House of Representatives
29 February 1972

27th Parliament · 2nd Session

  1. House of Representatives
  2. 27th Parliament
  3. 1972

Mr SPEAKER (Hon. Sir William Aston) took the chair at 2.30 p.m., and read prayers.

page 329

ISRAELI PARLIAMENTARY DELEGATION

Mr SPEAKER:

– I wish to inform the House that an Israeli parliamentary delegation, at the invitation of the President of the Senate and myself, arrived in Australia on Thursday last. After paying brief visits to Sydney and Adelaide the delegation was due to visit Canberra this week. It is with deep regret that I inform the House that a member of the delegation, Mr Yosef Sapir, died in Sydney at the weekend and as a consequence the delegation decided to defer the remainder of the visit and return home to Israel. On behalf of the House I have personally conveyed condolences to Mr Reuben Barkatt, the Speaker of the Knesset, who was the leader of the delegation.

page 329

PETITIONS

Education

Mr SHERRY:
FRANKLIN, 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 the undersigned citizens of Australia respectfully sheweth:

That the Australian Education Council’s report on the needs of government education services has established serious deficiencies in education, the most important areas being a severe shortage of teachers, inadequate accommodation, and, as a result, oversized classes.

That extra Federal finance is urgently required to save the government school system.

That while the needs of the government schools are being neglected, large amounts of public money are being given, in various and numerous grants, to private schools.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to make emergency Federal finance available to the States for State school education, and divert the large sums of public money being spent on private schools, to the government school system for which the government is specifically responsible. And your petitioners, as in duty bound, will ever pray.

Petition received.

Education

Mr PETTITT:
HUME, 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 the undersigned citizens of Australia respectfully sheweth:

That the Australian Education Council’s report on the needs of government education services has established serious deficiencies in education, the most important areas being a severe shortage of teachers, inadequate accommodation, and, as a result, oversized classes.

That extra Federal finance is urgently required to save the government school system.

That while the needs of the government schools are being neglected, large amounts of public money are being given, in various and numerous grants, to private schools.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to make emergency Federal finance available to the States for State school education, and divert the large sums of public money being spent on private schools, to the government school system for which the government is. truly responsible. And your petitioners, as in duty bound, will ever pray.

Petition received.

Lake Pedder

Mr GORTON:
HIGGINS, 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 the undersigned citizens of the Commonwealth of Australia respectfully showeth.

That Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.

That an alternative scheme exists, which, if implemented would avoid inundation of this lake.

That Lake Pedder and the surrounding wilderness area are of such beauty and scientific interest as to be of a value beyond monetary consideration.

And that some unique species of flora and fauna will be in danger of extinction if this area is inundated.

Your petitioners therefore humbly pray that the Federal Government take immediate steps to act on behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australians will benefit by being able to escape from their usual environment to rebuild their physical and mental strength in this unspoilt wilderness area. And your petitioners, as in duty bound, will ever pray.

Petition received.

Lake Pedder

Mr ENDERBY:

– 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 Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.

That an alternative scheme exists, which, if implemented would avoid inundation of this lake.

That Lake Pedder and the surrounding wilderness area are of such beauty and scientific interest as to be of a value beyond monetary consideration.

And that some unique species of flora and fauna will be in danger of extinction if this area is inundated.

Your petitioners therefore humbly pray that the Federal Government take immediate steps to act on behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australians will benefit by being able to escape from their usual environment to rebuild their physical and mental strength in this unspoilt wilderness area.

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

Petition received.

Lake Pedder

Mr FOX:
HENTY, 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 the undersigned citizens of the Commonwealth of Australia respectfully showeth.

That Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.

That an alternative scheme exists, which, if implemented would avoid inundation of this lake.

That Lake Pedder and the surrounding wilderness area are of such beauty and scientific interest as to be of a value beyond monetary consideration.

And that some unique species of flora and fauna will bc in danger of extinction if this area is inundated.

Your petitioners therefore humbly pray that the Federal Government take immediate steps to act on behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australians will benefit by being able to escape from their usual environment to rebuild their physical and metal strength in this unspoilt wilderness area.

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

Petition received.

Lake Pedder

Dr CASS:
MARIBYRNONG, 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 of Australia respectfully showeth:

That Lake Pedder, situated in the Lake Pedder National Park in South-West Tasmania, is threatened with inundation as part of the Gordon River hydro-electric power scheme.

That an alternative scheme exists, which, if implemented would avoid inundation of this lake.

That Lake Pedder and the surrounding wilderness area is of such beauty and scientific interest as to be of a value beyond monetary consideration.

And that some unique species of flora and fauna will be in danger of extinction is this area is inundated.

Your petitioners therefore humbly pray that the Federal Government take immediate steps to act on behalf of all Australian people to preserve Lake Pedder in its natural state. All present and particularly future Australians will benefit by being able to escape from their usual environment to rebuild their physical and mental strength in this unspoilt wilderness area. And your petitioners, as in duty bound, will ever pray.

Petition received.

Commonwealth Scholarships

Mr ENDERBY:

– T present the following petition:

To the Honourable the Speaker ami Members of the House of Representatives in Parliament assembled.

The humble petition of citizens of the community of the Australian National University respectfully sheweth:

That the increase in tertiary education fees for 1972 will cause increased hardship for a significant proportion of tertiary students.

That tertiary fees and concomitant living costs are a formidable barrier preventing significant numbers of students entering tertiary education who nevertheless have the ability to do so.

That the increase in tertiary fees for 1972 is immoral, in that Universities and Colleges of Advanced Education are being further restricted to that minimal section of the Australian population who can afford to send their sons and daughters onto higher education.

That all education should be free including tertiary education.

Your petitioners therefore humbly pray that the Federal Government take immediate action to introduce in order of priority:

Universal Commonwealth Scholarships.

Commonwealth scholarships on the basis of need rather than academic ability.

Abolition of tertiary fees.

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

Petition received.

page 331

NOTICE OF MOTION

Mr WHITLAM:
Leader of the Opposition · Werriwa

– Mr Speaker, I give notice that at the next sitting I shall move:

That the House has no confidence in the Prune Minister because in his answers to questions without notice he has deliberately misled the House and has harmed Australia’s relations with other countries.

page 331

SUSPENSION OF STANDING ORDERS

Motion (by Mr Swartz) - by leave - agreed to:

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition moving forthwith the motion of want of confidence in the Prime Minister, of which he has given notice for the next sitting, and such motion taking precedence of all other business until disposed of.

page 331

THE PRIME MINISTER

Want of Confidence Motion

Mr WHITLAM:
Leader of the Opposition · Werriwa

– -I move:

That the House has no confidence in the Prime Minister because in his answers to questions without notice he has deliberately misled the House and has harmed Australia’s relations with other countries.

The basic evidence to prove the serious charges in my motion lies between pages 209 and 216 of last Thursday’s Hansard. On those pages, two great matters, Australia’s future relations with China and Australia’s attitude to apartheid, merge into a single issue, the truthfulness of the Prime Minister (Mr McMahon).

I say at once: We are not dealing here just with a slip of the tongue, an inaccuracy, a flaw in the Prime Minister’s phenomenal memory, and hyperbole of debate. What is involved here is a charge of a consistent pattern of invention, relating to great affairs, and extending over weeks and months.

At question time on Thursday I asked the Prime Minister the same question I asked the Deputy Prime Minister (Mr Anthony) over 4 months before. I asked:

When does the right honourable gentleman expect to be able to announce the full membership and itinerary of the projected trade mission to the People’s Republic of China? I also ask him if he can. or will now identify the emissaries.

That was a simple enough question requiring a straightforward answer. Instead, the Prime Minister chose to give a tortuous, smart-aleck reply - a farrago of gratuitous sneers at China, ambiguities and assertions which fall before the most elementary tests of truthfulness. The relevant part of his reply was:

As to the second part of the honourable gentleman’s question, only one representation was made to me about sending a Minister. It did not come from the Government of the People’s Republic, nor did it come from anyone with an official status in the Chinese Government. But I can state that initially they thought it would be wise, providing the Minister gave up his portfolio, that he should be invited with his wife to go on what shall be called not so much a goodwill mission but a mission on which he could enjoy the comforts and delights of Peking. But he had to give up his portfolio.

He then went on:

That, I now state, is my colleague, the former Minister for the Army.

He then said:

Immediately we asked the reason why.

I repeat the Prime Minister’s words:

Immediately we asked the reason why. They said that in the China of that time the army had a pervasive influence throughout the whole of China. That was the reason given, again I say, from a non-official source.

Again 1 emphasise his words:

That was the reason given from a non-official source.

Many statements have been made since then which have exploded this account given to this Parliament by the Prime Minister - none, significantly, from the former Minister for the Army, now the Minister for External Territories (Mr Peacock) himself. But the relevant ones are the statements by Mr James Kibel and Mr Brian Kibel - the ministerial emissaries as the Prime Minister himself described them 4 months ago, the Minister for Foreign Affairs (Mr N. H. Bowen), and a spokesman for the Prime Minister.

Mr James Kibel was interviewed on an Australian Broadcasting Commission programme just before he left for New York last Thursday. He said:

The invitation to Mr Peacock was issued through me . . . from our side, anyway, there was never any indication given by the Chinese that they required Mr Peacock to resign his portfolio before he visited China.

The interview proceeded:

Q: Did they stipulate any conditions whatsoever

A: No, they wanted to know the dates and what he would like to do.

Q: Well, Mr McMahon said in the House this morning that one of the conditions, or the condition was that Mr Peacock would have to resign his Army portfolio. Do you know that such a condition existed?

A: I don’t know of any such condition. I don’t know where he got that information from, but it certainly wasn’t from us because all the negotiations which took place between the Chinese representatives, myself and my brother, nothing of the sort was ever suggested.

Sir, there is a total rebuttal of everything the Prime Minister said in the House, particularly the section of the Prime Minister’s reply I have quoted. A day passed before the official reply to Mr Kibel’s assertion. It came from the Minister for Foreign Affairs (Mr N. H. Bowen) who, as it happened, was not in the House on Thursday. Quite properly he was at the South Pacific Forum. But from the one Minis er best in a position to tell the whole truth, and the one who I trust - would always tell the truth - the Minister for External Territories (Mr Peacock) - silence.

The Minister for Foreign Affairs made no attempt to justify or to defend the part of the Prime Minister’s reply 1 have quoted. He could not. He knew he could not. He relies instead on an interpretation of another sentence in the Prime Minister’s reply; one sentence in an answer covering 2 columns of Hansard. This is the escape route that the Prime Minister, the Foreign Minister and their advisers discovered after a night and a day of anxious poring and probing. The Prime Minister had said:

When it was pointed out that it would require a ministerial resignation from the portfolio and that we had troops in Vietnam this non-official source prompt y dropped the idea and never raised it again.

No, the Foreign Minister concedes, the Prime Minister was wrong in saying immediately we asked the reason’. No, the Foreign Minister says, the Prime Minister was wrong in saying that they gave the pervasive influence of the People’s Liberation Army in China as the reason why the then Minister for the Army had to resign. No, the Foreign Minister says, the Prime Minister was wrong in saying that that was the reason from an unofficial source; the Prime Minister was wrong in saying, ‘They thought it was wise provided he gave up his portfolio.’ The Foreign Minister instructs us to ignore all these statements by the Prime Minister. Who pointed out that the visit would require a ministerial resignation? Not the Chinese. Not the Messrs Kibe). Who made the condition? Who laid down the terms? Not the Chinese. Not the Messrs Kibel. It was the Australian Government itself. The Foreign Minister said on Friday evening:

In Hie circumstances he was advised by the Foreign Affairs Department and myself that it would involve the resignation of a Minister if he went on a private visit.

This much vaunted escape clause, the sentence that was to solve everything, to defuse Ibis matter, only gets the Prime Minister in deeper. In itself it contains 2 mis-statements. The Messrs Kibel never heard of the so-called condition until last Thursday. It was not pointed out to them and they, the non-official source, never dropped the idea. It was the Australian Government which dropped the idea. It was not the Kibels’ idea in the first place and as the Kibels made quite clear again and again, their rote was never to initiate or advocate. It was to investigate and report. The very sentence of exculpation turns out to carry its own refutation and yet another condemnation of the Prime Minister.

The Foreign Minister further stated on Friday that the stumbling block for the Australian Government, not the Chinese Government, was the fact that the invitation was to the Minister for the Army. We had troops in Vietnam; it would be schizophrenic and inconvenient for the Minister for the Army to go. The Foreign Minister then said that now that Mr Peacock was Minister for External Territories the visit could be reconsidered. Yet the previous night the Prime Minister’s spokesman had said on his behalf that no Minister of the Crown could make the visit in a private capacity. The reason given on behalf of the Prime Minister contradicts the reason given the next day by the Foreign Minister. This is not the time to debate the merits of the Government’s decision. The Government decided that the Minister for the Army could not make a private visit. I question the validity of the argument. It may be abnormal for a Minister to make such a visit but everything in our relations, or lack of them, with China is abnormal. It would have been useful for the Australian Government and valuable for Australia and these considerations should have been put above strict formality or protocol. As to the possibility of an Australian Minister for the Army going while we had troops in Vietnam, you might tell that to the marines or at least to the commander in chief of the marines, the commander in chief of all United States forces - the President of the United States himself. But let that go.

The Government made a decision for what it regarded as good and sufficient reasons and that was all that the Prime Minister needed to say: That the invitation had been made but had been dropped by the Government because it believed that it was unsuitable for the then Minister for the Army to accept the invitation in a private capacity. I do not agree with the proposition but it would have been an adequate statement of the Government’s position. Instead the Prime Minister gave the Parliament a fantasy, a fabrication, designed to put the Chinese in a false light. He said that the Chinese had fiddled about. That was not true. He said that the Australian Government had been the chief advocate for the People’s Republic being a member of the United Nations. That was not true. He said that Australia had been peremptorily dismissed. That was not true. He said that they - the Chinese or the Messrs Kibel - had thought is wise for the Minister to give up his portfolio. That was not true. He said that the Australian Government had asked the Messrs Kibel the reason for this. That was not true. He said they had given as the reason the importance of the People’s Liberation Army in Chinese affairs. That was not true. He said then that the Messrs Kibel had been told of the difficulties of Mr Peacock’s position. That was not true. He said that the Messrs Kibel had then dropped the idea. That was not true. He said through his spokesman that the veto would apply to any Minister. The Foreign Minister says that was not true.

I said at the outset that this was not just a slip of the tongue, nor was it a pointless invention. The Prime Minister did have a motive. It was to put the Chinese into a poor light in the eyes of the Australian people on this matter. He wanted us to believe that the Chinese were the sole stumbling block to more sensible relations - that they were acting without rhyme, without reason, as he asserted on this very matter 3 months ago. Moreover, he wanted us to believe that they were so arrogant, so demanding, that they wanted to dictate to Australia about her own Ministers. That was the Prime Minister’s motive. Not for him to worry that in doing so he makes certain the very thing he professes to deplore, that he makes it certain that the Chinese will become more wary and cautious of any Australian approach on trade or diplomacy. Not for him to worry that the Kibels - acting as they were with disinterested patriotism and utter scrupulousness and discretion - are embarrassed with the Chinese officials with whom they must conduct their own business. Not for him to worry about the standards of this Parliament, the standard required of Ministers. Not for him to worry about the truth. The honourable member for Bendigo (Mr Kennedy) has exposed a similar motivated mis-statement by the Prime Minister about South African sporting teams. The honourable member spoke about it on the same day - last Thursday morning. Again the Prime Minister was silent and left it to a subordinate to provide his defence, to defuse this issue. The facts can be concisely and convincingly stated. On 6th April last he told me, in answer to a question without notice:

I have already communicated to the South African Government the disappointment and regret felt by a great number of Australians that native Africans should be prevented from coming here to participate in a sporting event.

On 9th September he was asked by the honourable member for Chisholm (Mr Staley) whether he would write to the Prime Minister of South Africa immediately, indicating that the Australian people would welcome multi-racial teams. The Prime Minister replied:

I have, for some weeks past, been contemplating writing a second letter to the Prime Minister of South Africa indicating what I thought were the feelings of the Australian people and. for that matter, my own feelings about the problems of apartheid and its association with sport. I have had discussions with the Foreign Minister about it but up to now we have felt that it would not be prudent to take further action - that one letter might be as much as diplomatic niceties might permit. Nonetheless, 1 will be only too happy to give further consideration to this letter. In the last letter that I wrote I pointed out the feelings of the Australian people - their regret and disappointment - and I also made known my own feelings which were exactly the same.

But to a question already put on notice by the honourable member for Bendigo on 18th August last, he replied last month. The answer which appeared in last Tuesday’s Hansard was as follows:

The communication about which the honourable member asks was in fact made orally, at my request to the South African Ambassador for forwarding to his government. It was inadvertently referred to as a letter in answering a question without notice some months later.

Inadvertence! Inadvertence about a reference made 4 times to a letter from one Prime Minister to another!

The parallel between this and the China matter is this: In both cases the Prime Minister had an identifiable motive, and in both cases he has done damage to Australia in pursuit of his aim. In this case he wished to contrast his own attitude of ‘responsible concern’ about apartheid with the alleged irresponsibility of those who were protesting against the proposed sporting tours. He wanted to discredit the demonstrators; but to do this he knew he had to create for himself an illusion of responsible statesmanlike action. So he invented his letter to Mr Vorster. I contrast his conduct with that of Sir Robert Menzies. It gives me an opportunity to put on the record of this House an incident greatly to Sir Robert’s credit for which he never sought praise from either side.In mid- 1960 Sir Robert did write to the then Prime Minister of South Africa, Dr Verwoerd, urging changes in South Africa’s apartheid policy. He never made it public. He tried, as it were, to do good by stealth. One could hardly have a more illuminating contrast: Sir Robert Menzies wrote a letter but never said he did; the present Prime Minister never wrote a letter, but claimed he did.

The present Prime Minister believes that he can get away with anything because of his great office. He never saw Sir Robert Menzies contradicted or exposed, and he thinks immunity goes with the office. He believes that citizens or colleagues will never contradict or expose him, even if his mis-statements damage their interests, or their reputations, or the country’s interests or reputation. His shortlived grandstanding on the Broken Hill Pty Co. Ltd price rise depended upon a conspiracy of silence. But the Treasurer (Mr Snedden) knew too much; the Deputy Prime Minister (Mr

Anthony) knew too little; and BHP knew everything. In this case, too, the truth has caught him up and caught him out. There are just too many instances, extending over too long a time, for us to dismiss this as accidental or incidental.

There are 2 charges he must answer. At the very time, in the very week, that the visit of the President of the United States to Peking has raised the world’s hopes for a new era of peace and understanding to a new pilch he chose to sabotage Australia’s own chances of an early normalisation of relations. Thanks to him, Australia will not be able to participate before the elections in the new stirrings of hope in our region. Further, he achieved this damage by presenting to this House an utterly false story - a fantasy, a fairy-tale, mischievous in its intention, mendacious in its substance.

These are not light matters and these are not light charges. They involve the reputation and relations of our country in the world. They involve the standing of this House and the standards of this House. They involve probity, integrity and responsibility in Australian public life. All these things the Prime Minister has wilfully damaged.

Mr SPEAKER:

– Is the motion seconded? Mr Barnard -I second the motion and reserve my right to speak.

Mr McMAHON:
Prime Minister · Lowe · LP

– There is no doubt at all that I have 2 obligations. One is-

Mr SPEAKER:

– Order! This is a matter of some seriousness. The Leader of the Opposition was heard in complete silence and I expect the Prime Minister to be heard in the same manner.

Mr McMAHON:

– The first is to explain the facts rather than the illusions which the Leader of the Opposition (Mr Whitlam) has attempted to create. The second is to deal with the question of my motive. My motive was to explain to the House the exact facts and no other purpose. If the honourable gentleman wishes to put up the example of Sir Robert Menzies, I can assure him of this: In future, rather than attempting to enlighten the House, I will adopt exactly the same attitude and no information whatsoever will be given to him.

Mr SPEAKER:

-Order! I have already appealed to the House. I suggest that the House co-operate with the Chair.

Mr McMAHON:

– Let me first of all analyse the reasons why the honourable gentleman wants to raise a motion of no confidence of this kind. I do not believe that he is doing it out of interest for the country. He is doing it out of personal interest and to disguise the fact that the Australian Labor Party is so divided on matters of policy that it must create irrelevant issues on matters of little substance so as to prevent the public understanding them and their attitude to life and give the Australian people the opportunity to judge. Let me illustrate a few of the differences between himself and his own Party. I can see the honourable gentleman turning around and beseeching his colleagues to be quiet. But we will see how quiet they can be under pressure or how he can live up to the issues that I intend to raise. First of all, let me speak about just some of the issues where there are vast divisions. I would ask honourable members opposite to interject and give correct answers if they feel that I turn out to be wrong. Where does he stand in relation to his Party on industrial law and the payment of fines? He has probably one supporter but does he want this to be known to the Australian people and to be debated effectively in this House or does he want to take up the time on what are completely irrelevant issues or issues that do not touch the substance of the matters that we have before us today? Where does he s.and in terms of migration? The honourable member for Grayndler (Mr Daly) might enlighten the House whether he completely agrees with his colleague. Certainly he has not done it publicly nor has he done it in private conversation. And where, too, does he stand not only on migration but also on the Labor policy relating - as we talked about the other day - to whether there should be a general policy relating to wage price fixation? On the contrary, over a wide spectrum I have had his different opinions: We will use tariff protection. He will go to the restrictive practices tribunal. He will require price, justification. But his own Party and particularly Mr Hawke disown him and say ‘No. there is only one matter that concerns us here. We believe in general price control.’ Now this, then, is the position. But, Mr Speaker, I want to deal with this today very, very sincerely because it is my truthfulness that is at stake, and to go through the facts for you. I will establish the facts in this way.

I first got to know of this on 1st September when my colleague the now Minister for External Territories (Mr Peacock) came to me and told me that Mr Kibel had contacted him about a possible visit to China. I then discussed this matter with the Secretary of the Department of Foreign Affairs and I told him then that I did not like the idea at all and that I wanted him to get in touch with Hong Kong to see what could be done. I had clearly indicated that I did not feel the Chinese would like a visit by the then Minister for the Army and I clearly indicated that I did not like it either. On 7fh September I received information from Hong Kong that the Australian trade representative there had - not the trade representative, it was a member attached to the trade representation - had interviewed Mr Kibel, who had informed him of 2 facts. The first one was the possible visit by the Minister for the Army - a private visit - who would no doubt see people like Mr Chou En-Iai, and secondly, a private trade mission which we were only too happy to arrange.

On 14th September I had a meeting with my colleagues, first of all the Foreign Minister and later on the Deputy Prime Minister, with 2 officials and with Mr Kibel. Mr Kibel told us of the whole story, and above all he pointed out that it was to be a private visit by the Minister. I raised 2 questions. The first one I raised was whether it was possible for a Minister to have a dual personality; and the second one I raised was whether the proper person to go was the Minister for the Army because it seemed to me to be wrong at that stage - and these are my own views that I am expressing now - that a Minister for the Army should go when our own Army troops were fighting in South Vietnam. Later when Mr Kibel went, my colleague the Deputy Prime Minister in very strong terms took exactly the same view and from that moment forward we did not change our mind about a visit by him.

Now let me come back to what I did say in the House and whether- 1 can be accused - I believe wrongly accused - of saying that it was the Chinese who imposed any conditions. The Chinese did not specifically impose any conditions but they said it was to be a private visit. I initially took the point of view that this could not happen and that afternoon, on the 14th, I was advised by my colleague the Foreign Minister, supported by the Department of Foreign Affairs, that it was impossible under these circumstances for such a visit to take place. In other words, when it was said to be private it necessarily involved the fact that he could not go as a Minister and therefore, if he went he had to go as a private individual. And that is why I made the statement that the honourable gentleman read out and the ‘they’ there referred quite clearly to Mi Kibel. I add immediately that when I used the words ‘providing the Minister gave up his portfolio’, that was implied in it by me and was necessary if he was to go on a private visit. But that was put by me, and they are my conclusions and the opinion that I drew. But let me go further to show why I did not incriminate in any way the Chinese Government. As to the second part of the honourable gentleman’s question I said:

  1. . only one representation was made to me about sending a Minister. It did not come from the Government of the People’s Republic, nor did it come from anyone with an official status in the Chinese Government.

So I completely absolve the Chinese Government from any responsibility for the decision itself. I emphasise therefore, firstly, the fact that it was a private visit that would have necessitated a resignation, and secondly, the other fact that was of critical importance, that he was the Minister for the Army. I might state that gentleman also referred to the pervasive influence of the Army as being one of the reasons why he was invited. I can state specifically that Mr Kibel on the 14th did state that in his belief one of the reasons why the then Minister for the Army was invited was the pervasive influence of the Army in China at that date. But on 24tb February I went on to state:

When it was pointed out that it would require a ministerial resignation from the portfolio and that we had troops m Vietnam this non-official source promptly dropped the idea and never raised it again.

Again I referred to a non-official source, and the matter was not raised again as a private visit, but whenever else it was raised it was a ministerial visit and it would have been in a ministerial capacity. So there, therefore, is the answer given to the honourable gentleman. But I want to make this clear too: Mr Kibel has of course now voluntarily interested himself in this problem. He is a businessman, and I suppose it is understandable that he wants to do business; but I for long have been very disturbed about the way in which he has been carrying on his business with me. But let me go back to the answers that were given on television by Mr Brian Kibel. This question was asked by the interviewer:

  1. . just to finish this once and for all, do you now accept that explanation as Mr Bowen gave it?

Mr Brian Kibel said:

Oh yes, 1 certainly do.

Dr Klugman:

– Go on. Read the rest of it.

Mr McMAHON:

– Yes, I will. Later on Mr Kibel said:

Oh yes. They were interested in showing him China and having mutually beneficial discussions.

The interviewer continued:

So this wasn’t strictly then, planned to be a private visit?

Mr Kibel replied:

It was titled a private visit, but of course Mr Bowen and Mr McMahon are absolutely right, there’s no doubt that converstations that he would have in China would be with all the right people.

So on the facts of it, therefore, while I am prepared to say that when I used the word they’ it might have been more felicitously expressed by saying ‘Mr Kibel’, there is no doubt whatsoever that it meant Mr Kibel and it meant no-one else. Now I turn to the second matter that concerns me. That is the question relating to the South African problem. Here I believe that if there is ever one person who is guilty of deceit and misrepresentation it is the honourable member who spoke in this debate last Thursday. Let me go through this question absolutely and according to record and fact. On the morning of 6th April 1971 I spoke to the Secretary of the Department of Foreign Affairs.

Dr Klugman:

– What date was that?

Mr MCMAHON:

– On 6th April 1971 I spoke to the Secretary of the Department of Foreign Affairs, instructing him to convey urgently my personal concern at the exclusion of non-white players from the South African cricket team which was then proposing to visit Australia. I asked that this should be done immediately, and I subsequently informed my Cabinet colleagues that I bad arranged that day for a message to be sent to the Government of South Africa through the South African Ambassador. They confirmed the instructions 1 had given. When I came into the House that afternoon, in answer to a question by the Leader of the Opposition I used the word ‘communication’ and not ‘letter’. It is true, and I accept the fact, that on a television programme and later, on 9th December, J did refer to the question of a letter. I was contemplating at that time signing a letter and, as F pointed out to the House, in discussion with my colleague, the Minister for Foreign Affairs, we decided that it would be better not to send a letter in addition to the communication. But when it was pointed out to me - and it was pointed out immediately prior :o an answer that I was to give lo the honourable member for Bendigo (Mr Kennedy) - it was I who informed him that inadvertently I bad referred to the first communication as a letter. Here we are not dealing with matters of substance. I have shown my interest in this problem. It came from me, I initiated it and 1 expressed-

Dr Klugman:

– Mr Speaker, could I move that so much of the Standing Orders be suspended as would require to be suspended in order to allow the Prime Minister to try to justify his position in this House - to allow him sufficient time-

Mr SPEAKER:

-Order! The honourable member is abusing the forms of the House.

