus is estimated to be larger than in 1970-71. The surplus of revenue over outlays in Australia- the Budget domestic surplus - is estimated to be $630 million compared with $460 million in 1970-71. Thus, the Budget will result in a substantial withdrawal of liquidity from the economy. This should act as a strong restraining factor on expenditure by the private sector. *Budget Estimates in 'Conventional' Terms* The following table summarises in 'conventional' terms the estimates for 1971-72 and actual expenditures and receipts for 1970-71. Notable aspects are:- An increase of $728 million or 9.0 per cent ($987 million or 12.2 per cent on the adjusted basis) in expenditures. On a basis comparable with 1970-71 the estimated rate of increase in expenditures is smaller than in 1970-71. An increase of $792 million or 9.9 per cent in total receipts. On a basis comparable with 1970-71 the increase would be $1,051 million or 13. 1 per cent. The main elements in the estimated change in expenditures in 1971-72 and the change on 1970-71 are as follows: - Some features of the expenditure estimates in conventional Budget terms are: - Proposed increases of $217 million in payments to the National Welfare Fund and $40 million in expenditure on repatriation services arising in part from the occurrence of additional pension pay-days and in part from changes in the numbers of recipients and the full-year effects of increased rates of benefit introduced last year. Thenew and increased benefits announced in the Budget Speech contribute an estimated $73.9 million of this increase. The increase would have been larger but for increased patients' contributions for pharmaceutical benefits which are expected to reduce estimated expenditures in 1971-72 by $15.8 million below what they would otherwise have been. A proposed increase of $117 million or 10.3 per cent on expenditures on defence services. The largest part of the increase - some $66 million - is for service pay and civil salaries. An estimated increase in departmental running expenses of $84 million or 15.4 per cent. About $69 million of this increase is due to greater payments of wages and salaries, arising from increased numbers of employees, from increases in wage and salary rates which became effective in 1970-71, and from an extra public service payday in 1971-72. A proposed increase of $55 million or 17.2 per cent in payments to industry arising in large part from assistance of various kinds to rural industry, particularly the wool industry. Of the estimated increase in expenditures including those above, an amount of about $40 million is attributable to the occurrence of an additional public service pay-day and a further $40 million to additional pay-days for some social service and repatriation pensions Further details of estimated expenditures in 1971-72 are given in Statement No. 4. Before taking account of the proposed revenue measures, total Commonwealth receipts are estimated to increase by $624 million - 7.8 per cent - to $8,654 million. Adjusted to remove the effects of the pay-roll tax transfer, the increase is estimated at $883 million or 11 .0 per cent. This would be a substantial rate of increase but below that in 1970-71 and in 1969-70. The assumed increases in average earnings and employment are estimated to produce another large increase in pay-as-you-earn income tax collections. The growth in income tax collections as a whole, however, will be adversly affected by the lower rate of growth of company incomes in 1970-71, which will be assessed for tax in 1971-72, and by the further decline in the incomes of primary producers in 1970-71. Continued growth in private sector expenditures is expected to result in increased revenue from indirect taxes. The proposed revenue measures announced in the Budget Speech are estimated to produce a net increase in receipts of $169 million in 1971-72- or $210 million if applying for the full financial year. The measures and their estimated revenue effects are shown in the following table:- After taking into account the estimated revenues arising in 1971-72 from these proposed measures, total Commonwealth receipts are estimated to be 58,822 million, an increase of $792 million or 9.9 per cent- $1,051 million or 13.1 per cent on the adjusted basis. {:#subdebate-36-1} #### Summing Up The Budget provides for substantial increases in outlays for social welfare, assistance to industry and defence. Other substantial increases in expenditure reflect the rising cost of sustaining the wide range of activities and services provided by the Commonwealth. These increased outlays will themselves contribute to the growth of demand and activity in the economy, although it is to be noted that the estimated rate of increase in the Commonwealth's domestic outlays is significantly below the actual rate of increase in 1970-71. To guard against the possibility of overall demand and activity in the economy running to excess, measures are proposed to raise substantial additional revenue. The estimated outcome of the Budget is a small deficit, but it is also estimated that the net result of the Commonwealth's outlays and revenues *within* Australia will be a domestic surplus of about $630 million in 1971-72. At the same time, it is expected that there will be a substantial build-up in liquidity in the economy, especially in the first half of the financial year, due in part to the sizeable *temporary* deficit in the Budget which arises largely from the seasonality of the Commonwealth's tax collections. This may facilitate preparation by the private sector for the expected liquidity tightness in the second half of the year. The monetary and financial aspects of the Budget are examined in more detail in Statement No. 3. {: .page-start } page 55 {:#debate-37} ### STATEMENT No. 2- BUDGET ESTIMATES IN NATIONAL ACCOUNTS FORM The presentation of receipts and outlay in national accounts form facilitates the analysis of the relationship between the Budget and the economy as a whole. The following table summarizes in this form the actual outcome in 1970-71 and the prospective outcome for 1971-72. A more detailed table appears on page 13. (*) Comparison of increases in receipts and outlays in 1970-71 and 1971-72 is affected by a number of special factors, the effect of which is discussed in a later section. Before allowance is made for these factors the estimated increase in total outlay in 1971-72 is $711 million, $284 million less than the actual increase of $995 million in 1970-71. In percentage terms the estimates imply an increase of 8.7 per cent this year, compared with an actual increase of 13.8 ner cent in 1970-71. Total receipts are estimated to increase by $775 million or 9.6 per cent in 1971-72 compared with an increase of $926 million or 12.9 per cent in 1970-71. The effects on the economy of particular classes of outlays and receipts, within these totals, differ significantly one from another. The more important distinctions for purposes of assessing the implications of the Commonwealth's transactions for demand and incomes within Australia and for the balance of payments are considered in the following sections and approximate adjustments are made to the estimates in order to indicate these effects more clearly. Other adjustments include those made to take account of the full-year effect of Budget measures, in order to provide an indication of the annual rates of change of the items affected. , (') A Supplement to lbc Treasury Information Bulletin entitled 'National Accounting Estimate) of Public Authority Receipts and Expenditure", being published concurrently with the Budgee, provides corresponding data for Commonwealth authorities outside the Budget and additional information on various aspects of the national accounting presentation employed in this Statement. *Payments in Australia and overseas* On the outlay side of the Budget there is an important distinction between payments made within Australia and payments made overseas. The immediate effects of overseas outlays are on the balance of payments ;(*) such outlays must therefore be deducted from total outlay as a step in the process of assessing the impact of the Budget on the domestic economy in the year immediately ahead. This is done in the following table: The table shows that the much smaller estimated increase in total outlay this year is attributable to the trend in the domestic component. Following a small increase of $1 million in 1970-71, overseas outlays are estimated to increase by a further $68 million in the current year.(2) After deducting overseas outlay the estimated increase in domestic outlay is $643 million compared with an actual increase of $994 million in 1970-71. This represents an estimated increase of 8.4 per cent this year, compared with an actual increase of 14.9 per cent in 1970-71. The increase in Budget outlays within Australia is estimated to be considerably less in 1971-72 than in 1970-71, and is smaller than the concurrent increase in receipts. The implications of the domestic surplus for liquidity conditions are discussed in Statement No. 3. *Composition of domestic outlay* Within the domestic component of outlay there is a further basic distinction to be made between expenditure on goods and services, and transfers and advances from the Budget. Expenditure on goods and services adds *directly* to demand within the economy, while the impact on demand of transfers and advances depends on their effects on the spending of the recipients.(3) (') Such payments do not add to domestic incomes and the demand for locally-produced goods and services. Payments within Australia may add *indirectly* to overseas rather than Australian incomes, because orders met by local suppliers may include an import content. Although it is not possible to make reliable estimates of the import content of Commonwealth expenditure within Australia the proportion would not be large, and it may be assumed that it is unlikely to change markedly between one year and the next. By contrast, direct payments overseas by the Commonwealth may fluctuate widely between one year and another. (*) The main overseas components are shown separately in Table 2 on page 9 of the Supplement to the Treasury Information Bulletin, entitled 'National Accounting Estimates of Public Authority Receipts and Expenditure', being published concurrently wilh the Budget (*) Whether payments from the Commonwealth Budget are themselves a source of demand for domestic resources, or add to demand indirectly by transferring purchasing power to other public authorities or the private sector, the initial impact of Budget outlays on expenditure can be expected to induce further increases which ara financed out of the incomes earned in meeting Ihe initial change in demand. As the *relative* sizes of the total increase in demand in two successive years would depend largely on the relative sizes or the initial increases which supported them, these 'multiplier' effects are not considered explicitly in the discussion which follows. The following table compares, for each main component of domestic outlay, the estimated increase in 1971-72 with the actual increase in 1970-71. The estimated percentage increase in domestic expenditure on goods and services is less than in 1970-71. Moreover, some part of the estimated increase of 12.2 per cent results from the occurrence of an extra public service pay-day during 1971-72 and approximate adjustment to remove the effects of this factor would reduce the rate of increase to 10. 1 per cent.f.1) This. is substantially lower than the increase of 14.3 per cent experienced in 1970-71 and, indeed, could carry some implication that the Commonwealth's domestic expenditure on. goods and services in 1971-72 may expand at a rate somewhat lower than the rate of expansion of the total output of the economy. The actual out-turn in any year can, of course, be influenced by rises in wages and costs unforeseen at the time of the Budget, as was the casein 1970-71. Precise estimates of the effect of the extra pay-day on the rates of increase for the main components of domestic expenditure are not available, but it is probable that, but for it, the rate of increase in expenditure on war and defence would be rather less than the 10. 5 per cent increase in 1970-71. The estimated increase for other current expenditure would be reduced, perhaps to the vicinity of 13 per cent - substantially below the 1970-71 increase of 16.9 per cent. Estimated capital expenditure probably would not be very much changed by this adjustment; the very small increase of 2.8 per cent in this category shows a sharp drop compared with the preceding year when the increase was 19.9 per cent. The percentage increase in domestic transfer payments and net advances expected in 1971-72 is less than half the percentage increase which occurred in 1970-71. However, the comparison is affected by certain special factors, particulars of which are given below. Adjustment of the figures to eliminate the effect of these factors results in an estimated increase of 10. 5 per cent in 1971-72 compared with a rate of increase of IS. 6 per cent in 1970-71. (2) As noted above, the impact of transfer payments and net advances on demand and incomes depends on their effects on the spending of the recipients. Grants and advances to the States are estimated to rise by only 4.3 per cent in 1971-72 compared with 19.2 per cent in 1970-71. In this case, the comparison is affected by the (') table showing how this adjustment is derived appears on page 10 of the Supplement to the Treasury Information Bulletin being published concurrently with (he Budget. Cash benefits to persons are estimated to increase by 13 . 0 per cent in 1971-72 compared with 10.8 per cent in 1970-71. For the purpose of judging the influence of such payments on rates of income or expenditure within a year, these increases should also be adjusted - first, to remove the effects of variations in the incidence of pay-days, and secondly, to allow for the 'full-year' effects of changes in the rates of benefit.(1) The adjusted rate of increase in outlay on cash benefits in 1970-71 is 11 . 0 per cent- before- account is taken of the fullyear effect of the measures introduced in March 1971, and 12.3 per cent after adjusting for the full-year effect of those measures.(2) The latter percentage indicates the increase in the annual rate of outlay which had been attained in the later part of 1970-71. The adjusted annual rate of increase in outlay on cash benefits resulting from the 1971-72 Budget is 9.3 per cent, or rather lower than the rate of expansion attained in 1970-71. Cash benefit payments would largely be spent by the recipients on goods and services. Although the advance to the Post Office is estimated to increase by a smaller amount in the current year than in 1970-71, the prospective increase in internal resources associated with the increased charges for postal and telephone services will make possible an increase in its capital expenditure on goods and services higher than in the year before.(3) It is not uncommon for the net increase in other transfer payments and net advances to vary considerably from year to year, and the estimated increase of $52 million in this category in 1971-72 follows an exceptionally large increase of $123 million in 1970-71. The 1970-71 figure included substantial payments in respect of a number of items for which there had been no corresponding expenditure in 1969-70 (e.g. the initial advances to the Australian Wool Commission and the Australian Industry Development Corporation); these items show reductions in 1971-72. The net increase in 1971-72 is due largely to the estimated $60 million deficiency payment for wool, which is partly offset by the net movements in other items. There is no ready way of assessing the extent to which the increase in other transfer payments and net advances is likely to influence spending on goods and services by the recipients. When these various adjustments are made to total domestic outlay, an estimated increase of 10.4 per cent is shown in 1971-72 compared with the adjusted rate of increase of 15.2 per cent reached in J 970-71 . (4) The reduced rate of expansion of all major categories of domestic outlay in 1 971 -72 is the most striking feature to emerge from the comparison of the adjusted estimates of the rates of increase in the two years,It has to be borne in mind, of course, that the extent to which increases in some of the categories of outlay would be reflected in increased expenditure on goods and services is somewhat uncertain. Nevertheless, it is clear that the expected increase in domestic outlay in the 1971-72 Budget would add directly and indirectly to demand for goods and services at a significantly lower rate than did the increase in domestic outlay experienced in the preceding year, in other words the outlay side of this Budget is considerably less expansionary than was the case, in the event, last year. It is true that 1970-71 was a year in which Commonwealth domestic outlay, as it turned out, expanded at a rate substantially above the rate of growth of total output of goods and services in the economy. It was, moreover, a year which saw a substantially higher rate of increase in the general price level than we have been accustomed to in this country. To Bulletin being published concurrently with the Budget. {:#subdebate-37-0} #### Composition of Receipts As on the expenditure side of the Budget, there are differences in the significance which different classes of receipts may have for prospective trends in the economy. The distinction drawn on the outlay side between transactions within Australia and transactions overseas does not have the same practical importance here. With relatively few exceptions the budget receipts are derived from within Australia. Another distinction is between movements in receipts which are expected to emerge as by-products of evolving trends in incomes and spending in the economy and those which are consequential on changes in rates of taxation or other charges. Any estimated rise in receipts of the former class will reflect expected increases in incomes and spending and cannot therefore be regarded as an independent factor capable of varying those expected increases^1) Both classes of movements in receipts will, of course, be reflected in the expected overall Budget outcome. However, it is the second class which reflects specific Budget measures relating to receipts, and which can be regarded as arising independently of evolving trends' in the economy .(2) It is not, in practice, easy to classify all increases in receipts in this way. For the most part, movements which would be expected in gross collections of P.A.Y.E. instalment deductions, indirect taxes and the income of public enterprises, at existing rates and charges, fall within the former class. But the position as regards movements in taxation collections at existing rates from individuals subject to provisional tax and from companies can be somewhat blurred; it depends on past trends in income and on the spending and saving habits of various classes of taxpayers. As mentioned above, the second class of movements in receipts is most clearly -exemplified by new revenue measures which involve changes in rates of taxation or in other charges. In 1971-72 there is a large increase in estimated receipts which is expected to be induced by the prospective growth in expenditure and incomes in the economy. However, the main factor on the receipts side which is relevant to this analysis is the changes in taxation rates for which provision has been made this year. The changes in personal income tax rates are expected to add a net $81 million in a full year. The consequent reduction of disposable incomes can be expected to exercise a moderating effect on the expansion of personal expenditure. However, there are expected to be lags between the reduction of disposable incomes and the changes in spending it induces; thus in the short-term some of the additional tax could operate to reduce the rate of saving and, possibly, part of this reduction in saving would continue in the longerterm. There will also be lags before the disposable income of persons subject to provisional tax reflects the effects of the new tax provisions. Nevertheless a significant part of the increase in income tax can be expected to operate to restrain the expansion of personal expenditure in the year ahead. (') This is not lo say that such a rise in receipts would be of no importance. For instance, when incomes are rising, an increase in receipts arising out of the operation of existing taxation provisions would transfer resources from the private to the public sector, thus exerting a moderating (but not completely offsetting) influence on trends in the economy by retarding the growth of private expenditure. However, expectations regarding trends n incomes and spending which (<n-thc absence of policy action to alter trends) would evolve in the coming year should already take account of the expected moderating influence of automatic increases in receipts. (*) lt might be noted that revenue estimates may sometimes reflect prospective trends in some particular areas of activity which are not the most desirable from the point of view of economic balance and reasonable price stability but which cannot, in practice, be corrected fully or quickly enough by fiscal or monetary means. An example relevant to the revenue estimates for 1971-72 is the very large increase which has been assumed in average earnings. Should average earnings rise less than assumed, taxation revenue would be less than estimated and a larger budget deficit would emerge (although the extent of the increase in the deficit would not reflect the full extent of the shortfall in receipts, because some components of expenditure - for example, financial assistance grants to the States - could also be lower than estimated if average earnings rose more slowly than assumed). It would not follow, however, that the Budget objective of maintaining an environment conducive to balanced economic growth would be adversely affected by such a development; on the contrary, such. a result would be more likely to serve the broad economic purposes to which budget policy is directed. A somewhat similar observation can be made about any movement in receipts which emerges as a consequence of developments in the economy which were not foreseen at the time the Budget was framed. For example, if an increase in receipts were to result, say, from an unforeseen rise in wages, then, especially with a progressive tax-rate structure, the increase in receipts could be expected to exert a stabilising effect in that increases in disposable income would be' that much less. But it Would be misleading to say that, because of that increase in receipts, the Budget had exercised a more restraining influence than originally envisaged.' The changes in excise and customs duty, which are estimated to add $87 million to revenues in a full year, can be expected to have a near commensurate effect on purchasing power, in consequence of their direct influence on the prices of the particular commodities affected. In the past it has normally been expected that changes in indirect taxes of these sorts would be quick to influence the trend in demand. However, in view of apparent timelags between changes in incomes and consequent changes in spending which have been observed in recent times, the analysis of the effect of these tax changes on demand becomes somewhat more difficult. But it would still seem reasonably certain that most of the increase in revenue from this source would operate to restrain the expansion of demand during the coming year. Increases in broadcasting and television licence fees are expected to yield about $15 million in a full year. The timing of these additional charges will, of course, vary according to the time at which individual licences are taken out but generally their effect on demand can be expected to be similar to the effect of increases in excise and customs duty. The changes in company tax, estimated to yield $26 million in a full year will, other, things being equal, reduce the funds available to companies for investment and distribution to shareholders; however, the actual effects on spending and in particular the timing of those effects depend on a variety of circumstances including the ability of companies to compete for alternative sources of funds or to 'pass on' the increased tax rates in the form of higher prices. Eventually, the increased revenue collected by the Commonwealth as a result of the increased tax rates will be at the expense of alternative uses of the funds concerned but the chain of causation is complex. In summary, the changes in taxation rates and licence fees will lead to an increase in revenue at an annual rate of $209 million. The influence of the increased revenue on the trend in demand can be expected to be somewhat indirect, and the operation of some of the effects may be relatively slow. But even when allowance is made for these factors, it can be expected that in the aggregate the tax changes will exercise a considerable restraining influence on the expansion ofdemand during the year ahead. *Review* The implications of Budget transactions, in terms of their initial impact on trends in expenditure and income in the economy, depend not on *total* outlays and receipts, but primarily on the change in domestic outlays, and on that part of the change in receipts which is not an automatic result of evolving trends in the economy. From this standpoint, the following aspects are therefore relevant to a consideration of the 1971-72 Budget: {: type="a" start="a"} 0. Domestic outlays, when adjusted to take account of certain special factors, (including the full-year effect of the cash benefit measures introduced in March 1971) are estimated to increase by 10.4 per cent in 1971-72, compared with 15.2 per cent in 1970-71. After the adjustments lower rates of increase are expected in all major categories of outlay. 1. Although the precise extent to which increases in some categories of domestic outlay would be reflected in additional demand for goods and services is uncertain, it is clear that the outlay side of the 1971-72 Budget is considerably less expansionary than was Commonwealth domestic outlay, in the event, in 1970-71. 2. The restraint in growth of Commonwealth domestic outlays would leave room for considerable further growth in the demand arising from other sources. *id)* The new revenue measures will have a restraining influence on the growth of demand in the private sector. It is, of course, important to remember that this analysis has been restricted to assessing the. effects of *Budget outlays and receipts.* Although these will have an important influence on trends in the economy in the year ahead, the likely economic effects of a Budget can only be fully assessed in the context of all the more important influences operating at the time in the economy as a whole. {: .page-start } page 62 {:#debate-38} ### STATEMENT No. 3 - THE BUDGET AND MONETARY CONDITIONS {:#subdebate-38-0} #### General The economic impact of the Budget is not restricted to its direct influence on expenditure and income which was discussed in Statement No. 2. The Budget can also have significant effects on economic activity through its influence on monetary conditions. The monetary effects of the Budget can usefully be divided into two broad components. First, there is the direct impact of budget receipts and outlays on liquidity and the money supply. This can be measured by the budget domestic surplus or deficit - that is, the excess or shortfall of receipts in Australia over outlays in Australia. A domestic surplus, other things being equal, involves a withdrawal from the volume of money of an equivalent amount ; a domestic deficit adds an equivalent amount to the volume of money. The Budget's monetary impact, however, is not restricted to the size of the domestic surplus or deficit but, secondly, depends importantly on the monetary effects deriving from the Commonwealth's domestic financing transactions. The Commonwealth's financing transactions - together with Reserve Bank open market operations - have a major impact on the volume and composition of financial assets in the economy and may have a significant influence on the cost and availability of funds through direct and indirect effects on interest rates and the value of financial assets. Measurement of the monetary effects of financing transactions must take into account not only the movements in total holdings of Commonwealth securities which may occur over a period but also the types and maturities of those securities and the classes of institutions or persons holding them. In particular, it is important to distinguish between changes in holdings of government securities by the banking system and by the non-bank private sector. An increase in the holdings of Commonwealth securities by the latter group operates to reduce the volume of money while a reduction in these holdings has the opposite effect. An increase in the holdings of the banking system does not in the same way directly affect the volume of money nor the total - as distinct from the components - of the L.G.S. assets which constitute the general banking system's liquidity base. Changes in holdings of government securities by particular groups are not, of course, solely the result of the Budget. These changes may be affected by the market operations in government securities of the Reserve Bank and by all of the other factors affecting monetary and liquidity conditions generally. The stance of monetary policy, especially in regard to official interest rates and controls on the banking system, will have a particularly important influence on monetary and financial conditions. Other important factors influencing such conditions include changes in Australia's gold and foreign exchange holdings resulting from the private sector's international trading and borrowing; Reserve Bank transactions with the private sector such as Rural Credits Department advances; and the activities of financial intermediaries, particularly the lending activities of the general banking system. All these various influences are significantly interrelated and the effects of the Commonwealth's transactions on monetary conditions cannot be considered in isolation.(1) {: type="1" start="1"} 0. A detailed analysis or the monetary effects of the Budget is contained in the " Supplement to the Treasury Information Bulle tin ' National Accounting Estimates *of* Public Authority Receipts and Expenditure ' August 1967 ". {: .page-start } page 63 {:#debate-39} ### THE FINANCIAL YEAR 1970-71 The analysis or the influence of the Commonwealth's transactions and other factors on monetary conditions can most conveniently be framed in terms of a money " formation table". The following table provides such an analysis for 1970-71 and the two preceding years. As the table shows, the Commonwealth Budget domestic surplus withdrew about $460 million from the volume of money for the year 1970-71 as a whole. While this was less than originally provided for and smaller than in 1969-70, it was nevertheless substantially greater than in other recent years. There was also in the last financial year a relatively large increase of about $277 million in the holdings of Commonwealth securities by the non-bank private sector which added to the contractionary monetary effects of the Commonwealth's transactions. Thus, the Budget and the Commonwealth's financing transactions - combined with the continued generally restrictive stance of monetary policy - were significant factors contributing to the relatively tight financial conditions which prevailed for most of 1970-71. Financial conditions, however, would have been substantially tighter but for the strongly expansionary monetary effects of the very substantial private sector balance of payments surplus The net result of the various factors influencing monetary aggregates in 1970-71 was that the volume of money increased by about 6.8 per cent compared with 6.2 per cent in the preceding year. As indicated below these were both modest increases by comparison with earlier years. While the foregoing summarises the full-year monetary effects of the Commonwealth's budgetary and financing transactions, the seasonality in such transactions means that these effects can vary markedly during the year. During the first half of 1970-71 the Budget domestic deficit- about $900 millioncombined with the balance of payments surplus of the private sector added substantially to liquidity. The relatively strong demand for government securities - notably short-term debt - by the non-bank private sector was, however, an important restraining influence on monetary conditions and particularly on the growth in bank liquidity. The tight liquidity positions of trading banks were a major restraint on their lending activity in this period. Between June and December 1970 the volume of money increased by 5.8 per cent compared with 6.9 per cent in the corresponding period of the previous year. In the second half of 1970-71, when the strong seasonal contractionary forces were operating, the volume of money increased by 1 .0 per cent compared with a fall of 0.7 per cent in 1969-70. Although during the second half of the year the Budget domestic surplus withdrew about $1,350 million from the money supply, at the same time a strong inflow of private overseas capital operated to ease monetary conditions. In addition, the private sector- probably influenced by the severe financial stringency of the June quarter of 1970- had sought to make adequate preparation for the seasonal contraction, and during the liquidity upswing in the first half of the year had invested substantially in short-term financial assets, particularly government securities, which would mature in the period of seasonal financial tightening. In the event, there was a stronger demand by the non-bank private sector for longer-term Commonwealth debt in the closing months of the financial year. The somewhat easier than expected monetary conditions and an apparent increased confidence in Commonwealth security yields may have been significant factors explaining this demand. Details of changes in holdings of Commonwealth debt in 1970-71 and in the two preceding years are shown in the following table. {: .page-start } page 65 {:#debate-40} ### PROSPECTS FOR 1971-72 There are many uncertainties in the way of predicting the course of monetary conditions over the year ahead. It is clear, however, that the Commonwealth's budgetary and financing transactions will have a very important influence on those conditions. It is estimated that the Budget domestic surplus for 1971-72 as a whole will be of the order of $630 million. This is about $170 million greater than in 1970-71 and will have a significant moderating effect on the growth of liquidity and the volume of money over the year. The monetary impact of the Budget within the year will again be influenced by the seasonality in budgetary transactions. The temporary domestic deficit in the first half of the year is likely to provide a substantial addition to liquidity. This applies particularly in the early months of the financial year as a result of a high level of P.A.Y.E. refunds associated with the income tax adjustments in last year's Budget and various timing factors. The expansionary effects of this temporary deficit will depend significantly on how this deficit is financed and particularly the extent to which the non-bank private sector increases its holdings of Commonwealth securities. It might be expected that the demand for Commonwealth securities could be relatively strong. In the second half of the year - with the collection of company income taxation and provisional income taxation on individuals - the large Budget domestic surplus will withdraw a substantial volume of funds from the private sector. Monetary conditions during 1971-72, however, will certainly not depend solely on the Commonwealth's transactions. The factors influencing the development of monetary conditions in 1970-71 are also likely to play an important role in the current financial year. International private capital flows could again be a significant element. Changes in the rate of such flows, both in the seasonal liquidity upswing and the subsequent downswing may accentuate or offset monetary movements emanating from the Commonwealth's transactions or from other factors. The general stance of monetary policy will also, of course, have an important influence on financial conditions. 16262/71- .31 {:#subdebate-40-0} #### Financing Transactions The following table summarises the budget financing transactions in 1970-71. Explanatory comments on these transactions are given in Statement No. 6. It is estimated that Commonwealth expenditures will slightly exceed Commonwealth receipts in 1971-72. In regard to financing transactions prospects for 1971-72, drawings under the credit arrangements for the purchase of defence equipment in the United States of America are estimated to be $63 million while repayments are estimated to be $67 million. Drawings on overseas loans to finance advances to Qantas Airways Limited and the Australian National . Airlines Commission are estimated at $97 million, while repayments of previous loans for the airlines will be approximately $34 million. In the present state of international capital markets, it is not possible to make a reliable estimate of new borrowings overseas for purposes other than defence and aircraft financing. Maturities falling due and other payments to reduce indebtedness, overseas are likely to amount to about $113 million in 1971-72 compared with $87 million in 1970-71. Net loan proceeds and the change in the Treasury Note issue in Australia cannot be estimated in advance with any degree of assurance. The value of securities due to mature during 1971-72 held in non-official hands at 30 June 1971 is estimated at $722 million (including Special Bonds $53 million), compared with $844 million (including Special Bonds $69 million) of securities in non-official hands which matured in 1970-71, but it is difficult to estimate the extent to which these securities will be redeemed rather than converted. It is also not possible to predict accurately what changes will occur in holdings of Commonwealth securities by the public, on the one hand, and by the banking system, on the other. These, as discussed earlier, will reflect monetary and other developments during the course of the year. *Loan Bill.* Because of the difficulty of estimating expenditures and receipts and the net amounts available from loan-raising operations in Australia and overseas there remains, in each year, the possibility that some borrowing from the Reserve Bank may be necessary to complete the Commonwealth's financing transactions. Accordingly, if necessary, authority will be sought in a Loan Bill to borrow for defence purposes such amounts as are required to complete the Commonwealth's financing transactions. {: .page-start } page 67 {:#debate-41} ### STATEMENT No. 4- ESTIMATES OF EXPENDITURES, 1971-72 In 1971-72, it b estimated that Commonwealth expenditures will increase by $727,735,000, or 9.0 per cent, to $8,833,268,000. Year-to-year comparisons have been affected by accounting changes and other factors, including the occurrence in 1971-72 of an extra public service and pensions pay day. The effect of the extra pay day is to increase estimated expenditures by about $80,000,000. By far the largest effect, however, results from the new pay-roll tax and financial assistance grants arrangements with the States *(see* Statement No. 7, Notes on. Tables). After adjustment to remove the effect of the pay-roll tax arrangements, it is estimated that expenditures in 1971-72 would increase by $986,735,000 or 12.2 per cent, compared with the increase of $984,088,000 or 13.8 per cent in 1970-71. The estimates for 1971-72 are compared in summary form with actual expenditures in 1969-70 and 1970-71 in the following table. Tables setting out the composition of the various items of expenditure and notes on the main variations follow. Total expenditure on Defence Services is expected to increase in 1971-72 by $117,400,000 or 10. J per cent. This includes an increase of $66,491,000 for pay and salaries. Of this, $29,700,000 is the estimated cost of adoption of the Kerr Committee recommendations for new pay rates for other rank members of the Forces. The remainder of $36,791,000 reflects the additional pay day this year, the cost of awards and determinations made in 1970-71, and expected changes in the strengths of the Forces and of civilian staffs of departments in the Defence Group. Other increases in estimated expenditure include $8,254,000 for Naval construction, $10,084,000 for increased stores for the R.A.N. and R.A.A.F., $21,043,000 for arms, armament and equipment for the Army and $6,009,000 for accommodation and technical facilities. Expenditure on Forces Overseas (Other than Pay) by the Army and the R.A.A.F. is expected to show a net decrease of $11,036,000. *Defence* Salaries are estimated to increase by $1,877,000, mainly as a result of an additional pay day in I v 71-72 and the full year effect of Public Service salary increases awarded in 1970-71. The estimate for Defence Aid is $7,760,000 compared with expenditure of $7,200,000 in 1970-71. The increase of $560,000 is attributable to increases of $1,293,000 and $180,000, respectively, in defence aid to South Vietnam and Malaysia, offset by a decrease of $913,000 in defence aid to Singapore. {:#subdebate-41-0} #### Navy Expenditure on pay and salaries is estimated to increase by $12,221,000, the nunn contributing factors being the proposed pay increases recommended by the Kerr Committee, the additional pay day and the full year effect of arbitration and other determinations made in 1970-71. Expenditure on Naval construction is expected to increase by $8,254,000 and an increased programme for the repair and maintenance of ships and aircraft is estimated to cost an additional $3,943,000. Expenditure on general stores is expected to rise by $7,215,000. This reflects mainly increased costs of more sophisticated equipment and prospective deliveries arising from previously approved programmes. However, there is an estimated reduction of $1,180,000 in the cost of aircraft purchases, which in 1970-71 included a large non-recurring payment on Skyhawk aircraft. {:#subdebate-41-1} #### Army Expenditure on pay and salaries is estimated to increase by (529,050,000 mainly as a result of increases flowing from the Kerr Committee recommendations, the extra pay day, and arbitration and other pay determinations in 1970-71. The increase of $21,043,000 to $109,553,000 for the purchase of arms, armament and equipment reflects expected deliveries flowing *from* programmes approved in earlier years. An increase of $3,325,000 is expected in the provision of accommodation and technical facilities. Provision has been made for $5,363,000 of the expected expenditure in 1971-72 to be paid to a Trust Account to finance Australia's share of common-user logistic support for the ANZUK force in Singapore. Expenditure on the maintenance of forces overseas (other than pay) shows an estimated decrease of $622,000. {:#subdebate-41-2} #### Air Estimated increases in expenditure include $17,921,000 for pay and salaries, $2,869,000 for expenditure on equipment and stores, $1,039,000 for repairs and maintenance to aircraft and other equipment and $2,211,000 for accommodation and technical facilities. The expected increase in pay and salaries reflects similar factors as apply to the other Services. Expenditure on equipment and stores is expected to increase because of a proposed increase in authorisations in 1971-72 on approved equipment programmes and increased payments on some specialised armament and communication equipment. The expected decrease of 810,4)4,000 in expenditure on the maintenance of forces overseas results largely from the withdrawal of the Canberra squadron and part of the Caribou squadron from South Vietnam in June 1971. *Supply* Increased expenditure in 1971 72 by the Department of Supply on civil salaries is estimated at $5,422,000. This reflects the extra pay day in 1971-72 and the full year effect of pay increases awarded in 1970-71. Maintenance of production capacity in, and working capital advances for, Government factories are expected to increase by a net $1,389,000. Estimated expenditure on production development and assistance is expected to be $1,227,000 greater. Provision of $1,086;000 has been made for Project N, the fixed-wing light aircraft project, and $1,653,000 for (he light helicopter project. The estimated increase of $722,000 in furniture removals, vehicles and storage is mainly attributable to increased purchases of motor vehicles that are proposed to replace vehicles which have reached the end of their economic life. These increases arc partly offset by estimated decreases of $2,020,000 in expenditure on accommodation and technical facilities and $843,000 on stockpiling of production reserve stocks. {:#subdebate-41-3} #### General Services The estimated increase of $3,660,000 in the Government's contribution to the Defence Forces Retirement Benefits Fund reflects in the main the increased benefits announced in the Budget. Interest payments on loans raised in the United States of America to finance the purchase of defence equipment are estimated to increase by $1,729,000 in 1971-72. {:#subdebate-41-4} #### Defence Expenditure Overseas Defence expenditure overseas is estimated to be $205,000,000 in 1971-72 or $7,000,000 more than in 1970-71. During 1970-71 payments overseas continued on current aircraft projects such as Tracker and Skyhawk for the R.A.N, and the Flll-C, Mirage and Macchi for the R.A.A.F., on other capital items including the Oberon class submarines, and on maintenance of forces overseas. The foregoing figures do not include defence expenditure in Papua New Guinea or defence aid for Malaysia, Singapore and South Vietnam. Defence expenditure overseas includes the following payments for material and equipment financed under credit arrangements with the United States of America authorised by the Loan (Defence) Acts 1966, 1968 and 1970. Repayments of principal under these loans amounting >n $5767,488 in 1970-71 and are estimated to amount to $66,800,000 in 1971-72. This item includes payments in the nature of financial assistance to or for the States, except payments to the States for the maintenance of tuberculosis hospitals and payments under the States Grants (Deserted Wives) Act 1968, both of which are charged to the National Welfare Fund, contributions towards the cost of development of an integrated township at Exmouth, which are charged to Defence Services, and expenditure on Aboriginal Advancement, which is included under Item Number 10 - Other Expenditures. It also includes interest-free capital grants to the States to finance part of their non-revenue producing works, and advances to the States for works and housing under the Loan Council borrowing programmes. Further details of tile various payments are given in the White Paper 'Commonwealth Payments to or for the States, 1971-72'. In 1971-72 Commonwealth payments to or for the States and works and housing programmes are estimated to total $2,930,83 3 ,000- an increase of $87,5 1 ! ,000 or 3 . 