House of Representatives
24 May 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 p.m., and read prayers.

page 2955

PETITIONS

The Clerk:

– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:

Social Services

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

That on December 10, 1948, Australia signed the ‘Universal Declaration of Human Rights’, Article 23 reads:Everyone has the right to security in the event of unemployment, sickness, disability, widowhood, old age and other lack of livelihood in circumstances beyond his control.’

Yet, 23 years later, in our country of great national wealth and abundance it is to the nation’s shame that many thousands of our people live in a state of being inconsistent with the dignity and worth of the human person languishing in poverty and want, neglect and the lack of proper care necessary for their health and well-being.

We, the undersigned, respectfully draw to your attention that the conscience of the nation is not at ease while the records of our country show that social services are not comparable with that of other advanced countries administering such services, therefore, we call upon the Commonwealth Government to immediately legislate for:

Base pension rate 30 per cent of the average weekly male earnings, all states, plus supplementary assistance and allowances based on a percentage of such earnings. Unemployed benefits equal to the foregoing.

Completely free health services to cover all needs of social service pensioners hospitalisation, chronic and long-term illness, fractures, anaesthetics, specialist, pharmaceutical, hearing aids, dental, optical, physiotherapy, chiropody, surgical aids and any other appliances.

Commonwealth Government to promote a comprehensive national scheme in cooperation with the States and make finance available to provide for the building of public hospitals, nursing and hosteltype homes necessary to effectively meet the special requirements of aged people, in conjunction with a comprehensive domiciliary care program to enable aged people to stay in their homes.

Mental illness placed in the same position as physical illness.

Substantial Commonwealth increase in the $5 subsidy a day per public bed pensioner patient in general hospitals.

Ten per cent of Commonwealth revenue to local government for general activities which now include social welfare, health, conservation and other community needs. Commonwealth subsidy for the waiving of rates for pensioners.

Commonwealth Government to increase the non-repayable grant to the States for low rental home units for pensioners.

Royal Commission or other form of public inquiry into Australia’s social welfare structure that Australia may be brought into line with accepted world standards of the most advanced countries.

And your petitioners, as in duty bound, will ever pray. by Mr Howson, Dr Cass, Mr Garrick, Mr Jacobi, Mr Kirwan and Mr Reynolds.

Petitions severally received.

Taxation

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

Women throughout Australia are indignant at the Commonwealth Government’s persistence in retaining the ‘luxury’ 271/2 per cent sales tax on cosmetics and toiletries.

Cosmetics and toiletries are the only consumer expendables subjected to this unreasonably high rate of tax.

Women quite rightly regard cosmetics and toiletries as everyday essentials. They should not be penalised for maintaining good morale.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to:

Reduce sales tax on cosmetics and toiletries from the present 271/2 per cent to the ‘general rate’ of 15 per cent.

And your petitioners, as in duty bound, will ever pray. by Mr Crean, Mr Daly, Mr Graham, Mr Irwin, Mr Mclvor and Mr Staley.

Petitions severally received.

Australian Tourist Industry

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

That we, citizens of the Commonwealth, earnestly request our government to:

  1. Take cognisance of serious financial difficulty facing the Australian tourist industry.
  2. Give the industry financial aid in the forthcoming Federal Budget.

And your petitioners, as in duty bound, will ever pray. by Mr Gorton, Mr Barnes, Mr Calder, Mr Allan Fraser, Mr Fulton, Mr Giles and Mr Kirwan.

Petitions severally received.

Postmaster-General’s Department

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

That the Postmaster-General’s Department, Central Office, policy of centralising Post Office affairs and activities under the various titles of Area Management, Area Mail Centres, Area Parcel Centres and similar titles is resulting in both loss of service and lowering of the standards of service to the public, directly resulting in the closing of Post Offices which is detrimental to the public interest.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will take immediate steps to:

  1. Call a halt to ali closing of Post Offices and reorganising within the Post Office, until full details of the proposed savings and all details of alteration to the standards of service to the public are made available to Parliament, and
  2. Initiate a joint Parliamentary inquiry into the

Postmaster-General’s Department, to assess the degree on which it should be run as a normal business undertaking and to what extent its unprofitable activities should be subsidised as a public service charged more correctly to national development.

And your petitioners, as in duty bound, will ever pray. by Mr Jeff Bate and Mr Giles.

Petitions severally received.

Lake Pedder

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 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 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. by Mr Uren.

Petition received.

Aborigines

To the honourable the Speaker and Members of the House of Representatives in Parliament assembled. The Petition of the undersigned citizens of Australia respectfully showeth:

That there is a crisis in Aboriginal Welfare in the South West Land Division of Western Australia resulting from a population explosion, poor housing and hygiene and unemployment and unemployability.

That there is a need to phase out Native Reserves in the South West Land Division of Western Australia over the next three years.

That town housing must be provided for all Aboriginal families where the bread winner has permanent employment or an age or invalid pension entitlement.

That such housing must be supported by the appointment of permanent ‘Home-maker’ assistance in the ratio of one home-maker to every eight houses or part thereof.

That incentives of housing, ‘home-maker’ services and training facilities must be created in centres of potential employment for those who are currently unemployed or unemployable.

That insufficient State or Federal assistance has been made available to meet these requirements.

That adequate finance to meet these requirements can only bc provided by the Commonwealth Government.

Your petitioners most humbly pray that the House of Representatives in Parliament assembled will give earnest consideration to this most vita] matter.

And your petitioners as in duty bound will ever pray. by Mr Kirwan.

Petition received.

Richmond Airport

To the Honourable the Speaker and Members of the the House of Representatives in Parliament assembled. The humble Petition from certain residents of the western suburbs in the Sydney Metropolitan area and surrounding districts respectfully showeth:

That due to an expanding passenger air travel business together with larger and more powerful jet aircraft, aircraft noise has already become a serious problem for people living in the vicinity of airports.

That jet aircraft operations have a detrimental effect by way of air and noise pollution on the environment and airports should be situated so as to preserve the environment of populated areas.

That protest should be made against the proposal to establish an international airport at Richmond owing to the detrimental effect it would have for the environment there and in surrounding districts.

Your Petitioners therefore humbly pray that this House take appropriate steps to ensure that the Government does not proceed with the proposal to site the second, twenty four hour international airport for Sydney at Richmond or anywhere else in the far western suburbs of the metropolitan area.

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

Petition received.

Australian Aircraft Industry

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

  1. That the Government has allowed the Australian Aircraft Industry to reach a state of serious decline, threatening the future of the industry and undermining any possibility of Australia having an independent defence capability.
  2. That owing to inconsistency in defence policy, the Government has not encouraged Service Departments to tailor their equipment needs with the necessary lead time for local design and manufacture.
  3. That the Government should make it mandatory that offset manufacturing provisions be written into all invitations to tender documents for the supply of civil and military aircraft from overseas.
  4. That the Government should stipulate that all high rate usage spares for service equipment be manufactured by the local industry.
  5. The need to provide finance at Export-Import Bank rates to assist the sale of high value Australian manufactured military equipment to foreign countries.
  6. The need for Government initiative to assist the Australian Aircraft Industry to secure and undertake collaborative research and development work in major overseas aerospace projects.

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

Petition received.

page 2957

MINISTERIAL ARRANGEMENTS

Mr McMAHON:
Prime Minister · Lowe Prime Minister · LP

– I wish to inform the House that the Minister for Health and Leader of the Government in the Senate, Senator Sir Kenneth Anderson, is leaving Australia tomorrow to have discussions with health authorities in Europe, the United Kingdom and North America. He is expected to return to Aus tralia on 29th June. During his absence the Minister for Immigration, Dr Forbes, will be Acting Minister for Health.

page 2957

QUESTION

BUILDING MATERIALS COSTS

Sir JOHN CRAMER:
BENNELONG, NEW SOUTH WALES

– Has the Prime Minister seen figures just released on the wholesale prices index of materials used in house building for the period ended March 1972? Do these figures give rise to any satisfaction regarding the Government’s efforts to combat upward movements in prices?

Mr McMAHON:
LP

– I am aware of the very great interest of the honourable gentleman in the costs involved in home construction and in the rest of the building industry. J have looked at the figures relating to the increase for the year ended in March in the cost of materials involved in housing construction, and I am glad to say that it has fallen from an annual rate of 7 per cent to somewhere in the vicinity of 41/2 per cent. While this is a favourable trend,I can say no more than that. We would need to see much more reassuring figures before we could be certain that we had inflation anywhere near under control.

page 2957

QUESTION

UNEMPLOYMENT

Mr SPEAKER:

– Order! The honourable member’s question is far too long. I suggest that he shorten it and ask a direct question.

Mr FitzPATRICK:

– I ask: Will the Acting Treasurer give an answer on this question of tourism which curently is considered virtually untapped?

Mr McMAHON:
LP

– I am aware of the marked attractions of the western district of New South Wales and I think it could become a very good tourist centre. As to the specific question asked by the honourable gentleman, the problem has not been brought to my attention by the Treasury. I will make inquiries immediately after question time.

page 2958

QUESTION

WOOL MARKETING

Mr KELLY:
WAKEFIELD, SOUTH AUSTRALIA

– Has the Minister for Primary Industry seen a transcript of yesterday’s interview on the programme ‘This Day Tonight’ with the honourable member for Moore, in which he stated that the Prime Minister was delaying changes in the methods of selling wool because of pressure from certain powerful unnamed interests. When the Minister received the report from the Australian Wool Industry Conference did he not feel that there were some areas of uncertainty as to the functioning of the AWIC scheme which should be clarified before any changes were made? Did he not refer these and related matters to the Randall Committee for report? Having done this, does he not agree that it is only common sense to wait until the report is received before taking action? In short, can the Minister assure me that it is his, as well as the Prime Minister’s, opinion that it is common prudence to get as many answers as possible before making big changes to our wool marketing system? Does the Minister not consider that the attack by the honourable member for Moore on the Prime Minister was grossly unfair?

Mr SINCLAIR:
Minister for Primary Industry · NEW ENGLAND, NEW SOUTH WALES · CP

– I think we ali recognise that any change to an industry is of consequence. Therefore, a change to Australia’s principal industry is of even greater consequence. At the same time, I also believe it is essential that industry itself should have a say in determining the future of the product which that industry owns. Industry in Australia for the first time has united in submitting, through the Australian Wool Industry Conference, recommendations for changes in the marketing system. I am not aware, in the consideration by the Govern ment of the recommendations of any influence being exerted upon any member of the Government - be it the Prime Minister or any Minister - other than the promotion of the interest of the industry itself. I think that it is of interest to compare our attitude generally with that of the Opposition on matters relating to the formulation of policy with respect to primary industry. We find that policies from the other side of this chamber normally are formulated in such a way that the producers themselves - those who own the product and those who will be affected in the marketing and handling of the product - are the last along the line to be consulted. Policies from the other side of this chamber are introduced by arbitrary means which deny to those who own the product and who are affected by the marketing and handling of the product the right to exercise any say in marketing changes. For our part we believe that it is necessary to have consultation within the industry and outside it. It is on that basis that a Government decision will be taken. As I have explained previously in this House, a statement will be made on the Government’s decision well in advance of the opening of the new wool selling season.

page 2958

QUESTION

WOOL MARKETING

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– Has the Minister for Trade and Industry learned that the honourable member for Moore, a member of his own Party, has written to organisations in his electorate alleging that the Randall Committee is a straight-out subterfuge to delay progress towards worthwhile market reform in the wool industry? Does the Minister agree with his follower’s assessment on this matter? If so, can he tell the House how this squares with the statement of the Prime Minister last week that there are no serious differences between the Deputy Prime Minister and him over the wool industry? If not, will he repudiate the statement of the honourable member for Moore?

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

– I am the Leader of a Party in which members have a great deal of latitude in what they say. This is where there is a very big distinction between the Australian Labor Party and the Government parties. Honourable members on this side of the House can express a point of view knowing that their heads will not be lopped off. I, as Leader, will look after the problems in my Party, and I suggest that the Leader of the Labor Party should look after his problems, because he has many.

page 2959

QUESTION

PAPUA NEW GUINEA

Mr BROWN:
DIAMOND VALLEY, VICTORIA

– My question, which I direct to the Minister for External Territories, relates to the Gazelle Local Government Council which in the past has been a focal point for dissension on the Gazelle Peninsula. Can the Minister confirm reports that that Council has been disbanded? If that is so, why has it come about? What, if anything, does the Government intend to do about it?

Mr PEACOCK:
Minister for External Territories · KOOYONG, VICTORIA · LP

– The honourable member is correct in describing the Gazelle Peninsula as a focal point of controversies, disturbances and difficulties that have been encountered. This was a major contributing factor in my decision to seek out both the members of the House of Assembly who represent the area and members of the Gazelle Local Government Council when I went to Rabaul some months ago. I was able to hold discussions with them and the future of the Gazelle Local Government Council was discussed. Of course, this is not primarily within my jurisdiction. It comes within the jurisdiction of the Papua New Guinea Local Government Minister, but I felt that it was a matter of such importance that I ought to raise it with the members and councillors concerned. Subsequently the Administrator’s Executive Council discussed the matter and resolved that the parties involved, namely the Gazelle Local Government Council, the Warbete villagers and in particular the Mataungan Association, should be brought together for discussions, if possible. In fact that has eventuated.

Discussions were held between the 3 groups and it was decided by them that the Gazelle Local Government Council ought to be suspended and replaced by a management body. I understand this has taken the form of a recommendation to the Administrator’s Executive Council which, I am advised, will consider the matter next Tuesday, 30th May and then recommend what future action should be taken. Naturally, we welcome these decisions that have been taken and the discussions that will eventuate.

page 2959

QUESTION

EMPLOYMENT

Mr CREAN:
MELBOURNE PORTS, VICTORIA

– By way of preamble to my question, which I address to the Minister for Labour and National Service, I refer to the March figures of total employment. These figures show that total employment in March 1972 was only 25,000 higher than a year before, despite a potential increase of about 160,000 in the labour force. On a seasonally adjusted basis, female employment fell between February and March. Whilst government employment provides work for only one male in 4, private male employment declined by 200 and government employment increased by 6,200. I ask: Do these figures indicate any evidence of buoyancy on the part of private enterprise or an ability quickly to absorb into active employment those people seeking employment?

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

– As I have made clear to the House, and I believe is made clear by the figures which were released recently by my Department, a number of encouraging facets in relation to both the employment market and the general economy at present are indicated. Of course, the honourable gentleman pointed to a slowing down which has certainly taken place in the growth of civilian labour. We have certainly recognised that factor and I have previously answered questions on it addressed to me by the honourable gentleman. I have made the point that in part this is certainly due to the reduced migrant intake in the present financial year. If I recall the figures correctly, the reduction is about 5,000. That would have a direct effect upon the present growth of labour.

However, the Government recognises that there has been a difficulty. As the honourable gentleman and all honourable members would be well aware, a number of diverse measures have been taken by the Government to correct the problem and to ensure maintenance of full employment in this country. The Government accepts that as a cardinal aim of our social and economic policy. The measures which have been instituted will take some time to work their way through the system because employment is a lagging economic indicator. But because of those measures we can look forward not only to a growth in productivity but also certainly to renewed economic growth which will deal with the difficulties to which the honourable gentleman adverts.

page 2960

QUESTION

EDUCATION

Mr JARMAN:
DEAKIN, VICTORIA

– Has the Minister for Education and Science seen certain rather savage comments published today on Government aid to particular independent schools? Can the Minister inform the House whether the article concerned really presents a true and balanced picture of the assistance which the Government is giving to education?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

– I do not think the reports in this morning’s Press give an accurate picture of what the Government is doing to support education. If the same sort of calculations were provided for support of the government sector of education one would have to say that over the next 5 years commitments of the State and the Commonwealth governments to government schools would total over $5,200m, of which the Commonwealth’s share would be $2, 600m. If one calculated the support for the Bendigo High School it would be $3m, and for University High School, which the honourable member for Bendigo attended, $3.3m. In capital terms the total State government spending would be likely to be over $800m over the next 5 years. This puts the extent of government support to government education well into context. What the honourable member for Bendigo seeks to do is to undertake an attack on a specific group of schools. It is not an attack on wealthy parents because he does not attack wealthy parents who send their children to government schools. It is an attack on a certain group of schools and this indicates a basic objection to the independent school system. The honourable member’s purpose is to pick on selected schools and to try to make some invidious comparison. It would make as much sense to suggest that because certain high schools are better than the average of the high schools in the States they should get less government support than other schools that might not be so well off.

Mr SPEAKER:

-Order! The Minister is entitled to continue his reply but I must say that during question time this week there have been a number of long answers to which the Minister himself has been a contributor. I ask him to condense his answer as much as he can.

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

-The sort of criticism that the honourable member for Bendigo has initiated would make just as much sense to us if he were to say that University High School, which he attended, should be caused to suffer by application of a needs formula within the State system itself. Of course, no State department of education would have that in contemplation.

page 2960

QUESTION

COMPANY TAKEOVERS

Mr ARMITAGE:
CHIFLEY, NEW SOUTH WALES

– I ask the Prime Minister in his capacity of Acting Treasurer, whether in view of the current rash of takeover bids, such as Ampol Petroleum Ltd v. R. W. Miller (Holdings) Ltd, British Tobacco Co. (Aust.) Ltd v. Refresh Holdings Ltd and the anonymous, multi-million dollar bid for Travelodge Aust. Ltd, and reports that the finance for these bids is being derived from the conventional banking system with its swollen liquidity, as in the cases of Ampol and British Tobacco, and from overseas sources, he is prepared-

Mr SPEAKER:

-Order! The honourable gentleman’s preface is too long. He has not attempted to ask a question of any sort yet and 1 suggest he should finish his preface and ask the question.

Mr ARMITAGE:

– This is the question.

Mr SPEAKER:

-I suggest the honourable member should ask it.

Mr ARMITAGE:

– Is the right honourable gentleman prepared to ensure, firstly, that the powers conferred on the Reserve Bank of Australia by the Banking Act are utilised by the issue of an instruction to banks that they shall not provide overdraft funds for takeover bids and secondly that the Reserve Bank in terms of its existing powers will refuse to approve the registration of scrip in the names of overseas parties in respect of such takeover bids.

Mr McMAHON:
LP

– Today the AttorneyGeneral will be making a statement in the form of a White Paper to the Senate setting out the Government’s policy relative to monopolies and takeovers. At the same time, or at about that time, the Leader of the House will, I understand, be presenting the paper to the House. It can then be noted, if that is the wish of the Opposition, and an opportunity will be given for a full debate on it. I think the House can take this as the attitude of the Government. The Government believes that the proper course to follow in a matter which is so important as this and which can have an impact, not only upon this country but also upon the social approaches that are taken to these problems and on the shareholders, is to have a full and free debate in this House. I hope that we will be able to make time available so that a debate can take place.

page 2961

QUESTION

USTASHI MOVEMENT

Mr BARNES:
MCPHERSON, QUEENSLAND

– I direct to the Minister for the Interior a question supplementary to that asked of him yesterday by the Leader of the Opposition. Did the Minister inform himself of the circumstances in which the Ustashi flag was alleged by the Leader of the Opposition to have been flown on a local registered club? If so, what were the circumstances?

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

– Since the Leader of the Opposition drew this matter to my attention I took the trouble to read a copy of the Canberra Times’ and, indeed, I was given 2 copies and a photograph. I have initiated some inquiries into the matter. One thing that I think the House ought to know is that in Canberra people can do what they like on their own premises on leased land, provided they do not breach the law in any way. It should not be necessary to remind this House that we do not have an authoritarian dictatorship in this country. On numerous occasions we see the Vietcong flag flying at rallies. The Leader of the Opposition himself has addressed meetings in the presence of such a flag, so I daresay this has made him flag conscious. No doubt this is what prompted his question yesterday.

page 2961

QUESTION

SOCIAL SERVICES

Mr Lionel Bowen:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– I direct my question to the Minister for Social Services. Does the Housing Commission of New South Wales provide single pensioner accommodation at approximately S3 per week, thereby leaving $17 for other needs? Is it a fact that there is now a waiting period of 6 years for pensioner accommodation in New South Wales? Are not many thousands of pensioners paying either private rents or rates and taxes on small homes, being left with as little as $7 a week for the necessaries of life and compelled to rely on charity to survive? As a matter of equity and urgency will the Government grant to all pensioners such rental and rate subsidies as may be required to ensure that every pensioner has a minimum of $17 a week for necessaries of life.

Mr WENTWORTH:
MACKELLAR, NEW SOUTH WALES · LP; IND LIB from Oct 1977

– I understand that it is the case that in New South Wales some houses from the Housing Commission are available at the price which the honourable member has mentioned. But I think that the House and the country will realise the tremendous strides that have been made towards accommodation of pensioners under this Government. I remind the House that our aged persons homes legislation, for example, is now giving accommodation to not quite 45,000 pensioners throughout Australia. I remind the House of the subsidies which are being given to the State governments, I think through the operations of my colleague, the Minister for Housing, for the accommodation of age pensioners. We hope that this programme which is already so successful will be continued and accelerated. I remind the House also that the principle of supplementary assistance for rent was introduced by this Government, if my memory serves me correctly, in about 1958. I think the honourable member will realise that if a pensioner is paying even $5 or $6 a week for rent that pensioner, who gets supplementary assistance also, is very well off by the standards which existed when this Government came into office.

I am not saying that the Government is satisfied. I think that the Prime Minister described social services some time ago as permanently unfinished business, but I remind the House of the rise in the living standard of pensioners and other people which has taken place during the lifetime of this Government. I can remember the strictures produced by honourable members of the Opposition when they were campaigning in elections to the effect that the Australian standard of living was falling under this Government. Such strictures were of course entirely nonsense put forward for electioneering purposes. I am not for one moment suggesting that we will not raise standards consistently higher and continually higher. I will not suggest that we are satisfied with the standards as they are, but I suggest to honourable members and to the House that some consideration should be given to the great improvement which has taken place.

page 2962

QUESTION

STATEMENT BY PRIVATE MEMBER

Mr JESS:
LA TROBE, VICTORIA

– I ask the Minister for National Development a question in his position as Leader of the House. Is there any way that the Government can assist the honourable member for Shortland to exercise his democratic right to make a statement in this House? Can the Leader of the House assure this House that the Government will not oppose any desire of the honourable member for Shortland to make such a statement?

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

– Unfortunately I cannot anticipate what any member is likely to do in this House. But if a situation arises in which a private member wishes to use the forms of the House in the correct way in accordance with Standing Orders, of course he should have the right to do so. The Government would obviously take no action to prevent any member exercising his rights in the correct way in accordance with the Standing Orders.

page 2962

QUESTION

URBAN AFFAIRS

Mr WHITLAM:

– I ask the Prime Minister a question. I note his recent statements in the first speeches he has ever made on urban affairs that it is wildly inaccurate to speak of a crisis in our cities and that people have been carried away by labels such as urban affairs’ and ‘the challenge of the cities’. Does this mean that the right honourable gentleman and his Government reject the views of the Royal Australian Institute of Architects, the Royal Australian Planning Institute and the Australian Institute of Landscape Architects, which have formed a national alliance and in a manifesto a month ago declared that the very real problems of unplanned urban growth are now approaching a crisis situation in many areas and are in large part caused by the failure to develop national and State policies to co-ordinate this growth? Are these architects and planners simply men who have been carried away?