Mr McMAHON:

– I have explained my position. It was given honestly and there is not one comma wrong in the substantive answer given on the first occasion. What the Opposition is doing - I now come back to it - is creating a mountain out of a molehill. It is trying arduously to confuse the issue and to deceive the Australian people to prevent them from knowing what is happening in the Australian Labor Party and what its policies are. When it comes to a question of credibility and the

Leader of the Opposition has to stand before the bar of public opinion, I defy the average, wise, sensible and reasonable person to be able to say on the matters that I mentioned at the beginning of my speech that he can understand what are the policies of the Leader of the Opposition. Not only would he not be able to understand his policies, but also I am certain that’ when it comes to a question of honesty, probity and integrity I know whom they will trust and it certainly will not be the Leader of the Opposition.

Mr SPEAKER:

-Order! The Prime Minister’s time has expired.

Mr BARNARD:
Bass

– The Prime Minister (Mr McMahon) finished on the note that the Opposition wanted to make a mountain out of a molehill. The plain fact is that the Prime Minister did not answer the charge which has been made. His credibility inside this Parliament, as well as outside it, is at stake. He made no attempt to refute the motion which was moved by the Leader of the Opposition (Mr Whitlam) - a motion of no confidence in the Prime Minister. Of course, he did endeavour to smear the brothers Kibel, but this is not sufficient refutation of the charge, and in the absence of any reasonable reply from the Prime Minister the motion which was moved by the Leader of the Opposition should be carried. This motion has immense relevance to the Government’s conduct of relations with the People’s Republic of China, surely the most vital issue of external policy confronting Australia. It bears also on the important question of the attitudes of the Prime Minister and his Government to racial relations in South Africa. This is a matter on which the honourable member for Bendigo (Mr Kennedy) has exposed the Prime Minister’s lack of frankness in a most devastating fashion.

Because of limited time, I want to concentrate my remarks on the issues raised by the Prime Minister’s comments in the Parliament last Thursday on a ministerial visit to the People’s Republic of China. There has been some suggestion that this is not an important matter - that it is a question of semantics or hair splitting over the meaning of words and sentences. But the issues raised go directly to the heart of conduct of our relations with the People’s Republic of China in the past year. Beyond this they raise the important issue of the veracity of the Prime Minister and what weight should be put on the information he gives the House. For many years there have been suspicions that the Prime Minister has given to the House statistical information which has been plucked out of the air. Since the right honourable gentleman became Prime Minister there has been repeated evidence that he has extended this off-the-top-of-the-head thinking to the weaving of elaborate fantasies about his own actions and motives. The Opposition will not accept any longer this conveying to the House of imprecise and often downright wrong information.

Yesterday the Prime Minister issued a lengthy statement on the communique from President Nixon and Premier Chou En-lai. Part of the statement complimented the President on a visit unprecedented in itself and in its bold disregard of established practice. It seems the Prime Minister recognised the essential nobility of the concept of President Nixon’s mission to China. Unfortunately, he did not recognise the shambles which passes for Australia’s relations with China. America has won immense kudos by a direct approach at head-of-Government level to a traditional and very bitter foe. Australia’s contacts with the People’s Republic are still conducted in a half world, a world of shadows. In saying this I do not intend to be disparaging of the Kibel brothers who seem to have been the Government’s main emissaries to China in the past few months. I am sure they are worthy men who have acted to the best of their ability in the Australian interest. But other nations of the world of no greater status or significance than Australia are approaching China at head of Government or senior diplomatic level.

The Australian Government has to fork out the expenses for 2 businessmen to go to Hong Kong and negotiate for it. The point is self-explanatory; it is a remarkable example of diplomatic helplessness. The Government clearly lacks the courage or even the hide to make a direct approach to China. Obviously, it has had the option at any time in the past year to make a direct approach to China and to send a ministerial delegation to China. Quite plainly,

China would not have rejected an official approach for a member of the Government to go to China. The Deputy Prime Minister and Leader of the Country Party (Mr Anthony) would have been an ideal person to go to China on behalf of his Government. The Deputy Prime Minister is no stranger to the Communist world; he has made a favourable impact on his official visits to Russia and Eastern Europe. There is also the stake his Party has in improving trade with China. But the Government left the initiative to the Labor Party delegation headed by the Leader of the Opposition.

The Prime Minister and his Government will never live down the fact that the Labor Party delegation got to Peking ‘7 months before the American President. It got there a generation before any Liberal or Country Party Minister can anticipate getting there; certainly the Prime Minister is destined never to follow President Nixon to Peking. As far as this Government and relations with China are concerned, the parade has gone by. The next official visit to China will be by the Leader of the Opposition as Prime Minister. The present Government has not the competence to get even a trade mission to China, let alone a junior Minister. This is the context of a disastrous series of diplomatic setbacks for the Prime Minister and his Government over relations with China.

The Prime Minister has tried to put the blame for failure to get effective relations going squarely onto the Chinese. He said on the television programme, ‘Monday Conference’, that the Chinese had cut off discussions ‘suddenly . . . without rhyme or reason’. He said further:

We thought quite frankly that we were on the way to success but the Chinese act in their own inscrutable ways.’

The Prime Minister’s phraseology alone would indicate that his understanding of Chinese psychology and politics was still in the realms of Fu Man Chu and Charlie Chan. It was disclosed a week later in the National Times’ that the Prime Minister had rejected an invitation by the Chinese to have a member of his Ministry go to China for 10 days. It was revealed that the Chinese had sent the invitation through Mr J. C. Kibel to the former Minister for the

Army. This illuminated an otherwise inexplicable reference by the Prime Minister to ministerial emissaries in the House some months earlier.

It became clear that the Government, in seeking to get a trade mission to China, had hooked a rather bigger fish. The Chinese had invited Mr Peacock and his wife to go to China, apparently on the recommendation of the brothers Kibel. The Government was extremely embarrassed by this disclosure according to a report in the Canberra Times’ on 13th December last year. Although there had been no official comment on the reported invitation Government sources did not entirely dispute the report. The Government did not dispute the report because it was spot on.

It gradually emerged that the Government had been using the Kibels as emissaries or intermediaries with the Chinese. This entailed flying them to Hong Kong and accommodating them while they negotiated, surely a most potent comment on the standing of Australian trade officials with the Chinese. Not a hint of these negotiations or the negotiators was conveyed to the Parliament. If the ‘National Times’ had not stumbled on the story, the negotiations and the eagerness of the Chinese to receive a member of the Australian Government would have been obscured forever.

In the words of Mr J. C. Kibel on the radio programme, ‘P.M.’ on 24th February: The invitation was issued through me. There were a number of negotiations concerning the possibility of a private visit by Andrew and Susan Peacock’. According to Mr Kibel, the Chinese were intrigued by the Minister’s relative youth and the nature of his portfolio. It seems they regarded him as one of the less reactionary members of the Australian Government and were prepared to bring him to China and ensure he met the right people.

These are facts that have come to light since the Prime Minister’s extraordinary and highly misleading answer in the Parliament last Thursday. This lengthy and garbled answer has attracted an immense amount of publicity and interpretation. Whatever interpretation is placed on the answer it cannot be regarded as other than highly misleading. Initially the Prime Minister said of the negotiations with the Chinese:

But i cao state that initially they thought it would be wise, providing the Minister gave up his portfolio, that he should be invited with his wife to go on what shall be called not so much a goodwill mission but a mission on which he could enjoy himself and enjoy the delights and comforts of Peking.

There is not the slightest doubt from the context here that the Prime Minister was referring to either the Chinese or the Kibels stipulating that the Minister had to give up his portfolio before making the visit. Later in his answer the Prime Minister said:

When it was pointed out that it would require a Ministerial resignation from the portfolio, and that we had troops in Vietnam this non-official source promptly dropped the idea and n;ve raised it again.

This implies that the Australian Government had pointed out to the Chinese that Australia was participating in Viet nam, and that Mr Peacock would have to resign if he wanted to enjoy the comforts and delights of Peking. Apart from the remarkable fact that the Chinese had to be told Australia had troops in Vietnam, it is clear that the Prime Minister has given 2 versions that cannot be reconciled.

On the first version, he said the Chinese through the Kibels had stipulated that the Minister had to resign to accept the invitation. This has been vehemently denied by the Kibels. The second version is that the Australian Government stipulated that the Minister had to resign and this was pointed out to the non-official Chinese source. The invitation was then promptly withdrawn by the Chinese.

This account was given by the Minister for Foreign Affairs (Mr N. H. Bowen) on the television programme ‘This Day Tonight’ on 25th February. According to the Minister, the Prime Minister pointed out to Mr James Kibel that a visit by Mr Peacock would require Ministerial resignation. I quote the Minister for Foreign Affairs from the television transcript:

So what the Prime Minister has clearly indicated in his answer, the same answer, that what he means is that he told Kibel that it would involve resignation because the stipulation was for a private visit.

Where this interpretation falls down is that Mr Brian Kibel has denied that Mr McMahon had given this explanation to his brother. It seems that even the Minister for Foreign Affairs cannot get the Prime Minister off the hook. His ingenious explanation of what the Prime Minister was saying falls down because a key part of it has been denied by the Kibels

The best possible interpretation that can be put on the Prime Minister’s answer is that it is grossly misleading. It is open to 2 conflicting interpretations, neither of them capable of being verified or sustained. I would like to quote further from the television interview given by the Minister for Foreign Affairs. It has some excellent stuff including the observation that an Army Minister could conceivably make a private visit as far afield as New Zealand without resigning. The Minister says also that an Army Minister would be put in a schizophrenic position by visiting China while Australian troops were engaged in Vietnam. He neglects to explain how the American President - as the Leader of the Opposition pointed out - who is the supreme authority - the supreme commander - for conduct of the Vietnam War avoided a spectacular division in his personality while he was in China.

We have not heard from the former Minister for the Army about whether a portfolio is adequate compensation for relinquishing the comforts and delights of Peking. We have not heard from the other party to these negotiations, the Chinese. It is probable that we will hear very little from any Chinese sources, official or nonofficial, while this Government remains in office.

It is pointless for the Prime Minister to express pathetic hopes that the Chinese should disregard Taiwan in dialogue with Australia, as he claims it has done with America. Any hopes of an effective dialogue have been destroyed by the constant campaign of distortion and vilification towards the Chinese conducted by the Prime Minister in the past year. This reached its peak in the Prime Minister’s rewriting of events which have baffled the Chinese just as much as it confounded all who heard it in this House. The Chinese can only wonder what limits exist to the blatant charlatanism of this Government’s conduct of its foreign relations.

It does not seem possible for Australia to get even a trade mission to China while this Government stays in office. Why should the Chinese have relations with us at any level while these misleading statements persist? Sir, the Opposition has moved this motion this afternoon in an effort to get the conduct of our foreign relations out of the fantasy world created by the Prime Minister and back into the real world of diplomatic logic and realism.

Mr SPEAKER:

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

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

– This is a shabby no confidence motion. It deals in trivialities and is wasting the time of the House. Our system in this Australian Parliament differs from that adopted in other Parliaments, such as the House of Commons, in having a set time every day for questions without notice. It is a system we all know under which every honourable member can ask a question and get an off the cuff answer.

Dr Patterson:

– Off the cuff?

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

– Yes. I think you understand the Australian language. A member can get an immediate answer without reference when he asks a question without notice. This is our system and I approve of it. It is not a system which is generally adopted in other Parliaments. It carries the advantage that a quick reply is given, but it also carries the inevitable consequence that the information given in the answer sometimes is less than comprehensive or less than accurate.

Dr J F Cairns:
LALOR, VICTORIA · ALP

– Less than the truth.

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

– Less than fully accurate, as far as information is concerned. All honourable members know that what I am saying is true, also while, of course, the questions are always elegantly phrased the answers, given immediately, are often not as elegantly phrased as would be answers given after full consideration. This is our system. I do not suppose any Minister who has stood at this dispatch box has not at some time or another read the Hansard record of an answer given by him on the previous day and thought to himself: ‘If I had a second chance to give that answer I am certain I could improve on it.’

Mr SPEAKER:

-Order! There are far too many interjections coming from my left. I warned the House last week about the continual barrage of interjections. This is an important motion and the House has co-operated reasonably. As I do not want to have to take steps to deal with some honourable members I suggest that the House continue to co-operate.

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

– Every honourable member knows that this is so. This is the way that human affairs go when we have this type of procedure. I would not want to see this procedure changed but we have to know what the consequences of it are and to understand them. I am sure we al) do understand it and this is why this is such a shabby motion. What has been done is that the Opposition has simply picked upon a few words here and there in an answer and has built on it a pack of cards that the slightest puff can blow down. It is just a pack of nonsense built on a few words in an answer. Let us look at these answers. Regarding the letter to South Africa, this matter is so trivial. As we have seen in the answer, it was the Prime Minister himself who called attention to the fact that when he was referring to a second letter months after he had communicated with the Prime Minister of South Africa - he called it a second letter thereby implying that there was a first letter - it was in fact a message sent by the Prime Minister to the Prime Minister of South Africa. The Prime Minister was the one who called attention to the error. How fantastic is it, therefore, to bring a motion of no confidence against a Prime Minister who has disclosed that he has made an error. One could not get a more ridiculous situation than this.

Let us go to 24th February when the Prime Minister was asked a question relating to this ministerial visit to China. Referring to this proposal in the course of his reply he said:

It did not come from the Government of the People’s Republic, nor did it come from anyone with an official status in the Chinese Government.

So one interpretation put on it which I have heard was that the Prime Minister said that the Chinese Government had stipulated a condition. Clearly the Prime Minister is excluding the People’s Republic or anyone with an official status. But it is a non-official proposal. He said:

But I can state that initially they thought it would be wise, providing the Minister gave up his portfolio, that he should be invited with his wife to go on what shall be called not so much a goodwill mission but a mission on which hs could enjoy himself and enjoy the comforts and delights of Peking. But he had to give up bis portfolio.

If one stops there one can say that they, the unofficial sources, are putting a proposal and a condition on it. Looking at it another way, one can say that the proviso is a kind of parenthesis, giving the Prime Minister’s own thoughts, but I do not see any advantage in going into an analysis this way and that and trying to find interpretations since the Prime Minister subsequently made perfectly clear what he meant. So if anyone was to be misled, as some honourable members now claim to have been, by the first part of the Prime Minister’s answer it can only be because of a refusal to read what is in effect a dictionary meaning supplied in the later part of the Prime Minister’s answer. Then he said:

That, 1 now state, is my colleague, the former Minister for the Army. Immediately we asked the reason why.

Not why it was a private visit but why it was the Minister for the Army, to take up something which the Leader of the Opposition said. The Prime Minister continued:

They said that in Ihe China of that time the army had a pervasive influence throughout the whole of China.

And the Kibels in their interviews confirmed that this was the view they put. The Prime Minister continued:

That was the reason given, again 1 say, from a non-official source.

That is, the reason why it was the Minister for the Army and not the reason why it was a private visit. Finally, the Prime Minister said:

When it was pointed out that it would require a ministerial resignation from the portfolio and that we had troops in Vietnam this non-official source promptly dropped the idea and never raised it again.

There we have the Prime Minister clearly stating that he has told the non-official source that the Government’s objection is to the Minister for the Army going, or purporting to go, on a private visit in the circumstances that are referred to. This is not a condition imposed by China or an official representative of China or a nonofficial representative of China and there is no other construction open if one reads the answer as a whole. So the whole thing is a pack of cards. It is quite clear and the House could not have been misled. It is clear that what was objected to by the Government was the fact that the Minister for the Army was invited to go as a private citizen and he could not go in that capacity in the circumstances. I pointed out that this view accorded with advice which had been given to the Prime Minister by the Department of Foreign Affairs and me and I now confirm that to the House. This led one newspaper to say that what I had been saying was that the ‘they’ referred to were the Department of Foreign Affairs and me. However, I did not say that. I brought the Department of Foreign Affairs and myself into it when, after we had discussed the matter, I was asked where the advice came from. There has never been any question of that. Therefore, I would make the same interpretation. I think it is the obvious one when one reads the answer and one which any sensible or reasonable man would make.

The decision which was taken was, I believe, a perfectly correct one and it accorded with the advice which was given by the Department of Foreign Affairs and by me. Such a visit would have done harm to our relations with other countries. The Leader of the Opposition is concerned with our relations with various countries in the South East Asian area. The Government has at all times been concerned with our relations with other countries in our region. It certainly could have done us harm in that respect. But the private refusal of the invitation could do no harm. It is only when mischief is sought to be made by raising in the House our relations with China in either this form or in relation to wheat sales that harm will result to Australia in its relations with China. I suggest that those who initiate this topic, rather than those who answer the questions, are the ones who initiate the mischief. It is quite clear that in relation to our sales of wheat to China there has been a long campaign of deliberate mischief. This was so in relation to the raising of the matter as a political issue in this Parliament last year. Subsequently the honourable member for Dawson (Dr Patterson) had the idea of visiting China with a view, I suggest, to embarrassing this Government over wheat sales to China. The Leader of the Opposition eventually joined that bandwaggon. But there was the attempt to embarrass.

So persistent is this attempt to make mischief that quite recently when the Leader of the Opposition was overseas he took the trouble during a discussion with a representative of the People’s Republic of China in New York to discuss the question of wheat sales and he received from that representative an assurance that there would be no sales to China preceding recognition of China. The Leader of the Opposition announced this and then announced that he would recognise China. In other words, mischievously the Leader of the Opposition is using this wheat issue to try to get electoral support. He has gone out of his way to receive and publicise something highly detrimental to this country in relation to wheat sales to China for purely political motives. As the Prime Minister said earlier, on such a trivial matter - a matter of semantics - the Opposition brings a no confidence motion and wastes the time of the House. Why? The Prime Minister suggested, and I too would like to suggest, the reasons for this. On the great issues of interest to the nation which we should be debating in this House, so vulnerable is the Leader of the Opposition and the Opposition that they do not wish to touch them. We should be debating things like industrial relations. The Leader of the Opposition and the honourable member for Hindmarsh (Mr Clyde Cameron) stated the policy of the Opposition one week, and the next week they withdraw it.

On the matter of the Broken Hill Pty Co. Ltd the Leader of the Opposition’s solution is to reduce tariffs in order to allow cheap Japanese steel to come into this country. I have never heard anything like that put forward as a solution for price rises. It means that the Leader of the Opposition would put at risk the jobs of Australian workers employed by BHP. He would damage a great Australian company. He would make it impossible for anyone to come in and set up another steel industry in Australia. That is one of the most ridiculous suggestions I have ever heard. But these things are not debated. Why are we not debating price control instead of debating the semantics of an answer? Here the Leader of the Opposition has a wonderful solution. He would appoint a joint supervisory committee of the Houses of Parliament. This would mean that members of Parliament, instead of doing their proper job, would be fixing the price of boots, galvanised iron, glass, windows, shirts and nails. What expertise have they? What motives would be attributed to them if they either agreed or disagreed with a price rise? I have never heard such a fantastic suggestion in my life. These are the things suggested by the Leader of the Opposition. He is vulnerable on all these major issues, so what is the ploy? Move a no confidence motion on semantics, on the wording of an answer! Build a house of cards! In this Parliament we should be debating the major issues facing the nation and not wasting our time on these trivialities.

Mr KENNEDY:
Bendigo

– Let me bring this debate back to the simple issue with which we are dealing. That issue is the credibility of the Prime Minister (Mr McMahon). The one question that the Opposition is asking this afternoon is whether, on the basis of the evidence that it has given, we can trust that man. The answer is that we cannot. The evidence that we have cited so far this afternoon concerns only 2 issues. The Prime Minister has not defended himself. As usual, he has left the apologising to be done by another Minister. Once again he is moving out of the House, as he did last week when he was under attack. He left the issue then to be discussed on his behalf by the Leader of the House (Mr Swartz). He has failed to answer the questions that we have raised, and the Minister for Foreign Affairs (Mr N. H. Bowen) has tried to rubbish the essential question of the credibility of the Government and its Prime Minister.

The Prime Minister’s reputation is in tatters. While that is so, he is trying to drag down the reputation of a man called Kibel. I am sure that many honourable members will recall with dismay the sneer and the smear cast on the commercial practices of a friend of one of the gentlemen sitting on the ministerial bench. That is the practice to which the Prime Minister resorts in self defence. Let me come back to the basic question of the letter that was not sent to the South African Prime Minister. I am most intrigued to know at long last that on 6th April a communication was sent by the Government. In August last year I put a question on notice, and the only part of that question not answered was the part that asked: On what day was the communication sent? That was not answered. The Prime Minister did nol reply to it last week when he had the chance to do so. Now, at long last, he has replied.

I would draw one simple fact to the attention of honourable members. The action that the Prime Minister took with regard to South Africa was taken on the very day on which the Leader of the Opposition (Mr Whitlam) asked the question in this House. The Prime Minister is the man who was so genuine in his protestations against the racism of the Vorster regime that he could act only either in anticipation of a question that he knew the Opposition would fire or after it. At long last, however, we know that an action was taken. ! am very interested to note also one other suggestion. Honourable members will recall that the Prime Minister said at that time that he was thinking of signing a letter. Most people think of sending letters. This suggests to me - I would like the Prime Minister to answer this - that he did in fact write a letter in the first place. I am sure that after he has had a few stings on this matter he is in a position in which he is inclined, more than he would be otherwise, to speak the truth. I am quite convinced that a letter was written to the Prime Minister of South Africa which was not signed. We may well ask: Why not?

Perhaps we can go back to the reply that the Prime Minister gave to the honourable member for Chisholm (Mr Staley) in September, when he said that he had discussed with the Embassy of South Africa in Canberra whether a second letter should be sent. I suggest that he also discussed with the Embassy of South Africa whether a first one should be sent and he was told then what he claimed he was told in relation to the second letter that was not sent. That is, that the South African Government would not accept such strong action by the Prime Minister of Australia. I suggest that the letter was written but was not sent.

The crux of the Prime Minister’s defence this afternoon was that the statement he made in the House on 6th April was in substance true - that he had sent a communication. But, of course, that is not the issue. The issue concerns the statement that he made on 4th July last year in Perth. He made that statement publicly. It was quoted by the Australian United Press on 5th July that Mr McMahon said he had written to the Prime Minister of South Africa pointing out that Australia was bitterly disappointed that colour had been the basis for choosing sporting teams. That is the issue. On 4th July he said he had written a letter. In August I put a question on notice asking what was the nature of the communication to which he had referred on 6th April. I gave him notice that I would ask what action he had taken. But the most surprising thing, which reflects upon the pathological tendencies of the Prime Minister in matters like this where veracity is concerned, is that only a few weeks later he was served up a question by the honourable member for Chisholm who asked whether he would take action about the racial policies in the selection of sporting teams. Let me refer to what the Prime Minister said some 3 weeks after I had asked the question. On 9th September he said:

I have, for some weeks past, been contemplating writing a second letter to the Prime Minister of South Africa indicating what I thought were the feelings of the Australian people and, for that matter, my own feelings about the problems of apartheid and its association with sport. I have had discussions with the Foreign Minister about it but up to now we have felt that it would not be prudent to take further action - that one letter might be as much as diplomatic niceties might permit. Nonetheless, I will be only too happy to give further consideration to this letter. In the last letter that I wrote I pointed out the feelings of the Australian people - their regret and disappointment - and I also made known my own feelings which were exactly the same.

The Prime Minister came into this House and described a letter which had not been sent. He promised that he would write another letter, which was not sent. The simple reality is that he referred 4 times to the letter that he claimed he had sent. Today he said that every comma of what he said earlier is true and that the Opposition is trying to make a mountain out of a molehill. I ask the very simple question: Is it conceivable that a Prime Minister of any country could forget or overlook a letter that he sent to another Prime Minister? It is absolutely inconceivable, and only a person who believes in purveying untruths could say that sort of thing, not once but 4 times in this Parliament.

The other point is that in reply to my question on notice the Prime Minister said:

As the honourable member will understand, a letter from one head of State to another head of State is a very rare occasion.

And this is a rare occasion which the Prime Minister expects us to believe that he had forgotten, overlooked or made some mistake about. This evidence which he has produced today is absolutely unbelievable. Here we have a man who prides himself on having had experience as Minister for Foreign Affairs. He expects us to believe that in fact there is no difference between a letter sent from one head of State to another and some communication passed on by one of his officers to another. He does not believe that himself and he does not expect us to believe it. We do not believe it.

The basic point which the Opposition makes this afternoon is that here we have a man who does not tell the truth in this Parliament, a man who on 2 occasions has been caught out and who, in particular in this South African case, has even condemned himself with his own words because the statement that he has made in reply to a question upon notice is that no such letter was ever sent. The Prime Minister expects us to believe that he referred to it as a letter inadvertently 4 times in the Parliament. We do not believe that.

The other matters that call the credibility of the Prime Minister into question are his relations with the Minister for External Territories (Mr Peacock) and the whole question of what really has been going on in regard to this proposed visit to China. An attempt has been made to play this down as an unofficial action. That argument will not stand up. It was an official action. It was sponsored by the Prime Minister himself. It was also paid for by the Australian Government. No doubt, in the next few weeks we will see just how rauch Mr Kibel’s visit to China and Hong Kong actually cost the Australian taxpayer. So no doubt exists that this was an official visit, no matter what attempts are made to play it down.

The second point to make in regard to this matter is this: There is a person in this Parliament who can set the record straight from one point of view as to what was the situation with regard to Mr Kibel. That person is the Minister for External Territories. This afternoon, he has been gagged. Last week, there was much coming and going between his office and the office of the Prime Minister. According to Press reports, the Prime Minister tried to press him into making statements which the Minister for External Territories realised would obviously damage his own credibility. He did not make those statements. He has made no statement so far. He has said nothing in this Parliament. He has been gagged. He will not be speaking in this debate this afternoon. Is it any wonder? It is bound to be only too embarrassing to him and to the person who is his friend. So an issue has been raised by the Opposition which reflects very badly on the trustworthiness of this Government. A simple question has to be asked: Can the gentleman who occupies the position of Prime Minister in the Parliament be trusted when he makes statements to the Australian people, to our allies, to our friends and neighbours, on the evidence that the Opposition has presented? The evidence that the Opposition has produced this afternoon suggests that the answer is no. The Prime Minister cannot be trusted and that is why I support this motion of no confidence in the Prime Minister.

Mr GORTON:
Higgins

– This motion of no confidence is directed ostensibly at the various interpretations which can be placed upon answers given in this House. It is directed ostensibly to that. But I think there are more significant undertones to the motion than appear in the wording of the motion. Very briefly, I want to say something about my own approach to this problem. This is a motion moved against an individual. It is true that that individual is the Leader of the Government. But the motion is not directed at the Government; it is directed at the individual. This is a practice which appears to have been increasing in this Parliament over recent years. It is a practice which I feel ought to be diminished if we are to follow proper parliamentary procedures. It is a practice which ought to be deplored.

That is my opinion. The right to move a motion of dissent against a government is, of course, one which all members of this House would cherish and protect. Of course one could not interfere with the right to move a motion of censure against an individual. But I feel that all too often the moving of censure motions against individuals is motivated more by expediency than by real principle, more by an attempt to embarrass politically rather than a true belief that they can change a government.

On my own experience, I believe that those in the Opposition who adopt these tactics do so for one reason only. It is that they hope to be able to attract the support of a handful of private members who have been elected to support the Government and who disagree on some particular measure or dislike some individual member personally. Therefore, the Opposition can hope that they may cause them to be disaffected. That is the purpose of this motion and of others. I think it is a bad principle to adopt. I think it can react against the national interest. This was the tactic that was adopted when the Territorial Sea and Continental Shelf Bill was before the House. The result was that a Bill of great significance to Australia’s futture and a Bill which was supported by the overwhelming majority of the members of this House, taking both sides together, is still because of this tactic, not an Act but merely a Bill. I think the nation is the poorer for it. This was the same kind of tactic that was adopted by the Opposition last March. It is not one which I would like to see continued in this Parliament for those purposes. I do not believe for one minute that the private members who presently support the Government would be inveigled into supporting the motion which is now before the House. I will not, and I have given the reasons why I will not.

Motion (by Mr Giles) put:

That the question be now put.

The House divided. (Mr Deputy Speaker - Mr P. E. Lucock)

AYES: 56

NOES: 52

Majority .. .. 4

In division:

AYES

NOES

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

– Order! The question has been put and no ether motions may be moved.