1 per cent. This relatively small increase reflects the reduction being made in the States' financial assistance grants to offset the loss of revenue to the Commonwealth from the transfer of pay-roll tax to the States. {:#subdebate-41-5} #### General Revenue Payments At the Premiers' Conference on 16 June 1971 it was agreed to transfer pay-roll tax from the Commonwealth to the States on the basis that the States' financial assistance grants will be reduced to help offset the resultant loss to Commonwealth revenue. The reduction in the States' financial assistance grants will not completely offset the loss to Commonwealth revenue (for further details see Chapter 1 1 of 'Commonwealth Payments to or for the States 1 97 1 -72'). However, the net effect is that the financial assistance grants are estimated to be $6,018,000 lower than in 1970-71 whereas, in the absence of the agreement to transfer pay-roll tax, they would be estimated to increase by $223,943,000, or by 15.8 per cent, in 1971-72. The States will, of course, receive the revenue from pay-roll tax as from the date of transfer. For the purpose of arriving at these estimates it has been assumed that the States will pass enabling legislation with effect from 1 September 1971. In addition to not completely offsetting the loss to Commonwealth revenue from the transfer of pay-roll tax, the Commonwealth has agreed to provide special revenue assistance in 1971-72 by way of a nonrecurring grant of $40,000,000. The special grants paid on the recommendation of the Grants Commission in 1971-72 will be $3,880,000 less than in 1970-71. *Specific Purpose Payments of a Revenue Nature* Specific purpose payments of a revenue nature are estimated to be $23,799,000 greater than in 1970-71. Payments to assist the States to meet debt charges are estimated to be $1 2,643,000 greater, including a further amount of $11,504,000 granted to the States under the financial arrangements agreed with the Premiers in June 1970 to meet debt charges on $200,000,000 of State debt in 1970-71 and on an additional $200,000,000 in each of the next four years. Payments to the States for education purposes are estimated to increase by $12,648,000, of which $8,986,000 relates to the increased recurrent expenses of universities, including exceptional increases in non-academic salaries and wages. As announced in the Budget Speech, the Commonwealth is to commence this year a scheme of grants to the States for housing purposes. Estimated expenditure in 1971-72 is $4,000,000. Further details of the scheme and of the various payments are given in the White Paper Commonwealth Payments to or for the States, 1971-72'. At this stage, natural disaster relief payments are estimated to be $8,002,000 less than in 1970-71. Payments included in the 1971-72 figures relate to known commitments. Future commitments of this type cannot, of course, be foreseen. *Specific Purpose Payments of a Capital Nature* Specific purpose payments of a capital nature are estimated to increase by $39,609,000. This includes estimated increases of $27,250,000 in Commonwealth aid roads grants and $1 1,124,000 in payments to the States for education. Payments to the States for the development and control of water resources are estimated to show a net decrease of $1,059,000; increased expenditure on irrigation projects is offset by smaller requirements for the construction of the Copeton and King River Dams. Payments for railway construction projects are estimated to be $1,543,000 more, largely as a result of the provision of $4,250,000 for the construction of the Bell Bay railway in Tasmania. Other large increases include $2,300,000 for the Gladstone (Queensland) Power Station; $1,519,000 in payments to assist in the construction of dwellings for aged pensioners; and $1,465,000 for beef cattle roads. Natural disaster relief payments are estimated to be $5,577,000 less than in 1970-71. {:#subdebate-41-6} #### Works and Housing Programmes At its meeting in June 1971 the Australian Loan Council approved a government borrowing programme for 1971-72, of which $860,000,000 was for the financing of State works and housing. This includes $209,800,000 which the Commonwealth is providing as an interest-free capital grant to help the States finance works from which debt charges are not normally recovered. As a result of the change in the form of Commonwealth assistance to the States for housing from 1971-72, the amounts allocated by the States for housing are no longer being specifically identified. The Loan Council approved borrowing programmes *ot* $426,733,000 for State semi-government and local authorities with programmes in excess of S300.000 in 1971-72, and $1,270,000 for Commonwealth authorities. The Loan Council also decided that no overall limit should be placed on borrowings by authorities for which the State Governments approve individual programmes of not more than $300,000 in 1971-72. The National Welfare Fund Act requires that the payment from Consolidated Revenue to the National Welfare Fund each year be equal to actual expenditure from the Fund in that year, tn 1970-71 expenditure from the Fund was SI ,477,238,000 and, after taking account of the net costs of the proposals announced in the Budget Speech, it is estimated to total $1,694,253,000 in 1971-72, an increase of $217,015,000. Of this increase, the additional full-year cost in 1971-72 of measures announced in the 1970-71 Budget or during 1970-71 is estimated to account for $37,000,000. The occurrence of an additional age and invalid pension and public service pay-day in 1971-72 is estimated to add $27,400,000 to expenditure. The measures announced in the 1971-72 Budget Speech are estimated to add a net $49,700,000 to expenditure in 1971-72 and $68,020,000 in a full year. Details of the estimated costs or and savings from the particular proposals are as shown on the following page: Expenditures on Repatriation Services are estimated to increase by $40,245,000 in 1971-72 to $355,410,000. An additional twelve-weekly payment of war pensions and benefits in 1971-72 is estimated to add $12,500,000 to expenditures. The additional full-year cost in 1971-72 of increased benefits announced in the 1970-71 Budget and in March 1971 is estimated to be $4,600,000. Higher local medical officer fees, pharmaceutical costs, State hospital charges and salaries for staff in repatriation institutions together with the occurrence of an additional public-service pay-day in 1971-72 account for $9,800,000 of the estimated increase. The proposals announced in the Budget Speech are estimated to cost 38,385,000 in 1971-72 and $11,230,000 in a fullyear. Details of the estimated costs of the particular proposals are as follows: *Interest - Commonwealth Inscribed Stock Act, etc.* Interest payments under the Commonwealth Inscribed Stock Act, etc., are estimated to decline by $3,028,000 mainly as a result of reductions of Commonwealth debt outstanding by the National Debt Sinking.Fund and the Loan Consolidation and Investment Reserve. These reductions are partly offset by increases in debt charges arising from the difference between the rates of interest at which the Commonwealth borrowed in Australia and overseas in 1970-71 and. the lower rates charged, by the Commonwealth, on. advances made to the States under the Commonwealth-States. Housing Agreements in that year. *Sinking Fundi* The *National Debt Sinking FundAct* 1966-1967 provides for contributions each year from the Consolidated Revenue Fund to the National Debt Sinking Fund equalto 4 per cent of the net debt of the Commonwealth liable to these contributions at 30 June of the previous year. The amount payable is reduced by income earned from investments after allowing for any profit or loss on the sale of securities. Net Commonwealth debt on which the 4 per cent contribution is calculated declined by $120,500,000 during 1970-71, due mainly to cancellations of $206,600,000 by the Loan Consolidation and Investment Reserve which were partly offset by a net increase in Treasury Notes of $83,200,000. The gross percentage contribution from Consolidated Revenue is estimated therefore to decrease by $4,819,000 in 1971-72. After allowing for an estimated reduction in investment income of $1,791,000, the net decrease in the contribution from Consolidated Revenue is estimated to be $3,028,000. Of the estimated increase of $68,605,000 in expenditure on wages and salaries in 1971-72, the occurrence of one more Public Service pay day accounts for about $16,000,000. The remainder is attributable mainly to the full year effects of higher wage and salary rates arising from arbitration and other determinations during 1970-71, and the increase in staff numbers. The estimated increase in expenditure in the Australian Capital Territory includes $2,907,000 for greater expenditure by the Department of the Interior on police, administration and municipal activities and $1,353,000 for the Department of Education and Science. Of the latter increase, $610,000 is for payment to the New South Wales Department of Education for teachers at government schools in the Australian Capital Territory, and $486,000 for increased running costs of government schools and increased interest payments arising from the growing independent school construction programme. The estimated increase of $8,579,000 in expenditure in the Northern Territory results from the continuing expansion of community, welfare and municipal services. Expenditure by the Department of the Interior is estimated to increase by $3,707,000, including increases of $2,314,000 for salaries and administrative expenses, $341,000 for general services undertaken by the Northern Territory Administration, and $1,001,000 for Aboriginal advancement. Expenditure on Health services is estimated to be $2,184,000 greater and expenditure undertaken by the Department of Works $2,146,000 greater. The figures in this table summarise clearly identifiable items in the Budget which are in the nature of economic aid to developing countries. A number of Commonwealth Departments and instrumentalities operate in Papua New Guinea and incur direct expenditures of an economic nature in the Territory which are also regarded as aid for purposes of international comparison. Such expenditures are included under other heads in the Budget. Details of total expenditure on external aid, including estimates of expenditure on certain items not Included in the table above, are set out in Statement No. 8. The figures in this table summarise bounties, subsidies and certain other Commonwealth payments to industry. Details of these, together with information on other Commonwealth expenditures made to assist industry and assistance to industry through the taxation system, are set out in Statement No. 9. Other Expenditures comprise expenditures and estimated expenditures under annual and special appropriations from the Consolidated Revenue Fund and the Loan Fund which are not included under other items. Total expenditure under this heading is estimated to increase by $41,236,000. Larger variations are: - {:#subdebate-41-7} #### Education and Science *Australian National University.* The estimated increase of $3,583,000 in payments to the Australian National University in 1971-72 reflects the second full-year costs of the 1970-72 triennial programme. *Commonweatlh Scholarship Schemes.* The estimated increase of $5,283,000 includes $3,281,000 for university scholarships, $864,000 for advanced education scholarships, and $773,000 for post-graduate awards. The estimated increase in expenditure on university scholarships takes into account the first fullyear effect of a greater number of open entrance scholarships and increased rates of allowances, both of which became effective from the beginning of 1971. The estimated increase in expenditure on advanced education scholarships, as well as taking account of the first full-year cost of increased allowances, also reflects the announcement in the Budget Speech that the number of scholarships will be raised from 2,500 to 4,000 from the beginning of 1972. The growth in the cost of post-graduate awards reflects the first full-year effect of an increase in the number of existing awards, the introduction of a new category of 'course awards' and increased stipends, all of which became effective as from the beginning of 1971. Provision has also been made for a number of teacher training scholarships to be awarded from the beginning of 1972, intended primarily to provide a source of teachers for community schools in the Northern Territory. *Commonwealth Scientific and Industrial Research Organization.* Of the total estimated increase of $5,759,000 in 1971-72, $4,618,000 is the result of increases in salaries arising from recent awards and determinations and the provision for an additional pay day in 1971-72. An additional $471,000 is required for the redeployment of staff previously supported from wool and dairy industry research funds. The remaining $670,000 reflects increases in administrative costs and grants to research associations. *Environment, Aborigines and the Arts* *Aboriginal Advancement.* An amount of $10,400,000 was paid to the Aboriginal Advancement Trust Account in 1970-71, which, with the unexpended balance in the Trust Account, meant that some $1 1,330,000 was available for expenditure on Aboriginal Advancement. Actual expenditure in 1970-71 totalled $11,210,000 of which grants to the States totalled $7,000,000. It is estimated that $14,230,000 will be paid Into the Aboriginal Advancement Trust Account in 1971-72, so that, with the balance in the Fund at 1 July 1971, $14,350,000 will be available for expenditure in 1971-72. Of the $3,140,000 increase in estimated expenditures from the Trust Account, payments to the States will increase by $2,200,000 and payments under the Study and Secondary Grants Schemes by $1,318,000. {:#subdebate-41-8} #### Foreign Affairs *International Organisations - Contributions.* Contributions to international organisations are estimated to increase by $1,018,000 in 1971-72 including an initial membership subscription of $500,000 to the Organisation for Economic Co-operation and Development. {:#subdebate-41-9} #### Immigration *Assisted Passage Schemes.* The 1971-72 assisted migrant programme is 100,000 settlers compared with 120.500 in 1970-71. This accounts for the decrease of $5,841,000 in estimated expenditure on embarkation and passage costs. *Migrant Education.* The estimated increase of $1,005,000 includes $765,000 for the further development of the child migrant education programme and $390,000 for intensive English language courses. {:#subdebate-41-10} #### Labour and National Service *Stevedoring Industry Aci.* The proceeds of the stevedoring industry charge levied on the industry are paid to the Australian Stevedoring Industry Authority. Payments are estimated to rise by $2,591,000 in 1971-72 as a result of increased charges operative from June 1971. {:#subdebate-41-11} #### Postmaster-General's *Broadcasting and Television Services.* The estimated increase in expenditure of $6,754,000 includes $5,138,000 for increased running expenses of the Australian Broadcasting Commission and $1,135,000 for additional expenditure on technical services provided by the Postmaster-General's Department. {:#subdebate-41-12} #### Primary Industry *Meat Research, etc.* The estimated increase of $1,330,000 reflects, in the main, the increased rate of cattle slaughter levy operative from February 1971. The proceeds of the levy are used to finance research and to meet the expenses of the Australian Meat Board. *War Service Land Settlement.* Payments to the agent States under the *States Grants (War Service Land Settlement) Act* 1952-53 for the acquisition and development of properties and for the provision of credit facilities to soldier settlers are financed from loan moneys and amounted to $3,391,000 in 1970-71. Of the estimated payment of $4,000,000 in 1971-72, $3,483,000 will be in respect of the provision of credit facilities. The estimated increase of $609,000 in 1971-72 arises mainly from an expected increase in the credit requirements of soldier settlers in the agent States. Administrative expenses under the War Service Land Settlement Scheme, which are met from annual appropriations, are estimated to increase from $537,000 to $730,000 in 1971-72. {:#subdebate-41-13} #### Social Services *Telephone concessions for- pensioners.* Of the increase of $90J,000 in estimated expenditure, $360,000 is attributable to the announced increases in telephone rentals. *Other.* Expenditure under this heading is expected to increase by $1,506,000. This increase is mainly attributable to an estimated increase of $794,000 in grants to eligible organisations under the *Sheltered Employment (Assistance) Act* 1970 and under the *Handicapped Children (Assistance) Act* 1970 for which an additional $705,000 is provided. {:#subdebate-41-14} #### Treasury *Superannuation.* Growth in the number of pensioners under the *Superannuation Act* 1922-1971, together with rising entitlements, in the case of new pensions, because of salary increases, the introduction of noncontributory units, and the Government's intention to increase rates of pension, are estimated to result in an increase of $12,544,000 in Government contributions to the Superannuation Fund. Recoveries of payments in respect of pensions to former Post Office employees are estimated to increase by $5,223,000, thus reducing the increase in the Government contribution to an estimated net $7,321,000. The estimated increase of $46,982,000 in advances for capital purposes is the net result of a number of significant variations. *Post Office.* It is estimated that an amount or $255,000,000, or $8,000,000 more than last year, will bo provided to the Post Office in 1971-72 to help finance its capital works programme. The Post Office wilt also be contributing to the programme from its own internal resources, mainly depreciation funds. *Australian National Airlines Commission and Qantas Airways Limited.* Advances to the Australian National Airlines Commission are estimated to decrease by $6,403,000 as a major part of the Commission's re-equipment programme was completed in 1970-71. The advance to Qantas Airways Limited is estimated to increase by $56,218,000 to meet payments on Boeing 747 aircraft. *Australian Coastal Shipping Commission.* The increase of $4,000,000 in the provision this year is to assist in financing investment by the Commission in new ships and equipment for overseas and coastal trades. *Snowy Mountains Hydro-electric Authority.* The estimated decrease of $11,343,000 in expenditure iri 1971-72 reflects progress towards completion of the Snowy Mountains Scheme. *Australian Atomic Energy Commission.* The estimated decrease of $2,395,000 in expenditure results from, the decision to defer consideration of the construction of the Jervis Bay nuclear power station. *Australian Industry Development Corporation.* Provision has been made for the payment of $12,500,000 to the Corporation in 1971-72 as a second instalment of capital. An amount of $25,000,000 was provided as an initial capital subscription for the Corporation in 1970-71. *Commonwealth Development Bank.* Provision has been made for an advance of $10,000,000 to help finance an extension of the Bank's operations to include loans to farmers for the acquisition of additional land to build up the size and operational efficiency of their farms. *Australian Wool Commission.* An amount or $10,000,000 has been provided for advances of additional Working capital. *War Service Homes.* As announced in the Budget Speech it *is* proposed *to* increase the maximum loan under the War Service Homes Scheme from $8,000 to $9,000. An amount of $60,000,000 has been provided for expenditure on War Service "Homes iri 197j>72. *Australian Capital 'Territory Housing Advances.* The provision of $14,530,000 for housing loans in the Australian Capital Territory, an increase of $2,440,000, makes allowance for proposed increases in maximum loans, to be made concurrently with the proposed increase in the maximum loan under the War Service Homes Scheme, from $8,000 to $9,000 in the case of the Commissioner for Housing and from $8,500 to $9,500 for co-operative building societies. *Northern Territory Housing Commission.* The increased provision of $1,500,000 includes $900,000 to cover payments for land from 1 January 1971 under the new land tenure arrangements for the Territory. la 1971-72 expenditure on other capital works and services is estimated to total $261,786,000, an Increase of $21,^30,400. These estimates Include expenditure in the Australian Capital Territory of $74,008,000 or $8,7I0;000 more than in 1970-71, and $51,079,000 in the Northern Territory, $8,366,000 more than last year. *Purchase -of Sites, Buildings and Improvements 'on Leases* *. Under the Control of the Department of the Interior* *Civil Aviation.* The increase of $968,000 in estimated expenditure stems mainly from the proposed purchase of land for the development of Brisbane and Perth airports. *Interior.* The estimated increase in expenditure by the Department of the Interior includes $16,700,000 in. payment for the transfer of five acres of Navy land at Woolloomooloo (N.S.W.) on which Commonwealth offices are planned to be built. This amount will be credited to Consolidated Revenue Fund and is shown Under the heading 'Other Revenue' in Statement No. 5. Also included in ihe estimates is an additional 1$2;995,000 for the purchase of freehold land in the Australian Capital Territory in continuation of tha policy to acquire such land for future development. *Other.* The estimated reduction of $2,031,000 in other expenditures under the control of the Department of the Interior relates chiefly to non-recurring expenditure in 1970-71 on the acquisition of hostel buildings in the Northern Territory on behalf of the Department of Labour and National Service. {:#subdebate-41-15} #### Buildings and Works *Under ihe Control of the Department of Works* *Civil Aviation.* The estimated $12,527,000 reduction in civil aviation works is due to the tapering off of major construction projects at Melbourne and Avalon Airports (Vic.) and Sydney (Kingsford-Smith) Airport (N.S.W.). *Education and Science.* Expenditure on laboratories for the C.S.I.R.O. is estimated to be $788,000 less than in 1970-71. The estimated increase of $2,148,000 in expenditure on other works reflects the expected increase of $2,170,000 on schools in the Northern Territory. *Health.* The estimated increase of $9,252,000 is attributable mainly to hospital construction. Expenditure; in the Northern Territory, principally for the Nhulunbuy hospital, is expected to increase by $6,110,000. Similar work in the Australian Capital Territory, related mainly to the Woden Valley Hospital, is estimated to. increase expenditures by $2,963,000. *Immigration.* Reduced activity on migrant hostel works in Victoria and New South Wales accounts for the reduction "of $939,000 in estimated expenditure on behalf of the Department of Immigration. *Interior.* The erection of Commonwealth offices, principally in Brisbane and Hobart, and urban development and Aboriginal advancement projects in the Northern Territory are the main factors leading to the increase of $5,398,000 in expenditure. Expenditure on office construction is estimated at $3,647,000 more than in 1970-71 and on the Northern Territory projects, $2,136,000 more. Expenditure on behalf of the Department of the Interior in the Australian Capital Territory is estimated to be $385,000 less. *Repatriation.* With major projects nearing completion in Perth and Sydney, works expenditure for the Department is expected to decline by $905,000 this year. *Social Services.* The estimated increase of $1,163,000 relates to the construction of a new rehabilitation centre at Glen Waverley (Vic). *Broadcasting and Television Services.* The increase of $2,399,000 in these expenditures relates mainly to the construction of radio broadcasting studios at Collinswood (S.A.). *Other.* Construction of a new archives repository at Villawood (N.S.W.) for the Department of the) Environment, Aborigines and the Arts, at a total estimated cost of about $1,700,000, is the principal factor accounting for the estimated net increase of $1,1 15,000 in this item. {:#subdebate-41-16} #### National Capital Development Commission The estimated increase of $2,750,000 in expenditure by the Commission is principally for basic works In the Australian Capital Territory, including land development, water, sewerage and stormwater services. Expenditure on education facilities and national works is also expected to be greater this year. *Plant and Equipment, etc.* *Civil Aviation.* The reduction of $1,820,000 in estimated expenditure this year is attributable mainly to the lower incidence of payments for equipment on long-term order. *Health.* Expenditure on plant and equipment is estimated to decline by $4,427,000. This is a result ( of non-recurring expenditure on computing equipment in 1970-71. *Interior.* The estimated increase of $1,463,000 arises from the proposed expenditure in 1971-72 of $1,060,000 for expansion of computer facilities for the Bureau of Meteorology, and from increases of $229,000 for the Australian Capital Territory Transport Undertaking for the purchase of new omnibuses And special duty vehicles and $102,000 for replacement vehicle purchases in the Northern Territory. *Repatriation.* The estimated decline of $1,943,000 reflects the purchase in 1970-71 of new computing facilities for the Department. No similar expenditure is envisaged this year. *Social Services.* Expenditure on plant and equipment is estimated to decline by $2,386,000. This is mainly a result of non-recurring expenditure on computing equipment in 1970-71. {:#subdebate-41-17} #### Other Payments to or for Statutory Bodies and Other Organisations *Commonwealth Railways. The* estimated increase of $3,356,000 in expenditure in 1971-72 relates mainly to the construction of new railways. The major project is a new line between Port Augusta and Whyalla which accounts for $4,033,000 of the estimated increase; a further $382,000 is for the Knuckey's LagoonEast Arm line in the Northern Territory. An estimated increase of $208,000 relates to the continuation of the survey of the proposed Tarcoola to Alice Springs railway; the balance of the increase relates to the continuing programme of upgrading existing lines and associated facilities and the purchase of rolling stock. *Commonwealth Hostels.* Expenditure on the replacement and improvement of existing accommodation is estimated to be $3,062,000 less in 1971-72 and relates mainly to a reduction in the migrant hostel re-building programme. *Anglo-Australian Telescope Board.* The estimated increase of $2,126,000 in the Australian contribution towards the capital expenditure of the Anglo-Australian Telescope Board is due to the substantially larger cash requirement of several major components of the project. In 1970-71, an additional $205,000 (net of United Kingdom reimbursements under the agreement) was provided as a separate item under the control of the Department of Education and Science, pending the establishment of the Board. {: .page-start } page 85 {:#debate-42} ### STATEMENT No. 5- ESTIMATES OF RECEIPTS, 1971-72 On the basis of existing legislation and in the absence of any changes in existing taxes and other charges, it is estimated that total receipts in 1971-72 would amount to $8,912,901,000, which would be $882,672,000, or 11 .0 per cent, more than total receipts in 1970-71. At thePremiers' Conference in June, however, it was agreed that the Commonwealth would ceaseto levy pay-roll tax in the States as from a date to be determined in 1971-72 and that the* States would levy their own pay-roll taxes as from the same date. This transfer of pay-roll tax to the States is to be accompanied by a reduction in financial assistance grants payableto the States. Details of these arrangements are set out in the document 'Commonwealth. Payments to or for the States 1971-72* presented concurrently with the Budget. On the* assumption that these arrangements become effective as from 1 September 1971, total Commonwealth receipts in 1971-72, at existing rates of taxes and charges, are estimated to be $259,000,000 less at $8,653,901,000. This would be an increase of $623,672,000, or 7.8 per cent. Details of the estimated effects on receipts in 1971-72 and in a full year of the revenueproposals announced in the Budget Speech are shown in the following table. After taking account of the new pay-roll tax arrangements and these other revenue proposals, total receipts in 1971-72 are estimated to be 88,822,476,000, an increase of $792,247,000 or 9.9 per cent. Were it not for the transfer of pay-roll tax to the States, the increase would be $1,051,247,000 or 13.1 per cent. In 1970-71, total receipts increased by $915,537,000 or 12.9 per cent, including the effects of revenue measures announced in the 1970-71 Budget Speech which were estimated to reduce receipts by a net $34,440,000 in 1970-71. The following table compares estimated receipts in 1971-72 with actual receipts in the two preceding financial years. {:#subdebate-42-0} #### Taxation Revenue In 1971-72 total taxation revenue is estimated to increase by 5674,307,000 or 9.4 per cent, to $7,824,245,000. The main changes in estimated taxation collections are discussed in the following notes. *Customs Duty.* The estimate of collections of customs duty allows for a faster rate of increase in recorded imports in 1971-72 than occurred in 1970-71 and for a further increase in the proportion of imports dutiable at higher rates. On the basis of existing legislation, collections of customs duty are estimated to increase by $64,272,000 to $530,000,000. After allowing for the effects of the measures announced in the Budget Speech it is estimated that collections will increase by $67,272,000 to $533,000,000 in 1971-72. *Excise Duty.* On the assumption that there will be an increase in clearances of goods subject to excise duty broadly equivalent to that which occurred in 1970-71 it is estimated that excise collections at existing rates of duty will increase by $66,696,000 or 6.3 per cent to $1,120,000,000. In 1970-71, excise collections increased by $113,592,000 or 12.1 per cent but that increase included the effects of changes in rates of duty estimated to yield an additional $92,000,000 in 1970-71, partly offset by the introduction of a scheme of weekly settlement of duties which is estimated to have reduced receipts by $13,600,000. After allowing for the effects of the measures announced in the Budget Speech it is estimated that collections will increase by $129,196,000 to $1,182,500,000 in 1971-72. The main components of the estimate for 1971-72 are as follows: - *Sales Tax.* The estimate of sales tax collections in 1971-72 is based on the assumption that the value of sales of goods subject to sales tax will increase at much the same rate in 1971-72 as it did in 1970-71. On the basis of existing legislation, it is estimated that sales tax collections will increase by $61,841,000 or 9.8 per cent to $695,000,000. This follows an increase of $65,800,000 or 11 .6 per cent in 1970-71 which included the effects of the increase in sales tax rates introduced in that year. *Income Tax - Individuals.* It is estimated that, on the basis of existing legislation, collections of income tax from individuals in 1971-72 would increase by $416,863,000, or 13.1 per cent, to $3,595,000,000. {: type="a" start="a"} 0. *Pay-as-you-earn Instalment Deductions.* On the basis of existing legislation, gross pay-as-you-earn instalment deductions in 1971-72 are estimated at $3,440,000,000 or $500,927,000 more than in 1970-71. In 1970-71 average weekly earnings increased by more than 10 per cent and the average number of employees in terms of 'male units' by about 3.3 per cent. For the purpose of estimating pay-as-you-earn collections, an increase of 9 per cent has been assumed as the increase in average earnings for 1971-72. This assumption, which takes account of the rise in average weekly earnings which has already occurred, does not imply that the trend in earnings from this point of time can be forecast with any reliability. Nor does its use imply that it is a Budget objective. The increase in average number of employees in 1971-72 is assumed to be 3.2 per cent, a little below that experienced in 1970-71, reflecting a slackening in the net migration intake including announced reductions in the number of assisted passage migrants in 1971-72. A considerable part of the increase of $127,989,000 in estimated refunds of tax instalment deductions in 1971-72 is due to the fact that the instalment deductions schedule incorporating the reduced income tax rates announced in the 1970-71 Budget did not apply until 1 October 1970, with the result that instalments were deducted at 1969-70 rates during part of 1970-71. After allowing, for this increase in refunds, net pay-as-you-earn collections at existing rates of taxation are estimated to increase by $372,938,000 to $2,805,000,000. 1. *Other.* On the basis of existing legislation, collection on assessments of individuals are estimated to increase by $43,925,000 to $790,000,000 in 1971-72. The overall increase in the 1970-71 incomes of individuals subject to provisional tax has been held down by an estimated further decline of 16 per cent in the business incomes of primary producers in 1970-71. The incomes of other individuals subject to provisional tax are estimated to have increased by 6.5 per cent in 1970-71. These 1970-71 incomes are, of course, subject to provisional tax in 1971-72. Net income tax collections from individuals at existing rates of tax are, therefore, estimated at $3,595,000,000, an increase of $416,863,000 on 1970-71. The increase in the rates of income tax on individuals and the changes in concessional deductions announced in the Budget Speech are estimated to result in a net increase in revenue of $67,595,000 in 1971-72. After allowing for these measures, it is estimated that income tax collections from individuals will increase by $484,458,000 to $3,662,595,000 in 1971-72. *Income Tax - Companies.* Incomes of companies in 1970-71, which are subject to tax in 1971-72, are estimated to have increased by only 4 per cent following an increase of about 16 per cent in 1969-70. At existing rates of tax, collections of income tax from companies in 1971-72 are estimated at $1,490,000,000, an increase of $94,611,000. The rate changes announced in the Budget Speech are estimated to increase income tax revenue from companies in 1971-72 by $24,000,000 to $1,514,000,000. *Pay-roll Tax.* On the basis of the assumed movements in employment and average weekly earnings adopted for the estimate of gross pay-as-you-earn collections, it is estimated that, in the absence of the agreement to transfer pay-roll tax to the States as from a date to be determined in 1971-72, gross pay-roll tax collections would increase by $59,572,000 to $355,000,000 in 1971-72. On the assumption that the transfer of pay-roll tax to the States will take effect from 1 September 1971, Commonwealth pay-roll tax collections are estimated to total $96,000,000 in 1971-72. The Commonwealth will continue to levy' pay-roll tax in its own Territories at the existing rate of 2.5 per cent. Following the transfer of pay-roll tax to the States, the Commonwealth will continue to assist industry through an export incentive scheme in respect of 1971-72 and 1972-73 exports on the basis of direct Commonwealth payments rather than through the rebate of pay-roll tax. Figures in the Statements have been adjusted to this new basis and now include refunds of pay-roll tax rebates as expenditures rather than as reductions in revenues as was formerly the case. *Estate Duty.* After a decrease of $1,259,000 in 1970-71 it is estimated that collections of estate duty will increase by $7,927,000 to $78,000,000 reflecting the expected growth in the value of estate duty returns available for assessment. *Stamp Duty (A.C.T. and N.T.).* At existing rates, stamp duty revenues in the Territories are estimated to total $3,150,000 in 1971-72, an increase of $499,000. Other revenue is estimated to increase by $78,344,000 in 1971-72. Brief explanations of the larger variations are contained in the following notes. {:#subdebate-42-1} #### Civil Aviation *Air Navigation Charges.* Collections are estimated to increase by $2,479,000 in 1971-72 as a result of growth in air traffic and the full year effects of increased charges applicable from 1 January 1971. *Other.* The estimated increase of $1,474,000 relates mainly to an expected increase in receipts from site and building rentals following the occupation of terminal areas and maintenance bases at Tullamarine by the domestic operators. {:#subdebate-42-2} #### Interior Interior revenues are estimated to increase, by $20,369,000. This increase includes an amount of $16,700,000 relating to the transfer of Navy land at Woolloomooloo, N.S.W., on which it is planned to build Commonwealth offices. An equal amount is included in the expenditure estimates under the Department of the Interior acquisition programme. Sales of property and materia) to State Governments, the C.S.I :R.O. and the Department of the Army also contribute to the increase. {:#subdebate-42-3} #### Labour and National Service *Stevedoring Industry Charge.* The proceeds of the stevedoring industry charge are paid to the Australian Stevedoring Industry Authority. The estimated increase of $3,358,000 results from increased charges effective from June 1971. {:#subdebate-42-4} #### National Development *Snowy Mountains Hydro-electric Authority - Interest and Principal.* Receipts of interest and repayments of principal from the Snowy Mountains Hydro-electric Authority are estimated to increase by $2,516,000 and $316,000 respectively in 1971-72 mainly as a result of bringing to account capital expenditure on the Blowering Dam and the first phase of the Tumut 3 project. {:#subdebate-42-5} #### Postmaster-General's *Broadcasting and Television Licence Fees and Charges.* The estimated increase of $12,487,000 in 1971-72 includes additional revenue of $11,937,000 from broadcasting listeners' and television viewers' licence fees. The increases in these fees announced in the Budget Speech are estimated to add $11,000,000 to revenue in 1971-72. {:#subdebate-42-6} #### Primary Industry *Livestock Slaughter Levies.* The estimated increase of $890,000 in collections of these levies on cattle and sheep and lambs in 1971-72 reflects the higher rates of levy operative from I February 1971. {:#subdebate-42-7} #### Shipping and Transport *Commonwealth Railways - Net Receipts.* Net receipts of the Commonwealth Railways are estimated to increase by $1,781,000. Gross receipts are estimated to be $3,222,000 greater than in 1970-71 as a result of an increase in traffic and increases in some fares and freight rates. Working expenses are however estimated to increase by $1,441,000 mainly because of higher wage and salary payments. *Other.* The estimated net decrease of $1,1 18,000 reflects a reduction of $3,000,000 in the repayment of loans by the Australian Coastal Shipping Commission. Receipts in connection with State railway projects are estimated to increase by $1,156,000. Receipts from light dues are estimated to increase by $624,000, of which $480,000 relates to the increased dues announced in the Budget Speech. {:#subdebate-42-8} #### Treasury *Reserve Bank.* Payments to Consolidated Revenue of Reserve Bank profits are estimated to increase by $18,432,000 in 1971-72. *Commonwealth Banking Corporation.* It is estimated that $5,660,000 of Commonwealth Trading Bank and Commonwealth Savings Bank profits will be paid to Consolidated Revenue in 1971-72, an increase of $1,836,000 on the previous year. *Unrequired Balances oj Trust Fund.* In 1970-71 the Canadian Loan Trust Account was closed and the unrequired balance of the account was transferred to the Consolidated Revenue Fund. No transactions of similar magnitude are expected in 1971-72 with the result that revenues from this source are estimated to be S8.40I.O00 less than in 1970-71. *Distribution of International Monetary Fund Net Income.* In 1970-71 Australia received $851,000 as its share of the net income of the International Monetary Fund for the year ended 30 April 1970 and $1,400,000 in remuneration as a 'net creditor' for the twelve months ended 30 April 1971. In 1971-72 the Australian share of net income is estimated at $400,000 and $200,000 is expected by way of remuneration. *Overseas Telecommunications Commission - Payment in the Nature of a Dividend.* Recent amendments to the Overseas Telecommunications Act make the Commission subject to the payment of income tax on its profits and provide for a dividend payment on equity capital. In the previous year, pending amendment of the Act, the Commission made a payment to Treasury in lieu of both dividend and taxation whereas the payment in 1971-72 will be in respect of dividend only with income tax paid separately. This factor accounts for most of the decrease of $5,168,000 under this heading in 1971-72. *Post Office - Interest on Capital.* It is estimated that, as a result of higher interest rates and the increase in the amount of capital advanced to the Post Office, interest received from the Post Office will increase by $18,149,000 in 1971-72. *Offshore Petroleum Royalties.* The Commonwealth's share of royalties on production in Bass Strait is estimated to increase by $2,384,000 as the production from the Bass Strait fields increases. *Interest on Wheat Board Advances.* Interest payable on funds advanced to the Australian "Wheat Board is estimated to decrease by $1,344,000 because of an expected decline in the net advance outstanding to the Wheat Board over 1971-72. *Repayments of Principal - Australian National Airlines Commission and Qantas Airways Limited.* Repayments of principal by the Australian National Airlines Commission are estimated to increase by $1,464,000 in 1971-72 while repayments by Qantas are estimated to be $5,439,000 greater reflecting loans drawn in 1970-71 under re-equipment programmes. *Other.* The increase of $5,180,000 in other receipts of the Department of the Treasury relates mainly to higher interest and principal repayments in respect of various advances to the States. {:#subdebate-42-9} #### Works During 1970-71 unrequired balances totalling $2,248,000 were paid to the Consolidated Revenue Fund in anticipation of the closure of the Works Suspense Trust Account. Payments of a similar magnitude are not estimated to occur in 1971-72. Revenues from services provided to the Papua New Guinea Administration and the Commonwealth Banking Corporation are estimated to decrease by $675,000. Other minor reductions in estimated revenue bring the total estimated reduction in 1971-72 to $3,444,000. {:#subdebate-42-10} #### Supply *Other.* The decrease of $4,747,000 in revenue under this heading results mainly from reduced proceeds from disposals sales and lower receipts from recoverable services and accommodation charges. {:#subdebate-42-11} #### Territories *Australian Capital Territory.* Of the estimated increase in revenue of $7,546,000 from the Australian Capital Territory, the principal components are $3,289,000 from sales of residential and commercial leases and $3,525,000 from general rates resulting from the new land tenure arrangements, the increase in rate for 1971-72 and the greater number of ratepayers in the A.C.T. It is estimated that there will be an offsetting decrease of $660,000 in land rents. Increased revenue of $934,000 is expected from interest and principal repayments on advances to the Australian Capital Territory Housing Commissioner. *Northern Territory.* In 1970-71 hostels in the Northern Territory valued at $2,853,000 were transferred to the Department of Labour and National Service. As no similar transactions are expected in 1971-72 this factor accounts for most of the net decrease of $2,441,000 in Northern Territory revenues. Other reductions include $490,000 in repayments of advances by the Northern Territory Housing Commission, due to the receipt of $848,000 in 1970-71 which should have been paid in the previous year; $319,000 in interest and principal repayments by the Darwin Port Authority because payments for both 1969-70 and 1970-71 were received in 1970-71 ; and $236,000 in land rentals within the Darwin and Alice Springs municipal areas arising from a new land tenure system, under which land rentals in these areas were abolished from 1 January 1971 and 1 July 1971, respectively. Revenue from the Northern Territory Electricity Authority is estimated to increase by $923,000 in 1971-72. {:#subdebate-42-12} #### Receipts of National Debt Sinking Fund Details of the estimated receipts of the National Debt Sinking Fund are shown in the following table. {:#subdebate-42-13} #### Commonwealth *Contribution from Consolidated Revenue and Interest on Investment.* The percentage contribution from the Consolidated Revenue Fund to the National Debt Sinking Fund and the interest income of the Sinking Fund are estimated to total $19,210,000 in 1971-72, $4,604,000 less than in 1970-71. This amount is equal to 4 per cent on the net Common* wealth debt at 30 June 1971 subject to contribution under the provisions of the National Debt Sinking Fund Act 1966-67. Net Commonwealth debt on which the 4 per cent,con« tribution is estimated, declined by $120,500,000 during 1970-71 due mainly to cancellations of $206,600,000 by the Loan Consolidation and Investment Reserve which were partly offset by the net increase in Treasury Notes of $83,200,000. The National Debt Sinking Fund Act 1966-67 also provides for the contribution from the Consolidated Revenue Fund to be reduced by an amount equal to income from investments (including profit or losses from realisation of investments) which is estimated to be $1,791,000 lower than in 1970-71. *Repayments of Loan Fund Advances for Housing.* Repayments to the Sinking Fund of Advances to the States under the various Housing Agreement Acts are estimated to be £1,018,000 greater in 1971-72 because of the increase in these advances. *Other Repayments.* Other repayments to the Sinking Fund include repayments made under the Railway Agreement (Queensland) Acts 1961 and 1968, the Loan (Emergency Wheat Storage) Act 1955, the War Service Land Settlement Agreements Act 1945 and the Nauru Island Agreement Act 1919-1932. In total, these repayments are estimated to increase by $87,000 in 1971-72. *Receipts in Respect of State Debt* *Contributions by Commonwealth and States.* Because of the growth of State debt, contributions by the Commonwealth and the States in respect of State debt are estimated to be 58,195,000 greater in 1971-72. Net Increase in Other Balances of The Commonwealth in The Trust Fund The net increase in other balances of the Commonwealth in the Trust Fund in 1971-72 is estimated to be $34,890,000 greater than the increase in 1970-71, largely due to an estimated increase of $17,465,000 in interest on investments held by the Loan Consolidation and Investment Reserve. In 1970-71 expenditures by the Munitions Factories and Supply Trust Accounts exceeded receipts so that the net balances held were reduced by $8,307,000. No similar reduction is estimated to occur in 1971-72. {: .page-start } page 94 {:#debate-43} ### STATEMENT No. 6 - BUDGET RESULT, 1970-71 {: .page-start } page 94 {:#debate-44} ### SUMMARY The outcome of the 1970-71 Budget was significantly affected by large increases in wage and salary payments during the year and by other unforeseen expenditure commitments,, including the payment to the States of $60 million to compensate them for the loss of their receipts duty revenues. In early February 1971 it was estimated that Commonwealth expenditures in 1970-71 would exceed the Budget estimates by $230 million(a). In the prevailing economic circumstances this estimated increase was considered excessive and a policy of restraint across a broad range of expenditures, intended to reduce estimated expenditures as they then stood by $75 million, was adopted by the Government. Details of proposed reductions were announced to Parliament on 16 February 1971. The larger proposed reductions in estimated expenditures included $22 million in defence services, $14 million in advances for capital purposes ($10 million of which related to the Post Office), and $9 million each in departmental running expenses and payments to industry. No reductions were made, however, in payments to the States. In fact, in recognition of the abnormal budget difficulties being faced by the States, the Commonwealth agreed in April 1971 to the provision of special additional revenue assistance of $43 million on condition that this was used by the States to finance their deficits and not to increase expenditures on goods and services. However, despite this additional payment and increases in the rates of pensions, actual expenditures exceeded the Budget estimates for 1970-71 by only $181 million, that is, by $69 million less than was estimated in February before the expenditure reduction measures.