Mr McMAHON:
LP

– My statement means exactly what it says. If the honourable gentleman cares to look at it in total, I think he will get the impression that I wished to create and did in fact create at the meeting I attended. If the honourable gentleman had attended that meeting with my colleague, the honourable member for Holt, he would have found a very enthusiastic audience and one that, I think, indicated quite clearly its confidence in the honourable member for Holt as a member who not only has a social conscience but also has represented the electorate very well in this House and elsewhere. The last part of the honourable gentleman’s question was not relevant to what I said, but if he would like the remainder of my speech to be sent to him he should ask my Press Officer for it. I can assure him that if he does he will receive it this afternoon.

page 2962

QUESTION

VIETNAM

Mr WHITTORN:
BALACLAVA, VICTORIA

– I address a question to the Minister for Defence. In view of the consistent news media reports about the gains made by Hanoi in its military aggression against South Vietnam, can the Minister give the House and the people of Australia the truth about this aggression? Is it correct that the Army of the Republic of Vietnam ib packing up and retreating, as the news media indicates, or is it standing firm and in many places hitting back at the aggressors?

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

– 1 am glad to be able to inform the honourable member for Bala*clava that the performance of the South Vietnamese has been extremely good since they were attacked towards the end of March. It is correct that in the early stages they suffered some reverses. That was because the North Vietnamese had some new and highly sophisticated Russian equipment which was being used for the first time in the area and which was superior to some of the equipment operated by the South Vietnamese. It is correct also that the South Vietnamese suffered a reverse because one of their divisions - the first one attacked at the west of the demilitarised zone - had been fairly newly formed and had not had the same experience in battle as others. Nevertheless, I believe that the South Vietnamese have performed extremely well and creditably. That is particularly so in the central highlands, at Kontum, where in spite of the fact that they have been heavily outnumbered they have been holding out; and also at An Loc, where they have been under siege for many weeks but have continued to hold out.

Of course, an aggressor can concentrate his forces at the point where he is going to attack whereas the defender has to wait and see where the attack is being made before he can make the necessary arrangements to move troops to meet the aggression. So the aggressor naturally has the initial advantage. But since those initial setbacks to the South Vietnamese the only area from which they have retreated has been Quang Tri, where there was some loss of command and control. As honourable members know, the general responsible has been replaced and there is now a considerably higher morale at Hue. This has been shown in the retaking of Fire Base Bastogne. Only a few moments ago I heard that units of the South Vietnamese marines had landed 9 miles north of Quang Tri to cut off or interfere with the logistical support for the attack on Hue. So one can say that there is no doubt whatsoever that the South Vietnamese have performed extremely well. They have inflicted very severe casualties on the North Vietnamese. These casualties are estimated as being in excess of 20,000 killed and perhaps the same number of wounded.

In addition, some 250 North Vietnamese tanks have been knocked out. The next few weeks in this area will undoubtedly be critical and crucial. It is possible and perhaps even probable that there will be some further North Vietnamese gains, but I believe that the South Vietnamese will be able to hold out. I have every optimism that they will continue to hold out and will send back the attackers - the aggressors - who are trying to take some of their country.

page 2963

QUESTION

STATE AID FOR SCHOOLS

Mr BRYANT:
WILLS, VICTORIA

– I refer to the answer which the Minister for Education and Science gave to the honourable member for Deakin. Are we to understand from his answer that he accepts the same financial responsibility for dependent schools as he does for state schools?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

-The Governments position in this matter has been made very plain. For a long while in Australia’s history governments accepted full responsibility for students sent to govern ment schools but none at all for students in independent schools. The Commonwealth Government and the State governments have been working over a period of years towards a situation in which there is greater justice than that in education. The Government has set as a realistic figure, and one to which I believe and hope that the States will agree, that about 40 percent of the equivalent cost for a government primary school and 40 per cent of the equivalent cost for a government secondary school should be the sum that is provided to independent schools to support their running costs. That is where the Government sees the level of Government support for independent schools.

Mr Bryant:

– May I ask a supplementary question, Mr Speaker?

Mr SPEAKER:

– No.

page 2963

QUESTION

ALICE SPRINGS TO PORT AUGUSTA ROAD

Mr CALDER:
NORTHERN TERRITORY

– My question is addressed to the Minister for Shipping and Transport. I refer to recent reports concerning the Alice Springs to Port Augusta road in which it was described - this time, amongst others by members of a caravan rally - as a ‘horror stretch’. There were also reports of serious damage and very high maintenance costs for the many tourist vehicles, especially buses which are at present thronging to the central and northern Australian area. Will the Minister treat as urgent the upgrading of this vital tourist and trade road? Will he use every effort to convince the South Australian Government that this is a matter of great importance also to that State?

Mr NIXON:
Minister for Shipping and Transport · GIPPSLAND, VICTORIA · CP

– I am fully aware of the importance of this road as a tourist link between Port Augusta and Alice Springs. The honourable member will know that it is about 800 miles long. Of that distance, about 200 miles are within the bounds of the Northern Territory. Whilst I did not see the reports of the experiences of the caravan tour, there is some good news for those who might venture on such an escapade in future. On the Northern Territory side at least 120 miles of the 200 miles are presently being sealed. My understanding is that, of the 600 miles on the South Australian side of the border, the South Australian Government has commenced a programme to seal from Port Augusta to

Pimba. The honourable member may know that the South Australian Government has received very good treatment under the Commonwealth Aid Roads Act. It has received something like $120m over a 5- year period, of which SI 3.6m was for rural arterial roads such as the road mentioned by the honourable member. As well, it has received a $9m supplementary grant to assist in road sealing in any area that it desires. I will raise the problem which the honourable member for the Northern Territory has properly brought to my attention with the Minister for Transport in South Australia and will impress upon him the importance of this road to the Northern Territory from the point of view, not only of tourists, but also of the carriage of freight on that road. I will see whether I can impress upon the Minister for Transport the need to raise the priority of that road in his government’s expenditure programme.

page 2964

QUESTION

TELEPHONES

Mr LUCHETTI:
MACQUARIE, NEW SOUTH WALES

– My question to the Prime Minister and Acting Treasurer (Mr McMahon) deals with the need for better communications in Australia. Having regard to the rapidly increasing number of applicants waiting for essential telephone services, will the Prime Minister take appropriate action to provide the Telephone Branch of the Postmaster-General’s Department with sufficient funds to satisfy the public demand for urgently required communication facilities? Does the Prime Minister know that of the 66,000 applicants in Australia waiting for telephones, many have been on the Department’s list for years?

Sir ALAN HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– j am aware that many honourable members would hope for a speed-up in telephone installations. The honourable member for Macquarie asked the Prime Minister whether the Government would make more money available, but I assure the House as I assure the Australian public that money is not the only requirement in relation to telephone installations. It is essential that we have the manpower and the equipment to do the job. If it is believed by honourable members opposite, who supposedly represent the trade union movement and supposedly understand the requirements of workmen in the PMG area, that any person can be brought into the Post Office to install telephones, then I would like to assure them that they are very greatly mistaken. It needs people who are skilled and properly qualified to perform that task, and those people are just not available in the numbers that would enable the Post Office, even with additional money, to overcome the backlog in telephone installations.

page 2964

QUESTION

SENATE COMMITTEE REPORT ON TEACHER EDUCATION

Dr SOLOMON:
DENISON, TASMANIA

– My question is directed to the Minister for Education and Science. Is the honourable gentleman aware that the Australian Education Council has been discussing the Senate Committee report on teacher education? Can he say how the report has been received?

Mr Malcolm Fraser:
WANNON, VICTORIA · LP

-The Senate report has, I think, broadly been well received by a wide number of people and organisations, lt will be discussed later this week with State Ministers, and it will be interesting to hear the views of the State Ministers in a definitive form. There is one part of that report, however, which J think puts a blemish on the document as a whole, and that is the minority report of 2 senators who dissented from the majority in important respects. The 2 senators concerned, Senator James McClelland and Senator Milliner, in dealing with some aspects of teacher education referred to it as religious indoctrination, and as being unjustifiable and probably unconstitutional as well. These attitudes, which are known to be widely held among members of the Australian Labor Party in the Senate, were embodied in the report and it is, 1 think, an unfortunate blemish on the total document.

page 2964

QUESTION

PATROL OFFICERS IN PAPUA NEW GUINEA

Mr FULTON:
LEICHHARDT, QUEENSLAND

– My question is directed to the Minister for External Territories. Some years ago the Government advertised for young men who had a certain education standard to make a career for themselves in New Guinea as patrol officers. Since then they have married and have families. Is it true that they will lose their careers soon, and has the Government made any attempt to absorb them within the Public Service in Australia or provide them with any other positions within government organisations in Australia?

Mr PEACOCK:
LP

– Both contract officers and permanent officers are covered by legislation that does give them* an opportunity to resume careers back in Australia. What the honourable member for Leichhardt is talking about, I assume, are the representations that have been made to me by the Public Service Association in particular. I have had 3 discussions with representatives of that association since becoming Minister for External Territories. I have indicated to them that I am keeping a close watch on the movements within Papua New Guinea and I am carefully considering the matters that have been placed before me. When the Government reaches a decision on the representations that have been made to me and when I have had an opportunity to discuss them with the Administrator’s Executive Council, I will be able to give the honourable member further information.

page 2965

QUESTION

INTERNATIONAL WOOL SECRETARIAT

Mr ENGLAND:
CALARE, NEW SOUTH WALES

– Does the Minister for Primary Industry believe that the activities of the International Wool Secretariat are an important element in the present recovery of wool prices? In view of the present widespread public interest in the wool marketing proposals and the necessity for an understanding of the support given to the industry in its competition with synthetic fibres, could the Minister make available reports of the International Wool Secretariat on its activities?

Mr SINCLAIR:
CP

– I think that, apart from the introduction of the wool mark, most people have been uncertain as to the activities of the International Wool Secretariat over the years. In fact, of course, the Secretariat engages in a wide field of promotion, one of the most successful of its ventures being the Ilkley station which has pioneered new technological developments in the processing of wool. However, 1 think that, at a time when the industry is uncertain as to its future, it is important that there should be an understanding of the activities of the Secretariat, particularly in view of the extent to which it is supported by growers and by the Government. Accord ingly, having received representations from so many honourable members and growers, I have made arrangements with the International Wool Secretariat for the current report on its activities to be available for distribution amongst wool growers, wool grower organisations, members of this Parliament and others who might be interested. I hope that, as a result of this, there might be a more widespread understanding of the very effective activities of the Secretariat, which 1 believe has contributed towards the present market recovery in wool prices.

page 2965

PERSONAL EXPLANATION

Mr WHITLAM:
Leader of the Opposition · Werriwa

– I wish to make a personal explanation.

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr WHITLAM:

– The Minister for the Interior (Mr Hunt) misrepresented me in an answer he gave to the honourable member for McPherson (Mr Barnes). He stated virtually that I had addressed a meeting or meetings in the presence of Vietcong flags. This is not true. The Minister and honourable members will remember quite well that this allegation was made and debated a couple of years ago in the House. I had addressed a meeting of Australian National University students on the lawns opposite Parliament House. After the meeting was over, photographs were taken by the Australian News and Information Bureau at the instigation of the former Prime Minister. The photographs showed that I was coming back to the Parliament. I had crossed over the road from the meeting place and along that road, on the other side of it, a procession was taking place of departing students and flags were held by some of those students.

Mr SPEAKER:

-Order! I think it is only fair that, no matter who is making a personal explanation, when an honourable member believes that he has been misrepresented in the Parliament he should be heard without interruption.

Mr WHITLAM:

– The matter was debated in the House so far back that there are no Hansard records of it on the table between us. I have never addressed such a meeting and the allegation stems from photographs which show quite the reverse of my addressing any meeting under those flags. I believe that I am entitled to point out the official view - the Government view - on the Ustashi situation about which yesterday I asked the Minister a completely relevant question-

Mr SPEAKER:

-Order! The Leader of the Opposition has shown where he has been misrepresented. To debate the question of the policy or attitude of the Government in relation to any matter would be out of order in the making of a personal explanation.

Mr WHITLAM:

– Sir, will you hear me on this? Yesterday in my question I drew a parallel between the display of the Ustashi flag and Ante Pavelic’s photograph with the display of a swastika flag and a photograph of Hitler. Will you allow me to quote–

Mr SPEAKER:

-Order! No, that would be stretching the Standing Orders too far at this stage.

page 2966

SHORTLAND ELECTORATE

Mr GRIFFITHS:
Shortland

– Mr Speaker, I seek leave to make a statement on matters affecting the Shortland electorate.

Mr SPEAKER:

-Is leave granted? There being no objection, leave is granted.

Mr GRIFFITHS:

– I thank the House for its indulgence. The pre-selection of Peter Morris as Labor’s candidate to represent the seat of Shortland by the Federal Executive of the Australian Labor Party last Sunday concludes one of the most sinister and evil episodes any single electorate has ever had to experience in Australian politics. I congratulate Mr Morris on his success and pledge him my undivided support in his campaign, i also congratulate the Executive on the decision it made, especially because the decision was a majority one and preferences were not required to be allocated.

I very much discount the Press claim that Mr Whitlam had suffered a reverse or that he had been rebuffed and that Mr Morris’ win was a victory for the Left. The win for Mr Morris, as I see it, was an acknowledgement by the majority of the Executive that he should have been declared the winner 12 months ago. In my view, Mr Morris will follow a centre of the road type of politics and will support progressive types of legislative proposals, whether they come from the Left or the Right, so long as they represent Labor policy. I believe that my Leader can expect, and indeed receive 100 per cent support from Mr Morris.

Having said that I turn, in general, to the dispute itself. For some time now many sections of the Press have continuously varied my age and have claimed, ever since nominations were called in October 1970, that I was over the age and was therefore ineligible again to submit a nomination as a Labor candidate. That is not true, as the New South Wales 1969 rules provided, in rule 131c, that persons 70 years and over at the date of the calling of nominations were ineligible to nominate. That rule did not then apply to me. Since then the rules have been amended, and the 1971-73 rules now provide, in rule M7c, that a person who will reach the age of 70 years in the term for which he is nominating will be ineligible for nomination, except on special grounds, and those grounds would have to be endorsed by the State Council.

However, I doubt whether the amended rule would apply to the 1972 election. My failure to nominate as a candidate in 1970 was not because of age. At that time I was 67 years of age. I had deliberately refused to nominate so that I could publicly protest at what was going on in the Australian Labor Party in New South Wales. For me to say that I have been both disillusioned and amazed at the Tammany Hall type practices being perpetrated in the New South Wales Australian Labor Party over recent years would be putting it extremely mildly. An abundance of evidence shows that for at least 3 years past, fraud, blackmail, conspiracy and forgery all had a place in the Shortland affair, and there are plenty of statutory declarations about to prove the point. It was that fact alone that had influenced me last Wednesday to accept an invitation to renominate for the seat, for a limited period. In the discussion I had stipulated that I was prepared to continue, subject to winning an election, for a period of upwards of 18 months, provided that Tingira Heights Branch had its charter withdrawn and the Branch reformed according to rule, and that -Mr Donnelly be expelled. As evidence of my sincerity regarding the period I might continue as a member, I point out that in submitting my nomination I also submitted an undated resignation which read:

Dear Mr Speaker,

I, Charles Edward Griffiths, Member of the House of Representatives for the Electoral Division of Shortland in the State of New South Wales, hereby resign, in accordance with Section 37 of the Constitution, my place in the House of Representatives.

However, when the assurances sought were not received and it was apparent that some members of the Executive, who I had thought would give my nomination favourable consideration, would not so consider it, I withdrew the nomination hoping that someone from within the electorate - preferably Mr Morris - would win the preselection. Mr Morris duly won the ballot but the intrigue and graft remain and could erupt at any dme. That means that there is an unfortunate aftermath to the Shortland affair which, in my opinion, is now vested fairly and squarely in the Federal Executive of the Labor Party. I believe that eventually it will rebound against the majority of the Executive should they leave the Shortland dispute as it is at present.

It is now history that by unanimous resolution in Adelaide the Executive upheld the appeal by Mr Morris against Mr Donnelly’s being declared winner of the third ballot, that ballot being the second rank and file vote to be held. The facts emerging from that discussion are very important. The Executive must have known of the discrepancies and the manipulation of the statutory declarations, and of the forgery and blackmail that had taken place, as well as the issue of false ALP membership tickets in 1969-70. On the Executive were a number of brilliant legal identities yet, as at this time, no announcement has been made by the Executive spokesman as to whether there is to be any action or inquiry into the graft that they all know took place in the Shortland electorate.

As I see it, any prolonged continuation of that silence in itself condemns the Executive members as being persons unfit to hold public office. It is rumoured, Mr

Speaker, that no disciplinary or punitive action is to be taken either by the Federal Executive or the NSW State Council against the people responsible for the happenings in Shortland, although its total cost can be measured in thousands of dollars. In contrast, about 18 months ago the State Executive suspended for 6 months a 70- year-old pensioner’s membership of the ALP for having signed a voter’s name on a municipal preselection voting list, which she had herself forgotten to do. The irony of the case was that the pensioner was only acting for the returning officer who was away on business. The voter is my sister, a widow who had lost her husband only a few months earlier. She was also aged 70 and was extremely ill with a heart condition. I had taken her to vote so that she would not break a promise she had made to record her vote.

In that instance both my sister and the acting returning officer were bullied and bounced by men who should have known better. Yet in this case in Shortland where graft in various forms has been proved, no action at all is contemplated, and I ask why. It is true that Donnelly may have sown the seeds of the events, but quite often seeds do not germinate without the help of the weather. I have a very small spark of sympathy for Donnelly because I do not think that it was his genius which touched off the spark which brought about the Shortland affair.

In this case it is apparent that the inspiration and help had been readily forthcoming from the head office of the ALP in New South Wales. For instance, the falsification of the 1969 and 1970 Tingira Heights membership could never have come about had not someone in the Sydney ALP office issued 1969 ticket books in 1970, thus giving to certain people illegal membership in the Labor Party in a period of preselection. That action alone has caused unbelievable suffering to families and individuals. The complications have been enormous. Family homes have been lost and broken up, while some persons have also lost their employment. I have no desire, Mr Speaker, further to labour this aspect of the Shortland dispute, but I suggest that if further evidence is required it is available. I suggest to my colleagues who are interjecting that

I can give the evidence to this House if they want me to do so, and put everything beyond dispute.

Mr GRIFFITHS:

– It has a lot to do with the House. I suggest that if further evidence is required, those people who are interested enough in the Labor movement might read the Burns report dated 23rd November 1970 in which Shortland does not even receive a mention. I am sure that anyone who takes the time to study the document will find it very interesting reading. I believe that it is reminiscent of the Wren era. In any case, those responsible for the mishandling of the membership ticket books must be apprehended and expelled from the Labor Party. The events of the past 3 years in the Shortland electorate can never be resolved until a public inquiry has been held into all the charges and counter charges that have been made. I urge that either this Government or the New South Wales Government institute an inquiry before all the evidence that has been accumulated has been removed or destroyed.

There are 2 or 3 other aspects of the Shortland electorate dispute that have caused me unceasing worry and I will mention them briefly. The first matter relates to an attack that was made on Mr Ley, the Chief Commonwealth Electoral Officer, and his deputies regarding ballot rigging and illegal voting at elections, by Mr Westerway, the New South Wales Secretary of the Australian Labor Party. In dissociating myself from Mr Westerway’s remarks I want to pay a tribute to Mr Ley and his officers for their attention to duty and the courteous way they have always received me when I have sought their help. I especially pay a tribute to the 3 divisional presiding officers who have conducted the business of the Shortland electorate since its inception in 1949. I refer to the late Bert Smith, Bill Budd and Don Stewart, the present presiding officer. Each of these 3 men has possessed qualities separate from each other, while being as virtuous and sustaining as one another. Any one of us could think himself lucky to be fortunate enough to have them administering the electorate for him. To them I say a gracious thank you.

Mr Speaker, you will be aware that over the past 2 years or more I have complained to you about the type of garbage that some members of the Press Gallery have been dishing out about me through their newspapers. I have been virtually accused of being a traitor to the Labor cause. It has been said that I had been prepared to sell Labor down the drain so that the Liberal Government could remain in office while I retained an alleged lifelong friendship with you, Mr Speaker. 1 refer to the journalist Maximilian Walsh. I have never spoken to him in my life, but he has most certainly cashed in on the Shortland affair. That man is an out and out scoundrel from whose pen flow lies with impunity. In other words, he is an unmitigated prevaricator. On several occasions Mr Walsh has proudly denigrated me, but in my view if he lives to be 100 years old he will never equal my industrial and political record.

On 19th December last he wrote in the Sun-Herald’ an article headed ‘Charlie G. Leaves His Shell Again’. In that article he accused me of winning preselection in 1949 by stacking branches, and in particular the Adamstown branch. It could be said that Mr Walsh, and my colleague the honourable member for Hunter (Mr James), who has also accused me of branch stacking, may have gone into a huddle somewhere and worked out together what they would say, because they tell the same story about branch stacking. So they both lie. Mr Walsh’s claim-

Mr SPEAKER:

-Order! The honourable member is not entitled to say that about the honourable member for Hunter and 1 would ask him to withdraw.

Mr GRIFFITHS:

- Mr Speaker, I will say that both prevaricate. Mr Walsh’s claim that I had attended the Kurri Kurri High School is simply a figment of his imagination and is also a prevarication. I was going to say ‘a lie*.

Mr SPEAKER:

-Order! Do not say it.

Mr GRIFFITHS:

– It is a lie, if I can say it.

Mr SPEAKER:

-Order! The honourable member will withdraw any imputation against the honourable member for Hunter. The honourable member knows that under the Standing Orders no member shall make an imputation against another honourable member. I ask him to withdraw the remark.

Mr James:

– He is a sick man and I do not want him to withdraw it.

Mr SPEAKER:

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

Mr GRIFFITHS:

– I am very sorry that the honourable member has come in like that because if ever I open my mouth inside or outside this Parliament there is plenty of evidence to show that he is the sick man or will be very sick if somebody opens his mouth about him, so I warn him to be tolerant. The statement that I knew Mr Speaker at Kurri High School shows just how illiterate Walsh is, because when I went to school there was no high school at Kurri Kurri. Mr Speaker I have been to Kurri Kurri, although I live within 30 miles of it, possibly less than 20 times in my lifetime. Neither had I met you, Mr Speaker, before you won the seat of Phillip and came into this House. So he prevaricates again. Of course, it is true that Rowley James junior was a Kurri Kurri High School teacher. It is also true, of course, that 1 did beat, among 12 others in the 1949 pre-selection ballot, the brother of the honourable member for Hunter, and the honourable member for Hunter has not forgiven me ever since.

The honourable member for Hunter has never told the House, or anybody else to my knowledge, that his brother had, before he contested the Shortland seat, also contested the seat of Newcastle in 1943 and 1946 against a sitting Federal Labor member. Of course, that was his right. He did this and yet he is supposed to be such a brilliant man compared with myself. What has not been said is that I won the ballot by more than 60 votes, that I did not canvass for support in the campaign and that Rowley James, who lived at Kurri outside the Shortland electorate, despite the fact that petrol was rationed, had been campaigning for almost 12 months. All this appears in ‘Charlie G Leaves His Shell Again’.

When all is said and done, this Parliament is the only place I know where I am able to deny the remarks and the statements that have been printed by Walsh. I have no protection other than here. To take him to court and face a costly legal process would be the only other course. Further, to my knowledge neither Mr Walsh nor the honourable member for Hunter has told anyone that Mr James’s father, the late Rowley James senior, was the sitting member for the AdamstownNew Lambton-Wallsend areas of the new Shortland electorate. The whole of my family in those days worked and voted for Mr James senior. It is logical to presume that if the Adamstown Branch had been stacked, as stated by the honourable member for Hunter, it was stacked for Mr James senior and not for me. Incidentally, if my memory serves me correctly, the voting at Adamstown was 123 to 5. If honourable members wish to ascertain why I recieved. such good support, 1 think the answer will be found in the fact that I had been branch president for 13 years and a member of the branch for 28 years. I was also an organiser of the Australian Railways Union at the time of pre-selection. My period of parliamentary service for the people of Shortland will have been almost 23 years when I retire. Between 1948 and now there have been 9 elections and of those I was privileged to be opposed in pre-selection only twice and by only one person each time. I think that that record should show that, in fact, I enjoyed the confidence of Labor Party members during all those years.