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: 52

NOES: 57

Majority…… 5

AYES

NOES

Question so resolved in the negative.

page 346

PERSONAL EXPLANATION

Mr PEACOCK:
Minister for External Territories · Kooyong · LP

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

Mr SPEAKER:

– Order! Does the Minister claim to have been misrepresented?

Mr PEACOCK:

– Yes, I do. A number of newspaper articles have alleged that I told the Prime Minister (Mr McMahon) that I refused to issue a statement concerning his answer to a question during last Thursday’s question time. This is in fact incorrect. It is common knowledge that the

Prime Minister and I discussed the matter on Thursday night. I did not refuse to issue a statement but rather as a consequence of our discussions it was agreed that the Prime Minister and not I would issue the statement, and this was done through a spokesman. Secondly it is said that I can throw light on this matter. It is already known that I did not seek, ask for or in any way solicit an invitation to visit the People’s Republic of China. It came out of the blue from Mr Kibel to me, and I conveyed it to the Prime Minister. Thereafter my only role was to introduce Mr Kibel to the Prime Minister’s private secretary. At no stage was I involved in discussions or decisions.

page 347

LONG TERM ADD TO BANGLA DESH

Ministerial Statement

Mr McMAHON:
Prime Minister · Lowe · LP

– by leave - Honourable members will recall that on 31st January the Australian Government announced formal recognition of the Government of Sheikh Mujibur Rahman as the Government of the new state of Bangla Desh. In announcing recognition, the Minister for Foreign Affairs (Mr N. H. Bowen) said that, as a nation of 75 million people bordering the Indian Ocean, Bangla Desh was likely to play an increasingly important role in the affairs of South and South East Asia. He also said we looked forward to co-operating with Bangla Desh in various regional organisations, including the Colombo Plan and the Economic Commission for Asia and the Far East. In taking this action, Australia was among the first of the Western and Commonwealth nations to accord recognition, and, I think we can claim, gave the lead to many of our neighbours. We have since followed up this initiative with positive steps in the field of aid to Bangla Desh. On 16th February, less than 3 weeks after we had recognised the new nation, my colleague, the Minister for Foreign Affairs, announced the imminent departure of the first sea-cargo of emergency relief aid to be shipped direct to Bangla Desh. During the same weekend, the first trainee under the Colombo Plan to be nominated by Bangla Desh arrived in Australia. He will be followed by many others, as our long term plans to assist Bangla Desh with technical training come to fruition.

At the time the announcement of the direct cargo of relief aid was made, the Minister said that the Government had the long-term needs of Bangla Desh under active consideration. Bangla Desh is one of the most overpopulated and impoverished regions in the world. Its natural resources are few, its secondary industry barely developed and much of what had been established was destroyed during the fighting there. International aid will be required on a large scale, not only to provide immediate relief and repair the damage caused during the war, but also to help in building up this young nation as a viable economic unit. We have also borne in mind the words of the Bangla Desh Minister for Rehabilitation, who said recently in welcoming Australian emergency relief aid: He gives twice . . . who gives quickly.’ So the Government has been looking to what aid Australia can best provide, to accord with the future long-term needs of Bangla Desh. We have been looking ahead to the next stage, and to longer-term aid programmes. For the next financial year, beginning in just a few months, Australia will provide aid for Bangla Desh totalling $4m. This will be in addition to the $2m of aid already in the pipeline. This new amount of $4m will be for special rehabilitation assistance, for regular aid, including projects and experts, training, and for food aid. It is a special amount which we shall make available to assist Bangla Desh in coping with the extraordinary problems which will confront it in its early stages of nationhood.

We have been having continuous discussions through our mission in Dacca with the Government of Bangla Desh. Details of the precise forms in which we intend to provide this longer-term aid are being worked out on the basis of the planning priorities of the Bangla Desh Government. These will be announced at appropriate times by my colleague, the Minister for Foreign Affairs. I would, however, like to make it clear to the House that the plans for new aid to Bangla Desh which I have just announced are the first stage of Australia’s long-term assistance. The ways and means in which this programme is to be and will be developed shall be kept under regular review. Earlier I said that Australia had taken a further initiative. It is, I point out to the House, that, apart from India, which is Bangla Desh’s closest neighbour, Australia is one of the first of those nations which have recognised Bangla Desh to come forward with a commitment of longer-term aid, other than emergency relief. I believe that, as we gave the lead to many nations in recognising Bangla Desh, this action, of announcing plans for longer-term aid may also give a lead to other nations to act similarly. For it is only with the concerted help of friendly countries that Bangla Desh will be enabled to emerge from the problems of her birth in war. Our aim is to help Bangla Desh to take her place as a stable and developing economy which will make a constructive contribution to the South Asian region.

Mr WHITLAM:
Leader of the Opposition · Werriwa

– by leave - Perhaps understandably, the usual procedure whereby a Minister proposing to make a statement lets the Opposition have a copy of it 2 hours before it is made in the House was not followed in this case. Some honourable members opposite are seeking to interject. Does any one of them gainsay that this is the usual procedure? I gave leave for the statement to be made because it is on a matter of public importance and public interest, and it should be made in the House. I am under some disability, of course, in not being able to make as adequate a comment at this stage as I should, as also are some of my colleagues, the honourable members for Kingston (Dr Gun), Hughes (Mr Les Johnson) and Brisbane (Mr Cross), who have visited the Bangla Desh region, and the honourable member for Fremantle (Mr Beazley), who is there at the moment and will be here next week. Therefore, it must suffice for me to say at this stage that the Australian Labor Party applauds the recognition which the Government has given to Bangla Desh and applauds the commencement of direct aid by the Australian Government to Bangla Desh. The people in that region have been subject to more slaughter and genocide than any people in recent centuries. It is very proper that Australia should give them all the political and economic assistance she can.

A few months ago I criticised the delay in recognising Bangla Desh. However, I must concede that by waiting a few weeks longer than was necessary to determine the political position in Bangla Desh we did in fact make it possible for many other countries particularly those in our region, to synchronise their recognition. A great number of Commonwealth countries have now recognised Bangla Desh. This has, one hopes, made it easier for Bang! a Desh to be admitted to the Commonwealth. Perhaps we should applaud the initiative of Tonga, which I believe was the first country to recognise Bangla Desh. Furthermore, it is significant that in our own region, one overwhelmingly Moslem country and one predominantly Moslem country - Indonesia and Malaysia - have since recognised Bangla Desh. Australia is playing a proper role politically and economically in rehabilitating this new nation. Accordingly, instead of moving that the debate be adjourned, I take this early, albeit insufficient, opportunity to assure the nations in our region and above all, the nation of Bangla Desh, that on all sides of the Australian Parliament we wish that new nation well and we will collaborate in political and economic measures in our region to help her to have a peaceful and, one would hope, a prosperous future.

page 348

SOCIAL SERVICES BILL 1972

Assent reported.

page 348

REPORTS OF PUBLIC WORKS COMMITTEE

Mr KELLY:
Wakefield

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

Central Hospital Services Complex - Stage 1 at Canberra, Australian Capital Territory;

Anula and Wulagi neighbourhoods, Sanderson district, Darwin, Northern Territory;

Sewerage system at Katherine, Northern Territoy;

Road to East Alligator River area, Northern Territory.

Ordered that the reports be printed.

page 348

TARIFF PROPOSALS

Mr CHIPP:
Minister for Customs and Excise · Hotham · LP

– I move:

Customs Tariff Proposals No. 4 (1972).

The customs tariff proposals which I have just tabled relate to proposed amendments to the Customs Tariff 1966-1971. These proposals implement the Government’s acceptance of the Tariff Board’s recommendations in its report on industrial chemicals and synthetic resins, etc. The Tariff Board has reviewed the level of protection for all chemicals on which duties exceeding 40 per cent, ad valorem, general tariff on special support value duties were imposed following the Board’s comprehensive report on the Australian chemical industry in 1966. The report also includes recommendations on Bisphenol A on which temporary support values were imposed on 10th January 1969 following a report of the Special Advisory Authority.

The Tariff Board found that local producers of most chemicals, protected by duties exceeding 40 per cent, ad valorem, general tariff, have improved their cost and competive position since 1966 and should now be able to operate with ad valorem duties at one of the industry rates the Board recommended in its 1966 report. These industry rates are either 40 per cent general tariff, 30 per cent preferential tariff or 25 per cent general tariff, 15 per cent preferential tariff.

On high density polyethylene, however, the Board has recommended that existing duties of 60 per cent general tariff, 50 per cent preferential tariff be maintained. The Board recommended rates of 50 per cent general tariff, 50 per cent preferential tariff on synthetic rubber. This represents a reduction of 10 per cent, by value, on the existing duties. As there is now no local production of DDT in Australia, the Board recommended duties on this product be reduced to rates of 7i per cent general tariff, free preferential tariff. The Board has recommended in 3 cases that duty rates be increased from the lower to the higher of the 2 industry rates in order to adequately protect the local industry. These are ethylene oxide derivatives, n-butyl alcohol and n-butyl acetate.

Turning now to the special duties based on support values, the Board has concluded that support value assistance continues to be the most suitable means of according the local industry assistance to counter the effects of disruptive pricing in international trade in industrial chemicals and synthetic resins. A generally lower level of support value assistance has been recommended by the Board. Of the 27 support values recommended, 23 are lower than those currently operating. Moreover, in a number of instances the Board has recommended the discontinuance of support values altogether. Where reductions in support values have been accompanied with no change in ad valorem rates, the Board indicated that local producers have achieved cost reductions that are relatively of the same general order as those achieved by overseas competitors.

The Government has accepted the Board’s suggestion that there should be some change in the programme of reviews recommended in its 1966 report. The review arrangements now intended are an overall review of the industry in 1975 and a review of support values to be referred to the Board in mid- 1973. The Government has also accepted the Board’s suggestion that the bounty presently payable on cellulose acetate flake should be continued until the Board has examined the question of assistance for this product and other related acetyl products as part of the general overall review.

In its report under the Dumping and Subsidies Act, the Tariff Board found that hydrogen peroxide has been sold to persons in Australia at export prices which are less than normal values in the countries of exportation and that the exportation of those goods has caused and is threatening injury to an Australian industry. By Gazette notice tomorrow, hydrogen peroxide exported to Australia on and after 14th July 1969 will become subject to dumping duty where sales are made to Australia at export free-on-board prices which are below normal values in the countries of export. Comprehensive summaries setting out the changes and the duty rates are now being distributed to honourable members. I commend the proposals.

Debate (on motion by Mr Crean) adjourned.

page 349

INDUSTRIAL CHEMICALS

Tariff Board Report

Mr CHIPP:
Minister for Customs and Excise · Hotham · LP

– Mr Speaker, I present the report by the Tariff Board on industrial chemicals and synthetic resins - an interim report on the general review inquiry on industrial chemicals - ethylene oxide derivatives and hydrogen peroxide (Dumping and Subsidies Act).

Ordered that the report be printed.

page 350

ECONOMIC CONDITIONS AND POLICY

Ministerial Statement

Debate resumed from 24th February (vide page 279), on the following paper presented by Mr Snedden:

Economic Conditions and Policy - Ministerial Statement, 24th February 1972- and on motion by Mr Swartz:

That the House take note of the paper.

Mr GARLAND:
Minister for Supply · Curtin · LP

– A debate on the Australian economy in the national Parliament ought always to be treated with seriousness because of the influence of economic factors on the life of each of our citizens. One would expect members of the Opposition, who have had so much to say on this subject in recent weeks, to be here and take some interest in the debate. At the moment there is a mere half dozen or so Opposition members in the chamber.

A responsible government must have a consistent set of economic policies to meet the economic problems of the moment. It is quite irresponsible and destructive for a Labor Party spokesman to make emotive criticisms at random, as did the honourable member for Melbourne Ports (Mr Crean) in his speech last Thursday evening, and to be carried on a flight of indignation towards the objective of calling for great increases of expenditure in one particular avenue. That is not an economic policy. It is just a shallow means of trying to attract support.

However, apart from the superficial flights of fancy, let us be clear that there are in the Australian Labor Party some determined Socialists - I believe sincere men - and 1 want to have something to say about their decisive effect on Labor’s economic plans in the future, should this country be so unfortunate as to find itself with a Labor Government. I think this is important because these men would have their way and the present leadership is far away from acknowledging that Socialism would result.

First, let me discuss - necessarily briefly In the time allowed to me - what are essential matters in the economic debates of today. In the Budget presented last August the Treasurer (Mr Snedden) set what was termed a Budget strategy. This strategy can be summarised in mis way. The Budget was aimed to serve an overriding economic purpose to diminish inflationary pressures; that is, to check the increase in costs and prices which cause increasing economic and social hardship to the majority of Australians and, as the Treasurer said, ‘add to the burdens of rural industries already depressed, disrupt development plans of great promise and undermine possibilities of growth which our future unquestionably holds’. Linked with this is the need to maintain a steady rate of economic growth to improve the standard of Living of everyone. That has been the consistent policy throughout. The House will be aware of repeated attempts to misrepresent it.

The national economy is an aggregate of all the economic influences of each citizen and is thus complex, pulsating and at times turbulent. Psychological factors as well as world conditions play on our economy an important part. There is no possible panacea. There is no absolute certainty of future events, but there are economic facts, realities and good judgments by men of experience which can be and have been applied in the interest, not just of short term gain, but in the middle and long term to help create a more secure Australia.

It is of no value at all to criticise by selecting a particular point - perhaps an anomaly - and inject into one’s speech an emotional content to try to build up a picture of disaster engulfing all. I would have thought it utterly clear to everyone that the well-being of the majority of Australians depends on maintaining a high productivity growth while keeping a fair degree of price stability. I would have thought that such a state is not reached by promising to spend money every time a group in the community makes a demand or that such a state is not reached by advocating on every occasion less work and more pay, as do the Labor Opposition and many trade union officials. Insofar as the Government has powers, and insofar as it believes it ought to involve itself in the affairs of individuals in the private sector in the public interest, the Government does have some influence and engages in some economic management which it carries out by fiscal and monetary means.

In a consideration of the economic aspects of inflation, employment and economic growth, there is one clear fact which is that only by an increase in productivity can the national economy increase and only by increasing the size of the national cake will there be more to cut up. There seems to be some difficulty in grasping the concept of productivity. But it is only another way of saying that the labour and machines in our country must be worked and organised to produce more goods and services per head of population. Each can play one’s part in this. That is why it is so evil for members of the Labor Party and trade union officials to encourage men into a ‘class war’ level of thinking creating disruption, lower incomes and dissatisfaction on the part of people both with their work and the part it plays in thenlives.

Let us examine some of the statements made by the honourable member for Melbourne Ports. (Quorum formed.) I must say for the record that the honourable member for Sydney (Mr Cope) usually calls a quorum when he wishes to take up the time of a speaker. I thank him for the acknowledgment that I am having, at least on him, some effect. As I was saying, let us examine some of the statements made by the honourable member for Melbourne Ports, who is the financial spokesman for the Labor Party and its ‘shadow Treasurer’. The honourable member is, I believe, a sincere and dedicated Socialist. I shall refer to what that means more fully in a moment. But when speaking on the Treasurer’s statement last Thursday evening he certainly did not present an overall policy but went along commenting at random. Unlike the rest of us, he had more than half an hour in which to make a contribution, and I believe as chief spokesman he had a duty to do so. But a close examination of his speech shows that what he said was not helpful or constructive. After a careful look I could not find a positive proposal of substance.

The honourable member made some play about the term ‘economic mismanagement’. We must be careful to realise what this term means to a Socialist - nationalising industries right through the economy would be only the start. However, I shall return to that later. On page 277 of Hansard the honourable member said:

Candidly I am not one who believes that unemployment is deliberately created-

He referred at that point to the Government and I thank him for that. The honourable member went on: but I think unemployment has been created in Australia out of economic mismanagement. Until one removes that economic mismanagement, and looks at what the seeds of it are it is going to increase.

Having made those strong statements I would have expected a full explanation of this economic mismanagement and what was to be done about it. But there was nothing - nothing of the kind. The honourable member, who is the official spokesman on economic matters for the Australian Labor Party, changed the subject.

An important area of Socialist belief - price control policy - which eventually would be imposed on the leadership of the Labor Party, now has to be faced in an election year by the people of this country. Mr Hawke, the President of the Australian Council of Trade Unions, is fond of suggesting price control and making invalid comparisons with wages paid. He asserts that the earnings of trade union members are controlled by awards and that those of business are not. The plain truth is that employees’ wages are not controlled by awards but only minimums are set. That is the law, and that is the practice. Indeed, over-award payments are not only legal but are extremely common and frequently substantial.

Setting aside the constitutional difficulties which exist in our federation where States rightly claim areas of authority - though we all know that the Labor Party does not want the States to have any authority - one finds in these economic arguments a great tendency to brush aside constitutional problems, even by Labor Queen’s Counsel. Price control by coercion of governments has failed as a method of preventing price rises in peace and in war. Labor has always wanted price control, and however the matter may be glossed over in an election year, Labor would implement price control if it formed a government, because Labor governments have always resorted to it before long. Labor’s theoreticians believe in price control.

The practical results of price control are shortages, inefficiency and the discouragement of initiative and inventiveness. Price control results in controls and restrictions in every aspect of business, both small and big. It results in droves of inspectors, black markets and rackets, and then when the inflationary wage pressure effect is received the government has to agree to price rises. So in spite of all the paraphernalia and restrictions, the prices still go up. That is the practical experience of price control. It does not work. But a Labor government, based for its support squarely on the trade unions, sooner or later has to try price control. (Quorum formed.)

Mr Jess:

– There were 7 Opposition members and 40 Government supporters present in the chamber.

Mr GARLAND:

– I thank the honourable member for La Trobe for reminding me that there were 7 Opposition members and 40 Government supporters present in the chamber when attention was drawn to the state of the House.

Mr Whitlam:

- -Mr Deputy Speaker, if that were so it would have been out of order to call for a quorum and the honourable member doing so would have been discharged from the service of the House.

Mr DEPUTY SPEAKER (Mr Drury:
RYAN, QUEENSLAND

– I call the Minister for Supply.

Mr GARLAND:

– I want to place on the record the fact that the Opposition has now taken up21/2 minutes of the 15 minutes accorded to me. 1 suggest that that is rather overdoing it.

I want to say in review: It is clear that the Labor Party has no economic policy, but it does have a full socialistic plan, and a leading member of the Opposition, the honourable member for Lalor (Dr J. F. Cairns) - and I believe him to he a dedicated socialist - recently had incorporated in Hansard the economic plan which is to be found in the recently ratified ‘Platform and Principles of the Australian Labor Party’.

Mr DEPUTY SPEAKER:

– Order! The Minister’s time has expired.

Mr Foster:

– Mr Deputy Speaker, on a point of order……

Mr DEPUTY SPEAKER:

– Is the honourable member for Sturt raising a point of order?

Mr Foster:

– When honourable members on the Government side finish their chatter

I will make my point of order. The Minister for Supply (Mr Garland) alleged that the Opposition had wasted21/2 minutes of his speaking time. It is the Government’s responsibility to ensure that a quorum is present in the House, and we have the right to demand it, if we so wish.

Mr DEPUTY SPEAKER:

– Order! That is not a point of order.

Debate interrupted.

page 352

WANT OF CONFIDENCE MOTION

Mr McMAHON:
Prime Minister · Lowe · LP

– by leave - I wish to make one small addition to what I said in my speech today. I wish to make no reflection whatsoever about either of the Kibel brothers. I said:

I suppose it is understandable that he wants to do business; but I for long have been very disturbed about the way in which he has been carrying on his business.

I want to add after the words ‘carrying on his business’ the words ‘with me’ in order to make it abundantly clear that it is the business between the two of us and not his general business that I am speaking about.

page 352

ECONOMIC CONDITIONS AND POLICY

Ministerial Statement

Debate resumed.

Mr WHITLAM:
Leader of the Opposition · Werriwa

– Mr Deputy Speaker, in order to test the goodwill and intentions of the Minister for Supply (Mr Garland) I move:

The additional words are the same as those contained in a motion of which my colleague, the Leader of the Opposition in the Senate, (Senator Murphy), gave notice last Tuesday. It would be useful if I recalled the general features of parliamentary committees. Parliamentary committees are a microcosm of the Parliament. Every party represented in any House of the Parliament is represented on any committee of that House. Accordingly, at this stage my Parly would not have a majority of members on the committee which 1 have moved should be established. At this stage on ihe committee there would be a majority of members of the Liberal and Country Parties.

The great merit in having a committee of this nature is ‘hat the public would gel access to information which at present is denied it. Parliamentary committees have their own miniature public service, f know that some people, particularly in the Ministry, are vexed and irked by ihe activities of some of the parliamentary committees which already exist. 1 know that Government supporters have been told to vote against ihe establishment of more such committees, for instance the committee which we have proposed should be established to inquire into the overseas control of our natural resources.

Let me recall the work which has been achieved already by the Senate Select Committee on Securities and Exchange. In our country, by contrast with most other trading and industrial countries, there is no public body which supervises the money market. Accordingly, we set up a committee to inquire into it. By sheer identification, publicity and exposure, the practices of the Australian money market have been transformed and rectified. Australia’s reputation stands better overseas as a result of the work of this Committee, lt is an allparty Committee. The members of the Liberal and Country Parties who opposed the establishment of the Committee serve on it. Such a procedure is available to the Parliament forthwith. It can deal with these matters by this procedure this very week. Never again could it be said that the Parliament or the Government had no power to deal with the last price rise by the Broken Hill Pty Co. Ltd. It could not be said that for a third occasion in 2 years we would just have to wring our hands. The Minister for Supply, who has just spoken in this debate, is merely the latest of the Ministers to say that there is nothing we can do about prices in Australia. We can do something this very week, by setting up such a committee. Is anybody to say that the Senate Select Committee on Securities and Exchange has not been an effective body?

If I were to sp;ak in a narrow, partisan way I could recall what has been said about the necessity cf having a prices policy, no less th;.n an incomes policy, by the Minister for Social Services (Mr Wentworth), who interjected earlier. He has been put in his place, he has been slapped down by the Prime Minister (Mr McMahon) on this as on so many other matters. The Minister does not always speak, as his Leader claims, from the heart but not from the head. If 1 have to go further, let me quote the words of an elder statesman delivered on the first sitting day of this session, a week ago. The right honourable member for Higgins (Mr Gorton) said, in referring to rises in remuneration outdistancing rises in productivity: 1 have said that that rate of rise must be dim inished and must be reduced if we are to get at the root cause of inflation, and i have said that that can scarcely be accepted unless it is oho seen that endeavours are made to ensure that price rises of basic commodities must be justified before they occur.

I do not go into other features of the statement of the Treasurer (Mr Snedden) on the economy. I do not go into the fact that it contains so little on tariffs and nothing on migration or devaluation. On all these matters there are differences within the ranks of the Government. I am contenting myself with the subject of prices. There are differences within the Government on this subject. Not all Government Ministers, cx-Ministers or backbench members accept Ihe proposition that nothing can be done or should be clone on prices in Australia.

The Treasurer has said from time to time that the Commonwealth has no constitutional power over prices. He might have been speaking in the context of President Nixon’s reiterated prices and wages freeze, or of the freeze of wages and prices by Mr Marshall, New Zealand’s new Prime Minister. It may be true that we cannot do that in Australia straight away. There is no machinery for it. Nobody in fact is suggesting here, in the United States or New Zealand that such policies can long endure. A joint freeze of wages and prices has been tried, in the war period only and immediately afterwards. Nevertheless, this temporary freeze in the United States has broken the inflationary psychology and in New Zealand it may similarly break the inflationary psychology.

In that sense, of doing something suddenly and totally for a short term, there is no machinery available in Australia. Other methods are available to us in Australia. I have now moved for one. It was moved a week ago in the Senate and I am moving it in this House now. It is not ideal, but it has the advantage of being something that can be done immediately and effectively. The Securities and Exchange Committee is the model of what can be done in uncharted economic fields in this country. From it we will get, I expect, I hope and I undertake, a securities and exchange commission in Australia as has existed for nearly 40 years in the United States.

In Australia we should be working for a prices justification tribunal. Certainly a tribunal is better than a parliamentary committee. The procedures before tribunals are better understood. They provide for a company to have precise notice of a complaint and regular representation in rebutting it. There is no hope of this Government’s establishing such a tribunal. It must be conceded that when steps are taken to introduce such machinery it will inevitably be subject to challenge, and that the challenge will take some time to be determined. The Parliament, however, can take encouragement from the High Court’s decisions on the Trade Practices Tribunal. I have no greater confidence than is prudent in how the members of the High Court may approach matters of economic regulation or planning. Nevertheless in every cass on the Trade Practices Tribunal which has come before the High Court in the 6 or more years since the Barwick proposals were passed by the Parliament in a truncated form, the High Court has either upheld the Commonwealth’s powers or has indicated how valid legislation could be passed by this Parliament. Accordingly, on the basis of the Trade Practices Tribunal we can set out to establish a prices justification tribunal.

The great triumph from the Parliament’s point of view in the trade practices legislation was that the original proposal by Sir

Garfield Barwick as Attorney-General to require companies to disclose their trading agreements is the basis upon which we could, with reasonable confidence, set out to achieve in a reasonable number of years a prices justification tribunal before which companies could be required to justify their pricing policies. There is nothing novel in the suggestion that there should be a prices policy in Australia as much as an incomes policy in Australia. For too long we have tried in Australia to implement a wages and salaries policy without having an incomes policy. We do not have in Australia a prices policy. It is incredible that a fortnight ago the Treasurer and the Prime Minister could review the economy for the State Premiers and Treasurers and not refer to prices. The bulk of the statement made at the Premiers Conference was reproduced in the Treasurer’s statement last Thursday night. Again there was no reference to prices. The Government is tackling inflation with one hand held behind its back; it should use both hands.

The motion I have moved would achieve a structure which would have immediate relevance. It is stated within terms of the Constitution and of our statutes. There is no impediment to this Parliament setting up committees to inquire into the pricing policies of corporations in the terms in which they are referred to in the Constitution, namely, foreign corporations or trading or financial corporations formed within the limits of the Commonwealth. Furthermore, there is no impediment to the Parliament inquiring into the pricing policies of corporations which enjoy advantages under Commonwealth tariff, revenue, subsidy or other laws. Finally, there is no impediment to the Parliament inquiring into the pricing policies of corporations which have contracts with the Commonwealth. Before the present Treasurer assumed that office he was Minister for Labour and National Service. On 8th October 1970 in an address to the Committee for the Economic Development of Australia he spoke in suppport of more competitiveness in the Australian economy: 1 have also argued that there are means available (the Trade Practices Act, the Tariff Board, moral suasions etc.) to sharpen competitive pressures in our economy.

Again, on 1st March last year, still as Minister for Labour and National Service, he told the Victorian Branch of the Economic Society of Australia and New Zealand:

Price control, whether applied across-the-board, or in selective areas, is not the way to counter restraints on competition. But I believe there is an important role to be played by consumer protection bodies and by the forces of public opinion, provided they can be mobilised effectively. In this last regard, consideration may need to be given to the value of establishing a body whose function would be simply to record and publicise price increases.

He did not go far enough but at least he was setting out on the track which, as Attorney-General, he followed at last to the Trade Practices Tribunal. If we set up a committee now we could educate the public, educate the Parliament and prepare for the next government to bring in a prices justification tribunal modelled on the Trade Practices Tribunal.

Mr DEPUTY SPEAKER (Mr Drury:

Order! The honourable member’s time has expired. Is the amendment seconded?

Mr Uren:

– I second the amendment and reserve my right to speak.

Mr Malcolm Fraser:
Minister for Education and Science · WANNON, VICTORIA · LP

– It is well understandable that the Leader of the Opposition (Mr Whitlam) should move a motion of this kind because we know that he has advocated a policy of prices justification although the official policy of his Party is one not only of prices justification but also of prices control. There have been reports of some difference of opinion between the Leader of the Opposition and his Party. Therefore, he no doubt looks upon this as a device which will cover up the quite bitter divisions which have occurred over his attempt to get away from his Party’s traditional support for prices control. A short while ago the Treasurer (Mr Snedden) in a major speech gave a masterly description of the Australian economy and the measures that the Government has undertaken in recent times to pursue balanced growth and development within the economy. I do not want to canvass the matters that were raised by the Treasurer in detail because his speech was a masterly exposition. But it has become apparent that under successive Liberal-Country Party governments Australia has experienced a period of full employment quite unparalleled in our history and quite unparalleled in the history of many countries.