(a) {: .page-start } page 95 {:#debate-45} ### EXPENDITURES The Budget estimates for 1970-71 are compared with actual expenditures for that year in the following table. AH items, apart from payments to or for the States and debt charges, were affected by the reductions in estimated expenditure announced in February 1971, The main variations from the Budget estimates were as follows: {:#subdebate-45-0} #### Defence Services Total expenditure on defence services exceeded the Budget estimate by $1 million. Service pay and civil salaries were $33 million greater than the Budget estimate, largely as a result of arbitration and other wage and salary determinations made after the Budget was presented. Against this, there were short-falls in other areas of expenditure, which resulted in part from the measures taken by the Government in February 1971 to reduce estimated Commonwealth expenditures. Actual expenditure on equipment and stores for the RAN and RAAF was $14 million less than the Budget estimate. Mainly because of the deferment of certain projects and some re-scheduling of payments, expenditure on the purchase, manufacture and lease of aircraft for the RAAF was $8 million less than the estimate. Expenditure on naval construction, which was affected by lags in delivery of equipment, was $4 million less than estimated. *Payments to or for the States and Works and Housing Programmes* Payments to or for the States and works and housing programmes were a net ; $133 million greater than the Budget estimate. General revenue grants exceeded the Budget estimate by $145 million, $60 million of which reflected receipts duty compensation payments, which the Commonwealth agreed to provide following the cessation of duty on monies received after 30 September 1970. The operation of the financial assistance grants formula resulted in an increase of $38 million in these grants over the Budget estimates, mainly because average wages in the year ended March 1971 increased by more than had been assumed. Additional revenue assistance of $43 million, for which no allowance had been included in the Budget, was also provided to the States to assist them with budgetary difficul* ties arising in large part from abnormally large increases in wage and salary costs. Specific purpose payments of a revenue nature were a net $5 million greater than the Budget estimate, mainly because natural disaster relief payments, particularly drought relief payments to Queensland, were greater than estimated. Specific purpose payments of a capital nature fell short of the Budget estimate by a net $14 million. Capital payments to the States for education purposes were $15 million less than the estimate. Although payments for school libraries exceeded the Budget estimate by $4 million there were short-falls of $9 million in payments for teachers' colleges, $4 million for universities and $4 million for colleges of advanced education. Payments to the States for railway projects were $3 million less than the Budget estimate. Natural disaster relief payments of a capital nature for flood relief were $5 million; no provision was made in the Budget for these payments. {:#subdebate-45-1} #### National Welfare Fund Payments to the National Welfare Fund exceeded the estimate by a net $4 million. Expenditure on national health services was $4 million greater than estimated, largely because of increased pharmaceutical benefits payments, which exceeded the estimate by $6 million. Payments to public hospitals for pensioners fell short of the estimate by $3 million and medical benefits were $2 million less. Although pension rate increases were announced in March 1971 expenditure on age and invalid pensions fell short of the Budget estimate by $5 million. Expenditure on unemployment and sickness benefits exceeded the estimate by $3 million. {:#subdebate-45-2} #### Repatriation Services Largely because of the increased cost of providing services at repatriation hospitals and institutions, expenditure on repatriation services exceeded the Budget estimate by $2 million. {:#subdebate-45-3} #### Debt Charges Expenditure on debt charges exceeded the Budget estimate by a net $4 million, mainly because of the interest payments arising from the very large amounts of Treasury Notes on issue during much of 1970-71. *Departmental Running Expenses and Territories (excluding Papua New Guinea)* Departmental running expenses were $31 million greater than estimated - $27 million of this amount related to wages and salaries. During 1970-71 there were substantial increases in wage and salary rates arising from arbitration and other determinations brought down after the Budget was presented. Similar factors account for much of the increase in expenditure for the Territories, which exceeded the Budget estimate by $4 million. {:#subdebate-45-4} #### Commonwealth Payments to Industry These payments exceeded the Budget estimate by a net $3 million. Payments to manufacturing industry were $9 million greater than estimated, the main factors being the provision of $6 million more than estimated for pay-roll tax rebates under the export incentives scheme and $1 million more for the net ship-building subsidy. Payments to rural industries were a net $5 million less than estimated. There were short-falls of $9 million in emergency assistance payments to woolgrowers and $5 million in expenditure on the phosphate fertilizers bounty. Payments of $6 million were made to assist the canned deciduous fruits industry and an initial $4 million was provided for the rural reconstruction scheme; no provision had been made in the Budget for these expenditures. {:#subdebate-45-5} #### Advances for Capital Purposes Advances for capital purposes exceeded me Budget estimate by a net §6 million, initial working capital advances to the Australian Wool Commission, for which no provision riad been included in the Budget, totalled SI 2 million. The advance to the Post Office was $7 million greater than estimated mainly because of increased wage and other costs during 1970-71. Advances to Qantas Airways Limited were $14 million less than estimated because of revisions to the expenditure programme relating to aircraft re-equipment. {:#subdebate-45-6} #### Other Capital Works and Services Expenditures on other capital works and services were a net $8 million less than the Budget estimate. In total, civil works expenditures were a net $3 million less than the estimatepartly because of revisions to the programme in the latter part of 1970-71. The largest shortfall in the civil works programme was $8 million, which related to Northern Territory buildings and works projects. Expenditure on civil works for the Department of Civil Aviation was, however, $9 million greater than the estimate. Outside the civil works programme, expenditure on Commonwealth railway projects fell short of the Budget estimate by $3 million. {: .page-start } page 97 {:#debate-46} ### RECEIPTS Actual receipts in 1970-71 and the Budget estimates for that year are set out in triefollowing table: The main variations from the Budget estimates were: {:#subdebate-46-0} #### Customs Duty Collections of customs duty exceeded the Budget estimate by S3 million because dutiable imports were greater than had been estimated at the time of the Budget. {:#subdebate-46-1} #### Excise Duty Collections of excise duty fell short of the Budget estimate by $27 million. The introduction of a system of weekly settlement of excise duties account for $14 million of the shortfall in excise collections. Clearances of wine, beer, tobacco and motor spirit fell short of Budget estimates. {:#subdebate-46-2} #### Sales Tax Sales tax collections fell short of the Budget estimate by $12 million. This short-fall related mainly to lower than estimated sales of motor vehicles. *Income Tax - Individuals - Pay-as-you-Earn* Largely because the increase in average earnings substantially exceeded the Budget assumptions, gross collections of P.A.Y.E. instalment deductions exceeded the Budget estimate by $155 million. As refunds of P.A.Y.E. collections were $3 million less than estimated, net P.A.Y.E. collections exceeded the Budget estimate by $158 million. *IncomeTax - Individuals - Collections on Assessments* Collections on assessments of income tax on individuals fell short of the Budget estimate by $15 million, despite business incomes in 1969-70 (assessed to tax in 1970-71) having been slightly higher overall than was estimated. Collection rates were lower than had been expected at the time of the Budget. {:#subdebate-46-3} #### Income Tax - Companies Income tax receipts from companies were$6 million less than the Budget estimate, because the collection rate was somewhat lower than anticipated. *Pay-roll Tax* Although the increase in average earnings during the year exceeded by a substantial margin that assumed for the purpose of the estimates, pay-roll tax collections were only $1 million more than the Budget estimate because collections of certain amounts of pay-roll tax were carried over into 1971-72. {:#subdebate-46-4} #### Estate Duty Collections of estate duty exceeded the Budget estimate by $5 million mainly because of a greater than estimated increase in the number of assessments issued during 1970-71. {:#subdebate-46-5} #### Other Revenue Other revenue exceeded the Budget estimate by a net $21 million. Unrequired balances of trust accounts shown under the Department of the Treasury exceeded the Budget estimate by $8 million, largely because of the transfer to the Consolidated Revenue Fund of the balance remaining in the Canadian Loan Trust Account when this account was closed during 1970-71. Revenues from the Territories exceeded the Budget estimate by $9 million. Australian Capital Territory revenues were$6 million greater than estimated, largely because of increased receipts from land sales. Northern Territory revenues exceeded the Budget estimate by $3 million. Receipts by the Department of Works were $4 million greater than estimated. The main short-falls in estimated revenues included $4 million in repayments of interest and principal on war service homes loans and $2 million in receipts from wool tax. *Net Increase in other Balances of the Commonwealth in the Trust Fund* Commonwealth balances in the Trust Fund increased by $23 million less than had been estimated in the Budget. An amount of $8 million was paid from the Canadian Loan Trust Account to the Consolidated Revenue Fund when the Trust Account was closed during 1970-71. No provision had been made for this transaction in the Budget estimates. The interest income of the Loan Consolidation and Investment Reserve was $5 million less than estimated due largely to cancellation during the year of part of the Reserve's holdings of securities. The reduction in balances of the Munitions Factories and Supply Trust Accounts was 55 million greater than estimated. {: .page-start } page 99 {:#debate-47} ### FINANCING TRANSACTIONS The following is a summary of financing transactions in 1970-71 : Some details of these financing transactions in 1970-71 are given below: *Net Drawings under Credit Arrangements for Defence Purchases in the United States of America* The *Loan (Defence) Acts* of 1966, 1968 and 1970 authorised the Commonwealth to finance defence equipment purchases in the United States of America on extended payment terms. In 1970-71 drawings against these arrangements totalled $64 million. Repayments of previous drawings amounted to $57 million. *Net Drawings under Credit Arrangements for Aircraft Purchases - Qantas Airways Limited and the Australian - National Airlines Commission* Drawings on aircraft loans arranged on behalf of Qantas Airways Limited and the Australian National Airlines Commission amounted to $47 million, exceeding repayments of previous drawings by $20 million. {:#subdebate-47-0} #### Net Proceeds of Other Overseas Borrowings A loan raised in Netherlands guilders yielded SI 5 million. However, redemptions and other expenditure on the reduction of debt overseas, totalling $87 million, exceeded this amount by $72 million. One maturity in London was paid off at a cost of $22 million and maturities in New York and Canada were paid off at a cost of $11 million and $7 million, respectively. Securities to the value of $19 million in New York and $10 million in London were repurchased. Repayments of $16 million were also made on borrowings from the International Bank for Reconstruction and Development and $1 million was repaid on borrowings from the Netherlands and Canada. *Funds provided for the International Monetary Fund* Under the *International Monetary Agreements Act* 1970 Australia subscribed $147 million to the International Monetary Fund in 1970-71 to meet an equivalent increase in its quota at the Fund. Finance was provided from the Budget for $37 million of this subscription, which was paid in gold ; the remainder was paid in non-negotiable, non-interest bearing notes. *Net Proceeds of Loan Raisings in Australia* Four Commonwealth public cash loans were raised in Australia in 1970-71. After excluding loan proceeds from advance subscriptions received before 30 June 1970 but including receipts from outstanding instalments and advance subscriptions received up to 30 June 1971, the proceeds from these cash loans totalled $522 million. Cash proceeds from the sale of Special Bonds during the year totalled $233 million. Proceeds of $15 million from State domestic loan raisings brought total cash proceeds from loans raised in Australia to $770 million. Of the $978 million of securities (other than Special Bonds) maturing in Australia which were offered for conversion in 1970-71, an amount of $386 million was redeemed. Redemptions of Special Bonds of all series amounted to $162 million. In addition, there were redemptions of $1 million of Drought Bonds. Other redemptions, market repurchases and contractural repayments in Australia amounted to $17 million. Total redemptions and repurchases in Australia were, therefore, $566 million, so that the net proceeds of loans raised in Australia in 1970-71 were $205 million. *Net Change in Treasury Notes on Issue* At 30 June 1971 Treasury Notes on issue amounted to $270 million, a net increase of $18 million on the amount on issue at 30 June 1970. There was a net decrease of $65 million in Treasury Notes involved in the provision of finance to the Australian Wheat Board, while other Treasury Notes on issue increased by a net $83 million. *Net Advance to the Australian Wheat Board* An advance of $190 million was made to the Wheat Board in March 1971 to finance its repayments in respect of the 1969-70 wheat crop to the Rural Credits Department of the Reserve Bank. This advance was financed by the issue of $190 million in Treasury Notes to the Reserve Bank. Repayments received from the Wheat Board during 1970-71 totalled $255 million, including repayment of $184 million outstanding at 30 June 1970. These repayments were applied to the redemption of Treasury Notes. {:#subdebate-47-1} #### Other Financing Transactions An amount of $27 million was available from these transactions. The largest item was an amount of $17 million in respect of coinage transactions, part of which related to the sale overseas of silver recovered from withdrawn coin. {:#subdebate-47-2} #### Residual Financing The amount available from the financing transactions mentioned above exceeded the deficit by $157 million, and this amount was added to Commonwealth cash balances. {: .page-start } page 101 {:#debate-48} ### STATEMENT No. 7 - COMMONWEALTH BUDGET TRANSACTIONS {: .page-start } page 101 {:#debate-49} ### SINCE 1961-62 The tables shown later in this Statement set out Commonwealth Budget receipts and expenditure in both 'conventional' and national accounts form. Subject to the important qualifications outlined in the notes to the tables, the figures for earlier years are broadly consistent with the figures for 1970-71 and the estimates for 1971-72 outlined in Statements Nos. 1 to 6. Tables 1 and 2 on pages 60 and 61 show Commonwealth expenditures, receipts and financing transactions in 'conventional' form for each year since 1961-62. This presentation is essentially a rearrangement of the transactions of the three Commonwealth Funds within the Public Account (Consolidated Revenue Fund, Loan Fund and Trust Fund). Table 3 on pages 62 and 63 shows figures in national accounts form for each year since 1961-62. In this form, transfers between different parts of the Commonwealth's accounts are eliminated and additional detail included so that the figures shown relate to the transactions which occur between the Commonwealth Government and the rest of the economy or overseas. The national accounts figures therefore show government transactions classified into economically significant categories, corresponding with those for which similar information is presented in past years for the entire economy in the White Paper on National Income and Expenditure. Over the 1960's, Commonwealth, State and local Governments in Australia have been faced with rapidly increasing demands for the many services which they provide, including such functions as defence, education, social welfare and health services. This has meant strong pressure on Governments to increase the share of available resources in the economy subject to their control. It is to be noted, however, that a large part of Government outlay is in the form of transfer payments, such as payments of pensions or subsidies, or in the form of advances to other sectors. The effect these transfers and advances have on the economy depends, of course, on the reactions of the recipients. Over the period 1961-62 to 1970-71 the direct demands on resources by the public sector in Australia grew more rapidly than private sector spending or total spending in the economy. This is highlighted in the following table which compares the relative growth in public sector (Commonwealth, State and local Government) spending on goods and services with the growth in gross national expenditure and with the major components of private sector expenditures. The preceding table .shows that the main increase in total public sector expenditures has been in respect of current expenditures on goods and services. Capital expenditures by public authorities and enterprises have increased much less rapidly than private sector capital expenditure. The table also illustrates the fact that the main component of private sector demand which has grown more slowly than total expenditures in the economy, and which has, in a sense, provided scope for the more rapid increases in Government expenditures, is personal consumption expenditure. Personal consumption expenditure has shown an average annual rate of growth of only 7 .9 per cent and has declined from 65 . 1 per cent of gross national expenditure in 1961-62 to 57.4 per cent in 1970-71. It would be incorrect, however, to infer that the relative and absolute growth in the size of the public sector necessarily has led to an absolute or relative diminution in the welfare of persons. Indeed, the provision of many goods and services by the public sector, such as education and health facilities, may be seen as an important factor contributing to increasing standards for the Australian population as a whole. The relative growth in the size of the public sector may therefore be seen as, in part, a reflection of the importance which the community places on the facilities and services provided through the public sector: The Commonwealth has contributed to the growth of public sector expenditures both directly through Budget expenditures and indirectly through the operation of its instrumentalities in the non-budget sector. The following table shows details of Commonwealth budget outlays as a proportion of gross national expenditure in 1961-62 and 1970-71. . A feature of these figures is the strong growth in Commonwealth budget outlays- on goods and services which, over the period since 1961-62, have increased significantly more rapidly than gross national. expenditure. In total, transfer payments and.net advances grew, less rapidly than gross national expenditure over the period. The more significant areas of increase in Commonwealth expenditure responsibilities can most readily be indicated by reference to the 'conventional' budget classification. Over the period 1961-62 to 1970-71 total Commonwealth expenditures have increased by $4,532 million or at an average annual rate of 9. 5 per cent. The following table summarises the main components in this overall increase. It may be noted that some expenditures which have been growing at a relatively slow annual rate have nevertheless made a major contribution to the absolute increase in total expenditures over the period. Thus, although Commonwealth payments to or for the States have increased at an average annual rate of 9 . 0 per cent, which is less than the rate of increase in total expenditures, these payments have contributed over one third of the total increase in expenditures during the period because they form such a large proportion of the total Commonwealth Budget. A proportion of these funds is provided for specific purposes, but the allocation of the larger part of them rests with the States. In the final analysis, these funds are in large part spent in areas which are primarily the responsibility of the States, including the provision of education and health services, the maintenance of law and order, and the construction of roads, water supply and sewerage facilities, and housing and land development projects. Of the areas of primary Commonwealth responsibility, the main absolute growth in expenditures has been in respect of the provision of defence services and social service benefits provided via the National Welfare Fund. Each of these categories of expenditure has contributed about 16 per cent of the overall increase between 1961-62 and 1970-71. The relatively rapid increase in defence expenditures occurred largely in the middle years of the period when major re-equipment programmes were undertaken and when the strength of the forces was increased rapidly. The re-equipment programmes, which reached a peak in 1967-68, required heavy expenditure overseas and these were in part financed by defence credit arrangements made with the United States of America. National Welfare Fund payments have shown a steady increase over the period reflecting growth in the number of beneficiaries and increased and extended ranges of social service and health benefits. The rate of increase in these expenditures has accelerated in recent years following the introduction of the tapered means test and extensions of health services. The other components of Commonwealth expenditure have had varying rates of growth. The expenditures exhibiting the most rapid rates of growth over the period were Commonwealth payments to industry (18- 1 per cent per annum); expenditure on Commonwealth Territories (16.3 per cent per annum) and departmental running expenses (13.9 per cent per annum). At the lower end of the scale, expenditures on repatriation services have, despite substantial increases in benefit rates, grown slowly - by 5.7 per cent per annum - because of the relatively stable number of beneficiaries. The increase of $246 million or 18.1 per cent per annum in direct Commonwealth payments to industry reflects in particular the growing range of support provided to the rural sector in recent years. The rapid growth of Canberra and Darwin as centres of population is the main reason for the above average increase of 16. 3 per cent per annum in expenditure on Commonwealth Territories. Departmental running expenses have increased relatively rapidly at 13.9 per cent per annum, reflecting in large part the increases which have occurred in wage and salary rates over the period and a growth in the numbers of departmental employees which was, over the period as a whole, more rapid than the growth in total civilian wage and salary employment. As a concomitant of the increase in the relative size of the public sector and in order to gain the resources necessary to meet expenditure demands, total public sector receipts have increased more rapidly than gross national expenditure. Total public sector current account revenues have, for example, increased at an average annual rate of 10.6 per cent compared with the average growth of 9.3 per cent per annum in gross national expenditure over the period 1961-62 to 1970-71. Similarly, total Commonwealth Budget receipts, in national accounts terms, have increased by $4,852 million or 10.7 per cent per annum over the period - rising from 22. 1 per cent of gross national expenditure in 1961-62 to 24.6 per cent in 1970-71. The composition of Commonwealth Budget receipts, in national accounts terms, in 1961-62 and 1970-71, together with the average annual rates of growth are shown in the following table. Of the increase in total receipts over the period 1961-62 to 1970-71 about 43 per cent has been generated by collections of income tax from individuals. The largest increase was in respect of net pay-as-you-earn income tax from wage and salary earners. Collections from this, source have increased by $1 ,779 million or 1 5 . 7 per cent per annum. Revenue from company income taxes increased by $862 million or 10.6 per cent per annum over the period and indirect taxation revenues increased by $1,359 million or 9.1 per cent per annum. The relatively rapid increase in personal income tax revenue reflects in large part the operation of the progressive rate scale of this tax and, although part of the increase in effective rates of income taxation arising from the operation of the rate scale was offset by the reduction in. income tax rates in 1970-71, total income taxes on persons have risen from 32.9 per cent of total Commonwealth revenues in 1961-62 to 39.2 per cent in 1970-71. Indirect taxation revenues have declined as a proportion of total revenues from 35.0 per cent in 1961-62 to 30.8 per cent in 1970-71, largely because expenditures on goods subject to indirect taxation have increased less rapidly than incomes and spending in the economy as a whole and because many products are subject to specific rates which have been changed only at irregular intervals. The Commonwealth has incurred a deficit in each of the years covered by the tables varying from a peak of $642 million in 1967-68 to a small deficit of $7 million in 1969-70. Any economic assessment of the relative importance of these Budget results would, of course, have to take into account the composition of receipts and expenditures in each year, the proportion of expenditures made overseas and the level of activity in the private sector of the economy at the time. The Commonwealth's financing transactions have varied considerably over the period from 1961-62 to 1970-71. Thus, the net proceeds of overseas borrowing reached a peak in 1968-69 when a net amount of $142 million was raised. The following year, redemptions overseas exceeded overseas loan raisings by $131 million. Net proceeds from Australian loan raisings and Treasury Notes were at their highest level over the period, $506 million, in 1962-63 and were at their lowest point, $180 million, in 1964-65. {: .page-start } page 105 {:#debate-50} ### NOTES ON TABLES 1 AND 2: FIGURES IN'CONVENTIONAL' TERMS At the Premiers' Conference in June 1971 it was agreed that the Commonwealth would cease to levy pay-roll tax in the States as from a date to be determined in 1971-72 and that the States would levy their own pay-roll taxes as from the same date. The resultant loss of revenue to the Commonwealth will be offset by a commensurate reduction in the financial assistance grants otherwise payable to the States. At the same time, however, certain special additions, estimated to total $29 million, will be made to the financial assistance grants payable to the States in 1971-72 and special revenue assistance of $40 million will. also be provided. Details of these arrangements are set out in 'Commonwealth Payments to or for the States 1971-72'. On the assumption that the new arrangements will operate from 1 September 1971, the effect of the decision will be to reduce Commonwealth pay-roll tax revenues by an estimated $259 million, with a consequential commensurate reduction in the financial assistance grants payable to the States. To assist meaningful comparisons of revenues and expenditures in 1971-72 with those in 1970- 71 and previous years, the following table shows the estimated increases in Commonwealth revenues and expenditures in 1971-72 before deducting this estimated amount of $259 million and compares these hypothetical increases with the estimated increases in 1971- 72 and the actual increases in 1970-71. Another change in the presentation of Commonwealth Budget figures for past years has also been made following the pay-roll tax decision. Export incentives in the form of rebates of pay-roll tax will continue; but after the passage of the necessary legislation, this assistance to industry under the present arrangements is to be provided by way of direct Commonwealth payments in respect of 1971-72 and 1972-73 exports. The accounts have been adjusted so that export incentives are no longer shown as an offset to pay-roll taxation receipts but rather as a part of Commonwealth expenditures under the heading 'Commonwealth Payments to Industry'. This treatment has the effect of increasing both Total Receipts' and 'Total Expenditures' in each year by equal amounts, thus leaving the overall Budget outcomeunchanged. Table 1 below sets out figures on this revised basis back to 1961-62. Numerous changes have been made in the accounting arrangements of the Commonwealth Government since 1961-62. The figures in the tables have been adjusted where possible to produce the greatest practicable degree of consistency, but it has not been possible to remove all inconsistencies. The more important that remain are: Other inconsistencies remaining do not involve substantial sums and are unlikely to affect significantly the comparability of the figures. {:#subdebate-50-0} #### Expenditures and Receipts The figures for expenditures in Table 1 exclude redemptions of debt of the Commonwealth and some transfers made to trust accounts such as transfers made to the Loan Consolidation and Investment Reserve. As a number of changes have been made to the classification of expenditures, figures included in these tables differ from those in previous Budget documents. The following notes refer to the larger adjustments which have been made to the figures of expenditures and receipts appearing in the Budget documents for earlier years: {: type="a" start="a"} 0. the figures for the years 1961-62 to 1967-68 have been adjusted to take account of an alteration in the accounting arrangements for the Post Office. A single payment representing the net funds provided from the Consolidated Revenue Fund is now included under the item Advances for Capital Purposes. The figures for Other Expenditures and Other Revenue are also affected; 1. operating expenditures of the Commonwealth Railways are no longer shown separately. They have been offset against revenue in order to show net receipts from this business undertaking; 2. the receipts heading 'Net Increase in Other Balances' used in the Budget documents for the years prior to 1968-69 has been dissected to distinguish between transactions which are in the nature of financing items and those which should be regarded as being in the nature of normal receipts and expenditures of the Commonwealth. The latter are included under the receipts item 'Net Increase in Other Balances of the Commonwealth inthe Trust Fund'. {:#subdebate-50-1} #### Financing Transactions The following notes explain the composition of some headings in Table 2 which summarises the Commonwealth's financing transactions: {: type="a" start="a"} 0. The figures for loan proceeds and drawings on credit arrangements include the actual cash proceeds from loans, etc. credited to Loan Fund in 1970-71 or their equivalents for earlier years. The figures for loan proceeds in Australia include amounts raised through State domestic loan raisings but exclude amounts subscribed by the Commonwealth to Special Loans. 1. The redemption and repayment items, both 'Overseas1 and 'Australia', consist of outlays incurred in reducing the amount of debt outstanding (other than temporary borrowings by way of Treasury Bills and Treasury Notes). They include outlays on redemptions, repurchases and repayments from the National Debt Sinking Fund and outlays on redemptions, etc. from Loan Fund, from the Consolidated Revenue Fund and from the Canadian and Swiss Loan Trust Accounts. 2. The figures shown under 'Net Change in Treasury Notes on Issue' include Treasury Notes issued to the Reserve Bank to finance advances to the Wheat Board, and those shown under the heading 'Net Advance to Australian Wheat Board' represent the net change in the indebtedness of the Australian Wheat Board to the Commonwealth each year. In March 1970 the Commonwealth advanced $250 million te the Wheat Board to enable the Board to finance its repayments in respect of the 1968-69 wheat crop to the Rural Credits Department of the Reserve Bank. This loan was fully repaid by March 1971 when the Commonwealth agreed to a similar advance of $190 million in respect of the 1969-70 crop. An amount of $71 million of this latter advance was repaid by 30 June 1971. / NOTES ON TABLE 3: FIGURES IN NATIONAL ACCOUNTS TERMS {:#subdebate-50-2} #### Outlay *Net expenditure on goods and services.* This heading covers direct purchases of domestic output and imports, and includes wages and salaries of government employees and pay and allowances of defence forces. Any recoupments of such expenditures from other sectors of the economy or overseas are netted off. Current and capital expenditures are shown, separately, and each is further classified by function. In accordance with national accounting conventions, all equipment purchased for defence purposes is classified as current expenditure. *Transfer payments.* Current payments to other parts of the economy or overseas, other than payments for goods or services supplied, are listed in their various forms under this heading. *Net advances.* Loans, advances and additional capital made available by the Commonwealth are shown in the respective items under this heading. Repayments of loans and advances are deducted to arrive at the net figures. {:#subdebate-50-3} #### Receipts *Taxation.* This heading includes, in addition to the larger items listed under the item Taxation' in Table 1, some minor taxes included in 'Other Revenue' in that table. Small amounts of expenditure are offset against receipts. *Interest, rent and dividends.* Interest on loans to the private sector is not included in this item, but is treated as financial enterprises income and included in the next item. *Gross income of public enterprises.* This item represents gross income, *less* operating expenses, of enterprises which operate within the Budget. It includes interest received on advances to the private sector, which is treated as financial enterprises income. *Net sales of existing assets.* The principal components of this item are sales of land and buildings (other than houses), *less* acquisitions of sites and existing buildings. {:#subdebate-50-4} #### Deficit This item is the difference between total outlay and total receipts. It is financed by net sales of Commonwealth securities other than to Commonwealth Government trust funds, *less* net purchases of other investments by Commonwealth Government trust funds, *less* the net increase in cash, *less* funds provided for the International Monetary Fund and the Australian Wheat Board, *plus* minor changes in other assets and liabilities. {: .page-start } page 112 {:#debate-51} ### STATEMENT No. 8 - EXTERNAL AID In 1970, for the first time, the total flow of financial resources, both official and private, from Australia to developing countries exceeded one per cent of Gross National Product. In that year Australia again ranked third in the world in terms of the net flow of official development assistance to developing countries expressed as a percentage of Gross National Product. The Development Assistance Committee (DAC) of the Organisation for Economic Cooperation and Development, which comprises all the major western aid donor countries, including Australia, uses three concepts to measure resource flows from developed to developing countries, the totals generally being expressed as percentages of Gross National Product. These are: The first concept - total net flow of official and private resources - corresponds to the definition used in the much publicised one per cent 'aid' target. It includes private investment in, and commercial loans and export credits with a maturity of more than twelve months extended to, developing countries. This concept is deficient in a number of important respects for comparing the relative aid efforts of donor countries, not least because it lumps private and official flows together as if they were the same, although they are, of course, generally motivated by entirely different considerations and their terms and conditions often differ widely. Such a measure, moreover, places capital importing countries like Australia at a disadvantage compared with capital exporting countries. Accordingly, ever since the first United Nations Conference on Trade and Development in 1964 when aid targets for individual donor countries were first evolved, Australia has consistently queried the validity and usefulness of this total flow concept. But, whatever one may think about it, the fact is that it forms the basis of the one per cent 'aid' target which has been accepted in international circles. The second concept - net official flows - represents that part of the total flow of resources to developing countries which is subject to decision by governments. However, it also has a number of shortcomings in that it comprehends various transactions which are not considered to be concessional in character. For example, net purchases by governments and central monetary authorities of bonds issued, at market rates of interest, by institutions like the World Bank and the Asian Development Bank are included, as also are official export credits, etc. Moreover, this concept, as presently defined, fails to allow fully for the difference between grants and loans inasmuch as interest payments by developing countries are *not* deducted in calculating net flows. The third concept - net official development assistance - omits the non-concessional elements in net official flows. This is by far the most meaningful of the three concepts and it is tending to become more widely used as a measure of comparative aid effort, or burdensharing, although interest is still not deducted. The following details of Australia's 'aid' performance in 1970 illustrate the differences between the three concepts: For the past live years Australia has consistently ranked third in the world in terms of the net flow of official development assistance to developing countries expressed as a percentage of Gross National Product. The following figures based on data published by the DAC compare relative aid performances by member countries since 1966. The fact that interest received on loans extended to developing countries has not been taken into account in the above data tends to distort international comparisons, especially vis-a-vis Australia, which until recently has provided all of its official development assistance in grant form and is still predominantly a grant-aid donor. {:#subdebate-51-0} #### Official Development Assistance 1971-72 The following table lists various items of expenditure which can be fairly readily identified as economic (i.e. non-military) aid to developing countries, including Papua New Guinea. The totals shown in this table differ from those quoted in Statement No. 4 - Estimates of Expenditures, 1971-72 by virtue of the inclusion of direct expenditures of an economic nature by various Commonwealth Departments and instrumentalities in or in connexion with Papua New Guinea, which are classified under other headings in the Budget. Expenditure relating to developed countries under the Commonwealth Co-operation in Education Scheme has been excluded. The estimates for 1971-72 do not necessarily represent the sum total of all the official development assistance which Australia will provide to developing countries this year. For instance, the estimates for payments to the International Development Association, the Indus Basin Development Fund and the Special Funds of the Asian Development Bank may be exceeded if these institutions make greater calls on Australia. The expected decline in expenditure on multilateral aid programmes in 1971-72 basically reflects the fact that the final instalment of Australia's subscription to the capital stock of the Asian Development Bank was paid in August 1970: no similar payment will be required this year. No allowance has been made in the above .table for the large subventions which the Commonwealth and State Governments provide each year for various educational institutions in Australia which are attended by several thousand overseas students, most of whom come from developing countries. The imputed costs involved in this hidden aid 'subsidy*' are estimated to exceed $10 million per annum. Similarly, the figures in the above table do not allow for the fact that parts of Australia's contributions to the regular budgets of a number of international organisations (included elsewhere in the Budget) are used to finance aid projects in developing countries - the annual amount involved is currently estimated to exceed $600,000. Nor has any allowance been made for the costs incurred in administering Australia's various aid programmes. In all, these costs, which are subsumed in Departmental Running Expenses, are tentatively estimated to exceed $7 million per annum at the present time. Proportionately, this compares favourably with the administrative costs of most other donor countries. Australia is also providing substantial amounts of defence aid to certain developing countries in Asia, not counting expenditures associated with the presence of Australian forces in those countries. In 1971-72, for example, military and para-military aid to Malaysia and Singapore is estimated to total $4,260,000 and military aid to South Vietnam, $3,500,000. Considerable amounts are also being expended on the Pacific Islands Regiment in Papua New Guinea. To the extent that this defence aid, which is included in the overall Defence Vote, releases domestic resources that would otherwise be used for the same purpose, it may indirectly help to promote the economic development of recipient countries. Some brief comments follow on the more important items shown in the above table: *International Development Association.* Australia has pledged a total of $99,982,143 ($US1 1 1,980,000) to IDA since its inception in 1960. This sum comprises: e an initial capital subscription of $US20,180,000 payable over the five-year period 1960-61 to 1964-65; e a contribution of $US19,8O0,O00 towards the first replenishment of the Association's resources over the triennium 1965-66 to 1967-68; e a contribution of $US24 million towards the second replenishment of the Association's resources over the triennium 1968-69 to 1970-71; and o a subscription and a contribution totalling $US48 million towards the third replenishment of the Association's resources over the triennium 1971-72 to 1973-74. The international agreement governing the third replenishment exercise has not yet entered into effect, although it was originally scheduled to do so on 1 July 1971. Contributions to IDA are initially made available in the form of non-negotiable, noninterestbearing promissory notes which are encashed on demand as and when funds are actually required. In the nature of things, there is a lag between commitments and disbursements by IDA. To the end of June 1971 actual cash payments to IDA totalled $35,569,142. An amount of $3,300,000 has been included in the Budget for 1971-72, although actual cash payments to IDA this year may be higher. *Asian Development Bank.* Australia has subscribed $75,893,000 ($US85 million) to the -initial capital stock of the Asian Development Bank, which was established in Manila in 1966 to promote the economic growth of developing countries in the ECAFE region by providing loans, on both commercial and concessional terms, and technical assistance to these countries. Papua New Guinea became the thirty-sixth member of the Bank in April 1971. One-half of Australia's capital subscription is to remain at call as security for borrowings by the Bank on international capital markets to supplement its subscribed capital and finance an expansion in its own lending operations. The balance has now been paid in to the Bank, half in convertible currency, and half in domestic currency; use of the latter has been restricted to the procurement of goods and services from Australia, as provided for in the Articles of Agreement of the Bank. Australia has also pledged the equivalent of $US10 million to the Special Funds of the Asian Development Bank over the triennium 1970-71 to 1972-73 to help finance loans by the Bank on concessional terms to developing member countries. Payments will be made to the Bank as and when funds are actually required. In all, $325,000 was paid to the Bank in 1970-71. An amount of $1 million has been included in the Budget for 1971-72, although actual cash payments to the Bank this year may be higher. *Other Multilateral Programmes.* The estimates provide for a continuation of existing rates of contribution to various U.N. aid programmes. The reason for the decrease in the estimates for the United Nations High Commissioner for Refugees and the United Nations Children's Fund is that three half-yearly payments were made to these institutions in 1970-71 to put Australia's annual contributions to them on the same basis, time-wise, as those of other countries. The estimate for the World Food Programme is lower because a special effort was made in 1970-71 to reduce the back-log in calls on Australia's previous pledges to this institution. Two new items have been included: $50,000 is provided to enable detailed design work to be undertaken on a phytotron which, it is envisaged, will be donated at a later date to the International Rice Research Institute at Los Banos in the Philippines, and $30,000 is provided to cover the cost of seconding an officer from the Australian Trade Commissioner Service to the International Trade Centre in Geneva to write a handbook on trade promotion for the benefit of officials in developing countries. *Colombo Plan.* This continues to be by far Australia's largest bilateral aid programme. It covers a wide range of activities, including the training of overseas students and officials in many different subjects in educational institutions, government services and private industry in Australia as well as the assignment of Australian experts in various fields to work and teach in developing countries overseas. It also embraces the provision of heavy machinery and equipment for large construction projects (for example, highways, bridges, dams and town water supplies) undertaken in collaboration with foreign governments. In addition, it includes the installation of radio telecommunications systems, assistance in the rehabilitation of telephone and railway networks, and gifts of such diverse items as trucks, irrigation and farm equipment, railway wagons and sleepers, dredges, pumps, hospital and broadcasting equipment, wool, bakery equipment, and teaching aids for vocational training, institutes. Various other commodities and manufactured goods have been given to developing, countries under the Colombo Plan in the past. Further details of the present programme are given in various official publications of the Department of Foreign Affairs. Australia has undertaken to provide the equivalent of $US60 million ($53,570,000) in bilateral aid to Indonesia over the triennium 1970-71 to 1972-73. lt is envisaged that about $18 million will be provided for Indonesia in 1971-72, compared with expenditure of §15,500,000 in 1970-71, making that country the largest recipient of bilateral aid from Australia at the present time. *International Wheat Agreement.* An amount of $12 million has been provided in the Budget to meet Australia's commitment under the new International Wheat Agreement to supply 225,000 metric tons of wheat or flour equivalent as food aid to developing countries in 1971-72. This is the same quantity as was supplied to developing countries in each of the last three financial years under the former International Grains Arrangement. The bulk of this wheat and flour will again be distributed to developing countries in Asia and the Pacific. *South Pacific Aid Programme.* In recognition of Australia's growing interests in, and responsibility for, developments in this part of the world, the estimate for the South Pacific Aid Programme has been almost doubled to $1 million in 1971-72. In each of the last three financial years, flour costing in the region of $690,000 has also been supplied to Fiji as part of Australia's commitment under the former International Grains Arrangement. *Indus Waters Scheme.* Australia has undertaken to contribute a total of $23,269,000 to the Indus Basin Development Fund to help finance the construction of dams, link canals and barrages on various tributaries of the Indus River designed to divide the waters between India and Pakistan in an equitable manner. Total expenditure for this purpose to 30 June 1971 amounted to $17,322,000. An amount of $1 million has been included in the Budget for 1971-72, although actual cash payments this year to the World Bank, which is responsible for administering this scheme, may be higher. *Other Bilateral Programmes.* The estimates provide for a continuation of Special Aid to South Vietnam to enable the houses being constructed for dependants of members of the Regional and Popular Forces in that country to be completed. Other aid will, of course, be provided to South Vietnam under the Colombo Plan and SEATO Aid programmes in 1971- 72. Special Aid to the Khmer Republic (Cambodia) will also be continued in 1971-72, with an amount of $1,350,000 being provided in the Budget, compared with expenditure of $960,000 in 1970-71. Likewise, other aid will be extended to this country in 1971-72 under the Colombo Plan. The estimate of $800,000 for Emergency Relief for Pakistan Refugees in 1971-72 is the balance of the $1 million pledged by the Government, of which $200,000 was spent last year. The lower estimate for Disaster Relief is a provisional figure since the need for such expenditures, because of their nature, cannot be foreseen. *Papua New Guinea.