In 1955 the man who had opposed me joined the Democratic Labor Party immediately after his defeat. The next occasion on which I was opposed was in 1968 and this was by the person who has caused the present Shortland dispute. Mr Walsh told his readers that my hold on the electorate began to slim as the numerical weight of the Labor Party shifted from Adamstown to New Lambton, but what Mr Walsh did not tell his readers was that for more than 50 years the Labor Party could not form a branch at New Lambton because no-one was interested, whereas at Adamstown the Labor Party branch was always a virile and strong organisation. The New Lambton branch came into existence only in 1967 simply because a certain person wanted to become a member of Parliament. That person employed all his guile and crookedness in his unsuccessful attempt to come here. That same person had also set up the Tingira Heights branch in 1969. 1 thank the House for its consideration in listening to me. I simply want to say that until such time as either the Labor Party federal executive or the State executive do something about correcting what has occurrred in Shortland in the last 3 years there will always be a cloud over the electorate.

Mr Swartz:

– I should like to know whether the Leader of the Opposition (Mr Whitlam) wishes the House to take note of the paper. I move:

That the House take note of the statement.

I do this as Leader of the House because I am aware of the seriousness of the position that has been explained by the honourable member for Shortland (Mr Griffiths). I realise also the dignity and sincerity with which he addressed himself to this matter. I also appreciate that matters of this nature concern, in this case, the members of the Opposition.

Mr SPEAKER:

-Order! The Leader of the House is not in order in moving that the House take note of the statement. No papers have been tabled and such a motion could only be moved if some papers from which the honourable member for Shortland made his statement were tabled.

Mr Swartz:

– Mr Speaker, my only intention was to try to give the Leader of the Opposition an opportunity to speak on the matter.

page 2970

COMPANY LAW ADVISORY COMMITTEE

Mr N H Bowen:
Minister for Foreign Affairs · PARRAMATTA, NEW SOUTH WALES · LP

– For the information of honourable members I present the Sixth Interim Report of the Company Law Advisory Committee. The report deals with the selling of shares by what is known as share hawking’.

page 2970

DEFENCE FORCES RETIREMENT BENEFITS BOARD

Mr GARLAND:
Minister for Supply · Curtin · LP

– Pursuant to section 14 of the Defence Forces Retirement Benefits Act 1948-1971, I present the Twenty-third Annual Report of the Defence Forces Retirement Benefits Board on the operation of the Act for the year ended 30th June 1971, together with financial accounts.

page 2970

INTERNATIONAL LABOUR TREATIES

Mr Kevin Cairns:
Minister for Housing · LILLEY, QUEENSLAND · LP

– For the information of honourable members I present the texts of the following international treaties: Convention No. 2, concerning unemployment, and Convention No. 109, concerning wages, hours of work on board ship and manning (revised 1958) adopted by the International Labour Conference at its first and forty-first sessions in 1919 and 1958 respectively. The relevant laws and practices are in conformity with both Conventions. Subject to the approval of the Federal Executive Council, the Government intends to lodge instruments of ratification in respect of both these Conventions with the Director-General of the International Labour Office as soon as possible.

page 2970

INTERNATIONAL LABOUR CONFERENCE

Mr Kevin Cairns:
Minister for Housing · LILLEY, QUEENSLAND · LP

– For the information of honourable members, I present the report of the Australian Delegation to the International Labour Conference, fifty-third sesion, 1969.

page 2970

AUSTRALIAN ENVIRONMENT: COMMONWEALTH POLICY AND ACHIEVEMENTS

Ministerial Statement

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

– by leave - In recent years there has been an increasing public awareness of the threat to our environment in Australia and the need to do something about it. My purpose, therefore in addressing honourable members today, is to emphasise the Commonwealth Government’s deep interest in the problems of the environment and our determination to do what we can, within our powers, to help solve those problems.

In Australia today we live in an affluent, liberal society where we are seeking standards of excellence in all these things. Basic to this is a healthy environment in which we can develop a quality of life to satisfy our needs in all fields of human endeavour. It is essential, therefore, that we preserve the great gifts nature has given us and that we keep our environment as free from man-made contamination as human skills can devise. It is a fact of recent history that while the technological revolution of the sixties and the seventies has brought great benefits in material good living, in national progress and in economic well-being - it has also had by-products which are despoiling our land and polluting the air and the water around us.

As Galbraith has said: ‘The greater the wealth the greater will be the dirt.’

page 2971

THE CHALLENGE

The challenge before us all, as a people is very real and I am gratified, that, in addition to the concern of Governments, there has developed a lively public conscience on this important subject. Fortunately, action is already being taken on several fronts to deal with pollution, waste disposal and the preservation of our natural environment with its unique flora and fauna. In short the challenge to protect the environment has been accepted. But much remains to be done. What I wish to do now is to identify the responsibilities of governments as we see them and to give some details of what is being done by the Commonwealth al the national and international level te protect our environment. The problem cannot be dealt with in isolation from other matters nor can governments alone achieve success.

So far as the Commonwealth is concerned the question is one of devising a pattern of national development in which environmental objectives go hand in hand with economic, social and cultural goals. Our philosophy is directed to this end - to devising and developing such a pattern in co-operation with the States, with local government, with business and industry and the community as a whole. And therefore we have to consider the environment as a major factor in the planning and management of practically all forms of development from human settlements to engineering and industrial works.

page 2971

A NATIONAL PROBLEM

At the outset I should point out, however, that the main responsibility for the environment over the greater part of the continent of Australia lies with the States. That is the constitutional position. Nevertheless, when there is a great problem of national pollution, the Commonwealth must co-ordinate and co-operate with the States.

I would identify the Commonwealth as having a national responsibility: Firstly, to give leadership in researching the problem; secondly, to co-operate with others; thirdly, to act within its powers as necessary; and fourthly, to keep before the Australian people the dangers to their environment.

In various ways concern for the environment is national in character. There are, perhaps, 3 main reasons why this is so. The first is that pollution of the air, the rivers and the seas is not confined by State boundaries, the second is that various authorities, Government and otherwise, must act in harmony to avoid unhealthy interstate competition arising from different environmental standards. And the third is that national action may be needed to meet specific international situations. With these matters in mind, I turn now to what the Commonwealth is doing to discharge its responsibilities.

page 2971

ACTION SO FAR

Our first consideration - having regard to the major role of the States - was to establish a system for close and continuing co-operation with them and make arrangements for the co-ordination of our various activities where this could be mutually beneficial. 1 believe that in this field we have made considerable progress. Both the Commonwealth and the States have set up, or are setting up, administrative machinery to deal with environmental matters. All have a Minister with a specific responsibility for the environment. These Ministers are meeting together regularly for consultation as the Australian Environment Council. The Council has been constituted by agreement between the Commonwealth and the States and after this was ratified it held its first formal meeting in Sydney last month. The council is to draw up standards and guidelines for its own use and it is hoped that these will have general recognition throughout the Commonwealth. The Council has already begun to study such important environmental problems as waste disposal and non-destructible, non-returnable, containers and packaging generally. The council has also noted the importance of decentralisation.

Here the Commonwealth itself has been actively participating over several years in the Commonwealth-State Officials Committee on Decentralisation. This is all a beginning. And I feel sure Australians will recognise and accept the Australian Environment Council as an important mechanism between the Commonwealth and the States on so many matters affecting the environment. I should add that the Council will also co-operate with other joint CommonwealthState ministerial councils whose activities and responsibilities bear, in one way or another, on the environment.

I refer, in particular, to those councils responsible for health, water resources, shipping and transport, forestry, minerals, agriculture and fisheries. They have, for a long time, been active in specific areas of pollution and environmental control.

page 2972

IMPACT STATEMENTS

In this context I wish to announce that the Government has decided to introduce a system of ‘impact statements’ designed to protect the environment. That is to say that when a Commonwealth Minister prepares a submission to the Cabinet on any proposal that has some relevance to the environment that submission must be accompanied by a statement setting out the impact the proposal is likely to make on the environment. This ‘impact statement’ will, I am sure, become an important element in decision-making. I might add that State projects for which Commonwealth financial assistance is sought will also need to be supported by assurances that all environmental factors have been considered and evaluated.

page 2972

ADVISORY COMMITTEE

The second announcement I wish to make concerns the membership of the special advisory committee which is to be set up to advise the Commonwealth Government in its consideration of environmental problems. This committee will consist of Professor R. J. Walsh, Professor of Human

Genetics, University of New South Wales, who will be Chairman; Mr L. W. Weickhardt, Chancellor of the University of Melbourne; and Mr K. W. Shugg, immediate past president of The Royal Australian Institute of Architects. This committee will be free to suggest to me as the Minister for The Environment matters that it feels it could usefully examine.

There are, of course, several research programmes already in progress in Commonwealth Departments and scientific agencies of the Government. They range over a wide spectrum and include such activities as water treatment, the abatement of smoke pollution, the problem of pesticides, the rehabilitation of areas damaged by man’s activities and guide-lines for the preservation of our flora and fauna. Increasing importance is being attached to research in the medical and social sciences because of the emotional and medical factors that are inseparable from man’s response to his environment.

page 2972

LAND USE

Hand in hand with conservation, of course, goes land use. The Government has decided to set up a Land Use Advisory Council to advise it in circumstances where environmental considerations arise in the Commonwealth’s jurisdiction which could arouse general concern. For example, when proposed industrial undertakings of national importance might appear to conflict with the preservation of such environmental assets as national parks in Commonwealth Territories the Government will be able to seek independent advice from this Council. Consequently, the Government will be able to refer to this council matters relating to any land under the Commonwealth’s control within Australia. The members of the council and its charter will be announced in due course.

page 2972

WHO SHOULD PAY?

In considering the general question of pollution, contamination and despoliation of the land the question inevitably arises: Who pays?’ It is not easy to make an exclusive identification of liability because environmental damage is the result of many things - of technological successes, of industrial activity and of social habit. A community responsibility has to be recognised. But I think it appropriate at this stage to say that the Government has already decided that Australia should agree to the guiding principles so far developed by the Organisation for Economic Cooperation and Development, of which we recently became a member. This is only an agreement in principle at this stage because many matters still need to be settled between members of this international body. The guiding principles adopted by the OECD relate to the national and international aspects of environmental policies and their effect on economies and trade.

In brief they embrace the principle that the polluter pays’ - that the costs of pollution control measures should be recognised as part of the total cost of production. They also provide for the principle of harmony - or similarity - of standards to avoid favouring one country - or State - against the other in terms of industrial and trade competition. I believe that the ‘polluter pays’ principle is likely to be adopted by nearly all the developed countries which are our main competitors. This will lead to some increased costs and may lead to some increase in prices. But I venture to say, at this stage, that so far as the Australian public is concerned increased product costs should be outweighed by the reduced social COStS which the community is already bearing. New enterprises will be able, more readily than existing ones, to adopt non-polluting techniques - for example at the plant design stage. It is encouraging to know that already several of our big industrial enterprises are already taking their own initiatives to reduce pollution and protect the environment.

page 2973

SPECIAL ACTIVITIES

May I now refer briefly to a number of other Commonwealth activities in environmental control with special reference to the pollution of the air, our water and our coastal seas. 1 summarise them in this way:

First the Department of Civil Aviation sought advice from a special committee of the Academy of Science on the effect on the upper atmosphere of supersonic aircraft. It has relevance in view of the forthcoming visit of the supersonic Concorde to Australia and the advent of the supersonic era. This report has now been circulated.

Second a national plan for combating oil spillage at sea is being prepared. The Government has offered to set up for the States stockpiles of materials and equipment around the coast to deal with oil spillage from tankers and other ships. It will contribute Sim towards the cost and will legislate to apply a single levy to the merchant shipping industry to recoup those costs not recovered from shipowners responsible for identifiable spillages.

Third the National Health and Medical Research Council has been doing valuable work on detergents since 1968 and last year negotiated a voluntary agreement with the detergent industry which effectively controlled most domestic washing and cleaning compounds so that damage to the environment has been considerably reduced. It is continuing its investigations in many other fields where detergents are used.

Fourth the Australian Transport Advisory Council - comprising Commonwealth and State Ministers - has taken action to control carbon monoxide emissions from motor vehicles. The measures it has adopted are similar to those established by the Economic Commission for Europe. This Council has also endorsed draft regulations to prohibit the emission of crank case gases and to limit smoke from diesel engines. 1 am quoting these details because they are a reminder to everyone who drives on our roads today that action is being taken to cut down on exhaust fumes and to keep the air cleaner.

page 2973

QUESTION

SELECT COMMITTEES

I want now to refer to the reports of the select committees of the Senate and House of Representatives on various environmental topics. These parliamentary inquiries have been most useful in drawing public attention to some of our pollution problems in Australia. The Government has carefully examined the recommendations of the Senate Select Committees on Air and Water Pollution and I ask for leave to incorporate in Hansard statements of the Government’s observations on the recommendations made by those committees.

Mr SPEAKER:

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

page 2974

AIR POLLUTION IN AUSTRALIA

page 2974

GOVERNMENT’S OBSERVATIONS ON THE RECOMMENDATIONS BY THE SENATE SELECT COMMITTEE

Legislation within Commonwealth Territories (Recommendation 1)

That the Commonwealth should immediately enact legislation for the control of air pollution within its territories’.

The Select Committee made this recommendation not ‘because there is an urgent need for such legislation but because the Committee feels that the Commonwealth should take an immediate and active interest in air pollution matters’. The Committee also stated that the promulgation of Commonwealth legislation in this field could provide a model for future State action.

The Commonwealth does take an active interest in air pollution matters. Research into various topics of relevance to air pollution problems is carried out or sponsored by Commonwealth Departments and authorities, viz. -

Department of Air

Australian Atomic Energy Commission

Bureau of Meteorology (Department of the Interior)

Department of Civil Aviation

Commonwealth Meteorology Research Centre

Commonwealth Scientific and Industrial Research Organisation

Department of Health

Department of National Development

Department of Shipping and Transport

Department of Supply

The Commonwealth is also actively involved in air pollution problems through the National Health and Medical Research Council, the Australian Transport Advisory Council and now through the Australian Environment Council.

The global nature of man-made atmospheric pollution, first brought to light by the problems of airborne radioactive debris, led the Commonwealth to establish the National Radiation Advisory Committee in 1957. The Committee examines the effects of ionizing radiation on the Australian community, including possible effects of fallout from nuclear weapons tests. The Committee’s reports on the biological aspects of the fallout have been published. The NRAC assesses these effects after a study of the data supplied by the Commonwealth X-ray and Radium Laboratory and the Atomic Weapons Tests Safety Committee. More recently there is an increasing concern with the wide dispersion of some chemical pollutants in the atmosphere arising from industrial and aircraft operations, and the possible climatic and other changes these might engender. Some of the Commonwealth agencies referred to above are active in investigating these problems. Monitoring is a key part of this activity and forms one of the important topics to be discussed at the United Nations Conference on the Human Environment.

So far as the Territories are concerned, the position remains much as the Committee found it in 1969, viz. no pressing air pollution problems have been revealed and the preparation of additional or comprehensive legislation is not of itself an urgent matter. However, in both Territories amendments have been made (as in the States) to the Motor Traffic Ordinance to provide additional controls over motor vehicle emissions.

The Commonwealth and the States are jointly examining problems relating to air pollution in such Commonwealth/State councils as the National Health and Medical Research Council, the Australian Transport Advisory Council and the Australian Environment Council. It would appear more appropriate for such Councils to work towards uniform Commonwealth/State legislation if this proves practicable than for the Commonwealth to attempt to provide a theoretical model in the Territories where there are few, if any, specific problems at present requiring legislation.

Commonwealth/State Bureau of Air Pollution (Recommendations 2, 3 and 4)

That the Commonwealth Government initiate a conference between Commonwealth and State Governments to discuss the establishment of a Commonwealth/State Bureau of Air Pollution’. Commonwealth/State consultation and coordination on air pollution matters is already effected through -

  1. the National Health and Medical Research Council which, since 1937, has been concerned with all health aspects of environmental disturbance. In 1970, the Council formally established the Environmental Health (Standing) Committee to which reports the Air Pollution Control (Reference) Sub-committee. Recommendations on the health aspects of air pollution are made through these committees;
  2. the Australian Transport Advisory Council which has a Committee on motor vehicle emissions.

More recently, the Australian Environment Council has been formed to provide for consultation and co-ordination between the Commonwealth and States on appropriate environmental matters and, at its meeting on 7 April 1972, decided to establish a Committee to investigate and, where appropriate, make recommendations for national emission standards and guides to environmental quality criteria.

The Government believes that these arrangements provide an appropriate framework for Commonwealth/State co-operation.

Air Pollution Research by CSIRO (Recommendation 5)

That a Division of Air Pollution be established within the CSIRO to undertake basic research into air pollution problems of particular relevance to Australia; to examine overseas studies and practices for application to the Australian situation; and to undertake studies recommended by the Bureau of Air Pollution’.

This matter has been examined by the Executive of CSIRO which is convinced that more would be gained by investigating different aspects of air pollution within the Organisation’s general framework than by establishing an overall Air Pollution Division.

With the object of unifying CSIRO research in the important area of environmental physics the

Organisation has recently formed the Environmental Physics Research Laboratories comprising the Division of Atmospheric Physics and the Division of Environmental Mechanics. An example of a specific air pollution problem more appropriately tackled elsewhere in the Organisation is the removal of fly ash from power station emissions which is dealt with in the Division of Mineral Chemistry. In the course of these studies, appropriate consideration is given by CSIRO to the results of overseas research where these are relevant to the Australian situation.

Aspects of air pollution research are also handled by a variety of other bodies, including the Commonwealth Departments and Instrumentalities listed under the observations of Recommendation 1.

Role of Bureau of Meteorology (Recommendation 6)

That the Commonwealth Bureau of Meteorology be charged with the responsibility of establishing a national network of monitoring stations for the collection of meteorological data specifically for air pollution needs, the continuous measurement of air pollutants, and eventually of setting up a predictive service for the warning of potential air pollution hazards’.

The Bureau of Meteorology maintains a comprehensive data collection network which gathers information capable of some application to air pollution control. There is a continuing process of development of the network both as to the form of data collected and the extent of the general network. The monitoring of pollution is under examination by the Australian Environment Council and, in the world context, by the United Nations Conference on the Human Environment. The future role of the Bureau of Meteorology will emerge in the light of further developments in these areas. The Bureau is already providing a predictive service for the warning of potential air pollution hazards in Perth and Adelaide and the provision of a service in Sydney is under consideration.

Motor Vehicle Emissions (Recommendation 7)

That, in view of the special importance of emissions from motor vehicles in the overall air pollution problem, urgent consideration be given by the appropriate Commonwealth and State authorities to ways and means of bringing about the abatement and eventual control of those motor vehicle emissions which contribute to pollution of the air’.

The Australian Transport Advisory Council has a committee on Motor Vehicle Emissions continuously looking into this problem. The Council in February 1971 endorsed its recommendations on Design Rules to limit exhaust emissions. One of these rules has already been put into effect by the respective governments. It covers all passenger cars (including station wagons) manufactured after 1 January 1972. It specifies that the carbon monoxide content by volume of the exhaust gases emitted by motor vehicles with the engine idling must not exceed 4.5 per cent.

The second Design Rule is to apply to passenger cars (including station wagons) manufactured after 1 January 1974 and provides for test under both idling and traffic conditions, and it lays down maximum levels for both hydro-carbons and carbon monoxide.

The Rules are regarded only as a first stage for petrol engined vehicles and work is continuing on the matter. Regarding diesel engined vehicles a draft regulation to control smoke emissions of diesel-powered vehicles has been endorsed by the Australian Transport Advisory Council (in February this year). This regulation provides for all ‘on road” diesel-powered vehicles not to omit exhaust smokes exceeding 70 Hartridge Units in opacity.

The problem of determining what further action is necessary to limit motor vehicle emissions is made difficult by the inadequacy of data on effects. Not only is there a need for continuous monitoring in key areas of ambient air but it is apparent there is also a need to monitor actual emissions from motor vehicles in order to determine as closely as possible the pollution attributable to the motor vehicle.

Financial Aspects (Recommendation 8)

That the Commonwealth Government give consideration to the granting of financial relief to industry and others involved in expenditure on air pollution control equipment and its maintenance by means of tax and duty concessions, with particular reference to the extension of the taxation allowance and to accelerate depreciation allowances’.

While the income tax law makes no reference to expenditure on air pollution control equipment, the full cost to business enterprises in installing, operating and maintaining such equipment would, as a general rule, be allowable as deductions either by way of depreciation allowances or as business outgoings. The proposition that extraordinary financial relief should be provided at the taxpayers’ expense to those incurring these expenditures is difficult to reconcile with what has come to be known as the ‘polluter pays principle’. Briefly stated, this principle holds that the real cost of pollution should be borne by those producers and users of goods and services whose production or consumption brought about that pollution.

That the taxation laws in respect of allowances for buildings and plant be reviewed, particular in relation to the definition of chimneys.’

The general question of allowing income tax deductions in respect of the cost of buildings and other structures, including chimneys, used by manufacturers and other taxpayers, has been examined by the Government on a number of occasions, lt has not so far been found practicable to introduce such allowances.

WATER POLLUTION IN AUSTRALIA

GOVERNMENT’S OBSERVATIONS ON THE RECOMMENDATIONS BY THE SENATE SELECT COMMITTEE

National Policy: National Body (Recommendations 1 and 2) l.A National Policy. Australia should adopt a National approach to the management of its water resources which sets out acceptable standards, co-ordinates the aims and aspirations of State and local government authorities, and creates the machinery to achieve them in balance with other national goals such as those for growth and development.

  1. A National Body. The Commonwealth should take urgent steps to establish a National Water Commission.

The functions of the Commission should include -

  1. the formulation of a national policy on water resources management;
  2. an assessment of water resources and quality;
  3. programming for the conservation and orderly development of water resources.

It should also be the administering authority for water resources within the Commonwealth’s jurisdiction.

The Government agrees with the view of the Australian Water Resources Council that the major objectives involved in a national approach to water quality can be achieved through the type of machinery and programme which is already in use.

The Australian Water Resources Council has as its major objective -

The provision of a comprehensive assessment on a continuing basis of Australia’s water resources and the extension of measurement and research so that future planning can be carried out on a sound and scientific basis’.

Its principal activities have been -

  1. Promotion of an accelerated programme of water resources measurement in which the Commonwealth is providing financial assistance to the States. Total expenditure over the 9 years ending 30 June 1973 will be about $47.1 million, of which the Commonwealth contribution will be about $13.5 million. This programme covers underground as well as surface waters.
  2. In addition to the acceleration of measurement programmes, Council has stimulated a marked improvement in the quality of this work, and the adoption of standard equipment and procedures where feasible.
  3. Promotion and oversight of a water research programme in which direct funding is by the Commonwealth, and State authorities are assisting with the provision of data, services and facilities as appropriate. Commonwealth funds totalling $1.1 million will have been allocated over the 6 years ending 30 June 1974. Much of the work is being carried out by the Universities, with active support by State and Commonwealth agencies.
  4. Publication of technical papers arising from the research programme, and from studies carried out by ad hoc expert panels. These publications are distributed widely in Australia and overseas.
  5. The arranging or sponsoring of training programmes for professional and subprofessional workers in various aspects of water resources studies.