When we compare the circumstances that we now face, and in which we recognise that there is a problem and a need for action, with the unemployment rates in other countries - for example, in the United States of America it is 5.9 per cent, in Great Britain 5.8 per cent and in Canada 6.2 per cent - Australia’s performance is unequalled by the great majority of advanced and developed countries. The same can be said over a long period of the Government’s efforts to contain inflation. The Treasurer admitted that this problem was giving concern and that it was a most important problem. He conceded that the current rate of inflation in Australia is greater than it is in some other advanced countries. But over a long period Australia’s efforts in this regard are better than those of most other countries. It should be noted that during the currency crisis last year, which resulted in a major realignment of currency values, there was minimal disturbance within Australia. This is one of the results of an underlying and basic strength in the Australian economy. Had this sort of crisis happened in the Australian economy 15 or 20 years ago the* impact on Australia would have been very much greater. The fact that the impact: within Australia was minimal again indicates the wisdom of the Government’s economic management. The flexible approach that the Government had adopted to the totality of our problems has been evidence in the recent Premiers Conference, the results of which were applauded not only by Liberal-Country Party Premiers but also by Labor Party Premiers. That surely indicates some strength in what we are doing.

When we talk about economic policy we are entitled at the same time to ermine the policies of the Opposition because they are the policies that would be pursued if it was the government. We are entitled ‘o examine them to get some indication of their consequences and to compare them with the results this Government has already achieved. I have already mentioned that the Leader of the Opposition has a policy of prices justification. The policy of the Australian Labor Party is prices control. The Leader of the Opposition seeks to overcome this conflict with this amendment he has moved. Whether it gets the Opposition off that particular hook is probably a matter that the honourable member for Lalor (Dr J. F. Cairns) and others will help resolve. The Australian Labor Party has a policy of a 35-hour week - a 35-hour week when there are immense tasks facing Australia; immense tasks to be undertaken in order to build a bigger, better and greater Australia that we all want to achieve! In whatever walk of life, how many people believe that they can acquire the standard of living they want with a 35- hour working week? How many people believe we can build a better Australia with a 35-hour week? The Treasurer has indicated that the increased costs to the total Australian community resulting from a 35-hour week would be $2,600m a year. For the rural community it would add 13c to the cost of producing a bushel of wheat. It would reduce the net income of woolgrowers by 40 per cent and that of dairy farmers by 37 per cent. But this again is official Australian Labor Party policy. It is not inappropriate here, because of the impact a 35-hour week would have on rural industry, to quote the remarks of the Opposition’s leading spokesman on rural affairs who is perhaps the only person in the Australian Labor Party with any knowledge of them. Being the only person he is, of course, excluded from policy decision making on rural matters as was the case at the Launceston conference. On This Day Tonight’ after the decisions were made at that conference he was asked:

On a broader note at the conference, the Australian Labor Party, now seems to want to wipe out rural subsidies altogether accepting Mr Hayden’s theories. Now, do you go along with this?

The honourable member replied:

Look, I find this a very dangerous statement, and Mr Hayden has made this statement many times in the caucus, that is, he seems to be a free trader and certainly his remarks that have been published in inverted commas ‘We cannot just keep on pouring subsidies out willy nilly like a madman in charge of a counterfeit press whether they go to Primary industries or Secondary industry.’ And incorporating those words in an amendment which was passed means it’s a very dangerous thing, because if this is followed by the Caucus as it should be it means we will have to vote against the wheat stabilisation Bill, dairy, industry, the various wool commitments, the Australian Wool Commission. All of these are subsidised industries that cannot stand on their feet under this criteria. More dangerously Graham, if this criteria is paid to secondary industry which is a tariff, it means the abolition virtually of all secondary industries in Australia.

That is what Dr Patterson said in that interview about the most recent official Labor Party rural policy. This, of course, is a signficant economic policy and what the Australian Labor Party spokesman on rural affairs was saying basically was that these policies will wipe out rural industries in Australia. (Quorum formed)

The Australian Labor Party has advocated a policy of price control. I think it needs to be pointed out ‘that a policy of price control establishes a maximum price whilst the arbitration system and the wage tribunals we have in Australia establish minimum wages which are often exceeded. In many cases these tribunals obviously take into account price levels. This indicates that there is a basic conflict in the Opposition’s 2 proposals. It would like a system in which arbitration courts establish minimum wages and other bodies establish maximum prices. I suggest that no economy could be operated on that basis.

I would like to say something about the industrial policy of the Leader of the Opposition, because this again has great economic impact. We well remember that when he and the Opposition’s industrial spokesman announced their Party’s industrial policy - whether or not it was a wise policy is another matter - part of which involved a $20 a day fine, it was announced in the Press on Monday and by Wednesday it had been reversed. The Leader of the Opposition had been dumped by his own Caucus because left wing militant unionists had got on to a large number of Caucus members and required them to reverse the decision. This makes a sham of the alleged changes in the organisation of the Australian Labor Party over a number of years because it indicates quite clearly that when the unions want to crack the whip in relation to these matters the Caucus members will respond. The Leader of the Opposition has indicated plainly that he will respond when this kind of pressure is applied.

If this can be done on matters of economic policy it can clearly be done on matters of foreign policy, defence policy or any other kind of policy on which the militant unionists might like to establish their own views. Some of the statements made by the Leader of the Opposition during the recent strike of State Electricity Commission workers in Victoria were quite revealing. The Leader ofthe Opposition tried to claim that the Government has declared war on the workers of Australia. These are almost precisely his words. This is an entirely emotional appeal going back to the class wars of last century. I believe that the great majority of workers of Australia will not pay much heed to it, because they know that for many years under Liberal and Country Party Governments they have prospered in a way they never did before.

This sort of cry by the Leader of the Opposition, that the Government is declaring war on the workers of Australia, is similar to the statement that he made a short while ago. indicating that dodging the draft or evading a certain law is not a crime. It is similar to the appeal he made some time ago when he issued a statement late one night from his own office in which he said that he would recommend to individual national service conscripts a course of action which would result in mutiny if more than one or a small number of them followed his advice. So here we have a Leader of the Opposition actively inciting people to break laws and actively suggesting that people should break laws which they happen not to like. It just so happens that there are certain people breaking these laws which are laws that the Leader of the Opposition also does not like, hut there are democratic processes in this country for changing the law. The Leader of the Opposition is embarking on extraordinarily dangerous ground when he takes a course which suggests that an individual for himself or an individual with the advice of a Leader of the Opposition may judge which law is valid and which is not, which he is entitled to uphold and which he may freely break.If a Leader of the Opposition who aspires to be the Prime Minister takes that view, how can he make the judgment that any law should be upheld? The whole basis of our society is dependent upon the upholding of the laws.

Mr Uren:

– What has this got to do with the economic policy?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– It has a great deal to do with economic policy.

Mr Foster:

– Mr Deputy Speaker, I rise to order. My point of order is that it is one matter for the man who last year was guilty of overthrowing a Prime Minister to talk of an individual outlook, but what relevance has his remarks to the debate?

Mr DEPUTY SPEAKER (Mr Drury)Order! The honourable member will resume his seat.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– This has a great deal to do with economic and industrial policy. The only objective ofsuch statements by the Leader of the Opposition can be to destroy industrial discipline and to destroy adherence to the law. Once we have this sort of thing moving throughthe framework and the fabric of society we have a situation in which the whole society will not advance as it ought to. The Leader of the Opposition knows full well that this year his Party would be advantaged by significant unemployment. Therefore, if he can promote by these means industrial indiscipline, by the use of the emotive phrase ‘declaring war on the workers’, and if he can persuade other people to break the law or says that it is no offence to break the law, he will establish the circumstance in Australia in which defiance of the law will become more and more widely accepted. He knows full well that if these policies can spread further there will be greater industrial indiscipline.

Mr Foster:

– Another point of order, Mr Deputy Speaker. Is the Minister who is now on his feet not giving a type of speech that I understand he may give in his Party room tonight?

Mr DEPUTY SPEAKER (Mr Drury)Order! That is not a point of order. The honourable member will resume his seat.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– Honourahle members opposite know full well that if this policy of the Leader of the Opposition can succeed, the sort of thing that happened in the SEC dispute, when 200,000 people were put out of work because of the dispute, will occur again and his fortunes will be advantaged.

Mr DEPUTY SPEAKER (Mr Drury)Order! The Minister’s time has expired.

DrJ. F. CAIRNS (Lalor) (5.17)- The Minister for Education and Science (Mr Malcolm Fraser) knows as well as we all know that a long, protracted strike harms only the Australian Labor Party politically and it benefits the party to which he belongs.

He knows, and supporters of the Government know if they have any common sense at all, that it is not in the interests of the Labor Party to have a long, protracted strike; that this reacts politically against the Labor Party. They know that, if they know anything. The Minister, by ending his speech on a point like that, showed the superficial nature of everything he has said this evening. He came in here pretending to make - we hoped that he would make - a substantial contribution to the debate upon a statement on economic policy and he left us with a peroration of that kind. Such a speech does not deserve attention at all.

The other evening the Treasurer (Mr Snedden) made a statement on the state of the economy. He referred to the Budget policy announced by his Government and to the consequences of that policy. I think what is called for in this House is an examination of the assumption that the Government adopted at the time of the Budget, what has happened since and the changes of policy by the Government that have taken place, so that the House and everyone concerned can evaluate these things. The remarks made by the Minister for Education and Science, who is just leaving the chamber as most Ministers do after they have made speeches here, have been of no advantage to us. He spoke, amongst other things, of 2 points. He quoted a difference that he claimed exists between the amendment moved by the Leader of the Opposition (Mr Whitlam) and the Labor Party’s policy on prices. The Opposition has moved an amendment so that, while it is still an opposition, something can bc done about prices. The amendment states that a select committee should be established to inquire into the determination of prices which affect the structure of costs in the Australian economy. This is all the Opposition can do at the moment. If it can succeed in having a committee appointed to inquire into prices, that is all such a motion and an opposition in the position which it is in at the moment can achieve. Of course, we have an economic policy in relation to prices. But that is not something which we can put into operation right now. We can put that into operation only when we become a government.

Another point made by the Minister for Education and Science which does not bear examination was his reference to a 35-hour working week. The objective of the Australian Council of Trade Unions in relation to the 35-hour working week necessarily will take a long time to achieve. It will be introduced in stages. Certain sections of the labour force will obtain a 35- hour working week ahead of other sections. They have done so already. This will not be introduced overnight. It is totally false and misleading for Government supporters to claim a cost for the introduction of a 35-hour working week as though it was to be introduced in 24 hours. The policy clearly stated by the ACTU is that it will take a considerable time to introduce a 35-hour week. Let me return to the examination of the Treasurer’s economic statement in the way I think it ought to be examined. The Treasurer made a statement when he introduced the Budget last year. He gave us a diagnosis of the economy at that time which was an exceedingly complex diagnosis. I refer the House to it. At page 2 of his Budget speech he said:

The factors which have caused these increases-

That is, increases that were inflationary - 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.

I remind the. House of the position the Treasurer took when he introduced his Budget. He said: lt is probably more helpful to think of an inter-acting set of conditions than to look for a single dominating cause.

The Treasurer has materially changed his position since then. Now he looks for a single dominating cause. He says that that single dominating cause is the increase in wages. It is very significant that the Treasurer has so fundamentally changed his position between the time, he introduced the Budget last August and today. I think we have to ask ourselves: Why has the Treasurer changed his position? I think the Treasurer has changed his position because now the Government is getting ready its election campaign. It will campaign in the election against the trade unions and against wage increases. It expects that in the course of doing this there will be a certain amount of industrial trouble. Those in the Press gallery and everybody else talk about that. They say that this is one of the main ways in which the Government is preparing for the election and I think the Treasurer has changed his position in accordance with that. What the Treasurer is putting forward now in his economic statement is not an economic policy; it is an election policy.

Let us look at some of the results of this election policy and what it does. The policy is, approximately 12 months before the election, to impose credit restrictions and to restrict expenditure as far as possible so that what the Government identifies as inflationary factors will be deleted from the economy. Then, 6 months before the election, the Government is able to release bank credit, increase expenditure and to provide a budget immediately before the election containing many handouts. By this means, it hopes that it will improve its currently very low prospects of winning an election. I say that this is an election policy and not an economic policy. It is in the political interests of the Government, so the Government believes, to have industrial disputes and industrial trouble, to blame the wage earners, unions and workers for inflation and campaign for an election under more favourable circumstances in order to have the best prospects of winning.

I do not say that the Government is fully aware of all the consequences. But a government comprised of political parties such as the Liberal and Country Parties which carry on electioneering and campaigning in this way and which put into operation an economic policy of this kind must be held to know the consequences of that policy. What are the consequences of that policy? In order to deal with inflation there have been credit restrictions and reductions of expenditure. This has affected the economy as a whole and unemployment has practically doubled as a result of this. The latest figures showed that 89,659 people are out of work. That is one of the consequences of this kind of economic election policy about which I am talking. Those 89,659 people are out of work. That is almost double the number who were out of work before the policy was put into operation. Whether the Government realises the significance of that move makes no real difference. Those are the consequences of what it has done in order to bring about stability in the economy and to give itself a better prospect of winning the next election.

What does this involve? It involves poverty standards for the great majority of those 89,659 people, many of them young. It means that by one blow from this kind of economic policy, many people have lost any opportunity they had of making economic and social progress, lt means that many thousands of them have been living of $10 or less a head of income. The Government is concerned, as it so often is, with cost of industrial disputes. We are told that 2,400,000 man days were lost last year - a big increase and, they say, a fantastic loss of production. But the 89,659 people who are out of work only have to be out of work for 5 weeks for the cost to exceed all the costs of the industrial disputes that have taken place in a year. The Government is very concerned about the costs of industrial disputes and days lost, but it does not seem to be much concerned about the cost of unemployment to the unemployed or in terms of days lost as the result of a policy which doubles the unemployment figure in the space of 12 months.

The Government claims some gains. In his speech the other night the Treasurer made the statement that 24 of 33 items of output had increased in December 1971 compared with December 1970. What would he find if he made the comparison with the figures for December 1969 or December 1968? Certainly, there is an increase on the period which was a period of setback, a setback which had l-cen brought about very largely by his po i.y. Taking that year of the setback brought about very largely by what he has done, he says that there has been an increase since then. He causes the setback and then claims credit for the increase that follows it. Figures were cited in the House ihe other night by the honourable member for Melbourne Ports (Mr Crean) showing precisely what had happened in relation to housing commencements. The Treasurer was able to refer to figures such as the December 1971 figure for housing commencements which was 71,620. The figure for December 1970 was 68,915. He takes credit for this increase. He said that this shows a satisfactory situation but if we compare the December 1971 figure of 71,620 with the December 1969 figure of 75.144 we see how shallow that claim really is. Unless we do more than simply cause these fluctuations in the economy and follow a policy of stop and go, we cannot ever come to the causes of the situation about which the Government is really complaining.

I ask honourable members to look at the housing figures I have just quoted and compare them to the rates of increase of non-home building, the commercial building in city areas, which have not been set back, and to relate that to the complaints about concentration in the cities, to urbanisation and to the desires of people for decentralisation. What are the causes of these things? These causes lie in the existence of economic and financial power where it is. The intense concentration of concrete towers in central city areas occurs not because it is economic, efficient or convenient. It occurs because the people who pay for these intense concentrations of buildings - the banks, insurance companies and giant industrial and commercial corporations - have so much power over the flow of money that they can direct it where they have put it so far. Hence their main purpose in building is to enhance the value of what they already own. Economy, efficiency and convenience for the public would result from decentralisation and would result in something different from these intense urban concentrations. But if this is to be achieved the power of the giants to control the flow of money in their own interests must be modified. Unless a decentralisation policy has this as its central feature it would merely be another Canute speaking to the waves of the ocean. That is where the Australian Labor Party differs from the Government.

We said we want to bring economic policy up to date in this nation. We point out that economic policy cannot simply be achieved by measures like monetary measures or fiscal policy. Economic policy has to be something different from that. It has to be much more than that. The market economy is not a process which arranges things perfectly according to efficiency. We have to use the institutions that are already immature and undeveloped in Australia, like the Tariff Board, so that we will know more about what is involved in the necessary and desirable distribution of resources in the country. We have to be able to build up the kind of institutions which are necessary to exercise some control and influence over the flow of resources in the public interest. This is a situation and a challenge that has faced the people and the governments of Australia for 25 years. For 21 years we have had governments in office in this country which have refused and which have failed to face this. Now we need a government in office which will take up the development of public policy in these directions and achieve for Australia, as a Labor Government can achieve for Australia, what is needed in this field to correspond with what Labor in fact achieved 30 years ago in the development of the welfare State. Australia needs the job to be done now in the public control of resources and their use that we achieved in social welfare 30 years ago.

Mr DEPUTY SPEAKER (Mr Corbett:
MARANOA, QUEENSLAND

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

Mr BARNES:
Mcpherson

– The honourable member for Lalor (Dr J. F. Cairns) must have his tongue in his cheek when he speaks of some of the policies that a Labor Government would introduce. We all remember - at least those who are in my age group do - when Labor was last in power what happened in regard to the development of our resources. What on earth did it do? There was no development of resources in Australia. There was control over everything. You could not build a house; you could not even buy a suit of clothes and you could not buy petrol. That was Labor’s control of resources. This is perfectly true. People have forgotten about this. Labor had price control and what happened? You could not buy anything that was price controlled. You had to get it on the black market. The black market was rife. Labor wants to go back to this as a new generation. It has never given up on these socialist attitudes.

Intelligent men learn from experience of socialism what a frightful failure it is. I read in the report of the Institute of Directors in London what Lee Kuan Yew,

Prime Minister of Singapore, said about the tremendous development of Singapore through private enterprise. That country had practically nothing and for a while it seemed to be going under communist control, but this brilliant leader brought about a tremendous rise in prosperity for the people of Singapore and in their standard of living: it is a miraculous situation. After his address to the Institute the Prime Minister of Singapore was asked: ‘How does all this private enterprise advancement in Singapore conform with your previous attitude to socialism? You advocated socialism in your day.’ In his reply, he referred to this great advance that had been made with free enterprise and be said:

But, of course, this is not in accordance with the doctrine which I was taught when I was a socialist in my younger days, but alas, we all have to revise and upgrade our thinking.

Here is a man who can learn - Lee Kuan Yew, the Prime Minister of Singapore.

We have to go through this sort of thing again. The honourable member for Lalor mentioned the large urban growth, t agree with him I deplore this. He said that Labor will stop this. But in Sydney and in Brisbane this great growth has occurred under Labor councils. The councils have had the means to stop this growth but they have encouraged it. When I was a boy a very long time ago in Sydney they had a limit on the height to which you could build an edifice. They bad a limit on the height to which you could build in London. This was a wise provision. I think it was about 6 or 7 storeys. But due to pressures the restriction was removed and the sky is the limit. Look at the hopeless mess we are in. This has been encouraged by Labor controlled councils. Labor controlled councils were not the end of it but I cannot see what a Labor Government would do in the matter. But that is getting away from the purpose of this motion.

Mr Foster:

– When have you gone into court to end an industrial dispute-

Mr BARNES:

– We will listen to you when you get up, so you listen to me for a change.

Mr DEPUTY SPEAKER (Mr Corbett:

– Order! The last speaker had the benefit of being heard in silence and 1 would ask that the honourable member for Mcpher son be given the same courtesy. If an honourable member does nol want to hear him he should leave the chamber.

Mr BARNES:

– 1 commend the Treasurer (Mr Snedden) on his Budget strategy. He bad an obligation to control inflation. We have come a tremendous way in the 23 years that the Government Parties have been in power in Australia. Australia has never known such vast expansion and vast prosperity. Unfortunately, it has become a way of life. It has been accepted as the natural consequence of Australia’s being, but there are forces coming info the picture which are damaging the situation. In fact our vast expansion has brought these great problems. I refer to our vast expansion in national resources and the development of these resources which has been remarkable and which could have happend only in a private enterprise economy. But this expansion has been so rapid that demand for goods and services has brought about an inflationary situation and we have to put a curb on the money supply and so on. The honourable member for Lalor said that we must get away from this stop-go policy. This is possible only in a socialist economy. In a place like Russia where they are in a devil of a mess the whole time, that is all right, lt is all stop over there. But we have this situation in Australia, a country recognised throughout the world as a country of substance and a great place in which to invest money. Of course this has meant a flow of vast capital in Australia but it has also meant a flow of know-how to Australia in the development of our resources. This great company. Broken Hill Pty Co. Ltd, which has been abused by members of the Opposition and by our Press, has done so much for Australia. What happens if companies such as BHP, which have a responsibility to tens of thousands of shareholders-

Mr O’Keefe:

– One hundred and eighty thousand.

Mr BARNES:

– It has a responsibility to 180,000 shareholders, the honourable member for Paterson informs me. Has not a company some obligation to a shareholder if the company is a national company? ff it has been taken over by a socialist government obviously it will work according to the policy of that socialist government, and then its advancement ceases. But this company has a magnificent r-cord. lt has developed our steel industry, our shipbuilding and our mining, and it has done so from its own resources. It has never dragged in partners from overseas except when it brought Esso into the oil operation in Bass strait, obviously because it needed Esso’s know-how. Through the efforts of these 2 companies Australia, which at one time imported 90 per cent of its crude oil requirements, now meets 60 per cent of its requirements. This is a wonderful achievement.

When I was the Minister responsible for the Northern Territory I had experience of BHP when it undertook a magnificent operation to develop mineral resources on Groote Eylandt. BHP came to an agreement with the mission there. Finding that there were manganese deposits in the area, the mission was bright enough to take out a licence to control the mineral rights. The Broken Hill Pty Co. Ltd negotiated with the mission, and now Groote Eylandt is one of the most prosperous Aboriginal communities to be found anywhere. BHP has done a magnificent job in this area. But let us look at the mess that has occurred elsewhere.

Mr Martin:

– Do you think that BHP should have a complete monopoly.

Mr BARNES:

– It depends. The honourable member speaks of a monopoly with its adverse connotations. Does he not think that there is such a thing as a benign monopoly? This is one. Undoubtedly BHP has a monopoly in steel, but look at the price and quality of its steel, lt exports all round the world.

Dr Klugman:

– We import steel.

Mr BARNES:

– We import small quantities of some classes of steel. It would not pay Broken Hill to produce these classes of steel because the requirements for them are so small. It has no tariff protection except in some small areas. This company is a going concern. It is a great Australian company abused by the Opposition and, unfortunately, abused by our Press. One should not, of course, take notice of the Press. I did not take any when I was Minister for External Territories. The Treasurer is to be complimented on his Budget strategy. It is working, and I admire him for the way he is sticking out. Pressures are being placed on the Treasurer also to release funds and to put the foot on the accelerator and let us go again. We cannot do this. We will face disaster if we do. I am very concerned at industrial lawlessness in Australia. (Quorum formed). As I was saying, 1 congratulate the Treasurer on his Budget strategy. He had to meet the threat of inflation, but pressure is now being brought to bear on him to relieve the situation and again to stimulate the economy, which I believe could be quite disastrous.

Inflation is brought about by 2 factors. Unfortunately in the business world there are people who give way to wage demands for the sake of peace. After all, they do not have to pay the extra amounts; it is the community that pays. A large section of business today has adopted the peace at any price attitude. Unfortunately in the business world - 1 have had experience of this - people do not look at the long term; they look at the next profit and loss account. They do not look far enough ahead. This can be disastrous for us. This is one of the problems in price inflation. The other factor is industrial lawlessness. Our coal mining operations in Queensland have been threatened by strikes that will hold up development. This is a new industry and a new development. The history of new development everywhere is that when that development is permitted to go ahead job opportunities are created for thousands of people. This development is being held back. We have had disputes not only between employers and with employees but also inter-union disputes.

We have experienced this situation in the motor industry, where we have had no end of strikes. Now people are squealing because a few men are being put off. If there had been hard work and fair work they could rightly squeal. We have an arbitration set-up to hear all disputes. Industrial disputes stultify development, job opportunities and so on. Because of them our great Australian shipping industry has been really wiped. Most of our goods now are carried by railways and motor transport. Look at the frightful problems that have been caused in Tasmania by shipping disputes involving men in the ‘Trader’ class vessels that go to Tasmania. They are usually inter-union disputes, too. These all affect employment.

Mr Foster:

– Do you agree that unions should amalgamate?

Mr BARNES:

– I do not. The only way to meet the shipping problem in a country which has a coastline of 12,000 miles is to open up the coastal trade to vessels flying foreign flags.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– When I prepared my notes for this speech I did not intend to talk about industrial relations because it did not occur to me that the Minister for Education and Science (Mr Malcolm Fraser), who preceded me in the debate, would refer to the subject. I did not know that the honourable member for Mcpherson (Mr Barnes) would do so. I will commence with some of the comments he made. He complained about inter-union disputes, but the very thing that will prevent inter-union disputes, and in some industries perhaps the only thing that will prevent inter-union disputes, is the amalgamation of unions so that there will be no need for unions to argue over which person does what job. Every member of the union will be available to do any job, and the employer in the industry concerned will not be plagued with demarcation disputes. 1 understand that this issue will be placed before the Liberal and Country Parties at their special meeting tonight. This is the very thing that certain members of the Country Party are opposing in the hope that they will get the second preferences of the Democratic Labor Party. They would prevent this worthwhile, sensible reform within the trade union movement. The Minister for Education and Science complained about employers who give way to wage demands and said that their giving way causes wages to go up. But has it ever occurred to him that this same problem faces people who need food, clothing and the other necessities of life? They either pay the price demanded by the people whom the Minister represents or they go without.

Now 1 want to refer to a statement made by the Minister for Education and Science about the difference between pegging prices, fixing the maximum price of things that people have to sell, and having the Commonwealth Conciliation and Arbitration Commission fixing only minimum prices for labour. Let me tell the Minister for Education and Science that it was that very thing which the Australian Labor Party set out to deal with when it put for ward as its policy the concept of industrial agreements. The idea of an industrial agreement is that the rate fixed by the agreement not only is the minimum rate but it also automatically becomes the maximum rate. In other words, it is the rate which the employer knows will apply in his industry for the duration of that agreement and that is why he will pay more to get a maximum rate, which becomes the rate for a given period, rather than worry about a minimum rate which may cause an industrial dispute at the drop of a hat - to use another Minister’s term - whenever the unions concerned feel that the time is opportune.

What is the cause of wage demands? I invite honourable members to think over this question. Why do people demand higher wages? Why is it that people on $46.40 a week, which is the national minimum rate, and people on $65 a week, which is what 64 per cent of the entire work force is receiving, say that $65 a week is not enough? Can any Minister produce a budget which would enable a worker or any person the Minister knows who has the right to expect the normal decencies of life to live on $70 a week and pay for house rent, food, clothing, hospital expenses, fares and the other necessaries of life? If he cannot show how a person can live on $70 a week and pay rent and the other things that 1 have enumerated, his government has no right to send counsel to the Commonwealth Conciliation and Arbitration Commission to oppose the unions’ claim for precisely that figure. The Government has no right to expect people to live on a miserable $46.40 a week, which is the present national minimum rate, lt has no right to expect hundreds of thousands of people to live on less than $50 a week - and more people live on less than $50 a week than honourable members imagine. I will take any honourable member into the Library and show him scores of awards and agreements which prescribe rates of less than $50 a week. A person cannot live properly on this amount.