* The estimates envisage a reduction of $3 million in the 'Basic grant-in-aid' to the Administration in 1971-72 but this will be offset by an equivalent increase in the 'Development grant' to the Territory this year. Payments of allowances and other benefits for overseas officers employed in the Papua New Guinea Public Service are estimated to increase by $4,503,000, largely because of the full-year effects of the wage and salary increases which were granted in 1970-71. However, provision has also been made for an increase in recruitment this year to facilitate the task of helping the Territory to prepare for self-government in the foreseeable future. Drawings on the Arawa loan are expected to be $3,700,000 greater than in 1970-71 to enable the Administration to meet final payments falling due on completion of the township being constructed at Arawa in conjunction with the Bougainville copper project, which will commence production in mid-1972. Finally, $225,000 has been provided for the Practical Training Scheme for Papuans and New Guineans in Australia in 1971-72, compared with expenditure of $78,000 in 1970-71. Historical Growth in Australia's Official Development Assistance The following table summarises the growth in Australia's official development assistance to developing countries, including Papua New Guinea, since 1961-62. The comments on and reservations about the figures for 1970-71 and 1971-72 included in the table on page 66 also apply to the data shown below for earlier years. {: .page-start } page 118 {:#debate-52} ### STATEMENT No. 9- COMMONWEALTH ASSISTANCE TO {: .page-start } page 118 {:#debate-53} ### INDUSTRY Assistance to Australian industry is provided through the Budget by way of bounties, subsidies and other payments, and by way of contributions to promotion and research. In addition, services and facilities are provided by the Commonwealth for which no charge is made or for which charges fall well short of covering the costs incurred. A large part of the current expenditure of the Commonwealth Scientific and Industrial Research Organization, for which it is estimated $50 million will be provided from Consolidated Revenue in 1971-72, is on activities undertaken for the benefit of Australian industry. Commonwealth departments providing assistance in the form of services and facilities include Primary Industry, Trade and Industry (including the Australian Tourist Commission), National Development (Bureau of Mineral Resources, and Forestry and Timber Bureau), Civil Aviation and Labour and National Service. Assistance to improve the defence capability of Australian industry is provided in a number of ways from the Defence Vote. The Commonwealth has provided substantial assistance to the rural sector in recent years by way of natural. disaster relief payments to the States, the largest of which has been reimbursement of State expenditure on drought relief schemes. A number of the specific purpose grants to the States also assist primary industries - for instance, payments for beef cattle roads, brigalow lands development, water resources investigations, and so on. In addition, a very considerable amount of assistance is being provided through the Budget by way of special taxation concessions which, as they result in a reduction of Commonwealth revenues (and a corresponding increase in the funds available to the recipients), are as much a call on the Budget as direct payments which add to expenditures. Assistance of this type is provided mainly by way of income tax concessions which permit firms and individuals to make deductions from their incomes for taxation purposes beyond those normally permitted under the income tax law. In total, the Commonwealth assistance specified under the following three headings, which does not include all the forms of assistance referred to above, amounted to about $658 million in 1970-71. {: .page-start } page 118 {:#debate-54} ### COMMONWEALTH PAYMENTS TO INDUSTRY The following table sets out estimates of Commonwealth payments to (or on behalf of) industry in 1971-72 included under the heading 'Commonwealth Payments to Industry', Item No. 9 in Statement No. 4. These payments are estimated to amount to 8371 million in 1971-72 which compares with payments of about $150 million five years ago (1966- 1967) and about $70 million ten years ago (1961-62). The following comments cover the main variations shown in the table on the preceding page. {:#subdebate-54-0} #### Rural Industries *Raw Cotton Bounty.* The estimated decrease of $2,177,000 in bounty payments on raw cotton results from an amendment made in 1969 to the Raw Cotton Bounty Act. This amendment placed a ceiling of $2,000,000 on bounty payments for the 1971 crop. The provision for 1971-72 is the balance of the liability on this crop. No further bounty is payable under the Act. *Apple and Pear Stabilization Schemed* The provision of $3,000,000 for 1971-72 represents the estimated Commonwealth liability in respect of apples and pears shipped and sold 'at risk' in 1971 under a proposed stabilization scheme. The scheme guarantees minimum returns for 23 varieties. Growers contribute when the. average export returns are in excess of the minima. *Canned Fruits Industry Assistance.* In 1970-71 the Commonwealth provided financial assistance to the States of Victoria, New South Wales and South Australia to enable assistance to be provided to the Shepparton Preserving Company Ltd. and for the relief of the long-term indebtedness problems of the Leeton, Riverland and Jon canneries. The provision of $200,000 for 1971-72 represents a further amount to be provided to Victoria to assist the Shepparton Preserving Company Ltd. *Butter and Cheese Bounties.* Payments are expected to decrease by $1,618,000 in 1971-72 as the special additional grant for 1970-71 has been renewed at a lower level. *Marginal Dairy Farm Reconstruction Scheme.* The increase of $8,422,000 reflects the first full year of operation of this scheme for which the Commonwealth has agreed to provide $25 million over a period of four years. *Devaluation Compensation.* An estimated $11,300,000 less than in 1970-71 is to be paid to rural industries in 1971-72 in respect of reduced returns in Australian currency arising from the 1967 devaluation of sterling and other currencies. Details of payments in each of the past two years, and those expected in 1971-72, are: - *Petroleum Products - All States and Northern Territory.* The subsidy scheme is designed to reduce the wholesale prices of certain petroleum products in rural areas to within 3. 3 cents per gallon of capital city prices. The estimated increase in expenditure for 1971-72 reflects an expected increase in consumption. *Phosphate Fertilizers Bounty:* It is proposed that this bounty, which is due to expire on. 31 October 1971, be extended to 31 December 1974. The estimated reduction of $2,815,000 in expenditure for 1971-72 reflects an expectation that sales of fertilizers eligible for the bounty ' will be less than in 1970-71. *Rural Reconstruction.* An amount of $40 million is to be provided to the States in 1971-72 for the first full year of operation of the scheme of debt reconstruction, farm build-up and rehabilitation, for which the Commonwealth has agreed to provide $100 million over a period of four years. *Wheat Industry Stabilization.* The wheat stabilization payment in respect of the 1969-70 season is based on an average export price of 132.30 cents per bushel, compared with a guaranteed return of 145.90 cents per bushel for 200 million bushels of exports. *Advances against possible loss by Australian Wool Commission.* The payment in 1970-71 was to provide for the estimated loss resulting from the trading operations of the Commission. A provision for a similar purpose has been included for 1971-72. *Deficiency Payments for Wool.* It is proposed to introduce a one-year scheme of deficiency payments in respect of the 1971-72 wool clip. The expenditure estimate of $60 million is subject to a considerable margin of uncertainty, as the level of payments will depend on actual market proceeds. *Emergency Assistance to Woolgrowers.* The provision of $150,000 in 1971-72 represents the amount outstanding under the one-year scheme, introduced last year, of emergency assistance to woolgrowers. *Wool Marketing Assistance.* Payments are made to meet half the costs of handling (interlotting, bulk-classing, etc.) of one, two and three bale lots covered by the price averaging plan operated by the Australian Wool Commission; and half of brokers' administration charges relating to the plan. The increase of $800,000 in 1971-72 reflects an expected increase in the quantity of wool to be included in the plan. {:#subdebate-54-1} #### Manufacturing Industries *Agricultural Tractors Bounty.* Actual expenditure for 1970-71 and estimated expenditure for 1971-72 include the temporary additional bounty on the sale of eligible tractors. *Book Bounty.* The estimated decrease of $717,000 in payments in 1971-72 is due mainly to the Government's decision, announced in May 1971, to exclude certain types of publications from the bounty. *Shipbuilding Subsidy.* Ships are purchased by the Commonwealth and sold at prices up to one-third below cost. The 1971-72 estimate shows an increase of $9,488,000 in gross expenditure compared with 1970-71. However, receipts from the sale of ships are expected to increase by $18,066,000, of which $6,075,000 represents recoveries in respect of expenditure in 1970-71. *Sulphate of Ammonia and Urea Bounties.* These bounties were terminated in November 1970 after the Government accepted the recommendations of the Tariff Board in its report on Nitrogenous Fertilizers. *Sulphuric Acid Bounty.* Provision has been made for trie operation of this bounty to be extended until May 1972. *Devaluation Compensation.* The scheme of assistance applied to exports up to the end of 1969 to markets affected by devaluation. It is expected that final payments under the scheme will be made in 1971-72. *Export Incentive Pay-roll Tax Rebates.* As already announced, the incentive scheme will be continued, following the transfer of pay-roll tax to the States, on the basis of direct Commonwealth payments in respect of 1971-72 and 1972-73 exports. The forecast increase of $5,250,000 reflects the continued increase in exports eligible under the scheme. *Industrial Research and Development Grants.* The decrease in 1971-72 of $3,250,000 is due mainly to the reduction in the general grant rate from 50 per cent to 35 per cent of companies' eligible expenditure on- research and development in 1970-71. {:#subdebate-54-2} #### Mining Industries *Pyrites Bounty.* Provision has been made for the operation of this bounty to be extended until May 1972. *Gold Mining Industry Assistance.* The estimated decrease results from declining production and a higher expected level of premium receipts from the sale of gold on the free market. *Petroleum Search Subsidy.* New commitments under the subsidy scheme will be higher In 1971-72 than in 1970-71 but payments will be less because of a reduction in liabilities carried forward from 1970-71. {: .page-start } page 122 {:#debate-55} ### COMMONWEALTH CONTRIBUTIONS TO PROMOTION AND RESEARCH In addition to its direct support of the Commonwealth Scientific and Industrial Research Organization, the main contributions made by the Commonwealth to promotion and research are shown below. {: .page-start } page 122 {:#debate-56} ### COMMONWEALTH ASSISTANCE TO INDUSTRY THROUGH THE TAXATION SYSTEM The amount of revenue forgone in 1970-71 through the main taxation concessions for which figures are shown below, is estimated to have been about $305 million. Most, though not all, of that amount is forgone through concessions in the income tax law, which are shown in some detail below. (Pay-roll tax rebates, under the export incentive scheme, are shown in the section headed 'Commonwealth Payments to Industry.') The special estate duty reliefs for primary production estates, introduced in the financial year 1969-70, cost $3 million in 1970-71. There are numerous concessions in the sales tax field in the form of special exemptions to assist particular industries. Most of the relevant concessions in the income tax field may be grouped in three broad categories, namely: A those which allow the deduction of larger amounts than are authorized under the general provisions of the law (included in this category is the rebate for export market development expenditure, which gives a tax saving additional to the saving resulting from the deduction from income for this expenditure); B those which allow certain taxpayers to deduct the cost of items of plant over shorter periods than is the case for the general run of taxpayers; and C those which exempt certain classes of income. The main provisions in each of these classes, and the estimated amounts of revenue forgone in 1970-71 are:- The preceding table does not include the cost of the averaging provisions applied to incomes of 'primary producers'. These provisions involve assessment at rates of tax which may differ from those otherwise applicable to the taxable income. They have the effect of reducing the tax otherwise payable in a year when taxable income exceeds the average of that year and four preceding years. It may exceed the average because of fluctuations in income, or because incomes had generally risen over the period, or both. Conversely, if taxable income falls below average income, tax payable under these provisions is higher than it would otherwise be. Options allowed by the law to withdraw permanently from the averaging provisions, or to re-enter them, have enabled 'primary producers' to have applied either tax at general rates or tax under the provisions, whichever is more favourable to them. The provisions are estimated to have involved a cost to revenue of approximately $1 1 1 million in the five assessment years ended 1970-71, of which approximately $24 million relates to revenue forgone in 1970-71. The table also excludes the cost of the drought bonds scheme which commenced in 1969-70. This scheme enables eligible pastoralists to reduce their taxable incomes in some years, by the amounts they subscribe to drought bonds, and increase them in later years, by amounts of redemptions. By evening out fluctuations in taxable income, the scheme, can enable them to make an overall saving in tax. The cost of the scheme to revenue up to 30 June 1971 is estimated at $640,000. With increasing mining production and continuing expenditure on exploration, it is probable that there will be further increases in the costs to revenue of the various income tax concessions which apply to the mining and mining exploration industries. In particular, increased production of bauxite, nickel and the other prescribed minerals, income from which is partly exempted under section 23a, will result in greater revenue losses in future years. Section 23a of the Income Tax Assessment Act provides for the exemption from income tax of one-fifth of the net income from the production or sale of certain prescribed metals and minerals. Also, as the income from production of Australian petroleum grows, there will be a continuing cost to revenue of the special allowances permitted for petroleumproducing enterprises. These allowances effectively free from tax income from the sale of Australian petroleum and its products, until capital expenditure incurred in finding and recovering the petroleum (other than such expenditure transferred for deduction against shareholders' income by reason of section 77d, which has been enacted to replace section 77a), has been recouped out of the mining profits. Dividends paid out of such tax-free income are exempt in the hands of shareholders of the mining and petroleum companies. {: .page-start } page 125 {:#debate-57} ### STATEMENT No. 10- SOCIAL WELFARE AND REPATRIATION {: .page-start } page 125 {:#debate-58} ### EXPENDITURES Commonwealth expenditures in the fields of social welfare and repatriation are brought together in the following table which shows actual expenditures in 1970-71, and estimated expenditures in 1971-72 including the cost of measures announced in the Budget Speech. In addition to expenditures contained in Item No. 3 - Payment to National Welfare Fund, and Item No. 4 - Repatriation Services, in Statement No. 4. this table includes certain expenditures contained in other Items in that Statement. {:#subdebate-58-0} #### Social Services Expenditures under this heading comprise amounts charged to the National Welfare Fund and other Social Services expenditures provided for by annual appropriations or by separate legislation. Details of the expenditures charged to the National Welfare Fund are contained in Item No. 3, Statement No. 4. The totals of these expenditures are repeated in the following table which also gives particulars of the other Social Services expenditures. {:#subdebate-58-1} #### Health Services Certain expenditures on Health Services are met from the National Welfare Fund. Other expenditures are provided for by annual appropriations or by separate legislation. Item No. 3, Statement No. 4, provides details of those expenditures for Health Services charged to the National Welfare Fund. The following table shows the totals of the National Welfare Fund expenditures on Health Services and particulars of other national Health Services items not charged to the Fund, Housing Benefits Item No. 3, Statement No. 4, gives' details of expenditures on Housing Benefits charged to the National Welfare Fund. The following table shows the composition of total expenditures on Housing Benefits. Repatriation Services Details of expenditures on Repatriation Services are given in Item No. 4, Statement No. 4. {: .page-start } page 127 {:#debate-59} ### OUTLINE OF SOCIAL WELFARE AND REPATRIATION BENEFITS A. SOCIAL WELFARE BENEFITS SOCIAL SERVICES HEALTH SERVICES {: .page-start } page 129 {:#debate-60} ### HOUSING BENEFITS {:#subdebate-60-0} #### Commonwealth and State Housing Agreement 1945 Under the 1945 Commonwealth and State Housing Agreement, the Commonwealth, subject to a State's observing the provisions of the Agreement, meets three-fifths of any net losses, including rental rebates granted by the State under the Agreement, incurred in a year. {:#subdebate-60-1} #### Homes Savings Grant Act 1964-1970 The *Homes Savings Grant Act* 1964-1970 authorizes the payment to an eligible person of a Commonwealth grant of $1 for every $3 of acceptable savings for a home accumulated over a period of at least three years. The maximum grant payable for a home is $500. {:#subdebate-60-2} #### States Grants (Dwellings for Aged Pensioners) Act 1969 Under the *States Grams (Dwellings for Aged Pensioners) Act* 1969 the Commonwealth has agreed to make non-repayable grants to the States totalling $25 million over 5 years, beginning in 1969-70, for the purpose of providing self-contained dwelling units at reasonable rentals for single age pensioners or service pensioners receiving pension on grounds of age, who have little or no means apart from pension. {:#subdebate-60-3} #### Housing Grants As announced in the Budget Speech, the Commonwealth has decided to offer the States, in respect of their housing activities in each year from 1971-72 to 1975-76, a basic grant of $2,750,000 a year payable for a period of thirty years. This will replace the interest concession on housing advances made by the Commonwealth up to 30 June 1971. The Commonwealth has also decided to oner additional assistance to the States for housing, in the form of a grant of $1,250,000 each year for the next five years, as a general contribution towards reducing housing rents for needy families occupying housing authority homes. {: type="a" start="a"} 0. Special rate pension (commonly referred to as the T.P.I. pension) is granted where an ex-serviceman, because of incapacity accepted as due to war service, is totally and permanently incapacitated - that is, to such an extent as to be precluded from earning other than a negligible percentage of a living wage - or has been blinded as a result of war service. Where an ex-serviceman is only temporarily totally incapacitated, an amount equal to the special rate pension is payable only for the period for which he is so incapacitated. It may also be granted under certain conditions to an ex-serviceman who is suffering from pulmonary tuberculosis. 1. Intermediate rate pension is payable where an ex-serviceman, because of the severity of his war-caused disabilities, can work only part-time or intermittently and therefore is unable to earn a living wage. 2. General rate pension is payable to an ex-serviceman whose war-caused disabilities do not prevent him from working, although they may reduce his earning capacity. Pension from 10 per cent to 100 per cent of the maximum general rate is payable according to the degree of incapacity as assessed by a Repatriation Board, the Repatriation Commission or an Assessment Appeal Tribunal. 3. A 'Special Compensation Allowance' is payable to certain general rate pensioners with assessed incapacity ranging from 75 per cent to 100 per cent. 4. These are additional amounts payable to general rate pensioners who have suffered specified amputations and/or loss of vision in one eye as a result of war service. 5. Pension is payable to the widow of an ex-serviceman whose death has been accepted as due to his war service or who has died from causes not due to war service but was receiving, at the time of his death, or is later adjudged to have been entitled to receive, the special rate of war pension, one of the rates payable to double amputees or one of the special rates payable in respect of tuberculosis, or who served in a theatre of war and died as a direct result of pulmonary tuberculosis. Domestic allowance is also payable to a war widow if she has a dependent child or children under 16 years, or is50 years of age or over, or is permanently unemployable or has a child 16 years or over who is undertaking education or training approved by the Commission and who, in the opinion of the Commission, is not receiving an adequate living wage. {: type="a" start="g"} 0. War orphans' pensions are paid for the children of an ex-serviceman whose death occurred in circumstances similar to those mentioned in (f) above. The pensions continue until the children attain 16 years. 1. Sustenance allowance is payable to an ex-serviceman who is prevented from following his usual occupation by the necessities of treatment for a disability accepted as war-caused. The allowance is payable at the higher rate during in-patient treatment, including essential convalescence; or for out-patient treatment or a combination of in- and out-patient treatment for a continuous period in excess of 28 days. It is payable at the lower rate for a period of up to 28 days where out-patient treatment of a war-caused disability prevents the ex-serviceman from following his usual occupation. It is also payable at the lower rate where investigation of a claim for pension or disability (either as an in- or out-patient) prevents an ex-serviceman from working. The amount of sustenance allowance payable is reduced by the amount of any war pension payable to the ex-serviceman. at the higher rate if he has two arms amputated; or been blinded and also afflicted with total loss of speech or total deafness; or at the lower rate if he has two legs and one arm amputated; or has certain amputations to both legs above the knees; or been blinded; or is deemed by the Repatriation Commission to be blinded and in need of an attendant; or. as a consequence of an injury or disease affecting the cerebrospinal system or an injury or disease similar in effect and severity, is deemed by the Repatriation Commission to be in need of an attendant; provided the disabilities are due to war service. 2. Children of ex-servicemen are eligible under the Soldiers' Children Education Scheme where the ex-serviceman: died as a result of war service; or is receiving a special rate pension; or died from causes not due to war service but was receiving, at the time of his death, or is later adjudged to have been entitled to receive, the special rate of war pension, or one of the rates payable to double amputees, or one of the special rates payable in respect of tuberculosis; or is blinded as a result of war service; or is suffering from tuberculosis and is receiving a pension equal to the special rate and is likely to remain in receipt of such pension for a period of three years. 3. An allowance for recreation transport, at the rates shown, may be payable to certain classes of seriously disabled ex-servicemen, the rate of allowance depending on the degree of loss of locomotion. An allowance for recreation transport is also payable, at the lower rate, to the totally war blinded. 4. A motor vehicle may be issued as a gift to certain classes of seriously disabled ex-servicemen and an allowance, at the rate shown, may be payable towards the upkeep of the vehicle. 5. Service pension, which is broadly the equivalent of the age and invalid pensions payable to civilians, is payable, subject to a means test, to an ex-serviceman who: is suffering from pulmonary tuberculosis; or has served in a theatre of war (or in the case of a woman, served abroad or embarked for service abroad) and has attained, if a man, the age of 60 years, or if a woman, 55 years; or is permanently unemployable. Where a service pension is granted to an ex-serviceman on the grounds that he is permanently unemployable or suffering from pulmonary tuberculosis, or if there is an eligible child, service pension may also be paid to his wife and the first four eligible children, but the amount for a first child is normally paid as an addition to the ex-serviceman's pension. Where the ex-serviceman's wife is receiving a social service pension, a tuberculosis allowance or a service pension as a 'member of the forces', the rate payable to the ex-serviceman is the married rate unless, because of the illness or infirmity of either or both of them, they cannot live together in a matrimonial home. Guardian's allowance may be payable to a service pensioner who is unmarried, widowed, divorced or married but separated and who has the custody, care and control of a child. Supplementary assistance at a maximum rate of $2.00 a week is payable, subject to the payment of rent and to a means test: to a single service pensioner; to a married service pensioner provided his spouse is not receiving a pension from the Department of Social Services, a tuberculosis allowance or a service pension as a 'member of the forces'; and to a married service pensioner whose spouse is receiving a social service pension, a tuberculosis allowance or a service pension as a 'member of the forces' and who is unable to live with his spouse in a matrimonial home because of the illness or infirmity of either or both of them. {: type="a" start="n"} 0. Wife's service pension is payable, subject to a means test, to a wife who is not in receipt of a pension (other than unemployment, sickness or special benefit) from the Department of Social Services or a service pension as an ex-servicewoman, if the service pensioner is permanently unemployable, suffers from pulmonary tuberculosis or has a child. {: .page-start } page 133 {:#debate-61} ### APPROPRIATION BILL (No. 2) 1971-72 Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by **Mr Snedden,** and read a first time. {:#subdebate-61-0} #### Second Reading {: #subdebate-61-0-s0 .speaker-DQF} ##### Mr SNEDDEN:
Treasurer · Bruce · LP -- I move: >That the Bill be now read a second time. This Bill contains details of proposed appropriations of the Consolidated Revenue Fund in 1971-72 totalling $710,462,000 for expenditure on (a) the construction of public works and buildings; (b) the acquisition of sites and buildings; (c) advances and loans; (d) items of plant and equipment which are clearly definable as capital expenditure; (e) grants to the States under section 96 of the Constitution; and (f) new policies not authorised by special legislation. Included in the above total is an amount of $25m as an advance to the Treasurer for the purposes set out in the Bill. The proposed expenditures in this Bill were dealt with as appropriate in my Budget Speech. I commend the Bill to honourable members. Debate (on motion by **Mr Crean)** adjourned. {: .page-start } page 133 {:#debate-62} ### BUDGET 1971-72 {: #debate-62-s0 .speaker-DQF} ##### Mr SNEDDEN:
Treasurer · Bruce · LP -I present for the information of honourable members the following papers in connection with the Budget for 1971-72: >Estimates of Receipts and Summary of Estimated Expenditure for the year ending 30 June 1972. > >Commonwealth Payments to or for the States 1971-72. {:#subdebate-62-0} #### National Income and Expenditure 1970-71 Government Securities on issue at 30 June 1971. Commonwealth Income Tax Statistics for income year 1968-69. Civil Works Programme 1971-72 circulated by the Minister for Works. Ordered to be printed. {: .page-start } page 133 {:#debate-63} ### POSTAL AND TELEPHONE CHARGES {:#subdebate-63-0} #### Ministerial Statement {: #subdebate-63-0-s0 .speaker-KIF} ##### Sir ALAN HULME:
PostmasterGeneral and Vice-President of the Executive Council · Petrie · LP -- by leave - My colleague the Treasurer **(Mr Snedden)** has referred in his Budget Speech to new postal and telephone charges which are to be introduced during the financial year 1971-72. The legislation relating to these will be introduced during this session. For the benefit of honourable members the proposed adjustments are set out in some detail in the schedules now available to them. The increase in the charges for telecommunications and postal services are proposed to be effective in the main from the 1st October 1971. As recorded in my White Paper on Post Office Prospects and Capital Programme 1971-72, at the beginning of the financial year 1970-71 the overall Post Office trading profit was estimated at $30m. By the end of the year this had changed to a trading loss of $2m with a loss on postal operations of $25m and a profit on telecommunications operations of $23m. The long-term forecast for the financial year 1971-72 was a modest profit. Without an adjustment in charges the current forecast is a loss of $36m - $35m in postal and $lm in the" telecommunications side. The deterioration in the financial position is due largely to new wage awards. During 1970- 71 some 50 new awards affecting Post Office staff were granted and these will add $77m to Post Office expenditure in 1971-72, compared with a 5-year average increase of $40m. In addition, arbitration awards to industry generally have had an effect on prices of materials and services used by the Post Office and increased prices will add about a further 81 Om to expenditure during 1971- 72. In the face of the abnormal increase in labour and other costs which must be met in 1971-72. the continued demand for services and the excessive pressure this places on available resources, and the serious deterioration in financial prospects for the future, the Government has decided to increase certain charges for postal and telecommunication services. The proposals which I will later present to the House are expected to provide $50m in 1971-72 and $90m in a full year. The estimated overall trading position for 1971-72 will then be $36m profit with a $53m profit in telecommunications and a $17m loss in postal. {: .page-start } page 134 {:#debate-64} ### TELEPHONE SERVICES When introducing a Bill to the House at this time last year proposing certain increases in telephone charges I mentioned that the rental structure that was then in force did not nearly cover the recurring annual expenses borne by the Post Office in relation to the facilities provided. Accordingly, each of the 3 rental categories was increased, as well as the service connection fee and the rental for some other miscellaneous telecommunications facilities. The new charges were based on the economic situation of the Post Office at the time. However, since the new tariff structure came into operation on 1st October 1970 the very substantial salary increases awarded throughout have added to Post Office operating costs and dramatically altered the 1971-72 financial results forecast last year. As a consequence, there is no alternative other than to make further adjustments to the telephone tariff structure and it is now proposed that the present rental charges in each of 3 classes be further increased. The present annual rentals for a basic telephone service, depend ing on its location, are $47, $31 or $23. It is proposed that these charges be increased by $8, $6 and $4 respectively which will mean that subscribers in State capital cities, Canberra and Newcastle will pay $55 per annum for a basic telephone service, and those in provincial areas will pay either $37 or $27 per annum depending on the number of subscribers they can call for a local call fee and on whether they have continuous service. The onethird reduction in rentals which is given to blind persons and certain classes of pensioners will be maintained. It is proposed also to increase the service connection fee by $10, making the fee $50. Telephone call charges have not been increased since 1967, despite rising costs, and the Post Office, as a business undertaking, has no alternative but to increase these charges. It is proposed to increase local call charges from 4c to 4.75c with a corresponding increase in trunk charges. The fees for particular person, reversed charge and fixed time calls are also to be increased. The Telex call fee of 5c per meter registration has not been altered since the automatic Telex system was introduced in 1966. It is proposed to increase this fee to 6c. Fixed fees for installing, altering or removing miscellaneous equipment (as distinct from the installation of a new or removal of an existing service to a new address) are to be increased. Present charges which have not been altered since 1964, do not cover costs. It is estimated that the variations will bring in additional revenue of $35m in 1971-72 and $69m in 1972-73. {:#subdebate-64-0} #### Postal Services With estimated postal losses of $25m in 1970-71 and $35m in 1971-72 at current tariffs, a general increase in rates is unavoidable if rising costs are to be recovered. It is expected that the increased charges will bring in SI 5m in 1971-72 and $21m in a full year and reduce the estimated postal loss to $17m in 1971-72. Although there was an increase in the basic postal rate last year the wage rates payable to postal staff have been increased since then by an average of 16 per cent. These have had a particularly adverse effect on the postal services because some 70 per cent of its costs are associated with labour. In the last 3 years postal wage rates have risen by about 40 per cent. {:#subdebate-64-1} #### Letters and Other Articles The existing basic rate of 6c will be increased to 7c, for the first ounce in respect of letters and for the first 2 ounces in respect of other articles. There will be no change in the rates for heavier weight letters and other articles. Publications Registered at the G.P.O. Tht existing general rate for registered Australian books, newspapers and periodicals of 6c for the first 6 ounces and5c for each additional 6 ounces will become 7c for the first 6 ounces and 6c for each additional 6 ounces. These concession rates represent, in effect, a substantial subsidy to the publishing and printing industry and to many organisations, ranging from religious, charitable and welfare organisations to social and recreational clubs. It is debatable whether this subsidy is an appropriate charge on the Post Office's finances. It is necessary, therefore, to continue the action taken in recent years, to reduce the extent of the postal loss from this concession. The rate for Category A publications will be increased to 7c for each 12 ounces on the total weight of the consignment, subject to a minimum per article charge of 1½c. This means that most country newspapers and periodicals, and the publications of religious, charitable and welfare organisations, and of educational, scientific, technical and agricultural bodies having the dissemination of knowledge as their principal object, will still be paying only 1½c postage per article compared with 7c at normal printed matter rates. Each item must be handled a number of times between posting and delivery. Registered newspapers and periodicals in Category B, including those published by professional, business, union, commercial, social, recreational and motoring organisations, will pay the following rates: For delivery from the office of posting: 2c first 2 ounces. ½c each additional ounce. For delivery elsewhere: 2½c first 2 ounces. 1c each additional ounce up to 8 ounces. ½c each additional ounce thereafter. The registered publications will still enjoy a substantial concession. These increases on bulk postings of Category A and Category B publications will operate from 1st March 1971 to give publishers and organisations time to adjust subscription rates. Category A publications will continue to be registered, at least for the time being. However, because of the need to contain increases in the loss from this concession area no further registrations in Category B will be allowed after 31st December 1971. Existing Category B publications will retain their registration as long as they comply with the eligibility conditions. A new Category C, at economic postage rates and requiring compliance with conditions to reduce postal costs, will be introduced. Controlled circulation publications, sent on request by publishers to defined customer groups, and not previously eligible for registration will be eligible for the new Category C. These publications, mainly heavy business magazines, are at a great disadvantage compared with comparable registered publications. In addition, newspapers and periodicals which would otherwise have been eligible for Category B will, after 31st December 1971, be eligible for registration in the new Category C. Conditions for page inscriptions, format, and supplementary material in respect of registered newspapers and periodicals will be varied to meet more satisfactorily present day needs of publishers. Bulk Pre-sorted and Householder Mail Adjustments are being made to the postage rates for letters, other articles and registered books posted under the bulk presorted mail service. Many customers are taking advantage of these lower rates and the Post Office is benefiting from the economies of higher mail volumes and compliance with mandatory pre-sorting and other conditions. Rates for heavier weights have been converted to a 2 ounce basis. In the Householder Service a reduction of up to 25 per cent for postings over 100,000 is proposed in order to meet competition from private delivery contractors and retain existing business. This service will continue to pay its way because no sorting is required, the articles being addressed simply to The Householder' and delivery is spread over several days. {:#subdebate-64-2} #### Other Postal Adjustments The rates for parcels will be increased, averaging 10 per cent for domestic and 20 per cent for overseas. The fees for many reasons for the increases when introducing the proposed legislation later in the session. I now turn to the new fees for broadcasting and television licences. These were referred to by the Treasurer in his Budget Speech. There will be no increase in the pensioner rate in either broadcasting or television licences fees. As to other areas, the broadcast listeners, hirers and lodging house licence fee for zone 1 will be increased from $6.50 to $8 and for zone 2 from $3.30 to $4.25. The television viewers licence fee will increase from $14 to $19 and the combined receiving licence, to cover both broadcasting and television, will increase from $20 to $26.50, and a new combined lodging house licence will be included with a fee at $26.50. All the proposed adjustments are detailed in tables, copies of which are being made available to honourable members. With the concurrence of honourable members, I incorporate these tables in Hansard. labour intensive special services, which fail to cover costs by a big margin, such as registered post, certified mail, and messenger delivery services will also be increased. However, the maximum compensation payable on registered mail will be increased to $150 and compensation of up to $20 for loss or damage in respect of certified mail will be introduced. Regarding overseas mail, airmail letter rates will be increased by 5c per half ounce, 2c per half ounce in the case of New Zealand, and aerogrammes by 2c, because of cost increases in the handling component and the need to cover processing costs on incoming mail which is nearly twice the outgoing volume, despite a 25 per cent reduction in conveyance rates. British Commonwealth preference rates for overseas surface letters will be abolished; few Commonwealth countries have this now and Canada has just eliminated it. As far as the general public is concerned, this will have relatively little effect as their most common form of surface communication overseas is greeting cards which may be sent at the 7c printed papers rate proposed. A new rate category for all registered newspapers and periodicals, posted in bulk to overseas will also be introduced, the charge being the same as for category C in the domestic service. Other changes include a sliding scale of fees relating to volume, for business reply items, and an allowance of lc in the postage on grouped artices. I will elaborate further on the {: .page-start } page 141 {:#debate-65} ### ADJUSTMENTS OF FEES FOR BROADCAST LISTENERS' AND TELEVISION VIEWERS' LICENCES (As from 1st October 1971) {: .page-start } page 141 {:#debate-66} ### INTRODUCTION It has been announced that, from 1st October 1971, the fees for broadcast listeners' and television viewers' licences will be increased. The fees for pensioner licences will not be varied. The facilities for the national broadcasting and television services are provided by the Australian Broadcasting Commission and the Post Office. The provision and running of the transmitters and transmitter buildings and the technical equipment involved in getting programmes from a studio to the transmitter are the responsibility of the Post Office while the Broadcasting Commission provides and operates the facilities required for the production of the programmes. There have been suggestions that these services should be financed wholly from taxation receipts, but it has been the practice in the past for listeners and viewers to contribute a major share of the costs, through licence fees, to the Consolidated Revenue Fund and it is not proposed that this arrangement be varied. The Post Office is responsible for collecting these fees. The existing licence fees were last varied in 1968 but since that time the excess of expenditure over receipts has grown from $14 million in 1968-69 to an estimated $31 million in 1971-72. The deterioration in the overall financial position of the services has been due to mounting wage costs, and higher operating and maintenance costs with the expansion of the services. A new type of licence is being introduced, from 1st October 1971. A combined broadcast/television licence will be available for lodging houses where both broadcast and television receivers are provided for the use of guests. This action is being taken to cover the motel situation where both facilities arc provided in suites. The new combined lodging house licence will offer a saving of fifty cents over the cost of the individual licences. I present the following papers: {:#subdebate-66-0} #### Postal, Telegraph and Telephone Services and Facilities - Adjustments of Charges {:#subdebate-66-1} #### Broadcast Listeners' and Television Viewers' Licences - Adjustments of Fees Ordered that the papers be printed. {: .page-start } page 142 {:#debate-67} ### REVIEW OF SERVICE GROUP PAY SYSTEM {:#subdebate-67-0} #### Ministerial Statement {: #subdebate-67-0-s0 .speaker-KDT} ##### Mr FAIRBAIRN:
Minister for Defence and Minister for Education and Science · Farrer · LP -- by leave - I should like to amplify the brief reference made by the Treasurer to the increases in pay included in the Estimates in respect of other ranks of the armed Services. It should be realised that the increased expenditure provision does not merely connote a pay increase, but marks a major change in the philosophy and system of other ranks pay as recommended by the Committee of Inquiry into Financial Terms and Conditions of Service Employment. In accordance with the Government's policy of ensuring the justice and adequacy of financial and other conditions of service of the armed Services, this Committee was set up in October 1970 under the chairmanship of the Honourable **Mr Justice** John R. Kerr, C.M.G., a judge of the Commonwealth Industrial Court, with other distinguished members having experience of the armed forces, conciliation and arbitration, commerce and industry and the Commonwealth Public Service. The Committee also has a senior serving officer from each of the armed Services attached to it in a consultative role. Under its terms of reference, the Kerr Committee is required to examine the principles for determining officers' pay, the practical working of the group pay system for other ranks, the nature and incidence of the demands and exigencies of Service life and various compensatory allowances. In relation to the matters before it, the Committee has sought and received the views of Service boards, relevant Commonwealth departments, serving servicemen of all ranks and other interested persons and organisations. It has also visited ships of the fleet at sea, Service establishments in Australia, bases in Singapore and Malaysia and operational units in South Vietnam to secure first-hand knowledge and experience of the wide variety of service employments and conditions of work, and life in the Services. Wide-ranging discussions of both a formal and informal nature have been a feature of the Committee's inquiries, and these are continuing. Quite early in its inquiries the Committee decided that it was necessary to give priority attention to the particular term of reference relating to the pay of other ranks in the Services and this approach was endorsed by the Minister for Defence. The outcome of this was report No. 1, entitled The Group Pay System', which was made available to honourable members and to the Press with the approval of the Government on 11th June 1971. A brief supplementary report No. 2 has since been submitted by the Committee on the same subject recommending amended pay rates in the light of certain changes in the pay rates of trades and associated staffs in the Commonwealth Public Service. These changes, which flowed from a consent determination issued by the Commonwealth Public Service Arbitrator on 8th July 1971 became effective after the date of submission of report No. 1 but were foreshadowed in that report, which requested that, if and when approved, these changes be referred back to the Committee for further consideration. This consideration resulted in further increases to all of the pay levels and the noncommissioned officer pay scales recommended in report No. 1. The Kerr Committee stated that it had considered and rejected the alternative of applying this increase only to those Service employments which have hitherto been aligned with the Commonwealth Public Service grades now granted an increase. Bearing in mind all the difficulties and anomalies which this process had generated in the past, the Committee stated that it proposed to adopt the course of placing new values on the pay levels established by report No. 1. The group pay system is based on the concept of aligning Service employments with civilian trades for pay purposes. Introduced originally with the Services pay code in 1947, the system was expanded to seven groups by the Allison Committee in 1958. A further review in 1968 greatly extended the number of groups and applied the system for the first time to the Navy. While it endorsed the concept of relating Service pay to equivalent civilian rates on a broad basis, the Kerr Committee found that the progression towards alignment of Service employments with a multitude of specific civilian trades, all undergoing pay changes in an uncoordinated way, was disruptive and counterproductive so far as Service pay satisfaction was concerned. The Committee criticised the pay turbulence within the Services resulting from the constant variation of outside awards with which Service employments are aligned, the constant and irritating changes in pay relativities between different Service employments due to the erratic influence of independent civilian award movements, the lengthy delays in the system, the inconsistencies which resulted from using a variety of Federal, State and Commonwealth Public Service awards as alignments points, and the anomalies and inadequacies in the pay margins allowed for senior NCO ranks. The Committee concluded that an extensive change was necessary and recommended the immediate introduction of a new pay system based on an 'industry' approach in which Service employments up to corporal level will no longer be aligned with a multiplicity of individual civilian trades but will form a co-ordinated pattern, divided into six broad pay levels. Stable internal relativities will be established and broad alignment maintained with general wage levels in outside industry and the Commonwealth Public Service. In relation to the ranks from sergeant to warrant officer class 1, the Committee recommended a structure designed to systematise and improve NCO pay margins, thus recognising the added responsibility which comes with increasing rank. Associated with this is a basic change in concept under which sergeant, staff sergeant and warrant officer rank will receive a uniform incremental scale of pay instead of group pay. Above the rank of corporal and its equivalent, no differential will be included for trade skill, the emphasis being placed on the common responsibility for supervision and management. Additionally, the Committee emphasised its strong view that proper pay relativities in respect of Service employment can only be determined ultimately by a systematic work value study and went on to recommend that an intensive work value examination be undertake. Because the Committee recommendations involve a concept of Service pay which is significantly different from that which currently applies to other ranks pay, all members will not receive the same percentage increase in pay. Some members will inevitably benefit more than others from the broad-banding process whereby a large number of pay groups were translated into 6 pay levels. In other cases, certain members will benefit from the application of market rates, while other members have already received this benefit. The largest increases will be given to warrant officers and senior NCOs in conformity with the concept of recognising the responsibilities of rank. Although the final rates for these ranks will be uniform, the increases cannot be uniform as NCOs currently receive differing rates of pay according to their respective trade skills. However, the introduction of the new system will bring pay increases to most other rank members of Australia's armed forces. The Committee clearly indicated that the pay rates which it had recommended for the various pay levels had regard to the rates paid by the Commonwealth Public Service for relevant trade and technical skills in various forms of Crown employment. This is not to say that individual Service employments are equated with specific trades in the Public Service. The Committee commented that it had in mind that members of the armed services are employed by the Crown, and that it seemed to the Committee entirely sensible that there should be, in general, equality of financial terms and conditions of employment between members of the armed forces and Commonwealth employees. In reaching its recommendations the Kerr Committee concluded that the special service allowance of $146 a year which was introduced by the Government in 1964 as an incentive to recruitment and re-engagement, was an over award payment appropriate to the period when service pay rates were related primarily to minimum award rates rather than market rates. With the new concept now being introduced, the Committee recommended that it should be consolidated in the rates of pay instead of remaining as a separate allowance. The Committee of Inquiry gave particular attention to the pay of servicewomen. Servicewomen do not receive the special service allowance, so that the consolidation of this allowance into pay will eliminate this difference between male and female rates of pay. At the private level, servicewomen will now receive 95 per cent of male rates, as in the general community, progressing to 100 per cent on 1st January 1972. Above the private level, rank margins for servicewomen are assessed on the basis of the difference in responsibilities compared with those of equivalent male ranks. The Committee observed that analysis of comparative responsibilities was a matter for the full work value inquiry but in the meantime, it recommended that the rank margin for servicewomen be raised to 80 per cent of the male margin. The Government accepted these recommendations and agreed that servicewomen's rates of pay should be reviewed during the work value examination. The Kerr Committee was not required by its terms of reference to deal with the pay of citizen forces and therefore made no recommendation in this regard. However, in conformity with past practice and the Government's desire to lend every encouragement to the citizen forces, it has decided to apply the increased pay levels to other ranks in the citizen forces using appropriate comparative levels of skill. The Committee considered that early commencement of a work value study of Service employments was essential and offered to undertake this task, emphasising the extent of its accumulated knowledge on the subject, and the interaction with some of the remaining terms of reference yet to be dealt with by the Committee. The Government has agreed that this task should be undertaken by the Committee. In developing its concept of an industrytype approach to Service pay the Committee emphasised the need for periodic systematic, review of pay rates in lieu of the present system of numerous uncoordinated adjustments resulting from individual trade links with outside industrial awards. The Committee suggested that these reviews might not be limited to fixed intervals but made as necessary to maintain comparative wage justice in the light of general wage movements in the community. Initially, such reviews will be associated with the studies being carried out by the Committee of Inquiry while it continues in being. The Government will later announce what machinery of review will be established after the Committee completes its assignment. The Government has decided that the new pay scales will become effective forthwith from the commencement of the next pay period which is 26th August 1971 foi the RAAF and 27th August 1971 for Army and Navy. It will not be possible of course to effect payment immediately. This is not merely a pay increase but a major change in the structure of Service pay, which will require extensive amendment of Service pay regulations. This is a complicated process which experience has shown will take up to 3 months. Efforts are being made to shorten this process as far as possible. When made, payment will be retrospective to the dates I have indicated. All of the recommendations contained in the No. 1 report of the Kerr Committee as amended by the No. 2 report have been accepted by the Government. The Government had the benefit of the views of the Services and its defence advisers and all supported the changes now introduced. The proposed daily rates of active pay for male and female other ranks as recommended in report No. 2 of the Kerr Committee are contained in the attached schedules, which with the concurrence of honourable members I incorporate in Hansard. For the convenience of honourable members, I have summarised the new rates of active pay on an annual basis. Recruits will receive $2,358. Privates and their equivalents in the Navy and RAAF will receive from $2,445 to $4,036 depending on the pay level to which their particular skill assigns them. Lance-corporals will receive from $2,565 to $4,157. Corporals will receive from $2,774 to $4,361. Sergeants will receive from $3,022 to $4,934 depending on their starting point on promotion or translation to the rank, and then on years of service in the rank. Staff Sergeants will receive from $4,934 to $6,234. Warrant Officers class 2 from $5,909 to $6,234, and Warrant Officers class 1 from $6,584 to $6,935. In general these are the rates applicable to single men living in service quarters. Married men receive further allowances totalling $712 per annum, and in addition all members receive uniform allowance, free medical and dental attention and other benefits. The total cost of the approved increases including those for the citizen forces, in a full year will be approximately $34m. The cost for 1971-72 will be a little over $29m. As I have indicated, the reports on group pay are only the first, though a very important stage in the Kerr Committee inquiry. Work is proceeding on the other terms of reference, including the principles and levels which should apply to officers pay, and the demands and exigencies of Service life, together with some special references on certain allowances, such as education allowance and temporary rental allowance. To these items will now be added the very important task of directing the work value examination which the Committee sees as the only satisfactory basis for determination of Service pay relativities. Finally, I should like to take this opportunity of commending the excellent work which **Mr Justice** Kerr and his Committee have carried out to the present time. The unqualified acceptance by the Government of all the recommendations made by the Committee in relation to other ranks pay is a demonstration both of confidence in the Committee and the Government's determinnation to provide financial and other conditions of service sufficient to attract and retain men and women with the needed qualities, skills and experience for the Australian Forces. I present the following paper: >Pay Increases for Other Ranks of the Armed Services - Ministerial Statement, 17th August 1971. Motion (by **Mr Swartz)** proposed: >That the House take note of the paper. {: #subdebate-67-0-s1 .speaker-JO8} ##### Mr BARNARD:
Bass -- by leave - The statement of the Minister for Defence **(Mr Fairbairn)** outlines pay increases for other ranks of the armed forces. It supplements the preliminary statement of the Kerr Committee which was released by the Minister's predecessor on 11th June. The estimates contained in that statement have been revised because of higher pay rates in relevant sections of the Public Service. In effect, what the Minister has done is to revise and clarify certain aspects of the initial report of the Kerr Committee in the light of the supplementary report made by the Committee. This had meant an increase in the cost of the changes recommended by the Kerr Committee and adopted by the Government. The whole area of pay increases for the Services is an immeasurably complex one, and I have not had the time to study the comparative pay rates in detail. What is important is that the Government has accepted the recommendation and has introduced them promptly. This is commendable because the Government had to be goaded into appointing the Kerr Committee. It took a considerable amount of pressure from sections of this Parliament to force the Government's hand. Belatedly, the Government realised the extent of Service unrest over pay and conditions and has acted to improve them and remove anomalies. At first sight, the reforms in the pay structures seem to be good ones. Undoubtedly, there will be anomalies with the introduction of these broad pay groupings. However, the great majority of other ranks will benefit. It is also gratifying that recognition has been given to simplifying the complex and unwieldy structure of allowances for all 3 Services. I hope that further substantial reforms will be made in this structure. It is encouraging that the Kerr Committee is to proceed with an intensive work value study of Service jobs. There has been some confusion on this point which has been removed by the Minister. This work value study is immensely important for the whole status and remuneration of Australian servicemen and women. I have seen some of the submissions presented to the Kerr Committee on this matter and the mass of evidence available will enable the Committee to assess for the first time the value of Service jobs relative to citizen employment. It is just and appropriate that the increased pay rates recommended by the Kerr Committee will be extended to members of the civilian forces. The Kerr Committee has made an encouraging start to the massive task it has undertaken. It is to be hoped that the Committee's recommendations will be brought quickly before the Government and transmitted to the thousands of servicemen and women who will benefit by better pay and conditions. These brief comments are a response to a quick reading of. the Minister's statement. The Opposition welcomes these reforms and hopes that the House will be able to debate them in greater detail later in the session. May 1 also say in conclusion that I join with the Minister in congratulating the Kerr Committee. The Minister may recall my initial objection, if I may use that term, to the appointment of a committee because I thought it would have been better had a select committee of the Parliament been appointed. I point out, however, that I did not direct my objection to the Kerr Committee specifically. The Committee which was appointed under the chairmanship of **Mr Justice** Kerr acted promptly, I think efficiently, and certainly very comprehensively in relation to the matters it was asked to investigate. Therefore, I join with the Minister in expressing on behalf of the Opposition our appreciation to the Committee of the very valuable contribution it made towards preventing what, if it had been allowed to continue, would have amounted to continued unrest in relation to pay and conditions in the 3 Services. {: #subdebate-67-0-s2 .speaker-10000} ##### Mr SPEAKER: -- I omitted to put the question. The question now is, That the House take note of the paper'. Debate (on motion by **Mr Giles)** adjourned. {: .page-start } page 147 {:#debate-68} ### TARIFF PROPOSALS {: #debate-68-s0 .speaker-3V4} ##### Mr CHIPP:
Minister for Customs and Excise · Hotham · LP -- I move: {:#subdebate-68-0} #### Customs Tariff Proposals No. 11 (1971) {:#subdebate-68-1} #### Customs Tariff Proposals No. 12 (1971) {:#subdebate-68-2} #### Customs Tariff Proposals No. 13 (1971) {:#subdebate-68-3} #### Customs Tariff Proposals No. 14 (1971) {:#subdebate-68-4} #### Customs Tariff Proposals No. 15 (1971) {:#subdebate-68-5} #### Customs Tariff Proposals No. 16 (1971) {:#subdebate-68-6} #### Customs Tariff Proposals No. 17 (1971) {:#subdebate-68-7} #### Excise Tariff Proposals No. 1 (1971) Customs Tariff Proposals No. 17 and Excise Tariff Proposals No. 1, which I have just tabled, introduce tariff changes as foreshadowed by my colleague, the Treasurer **(Mr Snedden),** in his Budget Speech earlier this evening. The changes operate from tomorrow. The proposals increase customs and excise duties on manufactured tobacco products and certain refined petroleum products. A summary of these alterations is being circulated to honourable members. I also tabled Customs Tariff Proposals Nos 11 to 16. These proposals formally place before the Parliament the tariff changes made while the Parliament was in recess and published by notice in Gazettes of 17th and 24th May, 22nd, 28th and 29th June and 23rd July 1971. These changes arise from the Government's adoption of Tariff Board reports on: Artificial flowers and fruit, etc.; and Vegetable oils, and Special Advisory Authority reports on: Cathode ray tube display terminals; {:#subdebate-68-8} #### Cherries; and Flue-heated economisers. Other changes in these proposals extend the list of commodities to which the New Zealand-Australia Free Trade Agreement applies. Except in respect to the changes made by Proposals No. 14 honourable members have already been given details of the changes by my colleague the Minister for Trade and Industry **(Mr Anthony)** but a detailed summary of the changes and rates of duty is now available. Proposals No. 14 related to changes giving effect to a joint exercise conducted by the Departments of Trade and Industry, and Customs and Excise to simplify the customs tariff. I intend to introduce a Bill in respect to these simplification changes tomorrow and will distribute comprehensive summaries of the alterations at that time. I commend the proposals. Debate(on motion by **Mr Stewart)** adjourned. {: .page-start } page 148 {:#debate-69} ### TARIFF BOARD Reports on Items {: #debate-69-s0 .speaker-3V4} ##### Mr CHIPP:
Minister for Csutoms and Excise · Hotham · LP -- I present the following reports by the Tariff Board: >Artificial flowers, fruit, etc.; carnival and entertainment articles, etc.; Christmas trees, decorations, stockings, etc. > >Burial and cremation caskets, of wood, unassembled; gramophone record covers, of paper or paperboard, printed or embossed; sails and tents; hoes, rakes and drags, being hand tools; vacuum pumps, including those used with milking machines; and petrol dispensing nozzles, automatic shut-off type (New ZealandAustralia Free Trade Agreement). > >Vegetable oils. I present also the following reports by the Tariff Board which do not call for any legislative action: >Acctylsalicylic acid(Dumping and Subsidies Act). > >Chain and chains (Dumping and Subsidies Act). > >Elastomeric fabric and elastic fabric, knitted or crocheted. > >Sulphur and sulphuric acid. Pursuant to statute I present also Special Advisory Authority reports on: >Cathode ray tube display terminals. {:#subdebate-69-0} #### Cherries Flue-heated economisers. Ordered that the reports be printed. {: .page-start } page 148 {:#debate-70} ### TARIFF PROPOSALS {:#subdebate-70-0} #### Discharge of Motions {: #subdebate-70-0-s0 .speaker-3V4} ##### Mr CHIPP:
Minister for Customs and Excise · Hotham · LP -- by leave - I move: >That Customs Tariff Proposals Nos 11 and 12 (1970) , Nos 14 to 21 (1970) and Nos 1 to 10 (1971) constituting Order of the Day No. 25, Government Business, be discharged. These Proposals were incorporated in the Customs Tariff Bill 1971, which has now been assented to, and in other customs tariff proposals which were introduced earlier this evening. Question resolved in the affirmative. {: .page-start } page 148 {:#debate-71} ### DIESEL FUEL TAX BILL (No. 1) 1971 Bill presented by **Mr Chipp,** and read a first time. {:#subdebate-71-0} #### Second Reading {: #subdebate-71-0-s0 .speaker-3V4} ##### Mr CHIPP:
Minister for Customs and Excise · Hotham · LP -- I move: >That the Bill be now read a second time. This Bill, to amend the Diesel Fuel Tax Act (No. 1) 1957-1970, contains amendments consequent upon the alteration in customs and excise duties in the tariff proposals introduced earlier tonight. The Bill varies the rate of tax to be collected on diesel fuel which is sold or disposed of to a person who is not the holder of a certificate and is therefore not entitled to receive concessional treatment. I commend the Bill. Debate (on motion by **Mr Charles** Jones) adjourned. {: .page-start } page 148 {:#debate-72} ### DIESEL FUEL TAX BILL (No. 2) 1971 Bill presented by **Mr Chipp,** and read a first time. {:#subdebate-72-0} #### Second Reading {: #subdebate-72-0-s0 .speaker-3V4} ##### Mr CHIPP:
Minister for Customs and Excise · Hotham · LP -- I move: >That the Bill be now read a second time. This Bill amends the Diesel Fuel Tax Act (No. 2) 1957-1970 and is complementary to the Bill I have just introduced. The Bill varies the rate of tax to be collected on diesel fuel used in propelling a road vehicle on a public road. I commend the Bill. Bill (on motion by **Mr Charles** Jones) adjourned. {: .page-start } page 148 {:#debate-73} ### PRIVILEGES COMMITTEE {:#subdebate-73-0} #### Report Motion (by **Mr Swartz)** agreed to: >That Order of the Day No. 1 - Committee of Privileges - Report relating to the commitment to prison of **Mr T.** Uren, M.P.: Consideration of report be postponed until Monday 23rd August 1971. House adjourned at 9.54 p.m. {: .page-start } page 149 {:#debate-74} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions upon notice were circulated: {:#subdebate-74-0} #### Alumina (Question No. 1883) {: #subdebate-74-0-s0 .speaker-KDP} ##### Dr Everingham:
CAPRICORNIA, QUEENSLAND asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Were duty free imports of caustic soda (or export alumina production valued at less than $500,000 during 1965-66 and over $2,500,000 during 1968-69. 1. If so, would this, apart from similar amounts imported at low duty, have attracted over $900,000 at full rates of duty in 1968-69. 2. Has his Department provided the Treasury with information to assist in the assessment of whether the prices received for export alumina exhibit a reasonable profit for the purposes of assessing company tax, considering that the purchasers are mainly foreign companies which own Australian alumina works. 3. If full duty was charged, would the price of alumina be thereby increased beyond competitive world market levels. {: #subdebate-74-0-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. No. Rates of duty applying to imports if caustic soda during 1968-69 were 25 per cent General and 15 per cent Preferential. If imports of caustic soda for alumina production in 1968-69 had been subject to these rates, the duty payable would have been approximately $635,000. 2. 1 refer the Honourable Member to the answer provided by the Treasurer to Question No. 1882 (Hansard 30th October Page 3194). In his administration of the income tax legislation, the Commissioner of Taxation is empowered to require any person to furnish him with such information as he may require. Accordingly, the Commissioner has the requisite authority to make his own enquiries into prices received for alumina exported overseas. 3. The attention of the Honourable Member is drawn to the conclusions reached by the Tariff Board in its report on Chlorine and Sodium Hydroxide released by the then Deputy ' Prime Minister and Minister for Trade and Industry, **Mr McEwen,** on 61h November 1969. In that report, the Board put forward the view that on the information available there seemed little doubt that the alumina industry in Australia could, at least for the time being, retain a substantial export trade without the Benefit of the by-law arrangement. However, the Board also recognised that should the cost of sodium hydroxide be raised, this could affect the alumina industry's ability to continue expanding its exports and could result in decisions by international companies involved in the industry to locate new plants outside Australia. In view of the importance of alumina exports to the Australian economy, the Board believed that the risks involved in imposing a duty on sodium hydroxide used in the production of export alumina were not warranted by the potential benefit to the local chlorine and sodium hydroxide industry. These views were accepted by the Government and the arrangement whereby producers of alumina for export secured supplies of caustic soda under bylaw was continued. {:#subdebate-74-1} #### Chemical Sprays (Question No. 1971) {: #subdebate-74-1-s0 .speaker-8V4} ##### Mr Grassby: asked the Minister for Primary Industry upon notice: {: type="1" start="1"} 0. ls he able to say whether the prices of chemical spray materials in New Zealand are as much as 50 per cent lower than those in Australia. 1. If so, does this give New Zealand orchardists a considerable advantage over Australian orchardists. 2. Is he able to say whether the difference in price is due to the Government of New Zealand permitting the entry of spray materials duty free and, in other cases by paying a subsidy to producers to keep costs down so enabling orchardists to compete on exports markets. 3. Will be order a review of the competitiveness of Australian orchardists, giving particular attention to the cost of chemical sprays. 4. Will the Government consider extending assistance to the Australian orchardists similar to that enjoyed by the New Zealand orchardists. {: #subdebate-74-1-s1 .speaker-5E4} ##### Mr Sinclair:
Minister for Primary Industry · NEW ENGLAND, NEW SOUTH WALES · CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. A comparison of the price paid for chemical sprays in New Zealand and the Australian list price (which is subject to a variety of discount's) shows that overall New Zealand prices are somewhat lower than the Australian price. 1. In respect to chemical sprays, the answer is yes. 2. The majority of insecticides and fungicides used by New Zealand orchardists are imported duty free. Most weed killers are imported duty free from British Commonwealth sources; these are subject to a 10 per cent duty when manufactured in other countries. In 1969 a system of weedicide and pesticide subsidies was introduced in New Zealand. It applies to herbicides and insecticides registered by the Agricultural Chemicals Board and approved by the Department of Agriculture, and does not include compounds which are used solely as fungicides. The scheme provides for a 50 subsidy on the exfactory price. For administrative purposes this, is taken to mean 42) per cent of the price paid by retailers, and the subsidy is claimed at this rate from the Department of Agriculture by registered manufacturers or importers on the basis of certified sales. 3. and (5) The Government has the economic position of the various sectors of rural industry under constant review. Measures of assistance which are appropriate to the circumstance of a particular industry will be introduced where these are considered necessary. {:#subdebate-74-2} #### Papua and New Guinea: Mapping Surveys (Question No. 2343) {: #subdebate-74-2-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Over what areas and or what scale have topographic and hydrographic surveys been made of the Territory of Papua and New Guinea. 1. What appropriations have been made for such surveys in each of the last 5 years. 2. What steps have been taken to train indigenes for such work. {: #subdebate-74-2-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: >(1)- Topographic Mapping by the Department of National Development Air Photography 83 per cent of the mainland has been covered by air photography at scales ranging between 1:25,000 and 1:50,000. Unphotographed areas are being steadily covered as whether conditions allow. 1 : 50,000 Manuscript (Planimetric) Maps This series of maps, used mainly for administrative purposes, gives 95 per cent coverage of that portion of the mainland between Lae and Milne Bay. World Aeronautical Charts and the Australian Geographical Series There is complete map coverage of the Territory with each of these series. The scale of each series is 1:1,000,000. These maps are of substandard quality pending completion of larger scale mapping. World Aeronautical Charts show information useful for aviation purposes and are produced for the Department of Civil Aviation. The Australian Geographic Series will be progressively replaced by the International Map of the World (IMW). Standard editions of the IMW are part of a world series and are produced to international specifications. Photomaps (1 : 63,360 scale) 48 per cent of the mainland has been covered by photomaps. Census Mapping Two maps of the Territory, each at a scale of 1 : 2,500,000 have been prepared for the Bureau of Census and Statistics. One map is a population distribution map and the other is a population density map. Thematic Mapping Six maps, each at a scale of 1:5,000,000 showing the geology, rainfall, soils, vegetation, population/transport and forest resources of the Territory have been produced. Topographic Mapping by the Department of the Army Mainland 2:250,000 Series There is a complete coverage at this scale. The series now requires revision. 1 : 100,000 Series This series was commenced in 1967. Sixteen maps have been published out of a total of 294 required to cover the mainland. 1 : 50,000 Topographic Series Eight sheets at this scale cover the area adjacent to Port Moresby. Side Looking Airborne Radar Photography In 1970, the Department of the Army arranged for the provision of side looking airborne radar photography of continually cloud covered area of mainland Papua and New Guinea which had not yet been covered by vertical air photography. The result was an uncontrolled radar mosaic consisting of assembled radar imagery at a scale of 1 : 250,000 to be used for reconnaisance mapping. New Britain Mapping covers New Britain at scales of 1 : 63,360 and 1 : 253,440. This mapping is of wartime vintage and obsolescent Reconnaissance is now being carried out on the island for the establishment if survey control for commencement of new 1 : 100,000 scale mapping in 1972. New Ireland Topographic mapping at scales of 1 : 50,000 and 1 : 250,000 covers the island. It is scheduled for revision in 1973. Admiralty Islands The existing mapping at scales of 1 : 25,000 and 1 : 250,000 is scheduled for revision in 1974. Bougainville Island Mapping covers Bougainville at a scale of 1 : 50,000. Revision is now required. Hydrographic Surveys by the Department of the Navy The following surveys were carried out by the RAN in Papua New Guinea waters during the years 1965-1970: Mapping by the Administration of the Territory of Papua and New Guinea The matter referred to is one which falls within the authority of the Assistant Ministerial Member for Lands and Surveys in the House of Assembly for Papua and New Guinea. The Administrator on the advice of the Assistant Ministerial Member for Lands and Surveys has provided the following information: . . . topographical mapping for and by the Department of Lands consists completely of existing conditions and contour maps of all territory centres including patrol posts, and project maps for land settlement and forestry. No hydrographic mapping has been carried out specifically for the Department of Lands and Surveys.' {: type="1" start="2"} 0. -- Department of National Development No specific amount has been set aside for each of the last 5 years for surveys in the Territory. However, for the full 5-year period, $994,200 has been spent by the Department on mapping activities in the Territory. The average cost per year over this period is $198,840. Department of the Navy and the Department of the Army No special appropriations have been made for surveys in the Territory by Navy or Army. Costs have been distributed over a number, of appropriate votes. Administration of the Territory of Papua and New Guinea The matter referred to is one which falls within the authority of the Assistant Ministerial Member for Lands and Surveys in the House of Assembly for Papua and New Guinea. The Administrator on the advice of the Assistant Ministerial Member for Lands and Surveys has provided the following information: Appropriations for mapping initiated by the Administration, including control surveys and photography; {: type="1" start="3"} 0. -- Department of National Development The Department has no existing scheme to train indigenes for survey work but has indicated to the Department of External Territories that it would be prepared to assist in any training scheme that was started. Department of the Navy A scheme to establish a naval hydrographic surveying unit is being formulated. One of its chief objectives would be the training of indigenes. Department of the Army The Department of the Army has no survey and mapping units deployed permanently in the Territory and training of indigenes is not contemplated by the Department. Administration of the Territory of Papua and New Guinea The matter referred to is one which falls within the authority of the Assistant Ministerial Member for Lands and Surveys in the House of Assembly for Papua and New Guinea. The Administrator on the advice of the Assistant Ministerial Member for Lands and Surveys has provided the following information: The Bulolo School of Cartography and the Lue Institute of Technology are training draftsmen, photogrammetrists and surveyors.' {:#subdebate-74-3} #### Papua and New Guinea: United Nations (Question No. 2347) {: #subdebate-74-3-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for External Territories, upon notice: >In what respects and to what extent has Australia sought and received assistance for the Territory of Papua and New Guinea from the specialised agencies of the United Nations since his answer to me on 13th October 1964. {: #subdebate-74-3-s1 .speaker-JOA} ##### Mr Barnes:
Minister for External Territories · MCPHERSON, QUEENSLAND · CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Basic Agreements in seeking aid for the Territory of Papua and New Guinea, Australia has entered into a number of Basic Agreements covering the terms and conditions under which such aid is to be provided. Two Basic Agreements with the United Nations Development Programme (UNDP) have been negotiated. The Special Fund (SF) Standard Agreement was signed on 6th February 1967 and the Technical Assistance (TA) Standard Agreement was signed on 21st May 1968. A Basic Agreement with the United Nations Children's Fund (UNICEF) was signed on 21st December 1967. A Basic Agreement with the World Health Organisation (WHO) was signed on 17th March 1969. {: type="1" start="2"} 0. Australia on behalf of the Territory of Papua and New Guinea has sought and received the following assistance: {: type="a" start="a"} 0. From the International Labour Organisation (ILO): * A Co-operative Education project to assist in the development of co-operative education, including instruction at the Co-operative Educational Centre, and advice on courses and equipment. Project's duration, one year from 11th August 1969. UNDP/TA contributed SUS23.500. * ILO UNDP/SF project of 3i years' duration (commenced 1st August 1970) to assist the Government in the establishment and initial operation of a Co-operative College at Laloki, and in the planning and implementation of extension programmes in the field for employees and members of co-operatives and owners of small business enterprises. The UNDP/SF contribution is $US572,000. * A Pottery Development project for 4 years from 25th June 1967, to develop a small scale pottery industry, utilising low level technology, in the Albom and coastal areas of New Guinea and the Amphlett Islands. An indigenous counterpart was appointed in December 1968 and completed a 6 months' fellowship in Thailand in April 1970. UNDP/TA is contributing $US107,000. * Vocational and Industrial Training project to assist the development of vocational and industrial training. Experts are provided for from 3 to 12 months. Approved 3rd April 1970. UNDP/TA contribution is $US130,200 * A Wood Carving Project, with UNDP/TA of $US29,000. To last 12 months. Approved but not yet in operation. Territory Representatives have attended regular internship study courses held by the International Institute for Labour between 1965 and 1970 and have also attended a number of seminars conducted by ILO. ILO Regional Project in conjunction with South Pacific Commission (S.P.C.) * I.L.O. UNDP/TA Project of 4 months' duration, to provide a training course in Elementary Economics and Business Methods for instructors and advisers from co-operative departments and business advisory services. UNDP/TA contribution of $US1 2,000. {: type="a" start="b"} 0. From the Food and Agriculture Organization (FAO): * An Animal By-Products Utilisation project. An FAO expert spent 5 weeks from 9 January 1969 examining and reporting on meat production and utilisation of products from livestock, including advising the Administration on the preservation of meat. (Administration met all costs; FAO provided expert.) * FAO UNDP/TA Home Economics project over 2 years to develop an instructional organisation in the field of home economics at the village level. Approved but not yet in operation. UNDP/TA is contributing $US73,000. A Veterinary Officer's Conference was held in TPNG in 1969. An expert from the FAO/IBRD Co-operative Programme visited TPNG to review its current fisheries programme and evaluate the possiblities of productive investment during 1968. FAO Regional Projects In Conjunction with SPC: *FAO UNDP/SF project on Control of the Coconut Palm Rhinoceros Beetle, began 30 September 1964. Originally of 5 years duration, the project was extended by 2i years to 1972. It is now committed to the expansion of training activities and to the evaluation of control measures so far discovered. UNDP/SF is contributing SUS600.000. *FAO UNDP/SF project to assist with the establishment of a Fisheries Development Agency, to determine feasible areas of fishery development in the South Pacific Region, Project's duration, 3 years from 3 March 1969. UNDP/SF is providing SUS426.700. {: type="a" start="c"} 0. From United Nations Educational, Scientific ami Cultural Organization (UNESCO): * UNESCO and UNDP/SF Secondary Teacher's College, Goroka, project to assist in the establishment and initial operation of the College, which is to train teachers for the lower forms of secondary schools. Preliminary operations were authorised from January 1968 and the project officially commenced 28 March 1968, duration 5 years. The UNDP/SF contribution is $US1,196,000. (This project is closely related to the UNICEF UNESCO/TA Science Education Project and the UNESCO UNDP/TA Science Teaching and Curriculum Development Project.) UNESCO UNDP/TA Science Teaching and Curriculum Development project to revise the curriculum in science and to improve the primary teacher training programme, and professional competence of science teachers in secondary schools. Commenced 1 February 1968; duration 3 years with possible extension. UNDP/TA contribution is $US70,900. (This project is closely related to the UNICEF UNESCO/TA Science Education Project and the UNESCO UNDP/SF Goroka Teacher's College Project.) TPNG is participating in the UNESCO International Hydrological Decade. During the Decade international experts will visit PNG and advise on specific matters. Territory delegates will attend seminars on hydrological topics and selected staff will receive special training overseas. Territory representative awarded UNESCO scholarship to undertake a laboratory technicians' course in Italy. A request has been made for UNESCO/SF assistance for a Technician Training project at Lae. {: type="a" start="d"} 0. From the United Nations Industrial Development Organization (UNIDO): *UNlDO and UNDP/TA Building and Construction Materials project, for 6 months from 9 September 1968, to make an assessment of the prospects for the economic production in the Territory of cement, glass, fibro-cement, bricks, clay pipes and other building and construction materials. UNDP/TA contribution was $US15,000. * UNIDO and UNDP/TA. Clothing and Textile Industries project for 3 months from 28 August 1968, to study and report on the feasibility of establishing a clothing and textile industry in TPNG, and to evaluate the Highlands hand-loom wool weaving project. UNDP/TA contribution was SUS9.000. * UNIDO UNDP/TA Paper and Pulp project for one year from 9th February 1970, to advise on the economics and feasibility of establishing a wood chip or pulp and paper industry. UNDP/TA is contributing SUS24.000. * UNIDO UNDP/TA Indigenous Entrepreneurship project of six months' duration from 5th June 1970, to advise on the formulation of a long range policy for the promotion of indigenous entrepreneurship and to identify areas where technical assistance could be rendered. UNDP/TA contribution SUS12.000. * UNIDO UNDP/TA Sericulture Industry of 6 months' duration from 22 June 1970, to investigate the possibility of rearing Eri silkworms and processing silk on a cottage-industry basis, UNDP/TA contribution $US12,000. {: type="a" start="e"} 0. From the International Bank for Reconstruction and Development (IBRD): In June 1968, a loan of SA6.3 million (SUS7.9 million) was negotiated from IBRD to expand and improve telecommunications throughout the Territory. Duration of project is 4 years. In June 1970, an agreement was entered into with the IBRD/IDA for a loan/credit of $A8.0 million (JUS9 million) for a highway project in the Highlands. The IBRD is contributing $A4 million ($US4.5 million) and the IDA SA4 million (SUS4.5 million). Negotiations were completed during April 1971 for a SUS23.2 million loan from IBRD to finance stage one of the Upper Ramu Hydro-Electric Scheme. *IBRD and UNDP/SF provided the Transport Survey analysis of the present transport facilities and services in the Territory and advice on how to improve efficiency and lower cost for these services. Its object was also to provide guidance for the future organisation of the Transport Department, and to prepare projections and allocations of traffic for the different modes of transport and a 5 year transport development programme. Project's duration, 18 months from 21 June 1968. UNDP/SF contribution was $US489,000. An IBRD Mission visited TPNG during 1967 to examine and discuss current developments and projects which could qualify for IBRD or IDA loans. Mission included economists and experts in agriculture, transport and power. A Mission from IBRD visited TPNG in 1969 and prepared a report on the economic development of the Territory and also examined projects for assistance from the World Bank Group. {: type="a" start="f"} 0. From the United Nations Children's Fund (UNICEF): UNICEF UNESCO/TA Science Education project of 3 years duration from February 1968, to improve the standards, quality and effectiveness of primary science education. An expert in Science teaching and curriculum development is provided by UNESCO. UNICEF contribution is $US275,000. (This project is closely related to the UNDP/UNESCO Science Education and Curriculum Development Project and the UNDP/UNESCO Goroka Teacher's College Project). A Territory representative attended a UNICEF Training Course in Child Health in December 1967. Three science specialists from TPNG attended a UNICEF Regional Workshop on Integrated Science Teaching in August 1970. {: type="a" start="g"} 0. From International Development Association (IDA): A credit of SUS1.S million ($A1.3 million) was approved in January 1969, for oil palm development in West New Britain. This involved the establishment of 580 smallholders to grow 4,600 acres of oil palm. A further credit of JUS5.0 million (SA4.5 million) was approved in January 1970. The credit will be used to finance the planting or replainting of 10,000 acres of coconuts; the development and stocking of 150,000 acres of beef cattle farms; the establishment of 980 smallholders to grow 7,840 acres of palm oil; and the construction of a wharf at Kimbe. Joint IDA/IBRD credit/loan of SA8 million for Highlands Road Project. IDA is contributing a credit of SA4.0 million. {: type="a" start="h"} 0. From Universal Postal Union (UPU): UPU and UNDP/TA Postal and Philatelic Training project. An Internation Fellowship for 5 months from 1 July 1968, to accelerate the development of training of local officers for executive duties in the Philately and General Section of the Department of Posts and Telegraphs, Port Moresby. The UNDP/TA contribution was SUS3.600. {: type="a" start="i"} 0. From World Health Organization (WHO): WHO UNDP/TA Malaria Eradication project of 3 months duration from November 1970, to analyse the present malaria programme in relation to the feasibility of initiating a malaria eradication programme or of continuing the present control measures. UNDP/TA contribution SUS12.000. Territory representative attended WHO study course in Dental Epidemiology in 1965. WHO Regional Malaria Adviser visited the malaria eradication services at Rabaul; and WHO Regional Adviser on Health Education visited TPNG in connection with the development of health education in TPNG during 1965. WHO Sanitary Engineer visited TPNG to familiarise himself with the water supply schemes in TPNG Two Territory representatives attend WHO Course on Environmental Sanitation; and a local malaria eradication assistant was a member of a WHO specialised course in epidemiology. Two Territory personnel attended WHO course in Malaria Control; and a Territory representative attended a WHO Malaria Course for Instructors, and WHO Course in Bacterial Disease. WHO Assistant Director Medical Services visited TPNG to inspect the Territory's medical services. Three WHO Dental Consultants appointed to provide dental health advisory services for TPNG Territory personnel attended WHO Malaria Eradication Courses in Manila during 1966-67. The 4th South-West Pacific Malaria Conference was held in Kundiawa in May 1969. Territory representative participated in the First Regional Course on the Health Aspects of Population Dynamics in Manila, November 1970. Territory representatives attended 21st, 22nd, 23rd and 24lh World Health Assembly. Territory representative attended Second General Course on Malaria in Manila, 1970. WHO consultant visited TPNG in 1968 and submitted a report on a Public Health Nursing Project. WHO representative appointed Advisory Consultant for a Nursing Advisory Services Project. Territory represented at 3rd Regional Training Course on National Health Planning. Forty-three WHO fellowships awarded to TPNG for special study and training in health matters not available in the Territory or Australia. WHO Regional Adviser on Nutrition visited TPNG to explore Administration's interest in participating in Applied Nutrition Education and Training project. WHO Medical Nutritionist visited TPNG in 1968 to carry out survey on medical nutrition. Regular WHO seminars and workshops have been attended by Territory personnel. {: type="a" start="j"} 0. From International Telecommunication Union (ITU): Two Territory representatives attended an I.T.U. Seminar on Organisation and Management of Telecommunication services in November 1970. A Territory representative attended anI.T.U. seminar on Broadcasting Technology in December 1970. I.T.U. Regional Telecommunications Adviser visited TPNG to report on possible I.T.U. assistance to TPNG during 1969. {: type="a" start="k"} 0. From International Monetary Fund (IMF): IMF Consultant spent one month in 1969 studying PNG taxation.. Projects marked with an asterisk (*) are UND Projects, with the appropriate specialised agency actng as executing agency for UNDP. {: type="1" start="1"} 0. General: The Administering Authority has continued to co-operate with the organs of the United Nations and with the Specialised Agencies in furnishing reports and other information in relation to the Territory. PNG became an associate member of ECAFE after the Economic and Social Council of the UN, at its 49th Session, passed a resolution to this effect and approved it without objection in 1970. The Territory was represented for the first time at meetings of ECAFE during January/ February 1971. Territory representatives are included in Australia's delegations or attend meetings of the Specialised Agencies when it appears that the subject matter will be of interest to the Territory. For example, Territory representatives have attended the 49th, 50th, 52nd, 53rd and 54th Sessions of the International Labour Conference; a Territory representative attended an FAO/ILO/UNESCO World Conference on Agricultural Education and Training during 1970; Territory personnel attended the WHO Inter-Regional Conference on Medical Education in developing countries and the 15th, 16th, 17th, 18th, 19th and 20th WHO Regional Committee Meetings. The specialised publications issued by the agencies are received in the Territory and are considered of particular value. Additionally, the Territory is visited from time to time by representatives of the UNDP and the Specialised Agencies to review progress with various assistance projects and consider possible future projects. The Territory has received considerable additional benefit from the United Nations Specialised Agencies through the South Pacific Commission. The Commission, which is not itself a United Nations Specialised Agency was set up by countries responsible for territories in the region, collaborates closely with and frequently seeks expert help from the Specialised Agencies in providing assistance through its regional projects to meet the particular needs of dependent territories in the South Pacific Region - including Papua and New Guinea. Assistance received by the Territory from this source includes specialised help from the following - {: type="a" start="i"} 0. joint SPC/WHO projects on health problems and conditions found in the territories including - {: type="i" start="i"} 0. refresher course on Tuberculosis, 1. course on Vital and Health statistics, 2. maternal and child welfare, 3. youth work, 4. sanitation, 5. community health education, 6. nutrition, 7. epidemiology, 8. training of health workers. 9. joint SPC/FAO projects in a number of fields including: 10. home economics training. 11. agricultural extension, 12. plant protection, collection and introduction, 13. crop production. 14. co-operatives, 15. control of pests and diseases in plants and animals, 16. nutrition, 17. fisheries training, 18. boat building. 19. joint UNDP/FAO/SPC projects: 1. fisheries development (SP1FDA) {: type="i" start="ii"} 0. control of the Coconut Plam Rhinoceros Beetle. Full details of these two projects are given under (b) above (FAC Regional Projects). {: type="i" start="iv"} 0. joint UNDP/ILO SPC Project: {: type="a" start="i"} 0. Course in Elementary Economics and Business Methods. Full details of this project are given under (a) above (ILO Regional Project). {:#subdebate-74-4} #### University: Albury-Wodouga (Question No. 2428) {: #subdebate-74-4-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Education and Science, upon notice: >What was the result of his predecessor's enquiries concerning a university at AlburyWodonga (Hansard, 5 May 1970, page 1564). {: #subdebate-74-4-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: >In his reply of 5th May 1970 to the honourable member's question without notice about the possibility of the establishment of a university at Albury-Wodonga as a joint venture by the Governments of Victoria and New South Wales, my predecessor stated that he knew of no recent consultation between the two State Governments on this matter. My further enquiry has confirmed that advice. {:#subdebate-74-5} #### Northern Territory - School Children (Question No. 2486) {: #subdebate-74-5-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. How many (a) Aboriginal and (b) other Australian children of school age live in the Northern Territory. 