In July 1970, the Australian Water Resources Council established a Technical Committee on Water Quality with the following functions -

The preparation of information and advice on -

  1. Equipment and methods for the measurement, collection, processing and presentation of water quality data, with a view to achieving uniform and adequate standards;
  2. Programmes for assessment of quality of water resources of Australia;
  3. Water quality management practices in Australia and overseas;
  4. The compilation of criteria on water quality to serve as a guide for limits of quality permissible for various beneficial uses, particularly for public water supplies, agricultural requirements, recreation in inland waters, fish and wildlife culture and industrial purposes.

The membership of the Committee comprises representatives of Commonwealth and State Government Departments involved in development and control of water resources, both rural and urban, and also specialists in the disciplines of chemistry, agriculture, human health and fisheries and wild life.

The main activities of the Technical Committee so far have been:

  1. a survey of existing networks of stations for collection of data on water quality with a view to planning the national network considered necessary for adequate monitoring of water quality;
  2. consideration of water quality criteria suitable for use in Australia;
  3. consideration of the most urgent research requirements in the water quality field having regard to work already being carried out.

Within recent months, the Branch of the Department of National Development which provides the Secretariat for the Australian Water Resources Council, has been enlarged by the creation of five new positions. This will provide additional assistance to the Council in its work on water quality and water resources generally.

The National Health and Medical Research Council, the Australian Fisheries Council and the Australian Agricultural Council are also concerned with aspects of water quality, whilst the recently formed Australian Environment Council, in its wider role, has decided to set up a specialist committee to investigate and, where appropriate, to make recommendations for national emission standards and guides to environmental quality criteria. Liaison with the other Council will, of course, be essential.

The Government acknowledges the attitude of the States, as expressed in the Australian Water Resources Council, that while they would welcome increased Commonwealth activity in liaison, information, research and other services, they could not accept the concept of a Commonwealth agency having the responsibilities described for a National Water Commission in Recommendation 2.

A Comprehensive Approach (Recommendation 3)

The control of pollution should be undertaken by authorites representative of all interests The prevention and abatement of pollution requires a comprehensive approach involving landuse planning, sociological and ecological assessments and the application of specialist water pollution technology. This comprehensive approach should be the objective at all levels of government. To achieve a co-ordinated, comprehensive approach, it is necessary, in the view of this Committee, that each State move towards the creation of its own central authority to coordinate State activities and to permit the most effective co-ordination between the Commonwealth and the States.’

Action on this Recommendation is a matter for the States. However, it can be said that in general co-ordinating machinery has been or is being set up to deal not only with water quality management, but also with environmental quality generally.

Systematic Assessment (Recommendation 4)

Regional and State authorities should be encouraged to undertake, with the National Water Commission, a systematic quantitative assessment of water quality and to monitor regularly their waterways and any pollution that occurs in them. Pending the formation of the Commission, the Commonwealth should encourage the interchange of data and the discussion of acceptable criteria.’

The Technical Committee on Water Quality of the A.W.R.C. has taken as one of its first tasks a survey of existing networks of stations to monitor water quality, with a view to planning the national network considered necessary. This network would provide the basis for a systematic assessment of water quality, on a continuing basis.

Financial and Technical Resources (Recommendation 5)

The financial and technical resources required to undertake an adequate programme of pollution abatement should be assessed. A financial aid programme in accord with the national policy should be considered. This should have particular regard to the major areas of sewerage, industry, and salinity. The Commonwealth should consider the practicability of making special loans or emergency grants to industry and to local government for works and research.

Prior to the formation of the National Water Commission, consideration should be given to the need for a coastal protection fund to meet the cost of damage arising from tanker mishaps and oil spillages from refineries. Funds for this purpose could come from appropriate oil industry levies.’

The Government accepts the view of the A.W.R.C. that pollution abatement involves a major and continuing programme, the primary responsibility for which rests with the States.

Until the 1969 Civil Liability Convention and the 1971 International Oil Pollution Fund Convention come into force, there is no legal basis on which the costs of oil pollution damage are recoverable beyond what can be recovered under common law action. The 1971 Convention is yet to be considered by the Government. In the meantime, the position is adequately covered by the Tanker Owners Voluntary Agreement Concerning Liability for Oil Pollution (TOVALOP) and the Contract Regarding an Interim Supplement to Tanker Liability for Oil Pollution (CRISTAL). Under these arrangements, tanker owners have contracted to make available compensation for pollution damage beyond the limits of liability presently available under existing legal regimes.

The Commonwealth formally approached the States in February 1972 with a national plan to combat oil spillages at sea under which -

  1. the Commonwealth would set up stockpiles of dispersal material and application equipment, strategically located around the coast;
  2. the Commonwealth would legislate to apply a single levy to the merchant shipping industry to meet the cost of servicing capita] and providing for unrecoverable operating costs.

Legislation and Control (Recommendation 6)

Urgent consideration should be given to the preparation of adequate legislation for the control of water pollution in Commonwealth Territories. Through the National Water Commission, the Commonwealth should encourage the standardisation of legislation and codes of practice in water pollution mutters, and should assist in the collating of existing legislation.’

There is no suggestion in the Select Committee’s report that legislation in the Australian Capital Territory was inadequate. The Select Committee reported that -

  1. Generally speaking, the degree of cooperation between Departments and agencies involved with water quality control in the A.C.T. seemed to the Committee to be at a high level;
  2. Because of the absence of industry, other than service and, to a very limited degree, light manufacturing, there is no industrial pollution problem of the kind that is so common in the States.

The Department of the Interior believes the existing legislation and administrative procedures are adequate for the control of water pollution in the A.C.T.

In the Northern Territory the Mining Ordinance was amended in 1970 to make it a prior condition that before the Administrator granted a mining lease or exploration licence that he would consider the likely effect of these mining operations on the environment and impose suitable conditions. Similarly, special mineral leases which it is proposed to grant in the uranium provinces will contain a wide and detailed range of controls over environmental matters. The Government will also introduce amendments to the prevention of pollution of waters by oil ordinance so as to increase maximum penalties imposed on polluters from $2,000 to $50,000. Action to identify and, if necessary, strengthen other areas to meet existing and foreseeable situations, will continue.

The view of the Australian Water Resources Council is that maximum uniformity of principles and criteria in legislation seems desirable but some variations are considered inevitable having regard to the wide variation in conditions as between States. The general question of uniformity of legislation and standards is under examination by the Australian Environment Council.

Education (Recommendation 7)

The Commonwealth Government should, as a matter of urgency, examine the facilities available for the education of professional and technical persons in water pollution matters so that the provision of adequate facilities will not be unduly delayed. Pending the establishment of the National Water Commission, the Commonwealth should use such instrumentalities as are available for the collection and dissemination of technical data.’

The Commonwealth is providing substantial financial support for the education of professional and technical persons generally and is assisting the States to expand their technical training ‘facilities. In general, this support is not given in a way that permits the Commonwealth to identify readily, the training facilities and programmes that are now available in the various institutions and which are relevant to specific fields of interest, such as water pollution control.

It is a matter for consideration as to whether educational institutions should seek to provide courses specifically in ‘water pollution matters’, or whether they should rely on general education in particular fields. The relevance of various training programmes and facilities now available in the various institutions will depend on how broadly the phrase ‘water pollution matters’, as used in Recommendation 7, is interpreted. This needs to be clarified to determine if any survey should be undertaken of facilities available for the education of professional and technical persons in water pollution matters. The Australian Universities Commission and the Australian Commission on Advanced Education and also the State authorities could then be invited to comment.

Research (Recommendation 8)

The Commonwealth should provide research and travel grants for qualified workers in those fields already identified as significant in water pollution abatement. Studies directed towards the controlled re-use of water should be encouraged.’

The Commonwealth is already supporting research by qualified workers in fields bearing directly upon water pollution abatement and the controlled re-use of water through the activities of a number of Commonwealth Departments and instrumentalities, including the Department of the Interior, CSIRO, the Australian Atomic Energy Commission Research Establishment and the Department of National Development, through the provision of funds for the water research programme administered by the Australian Water Resources Council.

Problems of water pollution must be viewed in the context of overall water use and management. It is therefore the Commonwealth commitment to water research overall that should be considered rather than its commitment to research in the narrower field of water pollution abatement. From this viewpoint, the Commonwealth contribution is clearly, substantial, and, in addition, thereis a considerable expenditure by the States on water research.

CSIRO - whose expenditure on water research Is far greater than that of any other organisation in Australia is carrying out, inter alia, research into some problems that relate to the detection and movement of pollutants in water and to the treatment of industrial waste effluents and urban sewage with the object of controlled re-use of water.

Provision is made for overseas travel in cases where this is appropriate.

A distinction should be made between research activities and the routine monitoring of pollutants and pollution levels. The Recommendation by the Select Committee is regarded as referring to fundamental and applied research activities while routine monitoring forms part of the continuing systematic assessment of water quality and is covered by the comments under Recommendation 4.

Public Education and Encouragement (Recommendation 9)

The Commonwealth should, through existing organisations, subsidise public education programmes on pollution and encourage a responsible attitude by all sectors of the community. Urgent attention should be given to measures relating to detergents nutrients and industrial wastes. Financial inducements by way of subsidies should be considered.’

The Australian Environment Council at its meeting on 7 April recognised the need for a greater public awareness of matters concerning the environment and agreed that each Minister will take immediately appropriate steps to promote this awareness in his own sphere. It also instructed its Standing Committee to propose for its consideration at its next meeting ways and means of improving public knowledge of the needs of the environment.

Mr HOWSON:
LP

page 2978

QUESTION

INTERNATIONAL ROLE

Now, in conclusion, may I mention our involvement in the international aspects of environmental control. The threat to man’s environment is world-wide. It makes no distinctions. There is much to be gained, therefore, by Australia sharing its problems and the search for solutions with others. We do this primarily through the United Nations and more recently through the OECD. We take an active part in the work of the specialised agencies of the United Nations whose work has environmental overtones. The Commonwealth was an early adherent to the International Convention for the Prevention of Pollution of the Sea by Oil as far back as 1954 and last year through the United Nations Agency in Maritime Affairs it secured provisions which will provide especially for the protection of the Great Barrier Reef. It has also contributed to recent conventions directed towards securing adequate compensation for damage by oil pollution. This participation in international discussion and consultation is a continuing process.

We are prepared to use all the international machinery at our disposal to achieve the sort of co-operation required for global action and to protect our own interests in problems with environmental implications. Next month we will be represented at an important United Nations conference on the human environment in Stockholm.

The Australian delegation has already been announced and I need not repeat the details. Sufficient to say I am sure it will be a significant conference. We were among the first to support the Swedish initiative for the conference and we have been closely involved in the preparations since 1968. And while Australia will have much to learn I am sure we will also have something worthwhile to contribute. The protection of the environment is a task that has no end. As the inventive genius of man produces new benefits for us all, so, too, will the problems of protecting the environment multiply.

We cannot leave it all to Governments. It is as much a challenge to the walker on a forest trail who drops litter as he goes as it is to the industrialist whose factories crowd the landscape. It is as much a challenge to the parent, the educator and the scientist as it is to the manager and the politician. It is a challenge the people of Australia have to take up as their own.

I present the following paper:

Environment - Commonwealth Policy and Achievements - Ministerial Statement 24 May 1972.

Motion (by Mr Swartz) proposed:

That the House take note of the paper.

Mr UREN:
Reid

– At the outset I wish to commend the Government for its decision to participate in the United Nations Conference on the Human Environment in Stockholm early in June of this year. It is one of the most important world conferences held for many years. It may be the beginning of an attempt to try and solve the problems confronting mankind in regard to the rape of resources and population. But I believe it is wrong that the Government has not given consideration to allowing a representative of the alternative government of this country to attend that

Conference. I think the Government should permit a representative of the Opposition to attend that important Conference. I criticise the Government for not permitting those 2 members of the Parliament the honourable member for Henty (Mr Fox) and Senator Keeffe who will be attending a parliamentary world conference on the environment in Vienna in late June to attend the Conference on the environment in Stockholm early in June. That seems to me to be a very short sighted view on the part of the Government.

Quite frankly, I think that there has been some window dressing by the Government in regard to the environment. We have just heard a Minister who is twenty seventh in seniority of the 27 Ministers in the Ministry make a statement on the environment. It seems to me that the Government has given very late and very low priority to this matter. However, I am glad that the Government has now officially recognised the environment. The statement by the Minister for the Environment, Aborigines and the Arts (Mr Howson) contains a few items which are very welcome but which are buried in a wealth of meaningless cliches. The most depressing thing about the Minister’s statement, however, is that it appears as if the Commonwealth Government has turned its back on accepting full responsibility in this field. It has sold out to the rights of the States. Certainly the States have a great deal to say on the subject. So they should. So should local government. However, the leader in the field must be the Commonwealth Government.

The United Nations Conference on the Human Environment, which is to be held in Stockholm in a few days, dramatises the fact that the problems of the environment are global problems and Australia, as a part of the world, has to share its responsibility in this respect. Even though representatives of the States will be going to this Conference in Stockholm it is the Commonwealth which will in the main represent Australia in the world environmental stage. It must be the Commonwealth which also leads the way at home. The Commonwealth must not opt out of the situation by claiming constitutional limitations. We are now in the 1970s and we are experiencing problems which are characteristic of the last third of the twentieth century. We should not allow a late nineteenth century constitution prevent us from facing the issues now and from facing them squarely.

The Government has at last recognised that environmental issues do exist, although depressingly it still emphasises only the pollution control aspect. The environment involves more than pollution control. But, even in terms of pollution control, the delinquency of the Government has been great. On 10th September 1969 the Senate Select Committee on Air Pollution tabled its report. Among the recommendations contained in that report was a recommendation that the Commonwealth Government should co-ordinate State and Commonwealth action on air pollution, undertake research in the area and institute tax relief measures to encourage the introduction of air pollution control equipment. On 10th June 1970 - almost 2 years ago - the Senate Select Committee on Water Pollution tabled its report in which it recommended, among other things, that Australia should adopt, firstly, a national policy - I stress the words ‘a national policy’. The Committee was under the chairmanship of Senator Davidson. He is today as much in favour of a national policy as anybody in the Opposition. In regard to its recommendation that Australia should adopt a national policy the Senate Select Committee on Water Pollution said:

Australia should adopt a national approach to the management of its water resources which sets out acceptable standards, co-ordinates the aims and aspirations of State and local government authorities, and creates the machinery to achieve them in balance with other national goals such as those for growth and development.

The Committee recommended, secondly, that Australia should adopt a national body. In that regard it said that the Commonwealth should take urgent action to establish a national water commission, which should formulate a national policy on water resources management, assess water resources and quality, and programme the conservation and orderly development of water resources. The Minister’s statement acknowledges the fact that the Senate Select Committee on Air Pollution and the Senate Select Committee on Water Pollution reported but it does not indicate that any action is planned on their recommendations. I wonder when the

Government is going to take some action. These recommendations were put forward about 2 years ago. When is the Government going to take action to implement the recommendations of committees which were comprised of a majority of Government supporters? The Water Pollution Committee said that the Government should take national responsibility; yet no action has been taken by the Government.

Still unanswered on the notice paper is a question asked on 17th August last year by the Leader of the Opposition (Mr Whitlam) of the Minister for the Environment, Aborigines and the Arts. That question reads:

  1. What action has been taken on the recommendations of the Senate Select Committee on Air Pollution (which reported on 10th September 1969) since the former Prime Minister’s answer on 12th June 1970.
  2. What steps have been taken to remedy the lack of cohesion and direction in the Commonwealth’s administration of water pollution, on which the Senate Select Committee on Water Pollution reported on 10 June 1970.
  3. What has been the (a) date and (b) outcome of correspondence between the Commonwealth and States concerning the National Advisory Council on the Environment since the former Prime Minister’s answer on 24 February 1971.

Another question asked by the Leader of the Opposition of the Minister for Health (Senator Sir Kenneth Anderson) aims at trying to pry out of the Government the composition and meeting dates of the interdepartmental working party on the environment since 25th November 1970. There is at present no way in which that working party’s work and worth can be examined or whether the competence of the membership can be assessed. In other words, there is no way of assessing whether the interdepartmental working party on the environment is of any real use or is just a piece of window dressing.

With the exception of salinity and the sometimes serious pollution from mine tailings in the interior rivers of the mainland States and Tasmania the major water pollution problems in Australia are within estuarine areas. It is there that the impact of industrialisation, land filling, tourist development, power generation and other activities of man is greatest. Already in certain areas - such as Cockburn Sound, where the vital sea grass community which stabilises the sandy bottom of the Sound is dying from pollution, and Botany Bay, where the State Government of New South Wales still pretends that land filling and industrial and port development are still compatible with oyster farming - the damage is possibly beyond repair. The land filling of estuaries in Queensland for tourist development is having a profound environmental impact on the nearby marine ecosystem, although we barely have any knowledge of the impact. In addition a nickel refinery is planned near Townsville in Queensland which will have a significant impact on the marine environment. That refinery will be very close to the Commonwealth funded Australian Institute of Marine Science. The Queensland Government did not have the grace even to inform the Interim Council of the Institute of its plans in regard to the Greenvale nickel project. When the Continental Shelf and Territorial Sea Bill is enacted we will have some clarification of these issues. No State government will have the right to do as it likes without an asessment by the Commonwealth.

We welcome the introduction of environmental impact statements on Commonwealth funded projects. However, this is not enough. The above example clearly shows that State-Commonwealth cooperation will be necessary in projects not using Commonwealth funds if we are to ensure that the delicate marine ecosystem is to survive the various ad hoc activities of man. We also welcome the principle that the polluter must pay. That is the only reasonable way to ensure that the extensive social costs of pollution are correctly allocated. The Government must tax, in the form of pollution tax and taxes to encourage recycling of materials. President Nixon has led the way with specific taxes on lead in petrol. There has been no action by this Government to give any indication at all as to whether it would impose a tax on lead in petrol. The Government still allows the pollution of our cities. Of the air pollution in our cities 60 per cent is caused by the emission from the exhausts of motor cars. President Nixon has forecast an emission tax of 15c per lb on sulphur dioxide. In the industrial area near Parramatta in the western suburbs of Sydney, which is one of the worst affected areas in metropolitan Sydney, at least 100 days a year there is an airshed, a draught of air, coming down from the mountains in the west - 300 feet to 400 feet deep with 17 miles of airdraught - which brings down sulphur dioxide and other emissions from factories in that area and creates a smog over Sydney and the harbour. One factory alone emits 30 tons to 35 tons of sulphur dioxide every day. If the 15c per lb tax that has been forecast by President Nixon were to be levied, that company alone would have to pay in excess of 310,000 a day. But no action has been taken and no leadership has been given by the Commonwealth Government in this country.

The polluter must pay, but he must not be able to pass all his new costs on to the public. He must bear some of the extra load himself. Differential taxation on pollution, which is one way of ensuring that the polluter pays, can also be used to achieve other desirable social goals such as decentralisation. What has the Government done about decentralisation in the 23 years it has been in office? It is only window dressing to say that we must have decentralisation. The Government has been in power for 23 years and has taken no action whatever on decentralisation. Because of its taxation powers and because of the recent High Court decision in the concrete pipes case, the Commonwealth has a large amount of power to ensure that industry acts in the overall social interest. It is about time the Government showed some leadership in this area.

We welcome the introduction of a land advisory council which will recommend to the Minister suitable policies on land use in Commonwealth territories. Again, however, land use in the States often has significant national interest. The Kosciusko State Park in New South Wales is of benefit to all Australians. A good Commonwealth environmental policy would ensure that Commonwealth-State consultations would take place on land use in the States. Again, the Commonwealth should show leadership and begin the task of joining with the States to build a national policy on land use. This includes land use for urban areas, agriculture and forestry. May I remind the Minister that in the Softwood Forestry Agreements Bill 1972 which is before the House there is not one mention of consideration of environmental matters.

The hardwood forests are being destroyed and softwood forests are being planted. The fauna which once resided in those forests will not reside in forests of exotic softwoods from the northern hemisphere. The land use policy should include also national parks and mining. The Government’s move is just not big enough. All this adds up to a shambles. All parts of the environment - airsheds, watersheds and land - have certain capacities to stand use and abuse. In using them we must ensure that we are not overloading and abusing them and causing irreversible damage.

The Government clearly feels that these problems are State matters. We on this side of the House question the Government’s interpretation in this matter. Additionally, because it has enacted virtually no legislation to cover its own territories, the Government obviously feels that citizens living in these territories have no environmental rights. (Extension of time granted.) Leaving the decisions to the States means that each goes off in a different direction. The result win be the development of ‘polluters’ havens’ if we are not very careful. A State will lower its resistance to pollution in order to attract industry. This has happened in other countries. If we do not have universal control throughout the nation, companies will bargain with the States, as they have done concerning foreign investment. We need to have national control over environmental matters. Even though the Government shows it is concerned about this possibility, nothing in the Minister’s statement indicates that the Government plans to do anything about it.

The Government has sold out to the motor industry in controlling emissions from motor cars. The country has opted for the Economic Commission of Europe standards which control carbon monoxide and hydrocarbons but not oxides of nitrogen. This might be all right in most European cities, but Australian cities have climatic conditions suitable for the creation of photochemical smog. Oxides of nitrogen are essentia] for its formation. Ironically, if decreases in hydrocarbon and carbon monoxide are obtained by altering air-fuel ratios, the oxide of nitrogen emission will go up and increase photochemical smog - not decrease it. All Australian cities have photochemical smog and it is rapidly worsening. We need stricter standards like the more rigorous United States standards which include oxides of nitrogen. We need taxation measures and public investment to encourage people to leave their cars at home when travelling to their employment and use public transport.

However, an environment department is much more than a pollution control department. The environment embraces a whole host of items such as over-population, urban sprawl, litter, dirty air and water, mining, land use planning and flora and fauna conservation. It is not something simple such as trade, defence or education. It is a whole umbrella of concerns which have as their common denominator the negative impact on a system with finite limits of man-generated growth which ignores the finite size of that system. The same principles apply at the global level as apply at every sub-system level down to the simple house. We must be concerned with a whole complex of man, nature, technology and society. It has been at the global level that the triple crises caused by over-population, resource depletion and technology and pollution have forced us to begin to rethink our entire attitude to our present life style. Because the environment is such a complex interaction of man, nature, technology and society we cannot just set up a bureaucracy and call it the Department of the Environment and expect it to solve our problems. The Commonwealth Department of the Environment has a staff of 8 clerks one is an Engineer the remainder is without any skilled scientists or men of technology in that field. We can see this in New South Wales where 4 departments - the Department of Health, the Department of Local Government, the Department of Transport and the Department of Environmental Control - are fighting each other about who has the right to monitor and control motor vehicle emissions and to manage the environment as a whole. All decisions by government, by private companies and by individuals have environmental impact. What we must do is design a new model which ensures that when any decision is made it is an environmentally wise one. This will mean that we might have to change quite drastically some of our present concepts of government departments. We can attain such a goal if we first set up proper social and environmental goals to keep us on course.

I would ask permission to have included in Hansard part of a speech that I made at the Housing Industry Conference in Canberra on 24th April this year.

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

– Is there any objection? There being no objection, leave is granted subject to the document being inspected. (The document read as follows):

The first law of ecology to biologist Barry Commoner is ‘everything is connected to everything else’. This point was made about 80 years ago by the poet Francis Thompson, who said -

All things by immortal power Near or Far Hiddenly To each other linked are That thou canst not stir a flower Without troubling of a star.’