No government is acting in the public interest when it pretends that $50 a week is an adequate rate, and that is what this Government is doing, all in the name of public interest. It has counsel appearing before the Arbitration Commission, presumably in the public interest. Do not forget that 64 per cent of the public receive $65 a week and they are people who cannot live on the wage that they are now receiving. They cannot live on the wage that the Government is telling the Arbitration Commission they ought to be living on. It is a misuse of governmental power and of the words ‘public interest’ for the Government, in the name of public interest, to have the hide to send counsel before the Arbitration Commission to oppose an increase in rates to bring the national minimum rate up to $70 a week. Does the Parliament not know that although the average weekly earning is now $91 a week, more than 64 per cent of the public receive less than that average, while only 36 per cent receive more? Do honourable members realise that of the 64 per cent who receive less than the average weekly earnings 22 per cent have 2 jobs and are working as much as 60 hours a week and still receive less than the average weekly wage?

Mr Jacobi:

– The poverty line is $50 a week.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– As the honourable member for Hawker said, the poverty line is more than $50 a week, yet this Government has the hide to talk about public interest.

Let me return to the question of industrial agreements. When I announced that the policy of the Labor Party was in favour of industrial agreements with over i award payments which would fix maximum as well as minimum rates to be observed by both parties for the duration of the agreement, the Government spokesman immediately announced that the Government would have nothing to do with it. Why was this? It was not because it would not work because, in figures which have just been released in an answer to a question I put on the notice paper and for which I waited months to receive a reply, it can be discovered that there are 151 industrial agreements registered in the court and there have been only 14 prosecutions over the last 10 years for breaches of those industrial agreements. Do not tell me that unions will not honour industrial agreements. Do not tell me that when the unions make an industrial agreement they will not honour it. because the plain fact of the matter is that t’_e un ons do honour the agreements. No union secretary 1 know of has ever said that a union has the right to make an industrial agreement for over award payments and then repudiate that agreement at will. It is true that sometimes agreements are repudiated at the factory floor level, but that is because in those cases the agreements were made without the ratification of the people at the factory floor level. That is why the Labor Party’s policy on industrial agreements envisages the concept of ratification of the agreement at the factory floor level after it has been recommended to the factory floor by the executive of the union, and not until it is ratified at that level shall the agreement be signed, nor can it be ‘ ‘cred till then.

The Australian Council of Trade Unions has recognised the need to honour industrial agreements. It has said in clear and unequivocal terms that any union that makes an agreement under the auspices of the ACTU will be expected to carry it out and the ACTU will use the full moral sanctions of the entire trade union movement against any union official who seeks to break or repudiate an agreement made under the auspices of the ACTU. That is a far more effective sanction than anything that can be written into any Act of Parliament, and it leaves only one way in which the agreements can be repudiated and that is if, at the level of the factory floor, the men themselves decide to repudiate the agreement in defiance of the ACTU and of the union secretaries who signed the agreement. When thai is done - when they act in defiance of an agreement which they themselves have ratified, there is nothing wrong with the union writing into the agreement penalties for repudiation of it. That is the attitude 1hat the Labor Party took at its Federal Executive meeting in Townsville. Unions already have agreements with penalties written into them. Neither the Australian Labor Party nor the ACTU can prevent that from being done. It is true that the ACTU can prevent penalties from being written into agreements made under its auspices but it cannot, and neither can any government prevent a union from writing in penalties provided that it has the sanction of its members to do so.

I should like to remind honourable members opposite, who talk about inflation, and the Treasurer (Mr Snedden), who stated that inflation is caused by wage increases, of an economic fact that cannot be controverted. Wage increases are the reflection of inflation that already has been brought about. They do not come before inflation; they come after inflation, and unless the workers receive an increase in wages once inflation is rampant, their living standards must go down. The Minister for Education and Science talked about public interest and said that the Government would intervene and oppose the 9 per cent flow on to the Third Division of the Commonwealth Public Service. I remind the Minister that some of the people in the Third Division of the Commonwealth Public Service now receive only $68 a week and they cannot live on this wage. This Government has no right to tell people living on $68 a week that they have no entitlement to a flow-on, because how ca 0 people live on this wage? If the Government cannot show how people can live on it it has no right to tell Third Division officers receiving a miserable $68 a week that they should not receive a flow on. This Government does not mind pushing up the salaries of the tall poppies, lt does not mind pushing up the salaries of those who have incomes of the order of $400 a week. They get their increases. There was no question of wage restraint in that instance. But as soon as the bottom rung of the Third Division asks for a 9 per cent increase on a miserable $68 a week the Government calls out for wage restraint. Is it any wonder that people - particularly the 64 per cent of the work force or 3 million employees in Australia - have ‘had’ this Government and are determined that they will throw it out?

We now know what the Treasurer meant when on 21st February this year he said: We have achieved what we set out to do in that we have created an environment in which over-award payments are depressed’. That is a statement he will live to regret. For once he was being frank enough to tell the world what the Government’s real economic policy is. The Government’s economic policy is to create a big enough pool of unemployment to discipline the workers and to intimidate those who are trying to get a decent wage or enough on which merely to live.

The rate of employment is now being reduced at a speed which, if it continues for another year, will see the employment position in Australia static because instead of increasing at the rate of 171,000 per year, as was the case up to November 1970, the year ended 30th November 1971 saw an increase of only 90,000. If that decline continues, by November of this year the employment position will have reached a static condition and every one of the 203,000 school leavers and the 77,000 migrants who seek to enter the work force after that time will not add to the work force but aggravate the unemployment situation.

The Leader of the Opposition was understating the position when he said that if the present trends continue the number of unemployed could increase by 50,000. I hope the present trends do not continue because every unit of statistics represents a human being. Many units represent men who have kids to feed and wives to keep. To talk about statistics in terms of unemployment as though one is talking about units of cheese or plastic is to show a complete and utter disregard for the position of human beings. I say that if the present trend continues the situation could easily be reached where unemployment will increase at the rate of 190,000 persons a year. Once the downturn gets fully under way that increase in unemployment will grow worse.

Mr DEPUTY SPEAKER (Mr Corbett:

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

Sitting suspended from 6.3 to 8 p.m.

Mr HUGHES:
Berowra

- Mr Speaker, this is a debate about the economy. This is an election year. The conjunction of those 2 events unfortunately tends to mean that the debate will not be conducted - as perhaps it has not been conducted - with that degree of objectivity that the circumstances in which we presently find ourselves demand. Speaking, as I do, with some of the objectivity that my pending detachment from politics may hopefully bring, I should like to offer some thoughts which may not be entirely orthodox, but at the same time I hope will not be too entirely heterodox for my Party to stomach. There is in the community, I believe, at the present time a strong sentiment, to which I for my part subscribe with firm conviction, that it just is not correct to place all or nearly all of the blame for cost-push inflation on the activities of the trade union movement under the leadership of Mr Hawke. I just cannot go along with this. I may be wrong. I will probably be regarded as wrong by many who sit on these benches with me, but if I am wrong I am wrong wilh firm conviction. 1 do not think that an increasingly sophisticated intelligent electorate should be treated in this day and age in rather the same way as young children are reputed to have been treated by their nannies in England during the Napoleonic Wars. Their nannies are said, by history, to have told children, when they were fractious: If you do not watch out that terrible man Boney will come and eat you up’. That approach to the trade union movement is, I believe, over-simplistic, and I believe that we on this side of politics have got to avoid it. I do not adhere for one moment to any proposition that a degree of militancy in the trade union movement is not in some measure responsible for the cost-push inflation that we have today. But what I do say is that if we are to approach our present problems with any semblance of balance, we ought to realise that there arc faults on both sides of the industrial fence. To me it is a terrible thing that one has to talk of an industrial fence, but the plain fact is that if you are going to adopt some sort of a simile you have to use some sort of expression. You have to act on the basis that there is a division, unfortunately. Sometimes it seems to be an irreconcilable division between employers on the one hand and labour on the other. One wishes that the division could be broken down, reduced, but there it is.

But if one is to be objejctive one must realise that there are elements in the economy on what I choose to describe for present purposes as the other side of the industrial fence - that is the employers’ side - that tend in a very real degree towards the acceleration of this vicious evil, cost-push inflation. There is excess tariff protection, with all the scope that gives to some people to push up costs under the umbrella of that excessive protection. There is the question of restrictive trade practices on the horizontal level. The Government - and it deserves to be congratulated for having done this - moved as quickly as circumstances permitted to control resale price maintenance, to ban it outright subject to justification, the onus being upon the person seeking justification of the practice to prove it. Yet we still are faced with this problem of devising suitable legislation to control restrictive trade practices on the horizontal level, and let it be remembered, let it never be forgotten, that restrictive trade practices in this country on the horizontal level - that is between groups of people in the same industry - are a much more pervasive force for inflation than is the practice of resale price maintenance.

I regret to say but am bound to say that it is a matter for disappointment that it has taken so long - I hope it will not be much longer; how much longer, oh Lord, how much longer, one might ask - to introduce tough, effective trade practices legislation to deal with the problem of these generally pernicious horizontal restrictive trade practices. It will do no good to any political party in the context of present day politics for the Government to criticise the Opposition because the Opposition stands for a strong trade union movement; so should any good Liberal government, and so does the present Government. It is of no use for the Government to say that it is all the trade unions’ fault or for the Opposition to say that it is all the employers’ fault. Let us realise, even though this be an election year - and I suppose that judgment tends to be clouded in an election year - that the fault lies on both sides. Let us realise, because I am sure this is a great truth, that in this country there is a large reservoir of intellectual talent on both sides of politics, inside and outside the trade union movement and inside and outside industry, that would -wish to grapple with these basic problems. But the Government must give a lead. I believe that the Government will give a lead, but I think that it has to give a lead very quickly.

I hope that I am not to be accused, as a result of what I say tonight, of rocking the political boat or of rocking my Party’s boat. That is the last thing I want to do. I disclaim any intention of doing so. But if I disclaim any intention, as I sincerely do, of rocking the political boat, I do not want it to be assumed that I regard myself as having no option but to lie inertly in the scuppers while the ship of state ploughs through rather heavy seas. I think that it is time for a little frank talking on some of the problems that we face. I find it not altogether easy - let me put it in those mild terms - to see how the Government can persuade the electorate that we are doing ail we ought to do and must do to stem the rising tide of cost-push inflation until such time as we have grappled with the task - enough time has gone by for us to have done this - of controlling effectively horizontal restrictive trade practices. I talk in shorthand because time is short. 1 find it difficult to see how it is altogether easy for the Government to persuade the electorate that we are doing all we can to control unilaterally decided price increases by corporations enjoying a near monopoly position when all we seem to be able to do - and it is not very effective - is to issue pious pleas or anxious exhortations when a price rise is pending. Surely it is time for honourable members on this side of the House to take stock of the position and to ask themselves why in this day and age we should be - 1 do not think we should be - or they should be opposed to the idea of a prices justification tribunal.

Dr Klugman:

– That is right.

Mr HUGHES:

– You may join us one day. The honourable member for Prospect is sitting a little out of his place, but J am grateful for bis interjection. Is there anything obnoxious to Liberal philosophy - I do not think there is - in the concept of a prices justification tribunal? I am referring not to price fixing, which is a very different matter, but to a prices justification tribunal which would vet price increases in relation to basic commodities by corporations that enjoy a monopoly or near monopoly position. I believe that the Australian electorate will not be altogether convinced of the Government’s intentions until such time as the Government displays a readiness and willingness to investigate and to study closely ways and means of introducing some system of prices justification for corporations in this position.

I agree with the Leader of the Opposition (Mr Whitlam) that as a result of the new found extent of the Commonwealth corporations power the Commonwealth Government, if it had the will, could find the way to introduce legislation to produce such a result. One always speaks tentatively in the field of constitutional law, knowing that decisions in the High Court go sometimes one way or another way on a very fine balance of numbers. However, I still think it is worth acting on the basis that there is power to introduce in relation to trading and financial corporations - those corporations that are mentioned in the corporations power - a system of prices justification. I would think that if the Government announced that it was prepared to investigate the feasibility of doing this it could only gain marks, and to gain marks at present would be very, very advantageous, speaking in the most subjective terms. Until we on both sides of politics can get out of this awful rut of standing in our ranks, sometimes* serried and sometimes solid, slanging each other and saying that one side or the other is entirely to blame, depending on the viewpoint, the way to solving the problems of this economy will be very long and rocky. It is about time that we all did something about it on a non-partisan basis.

Mr UREN:
Reid

– We are discussing a ministerial statement by the Treasurer (Mr Snedden) that was delivered to this House last Thursday, and an amendment moved by the Leader of the Opposition (Mr Whitlam) this afternoon to the motion that the House take note of the paper. 1 propose to support the amendment moved by the Leader of the Opposition. The rational speech just delivered by the honourable member for Berowra (Mr Hughes) should spread enlightenment in this chamber. We know of course that the honourable member is leaving the sinking ship. He expressed the view that we should not blame all on the unions. Coming from his side of the House that is a commendable statement. I want to elaborate on and develop some of the honourable member’s comments about the monopoly sector. It has been said on that side of the House that every increase in prices is due to wage increases demanded by the unions, but I point out that of about 82,000 companies that last year made profits in this country of §3,1 03m, about 240 companies made 38 per cent of those profits. I have taken those figures from a report of the Commissioner of Taxation. The report shows that Australia’s top 1,100 companies shared 60 per cent of the profits of $3, 103m, and the remaining 80,900 companies shared the balance of 40 per cent of the profits.

It is this monopoly sector that determines the prices of its commodities and can pass on increases to the purchasers, whether they are wage increases or any other type of increases. The profits may be used for the development of the companies or can be distributed to shareholders living in other countries. No action at all has been taken by any Federal government in the past 20 years to deal with this sector of the economy that has worsened year by year. More and more the monopoly sector takes control of the economy. My colleague the honourable member for Melbourne Ports (Mr Crean) has dealt with that aspect. The Leader of the Opposition put forward progresive propositions in that regard. I do not want to deal broadly with the economy. As federal spokesman for my Party on housing and urban affairs 1 want to deal with some matters related to housing. 1 want to touch on the struggle of young people to acquire a home or to purchase land on which to build a home. The Treasurer said in his statement to the House:

There are indeed some flat spots in the economy, of which the most notable and important is in the area of consumer spending.

The Treasurer did not refer at all to the home building sector of the building industry which was also a flat spot. He went on to say:

In the field of private investment, however, dwelling construction turned upwards in the first half of 1971-72 and recent trends both in commencements and approvals. . . .

That statement was made last Thursday. On Friday the Bureau of Census and Statistics revealed that building approvals for January 1972 were 9,247, the lowest figure for January for 5 years. It was 2.8 per cent below approvals of 9,511 for January 1971, and 7.3 per cent below approvals of 9,973 for January 1970. The Treasurer is in control of the Bureau of Census and Statistics, but on last Thursday evening he said that there was an upward trend in building approvals while on the following day the Bureau revealed that there had been in fact a downward trend. The figures released by the Bureau show that in the first 6 months of 1971-72 an increase of 3.9 per cent took place in building commencements compared with the period 1st July 1970 to 31st December 1970. Against the corresponding period in 1969 there is a 4.7 per cent drop in the last half of 1971.

The housing shortage is most acute in the most populous States of New South Wales and Victoria. Building approvals in New South Wales from July 1971 to December 1971 were up by 1.9 per cent on the approvals in the last half of 1970, and 9.4 per cent down on the approvals in the period July to December 1969. For Victoria the comparable falls are 0.7 per cent when compared with July-December 1970 and 9.9 per cent when compared with July-December 1969. lt is just ludicrous for the Treasurer to use the type of argument he did to support these figures. This Government made a decision in April 1970 to impose credit restrictions and increase interest rates and this affected the small people. There was no real demand pressure in the home building sector of the building industry. In fact, the great barometer - and one can take cither approvals or commencement, although I regard commencements as more realistic - indicates that in 1968-69 the commencements were up 20 per cent on the previous year. In 1969-70 when the credit restrictions were imposed they were up only 1 1 per cent on the previous year. In 1970-71 there was a slight rise of only 2 per cent. When one examines where the real wealth is going one finds it is to the commercial building sector of the building industry through the construction of big office blocks in the central business districts of our cap:tal cities. I hops I have time to expand on this.

In 1968-69 the value of new office buildings approved rose by 14 per cent. In 1969-70 when the restrictions were imposed it increased by 71 per cent, so it can be seen where the wealth was going. But what happened when the credit restrictions were imposed? The wealth was diverted more and more into the sector which had the highest profit margins, the commercial buildings in the central business districts of the capital cities. I asked the Prime Minister (Mr McMahon) whether the Commonwealth Government would control foreign investment and development investment in the central business districts of Sydney and Melbourne in particular and whether it would control the major insurance companies which were diverting their wealth into these big speculative building enterprises. The Prime Minister in reply said that although he could not give the figures in regard to foreign investment - and a great deal of it was confidential information - he was able to supply me with the figures for insurance company investment in developments and figures for their reserve funds. In a reply to me dated 13th

December 1971 he said that investment in development in office buildings had increased from 6.6 per cent in 1961 to 14.1 per cent in 1971. These were only percentages so I sought details from the Commonwealth Parliamentary Library Statistical Service and I seek leave to incorporate in Hansard a table showing the selected assets and liabilities of life insurance statutory funds in Australia.

Mr SPEAKER:

-Is leave granted? There being no objection leave is granted. (The document read as follows) -

Mr UREN:

– The table reveals that in 1961 the 6.6 per cent represented $144m in property which increased in 1971 to $825m. an increase of 472 per cent. At the same time the investment in housing loans from insurance companies increased from $307m in 1961 to $442m in 1971, an increase of 44 per cent. In other words, in 1961 there was twice as much money invested in housing as there was in commercial buildings in the central business district but in 1.971 the reverse was the case. At this time of course there had been reductions in other areas - for instance, in the money that was made available to building and housing societies. This had been reduced from $26m in 1961 to $12m in 1971, a reduction of 52 per cent.

However, insurance company reserves had increased from $2,200m in 1961 to $5,900m in 1971. How do these reserves accrue? Each year one can claim $1,200 in taxation deductions in respect of life assurance policies. The wealthy take out life assurance because 66c in every dollar they invest this way is paid by the taxpayers. In other words, the wealthy pay only onethird of their insurance policy premium. Consequently the insurance companies with their great reserve funds form a very wealthy sector in the economy, so much so that there is over-building in the central business districts of all our capital cities, forcing people to work in the cities. Here there is a transport system in which trains and buses go out empty of a morning to pick up workers and come back loaded and of a night the reverse situation applies. No transport system is able to carry a load such as this and pay its way. Recently workers of all types had to pay between a 50 per cent and a 79 per cent increase in their fares to and from work

This Government has to start using its priorities. It has to determine priorities in order to plan. It has to divert finance from the office building sector to the home building sector. If it wants to stimulate the horn” huilding industry the first thing it should do is reduce interest rates. This is common sense. From a permanent building society in Sydney one can get a loan of St 5.000 - the average price of house and land there is $19,000 - but on this loan over 25 years at 8 per cent interest one would have to pay $115 a month. To get such a loan one would have to be earning between $110 and $120 a week, yet the average weekly earnings of all wage earners is $91 a week and 70 per cent of all wage earners earn less than the average weekly earnings. One can see most young people are excluded. So let us talk common sense. We have to do something about stimulating the building industry because it and its associated industries are the biggest employers of labour in Australia. We want to stimulate the building industry; we want to give a stimulus to the economy as a whole and make sure that all people can get a home. There are 40,000 people on the waiting list of the New South Wales Housing Commission alone and throughout Australia there are 100,000 on waiting lists. I want to see interest rates reduced. 1 want to see the first mortgage loan increased, particularly from savings banks, so that young people will be able to acquire a home and afford to make their repayments. The recent action taken by this Government when it met the State Premiers will not stimulate the home building industry. In fact, only in Queensland where there is an election to be held and in Western Australia where there is certain government action threatening has there been a slight reduction in interest rates, and that reduction is not enough, ft is about time this Government met its responsibilities by protecting young people and by giving money to enable people to buy homes, thereby creating a stimulus.

Mr SPEAKER:

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

Debate (on motion by Mr Giles) adjourned.

page 370

INCOME TAX ASSESSMENT BILL 1972

Second Reading

Debate resumed from 23 February (vide page 161). on motion by Mr Snedden:

That the Bill be now read a second time.

Mr CREAN:
Melbourne Ports

– On behalf of the Opposition I move the following amendment:

That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: the Bill in its present form should be withdrawn because it is unselective in its application and gives no consideration to balanced economic development.

I think it is significant that this debate should follow the one that has just been adjourned. This is an example of how bullheaded the Government has been in facing up to the problems that beset the economy. 1 would like to quote some words that I uttered almost 10 years ago when this legislation was first before the House. I want to explain in a few minutes what the investment allowance is. I described it as ‘a specialised subsidy which will be paid under the subterfuge that it is an income tax deduction’. Let me make that point quite clear at the beginning, lt is necessary to do so, otherwise one may be accused of being against something that is going to be of considerable benefit.

In essence the investment allowance is a gimmick, a fiction, which suggests that something that costs $1,000 - one can use any unit - shall be presumed not to have cost $1,000 but 20 per cent more. In other words, any plant that one buys that costs $1,000 is presumed to have cost $1,200. In the year in which the plant is installed the difference, the fictional amount - there is no logic about it - is allowed io be written off for taxable income. I make this point iri the first instance simply to show the blatant, illogical nature of this kind of thing. The restoration of the investment allowance is, in my view, simply a triumph on the part of the public relations sections of the chambers of manufactures in Australia. It indicates the weight which this Government places upon representations made from business in defence of capital, compared with its attitude to the people who are employed in industry.

I say this categorically, and I think these are the sorts of things we have to face up to: Restoring the investment allowance means providing a benefit of something like $S0m to $60m annually to those industries which happen to install any plant after the date of the commencement of operation of this measure, which, I think, is 7th February 1972. What has been suggested is that this will be a stimulus to industry. I suggest that it is being achieved at the moment as a result of the belly-aching on the part of manufacturing industry, which is not at the moment utilising all the plant at its disposal. If anybody wants a good example of that, there is no better example than the motor car indus try, in which there is unutilised plant while the industry is claiming the restoration of this allowance as a triumph and as an incentive that will enable it to install new plant. That is the first kind of attitude one needs to take to this problem.

The other point made in the amendment is that the Bill is undiscriminating in its application. Whether new plant is installed in the declining motor car industry or in the growing brewing industry, both of them are entitled to claim the investment allowance. It is time that this country produced not only an economic policy but also something that might be called an industrial policy. What is the social purpose of industry in the years ahead? This debate has been going on in this Parliament for the last several sitting days. I still make the statement that, if the economy of Australia were being properly managed, our problem would be a surplus of jobs in relation to the people available to fill them. In some people’s minds there is an ominous feeling that, if 2 people are seeking every job, it is a good discipline for workers in industry. I regard that as a very dismal attitude as far as human beings are concerned. If one looks at the potential of this country one finds that the problem ought to be the other way round. I want to use one or two examples to show what I think is a lack of vision on the part of the Government. My Party resisted the investment allowance when it was introduced. We supported its removal. We are consistent now in suggesting that the Govern* ment, in reintroducing the investment allowance, is not doing so on any selective basis or in relation to a proper plan of balanced economic development.

This morning I happened to come across a paragraph in the ‘Australian Financial Review’ which dealt with the graduates of the Royal Melbourne Institute of Technology. We hear a lot of talk in this place about productivity. In the long run productivity depends on better management, more machines and better trained operatives to utilise the machines and the management potential. In my view, the Royal Melbourne Institute of Technology is a magnificent institution that has existed in a rather difficult environment. Unless one lived in the city of Melbourne one would hardly realise what the difficulties were. At least the Institute suggested that the people it turned out would not be granted diplomas unless they were first able to get some practical field work. This year it has found that the field work is not available. Some of the areas in which the work is not available are mining and geological surveying. That simply highlights to me the inadequacy of our approach to what might be called an industrial policy. Surely the future of this country depends upon switching over from products like wool, wheat and sugar into the direction of minerals, oil and natural gas. Yet there are not enough jobs available even to give temporary work between the times when diplomas are awarded to graduates of the Royal Melbourne Institute of Technology.

On page 2 of the January-February 1972 issue of the Australian Industries Development Association bulletin there is an article titled ‘Wage Push Inflation and the Skilled Tradesmen Shortage’. One of the incredible things that has happened in the last several months, at a time when this Government in conjunction with the States has been devoting more money than ever - it must devote even more yet - to higher education through universities, technical institutions and colleges of advanced education, has been a lesser demand for apprentices than previously. That is the burden, if you like, of this article. I will quote one paragraph:

The claim of the tradesman for higher differential may well be valid, but it should be settled on fis merits and not depend on a shortage for much of its force. A shortage of skilled tradesmen is a severe hamper to the growth of efficient, competitive manufacturing industry.

The article continues:

The drop in the numbers of skilled tradesmen migrating to Australia is largely due to the increased competition for skilled migrants abroad.

Another reference states:

On the whole, there will continue to be a shortage of skilled labour and as things stand at present the problem will be accentuated as demand increases faster than supply. Given the reduced opportunities for new apprentices, coupled with the four or more years required to train a skilled craftsman and the questionable outlook for increases in migrant intake of tradesmen, the prospects for a significant expansion in the supply of skilled labour are not good. 1 submit that the Government is wrong if it thinks that industry needs to be subsidised. I repeat that that is what the investment allowance is. I suggest that there are one or two other areas that the

Government could look at first if subsidies were to be regarded as the order of the day. One area would be as was suggested in the article, which reads:

Given the above situation-

The above situation is clear enough - there is ample argument for action to increase the supply of skilled labour to meet expected levels for future demand. One positive step would be a national survey to forecast needs over at least the next five years. This was one of the conclusions reached by the National Conference on Training for Industry and Commerce which met in Canberra last May. The Conference also noted the desirability of incentive payments encouraging employers to take on greater numbers of apprentices. Finally, it was recognised that if better training facilities were to be provided in technical colleges in the way of staffing, buildings, equipment and hostels, it would be necessary for increased finance to be made available to Departments of Education for that purpose. 1 submit that this proposition means an indiscriminate handing out of $50m to what is described as manufacturing industry al a time when plant capacity is not being fully utilised. That advantage is available technically to those who are lucky enough to be putting in new plan after 7th February 1972. Is that an example of properly facing up to the problems in the Austraiian economy? Is there any sense of priority? 1 would suggest this as one proposition: Why not make the investment allowance available only if it were for plant manufactured in Australia? Why not make it available only to those industries in Australia that are substantially Australian-owned? We have heard a lot of talk today from honourable members on the other side of the House about the misapplication of tariffs. This investment allowance has the effect of increased protection for anybody who takes advantage of it. Again, it seems to me that there has not been much thought given to its implications. Perhaps in 1962 when the wretched thing was introduced there was some logic in it. But there is none in 1972. After all, the allowance was reduced in 1971. supposedly to counter inflation. That was at a time when inflation was not running even at the same rate as it is now. What is the logic of its reintroduction in 1972 if there are any virtues in removing it in 1971.

I recently received a letter from Moore Road Machines (Aus) Pty Ltd, a firm in my area. Malcolm Moore Industries is one of its subsidiaries. It belongs to an organisation known as Construction Equipment Manufacturers of Australia. On 10th December 1971 that organisation wrote to the Minister for Trade and Industry (Mr Anthony). I want to quote one or two relevant passages from the letter. Firstly, it is suggested that the normal total sales of construction equipment in Australia, including servicing, are approximately $2 10m per annum. The local content of this is approximately Si 05m. So it is about a 50-50 basis as between locally manufactured equipment and imported equipment. It is therefore a very substantial industry which employs nearly 9,000 people. This is the pregnant passage of the letter. It states:

The current position, as vouched for by our members, is that the industry turnover has fallen by 30 to 40 per cent compared to recent years. This decline, starting in February last-

That is, February 1971, a year ago - has been continuing ever since.

It certainly has not declined in recent months. The letter continues:

Although a temporary fall-off in orders can be caused by simple delays in purchasing whilst potential customers make do with old equipment, it is our belief that the situation has now developed where, in fact, the ‘dirt being moved’ in Australia has actually lessened by 30 to 40 per cent, which must have a very important impact on the future productivity of this country.