1. How many (a) Aboriginal and (b) other Australian children in the Northern Territory attend (i) Administration and (ii) mission (A) primary and (B) secondary schools. 2. How many (a) Aboriginal and (b) other Australian children from the Northern Territory are assisted to receive (i) primary, (ii) secondary, (iii) university and (iv) other education elsewhere in Australia, and what is the nature and cost of such assistance in each category. {: #subdebate-74-5-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: >The details which follow have been derived from information supplied to me by my colleague the Minister for the Interior as well as from the resources of my own Department. > >The estimated number of children of school age living in the Northern Territory (at least 5 years and under 16 years) are: > >Aboriginal: 5,496 (Northern Territory Administration estimate at 16th April 1971) > >Other: 12,654 (Department of the Interior estimate as at 31st March 1971) > >(a) and (b), (i) and (ii), (A) and (B) The following tables show enrolments in Northern Territory Community Schools operated by my Department and enrolments in ' schools operated by the Welfare Branch of the Northern Territory Administration. As at 28th February 1971, the numbers of Aboriginal children attending schools in the Northern Territory (other than those operated by the Department of Education and Science - see above table) are as follows: The number of non-Aboriginal children attending special schools on settlements, missions and pastoral properties at 28th February 1971 was 154. {: type="1" start="3"} 0. (a) and (h) Because of the diversity of schemes of assistance available and because it has not always been possible to provide the information strictly in accordance with the classification requested by the Honourable Member, the information given below is classified broadly into assistance provided by the Department of Education and Science and that provided by the Northern Territory Administration. DEPARTMENT OF EDUCATION AND SCIENCE {: type="a" start="i"} 0. Assistance given to Aboriginal and other Australian children to receive primary education is confined to those receiving such education within the Northern Territory. Other Forms of Assistance Boarding Allowances. These allowances are paid to primary and secondary school children who must live away from home to attend school. The usual definition which is applied to the need to live away from home is that suitable education provision is not available within 10 miles of the child's home. The allowances range from $250 to $370 p.a. depending' on the operation of a means test. About 75 per cent receive the maximum allowance. In 1971 an estimated 450 pupils including some Aboriginals, are receiving an allowance and about one third of the total are attending school outside the Northern Territory. Travelling Allowances. Pupils who must live away from home to attend a school located within the Northern Territory receive reimbursement either of a return fare or a mileage allowance each term. Those attending school in a State receive reimbursement once per annum. Normally the entitlement to such travelling allowances would be determined on the same basis as the entitlement to a boarding allowance. In 1971 approximately 450 pupils, including some Aboriginals, will receive a travelling allowance and about one third of the total are attending school outside the Northern Territory. Tertiary Air Fares. Students from the Northern Territory doing tertiary studies elsewhere in Australia are reimbursed for cost of one return air fare each year to and from their place of study. Some 55 students are expected to benefit from this scheme in 1971 and the cost is estimated at $7700. Other forms of assistance such as Conveyance Allowance payable to parents for the use of private cars or other vehicles for transporting children to school in areas where buses are not available, reimbursement of the Queensland Uni versity Surcharge, the Secondary Book Allowance and the Free Primary Books and Materials Scheme are all confined to students who are studying in the Northern Territory. {: .page-start } page 156 {:#debate-75} ### NORTHERN TERRITORY ADMINISTRATION Assistance is given to Aboriginal children to receive education elsewhere in Australia as follows: The cost for the three Aboriginal secondary students referred to above is estimated to be $2400 for fares, fees, some clothing, etc. The number of part-Aboriginal children attending schools in the southern States under the PartAboriginal Education Scheme conducted by the Administration is 49 this year, including 45 secondary and 4 primary. The estimated cost, including board and lodging, fees, fares, extra tuition, books, clothing, etc. is $33,500 for the year. Because they refer to part-Aboriginal children, these figures should be included under 'other* not Aboriginal'. {:#subdebate-75-0} #### Universities: Quotas (Question No. 2592) {: #subdebate-75-0-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Education and Science, upon notice: >In which universities and faculties or schools have quotas been imposed this year. **Mr Fairbairn** ; The answer to the honourable member's question is as follows: >The universities and the faculties or schools in which quotas were imposed in 1971 were as follows: The University of New England and Macquarie University have applied an overall limit to their intake of new students. {:#subdebate-75-1} #### Industrial Relations (Question No. 2630) {: #subdebate-75-1-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. In the light of his answer to question No. 2242 (Hansard, 17th February 1971, pages 198-9) is he satisfied that his answers to paragraph (1) of question No. 215 (Hansard, 7th April 1970), paragraph (1) of question No. 710 (Hansard, 5th May 1970) and question No. 1011 (Hansard, 10th June 1970) were fully answered. 1. Did consultations take place between officers of his Department and the Public Service Board and/or the Postmaster-General's Department and/or any other department concerning the appearance of the Public Service Board as a party in the Joint Bench hearing of the Amalgamated Postal Workers' Union case for equal pay. 2. Did his Department approve of the action taken by the Public Service Board. {: #subdebate-75-1-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. As already indicated in the answers to questions Nos 215, 710 and 1011, the Public Service Board appeared as a respondent party to certain of the matters involved in the equal pay case before the Commonwealth Conciliation and Arbitration Commission. In connection with the Government's consideration of the question of the policy as to whether the Commonwealth, through the Attorney-General, should exercise its statutory right in intervention in private industry cases involved in the hearing. There was consultation between my Department and the Public Service Board. 2. The Public Service Board is an independent statutory body and thus no question arises of whether my Department approves or disapproves of action taken by it. {:#subdebate-75-2} #### Conciliation and Arbitration (Question No. 2634) {: #subdebate-75-2-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. Was financial assistance approved ot granted under Conciliation and Arbitration Regulation 138 to J. E. Dunford or to L. E. Dunford within the last 5 years. 1. If so, on what date was the assistance approved, and what amount has the Registrar paid in respect of the matter. {: #subdebate-75-2-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. (The name of **Mr J.** E. Dunford was inadvertently omitted from the list supplied in answer to Question No. 850). 1. Assistance was approved by a Registrar on 13th August 1969, and an amount of $275 has been paid to **Mr Dunford's** solicitor. {:#subdebate-75-3} #### Commonwealth Railways: Salaries (Question No. 2644) {: #subdebate-75-3-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. Why is it that the salaries of certain officers employed by the Commonwealth Railways and referred to in question No. 2242 (Hansard, 18th February 1971, pages 198-9) do not come within the scope of his Department's co-ordinating responsibility. 1. Do any of the employees of the Commonwealth Railways come within the scope of his Department's co-ordinating responsibility. 2. If so, what is the reason for excluding others. {: #subdebate-75-3-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: (I), (2) and (3) Under the Commonwealth's coordination arrangements, the Public Service Board has statutory responsibilities in respect to staffs of Departments and certain authorities. Tt is expected that authorities not linked statutorily with the Board will abide by the spirit of these arrangements by co-ordinating with the Board as to administrative staff. Departments and authorities not coming within the above arrangements are required to consult with my Department as to employees' wages. The salaries of the officers referred to in Question No. 2242 are related to those of Second Division officers in the Commonwealth Public Service and, consequently, the Commonwealth Railways Commissioner filed the application to vary rates of pay to reflect increases which had been granted to Second Division Officers. The matter merely involved the extension of a decision in one area to relate classification in another. {:#subdebate-75-4} #### Federal Awards: Inspections (Question No. 2657) {: #subdebate-75-4-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. What was the percentage of the total inspections of federal awards carried out by State Inspectors in each of the past 10 years for which figures are available. 1. What was the percentage of the total inspections of State prescriptions carried out by Commonwealth Inspectors in each of the past 10 years for which figures are available. {: #subdebate-75-4-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Reciprocal inspection arrangements exist in New South Wales, Western Australia, and Tasmania. Records of inspections of Commonwealth awards by State inspectors are available in New South Wales only and there from May, 1968. In the years 1968 (May to December), 1969 and 1970, the total number of inspections in New South Wales of Commonwealth awards was 4,145, 6,620 and 6,697, respectively. Of this number, the State Inspectors carried out 169 inspections in the relevant period of 1968 (4 per cent of the total), 266 inspections in 1969 (4 per cent of the total) and 243 inspections in 1970 (3.6 per cent of the total). 1. The comparable information relating to the inspection of State prescriptions is available in New South Wales for the years 1969 and 1970 only, lt relates to industrial inspections i.e., inspections under the State Industrial Arbitration, Annual Leave and Long Service Leave Acts. In the years 1969 and 1970, the total number of industrial inspections of State prescriptions was 35,371 and 29,718, respectively. Of this number, the Commonwealth Inspectors carried out 470 inspections in 1969 (J .3 per cent of the total) and 1,430 in 1970 (4.8 per cent of the total). {:#subdebate-75-5} #### Trade Union Rules (Question No. 2663) {: #subdebate-75-5-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. ls it in the public interest that union rules should not be contrary to law or be oppressive, unreasonable or unjust and that all lawful rules of a *union* should be observed by all persons who are under an obligation to observe those rules. 1. If so, will he consider the desirability of formulating regulations which will ensure thai no individual person shall be personally required to meet any of the costs of legal action taken by him under sections 140 and 141 of the Conciliation and Arbitration Act to protect the public interest. {: #subdebate-75-5-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. In ss. 140 and 141 of the Conciliation and Arbitration Act 1904-1970 there are provisions designed to secure the standards referred to by the honourable member and to enable members of organisations to ensure that those standards are adhered to. 1. Provision already exists under regulation 138 of the Conciliation and Arbitration Regulations for the Registrar to direct that financial assistance shall be given by the Commonwealth to a member of an organisation who proposes to take proceedings under ss. 140 or 141 of the Act. The extent of that assistance is at the discretion of the Registrar. {:#subdebate-75-6} #### Atomic Waste (Question No. 2689) {: #subdebate-75-6-s0 .speaker-JNG} ##### Dr Cass:
MARIBYRNONG, VICTORIA asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What sort of radionuclides are expected to occur as waste products from the nuclear reactor at Jervis Bay. 1. What will be the method of disposal of these waste products. 2. What will be the method of disposal of wastes other than radionuclides, such as organic liquids, low concentration heavy water and thermal-shielding-cooling system bleed, to mention some. 3. Have any investigations been made into the maximum permissible annual radionuclide intake amongst members of the general public through the distribution of affected primary products of any description. 4. What is the maximum permissible annual radionuclide intake in terms of doses to 'critical organs' amongst local residents near the reactor. {: #subdebate-75-6-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) The sort of radioactive wastes which will occur from the nuclear reactor at Jervis Bay and the methods employed to dispose of these products will depend very much on which type of reactor is chosen. An exact answer cannot therefore be given until the choice has been made. However, all the reactors finally examined were in the class known as 'water reactors' and the following general comments apply to these reactors which for convenience are considered in two classes, direct cycle and indirect cycle. Direct cycle systems have the turbine driven by steam produced in the reactor core from the coolant water. Indirect cycle systems have separate loops for the core coolant and the turbine steam circuit, heat being transferred from the former to the latter in a heat exchanger. The remarks deal with the three types of radioactive wastes produced, airborne, aqueous and solid and the figures in brackets after the radionuclides are their respective half lives. The half life is the time required for the radioactivity of a radionuclide to decay to half its original intensity. This decay continues progressively; i.e. after two half lives, the intensity will be one quarter the original, after three, one eighth and so on. Airborne Indirect cycle reactors produce small volumes of airborne waste which are retained for a time to allow radioactive decay. As a result of this decay, the gases finally discharged contain only minute quantities of krypton-85 (10.27 years) and occasionally xenon-133 (5.2 days). In direct cycle reactors the retention time is less. Radioactive decay is therefore not possible in Storage and the practice normally employed is to dilute the partially decayed gas with excess air and release from a high stack. The stack discharge would contain small amounts of tritium (10.26 years) argon-41 (1.83 hours), xenon-133 (5.2 days), xenon-135 (9.2 hours), krypton-83m (1.9 hours), krypton-85 (10.27 years) and krypton- 88 (2.8 hours). It may be seen from the half lives that with the exception of the tritium and krypton85 which in any case are well below internationally accepted levels, the airborne radioactive wastes will quickly decay away. Some fluorine-18 (1.8 hours) may be in the stack discharge, but races of iodine-131 (8.05 days) which may enter the steam circuit would be removed by filtration. Aqueous The total radioactivity which would be discharged in aqueous effluent at far below internationally accepted levels would be very small and of 3 types, activated corrosion products such as cobalt-58 (71 days), cobalt-60 (5.27 years) and iron-59 (45 days), tritium, and mixed fission products of which minute traces of iodine-129 (16 million years) and iodine-131 (8.05 days) would be the most important. Direct cycle reactors are likely to have a greater total release of radioactivity while heavy water *reactors* will have a higher tritium release than will light water reactors. These remarks are relative in the sense that the amounts discharged would always be well below internationally accepted levels. Solid Neglecting the fission products retained in the used fuel elements, the main sources of solid radioactive waste would be the filter sludge, spentionexchange resins and filters and the residues from concentration of liquid waste. The important radionuclides would therefore be the same as for liquid waste. Solid waste would be stored for eventual disposal at a national centre, the method of disposal depending upon its activity level and physical form. Other forms of solid waste such as contaminated tools and materials would be handled similarly. {: type="1" start="3"} 0. Wastes other than radionuclides, with the exception of heavy water, would be classed as normal industrial wastes and treated in a fashion appropriate for such materials. Heavy water because of its value, would, where economically possible, be recovered. 1. Considerable attention has, and still is, being given to this problem. A Working Party with representatives from the Commonwealth Department of Health's Commonwealth X-Ray and Radium Laboratory, the N.S.W. Department of Health, the Fisheries Branch of the N.S.W. Chief Secretary's Department, the N.S.W. Electricity Commission and the Atomic Energy Commission was established over a year ago to ensure that this matter was properly investigated. Accordingly a comprehensive site environmental studies programme has been under way for some time now, to gather the data for this work. Most of the necessary data has now been collected. However, the maximum annual radionuclide intake amongst members of the general public from local primary produce is determined by the exposure limits recommended by the National Health and Medical Research Council. Operations at Jervis Bay will be based on one tenth of these recommended limits and a continual monitoring programme of all locally produced primary produce will be carried out throughout the life of the power station to ensure that these limits are not exceeded. {: type="1" start="5"} 0. Exposure of the public living in the vicinity of the nuclear power station will be kept below the limits recommended by the National Health and Medical Research Council in the publication entitled 'Revised Radiation Standards for Individuals Exposed to High Ionising Radiation'. These limits are similar to those recommended by the International Commission on "Radiological Protection. The relevant parts of the document dealing with those limits for members of the public is as follows: {: type="1" start="1"} 0. DOSE LIMITS FOR MEMBERS OF THE PUBLIC The dose limitation for members of the public is a more theoretical concept than the maximum permissible doses for persons exposed to ionising radiation as the result of their employment Whereas it is practicable to monitor the radiation doses of the individuals in the latter group, the dose limits recommended in these radiation Protection Standards for the members of the public are intended to provide standards for the design and operation of radiation sources so that it is not likely that individuals in the public will receive more than a specified dose. The effectiveness of the design and operating procedures are, with respect to members of the public, not normally checked by the monitoring of individual doses but are assessed through sampling procedures in the environment, through area monitoring and through control of the sources from which the exposure may arise. The actual doses received, as a result of a certain use of ionising radiation, by individuals within a group of the public may vary, depending on such factors as differences in their age, size, metabolism and customs as well as variation in their environment. These factors make it impossible to derive the maximum doses that might be received individually. In practice, it is acceptable to use for the purpose of the assessment, a group representative of those individuals in the public expected to receive the highest dose. It is recommended that the mean dose of this group be compared with the relevant dose limits recommended in Table 3. These dose limits do not take into account radiation exposure from natural background radiation or that received by members of the public through the medical and dental use of ionising radiations'. {:#subdebate-75-7} #### Taxation (Question No. 2714) {: #subdebate-75-7-s0 .speaker-RK4} ##### Mr Hayden:
OXLEY, QUEENSLAND asked the Treasurer, upon notice: {: type="1" start="1"} 0. What would be the estimated increase in taxation revenue if payments on personal insurance policies were removed from the list of allowable taxation deductions. 1. How many taxpayers claimed a deduction for personal insurance policies in each of the last 5 years. 2. How many of these taxpayers claimed (a) less than $200, (b) between $200 and less than $400 and (c) so on, up to the limit. 3. What amount of tax revenue was forgone, in each of these groups. 4. Can he provide from recent data on personal income expenditure patterns in Australia, details of the amount the average Australian wage earner, in different income groups, spends each year on personal insurance policies. 5. Is it a fact that only taxpayers in upper income groups can afford to set aside hundreds ot dollars every year to invest substantially in personal insurance policies; if so, is it these taxpayers who gain most benefit from the existence of these deductions. 6. ls it a fact that the marginal tax rale is highest for those taxpayers in the upper income groups; if so, do these taxpayers stand to benefit most from the continuing existence of deductions for personal insurance policies. 7. Why does the Government allow this particular deduction. {: #subdebate-75-7-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the hon ourable member's question is as follows: {: type="1" start="1"} 0. No taxation statistics are available that would enable an accurate estimate to be made of the gain to income tax revenue that would result if payments in respect of personal insurance policies were not allowed as income tax deductions. However, using published statistics of premiums received by insurance companies in respect of life insurance and personal accident insurance business in Australia and of employees' contributions to superannuation funds, in conjunction with statistics of income tax deductions allowed under section 82h of the Income Tax Assessment Act, a broad estimate has been made to the order of the revenue forgone by the allowance of income tax deductions for payments in respect of life and personal accident insurance. On this basis, it is estimated that income tax revenue would be approximately $125m greater if payments on life and personal accident insurance policies in respect of taxpayers, their spouses and children were not allowed as income tax deductions. 1. and (3) Statistics of taxpayers who were allowed deductions for payments in respect of personal insurance policies only are not available. However, statistics have been compiled of deductions allowed to taxable individuals under section 82h of the Income Tax Assessment Act, i.e., of deductions allowed for payments in respect of life, sickness and accident insurance premiums and for payments to a friendly society, superannuation, sustentation or similar fund. The number of taxable individuals who were allowed deductions under section 82h in the most recent years for which these statistics were compiled are as follows: In addition statistics of numbers of taxable individuals who were allowed deductions under section 82hin respect of the 1967-68 income year were classified by: {: type="a" start="a"} 0. size of deduction allowed under section 82h, and 1. grade of actual income of taxpayer. These statistics are set out in Schedule 1.39 (page 106) of 'Taxation Statistics 1968-69', the supplement to the 48th Report of the Commissioner of Taxation. {: type="1" start="4"} 0. No statistics are available that would enable reliable estimates to be made of the revenue foregone classified by size of income tax deductions allowed for payments in respect of personal insurance policies. 1. The information requested is not available. 2. No. Schedule 1.39 indicates that large numbers of taxpayers in the lower and middle income groups claim deductions under section 82h. 3. Under a progressive rate scale, it is axiomatic that the marginal rate of tax rises with taxable income. Those receiving comparatively large benefits as a result of deductions allowed for superannuation contributions would, of course, usually pay relatively higher rates of tax on their superannuation pensions on retirement 4. Successive Governments have endorsed the deductions allowable under section 82h which, inter alia, encourages a taxpayer to make provision for his retirement or for his dependants after his death. {:#subdebate-75-8} #### Armed Forces (Question No. 2754) {: #subdebate-75-8-s0 .speaker-NF4} ##### Mr Cohen:
ROBERTSON, NEW SOUTH WALES asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to a statement made by **Dr Birrell,** Melbourne Police Surgeon at the Australian Study Week on Road Safety Practices, Melbourne, 1967, that the Armed Forces have a severe accident and fatality problem concerning drunken driving. 1. Do his departmental records support this view. 2. If so, and in view of the great current interest in road safety, will he consider making public all departmental records relating to this problem so that research groups may further investigate methods of reducing the road toll. 3. If he is not prepared to publish this information, is he prepared to allow qualified research groups, such as the New South Wales Traffic Accident Research Unit, access to departmental files covering this area. The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Yes. But the statement is not accepted as substantiated. 1. The majority of road accidents involving servicemen occur off-duty when the personnel are travelling in private vehicles. These accidents are investigated by State authorities and are frequently not reported to the Services except where servicemen are killed or seriously injured. Consequently, the Services do not have detailed records. 2. and (4) As mentioned in (2) the Services do not have comprehensive records of road accidents involving servicemen. The Services will support any practicable measures that may be taken to improve road safety, and would be prepared to discuss such measures with properly qualified research groups. Armed Forces (Question No. 2777) {: #subdebate-75-8-s1 .speaker-KGN} ##### Mr Kirwan:
FORREST, WESTERN AUSTRALIA asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. How many (a) servicemen and (b) servicewomen m the (i) Australian Army and (ii) Royal Australian Air Force are stationed in (A) Singapore and (B) Malaysia. 1. What heavy defence equipment is supplied for these forces. The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. (a) The Australian Army has about 1,500 Servicemen and 25 Servicewomen stationed in Singapore. Army also rotates a company through the Butterworth base in Malaysia, {: type="a" start="b"} 0. The Royal Australian Air Force has about 1,400 Servicemen and 25 Servicewomen in Malaysia. It also has a small number of Servicemen in Singapore. 1. **Major equipments** in the case of the Air Force include 2 squadrons of Mirage fighter aircraft, an air transport element of Dakotas, and Iroquois helicopter for search and rescue. In addition to normal infantry weapons and engineer and support equipment, Army equipments include 105 millimetre howitzers employed by the artillery field battery, and light observation helicopters of the Army reconnaissance flight. {:#subdebate-75-9} #### Conciliation and Arbitration: Annual Report (Question No. 2780) {: #subdebate-75-9-s0 .speaker-6U4} ##### Mr Whitlam: asked the Prime Minister, upon notice: >On what date did his predecessor or his Department first receive a copy of the report by the President of the Commonwealth Conciliation and Arbitration Commission dated 11th December 1970. {: #subdebate-75-9-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >The Department first received the report from the Department of Labour and National Service for tabling purposes on 23rd February 1971. My predecessor indicated in the House on 25th February that while he had- not had time to study remarks made in the report he had had a chance to look cursorily at them. The report he referred to was the one received by the Department. {:#subdebate-75-10} #### Conciliation and Arbitration (Question No. 2803) {: #subdebate-75-10-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. Does bis Department propose to cancel the weekly visits of the Federal Arbitration Inspector to Ballarat. 1. Is if a fact that approximately two-thirds of the work force in Ballarat operate under Federal awards.- 2. . If the position is as stated, will he reconsider the decision to cancel the visits of the Inspector. {: #subdebate-75-10-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. I am advised that the regular weekly visit was suspended temporarily, lt has been restored. 1. It would be possible to compile from Departmental records and from statistics published by the Commonwealth Bureau of Census and Statistics after the census in 1966 an estimate of the federal award coverage of the work force in Ballarat but I do not believe thai the' considerable time and effort involved in so doing would be justified. 2. See answer to (1). {:#subdebate-75-11} #### Armed Forces (Question No. 2806) {: #subdebate-75-11-s0 .speaker-SH4} ##### Dr Klugman:
PROSPECT, NEW SOUTH WALES asked the Minister for Defence, upon notice: >How many members of the Australian defence forces were charged with (a) dangerous driving, (b). driving under the influence and (c) exceeding the speed limit during (i) 1968, (ii) 1969 and (iii) 1970. The former Minister for Defence **(Mr Gorton)** supplied the following answer: - >The offences referred to are civil statutory offences for which servicemen are amendable like all citizens of the land to the ordinary laws of the land. The services would not be aware of the numbers of servicemen who are charged with the offences referred to when they are off. duty or otherwise engaged in pursuing their ordinary private lives. > >Service authorities are properly concerned with convictions for such offences when these convictions have some bearing on a servicemen's service. When this occurs the individual service takes appropriate action. > {:#subdebate-75-12} #### Nuclear Power (Question No. 2830) {: #subdebate-75-12-s0 .speaker-KUX} ##### Mr Stewart:
LANG, NEW SOUTH WALES asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he say whether New Zealand authorities on nuclear power were of the opinion that the use of natural uranium fuel makes the most economic sense. 1. Can he also say if there has been any change of opinion in that country and. if there has, what were the reasons for the change. {: #subdebate-75-12-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Vam not aware of any official statements by the New Zealand authorities to this effect. 1. In the tight of the answer to the first question, I am not in a position to comment. {:#subdebate-75-13} #### Nuclear Power (Question No. 2833) {: #subdebate-75-13-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: >What is the urgent need for Australia to introduce nuclear power bused on technology which is likely to be superseded within a few years. {: #subdebate-75-13-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: >It is incorrect to say that any proposed nuclear power station at jervis Bay will be based on a technology which is likely to be superseded within a few years. No doubt the honourable member is making reference to the possibility of fust breeder reactor systems superseding current thermal reactor systems. As stated on several previous occasions fast breeder systems hold great promise for the future but they are not yet commercially practicable. Accordingly they are not likely to supersede the current generation of reactors within a few years'. CANDU Reactor (Question No. 2834) {: #subdebate-75-13-s2 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he say how many CANDU reactors arc in commercial operation. 1. If so, where are they located, and what is the size of each reactor. 2. ls the CANDU reactor fully proved. {: #subdebate-75-13-s3 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Two. A third CANDU reactor, Pickering No. 1 of 500 MWe capacity situated in Ontario, Canada went critical on 25 th February 1971 and is scheduled to enter commercial operation in September 1971. . 1. Rolphton, Ontario, Canada- £5 Megawatts Electrical. Douglas Point, Ontario,. Canada - 200 Megawatts Electrical. 2. I invite the honourable member's - attention to my answer to his question on notice No. 2843. SGHW Reactors (Question No. 2835) {: #subdebate-75-13-s4 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he say how many SGHW reactors are in commercial operation. 1. If so, where are they located and what is" the size of each reactor. 2. Is the SGHW reactor fully proved. {: #subdebate-75-13-s5 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. One. 1. The SGHW reactor is located at Winfrith, Dorset, United Kingdom and has a capacity ot 100 Megawatts. 2. 1 invite the honourable member's attention to my answer to his question No. 2843. {:#subdebate-75-14} #### Heavy Water (Question No. 2838) {: #subdebate-75-14-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Has the Australian Atomic Energy Commission conducted any experiments into the manufacture of heavy water. 1. If not, why not. 2. If experiments have been made in Australia, is he able to say how the results compare with any experiments conducted in New Zealand. {: #subdebate-75-14-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No, apart from a few exploratory experiments on possible new methods of production. 1. There are several well-known and proven methods for the production of heavy water, and as yet there has been no need for the Commission to become involved in experimenting intensively in its production. 2. See answer to (1) above and my answer to the honourable member's question No. 2837. {:#subdebate-75-15} #### Nuclear Power (Question No. 2839) {: #subdebate-75-15-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he say whether the (a) Union of Soviet Socialist Republics and (b) People's Republic of China have any nuclear power reactors. 1. If so, (a) how many reactors are in operation in each country and (b) what is the type in each case. {: #subdebate-75-15-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. (a) There are several nuclear power reactors operating in the U.S.S.R. {: type="a" start="b"} 0. There have been unconfirmed reports that there are nuclear power reactors in operation in the People's Republic of China. 1. (a) and (b). There is no detailed information available on reactors operating in the People's Republic of China. {:#subdebate-75-16} #### Nuclear Power (Question No. 2840) {: #subdebate-75-16-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he yet say what the estimated cost per kilowatt hour of nuclear generated electricity in Australia will be using (a) natural uranium and (b) enriched uranium. 1. If so, can he supply a comparative statement showing these costs in relation to electricity generated by conventional plants in Australia. {: #subdebate-75-16-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. In answer to somewhat similar questions I stated it was not possible to give answers in precise quantitative terms. The cost of nuclear power generation in Australia will depend on a number of factors such as the size of the station, its location, the financial conditions involved, the type of reactor, the degree of local content and so on. It is true that as a result of the assessment of the tenders received for the proposed Jervis Bay nuclear power station we now have a better knowledge of the relative costs of electricity generated from reactors using natural uranium and those using enriched uranium. This information, however, relates only to that particular station and as the tendered figures are necessarily confidential, I am not in a position to disclose them to the honourable member. {: type="1" start="2"} 0. Costs of electricity generated by conventional plants in Australia vary very much between individual plants because of variations in local conditions so that again a precise comparative statement between nuclear and conventional generation cannot be supplied. I would add, however, that under current conditions in Australia I do not believe that nuclear power stations are competitive with conventional ones. {:#subdebate-75-17} #### Nuclear Reactor (Question No. 2841) {: #subdebate-75-17-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Did the tender documents for the proposed nuclear reactor at Jervis Bay stipulate the use of indigenous natural uranium after 5 years of operation. 1. Has there been any change of thought on this matter; if so, what are the reasons for the change. {: #subdebate-75-17-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. The Invitation to Tender document for theJervis Bay Nuclear Power Station States: It is the intention that the Jervis Bay Nuclear Power Station shall become fully independent of overseas fuel supplies and services. The (Atomic Energy) Commission may, at its discretion, authorise the purchase of overseas fuel supplies including fabrication for the first charge and replacement fuel for a period not exceeding 5 years after start-up. The acceptability of any Tender will depend on satisfactory arrangements being made between the Tenderer and the Commission for those operations required for local fuel preparation, including conversion and enrichment, if applicable, and fuel clement manufacture. The Tenderer shall provide, as a part of his Tender, a comprehensive description of the plan and assurances by which he will meet the requirements of an indigenous fuel supply, including evidence of the agreement of the necessary government authorities.' {: type="1" start="2"} 0. No. Insurance: Nuclear Accidents (Question No. 2842) {: #subdebate-75-17-s2 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Can he say whether insurance companies in Australia refuse to cover damage caused by the effects of nuclear accidents. 1. If so, what arrangements are to be made for the insurance coverage of property and persons within the danger zone of the proposed nuclear power station at Jervis Bay. {: #subdebate-75-17-s3 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Insurance companies in Australia include provisions in their policies to exclude liability for property damage which may have been caused by a nuclear accident. 1. I can assure the honourable member that adequate arrangements will be made to cover members of the public and their property against the most unlikely event of damage from a nuclear accident involving a Jervis Bay Station. Nuclear Reactors (Question No. 2843) {: #subdebate-75-17-s4 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What types of nuclear reactors are regarded as being fully proved. 1. Were tenders for any of these included in the final list for the proposed reactor at Jervis Bay. 2. If so, what were the types of reactors and the names of the tendering organisations. {: #subdebate-75-17-s5 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The answer to the honourable member's question depends in large measure on his understanding of 'fully proved'. Power reactors undergo continual development in the light of operating experience so that no plant currently, on offer can be considered fully proved although their reliability is generally quite acceptable. Reactors which could be built today with reasonable confidence in their safety, reliability and performance - although they could not be considered as fully proved - would be Magnox Reactors, Advanced Gas Reactors, Boiling Water Reactors, Pressurised Water Reactors, Steam Generating Heavy Water Reactors and the Canadian Heavy Water Natural Uranium Reactor (CANDU). 1. Yes. 2. PWR- Westinghouse, U.S.A. PWR - Draftwerk Union, Germany SGHWR-J-The Nuclear Power Group, U.K. CANDU - Atomic Energy of Canada Ltd. {:#subdebate-75-18} #### Jervis Bay Power Station (Question No. 2844) {: #subdebate-75-18-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Will he supply answers to questions Nos 2830 to 2843 prior to his promised statement on the successful tender for the Jervis Bay nuclear power station. 1. If not, will he make a detailed and comprehensive statement on the reasons for the selection at the time of his announcement. {: #subdebate-75-18-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) I have not so far been in the position to make a comprehensive statement on the proposed Jervis Bay Power Station but in the meantime I have provided answers to your questions Nos 2830 to 2843. {:#subdebate-75-19} #### Defence Purchases (Question No. 2860) {: #subdebate-75-19-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: >What defence purchases have been negotiated by the Chief Purchasing Officer of his Depart- . ment in (a) London and (b) Washington in each of the past 5 years. - The former Minister for Defence **(Mr Gorton)** supplied the following answer: Main Categories of items purchased - Aircraft and spares; Minesweepers; Ships Maintenance Stores; Dockyard equipment for maintenance of ships and submarines; Radar, sonar cypher and communications equipment and spares; Equipment for the construction of patrol boats, Destroyer escorts' and escort maintenance ship; Ships spare gear; Guided missile control systems; Anti-tank guns and tank spares; Gun mountings; Fire control equipment; Missiles, torpedoes and ammunition; Technical publications; Chemicals (for explosives manufacture); Electronic equipment; Plant, ammunition components; Laboratory equipment; Lead-in requirements for aircraft production. Main Categories of items purchased - Aircraft and spares; Helicopters and spares; Armoured personnel carriers and spares; Missiles; Ammunition; Bombs; Torpedoes and spares; Weapon system trainer; Flying helmets and oxygen masks; H200 computer; Machine guns and spares; Communications and radio equipment and spares; Guided missile control systems; Dockyard equipment for maintenance of ships and submarines; Maintenance stores for ships and establishments; Electrical generating sets; Miscellaneous support spares and equipment; Technical publications; Equipment for the construction of patrol boats, destroyer escorts and escort maintenance ship; Aircraft raw materials and ground support equipment; Scientific instruments and equipment; Chemicals; Plant items; Technical assistance and training. {:#subdebate-75-20} #### Defence Purchases (Question No. 2862) {: #subdebate-75-20-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: >What purchases of defence equipment have been made from (a) France, (b) Italy and (c) Sweden in each of the past 5 years. The former Minister for Defence **(Mr Gorton)** supplied the following answer: Main categories of items purchased Mirage and Mystere aircraft and spares; Helicopter spares; Missile spares; Ammunition and materials; Target camouflage equipment; Radar spares; Combined tank/bomb carriers. Main Categories of items purchased 105mm Howitzer parts; Macchi project spares; Radar parts; Macchi aircraft. Main Categories of items purchased Aircraft arrestor barriers and parts; 84mm antitank guns; Aircraft and spares. {:#subdebate-75-21} #### Overseas Relief (Question No. 2867) {: #subdebate-75-21-s0 .speaker-JP8} ##### Mr Berinson:
PERTH, WESTERN AUSTRALIA asked the Treasurer, upon notice: {: type="1" start="1"} 0. What appeals for overseas relief have been accorded tax deductible status in the last 5 years. 1. What was the (a) value of donations made to these appeals and (b) cost to revenue. 2. ls he able to state the estimated value of all overseas relief raised by donation in the last 5 years. 3. If so, what would have been the approximate cost to revenue if all these donations had been tax deductible. 4. Will the Government consider granting tax deductible status to a wider range of overseas relief donations, particularly those raised under the auspices of United Nations agencies. {: #subdebate-75-21-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. None. 1. ' (a) See answer to part (1) {: type="a" start="b"} 0. As donations to appeals for overseas relief in the past 5 years have not been allowed as deductions for income tax purposes, there has been no cost to revenue. 2. No official statistics are available on which to base an estimate of the figures sought. The Australian Council for Overseas Aid has estimated that overseas aid contributions by Australian voluntary agencies amounted to some $14m in 1970. The greater part of this figure represents expenditure by church missionary agencies, being moneys collected by churches in Australia and expended overseas. {: type="1" start="4"} 0. A meaningful estimate cannot be made of the cost to revenue of allowing deductions in respect of the total amount of voluntary aid contributions because of the varying nature of the sources from which they come and of the means by which they are raised. The cost of allowing deductions for cash donations at current levels to non-church voluntary agencies is estimated to be about$1.2m. 1. The question of allowing deductions in respect of donations for overseas relief purposes is being kept under review. Mining and Minerals (Question No. 2921) {: #subdebate-75-21-s2 .speaker-8V4} ##### Mr Grassby: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. ' How many overseas companies in Australia are engaged in (a) mining and (b) processing minerals. 1. What percentage of Australia's mineral resources are now controlled by overseas companies. {: #subdebate-75-21-s3 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: The Acting Commonwealth Statistician has advised as follows: {: type="1" start="1"} 0. The varying extent to which there may be an overseas interest in a company in Australia, and the different forms which this interest might take, creates the necessity to develop some objective criteria as to what constitutes an overseas company. The Bureau of Census and Statistics has adopted the following conventions for the purpose of producing statistics on overseas participation in Australian industry. As a general rule overseas Companies (and consortia) are those in which there is a direct overseas investment as follows: {: type="a" start="i"} 0. Australian companies in which at least 50 per cent of the ordinary shares (or voting stock) is held by individual shareholders or individual companies resident in one overseas country, or where 25 per cent or more of the ordinary shares (or voting stock) is held by one company or a group or associated companies, incorporated in one overseas country. {: type="i" start="ii"} 0. Branches of companies incorporated overseas and registered in Australia as foreign companies. 1. Wholly owned and partly owned subsidiaries and sub-subsidiaries, etc., of companies included in (i) and (ii) above. Based on these criteria, there were 57 overseas companies and consortia engaged in mining in Australia in the calendar year 1968, and '13 overseas companies engaged in mineral processing in Australia in the year ended June 1967. These are the latest years for which figures are available. It should be noted that some overseas companies included in the figure for mining would also be included in the number of overseas companies engaged in mineral processing. {: type="1" start="2"} 0. For statistical purposes, the Bureau measures the degree of overseas ownership and control in terms of the percentage of the total value of production of an industry which is attributable to overseas and to Australian companies respectively. To do this it *is* again necessary to adopt certain conventions. When measuring the degree of overseas ownership by overseas companies, the value of production of their mining or mineral processing activities is attributed according to the percentage of the equity interest held overseas and in Australia, respectively. However, when measuring the degree of overseas control by these overseas companies, the whole of the value of production of their mining or mineral processing ' activities is attributed to them, except where an Australian company holds a greater proportion of the equity interest than an overseas company in which case the value of production is attributed wholly to Australian control. Measured in these terms the overseas companies (mentioned in answer to Question 1) controlled 58 per cent of the total value of mining production (1968) and 71 per cent of the total value of mineral processing production (in 1966-67)'. {:#subdebate-75-22} #### Accident Statistics (Question No. 2924) {: #subdebate-75-22-s0 .speaker-NF4} ##### Mr Cohen: asked the Treasurer, upon notice: >What was the number of (a) deaths and (b) injuries requiring medical aid in (i) motor vehicle accidents, (ii) air accidents (including military), (iii) rail accidents, (iv) industrial accidents, (v) firearm accidents and (vi) poisoning by accident, during each of the last 5 years. {: #subdebate-75-22-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: >The Acting Commonwealth Statistician has supplied the following information in reply to the honourable member's question: Preliminary {: type="a" start="a"} 0. -In South Australia,, prior to1 October 1967, particulars of the. number of persons injured included those who did not require surgical or medical treatment. From 1 October 1967 the figures have been compiled on the basis set out in the Explanatory Notes below. Explanatory Notes Details of road traffic accidents involving casualties relate to accidents which were reported to the police and which satisfy the following conditions: {: type="a" start="a"} 0. That the accident occurred on any road, street, thoroughfare, etc., open to the public, including railway level crossings; 1. That it involved any road vehicle, i.e., motor car, tram, handbarrow, etc. (or other road user, such as an animal), which at the time of the accident was in motion; 2. That the accident resulted in - {: type="i" start="i"} 0. the death of any person within a period of 30 days of the accident; or 1. bodily injury to any person to an extent requiring surgical or medical treatment {: type="a" start="a"} 0. Excludes accidents outside Australia involving aircraft on the Australian register. Details of accidents involving military aircraft and military personnel are not available in the Commonwealth Bureau of Census and Statistics. 1. Excludes parachutists killed on contact with earth after an uninterrupted fall. {: type="a" start="a"} 0. Includes all casualties resulting from train accidents (derailments and collisions with other trains), other accidents involving passengers (persons falling out of or within trains in motion), accidents when persons are struck by railway vehicles (at crossings, etc.), and other accidents to persons legally on railway property (on platforms, in sheds and yards, etc.). Not all persons classified as injured would have received treatment from a medical practitioner. {: type="i" start="iv"} 0. The Departments of Labour Advisory Committee, on the basis of statistics published in. each State in respect of claims made under workers' compensation insurance, has estimated that fatalities caused byindustrial injuries average approximately 400 per year. (The accident factor in approximately 30 per cent of these claims has been indicated to be motor vehicles.) The Departments of Labour Advisory Committee, on the basis of statistics in respect of claims made under workers' compensation insurance, has estimated that roughly 300,000 workers are involved in accidents which cause them to be away from their jobs for one day or more. {: type="a" start="v"} 0. and (vi) Comprehensive statistics on firearm accidents and on poisoning by accident are not available in the Bureau. Numbers of deaths registered in which the underlying cause was described as 'accident caused by firearm' or 'accidental poisoning' are as follows: {: type="a" start="a"} 0. Figures for 1965 and 1966 are not comparable with those for later years, due to revision of the World Health Organisation's International Classification of Diseases which is used for classifying causes of death. Statistics of injuries requiring medical aid are not available. However, some data are available in respect of inpatients discharged from hospitals in Queensland and Tasmania, and are set out in the following table. In both cases, the data are available only for the year shown. In order to give a sense of proportion to these figures the following information may be of use. Deaths registered in Queensland in 1968 and in Tasmania in 1969 in which, the underlying cause was described as 'accident caused by firearm' or accidental poisoning' were as follows. {:#subdebate-75-23} #### Vietnamese Children-Adoption (Question No. 2938) {: #subdebate-75-23-s0 .speaker-8V4} ##### Mr Grassby: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Are there any impediments in the way of Australian servicemen arranging the adoption of Vietnamese children. 1. Have any requests for any such adoptions been made. 2. Can he say whether United States Army procedures enable United States soldiers to arrange the adoption of Vietnamese children without difficulty. The former Minister for Defence **(Mr Gorton)** supplied, the following answer: {: type="1" start="1"} 0. Servicemen, who wish, to adopt Vietnamese children must comply with the adoption Jaws of the state where the child is to reside, Vietnamese law concerning adoption and make application to. our Immigration authorities for entry of such children. Entry to Australia will normally be granted when the adoption has been in accordance with Slate and Vietnamese laws. Advice was given by my department in May 1970 to the Service Departments setting out the procedures to be followed by servicemen wishing to adopt foreign children. That advice has been promulgated in the Services. 1. My department, the Services and the Department of .Immigration have no record of any formal requests concerning such adoptions. 2. The position in regard to United States soldiers wishing to adopt Vietnamese children is similar to that of our own servicemen. {:#subdebate-75-24} #### Wages and Profits (Question No. 2942) {: #subdebate-75-24-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will he expand his predecessor's answer to paragraph (3) of question No. 2011 (Hansard, 16th February 1971, page 91) to say whether it is contrary to the best interests of Australia for the Conciliation and Arbitration Commission to refuse wage increases at a time when (a) prices and (b) profits are soaring. 1. Has the (a) total level of profits and (b) rate of increase in profits in any year since 1950 exceeded the (i) total value of increased productivity and (ii) the rate of growth in productivity, respectively. {: #subdebate-75-24-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. The answer given by my predecessor was complete in itself. 1. Since there is no relationship between the concepts mentioned by the honourable member, no meaningful answer can be given to the question. {:#subdebate-75-25} #### Medical Fees (Question No. 2953) {: #subdebate-75-25-s0 .speaker-KDP} ##### Dr Everingham: asked the Minister representing the Minister for Health, upon notice: {: type="1" start="1"} 0. Did the Australian Medical Association in June 1970 agree to meetings between officers of his Department and the Economic Advisory Committee of the AMA to discuss means of arriving at recommended fees. 1. If so, did the AMA reply in detail to all questions at these meetings. {: #subdebate-75-25-s1 .speaker-KFH} ##### Dr Forbes:
Minister for Immigration · BARKER, SOUTH AUSTRALIA · LP -- The Minister for Health has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. Yes. 1. Yes. {:#subdebate-75-26} #### Medical Fees (Question No. 2957) {: #subdebate-75-26-s0 .speaker-KDP} ##### Dr Everingham: asked the Minister representing the Minister for Health, upon notice: >Has the Government made no recommendation on medical fees except the general call for restraint in claims for income rises but objected to an overall 15 per cent rise in recommended fees when average earnings rose 17 per cent over the period. **Dr Forties** ; The Minister for Health has provided the following answer to the honourable member's question: >The Government has made no recommendation on medical fees. The Australian Medical Association was however advised that die proposed across the board' fee increases which it announced on 8th February 1971 were unacceptable to the Government. {:#subdebate-75-27} #### International Labour Conference (Question No. 2967) {: #subdebate-75-27-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Labour and National Service, upon notice: >When does he expect to table statements relating to the instruments adopted at the 41st, 48th, 50th and subsequent sessions of the International Labour Conference? {: #subdebate-75-27-s1 .speaker-KIM} ##### Mr Lynch:
LP -- 1 Tie answer to the honourable member's question is as follows: >The statements will be tabled when consultations with the States and with the Commonwealth authorities concerned have been completed. As the honourable member is aware, a review of the position of Australian law and practice relating to Conventions adopted at Sessions of the International Labour Conference up to 1968 was published by my Department in October 1969. {:#subdebate-75-28} #### Child Welfare (Question No. 2971) {: #subdebate-75-28-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Social Services, upon notice: {: type="1" start="1"} 0. What were the names and portfolios of the Ministers who attended the Conference of Child Welfare Ministers in Hobart on 18th March 1971? 1. What requests or suggestions were, made at the conference for legislative or administrative action by (a) the Commonwealth, (b) the Territories and (c) the States? {: #subdebate-75-28-s1 .speaker-DB6} ##### Mr Wentworth:
Minister for Social Services · MACKELLAR, NEW SOUTH WALES · LP -- The answer to the honourable member's question is as follows: (1). Tasmania - **Chairman,** The Hon. K. O. Lyons, M.L.A., Chief Secretary and Minister for Social Welfare. New South Wales- The Hon. L. J. Waddy, M.L.A., Minister for Child Welfare and Social Welfare. Victoria - The Hon. 1. Smith, M.L.A., Minister for Social Welfare. South Australia - The Hon. L. J. King, M.H.A., AttorneyGeneral and Minister for Social Welfare. Western Australia - The Hon. W. F. Willesee, M.L.C., Minister for Child Welfare. Commonwealth - The Hon. W. C. Wentworth, M.P., Minister for Social Services. {: type="1" start="2"} 0. The Conference was held as a forum for exchange of views on matters of mutual interest. It was not the purpose of the meeting to formulate Conference requests to the Governments of the Commonwealth or the States but rather to ensure that each Government, in determining its policy on a matter of some common interest, could be aware of the problems and views of Ministers of other Governments. {:#subdebate-75-29} #### Input-Output Tables (Question No. 2973) {: #subdebate-75-29-s0 .speaker-6U4} ##### Mr Whitlam: asked the Treasurer, upon notice: >On what date does the Bureau of Census and Statistics expect to publish its planned input-output tables for 1968-69. {: #subdebate-75-29-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: >It has for some time been the intention of the Commonwealth Statistician to proceed with the compilation of input-output tables for 1968-69 as soon as resources could be spared from the 1962- 63 project. Some preliminary work has commenced on the 1968-69 tables but the compilation of input-output tables is a time-consuming task requiring highly trained staff and it will be several years before the 1968-69 tables are completed. It is impossible to give any precise publication date. Fill Aircraft (Question No. 2984) {: #subdebate-75-29-s2 .speaker-KGN} ##### Mr Kirwan: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What sum has been spent on the Fill project in respect of: {: type="a" start="a"} 0. purchase of spare parts etc; 1. aircraft storage costs; 2. payments to date for the aircraft. 1. What would be the cost of cancelling the contract now. The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. (a) $US52.131m has been expended to 31st March 1971. {: type="a" start="b"} 0. The question of storage charges is still to be negotiated between the United States and the Australian Governments. 1. Payments for the project to 31st March 1971, are $US228.288m. 1. A complete statement was presented to the House on 12th May 1970, by the former Minister for Defence on the Fill project The statement included the Agreed Minute between the United States, Secretary of Defense and the Australian Minister for Defence. The Agreed Minute refers to confirmation by the Australian Minister for Defence that certain operational and technical criteria which were mutually agreed to are fundamental requirements for the Australian strike aircraft and that an F111C that meets those requirements will be suitable for operational use. In the event such operational and technical criteria or any mutually agreed modification thereof are not achieved, providing Fill series aircraft are being employed in the active USAF inventory, the Department of Defense agrees, subject to the authorisation by the Congress, to accept the aircraft and associated support for adaptation to its own use and to credit the Government of Australia with an equitable reimbursement. The amount of reimbursement is subject to further refinement and negotiation, but was estimated then (April 70) by the USAF to be in the range $130 to$150m. Vietnam (Question No. 2985) {: #subdebate-75-29-s3 .speaker-KGN} ##### Mr Kirwan: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. How many (a) Navy, (b) Army and (c) Air Force personnel are at present stationed in Vietnam. 1. What was the estimated cost of Australia's involvement in Vietnam for the year ended February 1971. 2. How many Australians have lost their lives in Vietnam or as the result of fighting there, and how many of these were conscripts. 3. How many Australians have (a) been wounded and (b) suffered permanent disability as a result of wounding and how many of these were conscripts. The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="2"} 0. The cost of our involvement in Vietnam for the year ended 28th February 1971 was$44.286m. This amount represents the excess over normal costs in Australia of the elements concerned. 1. Fatal casualties in Vietnam at 30th April 1971, were 472, of which 191 were national servicemen. 2. (a) At 30th April 1971, 2,284 Australian personnel bad been wounded in action in Vietnam. {: type="a" start="b"} 0. As at 28th February 1971, 3,505 servicemen who served in Vietnam were receiving pensions in respect of incapacity accepted as due to service there. Repatriation statistics do not distinguish between pensions for battle and non-battle disabilities nor between regular and national servicemen. {:#subdebate-75-30} #### Superannuation (Question No. 2996) - {: #subdebate-75-30-s0 .speaker-JM9} ##### Mr Armitage:
CHIFLEY, NEW SOUTH WALES asked the Treasurer, upon notice: {: type="1" start="1"} 0. What investments were made by the Superannuation Board during the last 10 years. 1. To whom were loans made, and what was the (a) date, (b) amount and (c) rate of interest of each loan during the same period. {: #subdebate-75-30-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) In summary, the investments of the Superannuation Board made during each of the last 10 financial years ended 30th June 1970, together with the related ranges of interest rates, are shown in the Table below. The Superannuation Board, which includes a member elected by the contributors, who is a party to all investment decisions, enters into private negotiations when a loan is to be secured by a mortgage of land or real property. Such negotiations are confidential between the Board and its client and reflect the established practice for lending institutions such as the Superannuation Board. Disclosure of the details of these investments would interfere with the proper functioning of the Board. The Board does not, therefore, publish details of individual loans. Details of investments other than mortgage loans as at 30th June each year are advised to the Parliament annually in the Treasurer's Statement of Receipts and Expenditure, but do not include the date on which each loan is made. This information, over a period of 10 years, would involve extensive analysis of records of a large number of investments which are not normally summarised in the form provided for in the question. {:#subdebate-75-31} #### Commonwealth Arbitration Inspectorate (Question No. 2999) {: #subdebate-75-31-s0 .speaker-KEC} ##### Mr Kennedy:
BENDIGO, VICTORIA asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. How many inspectors of the Commonwealth Arbitration Inspectorate operate in Victoria. 1. How many of them function in country areas. 2. Will the economy measures of the Government cause a deteriorationof services -provided by these inspectors in. country areas.: 3. If so, will he endeavour to reverse any decisions which would have such an effect. {: #subdebate-75-31-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Thirteen. 1. Inspectors or groups of inspectors make regular visits of inspection to a number of towns and from time to time undertake inspection tours of other provincial areas. 2. and (4) I am informed that as part of its efforts to curtail expenditure, my Department has found it necessary to re-arrange its programme of country inspections until 30th June 1971, but this will not affect the investigation of complaints lodged by on the spot inspections. {:#subdebate-75-32} #### Education (Question No. 3000) {: #subdebate-75-32-s0 .speaker-SH4} ##### Dr Klugman: asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. How many students graduated from Austraiian universities as (a) B.Sc., (b) B.Sc. with Honours, (c) Ph.D. in scientific subjects, (d) B.E., (e) M.B.. B.S., (f) B.A., (g) B.A. with Honours, (h) M.A. and (i) Ph.D. in Arts subjects during each of the years 1960, 1965, 1968, 1969 and 1970? 1. Has his Department made any attempt to predict the need for graduates? {: #subdebate-75-32-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The following answer is provided: {: type="1" start="1"} 0. The answer to this part of the honourable member's question is contained in the following table. {: type="1" start="2"} 0. Yes. My Department is currently associated with the Department of Labour and National Service in a survey of the supply and demand for engineers. My Department is undertaking a survey of the current supply of engineers from Australian educationl institutions and the Department' of Labour and National Service is undertaking . a survey to assess the demand by employers for graduates in engineering. 1 understand that the Department of Labour and National Service has also undertaken some surveys of the demand for graduates in other professional groups - for example, dentists. It is envisaged that my Department will be carrying out more extensive studies of the need for graduates in conjunction with the Department of Labour and National Service. {:#subdebate-75-33} #### Water Purification (Question No. 3024) {: #subdebate-75-33-s0 .speaker-8H7} ##### Mr Enderby: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to the claims made for the new method of purifying industrial waste water known as the Krupp-Katox process? 1. If so, is he able to say. whether (a) the degree of purity of water treated by this process is higher than that in water treated by the biological methods of treating industrial waste water, (b) the new process is more efficient in its claims on space and cost, (c) the new process is quicker than the previous process, (d) there are any known disadvantages of the new process and (e) any steps are being taken to encourage or facilitate the introduction of the new process into Australian industry? {: #subdebate-75-33-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. A large number of processes for treating industrial waste water are reported in the technical literature and although the process known as the Krupp-Katox process may have been reported in the literature I am not aware of it being called by that name. 1. In the light of the answer above, I am not able to provide the detailed comment sought. However I might say that the selection of a treatment system for any particular application will depend on the circumstances of the water being treated, the quality required of the product water, the environment in which the' treatment plant is to be located and any secondary effects resulting from the use of the process or set of processes. {:#subdebate-75-34} #### Fauna (Question No. 3034) {: #subdebate-75-34-s0 .speaker-5J4} ##### Mr Scholes:
CORIO, VICTORIA asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. Does existing Commonwealth legislation prohibit (he transportation of fauna from one State, in which it is protected, to an adjoining State. 1. If not, will bc examine ways in which interstate trading in protected fauna can be p teven led by law. {: #subdebate-75-34-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. 1. The honourable member will be aware that the House has appointed a select committee to inquire into and report upon a number of matters relating to the conservation of wildlife including the need for a Commonwealth Wildlife Conservation Authority. Without prejudicing the' findings of the Committee, it is possible that such an Authority could be established. If such an Authority were set tip, it may well be able to examine any problems relating to interstate trade in protected fauna with a view to establishing Suitable controls. {:#subdebate-75-35} #### Education (Question No. 3035) {: #subdebate-75-35-s0 .speaker-5J4} ##### Mr Scholes: , asked the Minister for Education and Science, upon notice: >What assistance for education costs is available for children of low income families in Commonwealth Territories? {: #subdebate-75-35-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question. is as follows: >The' information given below has been divided into two sections, namely programs of assistance which are administered by . the Department of Education and Science and' assistance provided by Department of the Interior. {: .page-start } page 172 {:#debate-76} ### DEPARTMENT OF EDUCATION AND SCIENCE As the honourable member will know, there are a number of Commonwealth programs in education e.g. the various Commonwealth scholarship schemes and the scheme of Study Grants for Aboriginals. These provide assistance for eligible students living in Australian States and Territories. However there are some schemes of assistance which are specific to the Australian Capital Territory and Northern Territory. Details of these are given below. Australian Capital Territory Junior Secondary Bursaries Conditions of Award Eligible candidates are sixth grade primary pupils intending to proceed to a course of secondary education. Bursaries are awarded on the results of the Junior Bursary Examination held in August each year. When the annual taxable income(s) of the parents/guardians exceeds $2,000 the candidate is not eligible for a bursary. Allowances are determined on the basis of taxable income(s) for the financial year preceding the Junior Secondary Bursary. The bursary is tenable for 4 years (forms 1 to 4) and is subject to a review of the taxable income(s) of the parents/guardians in December of each year. Senior Secondary Bursaries Conditions of Award Bursaries are awarded on the basis of results obtained at the School Certificate Examination. When the annual taxable income(s) of the parents/ guardians exceeds $3,999, the candidate is ineligible for a bursary. Allowances are determined on the basis of taxable income(s) for the financial year, preceding the School Certificate Examination, according to the following scale: Northern Territory In the Northern Territory free exercise books, materials and bus fares are provided for children on the Headmaster's recommendation. In addition a boarding allowance is available in respect of children who must board in order to attend school. This allowance is currently $370 per annum subject to a means test. Details of other schemes of assistance available to students from the Northern Territory are included in my reply to Parliamentary Question No. 2486- **Mr Whitlam.** {: .page-start } page 172 {:#debate-77} ### DEPARTMENT OF THE INTERIOR Australian Capital Territory Families in necessitous circumstances in the Australian Capital Territory may receive financial assistance on a discretionary basis from the Welfare Branch of the Department to meet the cost of school uniforms and, on occasions, school books. The families assisted are usually those who are in receipt of Social Welfare Benefits from the Department of Social Services. In assessing eligibility for this assistance, each case is examined on its individual merits. Northern Territory In the Northern Territory, the N.T. Welfare Division is responsible for the education of Aboriginal children in special schools. The information provided below is on the understanding that most Aboriginal children come from low income families and sets out the assistance for education costs provided by the Department. Main areas of assistance for low income families in relation to education are: {:#subdebate-77-0} #### Australia and America: Joint Scientific Activities (Question No. 3043) {: #subdebate-77-0-s0 .speaker-EE4} ##### Mr Uren: asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. Have joint activities been initiated between Australia and the United States since the signing of the Agreement relating to scientific and technical co-operation between the Government of the Commonwealth of Australia and the Government of the United States of America. 1. If so, do any of the joint activities relate to environmental problems. {: #subdebate-77-0-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: {: type="a" start="j"} 0. Yes, various joint activities have been ini tiated in a number of scientific fields including arid land research, atmospheric sciences and research on photosynthesis in plants. {: type="1" start="2"} 0. None of the joint activities initialed to date under the Agreement has been established specifically or principally to study problems of the environment. However, some joint activities that have been established in three scientific fields are relevant to acquiring a belter understanding of aspects of the environment and of environmental management. The principal relevant activities are as follows: Arid Land Research A joint seminar-workshop between Australia and United States scientists was held in California in March/April 1971 on the topic 'Plant Morphogenesis as the Basis for Scientific Management of Range Resources'. The aim was to evaluate existing scientific knowledge in both countries on this topic and to extract principles which can be applied to practical management situations. Atmospheric Sciences 'Research Three Australian scientists from the Department of Supply . and the Commonwealth Bureau of Meteorology visited the United State in September/October 1969 to work with United States scientists on measuring the structure of the lower atmosphere using ground-based acoustic sounding equipment developed by the Australian Department of Supply. This equipment utilises the response of sound waves to turbulence and temperature fluctuations in the atmosphere, and it has potential practical application in such fields as monitoring conditions conducive to air pollution buildup. In another project, balloons designed to float for long periods in the upper atmosphere were released from Darwin by United States scientists in February/March 1971 to obtain information about high level wind flows in the equatorial region. Australian scientists collaborated in the work which was designed to increasethe existing knowledge of global weather patterns and wind flows. These factors play a key role in air pollution buildup in many regions of the world. Research on Photosynthesis in Plants Australian and United States scientists have played leading roles in the discovery of new knowledge about photosynthetic processes in certain types of plants (e.g. sugar cane) which make unusually efficient use in their growth processes of the solar energy falling on them. This new knowledge could lead to important practical applications in tropical zone agriculture. A joint seminar between leading research scientists from the two countries in this field was held in Australia in November/ December 1970 to facilitate the exchange of research results and to identify areas in which research might prove fruitful. Bauxite (Question No. 3091) {: #subdebate-77-0-s2 .speaker-KDP} ##### Dr Everingham: asked the Minister for National Development, upon notice: >What parts were played by (a) officials, (b) former officials of the Bureau of Mineral Resources and other public instrumentalities and (c) private interests in the discovery and assessment of the bauxite resources of Australia. {: #subdebate-77-0-s3 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: >Welpa. This deposit was discovered by H. Evans of Consolidated Zinc Corporation Ltd in 1955 during the course of a field survey in which he was primarily concerned with petroleum exploration but under instructions to be on the look out also for other minerals. The Cape York area was mentioned in BMR Bulletin No. 24 - Bauxite in Australia, by H. B. Owen, issued in 1954, as an area in which 'commercially valuable deposits of iron ore and presumably bauxite' might occur. > >Gove and Wessel Islands: The Wessel Island deposits were found in 1949 by part-time prospectors who had been instructed by Owen (then an officer of the Bureau of Mineral Resources) what to look for and what samples to obtain. Samples brought in by them to Owen were foundto be bauxite. The individual deposits were identified by Owen in 1951 and testing was carried out in 1952. This was arranged by the Australian Aluminium Production Commission, a joint CommonwealthTasmanian Government Authority, under whose auspices most of the exploration for and testing of bauxites in Australia up to that time had been carried out, with the Bureau of Mineral Resources acting as the exploration agency. > >The Gove deposits were tested in detail, first by New Guinea Resources Prospecting Co., owned 51 per cent by the Commonwealth Government and 49 per cent by British Aluminium Co. Ltd and subsequently by various other companies including finally, Nabalco. > >Mitchell Plateau: These deposits were found by K. Malcolm of American Metal Climax (Amax) in 1965 and subsequently tested by that company. The Bureau of Mineral Resources was carrying out geological mapping in the southern part of the Kimberleys at the same time but was not directly concerned in the discovery. > >Darling Ranges: Bauxite has been known for long timeto occur in the Darling Ranges and the deposits are briefly described in BMR Bulletin No. {: type="1" start="24"} 0. They were regarded as being low grade until investigations by Alcoa showed that deposits consisted of material that could be economically treated to produce alumina. Subsequently testing and assessment of the deposits has been done by Alcoa and other companies holding exploration permits in different parts of the Darling Ranges. Other Deposits. The history and details of the geology and testing of these are set out in BMR Bulletin No. 24, a copy of which is available for examination in the Library of the Bureau of Mineral Resources. Aluminium (Question No. 3092) {: #subdebate-77-0-s4 .speaker-KDP} ##### Mr Everingham:
CAPRICORNIA, QUEENSLAND asked. the Minister for National Development, upon notice: >What were the (a) initial, (b) maximum and (c) latest annual production figures for aluminium in Australia under (i) public and (ii) private enterprise and on what dates were those figures reached in each case. {: #subdebate-77-0-s5 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: >The first production of aluminium in Australia was at the Bell Bay plant of the Australian Aluminium Production Commission, a Commonwealth and Tasmanian Government enterprise, during the period September 1955-December 1960. In . January 1961, Comalco Aluminium (Bell Bay) Limited purchased the plant, although the Tasmanian Government retained a 17.4 per cent shareholding. Comalco Ltd now holds all the ordinary shares in this company: the Tasmanian Government holds 1.5 million $1 preference shares. > >Subsequent aluminium smelting projects in Australia have been developed by private enterprise - namely, that of Alcoa of Australia Ltd at Point Henry, Victoria, and that of Alcan Australia Ltd at Kurri Kurri, New South Wales. > >Aluminium production by public enterprise: > >initial production: 1,248 tons were produced in the final quarter of 1955; 9,143 tons were produced in 1956-the first full year of operation; initial production capacity of the Bell Bay plant was 12,000 tons per annum. > >and (c) A maximum production of 11,655 tons was attained in 1960; this was also the last year of production by government enterprise. > >Aluminium production by private enterprise: > >Comalco Aluminium (Bell Bay) . Ltd produced 13,204 tons of aluminium in 1961, the company's first year of operation. > >and (c) A production of 201,258 tons was reached in 1970, and reflected a record' output by each of the 3 domestic smelters mentioned above. Exports (Question No. 3098) {: #subdebate-77-0-s6 .speaker-KXV} ##### Dr Patterson:
DAWSON, QUEENSLAND asked the Minister for Trade and Industry, upon notice: {: type="1" start="1"} 0. Is it a fact that the continuation of Commonwealth preferences is hindering Australia's expansion of exports to other countries. 1. Has he made any estimates of net losses of revenue resulting from Commonwealth preferences. 2. If so, what are the details. {: #subdebate-77-0-s7 .speaker-BU4} ##### Mr Anthony:
CP -- The following is provided in answer to the honourable member's question: {: type="1" start="1"} 0. The expansion of Australia's exports to non-Commonwealth countries has been hindered by various tariff and non-tariff barriers imposed by those countries. There is no evidence, however, that these barriers are related to the continuation of Commonwealth preferences. The Government has sought and will continue to seek improved conditions of access for Australian products in all markets. {: type="1" start="2"} 0. and (3) It is not possible to estimate the net effect of Commonwealth preferences on revenue from Customs duties without data on the elasticities of supply and demand for each good imported into Australia. As this data is not available, no estimates have been made. {:#subdebate-77-1} #### Balance of Payments (Question No. 3102) {: #subdebate-77-1-s0 .speaker-KXV} ##### Dr Patterson: asked the Treasurer, upon notice: {: type="1" start="1"} 0. What was the balance of the current account of Australia's balance of payments for each of the last 10 years? 1. What funds were transferred out of Australia by foreign investors and others during each of the same years? {: #subdebate-77-1-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The Commonwealth Statistician's latest published estimates of Australia's balance of payments on current account for the years 1960-61 to 1969-70 are as follows: {: type="1" start="2"} 0. Full details of Australia's overseas transactions, including those of overseas investors in Australia, are published in the half-yearly and annual bulletins of the Commonwealth Bureau of Census and Statistics entitled 'Balance of Payments'. The annual bulletin covering the period to the end of June 1970 is due to be released shortly. {:#subdebate-77-2} #### Housing Loan Interest Rates (Question No. 3116) {: #subdebate-77-2-s0 .speaker-EE4} ##### Mr Uren: asked the Treasurer, upon notice: {: type="1" start="1"} 0. Can he say whether the United States Federal Reserve Bank has reduced interest rates by at least 1 per cent during the last 6 months in order to stimulate the home building industry and to assist persons seeking a loan to construct private dwellings? 1. Was there a fall in the commencements of private dwellings in Australia during the March quarter of 1971 compared with the same period last year? 2. If so, were high interest rates one of the causes? 3. Will he instruct the Reserve Bank to reduce interest rates for home construction in order to stimulate the home building industry and to assist young people to acquire a home? {: #subdebate-77-2-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. In the period referred to. it has been the policy of the Federal Reserve Bank of the United States to bring about a rapid increase in the quantity of money in the economy. This has resulted in a general decline in interest rates in the United States. The objective of the policy, as T understand it, has been to produce conditions conducive to a general revival of economic activity in a nation which has been experiencing a level of unemployment which exceeded 6 per cent. One of the results of this increase in the quantity of money has been to make available a greater volume of funds to the housing industry and this has assisted in producing a revival in activity in that industry. The policy, however, is essentially one of general application, designed to stimulate overall economic activity. 1. Yes. Figures published by the Commonwealth Statistician on 3rd May show that in the March quarter of 1971 private dwelling commencements totalled 29,550 compared with 32,214 in the March quarter of 1970. 2. It should be noted that private dwelling commencements were at a seasonally-adjusted record level in the March quarter 1970. The subsequent decline has been associated with a number of factors, including tight monetary conditions. The increase in housing loan rates was part of the general rise in interest rates in the economy associated with these financial conditions. However, it is not possible- to single out interest rates as the cause of, or even a major factor in, the fall in commencements. 3. While the Government would not wish to see the current level of interest rates continue longer than is necessary, it would be inappropriate at this time for the Government to direct the Reserve Bank to arrange a reduction in those housing loan interest rates subject to the Bank's direct control. The level of interest rates is determined basically by the demand for and supply of funds in the economy. If the interest rates on housing loans were artificially lowered, the consequential limitations on the ability of housing finance institutions to compete for an adequate share of savings could result in a marked falling-ofT in the funds available for housing. This would, of course, be inimical to the acquisition of homes, by young people. At the same time, a reduction in the general level of interest rates would, in current economic circumstances, involve the very serious risk of adding to inflationary pressures, and this too could ultimately operate to the disadvantage of potential home buyers. While the cost of borrowed money is an important factor to potential home buyers, it is relatively less significant than the actual cost of a home which, of course, could increase significantly if inflationary pressures, in the economy were allowed to go unchecked. {:#subdebate-77-3} #### Forestry (Question No. 3123) {: #subdebate-77-3-s0 .speaker-6U4} ##### Mr Whitlam: itlam asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Did the Australian Forestry Council resolve at its meeting in July 1970 that its Standing Committee should make a study of the environment for the next meeting of the Council? 1. If so, what are the Committee's terms of reference? {: #subdebate-77-3-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) As stated by me in the House of Representatives on 31st March 1971 (Hansard page 1230) The Australian *Forestry* -Council at its meeting held on 10th July 1970, agreed that its Standing Committee should examine aspects of forestry activities in relation to the maintenance of the quality of the environment and report on its examination to the Council at, its next meeting. {:#subdebate-77-4} #### Water Quality (Question No. 3124) {: #subdebate-77-4-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. When did the Australian Water Resources Council agree to set up a Technical Committee on the Quality of Water? 1. Who are the members of the Committee? 2. What are their terms of reference? 3. When are they expected to report? {: #subdebate-77-4-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. As was announced in a Press statement issued on behalf of . the Australian Water Resources Council by the Chairman, the Technical Committee on Water Quality was established by ihe .Council at its meeting held !h Sydney on the 24th July 1970. 1. The membership of the Committee comprises the following State or Commonwealth officers: {: type="a" start="a"} 0. a representative of the major Water Authority in each State and the Northern Territory 1. a representative of a principal urban Water Authority in each State and the Australian Capital Territory 2. a specialist drawn from each of the 4 disciplines, chemistry, agriculture, fisheries and wildlife and human health 3. one representative each from the following Commonwealth Departments' or Authorities: Department of Works Department of National Development {: .page-start } page 176 {:#debate-78} ### CSIRO {:#subdebate-78-0} #### Defence Offset Orders (Question No. 3130) {: #subdebate-78-0-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What offset orders have been obtained to the procurement of additional Oberon class submarines from the United Kingdom? 1. What offset orders have been obtained to the procurement of (a) twelve medium lift helicopters, (b) forty-two utility helicopters and (c) eleven helicopter gunships? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Oberon class submarines. Reciprocal purchasing arrangements have been discussed with the United Kingdom Ministry of Defence (Navy) and prospective tenderers. Tenders are currently under consideration by the Department of Supply and offset orders will be negotiated as appropriate. 1. (a) Twelve medium lift helicopters. The placement of a firm order for these helicopters has been deferred pending further consideration. Until a decision has been reached on this matter negotiations for offset orders cannot be concluded. The value of offset orders to date placed- with Australian industry by the Boeing Company cover: {: type="a" start="b"} 0. and (c) Utility Helicopters and Helicopter Gunships. Contracts for the Helicopter Gunships and the balance of the UH-1H Utility Helicopters (7 have been delivered) are still under consideration. No specific offset orders have yet been finalised in respect of these aircraft. {:#subdebate-78-1} #### Army: Radio Relay Terminals (Question No. 3135) {: #subdebate-78-1-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What Australian firms have been assisted to study the possibility of producing transportable radio relay terminals for ' the Army as indicated on page 2 of the Defence Report 1970; 1. Have contracts been awarded to any of these firms for production of these items? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. On 3rd March 1970, contracts totalling $29,500 were awarded to the following firms to undertake feasibility studies for the local production of AN/ MRC 127 transportable radio relay terminals for the Department of the Army. Bendix Corporation Australia Pty Ltd, Hawker Siddeley Electronics Ltd; Amalgamated Wireless Australasia Ltd, Standard Telephones & Cables Ltd. {: type="1" start="2"} 0. Subsequently open tenders for the production of the terminals were called and four tenders received. These were submitted by those firms participating in the study. A recommendation supporting local production was received from the Department of the Army on 21st April 1971', and Department of Defence approval has been sought for the' selection of an Australian firm to undertake local production of the AN/MRC 127 radio relay terminals. {:#subdebate-78-2} #### Submarine Command Team Trainer (Question No. 3136) {: #subdebate-78-2-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Has a contract been placed for the design and supply of the Submarine Command Team Trainer? 1. If so, what is the contracting firm and what are its overseas associates? 2. What is involved in the contract and what will it cost? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Yes. A contract for the design and supply of the Submarine Command Team Trainer was placed on 8th February 1971. 1. Ferranti U.K. is the prime contractor; EMI (Electronics) Salisbury South Australia is a major sub-contractor. 2. The contract involves the design, manufacture installation in Australia and commissioning of the equipment. It will simulate the control area of a submarine and will provide facilities to train submarine crews. A similar trainer, built by Ferranti for the Royal Navy, is in operation. The value of the contract is $2,484,000. The value of the work that will be done by EMI (Electronics) in Australia is $699,000. {:#subdebate-78-3} #### Defence Services Communications Study (Question No. 3138) {: #subdebate-78-3-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Has the preparatory work for the study of Service communications been completed? 1. If so, has work begun on the substantive study and, if it has, when will it be completed? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Yes. 1. The present substantive study is proceeding. In view of its size and complexity, and the necessity to predict long term needs, the study may require twelve to eighteen months to complete. {:#subdebate-78-4} #### Defence Services Flying Training (Question No. 3139) {: #subdebate-78-4-s0 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Who is making the study of rotary and fixed-wing piston-engined flying training for the three Services? 1. When will the report be completed? 2. Will the report be made public? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. The study is being carried out by a working party chaired by Defence and with representatives from each Service. 1. Reports on both aspects of the study are close to completion for consideration at a higher level in the Defence Department. 2. No. Naval and Air Power (Question No. 3140) {: #subdebate-78-4-s1 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Who is making the long-term study of naval and air power referred to on page 11 of the Defence Report 1970? 1. When will the report be completed. The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. The Study is being conducted under the overall control of the Department of Defence. A Study Group to direct the work has been set up comprising representatives of Defence Department, the three Service departments and the Department of Supply. 1. This is a major study involving complex strategic, operational and technological factors and will extend over a considerable period. Defence Services: Ammunition (Question No. 3141) {: #subdebate-78-4-s2 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Has ammunition been purchased for the Australian Services from manufacturers in Singapore? 1. If so, what ammunition was purchased, and why was it not purchased from Australian sources? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Yes. 1. The ammunition purchased was cartridge 5.56mm. It was not procured from Australian sources because the relatively small requirement to date has not justified expenditure on the installation of local capacity. The Singapore source was investigated, and selected after the calling of competitive overseas tenders. In addition, procurement from Singapore has been a, useful reciprocal purchase, in view of the defence orders placed on Australia by that country. Defence Procurement (Question No. 3142) {: #subdebate-78-4-s3 .speaker-JO8} ##### Mr Barnard: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What items of Australian defence procurement have been made available for New Zealand bidding since the Defence Supply Co-operation Arrangement was negotiated with New Zealand. 1. What items of New Zealand defence procurement have been made available for Australian bidding since the agreement was negotiated? 2. What progress has been made since the agreement was negotiated in the co-ordination between Australia and New Zealand of (a) planning, (b) standardization of equipment, (c) training and (d) operational procedures? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. A wide range of items required by the Australian Services have been made available for New Zealand bidding. Tender invitations have been in line with New Zealand's production capability and have included such items as machinery and components, footwear, textiles, clothing, boats, crockery and ration packs. 1. Tenders for New Zealand defence requirements are issued by New Zealand authorities on commercial basis direct to Australian firms and details of tenders issued prior to November 1970 are not available. It is known, however, that some significant New Zealand defence purchases have been made locally as a result of Australian tendering, e.g. Land Rover vehicles and automatic signal switching equipment. In November 1970, arrangements were made for the Australian Trade Commissioner in New Zealand to forward copies of -tender documents for defence requirements to the Department of Trade and Industry. Since then tender documents for polyester material have been received. 2. (a) In the field of defence production Australia is giving New Zealand every assistance to develop its own capacity for self-reliance. Mutual co-operation in this area is being actively investigated. {: type="a" start="b"} 0. Standardization of defence equipment is a continuing process. It had been proceeding effectively for a considerable period prior to the conclusion of the Defence Supply Co-operation Arrangement and will be progressively developed in the future. Many items are in common use now, such as the 7.62mm rifle and ammunition and C1 30 Hercules and P3B Orion Aircraft. 1. There, are longstanding arrangements under which the Australian Services assist in the training of New Zealand Service personnel, including officer training at the RAN College, Jervis Bay, The Royal Military College, Duntroon and the Officer Cadet School, Portsea. New Zealand students attend the Joint Services Wing of the Australian Services Staff College, the Army and Air Force Staff Colleges and other regular short term courses. In 1970, 74 New Zealanders attended training courses in Australia. The number of personnel by service were as follows: Navy- 8 Army - 62 Air Force - 4 In addition, there are officer-exchange countries. In 1970, 7 New Zealanders arrangements between our two were in Australia under exchange, loan or detachment and 7 Australians were in New Zealand on exchange or loan; the numbers by Service were as follows: New Zealand Navy - 2 Army - 3 Air Force- 2 Australia Navy - 1 Army - 4 Air Forces - 2 {: type="a" start="d"} 0. In regard to co-ordination of operational procedures, the following areas have been developed with New Zealand: {: type="i" start="i"} 0. our National forces have been fighting together on active service in Vietnam in accordance with common operating procedures which are continually being revised in the light of current experience; 1. our forces are working together in Malaysia/Singapore on a similar basis; 2. both countries, as members of SEATO, have agreed to adopt standard procedures . which are agreed in that forum; 3. a close liaison is maintained through our liaison staffs on matters of doctrine and procedures and other subjects; 4. common operating procedures are practised in combined Single Service and Joint exercises both in our respective home countries and overseas in conjunction with other Five Power or SEATO countries.. {:#subdebate-78-5} #### Papua New Guinea: Armed Forces (Question No. 3147) {: #subdebate-78-5-s0 .speaker-JO8} ##### Mr Barnard: asked, the Minister for Defence, upon notice: {: type="1" start="1"} 0. Who are the members of the Committee making the study of the development of the Armed Forces of the Territory of Papua New Guinea? 1. When will the report be completed? 2. Will the report be made public? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. The study is being undertaken by representatives of the Department of Defence; Foreign Affairs; External Territories; Navy, Army and Air at the direction of the Defence Committee. 1. A number of reports has already been submitted. Study of the matter is proceeding on a continuing basis. 2. No, but the Parliament will be kept informed on developments affecting forces in Papua New Guinea. {:#subdebate-78-6} #### Income Tax Deductions (Question No. 3156) {: #subdebate-78-6-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Treasurer, upon notice: {: type="1" start="1"} 0. Is it a fact that payments made for sewerage and water services are tax deductible while payments made for the removal, of effluent and sullage are not? 1. If so, is this an anomalous situation? 2. Does he maintain that there are strong grounds for arguing that, the anomaly which some persons see in the present law. should be rectified by withdrawing the deduction,- not by extending it? . 3. What is the annual cost to revenue of lax deductions on payments for sewerage and water services? 4. What would be the estimated annual costto revenue of complete tax deductions on payments for the removal of effluent and sullage? 5. Docs the present policy represent a further penalty on people already deprived of the benefits of sewerage? 6. Would the extension of tax deductibility to the cost of effluent and sullage services provide a desirable incentive to householders to contribute to personal and community health through the frequent removal of waste materials form residential and commercial areas? {: #subdebate-78-6-s1 .speaker-DQF} ##### Mr Snedden:
LP -- The' answer to the honourable member's question is as follows: - {: type="1" start="1"} 0. ' Where premises are used by a taxpayer in gaining or producing his assessable income or in carrying on a business for that purpose, payments made by the taxpayer for sewerage and water services and the removal of effluent and sullage are deductible for income tax purposes except to the extent that they are of a capital, private or domestic nature. In relation to private premises, the income tax law authorises the allowance of deductions to a taxpayer for the payment of rates which are annually assessed and for which he is personally liable. To the extent, therefore, that charges for sewerage and water services and the removal of effluent and -sullage are incorporated in such rates, a deduction is allowed. However, payments made to a contractor for these services or charges imposed by the local authority independently of the annual levy for general rates do not qualify for deduction. {: type="1" start="2"} 0. In general, outgoings of a private or domestic nature are not allowable deductions. Rates paid on private premises fall within this category and the allowance of a deduction for expenditure of this kind represents a concession granted only when specific conditions are satisfied. Against this background, the denial of a deduction where the relevant tests are not met is not considered to create an anomaly; an amendment of the law would be necessary to widen the scope of the existing provisions. 1. Having regard to the history of the present concession, it could be argued that the proper way of correcting the anomaly which some people see would be to withdraw the concession. 2. No statistics are available of income tax deductions allowed in respect of payment made for sewerage and water services. Statistics of deductions allowed to taxable individuals for rates and land taxes on non-income-producing property were compiled for the 1963-66 income year, but no information is available that would enable payments in respect of sewerage and water services included in these deductions to be determined. 3. The information required to make a reliable estimate of the annual cost to income tax revenue of allowing deductions for all payments for the removal of effluent and sullage is not available. 4. No. See answer to part 2. 5. As it is understood that in many cases local by-laws already require the removal of sullage and effluent, the position would not be affected significantly by the allowance of an income tax incentive of the kind suggested by the honourable member. {:#subdebate-78-7} #### Papua New Guinea: Police Force (Question No. 3160) {: #subdebate-78-7-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for External Territories, upon notice: {: type="1" start="1"} 0. What is the total complement of the police force of the Territory of Papua New Guinea, and how is it deployed. 1. Is the force up to desirable strength,' if not what additional personnel are required. 2. What is the break-up of rank for (a) European and (b) indigenous personnel. 3. Is the force equipped with (a) sea-going vessels, (b) helicopters or (c) other aircraft. 4. In what circumstances is a dependency to be placed on the Pacific Island Regiment or other units of the defence Services. {: #subdebate-78-7-s1 .speaker-JOA} ##### Mr Barnes:
CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. As indicated in the Annual Reports for Papua and New Guinea (for the 1968-1969 Reports see Parliamentary Papers 136 and 99 of 1970) the Royal Papua and New Guinea Constabulary consists of three branches: {: type="a" start="a"} 0. the Regular Constabulary Branch - engaged wholly on police duties; 1. the Field Constabulary Branch - comprising officers of the Department of District Administration who carry out police duties only in those areas where no officer of the Regular Constabulary is stationed; and 2. the Reserve Constabulary Branch - a permanent body of part-time volunteers appointed by the Commissioner and trained by members of the Regular Constabulary. At 30th June 1971, the Reserve Constabulary Branch comprised - 110 local male members 94 overseas male members - local female members 6 overseas female members. Apart from members attached to Police Headquarters and training establishments members of the Force are attached to the six territorial Divisions and the manning requirements of police districts within each division are supplied by Divisional Headquarters. At 30th June 1971 the strength of the several divisions was - Papua Division (H.Q. Port Moresby - 5 districts) 714 members. Highlands Division (H.Q. Mt Hagen - 3 districts) 574 members. East Coastal Division (H.Q. Lae - 2 districts) 472 members. West Coastal Division (H.Q. Madang- 4 districts) 475 members. Islands Division (H.Q. Rabaul- 3 districts) 670 members. Bougainville Division (H.Q. Kieta - 1 district) 230 members. At 30th June 1971, the strengths of Police Headquarters ' and the training establishments were - Headquarters (including C.I.B., etc) - 166 members. Training Establishments- 324 members. {: type="1" start="2"} 0. The desirable strength of a police force, is very much a matter of judgment. In the case of the Royal Papua and New Guinea Constabulary I have approved a recommendation that there should be some expansion of the Force to enable it to meet additional commitments arising from increasing urbanization, social and political change and the need to expand the policing of rural areas. 1. See answer to Question (1) above. 2. (a) No. {: type="a" start="b"} 0. No." 1. No. 3. Units of the Defence Services may be used to assist the Royal Papua and New Guinea Constabulary where it appears that the maintenance of law and order may be beyond the capacity of the civil administration. The use of the Defence Forces for this purpose must be approved by the Australian Government. {:#subdebate-78-8} #### Indonesia (Question No. 3170) {: #subdebate-78-8-s0 .speaker-8V4} ##### Mr Grassby: asked the Minister for Trade and Industry, upon notice: {: type="1" start="1"} 0. Is he able to say whether under economic co-operation existing between Indonesia and Japan, a new textile factory has been established at Bandjaran to produce tetoron? 1. If so, can he say whether indications have been given that this is the first of a series of extensions in the textile industry of Indonesia by Japan? 2. Has he examined the possibility of parallel action by Australia in establishing similar industries based on wool utilisation? {: #subdebate-78-8-s1 .speaker-BU4} ##### Mr Anthony:
CP -- The answer to the honourable members question is as follows: {: type="1" start="1"} 0. The new textile factory referred to by the honourable member is a joint venture between two Japanese companies, Tomen Co. Ltd and Konebo Spinning Co. Ltd, and the Indonesian state-owned spinning mill P. T. Industri Sandang. The new company's name is Konebo Tomen Sandang Synthetic Mills. 1. This is not the first venture by Japanese textile companies in Indonesia. The Indonesian Government is placing particular importance on the development of the textile industry in Indonesia with a view to achieving eventual self sufficiency in the production of cheaper type cotton and synthetic fabrics needed by that country's population. To achieve the desired expansion in textile production a number of Indonesian mills have concluded joint venture arrangements with Japanese companies which supply technical assis-lance, capital and machinery. In addition, the Japanese Government has been known to offer training programmes in Japan for Indonesian mill operators and management. 2. Indonesia's domestic demand for textiles is almost entirely limited to cotton and synthetics. There have been no significant imports of raw or processed wool into Indonesia in the past and there are no immediate plans for utilisation of these products by the Indonesian industry. Nor does the Indonesian Government give any priority to the development of the woollen textile industry ' during their current five year development plan. {:#subdebate-78-9} #### Flood Damage: Salinity (Question No. 3172) {: #subdebate-78-9-s0 .speaker-8V4} ##### Mr Grassby: asked the .Minister for National Development, Upon notice: {: type="1" start="1"} 0. ls total flood damage in the Darling Valley from recent inundations estimated to exceed $100m? 1. Is it expected that much of the flood waters ' will eventually reach the Murray River? 2. Has the flood damage, together with the loss of water running wastefully to the sea, led to renewed demands for flood mitigation and conservation works? 3. Will he now consider the investigation of an integrated comprehensive river basin development programme along the lines sought by the Darling Conservation Association? 4. Has the River Murray Commission declined responsibility over all conservation including salinity control in line with modern ecological concepts? *(fi)* Did the salinity report issued under this authority envisage total overall valley' action? 5. Will he review the decisions of the Commission in relation to its' responsibility to ensure that the recommendations of the salinity report are implemented? {: #subdebate-78-9-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. I have seen reference -to various estimates of recent flood damage in the Darling Valley but I am not aware of any authentic figure. 1. Yes. 2. It is inevitable that the occurrence of widespread flooding stimulates interest in works to mitigate the effects of floods. 3. While some advantages may be claimed for the type of programme envisaged by the Darling Conservation Association, it would appear also to involve some major problems in relation to the well established patterns of administration in Australia, particularly with regard to the role of State Government Departments. Hence it may be questioned whether the proposals of the Darling Conservation Association represent the best approach in the Australian situation. In any case the proposals of the Darling Conservation Association are a matter for consideration first by the appropriate State authorities. 4. The role of the River Murray Commission is governed by the River Murray Waters Agreement between the Commonwealth and the three riparian States. The powers of the River Murray Commission as given by this Agreement, relate almost entirely to the construction of works and the apportionment of water. While the Commission has control over the allocation of water from ils storages and the waters of the River Murray and tributaries above Albury, the other tributaries arc under the control of the States. 'The extent to which' it can go in assuming responsibility for ' salinity in the river has not been determined, but generally speaking this is mainly a matter for the States. 5. The Salinity Report issued by the Consultants to the River Murray Commission put forward proposals for a variety of measures affecting the Valley generally. 6. A number of major recommendations in the Salinity Report relate' to matters which are the direct responsibility of the individual States and the Commission as such has no authority to ensure their implementation. As indicated in the note which 1 issued to accompany the report, it provides an essential basis for the more detailed studies which may be required prior to implementation, with particular reference to salinity control measures. I can assure the Honourable Member that I share his concern that there should be no unnecessary delay in carrying out these studies and in taking such measures as are found feasible and justified. {:#subdebate-78-10} #### Apples and Pears (Question No. 3184) {: #subdebate-78-10-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Why was Parliament not informed of the details of the proposed stabilisation plan for the apple and pear industry? 1. What organisations and States have been informed of these details? 2. How many official press releases has he made on this subject? {: #subdebate-78-10-s1 .speaker-5E4} ##### Mr Sinclair:
CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. I made a public statement on the 12th March to the effect that the Government had approved the details of a stabilisation plan for the apple and pear industry and that steps would now be taken for the necessary legislation to be brought down in the Parliament as soon as possible. I had initially hoped that this legislation would be introduced in the current session and that Parliament would have an opportunity to debate the plan in detail. This has not, however, proved possible. 1. Details have been made known to the Australian Apple and Pear Board, which negotiated the plan with the Government on the industry's behalf. 2. I have made two press releases on the subject of apple and pear stabilisation, one on the 26th February 1971 and one on the 12th March 1971. My predecessor made a release on the subject on the 22nd October 1970. {:#subdebate-78-11} #### Dam Construction (Question No. 3185) {: #subdebate-78-11-s0 .speaker-KXV} ##### Dr Patterson: asked the Minister for National Development, upon notice: >What was the (a) total cost and (b) cost per acre foot (yield) of all major dams constructed in Australia in the post-war years. {: #subdebate-78-11-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: >Most dams in Australia are constructed by State authorities, and I am not able to provide the data requested for all major dams constructed in the post-war period. However the following table has been compiled from published information. Some care should be exercised in interpreting this information. For instance the costs are the sums of the actual expenditures during construction, and have not been brought to a common basis with regard to money values. Furthermore, there is no uniform or standard basis for determination of storage yield; for instance the yield from a given storage can vary considerably depending on the degree and frequency of restriction in supply permitted in dry years. {:#subdebate-78-12} #### Fill Aircraft (Question No. 3198) {: #subdebate-78-12-s0 .speaker-YF4} ##### Mr Cross:
BRISBANE. QLD asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What has been the cost to date of the proposed acquisition of Fill aircraft including the cost of {: type="a" start="a"} 0. the aircraft 1. armament 2. the purchase of spare parts and other equipment 3. construction of hangars 4. workshops and 5. investigation and tests. 1. What cost has been incurred for the storage of the aircraft in the United States of America? 2. What other costs have yet to be met? 3. What loss has been incurred in spare parts which are now obsolete for the Australian aircraft or which have deteriorated and are no longer capable of use? 4. What has been the cost of training programmes so far carried out and what further training costs will be incurred when the aircraft are brought into service with the Royal Australian Air Force? The former Minister for Defence **(Mr Gorton)** supplied the following answer: {: type="1" start="1"} 0. Payments for the project to 30th April 1971, are $US228.359m for items (a), (b), (c) and (f) and $A3.802m for items (d) and (e). 1. None. The question of storage charges is still to be negotiated between the United States and the Australian Governments. 2. Final costing for some elements of the project is still Subject to discussion and agreement between the United States and Australian Governments. 3. No losses have been incurred at this stage. Shelf life items are still within serviceable time period. Other items which have become outmoded due to modifications are being reworked to update them for use. 4. Expenditure on training programmes to date totals $US2.567m. Some additional training costs will be involved, but the extent of these costs will be subject to negotiation with the United States authorities. {:#subdebate-78-13} #### Parliament (Question No. 3239) {: #subdebate-78-13-s0 .speaker-009DB} ##### Mr Morrison:
ST GEORGE, NEW SOUTH WALES asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to the statement issued by the Melbourne Chamber of Commerce on 25th March 1971 concerning parliamentary salaries which points out that Australians should seek acceptance of the principle that we only get the Government we deserve and are prepared to pay for, and that a better qualified Government can only result in long term benefits to every Australian. 1. If so, is the Government's attitude to this matter the same as that expressed by the Melbourne Chamber of Commerce. {: #subdebate-78-13-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. The Richardson Committee of 1959 considered that, "The salaries of a member should be fixed at an amount which is not so low as to deter a man of good attainments and ability who has no private income from entering or remaining in Parliament'. My Government accepts this prop- osition. Coal (Question No. 3251) {: #subdebate-78-13-s2 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What information was sought from coalowning companies by the Buerau of Mineral Resources in its recent survey of Australian coal reserves? 1. Did all companies give full co-operation; if not, what are the names of companies which did not co-operate fully and in which particular information areas was co-operation withheld? 2. Did Clutha Development Pty Ltd co-operate fully in providing details -of contracts and prices for coal mined, or to be mined, in the Burragorang Valley; if so, what are the details? {: #subdebate-78-13-s3 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to. the honourable member's question is as follows: {: type="1" start="1"} 0. Information sought by the Bureau of Mineral Resources from coal-owning' companies was restricted to details of black coal reserves in various categories including information on the bases for calculations, recovery factors, etc. 1. The response from companies is regarded as satisfactory and an inventory showing total known reserves of the several types of black coal in Australian coalfields has been compiled and will be published in due course. As the inquiry was conducted on a confidential basis, details of information supplied by individual companies are not available for release. 2. Information on contracts and prices was not sought from coal-owning companies. {:#subdebate-78-14} #### Vietnam (Question No. 3252) {: #subdebate-78-14-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. What rates of compensation are paid to the civilian victims of Australian military action in Vietnam? 1. Do these rates provide adequate compensation? 2. Is any review of the present rates to be undertaken? The former Minister for Defence **(Mr Gorton)** supplied the following answer: >The Government of South Vietnam is responsible for all claims for compensation that arise from combat activities of its own and other forces assisting her. The Australian Government meets, on an ex gratia basis, claims by Vietnamese civilians who have suffered loss in consequence of the wrongful act or neglects of members of the Australian force or employees of that force. Compensation is paid by the Australian Government after assessment of liability, entitlement and quantum having regard, in the light of Vietnamese law, to what probably would be paid as a result of litigation between the parties.' Careful regard is given to the adequacy of each claim. {:#subdebate-78-15} #### Water Resources (Question No. 3265) {: #subdebate-78-15-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. What were the names and portfolios of the Ministers . who attended, the Australian Water Resources Council in Melbourne on 15th April 1971? 1. What requests or suggestions were made by the Council for legislative or administrative action by (a) the Commonwealth, (b) the Territories and (c) the States. {: #subdebate-78-15-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer, to the honourable member's question is as follows: {: type="1" start="1"} 0. A meeting of the - Australian Water Resources Council was held in Canberra on the 15th April 1971 and presumably this is the meeting referredto. The following lists the names and portfolios of the Ministers in attendance: The Hon. R. W. Swartz; M.B.E., E.D., M.P, Minister for National Development (Chairman). The Hon. W. C. Fife, M.L., Minister for Mines and Conservation New South Wales. The Hon. Roberts C. Dunstan, D.S.O., M.L.A, Minister of Water Supply Victoria. The Hon. N. T. E. Hewitt, M.M., A.F.M., M.L.A., Minister for Conservation, Marine and Aboriginal Affairs Queensland. The Hon. J. D. Corcoran, M.H.A., Deputy Premier and Minister for Works and of Marine South Australia. The Hon. W. G. Barker, M.H.A., Minister for Lands and Works Tasmania. Apologies were received for the absence of the Hon. R. J. Hunt, M.P., Minister for the Interior and the Hon. C. J. Jamieson, M.L.A., Minister for Works, Water Supplies and Electricity Western Australia who were unable to attend because of other commitments. {: type="1" start="2"} 0. As was advised the honourable member in the reply to a similar question last year, the Australian Water Resources Council is an advisory and consultative body of Commonwealth and State Ministers and pronouncements are not necessarily made on all matters that have been discussed. Following the 12th meeting of the. Council held as indicated in (1), a press statement was issued on behalf of the Council by myself as Chairman, and this indicates the important matters discussed. A copy of this press statement is being made - available to the honourable member. {:#subdebate-78-16} #### Indonesia (Question No. 3303) {: #subdebate-78-16-s0 .speaker-8V4} ##### Mr Grassby: asked the Minister for Trade and Industry, upon notice: {: type="1" start="1"} 0. How many Australian companies have concluded investment agreements with the Indonesian Government in the past 4 years. 1. What is the total capitalisation of the projects. 2. What are the projects and where are they situated. 3. Can he say how this investment compares with that of other countries now engaged in trade and commerce with Indonesia, including the United States of America. {: #subdebate-78-16-s1 .speaker-BU4} ##### Mr Anthony:
CP -- The answer to the honourable member's question is as follows: >According to official figures published by the Indonesian Government - > >In the 4 years to December 1970, approval was given to 10 Australian investment projects in Indonesia. > >The total amount of investment involved is $US10.4m. > >Condensed milk plant - Djakarta > >Shoe polish plant - Djakarta. > >Steel and plastic containers plant - Djakarta. Collapsible tube factory - Djakarta. Cement asbestos factory - Djakarta. Dredging firm- Djakarta. Pipe fittings factory - Djakarta. Glass/bottle- factory - Djakarta. . Dry ice/ice cream factory - Djakarta. Aluminium sulphate factory - Gresik. {: type="1" start="4"} 0. The value of foreign investment projects approved by the Indonesian Government, accord ing to the country of capital origin, in the four years to December 1970, is as follows: {:#subdebate-78-17} #### Trade (Question No. 3304) {: #subdebate-78-17-s0 .speaker-KDP} ##### Dr Everingham: asked the Minister for Trade and Industry, upon notice: {: type="1" start="1"} 0. What has been the value of Australian (a) exports to and (b) imports from (i) South Africa and (ii) Rhodesia for each of the last 3 years for which figures are available? 1. To what extent have annual variations in these figures been affected by changes in the lists of proscribed commodities? 2. What are the proscribed commodities, and when and by whom were they added to or removed from the lists. {: #subdebate-78-17-s1 .speaker-BU4} ##### Mr Anthony:
CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Australian trade with these countries has been as follows: {: type="1" start="2"} 0. South Africa. There is no proscribed list of commodities applying specifically to South Africa. Exports to Rhodesia A resolution adopted by the U.N. Security Council in 1968 requires that all States members of the U.N. shall prevent the supply of goods to Rhodesia, but not including the following goods: Medical products Education equipment Publications and news material Foodstuffs (in' special humanitarian circumstances) Australia has implemented this decision by progressively listing the goods which may not be exported to Rhodesia. Some goods not proscribed by the Resolution- notably wheat exported for humanitarian reasons - have continued to be shipped from Australia to Rhodesia. Since restrictions were first imposed in 1965 exports, excluding wheat exports, have been as follows: Imports from Rhodesia The Security Council Resolution adopted in 1968 requires that all States members of the U.N. shall .prevent the importation of Rhodesian goods. Australia has implemented this decision by progressively listing goods which may not be imported from that country. In fact the only goods admitted in 1969-70 were personal effects and miscellaneous goods of small value. Since restrictions were first imposed by Australia in 1965 imports have declined to the levels shown in the following table: The following goods are prohibited from export to Rhodesia except with the written consent of the Minister for Customs and Excise: {: type="1" start="3"} 0. South Africa - See answer to Question (2). Rhodesia The fallowing Rhodesian goods are prohibited from importation into Australia except with the written consent of the Minister for Customs and Excise: {:#subdebate-78-18} #### Duboisia Leaf (Question No. 3315) {: #subdebate-78-18-s0 .speaker-KGH} ##### Mr Hansen:
WIDE BAY, QUEENSLAND asked the Minister for Trade and Industry, upon notice: {: type="i" start="i"} 0. What quantities of Duboisia (corkwood), leaf were exported during the last 3 years? 1. What were the principal countries to which this leaf was exported. {: #subdebate-78-18-s1 .speaker-BU4} ##### Mr Anthony:
CP -- The answer to the honourable member's question is as follows: {: type="i" start="i"} 0. In 1967-68,. 12,478 cwt of Duboisia leaves were exported. Exports declined to 9,812. cwt in 1968-69 and increased to 10,799 cwt in 1969-70. 1. Over the period, the Federal Republic of Germany has been Australia's main export market for Duboisia leaf. In 1969-70, Germany accounted for 73 per cent of Australia's exports of Duboisia leaf. Other export markets are Japan, Switzerland and Belgium-Luxembourg. {:#subdebate-78-19} #### Repatriation (Question No. 3322) {: #subdebate-78-19-s0 .speaker-SH4} ##### Dr Klugman: asked the Minister for Repatriation, upon notice: >What would be the estimated cost of increasing the special rate war pension from $39 to $46.40 (the Commonwealth average minimum wage) for the year 1971-72. {: #subdebate-78-19-s1 .speaker-KHS} ##### Mr Holten:
Minister for Repatriation · INDI, VICTORIA · CP -- The answer to the honourable member's question is as follows: >It is estimated that the additional cost involved in the payment ot special rate pensions would be $S.69m for the full year, but there would be additional consequential costs associated with the payment of special rate sustenance allowances of approximately $0.63m. {:#subdebate-78-20} #### Lock-Kimba Pipeline (Question No. 3383) {: #subdebate-78-20-s0 .speaker-KWZ} ##### Mr Wallis:
GREY, SOUTH AUSTRALIA asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Has the Australian Water Resources Council completed its examination of the request by the South Australian Government for financial assistance to expedite the completion of the LockKimba Water Pipeline on Eyre Peninsula? 1. If so, when can it be anticipated that he will announce the Government's decision on this matter? {: #subdebate-78-20-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Commonwealth Departments have carried out an examination of the request by the South Australian Government for financial assistance with the Lock-Kimba water pipeline on Eyre Peninsula. 1. I expect a decision on this matter to be made in the near future, and it will be conveyed to the South Australian Government as soon as possible. Pre-school Education (Question No. 3388) {: #subdebate-78-20-s2 .speaker-6U4} ##### Mr WHITLAM:
WERRIWA, NEW SOUTH WALES · ALP asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to an address by Professor Ronald Goldman. Dean of the School of Education at La Trobe University, on 7th April 1971 about pre-school education? 1. If so, does Professor Goldman estimate that pre-school education on the scale applying in Canberra could be provided throughout Australia for little more than $40m a year and could be provided in the inner-city areas of the State capitals for little more than $20m? 2. Can he say in the light of information available to him whether Professor Goldman's figures are correct? {: #subdebate-78-20-s3 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. In the text of Professor Goldman's speech made available to me, he includes the figures $40m and $20m quoted by the honourable member, lt is not clear, however, whether Professor Goldman is quoting annual or overall costs, whether they are additional to present costs to the Australian taxpayer, or whether the costs include capital as well as recurrent expenditure and the additional cost of teacher training. 2. As my predecessor stated in answer to a previous question by the honourable member (Hansard 25th September 1970, page 1756), it is not realistic to attempt to estimate the cost of providing pre-school education over the whole of Australia on the basis described by the honourable member. There are basic differences between the Australian Capital Territory and other areas in many of the factors which affect costs in the provision of pre-school education, such as the geographic spread of the pre-school aged population, the size of the pre-school centres which would be required, cost of acquisition and development of sites for centres, building costs, attendance patterns and salary levels. Estimates based on applying figures appropriate under one set of conditions to areas where conditions differ so substantially could not held but be misleading. For these reasons, and because the basis of Professor Goldman's estimates is not stated, 1 am unable to comment on them. {:#subdebate-78-21} #### Education (Question No. 3389) {: #subdebate-78-21-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Education and Science, upon notice: >How many students (a) commenced and (b) completed training in 1970 in each State at the teachers' colleges for which financial assistance has been authorised under the States Grants (Preschool Teachers Colleges) Act? {: #subdebate-78-21-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honour* able member's question is as follows: There was also an early childhood education course at the Hobart Teachers College which, as the honourable member knows, is now being amalgamated with the Tasmanian College of Advanced Education. {:#subdebate-78-22} #### ILO: Fishermen Conventions (Question No. 3398) {: #subdebate-78-22-s0 .speaker-6U4} ##### Mr Whitlam: asked the Minister for Labour and National Service, upon notice: {: type="1" start="1"} 0. On what dates did South Australia, Western Australia and Tasmania agree to the ratification of International Labour Organisation Convention No. 112 - Minimum Age (Fishermen), 1959 (Hansard, 3rd June 1970, page 2902, question No. 925 (3) (b) and 3rd May 1971, page 2353)7 1. What developments, if any, have taken place in respect of Convention No. 113 - Medical Examination (Fishermen), 1959 and No. 114 - Fishermen's Articles of Agreement, 1959 since the publication by his Department in October 1969 of the 'Review of Australian Law and Practice Relating to Conventions Adopted by the International Labour Conference'. {: #subdebate-78-22-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. South Australia agreed to ratification on 16th March 1971, Western Australia on 3rd December 1970 and Tasmania on 23rd November 1970. 1. The position m relation to possible ratification of I.L.O. Conventions No. 113 - Medical Examination (Fishermen), 1959 and No. 114 - Fishermen's Articles of Agreement, 1959 remains as set out in the 'Review of Australian Law and Practice Relating to Conventions Adopted by the International Labour Conference'. {:#subdebate-78-23} #### Employment (Question No. 3400) {: #subdebate-78-23-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: >Can he give an estimate of the extent to which technology has caused retrenchment of labour in each of the last 10 years? {: #subdebate-78-23-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >It is not possible to provide the information sought. However, some information on retrenchments caused by the introduction of technological change is available from studies conducted by the Department of Labour and National Service: > >A National Survey was recently conducted into the employment effects of technological change in manufacturing industry covering 40 per cent total employment in that industry. The Survey showed that 2070 persons were retrenched due to these changes during a three year period between 1967 and 1970 out of a total employment of over 500,000 in the firms surveyed. This represents a retrenchment rate of 0.13 per cent per year of average employment > >Establishments introducing electronic data processing during 1965 retrenched 39 persons due to changes in technologies compared with a total EDP employment of about 9200; in 1968, firms employing about 15,000 persons in EDP retrenched 45 workers for the same reasons. These figures represent an annual retrenchment rate of 0.3-0.4 per cent. > >In the printing industry, nine tradesmen were retrenched in 1965 due to technological change out of a total of 21,000 tradesmen employed, a retrenchment rate of less than 0.1 per cent. {:#subdebate-78-24} #### Labour-Management Relations (Question No. 3401) {: #subdebate-78-24-s0 .speaker-2V4} ##### Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP asked the Minister for Labour and National Service, upon notice: >What is the approximate percentage of industrial establishments that observe the guidelines issued by the National Labour Advisory Council for labour-management relationship at factory level. {: #subdebate-78-24-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >I assume the honourable member is referring in his question to the agreement arrived at on 6th May 1970, between the A.C.T.U. and the National Employers' Policy Committee as to procedures for dealing with industrial disputes. > >This agreement was not one associated with the National Labour Advisory Council. > >In an agreed statement issued in connection with the agreement, it was stated that it was 'the mutual responsibility of individual unions and employers to give effect to the guidelines' and that 'it would be important to ' translate these principles into action as soon as practicable on the basis of mutual decisions by the parties'. > >Unions and employers are under no obligation to keep me or my Department informed as to the extent or otherwise that they may have given effect to the guidelines. However, I am informed that in several major areas of employment there have either been discussions between union and employer representatives towards giving effect to the guidelines or there have been agreements entered into which have been influenced by the guidelines. Poly-vinyl-chloride {: type="i" start="1"} 0. (Question No. 3412) {: #subdebate-78-24-s2 .speaker-SH4} ##### Dr Klugman: asked the Minister for Trade and Industry, upon notice: {: type="1" start="1"} 0. Who are the manufacturers of polyvinylchloride in Australia. 1. How many people are employed by the manufacturers of PVC in Australia. 2. What was the value of ;PVC produced in Australia during each of the years 1968-69 and 1969-70. 3. What is the protective duty on PVC. 4. What was the value of PVC imported into Australia during each of the years 1968-69 and 1969-70. 5. How many people are employed by manufacturers using PVC in Australia. 6. What was the value of products based on PVC (a) manufactured in and (b) imported into Australia during each of the years 1968-69 and 1969-70. 7. What was the value of products based on PVC imported into Australia during each of those years. 8. What was the estimated added cost of goods manufactured in Australia from PVC because of Ihe protection accorded to the manufacturers of PVC during each of those years. {: #subdebate-78-24-s3 .speaker-BU4} ##### Mr Anthony:
CP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. There are two manufacturers of polyvinyl.chloride in Australia, Imperial Chemical Industries of Australia and New Zealand Ltd, and B. F. Goodrich Chemicals Ltd. 1. and (3) Details are not available. 2. Vinyl chloride polymers and copolymers in the form of liquids, pastes, blocks, powders, granules, flakes, waste or scrap are dutiable at the rates of 60 per cent General, 50 per- cent Preferential, and in addition, a support value duty which is imposed only on those imports where the landed duty-paid cost is below $400 per ton. 3. Import clearances of vinyl chloride polymers and copolymers in 1968-69 were- valued at $2,114,178 and in 1969-70, $3,589,209. 4. Information is not collected on this basis. 5. , (8) and (9) Details are not available. {:#subdebate-78-25} #### Commonwealth Secondary Scholarships (Question No. 3414) {: #subdebate-78-25-s0 .speaker-KEC} ##### Mr Kennedy: asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. What was the total value of all Commonwealth Secondary scholarships awarded in 1970? 1. What was the total value of Commonwealth Secondary scholarships allotted' to students attending (a) Government (b) Catholic and (c; other private schools in the same year? 2. What percentage of the total value of these scholarships was given to students? {: #subdebate-78-25-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -*-The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Separate details of benefits for Commonwealth scholarships awarded at the beginning of each year are not maintained. The total expenditure on Commonwealth Secondary scholarship benefits in 1970 was $6,329,874. 1. The earliest period for which details of expenditure are available in respect of scholarship holders attending each group of schools is 1970- 71. Expenditure on Commonwealth Secondary scholarship benefits in this period was: {: type="1" start="3"} 0. Payment of all benefits is made direct to the parents of scholarship holders either in the form of living allowance, text, book and equipment allowance or reimbursement of compulsory tuition and service fees. The ' amount of $6,384,758 was paid to parents under these headings as follows: {:#subdebate-78-26} #### Commonweatlh Scholarships (Question No. 3415) {: #subdebate-78-26-s0 .speaker-KEC} ##### Mr Kennedy: asked the Minister for Education and Science, upon notice: {: type="1" start="1"} 0. What were the costs of administering the (a) Commonwealth secondary and ' (b) Commonwealth technical scholarships schemes in each State .and Territory in .1970, or the latest: year for which figures are available... 1. What was the estimated administrative' cost per student who (a)' was enrolled in the- eligible -year and (b) sat for or otherwise competed for a scholarship and (c) was awarded a scholarship in each of the two 'scholarship schemes *in* each State and Territory in ihe same year. {: #subdebate-78-26-s1 .speaker-KDT} ##### Mr Fairbairn:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Records of expenditure within the Department are not maintained in sufficient detail to enable the costs of administering individual Commonwealth scholarship schemes to be provided. {:#subdebate-78-27} #### Pike Creek Dam (Question No. 3421) {: #subdebate-78-27-s0 .speaker-KDP} ##### Dr Everingham: asked the Minister for National Development, upon notice: {: type="1" start="1"} 0. Did the State governments of Queensland and New South Wales in September 1969 request that Commonwealth finance be made available for the construction of Pike Creek Dam. 1. If so, has the Commonwealth replied to the States concerned. 2. If not, why not. 3. If the Government has replied, when will details of the reply and the reasons for the decision be announced. {: #subdebate-78-27-s1 .speaker-KVR} ##### Mr Swartz:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. Yes. 2. See 2. 3. On the 26th November 1970 a joint statement by myself, the then New South Wales Minister for Conservation, the honourable J. G. Beale, M.L.A. and the Queensland Minister for Conservation the honourable N. T. E. Hewitt, M.L.A., was issued indicating the terms of Commonwealth financial assistance for construction of the Pike Creek Dam. A copy of this Press Statement will be made available to the honourable member. {:#subdebate-78-28} #### Commonwealth Employees' Furlough (Question No. 3424) {: #subdebate-78-28-s0 .speaker-KWZ} ##### Mr Wallis: asked the Prime Minister, upon notice: >Has he given any further consideration to introducing amendments to the Commonwealth Employees' Furlough Act to provide pro rata furlough after 10 years' service instead of the existing provisions of the Act which provide furlough after 15 years' service. {: #subdebate-78-28-s1 .speaker-009MA} ##### Mr McMahon:
LP -- The answer to the honourable member's question is as follows: >No, but I am aware that the Public Service Board has the matter of the minimum standards of furlough entitlement under review. {:#subdebate-78-29} #### Commonwealth Wool Payments (Question No. 3434) {: #subdebate-78-29-s0 .speaker-KFU} ##### Dr Gun:
KINGSTON, SOUTH AUSTRALIA asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Is it a fact that many people whose wool income has dropped solely by virtue of switching from wool production to beef production and thereby suffer no loss of total income have received the full $1,500 Commonwealth payment under the emergency assistance scheme for woolgrowers? 1. If so, is this in accord with the intention of the Government? {: #subdebate-78-29-s1 .speaker-5E4} ##### Mr Sinclair:
CP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. In the application form used for the wool emergency financial assistance scheme, provision was made to obtain details of the number of sheep shorn in each of the years 1968-69 and 1969-70 and the number of sheep on hand at 30th June 1969 and 1970. Where it was clear from these figures or from additional information sought from an applicant that sheep numbers had been reduced voluntarily and not as the result of drought, countervailing adjustment was made to the applicant's wool income. This was done to ensure, as far as possible, that assistance was granted only where the decline in wool income resulted from factors beyond the applicant's control and not as the result of a voluntary policy to replace sheep with some other form of primary production. Where an applicant maintained sheep numbers in 1969-70- at approximately the level of the previous year and was otherwise eligible for an assistance payment, he would have received a grant under the scheme. Undoubtedly some growers, particularly in areas of Victoria and South Australia where the 1969-70 season was favourable, could have maintained sheep numbers and also increased the number of cattle carried. Such growers may have received grants under the scheme even though their gross income from both wool and cattle did not decline in 1969-70. The Government was aware that, with the necessarily arbitrary conditions of the emergency scheme framed to expedite the allocation of funds to woolgrowers in serious need, such cases might occur. It considered this preferable to the withholding of assistance from growers whose financial situation had become precarious following the serious decline in wool prices and the effect of prolonged drought on 1969-70 wool incomes. {: type="1" start="2"} 0. See (1) above. Australian Forces in Vietnam (Question No. 3441) {: #subdebate-78-29-s2 .speaker-BV8} ##### Mr Calwell:
MELBOURNE, VICTORIA asked the Minister for Defence, upon notice: >What amount was spent in maintaining Australian Forces in Vietnam in each of the years 1967-68, 1968-69, and 1969-70. The former Minister for Defence **(Mr Gorton)** supplied the following answer: These amounts represent the excess over normal costs of maintaining the forces in Australia.

Cite as: Australia, House of Representatives, Debates, 17 August 1971, viewed 22 October 2017, <http://historichansard.net/hofreps/1971/19710817_reps_27_hor73/>.

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