It is the existence of these ‘hidden links’ which we must recognise now when we talk about ‘the environment’. Clearly the ‘environment’ means virtually ‘the world’. It is not a component such as clean air or water’. It is not something which is as readily definable as ‘education’, ‘defence’ or trade’. It is an entire complex of Nature, Man, Technology and Society, all these are interlinked, changing, evolving and influencing each other. In a world where everything is connected to everything else, it can be very misleading to isolate ‘basic environmental factors’. No system in the world, be it a watershed, a national trade pattern or an urban unit, can be regarded as self-contained and cut oil from the rest of the world. Up until recently we have tended to regard parts of the NatureManTechnologySociety complex as separate from one another. This is not so. Our technology affects the other three for example. New methods of fishing are threatening the entire world’s fisheries. The motor car has perverted the design of the cities and dehumanised them. City planners have made the situation worse and worse by trying to re-model the city to fit the car. Only now are we realising how much we have lost by regarding motor car transportation as a separate entity in itself. We must recognise the ‘hidden links’ which exist. Not to do so will be to risk our own survival.

What then is ‘the environment’? Dr Aurelio Peccei, the founder of the Club of Rome expressed ‘environment’ in a systems way which embraces both natural and man-made components. each subsystem or system is contained in a system of a higher order, which represents its environment. All systems besides overlapping here and there are linked directly or indirectly by relations of interdependence.

The subsystems can be natural or man-made but they interlink anyway. We must forever bury the notion that the ‘environment’ means clean water or air, depleting resources or anything in an absolute sense. It is foremost a relative thing. It is a way of looking from the subsystem level to the system level. It is a way of seeing which part of the system the subsystem depends for its existence.

Let us look at a factory. Let us consider the various parts of the larger system of which it is a part, which affect its productivity. That is, let us consider its environment. A factory uses water, air, energy, capital, knowledge, material resources (both renewable and non-renewable) labour and technology. Using these resources for production this factory takes one thing and fabricates it into another. The raw material of this factory was produced by the harnessing of renewable and nonrenewable resources. The air used came to it in an ‘air shed’, and it has a history of use before it gets there. It also possibly has a history of abuse.

In other words the ‘hidden links’ to that factory are many and far reaching. As we have seen, we can drawn a similar picture for a house.

The environment of a wild animal can be expressed similarly. It is that eco-system of which it is part and upon which it depends for food, air, water, and protection.

In each case the principles are the same. The environment is the system upon which the subsystem depends for its maintenance.

There are three things which we must constantly keep in mind when we consider the environment. These points are also based upon some made by Aurelio Peccei.

The world’s destiny has become one and indivisible. Disaster is certain unless each nation broadens its own limited circle of solidarity, progressively embracing all mankind. The UN conference in Stockholm in June will be a big beginning. It could be the most important conference so far held on the earth. Significantly one of the six major subject areas being discussed in Stockholm involves ‘Problems of Human Settlements’. It is also the only area in. six which Australia presented a paper worthy of itself, to the Conference a paper on the planning of Canberra by the NCDC. The planning of Canberra is a good example except when you consider the land, water, and energy consumed by its 150,000 inhabitants and compare that to an. Indian or African town of the same size. Western culture consumes far too many resources of all kinds. One major problem for the future is that we must come up with alternatives which consume far less resources per person.

The sum of human things must be guided by long range vision and objectives. Decision making is becoming all the more difficult by the quickening rhythm of events, growth and change, Under such conditions if we are guided by expediency or short term decisions we can likewise court disaster. We must know where we want to go. We must have long term planning goals. Otherwise successive ‘ad hoc’, short term decisions will increasingly mean ‘bad news’ for people. Results of such decisions will deviate more and more from true human welfare. Look at where all the decisions which have been made to accommodate the motor car in the city have got us; bad air, destroyed homes to make room for freeways, decaying public transport, destroyed lives from traffic accidents, urban noise, destruction of buildings for car parks, growth of junk yards, and many other consequences. Despite all these decisions we are now worse off. What we have done by successive short term ‘ad hoc’ decisions is to have ‘thrown out the baby, but kept the bath water’. Another good example is the impact of one sub-system, migration, on the integrated urban system where migrants have settled. Migrants have made great additions to the city by enrichment of cultural diversity. The arrival in Australia of such large numbers in the last 10 years particularly, has, however, strained almost every aspect of the Nature-Man-Technology-Society System. It is not migrants specifically but the increase in population growth from 1 per cent to 2 per cent caused by migration which is doing the damage. A 2 per cent home grown population growth rate would impose similar strains.

Problems of a complex nature do not have simple solutions or can they be solved by partial approaches. In other words, we cannot ‘isolate’ the basic factors of the environment. AH problems are interlinked with other problems. Again the impact of the motor car on the urban system can be .seen as a consequence of not seeing the ‘hidden links’ or of ignoring them altogether. We must become system oriented in our thinking when we consider the environment. We must understand what is the environment of any subsystem. This is equally true of the level of a house, a city, a natural region, a nation or a whole earth. Each sub-system is part of a larger system. That larger system is the environment of the subsystem.

For the first time in our history we have a chance to handle these difficult problems. We can look at the way these complex systems operate and where and how the links occur. Recently there have been some attempts made to simulate on computer the entire world system, by systems specialists in the USA. These specialists have worked under the auspices of the Club of Rome. Their results have had tremendous impact and have caused much debate. The biggest breakthrough however is that we now have the courage to do this sort of thing at the global level. We can then tackle the problems at other subsystem levels - regions, nations, cities and houses. In our era of doomsday prophesies we perhaps now have the techniques to confront the problems. However, the social problems stemming from implementing necessary reforms should not bc underestimated.

These three basic guide lines must constantly stay in the front of our minds from now on when we consider environmental problems.

Besides thinking system-wise the other essential thing which we must do is to define goals. If we do not, in this rapidly changing world, we will continue to throw out more babies and keep more bath water. To keep our lives human and preserve at least some of nature at all we must reaffirm our control of technology and end our mindless slavery to it and worship of it. The Concorde is an example of such a situation. Anybody who does a total cost-benefit study of the Concorde to society, must decide that it is not in the interest of most to go ahead with it. If we do not put man in control of his technology we will continue to stagger from one crisis to the next. We will do too little, too late and often the wrong thing in addition; all because we do not know where we want to go.

We must sit down and decide what kind of environment we want. We can do this successively at every level from the globe down to the house. It is the job of all, not only Governments. Hie housing industry, for example, can do it within its own area of interest, making sure that it recognises all the hidden links which connect the house and its inhabitants to the systems of which they are part.

The definition of goals is a difficult thing to do, but it is by no means impossible. Already we would have considerable consensus on what we want in terms of air and water quality and freedom from pollution, of housing, of access to recreation and work, of working hours and conditions, of education and health services, of access to and use of material resources, of cultural facilities, of wages and salaries as a proportion of the total wealth and so on. We can hammer out a basic set of guidelines to keep us on course. Obviously we should revise them often. We should put all of them down as an optimum environment statement. The biggest single difficulty which we will face will be to reconcile the different cultural preferences in our pluralistic society.

In Australia we have serious and escalating problems. However, by world standards we are still lucky, despite a rapidly worsening situation now. We have one of the best population resources ratios in the world. We have the chance to prevent problems by planning. We should be setting an example to the world. One of the most urgent problems, for example, is that we must make decentralisation work here in Australia. We must build new planned communities outside the sprawling disasters which Sydney and Melbourne are rapidly becoming. Decentralisation is working in a few places (notably Western Europe, England and Scandinavia). An optimum environment statement, can be used to provide the framework for policies of decentralisation just as it can for other policies. It should be the frame in which we design all our national and foreign policies. As well as guiding the shape of new cities, it gives as a yardstick to measure what has to be done in old, problem filled cities.

An optimum environment statement should be idealistic and be reached as much as possible by consensus. It is an easy matter to set up the necessary institution to produce this statement. A Commonwealth Department of the Environment would be a suitable place. A forum in that department could hear the views of state and local governments, conservation and consumer organisations, and just people as well as experts. It will be difficult to do it. Not to do it will mean disaster to us all, for we will face the future rudderless.

The optimum environment statement should also include the rights of the environment. This can provide the legal basis for protection of the environment from man and his technology. Up until now the law has protected man from man. Man is now doing violence to the environment at an increasingly alarming rate. It is very easy for a subsystem to wreck the larger system of which it is a part, that is its environment. The subsystem ignores oris not aware that the system of which it is part has a finite limit.

Such an attitude was summarised very well by Dr Garrett Hardin as the ‘Tragedy of the Commons’. Hardin considers a common cow pasture where local people can graze their cows. Each herder can increase his number of cows as he pleases. This is because his gain is offset by a loss which is distributed between all other users of the common who do not recognise what they are losing, because it is so small. All the others of course can do the same. Soon there is no grass on the common and everybody loses. Hardin concludes ‘freedom of the commons bring ruin on us all’. The subsystem (the single owner) did not recognise the limits of the system (the common) and the ‘hidden links’ (the demands of others on the common and the flows of air, water and sunlight to make grass).

The situation applies to most other systems, be they at house or global levels.

Finally, it must become obvious that once we recognise that everything is interconnected in a systems way, that the environment can be overloaded and destroyed, we must realise that our concepts of ‘freedom’ will have to undergo great changes. Years ago robbing of banks became illegal. If everybody robbed banks, the entire social system would collapse. That is another way of saying that the rights of the majority who did not rob banks would not be served. There will be a host of equivalents of ‘robbing banks’ in the near future, if we want to survive at all. The right to bear arms and the right to drive cars in the central city are now openly questioned everywhere. They have already been abolished in some places. The former is not in the interest of the majority who did not bear arms but had rights to walk the streets in safety. The latter is not in the interests of the majority who are not riding in a car but have a right to breath good air, be safe from traffic and noise and take a seat on an alternative system of public transport. So there will be many ‘rights’ in conflict in the near future. However, if, ahead of time, we have agreed upon a set of environmental goals we will be better off. We will have then a frame of reference within which we can rationally decide which rights’ society can keep, increase or decrease in the interests of most people. It is the only way which will be socially responsible, be fair to all people at the same time, and which will result in the collective survival of all men.

Mr UREN:

– I thank the House. The Minister recognises at long last that Australia has an international role to play. We in Australia are in a very lucky country. We are one of the few countries on this planet with a good populationresources ratio, high literacy, a reasonably skilled work force, and competent specialists. We can show the way by setting a good example at home. This will require extensive planning and Commonwealth leadership in that planning. The financial resources of the Commonwealth will have to be involved to combat the brute economic power of many of the large multi-national corporations which are located in this country, which have been bad polluters in other places and which are increasing their power and influence daily. Above all, we have the chance to prevent problems before they occur, to learn from the mistakes of others, and to commit ourselves to building a new alternative. Let us take up that challenge; let the Commonwealth lead the way it is the only authority in Australia that can do so.

Might I repeat the criticism of the Government for not including one member of the alternative government among those to go to the important conference in Stockholm. We on this side of the House believe that in matters of the environment everything is connected with everything else. This is the only way to look at the problem in this country. We have to look at it nationally and globally and to make sure that we manage the environment and I use that word ‘manage’ deliberately one cannot control the environment; it can only be managed in this sector of planet earth.

Debate (on motion by Mr Giles) adjourned.

page 2985

MARKETING OF AUSTRALIAN WOOL

Discussion of Matter of Public Importance

Mr SPEAKER:

– I have received a letter from the honourable member for Dawson (Dr Patterson) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to give leadership on the marketing of the Australian woo) clip.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)

Mr Pettitt:

– Not a wool grower among them.

Dr PATTERSON:
Dawson

– It was very clear that the honourable member for Hume (Mr Pettitt), who just interjected, did not rise in support of the proposal to discuss this matter. Apparently he believes that the Country Party, and his own Government, have given positive leadership to the wool industry on the question of the acquisition of wool. It must be patently clear to the rural industries of Australia that this Government is incapable of giving positive leadership to the Australian wool industry. The Government has now embarked upon a deliberate policy of procrastination and stalling, aimed at delaying any positive decisions with respect to the most dynamic question in rural Australia today, namely the establishment of a wool marketing authority to acquire, to appraise and to market the wool clip on behalf of the Australian wool growing industry.

The peculiar behaviour of the Government in consistently refusing to make decisions, and in appointing yet another top level committee to look into the problems of wool marketing, illustrates its incompetence. A government is elected by the people to make decisions. This Government has had at least 2 years to consider the problems of wool marketing and to make a positive decision on the need for acquisition and on the future of the wool auction system in Australia. Reforms and new policies are urgently required. The Government has had before it considered reports and recommendations from both independent and industry organisations. It has had at its displosal the most knowledgeable government agency in Australia on the economic structure of wool marketing, the Bureau of Agricultural Economics. It has had access to the top marketing and finance brains of the Commonwealth in the Department of Primary Industry, the Treasury and the Department of Trade. In addition, the Australian Wool Industry Conference, the so-called parliament of the wool industry, has carefully considered this matter and has made constructive recommendations to the Government. The Government has had the benefit also of the views of wool growing and marketing organisations throughout Australia.

Despite the availability over the past two years of this wealth of advice from the industry, from government agencies and from independent committees, the McMahon-Anthony Government still refuses to make positive decisions on wool marketing and on the acquisition of the Aus tralian wool clip. Instead, the great decision it has made up to date has been to establish yet another committee. The Government is so incompetent that it cannot even make a positive decision on the amalgamation of the Australian Wool Board and the Australian Wool Commission, an obvious and urgent requirement for streamlining wool marketing in Australia.

Not only is the Government incapable of giving leadership, but also the Parliament is being treated with contempt by the refusal of the Prime Minister and his Ministers to make a considered statement in this House as to what the Government has decided up to this point of time, after 2 years of consideration, about acquisition. Parliament is being treated with garbled newspaper reports about Country Party and Liberal Party in-fighting, and the warriorlike attitude outside Parliament of the Minister for Trade and Industry, the Leader of the Country Party (Mr Anthony), is in marked contrast to his attitude in Parliament, which is one of subservience to the Prime Minister.

This is not good enough. What are the preliminary recommendations, for example, of the Randall Committee? Surely after 2 years of deliberations and stalling the Government has made some progress on whether or not it is desirable to acquire the wool clip; and surely after 2 years it has some positive views on acquisition. Or is it a fact that the Government is in a hopeless position, incapable of sound and constructive decision on wool acquisition? Wool growing is Australia’s most important single industry. Its past and present contributions to the growth of Australia economically, and to the development of the nation, are of great magnitude. Its future is clouded with deep uncertainty and the Government, by refusing to make a positive decision and to give leadership on this vital marketing reform, is contributing greatly to wool’s misfortunes and the widespread uncertainty which presently exists. Instead of making wool marketing reform one of its highest priorities, the Government has relegated it to one of the lowest priorities.

Let not the Government waste time in the House this afternoon parroting off its policies on wool deficiency payments, the

Australian Wool Commission activities or the price averaging plan policy. These are temporary stop-go policies only. They are not necessarily reliable or permanent machinery for stabilising the wool situation in this country, and they are not based on the solid foundation of permanency. The basic issue before the House today is whether or not the Government supports the establishment of a wool marketing authority to acquire and to market the Australian wool clip. Does it support this proposition or does it not, after 2 years of deliberations? All we have had has been a wall of frustration and indecision, buckpassing and promises.

What this nation desperately needs, not only in wool marketing but also in other economic matters, is some semblance of leadership. At present, the Government is nothing more than a rabble, torn apart by dissension on this most important matter.

For 2 years the Australian Labor Party has been hammering the Government to take action to establish a statutory authority to acquire and market the exportable wool clip. Every major wool grower organisation in Australia now supports the principle of orderly marketing through acquisition of the wool clip. The auction system of selling wool in Australia has failed the wool grower. The auction system is archaic and inefficient and should be progressively scrapped. By continuing with this system, the Government is condoning inefficiency; it is perpetuating the problem. Because the Government has strong political allegiances to the major wool broking houses and hire purchase and pastoral companies, it has embarked on a deliberate policy of stalling. The Liberal Party, as is well known and as was certainly exposed last night by the honourable member for Moore (Mr Maisey), is bitterly opposed to any interference with the auction system. It is prepared to sacrifice the economic livelihood of thousands of traditional small wool growers and their families in order to support powerful wool broking interests and an inefficient auction system.

It is obvious also that the Australian Country Party is too weak to buck the Liberals for fear of widening the serious dissension which already exists within the Government. The Country Party is most vocal outside the Parliament - in the electorates - about its wicked partner, the Liberal Party. But, when it comes to positive decisions in this House and positive action in the Parliament, every member of the Country Party is completely subservient to the dictates of the Liberal Party and the Liberal Prime Minister (Mr McMahon). Despite the fact that the Prime Minister and his Liberal Party cohorts are doing consistent damage to the overall economy of this nation, serious blame must also fall on the shoulders of members of the Country Party for their weakness in not taking the responsibility of leadership in the matter of wool. The honourable member for Moore is most vocal in his electorate and elsewhere outside the Parliament in condemning his own leaders. I hope that he would be taking part in this debate this afternoon in order to make his statements in the Parliament. If he liked to ask for leave to make a statement in order to repeat and to elucidate the allegations that he made last night, the Opposition would have no hesitation in giving him leave to make such a statement.

Two years ago, when I announced Labor’s policy on wool marketing, of which the central theme was the establishment of a statutory marketing authority to acquire, appraise and market the exportable wool clip, Government speakers ridiculed Labor’s proposals and the principle of acquisition. Now, of course, the wool industry throughout the nation has stated in categorical terms that acquisition is urgently required and is the key to the marketing needs of wool on the international scene. Wool growers have seen the efficiency of the international marketing of wheat and sugar and they want it also for wool. But still the Government refuses to make a decision, obviously because of its political allegiance to the powerful vested interests who bitterly oppose a governmentbacked marketing organisation. lt is clear that the Government is blind to the current facts of political life throughout the wool growing and rural electorates of Australia. The LiberalCountry Party coalition is facing political oblivion in wool growing electorates because of its arrogance and its contemptuous treatment of the entire wool industry - mainly because it refuses to make positive decisions. The wool industry in the producing areas does not mean just wool growers; it embraces entire rural communities of producers, businessmen and employees. It is not just the wool growers who are condemning this Government. It is being condemned also by the workers, the shopkeepers and the trading interests throughout the electorate whose economic livelihood is tied to the wool towns throughout Australia. Does anyone in the Parliament really believe that the Randall Committee will come up with anything which is new or which has not been thoroughly evaluated before? Of course it will not. It is simply a delaying tactic which should not be tolerated. It is a tactic to hoodwink the wool growers of Australia.

I want to make it perfectly clear that Labor fully supports the establishment of a statutory marketing authority to acquire and market the Australian wool clip. Labor’s policy is centred on 5 fundamental points: Firstly, the amalgamation of the Australian Wool Board and the Australian Wool Commission to form the nucleus of a single statutory marketing authority under the control of a full time chairman; secondly, a statutory authority to acquire, appraise and market the Australian wool clip on behalf of wool growers; thirdly, a continuous and progressive reconstruction and development scheme to assist in the solution of production problems and in the solution of production problems and in the streamlining of the physical methods of selling wool, including objective measurement; fourthly, the payment of tariff compensation, if justified, to offset the serious net cost disabilities incurred in the production of wool for export as a result of essential high tariffs in Australia; and, lastly, a fully elected Australian Wool Industry Conference to represent wool growers in all wool producing areas of Australia. Those are the 5 basic points on which the Labor Party’s wool policy has been formulated, and it has been in existence for 2 years.

Mr Sinclair:

– When was this?

Dr PATTERSON:

– I announced it 2 years ago in the Parliament and, if the Minister for Primary Industry wants to confirm it, he can look through the record of the debates. But where is the Government’s wool policy? That is the most pertinent question today. Firstly, of course, we know that the Government was opposed to the acquisition of the wool clip. I can only assume - with other members of the Opposition and, I believe, most other members of this Parliament - that the Government still is irrevocably opposed to acquisition. Because of the Government’s silence in this matter, every wool growing organisation in Australia is full entitled to make the same assumption, namely, that the Government is opposed to acquisition. If the Government is not opposed to acquisition, let the Minister, when he follows me in this debate, state the case of the Government and where it stands on the acquisition of the wool clip.

The House should not complete this session until the Government has made and announced in this Parliament a definite decision on wool marketing reform and has told the industry and the nation whether it will legislate for a statutory marketing authority to acquire, appraise and market the wool clip. The indecision and uncertainty of this Government cannot be tolerated any longer by the wool growing industry and, because of the importance of this industry to the nation, by the nation in general. Because of the great importance of wool, the wool growing industry and the nation are fully entitled to a decision by this Government - a decision based on positive leadership, not the negative leadership we have had with respect to the wool industry over the last 2 years.

Mr SINCLAIR:
Minister for Primary Industry · New England · CP

– I feel sorry for the honourable member for Dawson (Dr Patterson). It is always very pleasant to see a man who feels that his pride is worth preserving. I think that it is always commendable, if somebody feels that he has been aggrieved in any way, for him to seek to take action to rectify his grievance. Of course, we all heard in this House, following the publication of a newspaper article after the Caucus meeting last week, that the honourable gentleman lost out in a debate that apparently was conducted in Caucus. It is very difficult if one loses in a debate or on an issue which one regards as significant. So, the Government and the

Opposition today are in conflict on a matter of public importance which was raised by the honourable member for Dawson in order to demonstrate that he still has some opportunity to express his thoughts with regard to one of our principal primary industries.

Of course, the fact that the Government and the Opposition had already come to an agreement that there would be no discussion of matters of public importance this week is incidental. There is also the fact that we decided that the best way in which the 10 Opposition members who are, I understand, going to Singapore on Saturday morning, would be able to conclude their parliamentary commitments and be free to attend whatever this international socialist conference might be in Singapore was for the business of the House to be concluded this week. But the honourable member for Dawson felt aggrieved. His pride was hurt to such an extent that he felt he had to have an opportunity to get up in this House and tell the primary producers of Australia that sometimes he has an opportunity to express a point of view. That is why this matter of public importance has been raised today.

It is unfortunate for the Opposition that the Bureau of Agricultural Economics, of which the honourable member for Dawson was formerly an officer, released only a few days ago figures showing improved returns for wool growers. It is unfortunate for the Opposition that this year wool growers will do much better. It is unfortunate that the Government has been so actively involved in ensuring that wool growers will do so much better. Of course, it is unfortunate for the Opposition that not only wool growers, but all primary producers will have a far better year this year. Again it is unfortunate that the Government has contributed towards the betterment of the circumstances of these people. So the honourable member for Dawson finds himself in a position where he has urgently to come into this chamber and tell us that the Government is not helping the wool grower. I have been told that the honourable member tried to make this move on at least 3 occasions - I might be wrong in the number - but apparently the Executive of the Labor Party was not prepared to give priority to wool. It felt that other issues were of far more significance. But at last, because the honourable member for Dawson wanted to have some opportunity to get up in this House and speak on wool, he was given the right to do so.

So far as I can recall, the Opposition has asked 2 questions on wool in this session. This question of wool has been very urgent for the Opposition; it claims it has been very worried about wool. As far as I can recall, only one question on wool was asked by the honourable member for Dawson. So today it was very urgent for the Opposition to see what is happening in the wool industry. Regarding the wool selling season, the auction season begins about 15th August 1972, and while it is true that private sales will commence from 1st July and that today is the 24th of May, the Opposition claims it is very urgent that a decision be taken today so that everybody knows just what will happen m the wool industry. What utter nonsense. It is important that the industry should know what is happening before the next wool selling season, and the next wool selling season will begin on 1st July.

What has happened with wool as far as the Labor Party is concerned? We hear a great deal of hoohaa from the Labor Party claiming that for 2 years it advocated an acquisition scheme for the wool industry. I will just take honourable members briefly through the events that happened during those 2 years. Today I was interested to hear of another 5 points. The Opposition’s points seem to change from time to time. For the first time in my recollection the word ‘amalgamation’ has been used in this House today by the Opposition. That is a sensible proposal; it is part of the recommendations of the Australian Wool Industry Conference. But of course the Opposition is not really interested in what the industry recommends. It does not believe in consulting industry; it arbitrarily sets down what an industry shall do. The Opposition says: ‘We are going to do this, and pity help those who dislike it’. Of course, the problem with the Opposition saying that it will do this is that basically it seems to have a policy of establishing a peasant agriculture in Australia.