In other words, what is suggested is that the capacity that is already there is not being utilised for such works as building roads and dams which do not come within the scope of the investment allowance. The firm that is in decline is not in a position to install more plant because it is not utilising what is already there. I deplore the fact that at times the Government uses those kinds of words and the sort of piffling defence that was given this afternoon in the name of the Government against the attack which I launched the other evening on the economic statement of the Treasurer (Mr Snedden). It is not the job of the Opposition to say what it will do. Our job at this point is to show the deficiencies in what the Government is doing and to indicate why there is a need for a change of government. Does anybody believe, to use that phrase of the Treasurer, that we have a growing, dynamic and flexible economy at the moment? That is sheer rubbish and humbug. I will quote what this association of serious businessmen states:

The meeting of our members revealed: In our factories and servicing facilities, overtime has been drastically reduced and is now virtually nonexistent.

Does that sound like a section of industry that has to be stimulated by the reintroduction of the investment allowance? The second point reads:

Prominent members of our industry have carried out substantial retrenchments of personnel and further retrenchments are contemplated.

Does that sound like waiting for the investment allowance to be introduced? The third point reads:

In all cases the amount of work being let out on a sub-contracting basis has been greatly diminished.

The fourth point - and this is a tragedy at a time when we are devoting additional resources to education - reads:

The .number of apprentices hired has been substantially cut, in many cases by 50 p:r cent.

Will there be a greater increase in productivity in Australia as a result of reintroducing the investment allowance rather than taking on more skilled tradesmen into industries that are in decline even if the same amounts of money are used to achieve the same kind of end? The fifth point reads:

No member has any, existing plans for the expansion of manufacturing capacity and any plans that did exist have been completely shelved.

The final point reads:

The retrenchments in personnel have not only been in areas of normal replacement such as skilled artisans, but also in areas of lengthy technical training such as draftsmen, engineers, where the time taken in training extends over many years.

I suggest again that honourable members read carefully the statistics that are published monthly in what is called the Monthly Employment Survey. It is a tragedy that whereas in the past the preponderant part has been semi-skilled and unskilled manual, it is now flowing over into skilled as well and particularly in fields like earth moving equipment, electrical and so on. The association also stated:

The erosion of key personnel, the cancelling of research programmes and other similar events will have a permanent effect on our industry and the depth of the effect will be directly re’.–’* i” ‘!v -ne taken for corrective action by the Government.

What is the corrective action? It is restoration of the investment allowance - the giving of ounce, if you like - to certain people in industry who will put manufacturing plant into operation from now on. I think we ought to look at the statistics that are available in the 49th report of the Commissioner of Taxation. When the investment allowance was in force, for companies it amounted to $86m for the year ended June 1969. These are the last available figures. With company tax at about 45 per cent the cost was about $40m. There was another $23m in respect of individual persons. Of that $86m there was $45m for companies which had a profit in excess of $2m a year. Where is the selectivity in this kind of situation?

I said in this House the other evening that I could see some logic in reducing employment in the motor car industry if you had some sort of formula whereby if there is excessive investment in the motor car industry people are put somewhere else. But about half of the people who are out of work in the motor industry are people who have been brought out here as part of a planned programme of migration and they are not going to be absorbed anywhere else. Surely this is the sort of place that the Government ought to be looking at when it comes to a restoration of this investment allowance. This is why we have moved an amendment. Of course, industry throws up its hand in glee when this allowance is restored just as the individual taxpayers would if their taxes were reduced, but what is the logic? What is the equity of giving $50m indiscriminately to those who happen to be putting in new plant after 7th February as against some other sort of concessions that might be made? 1 suggest that if the Government were going to subsidise industry there were several ways in which it could have done this. It could have given a subsidy to particular industries for particular purposes. It could have given a subsidy to industries that would say: ‘We are going to take on more apprentices in future’. It could have given a subsidy to those country industries which say: ‘We will employ people in the country rather than in the metropolitan area’. I think the thing that has to be looked at - and this is spelt out in the Australian

Industries Development Association bulletin - is that we are living in a period of technological change, and one of the tragedies is that we are still training people to do jobs that are not wanted and we are not training people to do jobs that the technological revolution demands. Those figures are starkly portrayed in the monthly bulletins which are available.

In a previous debate I mentioned the curious phenomena that in terms of aggregates in the metropolitan areas of New South Wales and Victoria - that is, Sydney and Melbourne basically - there are more jobs available for females than there are females to fill them yet about 2,500 of those females are on the dole in those 2 States. This throws serious doubt on the categorisation between jobs and jobless. It is the great tragedy in Australia at the moment that instead of looking and planning an industrial policy the Government talks about an overall economic policy. If it thinks that all that matters is that everybody should be employed whether sweeping leaves or filling in potholes, rather than looking for quality as well as quantity, there is something radically wrong in the Australian economy today. No defence was made in this House this afternoon on behalf of the Government as to why the absorptive capacity for total employment of Australia is declining. The honourable member for Hindmarsh (Mr Clyde Cameron) quoted figures this afternoon and stated that we absorbed only half as many people in the last 12 months as we did in the previous 12 months. That is the key to increasing unemployment in Australia at the moment. If 1 may repeat it, I do not think that the jobless are deliberately created because I think that even the stupidity of this Government would not deliberately put out of employment the people it has invited to this country via a migration programme. But the fact that that is what has happened shows gross economic mismanagement and doing this kind of hand-piece job indicates that the Government is not aware of what the problems are.

Mr SPEAKER:

– Order! Is the amendment seconded?

Mr Connor:

– I second the amendment and reserve my right to speak later.

Mr WHITTORN:
Balaclava

– As the honourable member for Melbourne Ports (Mr Crean) has said, we are debating the Income Tax Assessment Bill (No. 2) and more particularly the Government’s decision to reintroduce the plant investment allowance for manufacturing industries. Those of us interested in this form of legislation know that it was introduced by the Government during April 1962, and at that time I supported the Government in its intention to create greater opportunities for employment, to enable manufacturing industries particularly to set up a base for exporting their products overseas, and to make them more efficient. 1 have no doubt that when the vote is taken on this new piece of legislation the Government will reject the amendment moved by the honourable member for Melbourne Ports. I think he put his finger on the crux of the situation when he read a letter from one of the companies within his electorate stating that other companies using the manufactured goods of this company had to make do with old equipment. This is what the Liberal Party in coalition with the Country Party, as a free enterprise Government, is trying to avoid. We want manufacturing industries to use the most up to date equipment that it is possible to obtain. Not only do we want them to obtain it in Australia if it is manufactured here; we also want them to import it from overseas. Hence this incentive by the Government.

On 3rd February 1971 the Government suspended this plant investment allowance. I was one of the few on this side of the House who chided the Government for having suspended this very important and useful legislation. I told the Government then that the decision it had made was incorrect, and I repeat now that I support the reintroduction of this legislation because it is so useful to manufacturing industry. One of the points made by the honourable member for Melbourne Ports was that overseas investment in companies in Australia is fraught with danger. Of course it is. But when one looks at the figures - I do not have them readily available with me but I did have a look at them over the weekend - one can realise that the investment in Australia by overseas interests, entrepreneurs and so on does not affect manufacturing industry to a great extent. The investment by overseas companies in Australia’s operations takes the form of speculative investment in the mining industry, the oil industry, the chemical industry and investment companies themselves. The figures associated with the manufacturing industry show very little increased investment by overseas companies in Australian industry, with one or 2 minor exceptions, so I do not think we can use that argument as a reason for not reintroducing this plant investment allowance. It is possible, of course, for people on this side of the House to say, as I did in February 1971, that the Government has made a wrong decision. We on this side of the House do that in our Party room meetings, and we can also do it on the floor of the Parliament, as I did last year; but of course on this occasion I am supporting the Government in its decision. In 1962 the then Treasurer, when introducing this form of legislation, used these words:

In proposing (his allowance the Government aims to encourage greater investment in our manufacturing industries -

I believe the intention was that there should be investment by Australians in manufacturing industries - and thus ensure in both the short and long term a greater volume of output and employment.

I believe that these facts were really the core of the situation in 1962 and I believe that manufacturing industry in Australia, because of the initial 20 per cent deduction in the first year after their plant investment, took advantage of this legislation. Nobody could gainsay that all countries, particularly industrial countries, use this form of encouragement to manufacturing industries. In Australia it was given not only to manufacturing industries - I will come to that very shortly - but also to primary industry and other industries. I believe that we should and must keep manufacturing industry up to maximum efficiency if we are to maintain efficiency and employment opportunities and establish the base that manufacturing industries have already started so that they may continue their drive for the export of their products overseas.

There are no doubts in my mind that costs in Australia have risen to such an extent that productivity and efficiency are the real nub of our problem. The better the equipment used by the manufacturers the better we will be able to compete wilh other industrial nations. I think it should be remembered that we are now competing on an international basis with overseas countries in all fields, manufacturing, primary industry, mining - you name it, we have to compete. One thing that all buyers want to know is the price of the product. They ask: ‘What will it cost delivered on to my floor?’ Therefore efficiency in the Australian manufacturing industry is of paramount importance.

Of course it is true, as was said last week, that the reintroduction of the plant investment allowance will help companies such as Broken Hill Pty Co. Ltd. Frankly I was sickened by the reports and discussion that 1 read in the newspapers and saw in the news media generally concerning BHP and the general effect that it had on the people of Australia. This mighty company has done much for Australia, yet we in this Parliament and practically all the news media criticise it left right and centre. Most Australians look with awe at overseas companies such as General Motors-Holden’s of America, Mitsubishi of Japan and the Krupp company of Germany. We used to look with a good deal of awc too at Rolls-Royce in Great Britain until the unions in the United Kingdom brought that once great company to its knees. But when a company in Australia does as much for Australia as BHP has done we tear it apart. I often wonder how the directors and the executive of BHP stand the criticism and listen to the hogwash that is thrown at them in this Parliament and by the news media. Honourable members opposite are trying to interject. Of course the Opposition agrees that BHP also should be brought to its knees.

How many people realise that for every $1 received by the BHP for its steel products 4c is set aside for profit? How many people know that the Government guarantees the investor in a conversion loan or any Commonwealth loan 6c or 6 per cent minimum return on investment. If it is good enough for a government to give its shareholders 6 per cent per annum on their investment in Commonwealth loans surely it is good enough for the biggest company in this country to give its shareholders 6 per cent on the investment that they have in the company. The shareholders give themselves 4c in the SI and yet we criticise this mighty company. How many people realise that the defence of Australia is almost entirely dependent on what BHP does in the future, with all the industrial strife that it has to put up with? How many people in this Parliament realise that it has docked or tied up a new 105,000 ton ore carrier simply because of industrial unrest at Port Kembla? These are the things people ought to be talking about. I would like to think that the news media when it talked about BHP talked also about the regular and consistent wage increases and the stoppages that take place throughout Australia at this great company’s expense. These are the reasons why BHP put its prices up. with a basic rise of 5.3 per cent, last week or the week before. I hope that the BHP can take advantage-

Mr Charles Jones:

– Ate you speaking as a shareholder?

Mr WHITTORN:

– I speak as a member of this Parliament who likes to see a fair go and who likes to see a company like BHP and other companies which are big and successful and which are doing a good job for the thousands of workers that they employ aided and abetted by any government, whether it be the government that presently holds office or any other government that may hold office in the far distant future. These are the companies that create employment opportunities and that do a tremendous amount for Australia overseas. Let it be known that over the years BHP has continued to supply Australian needs first. BHP has had many opportunities to export its products at lucrative prices. As most members of the Opposition will know, its prices are competitive with those of all countries that produce ordinary steel, unless it is made in the salt mines so to speak, and even then 1 think that BHP can beat their prices. BHP is an Australian company, trying to look after Australia’s interests, and yet we see honourable members in this Parliament and practically all of the news media trying to tear it apart. 1 wonder that the directors, the executive and even the worker- of BHP do not go home, saying: We have had enough of this criticism by so-called Australians’.

There is less specula; ion in manufacturing industry shares on the stock market than in other shares. Its shares increase or decrease according to market needs or to supply and demand, but not to the same extent as with many other industries throughout Australia. Most manufacturers - not all of them, but most of them - undertake a real market research of their requirements for one year, 2 years or further ahead, and therefore any investment in equipment, buildings or anything else is done after this work has been carried out. 1 wish that the primary industry sector would do the same market research so that it would be able to tell the boards that seem to look after its interests that in future it will sell so many bushels of wheat or so many bales of wool wherever that research indicates produce should be sold, instead of continuing to produce, as has happened with the wheat industry on the one hand and with the wool industry on the other, and then saying to the Government: ‘We are in trouble; you had better help us out’. 1 would like to think that other industries had the same sensible reasoning as manufacturing industries appear to have. There is more stability in the manufacturing industries than in other industry in Australia. As I have said, management research on the future of private enterprise companies is carried out to make certain that what managements put in black and white to their directors is true and not false. 1 have spoken particularly about BHP and I am glad, Mr Deputy Speaker, that you have allowed me to do so, because 1 was really sickened at the criticism by people-

Mr Keogh:

– Get back to the Bill.

Mr WHITTORN:

– We are debating the Income Tax Assessment Bill (No. 2) and this is relevant to the Bill. I should like to hear the honourable member for Bowman talk about this Bill. 1 have not heard him talk yet on this subject or on any other subject. I should like to know what are his feelings about plant investment. A tremendous number of figures are available indicating the amount of assistance provided to industry. I have already mentioned primary industry. I will use my memory for what I am now about to say. If one looks at the Budget papers one will find that $37 lm was set aside this financial year for assistance to industry. This year primary industry is to receive an additional $64m in assistance. Assistance for secondary industry - for manufacturing industries - has depreciated from $90m, which was provided last financial year, to approximately $82m. Of course, these figures will alter as a result of this decision by the Government to reintroduce the plant investment allowance. Of the $37 lm provided as assistance to industry, $27 lm has been set aside for primary industry. A quick calculation reveals that this is equal to $Sm a week set aside to help the wool industry and any other primary industry that one cares to mention. This is why I feel so strongly about manufacturing industry, which looks after its workers and endeavours to maintain stability in employment for its workers, receiving so much criticism.

The amendment moved by the honourable member for Melbourne Ports is designed to specialise industry or, by one way or another, to let the Government take over control of the profits of these industries. This is the purpose of the amendment moved by the honourable member for Melbourne Ports. He said that we should look at the industries we want to support and select them on a personal basis so that we can help this one and not help the other one. I cannot agree with the purpose of the amendment and I support and applaud the Government for this new legislation which reintroduces the plant investment allowance.

Mr CONNOR:
Cunningham

– It might be worth while to remind the House and those in the galleries of the origin - the inception - of this legislation. It was introduced in the early months of 1962 after the Liberal-Country Party Government had the fright of its life and survived a near electoral disaster by one vote. A- a sweetener it was introduced by the then Prime Minister. Today, with a government of the same kidney threatened with electoral disaster, it is natural that it is doing the same thing. It wants to ensure its own political survival. Let me put it this way: I might be uncharitable to think it, but campaign funds obviously are not flowing in as they ought to. Although I think my friend the honourable member for Melbourne Ports (Mr Crean) was rather charitable in understating the position, what will be the cash flow-back from the $50m or more that the industries of Australia - the undeserving industries - will contribute to the funds of this Government for its political survival?

Of course, the Government has abandoned the phoney fight against inflation. Let me remind the House that in October last year, the Treasurer (Mr Snedden) said that there were 4 ways in which inflation could be tackled. The first was to ignore it and let things take their course. The second was to bring in crashing measures of a most draconian type that would have the effect of literally choking off industry. That of course, was politically unacceptable, although it was tried in some measure in the Budget strategy of August last year. The third phase, which has now been reached, is the carrot and stick technique, combined with jawboning, Where there are appeals to sweet reason as being better than coercion. Of course, the Government is not averse to appearing before the Commonwealth Conciliation and Arbitration Commission to coerce the judiciary there into denying the trade union movement of Australia what is its just economic due. Finally, now that the Government has run the whole gamut of its concept of economic measures against inflation, we get back to the point where, in effect, the Government says: ‘Let her rip; the brakes are off. We want to win the election anyhow and we have $630m of domestic surplus in the pork barrel to dip out to our friends’. This, of course, is one of the measures which has been promoted for that purpose.

It might also be interesting to examine the exact effect of the proposed amendment. After all, assistance of hundreds of millions of dollars was ladled out to heavy industry for the 9-year period until the former Prime Minister, with his shoot from the hip technique, decided that it was to be cut off, and cut off it was, with the exception of aid to rural industry. Hence, we have subsection 13 of section 62aa of the Income Tax Assessment Act. Now it is proposed to tinker with that.

At this point I would like to quote from the explanatory memorandum which was distributed to the House. The proposed amendment, which is the very essence of this Bill, will limit its application to expenditure incurred before 14th September 1972 - the date of the last Premiers Conference - and the effect will be to restore the allowance in respect of eligible capital expenditure incurred or after 14th February 1972 irrespective of the date of the making of the contract under which the expenditure was incurred. In other words, this is supposed to be an inducement - I repeat the word ‘inducement’ - to heavy industry to instal new manufacturing plant. Those who, in the interegnum between February of last year with the Gorton amendment and the further amendment that is the subject of this Bill, and who never had in contemplation of restoration of this allowance, will now be beneficiaries from it. What would this Government say if retrospectivity were applied to the needs of the pensioners?

By the way, Sir, to make sure that the cash flow is expedited, the Government is prepared even to by-pass the provisions of the Acts Interpretation Act, and the period of 28 days which normally takes place from the granting of the royal assent until the Bill actually operates has been cut off on this occasion. In other words, the Government cannot get the money into the hands of its friends quickly enough. As the honourable member for Melbourne Ports said, there has been a remarkably successful campaign. Every possible organ and every section of the media that could influence public opinion has been used with heart rending efficiency stating the plight of these people. The pressure has come from the Australian Country Party too, and this is particularly notable. There does seem to be some particular law of economic inversion so that the greater the amount that is to be handed out by way of largesse the quicker is the second reading speech of the Minister in charge of the Bill. In this case, the Treasurer in the short span of 3 minutes - 3 minutes mark you, Sir - without ever saying what it would cost, introduced the legislation.

Just 24 hours before, the Minister for Social Services (Mr Wentworth), with the usual bonus of diatribes and political obloquy directed against the Labor Party, took the full 30 minutes, with paeons of self-congratulation, to hand out S4m a year in the way of increases in unemployment benefits to the victims of the Government’s economic mismanagement. The Minister for Social Services took 10 times as long as the Treasurer. Of course, it is worth looking at the real impact of this allowance. In addition to the 20 per cent initial depreciation there will be the various rates of normal depreciation on equipment according to its type and category. But in total, over the period of years, there will be an actual concessional allowance or concessional deduction for income tax purposes of 120 per cent of the cost of the particular equipment. Today, with 47* per cent being the going rate of company tax, it means that 57£ per cent of the total cost will be recouped to the particular beneficiary. One can add to that, if one likes, at the tail end of the period of depreciation, what can be obtained for the equipment on the second-hand market by way of resale, or alternatively by trading the equipment in on new equipment.

Will these measures increase confidence, will they increase productivity, or will they increase employment? Need I remind the House of the survey which was conducted by the Associated Chambers of Manufactures of Australia and the Bank of New South Wales. The survey pointed out very effectively, as well as grimly and starkly that only 70 per cent of manufacturing equipment in secondary industry was being used to capacity. What proof has the Government given of any increase in anticipated productivity since that date? Who today would risk plant expansion? Would the motor car industry risk this type of expansion? Certainly not. Let the Government or any of its spokesmen name the particular industry that is prepared to do so.

No matter which way one looks at it, it is pork barrelling, lt is a concession of the worst possible type. I repeat that it is a concession that is starkly for the political advantage of the Government. For this Government planning is a dirty word. But that is the essence of the amendment moved on behalf of the Opposition by the honourable member for Melbourne Ports. Let the Government state, if it can or dare, exactly what has been paid out since 1962 until the Gorton amendment, and what will be paid out - in particular what will be paid out - for last year for expenditure on and from 14th February of this year. Also let the Government state why it is not prepared to differentiate between the different groups.

Today there are new phenomena in industrial development and investment. The Government conveniently overlooks these things. Today there is a distinct line of cleavage in industrial investment. Investment is classified as being in either a labour intensive industry or a capital intensive industry. Let us specifically take the oil industry which is a maximum capital intensity and a minimum labour intensity industry. Yet that industry will benefit whereas other industries, where the relative cost of investment in equipment per person employed in much lower, is put on exactly the same footing. The big foreign companies, and in particular the multi-national corporations, are the people who are really responsible today for world stagflation. They are so big that they are able to distort the economy of any country of small or even medium economic size. These companies are in Australia as well as countries of a comparable size as Australia. They are largely responsible, together with this Government’s ineptitude, for our present economic crisis.

Again, the subsidies granted under this legislation will apply to luxury industries. Can we suggest that, for example, the manufacturer of cosmetics or some useless domestic appliance should be put on the same basis as the manufacturer who is producing equipment that can be used to restore Australia’s export trade? Should some consideration not be given to industries which are capable of manufacturing equipment that can replace the imported product? Conversely, is assistance to be given to some of these multi-national corporations which come into Australia, and through their subsidiaries, by franchise agreements, restrict the export to overseas markets of equipment manufactured in Australia and other secondary products, and limit them to Australia, Oceania or perhaps South East Asia? Where is the line of distinction to be drawn? There is none because, I repeat, of this bare-faced pork barrelling.

Let us take specifically the case of the Broken Hill Pty Co. Ltd and its proposed rolling mill which is to be built at Newcastle at a cost of $54m. Let us assume that the whole of this amount is to go into manufacturing equipment. If that is the case, taking 20 per cent of that, and 47i per cent of the 20 per cent, one gets the effective bonus for the first year of $5. 2m. Take the case of the long publicised project at Jervis Bay known as the Armco steelworks. If that proposition is ever consummated the following firms will be involved: Firstly there is Armco- the American Rolling Mill Company; secondly there is Kaiser Refractories Steel; and thirdly there is Thyssen, the major West German steel combine. This group is looking for another partner and have got even Nippon Mining steel to take a fourth interest in it. Assuming that this group can assemble the full complement of the consortium, the project will be worth somewhere between $800m and $ 1,000m. This Government is prepared to subsidise to the tune of anything up to $200m, by way of concessional deduction, the establishment of a steel industry in Australia not so much, I understand, to supply the local market but rather to process iron ore, to reduce it to the ingot steel form and send abroad the billets or ingots or whatever large form the exported steel takes.

Some of the industrial giants of the world will be subsidised by this Government. Could there ever be anything more ludicrous or disgraceful? Whatever we might say in the way of criticism of BHP. at least it is 85 per cent Australian owned and we know how to deal with that company fairly and to put it under control in the proper way and to keep it under control so that it pulls it weight in the right direction. So far as BHP pulling its weight is concerned, need I remind honourable members that in the last 2 financial years completed the excess of steel imported into Australia over exports totalled $135m. If we look much more closely at the recent price rise by BHP we can analyse it from this point of view: Following the international revaluation of currencies the yen was upvalued against the dollar by over 16 per cent. The Australian dollar was upvalued to the tune of 6.32 per cent, a differential of approximately 10 per cent. BHP decided that it could very safely help itself to half of that differential, and it had this further reason for doing it: Whilst it has been able in open competition, quite effectively, to ward of Japanese steel imports in the larger section of steel, when it got down to the smaller gauges of steel where the labour component was high, there were certain types of sheet steel where the Japanese, despite the present tariff, could come in and compete with BHP. They got in quite effectively and they have pulled out the maximum that the traffic would bear.

This is the industrial world of the future - and do not forget it. It is a world of cash flow. It is a world of major corporations, of multi-national corporations which are so big that they can ride through any period of depression or economic crisis. They take the long term view because they know that after every slump or recession there is a boom. They deliberately adjust their pricing policies, because of their monopolistic position and through manipulation of their cash flows, ensure that they will have a fixed amount each year with which to expand to deal with future market development. That is the major cause of economic distortion in. Australia today.

In the time remaining to me I want to recapitulate and say this - and this is probably the most damning indictment of the Government of all: The Government has taken this action despite the advice of the Treasury. The Treasury has told this Government that there will be no increase in employment as a result of restoration of this investment allowance. I challenge the Government and the Minister for the Army (Mr Katter), who is sitting at the table, if he knows anything about it, to produce that advice, because that is the key to the whole situation. The Government received the advice not to restore this investment allowance, but notwithstanding that, it has restored the allowance and it will continue to allow this allowance because it wants to ensure its own miserable political survival. But today the Australian people are thoroughly awake to what the Government is doing, and it does not matter what the Government does, how much largess it hands out, it will face inevitable political destruction, and it will be well merited. For the first time the Australian people will find that there will be in Australia an economic plan which will be to the benefit of the Australian people and which will make this nation take it proper place in the future.

Mr HAMER:
Isaacs

– I welcome this decision by the Government. When the investment allowance on manufacturing plant and equipment was suspended last February I reluctantly accepted it as a temporary psychological weapon in the campaign against inflation. Whatever psychological value it had has long since been exhausted, and it is most timely that the allowance is now restored, for in the long run investment in plant and equipment is vital to our productivity and thereby to our standard of living and the control of inflation. Incidentally, the honourable member for Wentworth (Mr Bury) when he was Treasurer was very shrewd - whether deliberately or not I do not know - in merely suspending the allowance if his aim was to force down expenditure on plant and equipment. The more usual course would have been to cancel rather than suspend the allowance, and suspension implied that the allowance would soon be restored. This caused manufacturing businesses to hold off ordering new plant and equipment, and according to the publication of the Bureau of Census and Statistics titled ‘Capital Expenditure by Private Business in Australia’ for the December quarter of 1971 - it was issued on 10th February - expenditure on manufacturing plant and equipment, other than mineral processing, remained static during 1971 despite rapidly rising prices. This was a dangerous situation which the present step by the Government should end.

Why is investment in plant and equipment so important? Export trade is highly competitive, and if our manufactured exports are to grow, as they must, we must see that they are not operating at a disadvantage compared with their competitors. The honourable member for Cunningham (Mr Connor) implied that this tax concession is an unusual one. It is worth noting what other countries do about comparable allowances. In Britain, for instance, 80 per cent - not 20 per cent as is the case in Australia - of investment in plant and equipment is tax deductible in the first year, and this rises to 100 per cent in special development areas. Ireland runs one of the most lavish incentive schemes in the world.

Capital grants defray well over two-fifths of the total capital costs of new plants in special areas and one-third of total capital costs in the country as a whole, and there is a 15-year tax holiday on profits made from exports. As a result, in 10 years Ireland has - not surprisingly - multiplied its industrial exports 5 times. These 2 examples show how 2 export orientated countries tackled this problem. 1 believe that we must become similarly export orientated.

Of course, internally our productivity depends on wise investment in plant and equipment, and many people - Professor Colin Clark, for example - have been suggesting that, by international standards, we have a relatively low investment in industrial equipment. The honourable member for Melbourne Ports (Mr Crean) produced the extraordinary argument that because some firms had surplus or unused capacity, therefore, they had no need for assistance in acquiring plant and equipment. That *s arrant nonsense. These firms are the onus most likely to need to replace obsolete and inefficient equipment so that they can again become competitive. Such investment .s financed principally from profits, and profits of companies as a proportion of net national product have fallen sharply in recent years, from 12.2 per cent in 1969-70 to 10.8 per cent in 1970-71. This is a disturbing fall, and its significance is heightened by a survey of a sample of Australian companies taken by PA Management Consultants, which showed that the median return on shareholders’ funds fell from 9.3 per cent in 1966 to 8.9 per cent in 1969 and 8.3 per cent in 1970.

The restored investment allowance will increase the availability of funds for investment in plant and equipment, particularly in the early stages, when the cash flow problem is sometimes acute. The honourable member for Melbourne Ports raised his hands in mock horror at the thought of the investment allowance going to firms with profits in excess of $2m. As usual he is confusing profits with profitability. As I pointed out earlier, the profitability of many of our companies is low by international standards, and I include Broken Hill Pty Co. Ltd and its steelmaking operations, referred to earlier by the honourable member for Balaclava (Mr Whittorn).

An important point about the investment allowance is that it has long term planning implications for industry. Major capital investment may take 4 years or more to complete and the existence of the tax allowance will be an important planning factor. This allowance must not be turned on and off like a tap as a regulator of the economy, lt is most unsuitable for this purpose. The honourable member for Melbourne Ports in moving his amendment made it clear that he would like to use the investment allowance in the most unsuitable way that it is possible to imagine. He suggested that the present allowance is indiscriminate and leads to wasteful use of resources. I would much rather rely on business judgment than on the whim of bureaucrats, which is the Australian Labor Party’s solution to every problem.

The role of government is to see that there is adequate competition, either external or internal or both. This is- being done by the tariff review and the new restrictive trade practices legislation. If the products are economically questionable the weapon of the sales tax is always available. But if the Government controls these things, decisions about investments are much better left to the businesses themselves. It is in their interests to see that their investments are wise. If the products are being produced in Australia, it is in the interests of all Australians that they should be produced efficiently, whether the products are beer taps or motor cars.

The honourable member for Melbourne Ports and the honourable member for Cunningham would like to use the investment allowance as a vehicle for democratic socialist planning. They and their bureaucrats would like to decide which industries would receive the investment allowance and at what rate, a process that would soon be extended to deciding which firms inside an industry would receive the allowance. One can visualise the situation of firms not knowing whether they would receive the allowance or not, waiting for months while they answered irrelevant, politically motivated questions from people who knew nothing of the industry. Any coherent industrial planning would become impossible. The Labor Party would create industrial chaos and call it planning, or perhaps democratic socialism.

Mr HURFORD:
Adelaide

– I am rather surprised that the honourable member for Isaacs (Mr Hamer) has taken so little of the time available to him. I support the amendment moved by my colleague the honourable member for Melbourne Ports (Mr Crean). I have gathered from listening to the honourable member for Isaacs that he for one has not properly studied the amendment that has been proposed. I think it would be worth my while at this stage reading it again. It reads:

That the House has no confidence-

I beg the honourable member’s pardon. I started to read the wrong amendment, but I might just as well have read it because the House does have no confidence in this Government. Unfortunately, that amendment was defeated earlier today. The amendment moved by the honourable member for Melbourne Ports is as follows:

That all the words after ‘That’ be omitted with a view to inserting the following words in place thereof: the Bill in its present form should be withdrawn because it is unselective in its application and gives no consideration to balanced economic development’.

The fact is that the system of investment allowances is merely one of the manifestations of the present Government’s stop-go economic policy. It is a fact that in 1960, when there was another recession of the sort that we are suffering today - a recession brought on by a Liberal-Country Party Government, the type of government that unfortunately we are suffering today - the Government then lifted the investment allowance and brought it back a little while later when in its view the situation had quickly changed. The present Government is attempting the same stop-go policy today. It is an excellent manifestation of the difference between the attitude of the Government to economic planning in this country and the attitude of the Labor Party Opposition.

The lifting of the investment allowance at this time last year was one of the number of measures ostensibly taken to attack inflation. Another of the measures was a drastic cut in government expenditure which has created great hardship in many areas in the intervening period. This policy was continued in the Budget introduced on 17th

August, about 6 months later, by the Treasurer (Mr Snedden). At that time many of us on this side of the House pointed out that the policy was completely wrong, that events bad overtaken the Government. Whereas there might have been some excuse at this time last year for an attack on inflation by some measures - I am not going to defend the sort of measures that were taken - by the time the Budget was introduced in August, as I have already said, events had overtaken the Government and the policies it was pursuing were wrong.

We were proved right in no time.In November the Government was already beginning to relent. We saw such measures as grants to the States for the relief of unemployment in non-metropolitan areas. A few months later the Prime Minister (Mr McMahon) at the Premiers Conference gave further grants to the States for the same purpose, lifted at long last, even though to a miserable extent, the unemployment benefit, and relented to pressure for reinstatement of the investment allowance. I have given that outline in order to show that this is merely one part of the overall economic policy of the Government. I do this to attack the policy as a stop-go policy which is creating great hardship in this country. If the policy were effective some of us might feel that it was worthwhile, but in fact it is following outworn economic attitudes.

In an earlier debate today the seasonally adjusted figures for unemployment were cited. I want to make it quite clear that the number of unemployed at the end of January last was 120,574. That figure was supplied by the Bureau of Census and Statistics in conjunction with the Department of Labour and National Service. At that date vacancies as a proportion of unemployment were down to 37.6 per cent. That figure has never been lower in the years for which I have seen statistics. As recently as October 1970 vacancies as a proportion of unemployment reached 115.7 per cent. That is just one indicator of the seriousness of unemployment in this country today. But it is not enough for somebody such as myself, as a part of the alternative government of this country, to talk about the wrongs of the present Government’s policies. Earlier today we debated a motion that the House take note of a statement on the economy made by the Treasurer last Thursday. In that debate it was indicated that a viable alternative policy is being put forward by the alternative government of this country. That policy is not one of creating unemployment in order to cure inflation. The policy is one of direct intervention in the economy of this country. The Opposition believes in a prices policy for this country. It believes in long term planning so that business men in the private sector as well as the many different areas of the government sector know what the overall aims of the central government are.

Mr McLeay:

– Tell us about your prices policy.

Mr HURFORD:

– With much pleasure I draw to the honourable member’s attention the speech of the Leader of the Opposition (Mr Whitlam) earlier this afternoon when he outlined our prices policy at some length. The honourable member willlearn more from that. It is a policy of a prices justification authority to determine whether there is justification for the prices being claimed for the basic commodities in our community. The honourable member who is interjecting comes from South Australia. His own Party in South Australia for the number of years it was the Government in South Australia by reason of a gerrymander held to such a policy of intervention by a prices commissioner in that State. I will state for his benefit and for the benefit of the House, because he has asked me about our prices policy, some of the details of the South Australian policy. I am grateful for his intervention. The prices control legislation has helped to keep prices of goods and services down in South Australia. IfI sound cryptic it is because of the short time at my disposal. Price increases are only approved after a thorough investigation has been made of cost increases incurred and the ability of the company or industry to carry some part of them. I have been challenged to give the policy of my Party and I am outlining now for the benefit of the honourable member for Boothby (Mr McLeay) the system in South Australia, the system to be followed by a Federal Labor government when it takes over the reins of government in this country. In addition in South Australia arrangements exist wilh many industries whereby, although the maximum prices or rates of their goods and services’ are no longer fixed under the Prices Act, details of the proposed price increases, together with the reasons therefor, are submitted for examination by the Prices Branch 14 days prior to their implementation. Not infrequently such increases are deferred, withheld or reduced following discussions with the Branch. This policy ensures that unwarranted increases are not implemented, thus resulting in substantial savings to consumers. This type of action has helped to keep a number of prices and ra.es below those of other States. Another point to be made about this policy is that a close watch is a’so maintained over all price increases whether or not there is any agreement with the industry concerned. Where an increase appears unwarranted, explanations are sought. An example is the excessive margin applied last year by steel distributors on sales of less than one ton. In South Australia action was taken which resulted in the margin being reduced substantially. Action taken in this way acts as a deterrent against excessive price increases being proposed.

Mr DEPUTY SPEAKER (Mr Luchetti:
MACQUARIE, NEW SOUTH WALES

– I think that the honourable member has dealt fairly fully with this matter and should return to the subject of the debate.

Mr HURFORD:

– 1 understand that this is a debate on the investment allowance but. as I started off by saying, this investment allowance is part of the stop-go policy of this Government and I felt it incumbent upon me to point out that there are alternative policies, one of which is being put forward not only by me in outlining in substantiation what the Leader of the Opposition had to say about a prices policy but also by the former South Australian Government. In the 5 years from 1966 prices in South Australia increased by only 19.4 per cent as compared with 25.7 per cent in Sydney. I come back now to the alternative arrangements relating to the investment allowance which the Opposition would hope to introduce if it were in power and I refer to the amendment about which we are talking which seeks that the investment allowance be selective in its application and that con sideration be given to balanced economic development. The fact is that this is one of the last countries to obtain a long term economic planning policy and it will not have such a policy until the Labor Party takes over the Treasury benches of this country.

At the present time we have what Kenneth Davidson of ‘The Australian’ has called a ‘hydra-head’ planning structure. This hydra-head planning structure is made up of a complex of policy-making bodies, such as the Tariff Board, the Arbitration Commission, (he Treasury, the Department of Trade and Industry, the Reserve Bank, the Trade Practices Tribunal and 6 State governments, lt is not true that we do not have ony planning at all but we have this piecemeal planning taking place in the areas I have outlined. The Treasury has established its pre-eminent position after a struggle wilh the Department of Post-War Reconstruction and exercises its influence on the future of ihe fixed investment of public corporations. The Department of Trade in recent years has controlled mineral policy, tariff policy and exports. The Commonwealth has been forced, protesting and reluctant, to take an increasing role in the planning of rail and road networks, health and the whole field of education. We have seen the Government pushed increasingly towards a more integrated fuel power policy. In its ad hoc bits of legislation for encouraging separate energy supplies it has been forced to recognise that legislation implies economic judgment on the energy pattern viewed as a whole.

The trouble with ali this planning is that it fails to dovetail trends in various sectors and fails to make provision for the training of efficient planners, so creating a bottleneck in the supply of the sort of people who can understand and apply the knowledge revolution about planning and forecasting techniques that has taken place in the rest of the world in the 1960s. Other factors prominent in the development of the hydra-head system which we have at the present time are the ideology of the present Government we are suffering in power - the growth of a system of government preferment of vested interests and the isolation of Australia from new developments in economic thought and planning abroad. The main criticism that has been made against this system is that it confuses regulation with planning, fails to make the various agencies of regulation work towards common objectives and creates an overlapping of functions or a lack of coordination which tends to push and pull industry, businessmen and workers in directions which are often conflicting and never clear. In short, the many heads of the system work in blindness to what each other is doing and to what they are all trying to achieve. That is the present hydra-head planning which we have in this country at the present time.

Can it be seriously denied that a national planning ministry with a view of the overall economy and how its sectors could be dovetailed would not have eliminated the uncertainties and delays and the stop-go policy of which this Bill is only one part? If planning is understood as the establishment of major objectives of economic policy and their relative priorities, followed by their translation into a complex of explicit and consistent quantitative targets, thin the opposition to such industrial targets as I am outlining has little basis. In this sense planning becomes an indispensable technique for exploring in systematic fashion the range of possible economic policies and strategies on the basis of accurate knowledge, taking into account all the objectives that the Government and the private sector may similarly wish to pursue. We get speeches, short though they are, from the honourable member for Isaacs wiping off this sort of planning.

As I said in my speech on the Budget in 1971, as well as in 1970, this is the last country to have these sorts of targets whereby businessmen know where they are going. They have them in Japan, which my political opponents opposite would hold up as being an example of private enterprise. They have them in France. They have them in the United Kingdom. The businessmen have even more sense of where they are going in that great example of private enterprise, the United States of America, than we have here with our 6 separate State governments going in different ways and with a Federal Government which will not take a lead and which is exemplified by the sort of legislation that we are debating tonight - bringing back investment allowances when they have been off the books for only one year. It is for these reasons that I support the amendment moved by the honourable member for Melbourne Ports.

We must be more selective in the way we give what is nothing more than a handout to private industry. No evidence has been brought forward by the speakers on the Government side as to which company is in fact going to employ more men because of this legislation. Not very long ago at question time the Prime Minister said that bringing in this legislation would not make the slightest difference to the price of steel in this country, because the Broken Hill Pty Co. Ltd would not derive any benefits from this legislation until April of next year. That is true, because it is not until April of next year that the tax assessment for BHP based on the year ended 30th June 1971 will become payable. So that will be the first time that they will be given any advantage under this legislation. How is it going to affect BHP’s investment policies right now, by giving this investment allowance and by making more of this handout available?

In other cases where entrepreneurs are making decisions whether they will invest here or elsewhere in the world, whether they will invest now or put off their investment until a later occasion, this investment allowance would be taken into consideration. We would bc prepared to give the investment allowance in these circumstances, assuming that the investment itself were in the best interests of this country. If we found that the investment was going to be in an area which would not be to the long term benefit of this country we would be able to tell these people sooner rather than later, instead of allowing this investment to take place and then causing great disruption by the business not being a viable one. For these reasons I have much pleasure in supporting the amendment moved by the honourable member for Melbourne Ports. I request the Government to think again before it works in this ad hoc manner and merely hands out money to industry because the pressures from industry are strong.

Mr BROWN:
Diamond Valley

– I must say at the outset that I was rather disappointed in the speech made by the honourable member for Adelaide (Mr

Hurford) because, in all fairness to him, we have heard some fairly reasoned and sensible speeches from him, very different speeches from the scissors and paste job we heard tonight. As far as I could judge, it was composed almost entirely from some handout from the Australian Labor Party office in South Australia and from a speech by the Leader of the Opposition (Mr Whitlam). But I will go this far with the honourable member for Adelaide: I will agree with him that there probably is a case for the Government indicating what are its long term objectives so far as the role of manufacturing industry in this country is concerned. I agree with him to that extent. But what a world of difference there is between the 2 philosophies that are espoused. It is worth while recalling the words used by the honourable member for Adelaide, because similar words have been used by other speakers on the other side of the House.

The honourable member advocated, and his Party has advocated, direct intervention by the Government in the economic affairs of this country. He has advocated, and others with him have advocated, that there be long term planning in such a way that the aims of the central government in industry will be carried out and will be slavishly complied with under the dictates and orders of the central government. That is a world of difference. It would well become those in this country who are associated with industry to recall these words. Those who are associated with industry should recall that this is the specific policy that is being advocated by this alternative government.

The legislation was introduced at the end of a very significant week. Last week in this House the Opposition indicated the sort of measures that it would like to see introduced for the control of the economy. The Opposition referred to such things as the way in which the tariff structure should be controlled, specific price control and then, right at the end of the week, came the crowning glory - the opposition to this very modest piece of incentive, by taxation relief to the manufacturing industry of this country. I will say a little more about the general attitude of the Opposition to these things at a later stage, but I want to make it quite clear at the outset that I support this piece of legislation. My one regret is that it could perhaps have been introduced earlier. I made a speech in the last Budget debate which, when I come to read it now, I find even more persuasive than when 1 made it. On that occasion I advocated that perhaps the Government in the Budget could have restored the investment allowance at that time, in that speech I outlined the way in which the investment allowance worked. I said:

I have said that the purpose of this new allow,ance was to stimulate production and increase employment opportunities in industry. The then Treasurer summed up the intention of the Government in introducing this new deduction when he said that the purpose of the allowance was to provide a general incentive to investment in manufacturing industry. He added that the manufacturing industry was a great employer of labour and that the Government wished particularly to encourage it to expand and to increase its efficiency to the highest degree. One could not disagree with that opinion that he then expressed. The deduction operated, as I said, until 3rd February 1971 when it was abolished as part of the Government’s anti-inflationary measures.

With that in mind, 1 have no hesitation in congratulating the Government on restoring this allowance in this legislation. I have only one qualification to make in my support for the legislation, and that is that there seems to be an anomaly in the interregnum while the allowance was not operative and while the deduction could not be made. With respect to contracts entered into before 4th February 1971 and payments made under those contracts after that time, the amount that was paid was deductible. It was not affected by the abolition of the investment allowance at that time. Now we have payments made after 13th February 1972 - that is, on the occasion of the restoration of the allowance. Those payments are also deductible. But what is not deductible is that amount which was invested in plant and equipment in the period after 4th February 1971 when the allowance was lifted and up until the time when the allowance was restored. In other words, manufacturers may well have had the courage of their convictions and may well have gone in and acquired new plant and equipment and paid for it on the spot at that time, even in very recent times, shortly prior to the restoration of the allowance. It would seem to me that is an anomaly. I hope that the Government will look at it with a view to perhaps rectifying it at some future time. 1 want to emphasise that, with that qualification, J support the legislation and 1 very strongly oppose the amendment that has been moved by the Opposition. The legislation is a welcome measure. I believe it should stimulate the economy and contribute substantially to increased productivity. The honourable member for Melbourne Ports (Mr Crean) in a thoughtful but, with respect, misguided contribution to the debate indicated that productivity depended on 3 things. I think that the 3 criteria that he listed were better management, more machinery and better and more operatives. I agree with the honourable member for Melbourne Ports. That is a fair assessment. But what he does not seem to understand is that this measure is designed to satisfy at least one of those criteria. It is designed to enable manufacturers to replace old worn out equipment and machinery, to acquire better machines and more machinery and to increase productivity in that way. That is the purpose of this legislation.

The honourable member for Melbourne Ports stated as another objection to the legislation that the investment allowance was unselective and that incentives should be given in particular areas throughout the country. Indeed, I think he went so far as to suggest that perhaps the allowance should be available to encourage industry in States where there was a higher unemployment rate than in other States.

Mr Crean:

– I did not say that.

Mr BROWN:

– As 1 understand the honourable member for Melbourne Ports, he said he would seek to restrict the investment allowance in that way to particular parts - I think he mentioned country areas - and particular States if the occasion arose. The short and simple answer to that proposition is that it would be unconstitutional. That would be a taxation law which discriminated between States or parts of States and consequently would be uncontitutional. So we need not concern ourselves with that proposition.

A third point made by the honourable member for Melbourne Ports to which I wish to refer was that incentives should be given to particular industries and that on occasions incentives should not be allowed at all in the case of other industries. I suggest to the House that this is the real nub of the Opposition’s case. The Opposition would seek to distinguish between industries and, for all I know, between particular manufacturers and companies. It would say ‘We will grant you the investment allowance because we think what you are doing is appropriate and deserves a taxation deduction’. But it would not allow the deduction to be given to other companies or manufacturers. It would pick and choose. What the Opposition is proposing to the people of Australia - it is well that those involved in manufacture in this country should bear this in mind - is that if it were the government it would pick and choose in this grace and favour way between the lucky beneficiaries of the investment allowance deduction and those who missed out. Heaven only knows what sort of criterion a Labor government would use to decide who would receive the investment allowance and who would not receive it.

Honourable members will recall that at the commencement of my speech I indicated that the Opposition’s opposition to this legislation had come at the end of a very significant week. In that week the Opposition indicated that it would use the tariff structure in this country in a most political way. The Minister for Trade and Industry (Mr Anthony) used the expression that it would be one of the instruments of a grace and favour government. It would pick and choose the industries that it supported. It would use its own criteria. Heaven only knows what these criteria would be. The honourable member for Lalor (Dr J. F. Cairns) indicated very much the same thing. Another matter that was discussed at some length last week was the question of prices control. I do not know when the Opposition will sort out precisely what it is that it is proposing as its prices policy. The honourable member for Adelaide quoted an extract from the policy of the Australian Labor Party in South Australia. He read it out in a very dutiful way, complying with the letter of the Party’s policy. But it left me none the wiser. I do not know whether what the Australian Labor Party is advocating is strict prices control by bureaucrats or whether it is advocating the establishment of some sort of prices justification tribunal. I am not an economist. For all I know, some justification may exist for the establishment of a body of that nature. What I am very much opposed to is the proposal put forward in simple, bald terms by the honourable member for Lalor last week, namely, the introduction of prices control. He almost used those words. He almost said that the Australian Labor Party would introduce prices control. This is just another example of the attitude adopted tonight in regard to this Bill to restore the investment allowance. The Opposition would say ‘We will decide what will be done in manufacturing industry. We will decide which industries receive the allowance and which do not receive it. We will decide the criteria that will be used to determine whether the allowance will be made’. I do not know how any manufacturer would be able to plan ahead on that basis. For instance, if a Labor government were in power and the manufacturer required new plant and equipment, would the Labor government give its approval? Would it say: Yes, we approve of what this manufacturer is involved in. We will allow the investment allowance to be granted.’ Or would the manufacturer be in doubt as to whether the allowance would be granted to him? Of course, he would be in doubt. I suggest that the consequence of that would be that manufacturers would be hesitant to acquire plant and equipment and that the investment allowance would not operate in the way in which it is now designed to operate, namely, to encourage the use of better plant and equipment and to increase and improve productivity in this country.

I conclude on this note: On 2 occasions in these comments tonight we have heard 3 indications of what the Labor Party would do if it were the government.It would use a grace and favour implementation of the tariff; it would implement strict prices control without any qualifications, according to the honourable member for Lalor; and it would distribute in a pork barrel way the benefits that are given across the board under this legislation to all manufacturers in the country. I suggest that that is a warning. I suggest that those who are engaged in business in this country and those who are concerned with manufacturing should look very closely at some of the speeches made by the members of the Opposition and decide what is preferable. They have 2 alternatives: Firstly, if they acquire plant and equipment according to the strict tests under the formula laid out in the legislation, they know that the money they expend will be deductible. Irrespective of any grace and favour criterion, that deduction would be allowed. The second alternative is:If a Labor Government introduced the policies as outlined by the honourable member for Melbourne Ports tonight, whether manufacturers were allowed the deduction would depend purely and simply on grace and favour. It would depend purely and simply on the criterion selected by a government to decide particular cases of their own choosing. I suggest that that would be very unfortunate for the manufacturing industry of this country. It would be very unfortunate for the development of the manufacturing industry in this country and for the improvement and expansion of productivity in this country. Accordingly, I support the legislation and I oppose the amendment introduced by the honourable member for Melbourne Ports.

Question put:

That the words proposed to be omitted (Mr Crean’s amendment) stand part of the question.

The House divided. (Mr Deputy Speaker- Mr J. M. Hallett)

AYES: 54

NOES: 49

Majority . . 5

Quest:on so resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time.

AYES

NOES

Third Reading

Leave grunted for third reading to be moved forthwith.

Bill (on motion by Mr Swartz) read a third time.

page 389

BANKS (SHAREHOLDINGS) BILL 1971

Bill returned from the Senate with amendments.

page 389

SUSPENSION OF STANDING ORDERS

Motion (by Mr Swartz) - by leave - agreed to:

That so much of the Standing Orders be suspended as would prevent notices Nos. 9 and 10, General Business, being forthwith called on and moved together and one question being put in relation to the two motions

page 389

QUESTION

DISALLOWANCE OF ORDINANCE AND REGULATION

Mr ENDERBY:
Australian Capital Territory

– I 110Ve

  1. That the Education Ordinance 1971 (No. 28 of 1971), made under the Scat of Government (Administration) Act 1910-1970, be disallowed.

    1. That the amendment to regulation 6 of the Commonwealth Motor Omnibus Fares Regulations as contained in Regulations 1971 No. 7, made under the Commonwealth Motor Omnibus Services Ordinance 1955-1970 of the Australian Capital Territory, be disallowed.

These 2 ordinances have the efi ,ct of increasing school bus fares in the Australian Capital Territory from 2c to 5c per journey. The amendment to the Education Ordinance can for practical purposes be disregarded because its purpose is mainly to make the increase in fares brought about by the amendment to regulation 6 of the Commonwealth Motor Omnibus Fares Regulations consistent with other sections of the Education Ordinance. The fact that an ordinance of this kind has to be debated in this Parliament after some 72 years of federation and after the Australian Capital Territory has been in existence for well over 40 years is the strongest condemnation of this Government’s inertia and complete failure to provide a proper and alternative system of making, laws for the ACT. May 1 tell the House what the measure is all about. In June last year the Department of Education and Science indicated by circular that it wds currently reviewing the provision of school bus services in the Australian Capital Territory, lt gave its reasons and they were the increased amounts being paid for the bus services. They had risen to approximately $420,000 and the Department also gave as a reason the need to impose economic restraints. Very few people were aware of this circular here in Canberra at the time but those who were interpreted it as just another example of the Government’s then policy of restricting public spending in an attempt to curb inflation. Of course, it was as useless for that purpose as turning off the fountain in Lake Burley Griffin although it did have the difference that it was much more serious because it imposed a financial burden on many parents of school age children. lt was in September 1971 that the Minister for the Interior (Mr Hunt) announced that school bus fares would rise from 2c to 5c per journey and he indicated that the expected revenue would increase to about $120,000. The previous ?c fare had produced approximately S38.000 As I have said, the cost of school transport itself was approximately $420,000. These figures show that the fares in no way recoup the Government for what it spends. The increase is only an attempt to extract money from parents who have school age children. As such it is nothing more or less than a tax on the parents of school age children - a tax which in the form in which it has been imposed here in the Australian Capital Territory is not imposed in many of the other States, certainly not in New South Wales, South Australia. Queensland and Victoria.

The ordinances were introduced in October last year, and promptly a number of complaints were made by local parents and citizens associations protesting about the increase and the effect it would have. The protests were that this would have a terrible effect on low income families. 1 have been told, and I accept, that a number of other parents and citizens associations discussed the problem but passed no resolutions of protest because they were persuaded - and it is a common view held in this city of Canberra - that once an ordinance has been introduced it is too late to protest. It is my own view that, because of party divisions, there is no chance in the world of persuading this House to do anything about it. I am merely acting out a charade here when I stand up and say what I am saying. Those parents and citizens associations took no action because it was considered too late. That feature of despair, if I may call it that, and frustration is just another feature of how laws are made in the Australian Capital Territory and for the Australian Capital Territory.

What does the increase mean? It means that a family with 3 school age children has had its bus fares for those 3 children increased from 60c a week to $1.50 a week. Its new school bus bill for a 42 week year is now $63. If the family has 6 school age children - and I know of one which has 8 - the bus fares increase by $1.80 a week to $3 a week. The new yearly school bus bill is approximately $126. I have called the charge a tax. It is nothing else. It is almost impossible to find out just how many families with school age children there are in Canberra whose incomes are such that the fare increase will cause hardship. We do know that the average national income is about $90 a week. How anyone supports a family on that I do not know. We also know that approximately 64 per cent of the wage earners of Australia receive less than that $90 a week. The income tax returns for 1969 showed that approximately 26,000 persons in the Australian Capital Territory received less than $60 a week. I do not know how many of those are married and have families or in how many cases the other spouse does not have in income, but there must be many of them. I know from my own experience of the large number of people coming to my office here in Canberra with one problem or another who are trying to live and support families on a total take-home pay of $55 or $60 a week. Any increase, whether it is an increase in the cost of food or electricity or an increase in bus fares, to such a family means great hardship.

The Government must have recognised that the increase could cause such hardship because it included in its amendment subregulation 5. This allows an application to be made for a refund if the person concerned can satisfy the Minister, through his officers, that the increase has caused hardship. The Minister suggested the same concern when he announced the increase, because he said that he would have preferred to leave fares at the old rate. I interpret this to mean that he knew it would cause financial hardship. The Minister went on to say, and repeat what his Department had earlier said, that the pressure on the Budget had led him to impose the increase. He also said that the money would help to provide Australian Capital Territory school libraries, and in a letter to me dated 4th November 1971 he said that the increase would help provide Australian Capital Territory school vacation play centres and a teaching resources centre for the assistance of Australian Capital Territory teachers. If this is so, it is surely wrong. It is a wrong way to go about financing such projects, because the charge is nothing more than a tax on the persons who are least able to pay - the wrong people. The Minister does not tax the wealthy who drive their children to schools in cars. He taxes the people who have to use the public transport system.

The argument based upon budgetary considerations is false. It is now generally agreed that the policy of that Budget has been abandoned. The Prime Minister (Mr

McMahon) and his Treasurer (Mr Snedden) are now taking steps contrary to those they took in September last year. Then they were trying to restrict public spending; now they are encouraging it. Last week the Prime Minister gave the State Premiers a great sum of money - about $9lm - in an attempt to increase public spending and arouse some enthusiasm in the economy. By that test the underlying policy that required that these Australian Capital Territory bus fares be put up should now be scrapped and the increases dropped.

I come back to the proviso about giving relief where there is financial hardship. How can this help? The Minister must know that the decision whether or not to give relief in a case of hardship has to be made by social workers. He should know, or if he does not 1 would suggest that his colleagues tell him, that the social workers of Canberra arc hopelessly overworked and understaffed. There has been recent, publicity on the subject. For example the senior resident judge of the Australian Capital Territory Supreme Court has publicly protested about the inability of the social workers to provide him with pre-sentence reports, and he has been told by counsel representing the Crown, who presumably knows, that the social workers of Canberra carry a work load more than double that carried by their colleagues in New South Wales. Yet the Minister asks those same social workers to pick up the check and administer this piece of legislation as well by interviewing applicants for relief from hardship caused by this increase in school bus fares. Does the Minister know that the social workers of Canberra have not had any major staffing review since 1968? Does he know that their numbers are basically the same as they were then, notwithstanding the fact that their case loads have increased by about 130 per cent in those 3 years? That percentage is far greater than the rate of growth of the city of Canberra and a rate of growth that can only be accounted for by those social workers being given extra jobs to do. Yet the Minister seeks to impose another job on them.