For example, we have heard the honourable member for Riverina (Mr

Grassby) suggesting that across the border trading of wheat has advantages for the wheat grower. The Labor Party says: ‘We want to get cheaper prices for wheat. We do not want our wheat farmers paid enough money so that they can earn a living.’ We hear policies from the Opposition about low priced foods. We know what the Opposition is interested in. It is not interested in obtaining a proper balance between consumer availability and returns to producers to enable producers to earn a living and to develop to the point where they are able to maintain equal standards with the rest of our society. No, the Opposition is interested in a peasant agriculture, and by that I mean that a farmer is kept down to the very minimum level and the Government comes along with a black rod and says: ‘You do this and you do that. We are going to introduce this policy, and pity help you if you do not like it. We are not going to take into account anybody else who is involved in the industry.’ The fact that there are a good many other people along the marketing and supply chain is incidental. What the Opposition does is to come in here, advocate a policy and then start to think about it.

Of course, the difficulty facing the Labor Party during the Federal election campaign in 1969 was that it did not quite know what to advocate. Two wool policies were proposed: One by a present member of the Bureau of Agricultural Economics and one by a past member of the Bureau of Agricultural Economics one a present member of this House and one, I understand, a contender for election to this House. But a divergence of opinion developed about the Opposition’s policy on wool to the point where it was discussed at length in the ‘Australian Financial Review’. One member of the Labor Party said: a Labor Government would create a pro ducer controlled wool marketing authority to introduce pre-sale testing, to register and check the standards of commercial testing houses, to introduce computer bidding, investigate price support schemes and to register private buyers.

Registered private buyers would be allowed to purchase small mixed chips. Selling brokers would be encouraged to break the cartel arrangements that fix the price of wool selling services to growers.

There was no mention of acquisition. This was another proposition advanced in 1969. The other member of the Labor Party said that the wool industry needed extensive, reconstruction and some form of produc-. tion control might be necessary. He also said that a statutory wool marketing authority should be set up to superintend the marketing of the wool clip. He added that this authority would be an acquisition authority.

Then in October 1970, when we debated the legislation which set up the Australian Wool Commission, we again heard another one of the Opposition’s policies on wool. But this one added a tail to the dog. It referred to the establishment of a statutory authority which would be responsible for the acquisition, appraisal, marketing and distribution of Australia’s annual wool clip. There was no qualification; it was straight out acquisition. The tail was added in one of the subsequent clauses of that policy which stated that wool growers would contribute a percentage of the gross proceed of their annual wool clip for a period of, say, 5 years in order to build up a capital fund to control and market all surplus wools taken over. It was stated that this would act as an insurance fund until all wool taken over was disposed of at the most satisfactory level of prices.In other words, in order to get the policy on wool through the Labor Caucus, the honourable member for Dawson had to ensure that the wool industry would provide its own rotating funds; that the Government would not be involved in it; that the funds would be contributed in such a way that the wool grower himself would provide the funds to run the authority.

Dr Patterson:

– Read the rest of it.

Mr SINCLAIR:

– The rest of it can be found in the Hansard report of the debate in this House on 27th October 1970. But the third Labor Party policy on wool came out in June 1971. The Labor Party’s Federal Executive agreed to another policy on wool. That policy stated:

That Labor will legislate for a statutory wool marketing authority to acquire and/or market the Australian clip-

That part of the policy remained from an earlier proposal - in the most efficient way.

So suddenly a tail, a qualification, and uncertainty is introduced into it. Under that policy there was no acquisition; the Australian clip was to be acquired and marketed in the most efficient way. That again was introduced presumably to qualify the sorts of proposals which the honourable member for Dawson had been putting to the Labor Executive. But again the growers were to contribute a small percentage of their clip income for several years in order to establish a fund to back the reserve price scheme. So we have had 3 policies on wool from the Opposition. Another policy has come out today, again with some variations in it. The Labor Party has said that it always has been solidly behind the introduction of an acquisition scheme. The Opposition’s scheme changes with the wind; it is still as uncertain as tomorrow. It is a scheme which still is not capable of defining for the wool grower how his interests will be protected and how this major primary industry will be able to go out and face the world of the future.

Mr Stewart:

– What is your policy?

Mr SINCLAIR:

– The Government is asked today what our policy is. The wool industry, through the Australian Wool Industry Conference, submitted to the Government proposals which were jointly backed by the 2 producer organisations. The Government received those proposals and, in conjunction with an analysis which was already under way, is conducting an inquiry to ascertain whether the proposals which have been submitted by the wool industry are those which will best protect the industry in the intensely competitive marketing circumstances which face the wool industry in the present world fibre market. One decision that we had to take was the decision relative to the introduction of a new marketing system for small bale lots, and it was urgent that that decision be taken in order that it could be implemented by the next wool selling season. The brokers had to introduce software into their computer processing so that the scheme could operate as from 1st July. We were told that this decision had to be taken by 1st May. So the Government considered the recommendations contained in the report of the Australian Wool Industry Conference only in respect of that part on which a decision had to be taken by 1st May. The deadline for the conclusion of the Government’s consideration of the recommendations made by the wool industry is not the date of the rising of this Parliament, but the commencing date of the new wool selling season.

I am asked what is the Government’s policy with respect to wool. I began by referring to the fact that the gross return to wool growers in 1971-72 is estimated to be $120m more than the gross return in 1970-71. The Bureau of Agricultural Economics released that figure only about a week ago. The increase has come about because the Government’s policy has been to provide emergency relief, price support, the establishment of the Australian Wool Commission, the maintenance of reserve prices, financial backing through commercial means - certainly with payment of interest on the funds borrowed - and the Wool Commission’s capacity to buy in wool so that it has been able not only to hold the floor in the market but also to be the catalyst for the present market recovery. On successive auction days throughout the whole of 1972 the wool market has maintained a much firmer tone than anybody would have believed possible in 1971.

What is the Government’s policy for wool? The Government’s policy for wool is to provide government backing for an industry which it regards as significant. That backing is provided through temporary and permanent devices which have ensured that wool growers’ returns this year are far better and far higher than they were last year. But we are not turning our backs on future marketing change. We are rationally looking at proposals which the industry has submitted. We are not saying to the industry, ‘You will do that and that, and next year you will do something else, the year after something else, and tonight something else.’ We are developing our proposals in conjunction with all sections of the industry. I have personally met not only wool growers and wool grower organisations; I have also discussed the proposals with our customers, entrepreneurs, wool brokers, private buyers, representatives of economic wool producers and all those people who are in the multiple chains of supply right through to the ultimate consumer.

The Government’s policy is to develop a proposal rationally. Essentially we must recognise that this is a federation and in a federation it is not for a federal government to say what it is about to do without being sure that it is able to do so through its constitutional and legislative capacity. Essentially, in the field of wool marketing change there is a necessity, which is amply demonstrated through the wheat marketing legislation, for consultation between the Commonwealth and State governments in order to formulate a way in which any marketing change which embraces acquisition of the clip can be implemented. The Government is not turning its back on change. It is facilitating change. The Government is facilitating change in such a way that wool growers will not be peasant growers. It is facilitating change in such a way that the wool industry can continue to maintain its strength in the markets of the world in the future, so that it can also maintain its competitive position with synthetic fibres. The Government is backing the industry as it progressively moves towards re-establishing itself as a profitable industry for the individuals in it. As I have announced in the House before, decisions on the Government’s attitude towards proposals of the Australian Wool Industry Conference will be made before the commencement of the next wool selling season and will be made long before there is any necessity for the people in the industry to know what the decisions will be.

Mr KIRWAN:
Forrest

– I have never heard a speech more full of fallicious comment than the spech just delivered by the Minister for Primary Industry (Mr Sinclair). I cannot this afternoon deal with all the fallacies it contained but I will content myself with dealing with a few of them. The Minister claimed credit for the improvement in wool prices. The improvement in wool prices has been a fortuitous circumstance brought about by changed world conditions and changed conditions in the marketing situation completly outside the control of the Government, and in spite of the Government’s actions and decisions. The Government has taken very little action on behalf of wool. It was very late in deciding on a support scheme which lasted for only about 12 months and has ceased operations. It was very late in deciding to set up the Australian Wool Commission.

These moves have been beneficial but they have been aimed at dealing only with the results of some of the problems that have arisen in the industry. No legislative attempt has been made to deal with the seats of the problems and their elimination. The Minister’s interpretation of what took place in our caucus is completely false. It does not accord with the facts. He has been falsely informed. In fact, what he said must have been a figment of his imagination. We decided early last week that we would move an urgency motion on this matter and we gave the Government time to bring down legislation to be debated in this place. The Minister knows that after this session no time is left for legislation to be introduced for a change in the wool marketing system before the new wool selling season commences. Parliament will not meet again until August and the wool selling season begins in July, as he said. That was one fact in a speech that was almost completely devoid of facts.

The Minister read out part of our policy which says that wool growers would contribute a small percentage of the gross proceeds of their annual wool clip for a period of, say, 5 years in order to build a capital fund to control the marketing of surplus wool taken over. This would act as an insurance fund until the wool taken over was disposed of at the most satisfactry level of prices. He failed to read the following passage which is tied to it. The capital fund would be guaranteed initially by the Commonwealth Government by loan until the authority’s fund was fully subscribed. It would then be repaid. That system already operates with the cooperative bulk handling operations in Western Australia and with wheat selling operations in the rest of the country.

I support the action taken this afternoon by the honourable member for Dawson (Dr Patterson) to have debated a matter of public importance that is currently engaging our attention. I believe the situation in which we find ourselves this afternoon is deplorable and paradoxical, to say the least. It is deplorable that a government so long in office has allowed itself to neglect an industry of the magnitude and importance of the Australian wool industry for as long as this Government has done. The Australian wool industry has been this country’s largest export earner for almost 200 years. The wool industry has provided a sound basis upon which our economy has been established since its inception. Yet this Government has presided over and has contributed to, through its inaction and indecision, the serious situation in which the industry has recently found itself. It is deplorable that in spite of the advice given to this Government by its own advisers and authorities outside the Public Service, the present situation has been arrived at.

We are currently engaged in debating a motion on which there is little likelihood of a vote being taken. We are debating a motion that has no legislative content. We are debating it because no legislation can be prepared or presented in this place by the Opposition. What is worse, we are debating this motion in the almost certain knowledge that no action will be taken on it during the current session of this Parliament. In order to indicate that the sorts of proposals that have been presented to the Government by the Australian Wool Industry Conference are not unexpected or new, I shall quote from ‘Farm Policy* of September 1964. This publication is issued by the University of Western Australia. The article reads:

At this point it is time to ask, is there an alternative? Several possibilities were noted by the Philp Committee and the Australian Wool Board. Of these only one appears capable of modifying the marketing and pricing of wool so that the producer of synthetics is forced to rely on price (as distinct from pricing procedures), and the inherent characteristics of his fibres, without the advantage of a more attractive pricing policy and of numerous non-price marketing advantages, in his competition with wool. The alternative to the present system which would enable wool to compete with synthetics without marketing handicaps is a central marketing authority. Such an authority could do the following:

Give maximum price stability (without resort to production control).

Standardise the preparation and presentation of the national clip.

Sell to firm specification and firm price.

Remove politics from promotion.

Relate marketing directly to promotion.

Control the volume of supply to the market in accordance with manufacturers’ requirements.

Combat concentrations of buying power and negotiate with shipping companies.

Despite these disadvantages I conclude that a central marketing scheme is the one most likely and able to best meet the pricing and marketing needs of both woolgrowers and wool users, and is the one farmers and their leaders should be working towards.

That was written 8 years ago and is representative of a great deal of material that has been written and prepared by people in authority. This material has been available to this Government and that, as I said, is apart from all the fine and very valuable material that has been prepared by the Bureau of Agricultural Economics. It is deplorable that though the proposals that have come from the Australian Wool Industry Conference could have been anticipated, the Government has not taken any action to prepare for that eventuality. Instead it has resorted to various ruses to cause further delays and, instead of obtaining the agreement of the States in anticipation, the Government is using the lack of such agreement as an excuse for delays.

I remind the Minister of what happened with the marginal dairy farm scheme. Agreement was not reached except with one State before the legislation was brought in to this place, but agreement was reached wilh the rest of the State shortly afterwards. The same could be done in this case because I believe no State would be opposed to such legislation. I said also that the situation in which we find ourselves is paradoxical. It is paradoxical because we find that the Opposition has a desirable policy but is precluded by Standing Orders from proceeding with it. The Opposition is attacking the Government because the Government is without a policy and without any constraints either from Standing Orders or the numbers in this place. The Opposition has a shadow Minister who has done the work which is confronting a Minister who so patently has not done the work - the Minister for Primary Industry (Mr Sinclair). Indeed, the Minister ridiculed our proposals 2 years ago and he is now caught with similar proposals from the Australian Wool Industry Conference and with the McEwen doctrine.

It is futile for the Country Party to do as the honourable member for Moore (Mr Maisey) has been doing of late - trying to blame the Liberal Party for the situation facing the wool industry. A Country Party member has held and currently holds the portfolio of Minister for Primary Industry. It is the Country

Party which has preached the McEwen doctrine over the years. I give 2 instances of this: In answer to a speech made on the adjournment by the honourable member for Riverina (Mr Grassby), the honourable member for Maranoa (Mr Corbett) on 6th May 1970 said:

The problems facing the industry are being handled by wool industry organisations. Their representations are being given consideration by the Government. The Government has said repeatedly-

I repeat - ‘has said repeatedly’ - that provided that the wool growing organisations and the wool growers themselves could present a policy or proposition to the Government, it would be only too anxious to implement it.

I repeat - ‘only too anxious to implement it’. The honourable member went on to say:

It is the division among wool growers that has prevented the Government from taking action so far.

This was said 2 years ago, though our policy was in existence at that time and though it anticipated what the Australian Wool Industry Conference has said. But of course the McEwen doctrine is not in doubt because the honourable member for Moore only 2 days ago said:

It is true that the successive Ministers for Primary Industry have repeatedly stated that when the industry eventually made up its mind what it wanted, and said so with one voice, then the Government should act.

Of course, the industry has come out with the proposals that it wants. It is united in its desires. Yet we find that nothing has been done about them. Because my time has almost run out I wish to make only one other reference. It has been said outside the House that the differences are between the Liberal Party and Country Party. This is patently false. We know that the Prime Minister himself has said only recently that there are no serious differences of opinion between the Minister for Trade and Industry (Mr Anthony) and himself on this matter; they are as one in the Cabinet room. They are only at odds outside in the electorate. We know that the Minister for Trade and Industry says that he made it patently clear to the British Government what was required for Australia to protect its interests when Britain goes into the European Economic Community, but we find now that there were no firm proposals from honourable members opposite. It was all in the Press. The

Minister himself said that it was in Press statements and it is to Press statements that we must look. This is not good enough.

Mr DEPUTY SPEAKER (Mr Luchetti:

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

Mr KELLY:
Wakefield

– The Minister for Primary Industry (Mr Sinclair) began his speech by saying that he was sorry for the honourable member for Dawson (Dr Patterson). I join hi’m in that sentiment. I take a friendly and fatherly interest in the honourable member for Dawson. I am always reminding him of the proverb which says that it is better to keep your mouth shut and have people think you are a fool than to open it and remove all doubt. Every time he and members of his party speak they expose their ignorance about things rural. One of the fundamental reasons for this is that there just does not happen to be a wool grower amongst them so I am not being critical. This is one of the fundamental facts of life, but I guess they cannot help themselves. The Labor Party’s plea seems to be that there should be a lead given by the Government and that the Government should press on with an acquisition scheme which is very much in its mind and which members of the Labor Party are continually expounding. What I am waiting for them to tell me is what kind of an acquisition scheme they have in mind. Perhaps they do not know. One cannot be critical of them for that for reasons I have given. Anyway, they do not say what their scheme is. We can be sure only of that.

They do not say whether they want a compulsory acquisition scheme whereby no-one else can operate and buy wool. They do not tell us that; I guess they do not know, but if they want that kind of scheme they must admit immediately that it would exclude the operation of private wool buyers who have a particular part to play - not an overwhelmingly important part, but a part - in the scheme of things, because they can handle wool so cheaply. Secondly, it would preclude the operations of the economic wool producer organisations and similar bodies. Perhaps what they want is a compulsory acquisition scheme. I repeat: They do not say whether they do. But if they do, I point out that the Australian Wool Industry Conference does not want it. I quote from its report which begins by saying - it is not in the text but the report is related to complete or total acquisition:

Such an ‘ideal system’ is probably not attainable and may not even be desirable. Certainly, there is no question of seeking government support for a marketing system which would exclude independent operators in Australia and overseas whose services are essential to the efficient handling and distribution of the Australian wool clip.

Perhaps the Australian Labor Party wants this sort of scheme. Perhaps its inability to comprehend the marketing system leads it to a compulsory acquisition scheme without the operation of these other bodies that are already in the business. If that is the scheme members opposite are proposing - I repeat that they will not tell us - it must be for good reasons. Members of the Labor Party do the best they can with what ability they have. One of the reasons for having this scheme would be, I suppose, to gladden their little socialistic hearts. It would give them an opportunity to control things. If that is not the reason, there may be some other purpose. Is it to jack up the prices of wool - to be a strong seller in the market so that we will be able to demand a fixed price for wool of certain qualities? Anyone who thinks this at this stage and ignores the ceiling setting effect of synthetics is deluding himself. It is just irresponsible to assume that we can demand and hold the textile industry to ransom when there are on hand other fibres that can be used on the same machinery.

Perhaps there is another reason. We have to give members opposite credit for meaning well. Perhaps they think that economies of handling can be achieved by handling the wool in that way. Indeed, this can be done. I am sure that a great many economies are opening up. This year I sold my wool, core tested and classed in a completely new way without the large number of class lots I used to have, and I got a surprisingly good price for it. However, my point is that we do not need an acquisition scheme to introduce improved and different methods of selling. Let us assume, though, that the Labor Party wants an acquisition scheme. It is important that if there is to be a scheme of some kind it must be thought out thoroughly. It is easy to have visions. There is no problem in having visions. However the task is getting a working model that does the job. A selling system that is efficient and is able to tackle the immensely difficult process of selling wool efficiently is another matter.

A very dear friend of mine who used to come from the city to join me on the farm had some perfectly splendid ideas. I do not know whether he got these ideas because of the peace of the countryside or because of the magpies warbling outside his bedroom window, but he thought that if the farmers drove the sowing machines faster they would use less seed. Another idea of his was to bale standard lucerne direct from the crop out in the paddock. He had all kinds of splendid ideas, but he forgot the fundamental fact that doing something was not the same as having an idea. Whenever he left the farm I felt regret at his going, but in some ways I was glad to see him go because I had the job of putting ideas into practice. This is the problem with the Labor Party.

It is all right for honourable members opposite to have these kinds of splendid ideas and suddenly to say: ‘Well, this is a splendid idea, we will have an acquisition scheme which has a certain amount of popularity and a bit of steam behind it.’ But they do not realise the immense difficulty of setting up a system that will be efficient. My wool growing constituents, for whom I have great respect, are very sensible people. They have begged me: For goodness sake, please do not rush into this and have a half-baked scheme.’ They have begged me to proceed with caution and wisdom and not to be carried away on waves of enthusiasm. They know that the well-being of the industry depends on the wisdom of the decision that the Government makes. I want to see changes. I think very important changes are in the offing. I have instanced some in which I have been interested and in which I have taken part myself.

I am not denying that there is a need for change, but my plea is that we in this House and the people in the country look for a well thought out scheme which is sound. The Government, haying received the submission from the AWIC, quite rightly referred it to the Randall Committee to have the bugs ironed out. If it had not done so I would have thought it irresponsible. Honourable members have heard me plead in this House for the establishment of a rural industries board so that examinations could be made of similar rural problems. I think much benefit could be obtained from such a proposition. The Rural Committee of the Liberal Party is continually putting forward the view that the responsible way to proceed is by seeking out these rural problems and finding solutions for them. The reference of this submission to the Randall Committee is a sample of the change that I want to see brought about. I have nothing but commendation for the Minister for referring the submission to the Randall Committee. Opposition supporters do not want us to proceed in this way. They say Charge ahead’ or ‘Let us have change for the sake of change.’ They say: ‘Let us have control for control’s sake.’ I, just as much as the Labor Party, want to see change. Without being my usual modest self I could say that probably I would know more than honourable members opposite about the way changes work. But because I want to see change and because I want to see well-founded, soundly thought out plans, I would have been most critical of the Government if it had not done exactly what it did do, that is, take time to think out ways of changing the system, introduce a system that will be fundamentally sound and on which the industry will prosper in the future.

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

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

Mr FitzPATRICK (Darling) (4.54)- The honourable member for Wakefield (Mr Kelly) said that he supported the Minister for Primary Industry (Mr Sinclair) when he said that he was sorry for the honourable member for Dawson (Dr Patterson). Some reference was made to there being no wool growers on this side of the House. This seems to me to be a pretty strange approach to the problem now under discussion. I know that most wool growers in my electorate would be happy if they had a parliamentary salary coming in on top of their annual income. I do not think members of this House are any closer to the wool grower because they happen to be in receipt of a parliamentary salary. I am sure that if the people in my electorate were receiving as much as a parliamentary salary we would not be half so worried as we are about the position of the wool industry at the present time.

The Minister seemed to be very concerned to find some slight change over the past 2 years in the Labor Party’s acquisition scheme, yet he claims that over this period there has been a big change in the position of the wool industry. It seems to me that this slight change does not necessarily indicate bad administration. If some slight adjustment is needed because of changed circumstances in the wool industry it would be good administration to make an adjustment according to the changed circumstances. In my opinion, in any wool plan, whether it be for marketing or for some other form of re-organisation, the main responsibility of the Government is to make farming economically viable. In the long term a farm can be considered to be economically viable only if it is capable of paying for the cost of materials used each year out of the proceeds received from the gross output of products. In addition there are annual operating costs, interest and debt repayments which must be made. Provision must be made also for depreciation of assets each year. This seems to me to be a logical approach to any form of business enterprise.

This House has taken action already to make the wool grower economically viable. The House was told that prior to these measures being taken the combination of low prices, rising costs and - at least so far as my electorate was concerned - the severe drought had brought the wool industry to a position where it owed creditors over $ 1,200m, yet the net income of the wool industry was only about $3 20m annually and nearly one-third of this income was needed to meet interest payments on debts. In this situation it has been estimated that half of the 90,000 wool growers earn less than $2,000 a year after service of their debts.

One of the worst hit areas would be in the Western Division of New South Wales. In my opinion this area should be given special consideration until it recovers from the severe drought period through which it had to go at a time when most wool growers were enjoying higher prices. There can be no doubt that the acquisition of the wool clip would be one way of cutting down expense in the handling and marketing of wool at a time when many growers cannot pay bills, moneylenders are reluctant to provide more finance and many local government authorities in wool areas are in serious difficulties. There is a real danger - this is not an imaginary danger - of the collapse of the whole country areas which depend solely on wool growers. It seems to me that it is the Government’s responsibility to take some definite action on the preparation and marketing of wool. It is admitted that this House has considered already the economic viability of the wool grower and has provided direct financial aid, such as the emergency assistance for wool growers, supplementary payments and the S 10Om reconstruction programme. No doubt these things have played some part. But it is quite clear that there must be some fundamental changes in the thinking about the future. Perhaps a good deal of thinking has already been carried out, but the Parliament has a duty to realise the urgency of the situation, and it should translate this thinking into action.