I have made some inquiries that reveal that the social workers administer, or try to administer, this relief of hardship provision in the manner in which they adminis- ter the subsidised medical benefits scheme. That means that a person has to have an income of not more than $52.50 a week to be eligible for relief. It is true that in special circumstances, where there are large numbers of children or special medical expenses have been incurred, other factors can be considered but I am told this is extremely rare. Families with a breadwinner who earns $53 a week or more get no relief, notwithstanding that for, say 6 school children their bus fares now amount to $3 a week. They get no assistance even if they are paying rent of perhaps $30 or S35 a week, and there are many families in Canberra who are paying such rent on a take-home pay of less than $60 a week. The application of the regulation 97 allowance in Canberra partly contributes to it, coupled with the Government’s decision not to have premises subjected to fair renting. Again how those people live I do not know. On those figures it probably never gets to the stage where the officer has to investigate and decide whether the family spends too much on its electricity, its hire purchase payments or any other such considered luxuries.

The whole philosophy underlining the increase is wrong. Canberra, with all its attractiveness and with all its advantages and good living, has some very serious defects. One of the most obvious, and it is well known to anyone who lives in Canberra, is its deplorable public transport system. In many cases it is cheaper for people to drive a car to work than to use the public transport system. The other night I made some inquiries of a public service acquaintance of mine who lives in Weston Creek. I was told that travelling by bus to the Administrative Building, close by Parliament here, costs him 80c return a day. You can drive your car for that. Is it any wonder people are discouraged from using the public transport system, and is it any wonder that the Government’s only solution to the problem of providing public transport is to increase fares and offer fewer buses and so make the system worse? Anyone who works in the city of Canberra knows how it has been transformed in recent years by the developing parking problem. I have here a newspaper account from the ‘National Times’ of 28th February carrying the headline ‘Office Block and the

Motor Car - a Match that Failed’. It sums up the position as eloquently as anything I can say. People are picking up parking tickets, but parking tickets do not seem to deter motorists who I suppose are eternal optimists. I am receiving more and more complaints from people who cannot find a place to park their motor car in the city of Canberra. It seems that we are following the path of misfortune of the big cities such as Sydney and Melbourne and others overseas. 1 know that there are difficulties about providing good public transport, but the answer is to provide it and accept it as a charge on the community rather than try to limit and restrict the service to service based upon some outmoded test of how we can make it pay or whether it can produce a profit, because it clearly cannot and it never has. We cannot make it pay. The sooner we realise that the better. We should be moving in the direction of overseas cities such as Rome and Bologna, which are now providing free bus services. It is more than just a matter of convenience and the shortage of parking space. It is a matter of common sense. It is linked with pollution, congestion and anything else one cares to think about. We should stop trying to deter motorists from taking their cars to work. We should provide a better and more attractive alternative public transport system. I should like to quote the remarks of 2 gentlemen who have considered this subject in some depth. The head of the Urban Research Unit of the Australian National University in Canberra, Dr Max Neutze, stated recently that Sydney and Melbourne should have free transport so that people would be encouraged to use public transport instead of using their cars. The Head of the Transport Section of the Department of Civil Engineering at Melbourne, Mr Nicholas Clarke, recently described the present policies of trying to finance public transport services from user charges as economic lunancy.

The Minister for Education and Science (Mr Malcolm Fraser) has shown by his recent intervention in a particular case that I am sure he will recall - the case of the Tharwa primary school children - that basically he is sympathetic to this problem because in that case he did intervene and, as I understand it, overrule a departmental decision which would have taken away some transport subsidies and he restored the subsidies to the parents of those school children because of their geographical isolation. I can end only by asking both Ministers concerned with this problem and all honourable members present to support this motion. The Government is imposing a tax on people Who can least afford to pay it. For the wage earner who tries to support himself and his family on $55 or $60 a week, it is an impossible task to have added to that burden an extra $1, $1.30 or $1.50 a week. Very often during the 3 years that is now the waiting period for government houses in Canberra, people are forced to pay rents of $30, $35 and $40 a week. This is common knowledge. I cannot quote exact figures but the ‘Canberra Times’ recently compared advertisements for rental houses in Canberra. In a 12- month period from, I think, December 1 968 to December 1969 the average rents rose from about $28 a week to something in the neighbourhood of $40. As I have suggested, the reason for that is the refusal of the Department of the Interior to fair rent the premises on which it allocates its regulation 97 allowance. Be that as it may, rents in Canberra are extremely high and enormous economic hardship is caused to people who are trying to make ends meet. To impose increased school transport fees as an additional hardship on them is wrong and should be avoided, particularly when one has regard to the reasons given toy the Minister last year as being linked with the same sort of thinking that led the Government to turn off the fountain in the lake to attempt to save money and, when it realised how silly it had become, it turned the fountain on again. The Government now is pouring money back into certain parts of the public sector, as evidenced by the payments made recently to the Premiers of the States. If the thinking behind the imposition of the increase on those fares was the same and if economic conditions have now changed and the Government accepts that they have changed and that it is following a different policy, there is all the more reason apart from hardship, to rescind this decision to-night.

Mr DEPUTY SPEAKER (Mr Hallett:
CANNING, WESTERN AUSTRALIA

– Is the motion seconded?

Mr Bryant:

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

Mr HUNT:
Minister for the Interior · Gwydir · CP

– The honourable member for the Australian Capital Territory (Mr Enderby) gave his side of an argument against an increase in school bus fares. He condemned the law making processes in the Australian Capital Territory and condemned generally the transport system that operates in the Australian Capital Territory, so it was a fairly wide-sweeping attack upon the processes of administration in the Australian Capital Territory. While there may be some value and virtue in the argument that there should be free school buses and a free transport system in the Australian Capital Territory and while 145,000 people in the Australian Capital Territory would welcome such a proposition I doubt very much whether the taxpayers of Australia would share that sort of view, because I do not know of any other place in Australia where a free public transport system operates, desirable as this might be. Of course it is just not on.

The increase in bus fares for school children travelling to and from school on special buses and on regular buses in the Australian Capital Territory was approved by the Minister for Education and Science (Mr Malcolm Fraser) in September 1971. This led to an amendment to regulation 6 of the Commonwealth Motor Omnibus Fares Regulations. The fares were increased from 2c to 5c a trip and consequential amendments were made to the Education Ordinance 1937-1966 to give effect to this decision. Both sets of amendments came into operation on 1st November last year. This rise was due to a 150 per cent increase in operating costs to the Department since 1964 when the Commonwealth Motor Omnibus Fares Regulations ordinance came into force. With the increases in wages and in costs generally, it is not unreasonable to expect that there would be an increase in fares. In this period there has been a substantial increase in wages and salaries generally and, of course, the services to the community ultimately must be paid for by somebody. As wages increase, so does the cost of providing services to a city such as Canberra. With the exception of private buses, which are hired on a contractual basis to transport children living in rural areas to and from school, all the buses used by school children in the Australian Capital Territory are operated by the Department of the Interior.

The decision to increase school bus fares was taken after careful consideration by the Department of Education and Science of the cost to that Department for the provision of special school buses, and of subsidising reduced fares for school children who travel to and from school on regular buses. The bus fare charge of 2c for school children, as I mentioned earlier, was not varied from November 1964 until November 1971. In that time the cost to the Department of Education and Science of subsidising the cost of bus transport for school children rose approximately 150 per cent. For example, the cost in the financial year 1968-69 was $163,497; in the following year it was $260,000 and, in the financial year 1970-71, it was $428,972. It is estimated that the cost of the subsidy for the financial year 1971-72 on a 2c fare charge for the whole year will be $482,000 and, on a 5c fare charge for the whole year it will be $426,000. The major element of the cost is the provision of special buses to take children to and from school. The buses pick up at regular intervals and set down outside each school. Other elements of the cost include the provision of special buses to transport school children to and from school sporting fixtures and special events; a subsidy of school children’s fares to and from school on regular government passenger buses; a subsidy of the fares for the bus transport to and from school of children living in rural areas of the Australian Capital Territory who are not served by private contract buses; and payment of the cost of fare concessions granted to secondary school children during their school vacations.

Children attending non-government schools come from a wider area of the Australian Capital Territory and are mors dependent on special buses for transport to and from school. The special school bus service provided for Australian Capital Territory school children is different from the school bus services provided in other parts of Australia. In Sydney and Melbourne, for example, the majority of school children who are dependent on bus transport travel to and from their school on ordinary passenger buses, which operate along the normal routes and which are adequate for this purpose.

The proposals to amend the Commonwealth Motor Omnibus Fares Regulations and the Education Ordinance of the Australian Capital Territory were discussed at a meeting of the Australian Capital Territory Advisory Council on 20th September 1971. The members of this Council did not express any objection to the proposed fares increases. In fact, they could see the reason why the increases were necessary. But the Council did suggest that the Department of Education and Science should consider the granting of school bus fare concessions to families suffering hardship. This recommendation was accepted and a provision was included in the regulations authorising the Minister to refund to the parent or guardian of a school child the whole or part of the fares in respect of the child’s bus travel between his home and school where payment of the fares has caused hardship.

I know that there are some problems in trying to administer this type of regulation. I know there are difficulties within the social welfare section of my Department. But we saw this as a genuine way of trying to relieve any hardship that may have been caused to parents in the Australian Capital Territory by this essential increase in fares from 2c to 5c per child. Admittedly there have been only a very few applications for a refund, but all the applications that have been made have in fact been approved.

I might add that provisions already exist under which persons requiring assistance can be helped and in these cases it would not be necessary to rely on the provisions of the Ordinance. This Ordinance has been widely canvassed in the community. As I said earlier, there was a reference to the Australian Capital Territory Advisory Council. There was a debate on the issue and the Government did accept the provision to ensure that those parents who were suffering economic disabilities or hardship were in fact given a concessional rate

I would like to inform the member for the Australian Capital Territory and the House that the Department of tie Interior has been undertaking a review of the general structure of the administration of the social welfare section of the Department. I would hope that in the very near future an announcement will be made along these lines to try to improve the general services to the Canberra community. But this has been an absolutely essential Ordinance. It was essential to increase the fares and we have tried genuinely to assist those people who through hardship have not been able, and will not be able, to meet the increase.

Mr BRYANT:
Wills

– This, of course, is not an argument about bus fares at all. It is a question of free education; it is a question of whether the Minister for the Interior (Mr Hunt) is prepared to support for the people of Canberra the system that is applicable to his own children, wherever he comes from, up beyond the black stump. I think this place is Moree. Free education is the matter before the House, lt is nonsense for the Minister to say that it is essential in this circumstance to increase from 2c to 5c the fare in Canberra for school children in order to raise another $70,000 or $80,000 to balance the Australian Budget. What nonsense is that? This has nothing to do with it. This is a normal piece of Treasury nonsense and the Minister is just the victim of it. The Minister is the rubber stamp apparently of the Minister for Education and Science (Mr Malcolm Fraser) whose children, if they went to a State school in the area where he lives, would also have the benefit of free transport to that school.

But the irony of the situation is that if my friend the Minister for Education and Science - and I am a broadminded Socialist and am still prepared to call him a friend despite his heretical politics - cared to send his children every day by some bus service from near Hamilton a distance of 10, 15 or 20 miles to the most expensive school in Australia, he would get the transport free. But this does not apply to the citizenry of Canberra. I do not believe that this is a question of bus transport; it is a question of free education. The Minister for the Interior, of course, waves the magic wand at wage rises. Everything is the responsibility of that filthy fellow, the worker, who demands to be paid for what he does! It is not anything of the sort.

What exactly has happened? The Department of the Interior supplies the buses. It charges the Department of Education and Science for the service; the amount I think, is 72c a mile. I do not know whether that is a reasonable charge per mile for buses in the Australian Capital Territory. I presume that this amount has been worked out on a slide rule in the Treasury with a proper allowance made for amortisation, for a high interest rate and for all of the other overheads and nonsense. I do not know what the costs are in Victoria for a Tramways Board bus. Speaking from memory I think that the cost is below 72c per mile. So the system here is loaded with some mythical figure dredged out of the depths of the Treasury somewhere, passed on to the Minister for Education and Science and then adopted by the Minister for the Interior.

We should reject out of hand the operation here before us. I believe that what we are discussing comes to the heart of the matter - the question of the government of the Australian Capital Territory. I suppose it is by chance almost that a regulation such as this is noted as it goes before the House. In normal circumstances we get a roll of paper delivered to our offices in which there is the memorandum and the regulation. It is a fluke if someone has his eye upon it. However, we are singularly fortunate that the people of Canberra have the eagle eye of the honourable member for the Australian Capital Territory (Mr Enderby) upon this regulation. Therefore the regulation has been captured in mid flight and we have taken the opportunity here in the national Parliament to try to protect the people of Canberra against this nonsense.

The House itself is in a special relationship about this. In a few moments a large number of members of the Government parties will answer the division bells and troop into the chamber. Not more than one-quarter or one-fifth of them will know what the system is about. They will not know that they are making a decision on this matter. What is the decision? One may say: ‘Well, 5c a day - what is that? Surely that is a reasonable charge?’ But the facts are that the Government is raising the amount from 2c to 5c and I believe that is a change in quality. One may have a token payment of 2c and say: ‘Well, they are going to school and they have to part up with some coin which is a token of the system’. But the moment the Government raises the payment to 5c a person who has 3, 4 or 5 children - and families consist of this number of children not only in the ACT but everywhere else in Australia - is affected and hardship is caused in thousands of homes. No-one can deny that. This money to be raised out of the school system is chicken feed. The parents of children are contributing this year perhaps as much as $40,000. As a result of this rise in fares the contribution will be more than $100,000. Some 5,000 parents are involved.

I believe this is a fair example of the eccentric nature of the financial arrangements of this country. The rise in fares is 150 per cent. It has been a long time since the workers who drive buses have received a pay rise of 150 per cent. As I have said, I believe that this proposal should be rejected. What is the situation elsewhere? As I understand it any child who travels more than one mile to school in New South Wales - and perhaps the Minister has built a special school in the A.C.T. to cater for the Hunt family - is carried free. Is that correct or not?

Mr Hunt:

– In New South Wales?

Mr BRYANT:

– Yes.

Mr Hunt:

– Oh yes.

Mr BRYANT:

– Yes, that is right- the Minister admits it.

Mr Hunt:

– Free school buses for country children. That is Country Party policy.

Mr BRYANT:

– That is right. Of course, there are apparently no Country Party voters here. It has been the tradition in New South Wales for a long, long while, as it has been in Canberra. As I remember, going back to my own school days which are in the fairly dim and distant past, we received so much a mile if we lived more than 3 miles from our school. It is part of the established Australian system that free education includes transport of childTen to school. I believe that is the issue before us. What is the difference between the cost of the school building, the cost of teachers’ salaries and the cost of transport of children to school? Once children live beyond a reasonable walking distance to school, transport is an integral part of the school service.

I believe that the Parliament ought to disallow this Ordinance and these Regulations out of hand. I believe that it is our duty to supply free transport of children to school. But now I come to the irony of the situation. I wonder whether the Minister for the Interior has taken the trouble to look at the States Grants (Independent Schools) Bill which is to come before the chamber for debate. Our colleague, the Minister for Education and Science, has told us that a grant of $34.3m will be made to independent schools this year. That is the sort of money which the Minister talks about in this area. But in this instance we are talking about taking 2c, 3c or 4c out of the pockets of people in the Australian Capital Territory, many of whom can ill afford to pay it. An imbalance will be caused in 2,000 or 3,000 domestic budgets for a miserable $60,000. $70,000 or $80,000 a year.

My friend the honourable member for Wilmot (Mr Duthie) pointed out to me that in Tasmania this year an amount of $1,600,000 will be spent on providing transport for school children. I think that Tasmania’s population is between 350,000 and 400,000 people. The population of the Australian Capital Territory is approaching 150,000. On a proportional basis I should think that the Government would be prepared to spend approximately $500,000 to transport children to school in the Australian Capital Territory. In fact, that is the approximate cost if the transport were provided free. Therefore, I believe that the Minister for the Interior is following a false pattern in attempting to recoup the cost of the transport of children to school. I believe that the transport of children to school is part of the education system. I believe that the principle which applies throughout most of Australia for thousands of Australian children - that no matter how far they are from a school, transport to the school is provided free - should apply in the Australian Capital Territory. It is part of the established Australian way of doing things, and I believe that this Ordinance and these Regulations ought to be disallowed.

Question put:

That the motions (Mr Enderby’s) be agreed to.

The House divided. (Mr Deputy Speaker - Mr P. E. Lucock)

AYES: 49

NOES: 54

Majority . . 5

AYES

NOES

Question so resolved in the negative.

House adjourned at 11.9 p.m.

page 397

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Australian Capital Territory: Employment of School Leavers (Question No. 4743)

Mr Enderby:

asked the Prime Minister, upon notice:

  1. How many school leavers are expected to graduate and to seek employment in the Australian Capital Territory at the commencement of 1972.
  2. How many school leavers in the Australian Capital Territory with the (a) school certificate, and (b) higher school certificate were accepted for employment with the Commonwealth Public Service in each of the last 5 years.
  3. Have any decisions been taken which will affect the likely intake of school leavers from the Australian Capital Territory as recruits to the Public Service at the commencement of 1972.
  4. On the basis of previous experience, what is the estimated number of school leaver applicants in the Australian Capital Territory who will be refused employment in the Public Service in 1972.
Mr McMahon:
LP

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

  1. I have been advised that it is not possible to make a firm assessment at this time of how many young people terminated their secondary schooling and sought employment in the Australian Capital Territory at the commencement of 1972, since not all would have yet made a definite decision as to their future. The latest available estimate is that approximately 2,200 terminated their schooling last year. In the light of previous experience it is estimated that between 1,400 and 1,500 will seek to obtain employment in the Australian Capital Territory and adjoining areas in New South Wales early in 1972.
  2. The Public Service Board has informed me that it maintains statistics of permanent appointments effected in the Australian Capital Territory but that these do not distinguish between ‘school leavers’ and ‘others’. From its records, however, the Board can identify the number of officers appointed to the Third Division who completed their qualifying examinations in the previous year - that does not mean, necessarily, that they were school leavers as an unknown proportion would have completed their qualifications while in employment. The numbers of such appointees to the Third Division for each of the last 5 years are as follows:
  1. The announcement by the Treasurer in the Budget Speech 1971-72 that the Government ‘has decided to limit the growth in the numbers employed full-time under the Public Service Act to 3.1 per cent in 1971-72’ is relevant
  2. The Public Service Board has advised that it is not in a position to estimate the number of school leaver applicants in the Australian Capital Territory who will fail to win selection for employment in the Commonwealth Service in 1972.

United Nations: Representation of China (Question No. 4876)

Mr Whitlam:

asked the Minister for

Foreign Affairs, upon notice:

  1. Which United Nation bodies and specialised agencies have voted on the representation of China since the decision of the General Assembly on 25th October 1971.
  2. How did each member vote.
Mr N H Bowen:
PARRAMATTA, NEW SOUTH WALES · LP

– I furnish the following reply:

So far as the Subsidiary and Special Bodies of the UN are concerned the General Assembly vote is regarded as binding and the People’s Republic of China can automatically take its place. The Special bodies concerned are:

United Nations Children’s Fund (UNICEF). Office of the United Nations High Commissioner for Refugees (UNHCR).

United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

United Nations Conference on Trade and Development (UNCTAD).

United Nations Development Programme (UNDP).

United Nations Industrial Development Organisation (UNIDO).

United Nations Capital Development Fund (UNCDF).

So far as the Specialised and Other Agencies are concerned the position as at the 21st January 1972 was as follows:

International Labour Organisation (ILO)

On 16th November 1971, the Governing Body voted to recognise the People’s Republic of China as the Representative Government of China.

Details of the voting were:

In favour (36)

Canada, France, Germany (Fed. Rep.), Italy, India, USSR, United Kingdom, Czechoslovakia, Ecuador, Indonesia, Kenya, Libya, Nigeria, Romania, Syria, Brazil (Employers Representative), Ghana (Employers), Sweden (Employers), Germany (Fed. Rep.) (Employers), Iran (Employers), UK (Employers), India (Employers), France (Employers), Mexico (Employers), USA (Employers), Germany (Workers Representative), Tunisia (Workers), Morocco (Workers), Belgium (Workers), Cameroon (Workers), Canada (Workers, USSR (Workers), Mexico (Workers), UK (Workers), Japan (Workers), Norway (Workers).

Against (3)

United States, Vietnam, United States (Workers).

Abstentions (8)

Japan, Uruguay, Niger (Employers), Brazil, Upper Volta, Colombia, Republicof Central Africa, Malagasy (Workers), Malagasy (Employers).

Food and Agricultural Organisation (FAO)

On 26th November 1971 the 16th Conference of the Food and Agricultural Organisation adopted a resolution, the main points of which were:

The Conference -

Noting the exchange of telegrams between the Director-General of FAO and the Government of the People’s Republic of China dated respectively 2nd November and 23rd November 1971.

Pursuant to resolution 2758 (XVII) of the General Assembly of the United Nations.

Authorises the Director-General when the People’s Republic of China manifests the wish to take its place in the Organisation, to take all appropriate measures to bring into effect the resumption by China of its place in the Organisation.

Authorises further the Director-General to take all necessary measures concerning financial questions, taking into account any action that may be taken by the United Nations in this respect and after consultation with the competent organis of FAO.

Requests the Director-General to transmit the text of this resolution to the Government of the People’s Republic of China.

Details of the voting were:

In favour (68) (Vote was by show of hands.)

Individual Country positions were not recorded).

Abstentions (3)

United States, Japan, Australia.

United Nations Educational, Scientific and Cultural Organisation (UNESCO)

On 30th October 1971, the Executive Board of UNESCO adopted a resolution, the operative paragraph of which was:

The Executive Board

Decides that from today the Government of the People’s Republic of China is the only legitimate representative of China in UNESCO and invited the Director-General to act accordingly.

Details of the voting were:

In favour (25)

Afghanistan, Algeria, Canada, Ceylon, Czechoslovakia, Ethiopia, Finland France, Germany (Federal Republic of), Ghana, Hungary, Jamaica, Lebanon, Mexico, Netherlands, Pakistan, People’s Republic of Congo, Peru, Senegal, Switzerland, U.S.S.R., United Arab Republic, United Kingdom, United Republic of Tanzania, Zambia.

Against (2)

United States, Brazil.

Abstentions (5)

Japan, Colombia, Spain, Costa Rica,

Zaire (India and the Ivory Coast did not vote).

International Civil Aviation Organisation (1CAO)

On 19th November the Council of the International Civil Aviation Organisation adopted a resolution, the operative paragraphs of which were:

The Council:

  1. Decides, for the matters within its competence to recognise the representatives of the Government of the People’s Republic of China as the only legitimate representative of China to the International Civil Aviation Organisation, and
  2. Requests the Secretary-General to immediately communicate this decision to all contracting states.

Details of the voting were:

In Favour (20)

Belgium, Canada, Congo, Czechoslo vakia, Egypt, France, Germany, India, Indonesia, Italy, Lebanon, Mexico, Nigeria, Norway, Senegal, Spain, Tunisia, Uganda, United Kingdom, USSR.

Against (2)

Nicaragua, United States

Abstentions (5)

Argentina, Australia, Brazil, Colombia, Japan

International Atomic Energy Agency (IAEA)

On 9th December 1971, the Board of Governors of the International Atomic Energy Agency passed a resolution, the operative paragraphs of which were:

The Board of Governors .

Recognises that the Government of the People’s Republic ofChina is the only Government which has the right to represent China in the International Atomic Energy Agency; and

Decides that Chiang Kai-Shek’s representatives be expelled immediately from the place they unlawfully occupy in the International Atomic Energy Agency; and

Requests the Chairman and the DirectorGeneral to take all the actions resulting from this resolution.

In Favour (13)

Canada, Ceylon, Chile, Czecho slovakia, Egypt, France, India, Netherlands, Norway, Romania, Syria, USSR, United Kingdom.

Against (6)

Brazil, Colombia, Greece, South Africa, United States, Zaire.

Abstentions (5)

Argentina, Australia, Japan, Portugal, Thailand

Absent (1)

Republic of China

General Agreement on Tariffs and Trade (GATT) At the beginning of the 27th Session of the Contracting Parties the Chairman made the following statement:

In 1965 the Session of the Contracting Parties when examining the problem of China, decided that in matters of essentially political nature GATT would follow decisions of the UN. In view of the UN having taken a decision on 25th October the Chairman of the Contracting Parties is of the opinion that, on the basis of the 1965 Contracting Parties decision, the ROC could not attend as an Observer’.

The Chairman then declared that he believed the consensus agreeing with his view existed. A vote was not requested and the matter was considered terminated.

Other Agencies

Other Specialised Agencies yet to take a vote or make a decision on the China question are:

World Health Organisation (WHO)

International Bank for Reconstruction and Development (IBRD)

International Finance Corporation (IFC)

International Development Association (IDA)

International Monetary Fund (IMF)

Universal Postal Union (UPU)

International Telecommunications Union (ITU)

World Meteorological Organisation (WMO)

International Maritime Consultative Organisation (IMCO)

Regional Economic Commission

The Economic Commission for Asia and the Far East considered that the General Assembly vote applied automatically. The Executive Secretary of ECAFE has invited the People’s Republic of China to participate in all ECAFE activities.

Migration Agreement with Italy (Question No. 4983)

Mr Whitlam:

asked the Minister for Immigration, upon notice:

When were instruments of ratification exchanged for the Migration Agreement with Italy signed on 26 September 1967 (Hansard, 18 March 1971, page 1117).

Dr Forbes:
Minister for Immigration · BARKER, SOUTH AUSTRALIA · LP

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

The Migration and Settlement Agreement between Australia and Italy, signed on 26 September 1967, was ratified on 8 June 1971 by an exchange of instruments in Rome.

The Senate: Representation of Territories (Question No. 3939)

Mr Calwell:
MELBOURNE, VICTORIA

asked the Prime Minister, upon notice:

  1. Will he give consideration to the suggestion that the Australian Capital Territory and the Northern Territory be represented in the Senate by 2 Senators each.
  2. If so, would such an addition to the size of the Senate entitle the House of Representatives to be increased by 8.
Mr McMahon:
LP

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

  1. This part of the question concerns Government policy. Consideration has been given and will continue to be given to the suggestion.
  2. This part of the question calls for an expression of legal opinion which, under the Standing Orders, it would not be appropriate to provide.

Education (Question No. 4438)

Mr Daly:
GRAYNDLER, NEW SOUTH WALES

asked the Minister for Educa tion and Science, upon notice:

  1. Has his attention been drawn to a letter dated 30th August 1971 forwarded to all members of the Commonwealth Parliament by the Federation of Catholic Parents and Friends’ Associations, Sydney, in which the Government is criticised for its alleged failure to honour its promises to the Catholic educational system.
  2. If so, will he make a complete reply to the letter and state the reasons for the Government’s alleged failure to honour its promises and obligations to the Catholic educational system.
Mr Malcolm Fraser:
WANNON, VICTORIA · LP

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

  1. Yes.
  2. The honourable member for Ryan forwarded to me a copy of this letter which I answered in detail in my reply to him. I will provide the honourable member for Grayndler with a copy of this reply. I do not accept that the Government has failed to honour its promises and obligations to the Catholic educational system. On 5th October 1971, I gave the House details of the Commonwealth Education Programme for 1971- 72, and on 9th December 1971, the Prime Minister announced the provision of additional assistance for Government and Independent schools. Both of these clearly show that the Government is fulfilling its obligations to all sectors of Australian education.

Cite as: Australia, House of Representatives, Debates, 29 February 1972, viewed 22 October 2017, <http://historichansard.net/hofreps/1972/19720229_reps_27_hor76/>.

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