Just because wool prices have improved, as we have been told by the Minister, and seasonal conditions are better, we have no right to delay any action, because there can be no doubt that the long term problem of the wool industry still remains. Because of this the basic approach, I believe, must be aimed at modernising and improving the industry’s marketing and handling arrangements. One of the keys to this modernisation process lies in the pre-sale objective measurement of wool and the sale of wool by sample. Of course this raises the question of what further developments we can expect to see in the method of selling wool in Australia. It is a tragedy that the wool industry has not had the same progressive outlook as the wheat industry has had in keeping pace with the technical developments of marketing.

At a time when the whole wool industry is crying out for the acquisition of wool there can be no doubt that we should act. The different forms of acquisition should be considered. They include sale by auction, acquisition with sales at fixed prices, acquisition with sales at negotiated prices or even a combination of these. These means of acquisition should be only short term measures. Our aim should be eventually to sell the wool as we sell our wheat and sugar. The advantages of these schemes would be a more sensible regulation of the offerings, and there would be greater control over the standard of preparation and presentation of the wool offered. An acquisition scheme would also permit the introduction of cost saving techniques, which are not feasible under the present system.

The Minister said that the Labor Party would not consult the wool industry about any scheme it wished to introduce. This is not true. The wool industry would be consulted. But it must be emphasised that the wool industry itself has a part to play. One thing that the wool industry must prove to the people of Australia at all levels is that it is willing to co-operate in any way possible not only to solve the immediate problems that it has to face but at the same time to consolidate the economic well being and the future of Australia. No one section of the community can expect continued assistance from the Government unless it is prepared to do this. Certainly we should know what the wool industry wishes in this matter. No-one should suggest, however, that our support should be automatic no matter how inefficient the industry is. The present rural crisis not only concerns the man on the land but has widespread sociological, community and centralisation problems. The crisis seriously impairs development and also consolidation of rural districts throughout Australia.

The acquisition of the wool clip cannot be considered the only efficiency step to be taken. We must continue with other steps that will not only bring economic viability to the wool industry but will also consider the whole of Australia generally. It may be necessary to make some adjustment to the actual amount of wool growing to be encouraged. As the emphasis is transferred, the economic loading hitherto largely carried by the rural sector and allied industries must be transferred.

Mr DEPUTY SPEAKER:

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

Mr HALLETT:
Canning

– I certainly do not underestimate the importance of the Australian wool industry to those whom it benefits, and I am sure that none of my colleagues underestimate it either. In speaking to the Labor Party’s matter of public importance on the failure of the Government to give leadership on the marketing of the Australian wool clip, I remind the House that in 1951 the Government offered unlimited support to a reserve price plan. Again in 1965 it offered unreserved financial backing to a similar scheme which was not agreed to by the industry as a whole. Since that time, of course, the Government has brought in many measures, including the present reserve price plan which has the backing of the present Commission and which has meant much to the wool industry of this country, as I said only last week in this House. The Australian Labor Party has said that it has its plans which it could put into operation tomorrow. Of course it could not do so because of the Constitution of this country. This I have also explained in the House on many occasions. Let us hark back to the performance of the Labor Party in office. It is, of course, a long time since we had a Labor government. About 1956, when the Labor Party certainly occupied the treasury bench, it took control of the wheat industry.

Dr Patterson:

– That was 1946.

Mr HALLETT:

– I correct myself. It was 1946. It is so long since Labor was in office that it is a little difficult to remember. But the policy of the Labor Party at that time was to take control of certain primary industries. What did it do? It took the Australian wheat growers’ wheat and sold it to New Zealand for exactly half the price it could have obtained overseas on other markets. If a Labor government has a chance to deal with the rural industries of this country again it will do the same thing again without any hesitation.

The honourable member for Dawson (Dr Patterson) stated in his speech today that very little has been said by honourable members on this side about the wool industry. If the honourable member reads Hansard he will find that since I came into this House in 1963 I have made endless speeches on wool. On many occasions I have made speeches about wool marketing and other matters relating to primary industries. Only last week I made a speech in this House relating to the wool industry. I have made them many, many times, and everybody in Australia knows where I stand in relation to the wool industry. The wool industry will obtain an acquisition scheme which is put forward to the Government. There is no doubt about this. We have at the moment a scheme which, as the Minister for Primary Industry (Mr Sinclair) said, has been backed by the Government. This scheme was introduced at the end of 1970 to assist the wool industry because of the situation it faced at that time. As I said last week, it has been of tremendous benefit to the wool industry. This is a current scheme which has been approved by this House and which is being backed by the Government. In this year alone it will provide anything from $100m to $150m to the wool growers of this country and will also benefit every other section of the community. This machinery is in operation.

I say to the Government that it must bring down the legislation required by the industry itself as soon as possible. But if the Labor Party introduced legislation, as it says it would, without having regard for the Constitution, the legislation would be challenged in the High Court tomorrow and the Labor Party would lose. As I said last week, we must have agreement with the industry and the States before legislation is in fact put through this House. The machinery which we have at the moment must be preserved to assist the wool industry. It is important machinery and precisely the machinery which was sought in 1951 and 1965 by the industry with the backing of the Government. The history of the wool industry shows that if a price support plan such as the one we have at the moment can underpin the prices which wool has been bringing on the market for some time and can put confidence back into the market obviously the market will improve immediately. This is what is happening at the moment, despite everything that has been said about the competition from synthetics.

What has been said in the House today about synthetics is not correct. Anyone who cares to study the position at the moment will find out that the price of synthetics has dropped to the floor. It was only towards the end of last year that statements were being made in this country and elsewhere that the Australian Wool Commission’s price was 2c or 3c a kilo too high in comparison with synthetics. The position in which we find ourselves today is that wool is so superior from the manufacturers’ point of view that its price has increased and the price of synthetics has dropped to the floor. There is a place for synthetics in the world; but there is also a major place for the wool industry.

As I have said on many occasions the policy of the Government has always been to negotiate with the industry on its marketing and research proposals. That is what has been done on each and every occasion previously. The actions of the Prime Minister (Mr McMahon) have been mentioned. Anyone who goes back through the record to 1957 or thereabouts when the present Prime Minister was Minister for Primary Industry will find that on every occasion when Bills concerning the wool industry were introduced in the House the right honourable gentleman announced that the Government had negotiated with the industry before bringing forward the legislation. I hope that the Prime Minister will stand by the policy which he followed when he was Minister for Primary Industry. As I see it, it is still the policy of the Government - it is certainly where I stand on the matter - to negotiate with the industry, work out its problems, come to a decision on them and bring down legislation. No doubt the Government will, as I said last week, do just that. But it must do it as soon as possible. The Government must state precisely where the wool industry will stand in relation to legislation that will be brought down in due course.

I would say that confidence is one of the most important things in the wool industry. It has been said around the world that wool is cheaper at 60c per lb on a market that the buyers regard as being a stable market than at 50c per lb on what they regard as an unstable market. The textile manufacturers do not like to see an unstable market because it means that their competitors can have an advantage over them. The textile manufacturers like to see stability. It should be remembered that the price of the raw material is very low indeed in comparison with the cost of the finished article. Anyone who has studied the facts will know precisely what I am talking about. If the honourable member for Dawson were to go back through Hansard he would see where I have quoted actual figures in this context.

The Australian Labor Party has initiated this debate in order to spell out its platform on the subject of wool, which is fair enough. I do not argue with that. But if it wants to spell out its policy it should spell out all of it. The copy I have in front of me of the Australian Labor Party’s platform is, to my knowledge, the most recent one. I think honourable members should examine that part of its platform which appears under the heading of ‘Rural’. Among other things it states:

Appropriate measures to adjust the levels of farm production in balance with realistic domestic and overseas market demands, in order to provide satisfactory prices to farmers and consumers, with the aim of establishing industry on an economic self supporting basis within a definable period.

I take that to mean that the Australian Labor Party would cut production if it thought that this was necessary and would leave the producers to themselves over a period of time, with no subsidies or assistance of any description. Anyone who cares to go through the speeches that were made in this House by members of the Labor Party on wool not so long ago will find included in them a reference to a cut in production. I think - I am not sure of this; the honourable member can correct me if I am wrong - that the honourable member for Dawson has mentioned that aim on occasions. There is no surplus of wool in the world. There is certainly no surplus of wool in this country. There is no need for cuts.

Mr DEPUTY SPEAKER:

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

Mr COLLARD:
Kalgoorlie

- Mr Deputy Speaker, I rise to support the remarks of the honourable member for Dawson (Dr Patterson) and the honourable member for Forrest (Mr Kirwan).

Motion (by Mr Giles) proposed:

That the question be now put.

Mr DEPUTY SPEAKER:

-The question is: “That the question be now put.’ Those in favour say ‘aye’; to the contrary ‘no’. I think the ‘ayes’ have it.

Mr Collard:

– The ‘noes’ have it.

Mr Foster:

– The ‘noes’ have it.

Mr DEPUTY SPEAKER:

– Is a division required?

Mr Foster:

– Yes. If the Government wants to play rough and apply the gag it should be made to go through all the procedures.

Mr Swartz:

– Mr Deputy Speaker, could I indicate that it was a firm arrangement between the Government and the Opposition that 3 speakers on either side of the House should participate in the debate.

Question resolved in the affirmative.

page 3000

RESTRICTIVE TRADE PRACTICES AND MONOPOLISATION

Mr SWARTZ:
Darling Downs Minister for National Development · LP

– I lay on the table of the House a copy of a statement made in the Senate today by Senator the Honourable L J. Greenwood, Q.C., on restrictive trade practices and monopolisation, and move:

That the House take note of the paper.

Debate (on motion by Mr Hughes) adjourned.

page 3000

QUESTION

GOVERNMENT BUSINESS

Precedence

Motion (by Mr Swartz) proposed:

That Government Business shall take precedence over General Business tomorrow.

Mr FOSTER:
Sturt

– I bitterly oppose the motion. At the end of the Budget session last year the Prime Minister (Mr McMahon) promised that he would not interfere with the latter stages of this session, but what do we find? We find that last week the Government deprived honourable members of a grievance debate and this afternoon we have before us a measure designed to deny honourable members a debate on general business. That is not good enough. I can recall the Leader of the House (Mr Swartz) saying in either a television or Press statement last year that ample opportunity is afforded to back bench members of this Parliament to debate the matters that they consider to be of importance. He was referring to grievance debates. In addition he said that honourable members could put their views forward in the form of general business. Acceptance of the motion which has now been brought forward by the Leader of the House will deny honourable members on both sides of the House an opportunity to debate matters of their choice. I have already said that honourable members were denied the opportunity to participate in a grievance debate last week. In addition to that the gag has been applied in such a vicious and intolerant manner during debates in this House in the last 2 weeks that there has not been a proper adjournment debate at the end of the day.

It so happens that there are a number of matters on the notice paper under the heading of General Business for debate. It is all right for members of the Australian Country Party to agree to this proposal. They have already had a bit of a go on the subject of wool although they have not done very much. I notice that there are some11 items under General Business. I wish to acquaint the House with some of them. Item No. 1 states:

Mr Barnard: To move: That this House supports the 2 fundamental principles of the Bandung Declaration. That is (1) noninterference in the affairs of other countries; and (2) the right of all countries to determine their own future; and supports the Prime Minister’s call for the withdrawal of Vietcong, North Vietnamese, South Vietnamese and all foreign troops from Cambodia-

And so on. That is one matter for debate. Another one in which 1 am most interested and which will come up for debate in this House if the normal procedures of the House are followed is item No. 5, which appears under the name of the honourable member for Fremantle (Mr Beazley). That honourable member proposes to move that a committee of the House be appointed to take into consideration the petitions for aid and relief in West Bengal and East Pakistan. Notice of that motion was given on 14th October 1971. So honourable members can see that it has been there for plenty of time. There is also a notice standing in the name of the honourable member for Corio (Mr Scholes) which reads as follows:

That this House disagrees with the announcement by the Prime Minister that Camp Hill will be the site for the New and Permanent Parliament House -

This matter came up only a few weeks ago on a popular television programme. Much was said about this project costing some $40m. Perhaps one would not be so critical if, today and during the course of the last few weeks, the Government had not played petty party politics to the extent that it brought before this House only the measures it considered should be aired in this place. The Government regards the decision as to what should be discussed in this place as its province and nobody else’s. The Government has wasted a considerable amount of time, as it did yesterday in the debate on foreign affairs. Yesterday when I wanted to rise and enter the debate I was not permitted to do so. We always hear the cry by the Party Whips and the Leader of the House that there nas been some form of agreement between the Opposition Whips and the Government when there has been no such agreement.

The Social Services Bill (No. 3) will come before the House this week. It is limited as to the number of Opposition speakers who will be allowed to address the House on that most important measure and it is restricted as to the amount of time that will be allocated to speakers on that measure. We have waited for weeks for the Softwood Forestry Agreements Bill to come before the House. I find that that Bill is restricted in the totality of time and it restricts the number of speakers. Here again the speakers from both sides of the House will have to decrease their time to afford an opportunity to somebody else to speak who is perhaps not on the list. Is this any way to run a government? Is this any way to cater for the rights of the Opposition? The Leader of the House merely stands in this place and says that Government business will take precedence over general business. Why does the Minister not inform the House as to what business the Government intends to fetch on tomorrow morning when the House resumes at 10 o’clock? He has not done that. He squeals all the time and says: ‘We have lost 2 hours today.’ If the Leader of the House has been losing time, how much time has been saved in running this place by the manner in which petitions are presented to this House now compared with the way they were presented a few weeks ago?

Mr Cope:

– You have got him rattled.

Mr FOSTER:

– What does he have to rattle anyway? The fact is that in the last few weeks the Leader of the House has had far more opportunity and time to adjust the affairs of this House than his predecessors have had or than he himself has had previously. Where are the important issues? The Minister for the Environment, Aborigines and the Arts and Minister in Charge of Tourist Activities (Mr Howson) spoke today on the important matter of the environment, but there was no debate on the matter. One honourable member from this side of the House had to seek leave of the House - and was fortunately given it - to make some form of contribution. This is a matter which ought to be the subject of a debate of some hours.

Mr Peacock:

– Which is this?

Mr FOSTER:

– The matter of the environment. The Minister sitting on the front bench opposite asked: ‘Which measure is this?’.

Mr Peacock:

– I thought the honourable member might have been referring to the contribution made by the honourable member for Shortland.

Mr FOSTER:

– No. I am not worried about the contribution of the honourable member for Shortland (Mr Griffiths). I could ask: ‘What did the Government do about Mr St John, a previous member of this House?’ It kicked him out. What did the Government do with the late senator from South Australia who dissociated himself from the Liberal Party’s views on our shocking involvement in Vietnam? It ostracised him in this place and never recognised him. Then a Liberal government in South Australia had the hide, upon his death, to appoint another Liberal senator to the Senate on the opposite side of Kings Hall. I thank the Minister for introducing that remark about the honourable member for Shortland. I do not give a damn about the honourable member for Shortland. I do not give a damn about what he had to say in this House today. I hope to goodness that, if I get to that stage, I will not be re-elected to this House.

I am going to take my full time in this debate unless I am gagged. There have been matters before this House that have been completely and absolutely curtailed. Let me go back to the matter of the environment

We have a situation in this country in which the Government is a party, by treaty, recognition or otherwise, to the most dastardly acts carried out in the Pacific Ocean by a so-called friendly government. I refer to the atmospheric testing of nuclear devices in the Pacific by a power that will not test them near its own shores and contaminate its people. We could have said something about that in relation to the environment today. The Government has not shown that it has a proper understanding of the dangers of fallout, particularly to the people who are living in the southern half of this continent. We should be afforded the opportunity to tell this House that, because of the type of testing and atomic plants in America today, 7 per cent of children are born deformed. Are we not entitled to time in this House to question the Government as to why this is happening and why something should not be said about it in this place, why a form of inquiry should not be undertaken and why we should not search our minds and ask the questions that ought to be asked in regard to it?

Should we not have an opportunity in this House to say to the Government that the Concorde aircraft should not land in this country until such time as we are assured - doubly assured, for that matter - that it will not interfere with the rights of the public of this country? If I lived anywhere near the airports in Sydney I would be out on the streets and, as a member of the Federal Parliament, would urge as many people as possible to be at that particular airport on the day the Concorde is scheduled to land, to prevent it from landing. That is what ought to be done and that is what we ought to be speaking about in this place. Yet the Government will not provide a notice paper which will give honourable members the right to debate these matters, and any opportunity an honourable member has as an individually elected member of this Parliament to raise those issues will be denied to him because the Government will use the gag, the guillotine and the old numbers game to prevent such a debate in this place. Since I have been in this place, at no time has the Government had the guts, the courage, the common sense or the common decency to produce for a particular session a legislative programme in the true and proper sense so that people could understand it. The daily programme is an insult to the intelligence of the average person. It is an absolute disgrace to describe it as a legislative programme for any particular time. The blue paper is not always followed. It is often completely ignored. I hope that an honourable member opposite will get up and correct me if I am wrong. The programme is often curtailed. The Government is completely, absolutely and utterly dictatorial.

Sir Winton Turnbull:

– Read what the daily programme has at the top of it.

Mr FOSTER:

– I do not give a darn what it has on the top of it. That does not worry me at all. It has ‘Prayers’ at the top of it. One should say prayers with a degree of sincerity. If the honourable member for Mallee will tell me that this Government, since it was elected in 1969, has produced a legislative programme for this House prior to each session I will get up and apologise to the place but I do not think I will need to do that. Let me remind the honourable, gallant, knighted gentleman that the Governor-General’s Speech lasted about one minute 58 seconds and, if my memory serves me correctly, he delivered us into the hands of God. Honourable members have the right to receive replies to certain questions from Ministers. I will wind up on this note, Mr Acting Speaker. I notice that you are watching the clock pretty closely - or maybe it is the gallery.

I have raised the matter of Assistant Ministers before, and it has been bashed through this House. During the course of the last 2 weeks I directed correspondence to a Minister who is in the Senate - the Minister for Health (Senator Sir Kenneth Anderson). Incidentally, he is the Leader of the Government in that House. He is a Minister as a result of the Prime Minister’s whim to appoint him to such a position. I received a letter back from a fellow in the Senate who signs himself ‘Senator Marriott’ and who says that he is the Assistant Minister assisting the Minister for Health. My understanding is that the President of the Senate has declared, quite openly and quite distinctly, that he will not recognise Assistant Ministers.

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I would suggest to the honourable member for Sturt, although he does not have a great deal of time left, that he is getting a little away from the subject matter under discussion.

Mr FOSTER:

– Am I? I wanted to raise that matter also during the course of the debate tomorrow, so it becomes quite relevant now. You should not anticipate too much, Mr Deputy Speaker. I received a letter back from a Senator Marriott. I do not know that he is associated with the portfolio of Health, Why should I know that? A group of my constituents wants a reply on this matter from a responsible Minister. But the Government dodges its responsibilities by appointing Assistant Ministers. I have already directed correspondence to the President of the Senate asking: ‘How come I can get a letter from a so-called Assistant Minister in your House when you have, in fact, as President of the Senate, ruled that Assistant Ministers have no recognition or place whatever there?’ That was another matter. One could speak for some considerable time on this. There is the debate we had the other week on industrial relations, when a Bill was bulldozed through. I ask the Leader of the House, through you, Mr Deputy Speaker: Were we not told by the Minister at the table at the time, the Minister for Labour and National Service (Mr Lynch): ‘We have the numbers in this House and we will curtail the debate. We will get the Bill through by midnight, or a little later’? That is exactly what happened; the Government does have the numbers. I cannot quarrel with that, but it is a pretty totalitarian type of outlook. Honourable members opposite stand up in this place so frequently and with so much hypocrisy and say - and we heard it yesterday in the debate on foreign affairs: ‘We are the sole guardian of democracy; we have the God-given right to be sole protectors of any form of true democracy’. They kicked it to death down Kings Hall years ago. One young fellow on the Government side yesterday accused members on this side of the House of being under a Vietcong flag or of carrying a Vietcong flag, which was quite untrue. But the young member who made the allegation, the honourable member for Waringah (Mr MacKellar), did not have the courage to carry the flag of his own country - nor did his colleague, the honourable member for Diamond Valley (Mr Brown). So much for their criticism of members on this side of the House who have been near rallies, or places where kids have been carrying some types of flags that might insult-

Mr DEPUTY SPEAKER:

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

Mr SCHOLES:
Corio

– I want to protest against the action of the Government in moving the motion now before the House. I intend to deal only with the motion before the House, and that is that Government business take precedence over general business. The notice of motion that would have come forward tomorrow stands in my name. It is:

That this House disagrees with the announcement by the Prime Minister that Camp Hill be the site for the new and permanent parliament house and is of the opinion that the site should be on Capital Hill.

This is a non-party matter, and it is a matter which I believe the Parliament has a right to discuss. On a previous occasion when votes were taken on this subject, the overwhelming number of members of the Parliament voted for the Capital Hill site. By an arbitrary action the then Prime Minister, who has since been replaced, decided that Camp Hill would be the site. I say ‘by an arbitrary action’, because that is what it was. Had a vote of the total Parliament been taken - and I think that was not an unreasonable thing to expect - a very substantial majority would have supported Capital Hill.

This may not seem to be the most important subject that the nation can debate, but the future of Parliament and Parliament’s control over itself are important matters. When a single person can arbitrarily overrule the majority of members of the Parliament on a matter which affects the Parliament solely, it is serious, and it is a matter that this House should debate. We are not merely. deferring debate on the question, and we should be clear on this. What we are doing is making it impossible for this matter to be debated again in this Parliament. My understanding is that if the matter does not come on tomorrow, the next Thursday on which this House sits, which will be the Thursday of Budget week, will be a grievance day week and there will not be another general business day, if the normal practices of the Parliament are followed. There is no general business during the Budget debates. So what the Minister is proposing is to wipe this motion out altogether and to prevent its being discussed or a decision being made on it by this House.

The notice has been on the notice paper since June 1970, which is a substantial time, and it has not yet come up for debate. I believe that the Parliament itself should make the decisions on where the Parliament of the future is to be located, and the only way that that can be done under the present procedures is by a general business item such as is on the notice paper and was due to be debated tomorrow. The whole question of Parliament and Parliament’s control over itself is something that should be debated by this House and should be taken far more seriously by honourable members.

The House on the hill is one thing, but there are a number of other matters, associated and related, that are going on in this Parliament at the moment about which honourable members are never consulted. Ministers’ suites are moved into areas where members previously were located; walls are knocked down, members’ facilities are altered, and never is an attempt made to consult members of the Parliament about what is going to happen to Parliament.

Mr Graham:

– Do you think that Mr Speaker Rosevear never did those things?

Mr SCHOLES:

– I do not know what Mr Speaker Rosevear did.

Mr Graham:

– You must be joking if you think that Mr Speaker Rosevear did not do such things.

Mr SCHOLES:

– I am a member of this particular Parliament and I am talking about what goes on here at this time. What happened 30, 50 or 100 years ago, I do not know. I do know that a gentleman in England was refused admission to the Parliament because he would not swear an oath on the Bible. We do not carry out that practice now either. In fact, 5 members of this Parliament made affirmation. So if one likes to go back in time, one can find a precedent for anything. The facts are that the Minister is moving today to remove one of the very few chances that honourable members have for bringing forward items for discussion. This is most likely the most restrictive Parliament in any western democracy so far as private members’ business is concerned. Whenever the Government feels like it, it moves in and takes over private members’ time. I believe that if we cannot conduct our business in the proper manner, then we should come back here next Tuesday and sit and conduct the business of the Parliament in a civilised and proper way. We have a Bill coming in here tonight which apparently has to be passed tomorrow, even though it is well known that the parties do not meet in the meantime.

Mr Kelly:

– Are you going to Singapore?

Mr SCHOLES:

– No, I am not going to Singapore, but even if I were it would be just bad luck, would it not? I have no doubt that the Government would arrange for pairs for those members who could not be here, the same as the Opposition arranges for pairs if Government members cannot be here. So I think that that is totally irrelevant. I have said what I wanted to say. I believe that the Government is acting in a high-handed manner and Parliament should take cognisance of the fact that it should be master of its own business.

Mr GRAHAM:
North Sydney

– I always listen with great interest to what the honourable member for Corio (Mr Scholes) has to say on these matters. I am conscious of the fact that he has taken a great deal of interest in the techniques that are adopted in the running of the House of Representatives. I know that he is a member of the Standing Orders Committee, and I am appreciative of the histrionics that from time to time emerge when these criticisms of the Leader of the House (Mr Swartz) are brought up towards the end of a session. I want to say to the honourable member for Corio that I have been privileged to be in the House of Commons and to listen to members of that House complaining about restrictions upon the way in which they are able to conduct their affairs and their business in the House.

I have been with an Australian parliamentary mission into the Parliament of the Federation of Canada and I have listened to a much bigger House than this going through all these criticisms and complaints. I know full well that they have on many occasions in recent years sat till all hours of the morning and we, on the occasion when we visited them, found them extremely tired because for the 2 previous nights they had been sitting till the early hours of the morning. In the light of these circumstances I feel that it should be placed on the record that the statement made by the honourable member for Corio that this is a chamber in which there are restrictions unparalleled throughout the world upon the functions of private members, ought to be at least questioned. Frankly, I regard it as a statement which is unsubstantiated, and I believe that the facilities available to members of the Australian House of Representatives will compare favourably with those in the Houses to which I have referred, namely, the House of Commons in London and the House of Commons in Ottawa.

When I made reference to Mr Speaker Rosevear, I was referring, of course, to a distinguished former Speaker of the House of Representatives who was in the chair of this House at the time when the last Labor Government was in power. I repeat that anybody who is familiar with history will know that Mr Speaker Rosevear, who enjoyed the respect of the House, certainly did not encourage members to interfere with those affairs which he regarded as his prerogative. What is more, if honourable members studied the Hansard records, they would see that from time to time complaints were made by members of the Liberal Party and the Country Party who were sitting on the other side of the chamber about what might be regarded as difficult decisions made by Mr Speaker Rosevear without their being consulted. In the light of this history, I believe that the honourable member for Corio should be told that the efforts made in this House by Mr Speaker, the Leader of the House and the Deputy Leader of the House (Mr Chipp) those responsible for the functioning of the House are fair and reasonable and, in the light of all the circumstances, should be accepted by honourable members.

I take the view that a majority of people believe that when this session comes to a conclusion it should come to a peaceful conclusion and that those who must go about their business outside Canberra ought to be able to do so without agrimony debate and without any unfortunate signs of temper. For this reason, I felt that I had to place this point of view on the record to counter what was said by the honourable member for Corio as, undoubtedly, his comments would be used during the election campaign.

Mr BRYANT:
Wills

- Mr Deputy Speaker-

Motion (by Mr Giles) agreed to:

That the question be now put.

Original question put:

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

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

AYES: 57

NOES: 48

Majority .. ..9

AYES

NOES

Question so resolved in the affirmative.

page 3006

SALARIES (STATUTORY OFFICES) ADJUSTMENT BILL 1972

Bill- by leave- presented by Mr Swartz, and read a first time.

Second Reading

Mr SWARTZ:
Minister for National Development · Darling Downs · LP

– I move:

That the Bill be now read a second time. The purpose of this Bill is to provide for increased salaries for certain statutory office holders. I should say at once that this is not the beginning of a new round. It is in no sense an initiative but a remedying of the anomalies that arose from the action of Parliament in amending the Salaries (Statutory Offices) Adjustment Bill 1971.

It is customary for the salaries of fulltime statutory office holders in the group below the levels of permanent heads of departments of State to be reviewed whenever salaries for Second Division offices of the Commonwealth Public Service are increased. Such a review was undertaken following the determination by the Public Service Arbitrator of new salaries for Second Division officers, which took effect from 4th November 1971, and the Salaries (Statutory Offices) Adjustment Bill 1971 was introduced.

The present Bill is required because of the amendments made last year to the Salaries ‘(Statutory Offices) Adjustment Bill 1971 which had the effect of withholding from the statutory office holders referred to in the First Schedule to the Bill increases comparable with those which had been received by Second Division officers of the Commonwealth Public Service as a result of the determination by the Public Service Arbitrator. As was made clear at that time, those amendments were accepted by the Government only to avoid a situation where, because of the form of existing statutory provisions, some of the office holders would not have been entitled to any salary at all.

As indicated when the Salaries (Statutory Offices) Adjustment Bill 1971 was introduced, in the case of various other comparable statutory office holders approval had been given for increases of the same order be applied, subject to compliance with the requirements of relevant legislation. With a few exceptions, action for implementation of that approval had not been completed when the Parliament amended the Bill and, in view of the attitude taken by the Parliament, the increases were withheld from a considerable number of statutory office holders.

As foreshadowed by the Government in another place during the debate on the earlier Bill, injustices have arisen from withholding the salary increases from this group of officers. There is a strong element of unfairness to them and the attractiveness of salary for new and vacant offices, for which the Government must attract suitable appointees, has been diminished. Serious anomalies have been created; for example, in some cases top staff now receive a higher salary than statutory office holders under whose direction they work; and some statutory officers now receive less salary than they would have received if they had remained in the Public Service. Examples can be given to the House if desired.

The Bill provides for the salary increases to be effective from 4th November 1971. This is because that date was the effective date included in the Salaries (Statutory Offices) Adjustment Bill 1971, as originally introduced. In fairness to the officers affected by the unusual situation that followed the amendment of that Bill, the Government feels that there should be no departure from the original intention, which adopted the date of effect in the Public Service Arbitrator’s determination for Second Division officers.

It is also customary for national wage case decisions of the Commonwealth Conciliation and Arbitration Commission, which are applied to the salaries of officers of the Second, Third and Fourth Divisions of the Commonwealth Public Service, to be applied also to these statutory office holders. Accordingly, this Bill also provides for additional increases of $104 per annum in the salaries of those statutory office holders, following the 1971-72 national wage case decision handed down by the Conciliation and Arbitration Commission on 5th May 1972. As in the Public Service, this increase will apply from 1st June 1972.

The Government considers that, in terms of equity and principle, the salaries for this group of officers should, as in the past, be kept in their proper relationship with the salaries granted by the appropriate authorities to Second Division officers of the Public Service.

The Bill also includes revised salaries for lay offices under the Conciliation and Arbitration Act and offices of Deputy Public Service Arbitrator under the Public Service Arbitration Act. These salaries were reviewed separately m their own right and included in the Salaries (Statutory Offices) Adjustment Bill 1971 but were not approved by the Parliament. The revised salaries for Commissioners were also included in the Conciliation and Arbitration Bill 1972 now before the Parliament. As originally intended, these increases will also be effective from 4th November 1971. As in the past, this group will not receive national wage case adjustments.

Details of the salary changes involved have been circulated to all honourable members. I again emphasise that this Bill is designed merely to complete the implementation of salary rates which have been paid to comparable Commonwealth officials as a result of arbitral decisions. I comend the Bill to the House.

Debate (on motion by Mr Clyde Cameron) adjourned.

Sitting suspended from 5.55 to 8 p.m.

page 3007

QUESTION

SUSPENSION OF STANDING ORDERS

Motion (by Mir N. H. Bowen) agreed to:

That so much of the standing orders be suspended as would prevent a Consular Privileges and Immunities Bill and 7 associated Bills -

being presented and read a first time together and one motion being moved without delay and one question being put in regard to, respectively, the second readings, the committee’s report stage, and the third readings, of all the Bills together, and

the consideration of the Bills in one committee of the whole.

In view of the fact that this morning at question time it was ruled that you did not know the Standing Orders, should it now be taken that you are competent to preside over the Parliament?

Mr DEPUTY SPEAKER (Mr Lucock:

– Order! I remind the honourable member from Grayndler of the proverb which says that to err is human and to forgive divine.

page 3007

CONSULAR PRIVILEGES AND IMMUNITIES BILL 1972

page 3007

EXCISE TARIFF BILL (No. 2) 1972

PAY ROLL TAX (TERRITORIES) i ASSESSMENT BILL 1972

page 3007

SALES TAX (EXEMPTIONS AND CLASSIFICATIONS) BILL 1972

Bills presented by Mr N. H. Bowen, and together read a first time.

Second Readings

Mr N H Bowen:
Minis.ter for Foreign Affairs · PARRAMATTA, NEW SOUTH WALES · LP

– I move:

That the Bills be now read a second time. The purpose of the first 7 Bills is to give effect in Australia to the Vienna Convention on Consular Relations which provides a comprehensive code of international conduct on consular relations. The last Bill amends the Diplomatic Privileges and Immunities Act 1967 to bring certain provisions of that Act into line with the provisions applicable to consuls under the Consular Privileges and Immunities Bill as well as introducing modifications found necessary in the light of experience since the 1967 Act has been in operation. Before continuing, I should perhaps mention the difference between the functions of a consul and those of a diplomat. While their functions might overlap in some matters, a diplomat primarily represents the sending state in the receiving state. A diplomatic mission, and in particular the head of the mission, is the spokesman for the sending state in communications with the receiving state or in any discussions with the government of that state to which relations between the two states may give rise. A consul, on the other hand, does not represent the sending state. He is an official of the sending state resident in the receiving state with the permission of that state. He is charged with the responsibility of performing official functions of the sending state - for example the issue of visas and passports - to protect the interest of the citizens of the sending state.

The history of the Vienna Convention on Consular Relations is closely parallel to that of the Vienna Convention on Diplomatic Relations. Consular intercourse and immunities were included in the 1949 agenda of the International Law Commission as one of 14 subjects provisionally designated as ripe for codification. The Commission, a body of 25 eminent jurists established by the General Assembly of the United Nations in 1947 and representative of the principal legal systems of the world, began work on the subject in 1955 and completed its first draft in 1960. This was transmitted to governments for comments. In the light of these comments the final text of the draft was completed in the following year and 2 years later was considered by a diplomatic conference in Vienna attended by the representatives of 92 states, including Australia. The text adopted by the conference entered into force in 1967 after 22 states had become party to it. There are now 48 states party to the Convention including the United States of America, the United Kingdom and the Federal Republic of Germany. The text of the Convention is an amalgamation of the views of expert lawyers and the views of governments and has now gained the active support of a significant number of countries.

Australia signed the Convention in 1964, hut legislation is necessary before we are in a position to give effect to and to become a party to it. In this the Government is following the same course as it did in 1967 when the Diplomatic Privileges and Immunities Act was passed, thus allowing Australia to become party to the Vienna Convention on Diplomatic Rela tions. If the Bills at present before Parliament are enacted into law and Australia ratifies the Vienna Convention on Consular Relations, we shall have a system of privileges and immunities based on internationally accepted standards covering the entire field of diplomatic and consular relations. As indicated by the then Minister for External Affairs in his second reading speech on the Diplomatic Privileges and Immunities Bill on 9th March 1967, the effect is to set out the standards in the Conventions and the general level of privileges and immunities accorded to foreign representatives in Australia.

I should like to mention briefly here for the information of honourable members the meaning to be attached to the terms consular privileges’ and ‘consular immunities’. In common parlance these terms are often confused and this has sometimes led to the belief that consuls do not have to respect the local law. This is not the case. The term ‘privileges’ is commonly used to describe the concessions, often of a fiscal nature, which countries traditionally accord to foreign consular posts and their staffs, while the term ‘immunities’ describes the jurisdictional immunities which international law confers on them. The Convention, in Article 55, emphasises that it is the duty of all persons enjoying privileges and immunities to respect the laws and regulations of the receiving state. Thus, immunity is not immunity from the law. It is immunity from the jurisdiction of the courts of the receiving state. If such immunity is waived by the sending state in a particular case the court can proceed in the usual way.

The purpose of privileges and immunities - as the preamble to the Convention recites - is not to benefit individuals, but to ensure the efficient performance of functions by consular posts on behalf of their respective states. Immunities in particular are protections which experience has long established as necessary to ensure the performance of the functions of a consular post without undue interference. In this respect we should also bear in mind that Australia cannot expect that its overseas posts and their staffs should receive more generous treatment than that which Australia is prepared to concede to overseas posts and their staffs in Australia. Any curtailment of the internationally recognised privileges and immunities - particularly the latter - on Australia’s part could thus create difficulties for our Australian posts overseas and perhaps jeopardise their security. There is need to maintain a proper balance between these 2 considerations.

There are now some 52 consular posts in Australia headed by career consular officers and 106 headed by honorary consuls. The privileges enjoyed by these posts and their staffs as well as members of the family of some of them, are presently to be found in the Acts concerned with income tax, sales tax, customs, excise and so on. The Bills now before the House do not alter the level of privileges accorded under these Acts. This is because the present level of privileges was established in 1967 by legislation supplementary to the Diplomatic Privileges and Immunities Act. For example, a provision - section 23aaa - was inserted in the Income Tax Assessment Act authorising exemptions which were in line with those required by the Consular Convention. The provisions inserted in the sales tax, pay-roll tax and customs duties legislation also incorporated the standard of privileges required by the Consular Convention. Besides bringing these privileges into line with those of the Consular Convention this action also brought them into a proper relationship with those granted to diplomatic missions and their staffs. Had this not been done at the time, there would have been a disparity in favour of consular personnel brought about by a reduction generally of diplomatic privileges under the Diplomatic Privileges and Immunities Act.

The system of privileges established under the 1967 Act exceeded the level required by the Convention in some respects. For example, although the Diplomatic Convention did not provide for exemption from excise duty, the Acts passed at that time gave excise concessions on the same basis as customs concessions - that is, in cases where purchases were made from bond. Exciseable goods were also exempted from sales tax. The Consular Privileges and Immunities Bill continues these limited excise and sales tax concessions in excess of requirements under the Convention. The present legislative system of imposing quantitative limitations on goods that may be exempted for use under the customs, excise and sales tax provisions as well as time limitations on selling or otherwise disposing of them, is of course continued.

However, in the case of customs duties and sales tax applicable to imported goods, the Consular Privileges and Immunities Bill introduces certain alterations in the system of limitations. At present, if, for example, a consular officer purchased a car free of customs duty, he may not sell it within 2 years after the date of entry for home consumption without paying an amount equal to that customs duty, unless the Minister for Customs and Excise otherwise determines. Under the existing legislation the Minister’s power to determine otherwise is limited to determining that, in the particular circumstances of a case, no payment need be made. There is no provision enabling the Minister to determine that if, for instance, a consular officer is transferred from Australia before the expiry of the 2-year period, he should pay a proportion of the duty only. On the one hand a determination that no payment need be made results in a loss to Commonwealth revenue while, on the other hand, if the consular officer has to pay the full amount, it could result in an unfair personal loss to him. In these circumstances the Bill provides, in addition to the Minister’s authority to waive or require payment of the full amount of duty in any particular case, a general scheme whereby, if goods are sold within a defined time after importation, duty and tax are assessed on a pro rata basis - the time and basis for assessment being determined by the Minister for each class of goods. This right of the Minister to require the whole or part of the duty or tax in the event of the sale of the goods concerned in Australia within 2 years after importation is extended to cover the case where the goods are sold in an external territory of the Commonwealth within that period. Thus, apart from this aspect, these Bills do not alter the level or nature of the privileges consular posts and their personnel have been accorded for the past 5 years. In effect what is involved is mainly a change in the form of the legislation dealing with such matters. Instead of being scattered over 6 different Acts such privileges will now all be found in the one Act closely linked to the standards in the Convention.

I now turn to the question of consular immunities. There is at present no legislation covering consular immunity in Australia. This is governed by the common law and is often uncertain. Both consular officers and consular employees, that is, persons employed in the administration or technical service of a consular post, are accorded in the Consular Privileges and Immunities Bill, immunity from jurisdiction in respect of acts performed in the exercise of consular functions. The immunity accorded to these people is thus less than that accorded to corresponding ranks in a diplomatic mission. Overseas practice and interpretation of the requirements of the Convention in this regard has been that consular officers do not enjoy immunity from jurisdiction in respect of acts associated with, but not forming part of, their consular acts’; for example, parking in a no parking* zone while making an official call. It, of course, remains to be seen whether our own courts adopt a similar interpretation. In repect of motor vehicle accidents the Convention lays down specific rules. All members of a consular post are required to comply with local laws dealing with third party insurance for vehicles, vessels or aircraft and there is no immunity in respect of a civil action by a third party for damages arising from an accident caused by a vehicle, vessel or aircraft. Moreover, there is no immunity from the jurisdiction of the Australian courts in respect of a civil action against a consular officer or consular employee arising out of a contract concluded by him in which he did not expressly or impliedly contract as an agent of the sending State. If the consular officer commits a grave crime - and this has been defined in the Bill as one for which the maximum penalty on first conviction is imprisonment that may extend to 5 years or more - he may be arrested in the same way as any other person in similar circumstances. If criminal proceedings are instituted against him, he must appear before the appropriate court.

The Convention aims to accord to the consulate and its staff that degree of immunity which the international community considers necessary for them to perform their functions free from interference or harassment, while at the same time the rights of citizens and the receiving State are protected to the greatest extent possible commensurate with that need. The balancing of interest can be seen, for example, in the degree of inviolability given the consular premises. The authorities of the receiving State are not permitted to enter that part of the premises used exclusively for the work of the consular post, except with the consent of the head of the post. Moreover, the authorities are under a special duty to take all appropriate steps to protect the consular premises against any intrusion or damage and to prevent any disturbance of the peace of the consular post or impairment of its dignity. On the other hand, the consent of the head of the post for entry by the authorities of the host State is assumed in case of fire or other disaster requiring prompt protective action. In such circumstances the interests of the host State are regarded as paramount.

It would be appropriate to mention at this point that the Convention makes special provision regarding members of the consular post who are either Australian citizens or who are permanently resident in Australia. In the case of consular officers in this category the Convention itself specifies the privileges and immunities to which they are entitled. But consular employees and members of the service staff are entitled only to such privileges and immunities as the receiving State determines. The Government considers that such consular employees, only, should be granted immunity from jurisdiction in respect of official acts performed in the exercise of their functions.

What I have said so far relates to what are called ‘career’ consuls and posts headed by such people. There is, however, another classification of consuls known as ‘honorary’ consuls in relation to whom separate provision is made in the Convention. In general the facilities, privileges and immunities accorded to honorary consuls are much less than those accorded to a career consul. For example, there is no personal inviolability; that is, an honorary consular officer may be subject to arrest. He does, however, have immunity, similar to that of a career consular officer, in respect of acts performed in the exercise of his consular functions. Unfortunately, the international conference in 1963 which considered the draft Convention found that it could not agree on a definition of ‘honorary’ consul. Broadly, the distinction is that, while a career consul is a subject of the sending

State, is specially sent by that State and has to devote the whole of his time to his consular functions, an honorary consul may or may not be a subject of the sending State, is appointed from individuals, usually businessmen, residing in the district of the receiving State for which he is to perform consular functions and, for part of the time, follows his ordinary calling. Present Australian practice is not to appoint honorary consuls in other countries; but we do accept them. As I have said, there are now in Australia some 106 consular posts headed by honorary consular officers.

There is another matter dealt with by the Consular Privileges and Immunities Bill to which I should like to draw the attention of honourable members. For many years a number of overseas countries - mainly Commonwealth countries - have maintained offices with diplomatic status in cities other than Canberra. The Convention on Diplomatic Relations precludes the sending State from establishing such offices without the prior consent of the receiving State and, in international practice, it is unusual for this consent to be given. In April 197.1, following the Government’s decision on the matter, the heads of foreign diplomatic missions and consular posts were notified that the maintenance of diplomatic offices outside Canberra could not be continued and that diplomatic status and designation would, in future, be accorded only to missions and personnel respectively situated in, or resident in, Canberra. They were informed that consular status would then be the most that could be granted to the representation of foreign countries located elsewhere in Australia than Canberra and entitlement to this would depend on the type of functions performed by that representation and accepted by Australia.

In the case of the representation of Commonwealth countries in Australia specific legislation is needed to achieve this objective because there is as yet no system of consular relations between Commonwealth countries. We have what is known as the host country convention’. This is an unwritten understanding according to which each Commonwealth country provides the equivalent of consular facilities for citizens of other Commonwealth countries. The Government now proposes to grant an office of a Commonwealth country not covered by the Diplomatic Privileges and Immunities Act 1967, but performing tasks substantially corresponding to those of a consulate, the same privileges and immunities as a consulate. The staff of such an office would be treated on a corresponding basis. Clause 9 of the Bill gives effect to this proposal. The British Consular Relations Act 1968 establishes a similar system.

This brings me to the specific provisions of the Bills. As to the Consular Privileges and Immunities Bill, clauses 1 and 2 are formal provisions. Clause 3 contains several necessary definitions of terms used in the Convention. Clause 4 provides for the extension of the Act to the Territories of the Commonwealth. Clause 5 is the main operative clause of the Bill and provides for the incorporation into Australian law of specific articles of the Convention. The remaining articles are not regarded as appropriate or necessary for action by legislation and the obligations in them can be met by administrative action. The other provisions of clause 5 are inserted for reasons of clarity of interpretation. Clause 6 qualifies the privileges of duty-free importation of goods in the same way as is done in the present Customs Tariff Act, with the addition of the alteration regarding pro rata payment of duties and taxes, which I discussed earlier, and extension of the legislation to cover the case where goods are sold in an external territory of the Commonwealth. Clause 7 grants exemption from excise duty on goods purchased from bond and clause 8 provides for the exemption of the same goods from sales tax. These clauses have the same effect as existing provisions in the excise and sales tax legislation except that provision is made for the case of sale in an external territory of the Commonwealth.

Clause 9 deals with the position of posts established by Commonwealth countries in cities other than Canberra. The reasons for this I have already mentioned. This clause enables regulations to be made conferring on such posts all or any of the privileges and immunities conferred by the Act on a consular post. Provision is also made to cover the various classes of personnel attached to the post in a similar fashion. Clause 10 establishes the extent of privileges and immunities to be enjoyed in Australia by consular employees who are

Australian citizens or ordinarily resident in Australia. This is to be confined to immunity from jurisdiction in respect of official acts performed in the exercise of their functions. Clause 11 enables privileges and immunities accorded under the Bill to be withdrawn from a consular post or from persons connected with the post in Australia if the country to which the post belongs has curtailed the privileges and immunities of the Australian consular post or the staff of that post in that country. The international approval of such reciprocal action is to be found in Article 72 of the Convention Clause 12 enables the Minister to certify in writing for the purpose of the Act or the regulations, any fact relevant to the question whether a person is or was entitled to privileges and immunities. Certificates of this nature are sought from time to time for use in our courts. I would emphasise that the certificates are certificates as to the facts on which the court can base its decision; and the certificates are evidence only, not conclusive evidence.

The Diplomatic Privileges and Immunities Bill amends the 1967 Act where this is necessary to maintain conformity with the provisions of the Consular Bill to regulate duty and tax free entry of goods, etc. Thus, clause 5 amends section 8 of the principal Act to provide a similar system of pro rata payment of customs duties and sales tax as is proposed for the consular field. Moreover, the right of the Minister to require payment of the whole or part of the duty or tax in the event of the sale of the goods concerned in Australia within 2 years is extended to cover the case where goods are sold in an external Territory of the Commonwealth within that period. Clauses 6 and 7 provide for a similar extension of the legislation to the Territories in the case of exemption from excise duty and from sales tax in excisable goods.

Clause 8 amends section 11 of the principal Act to remedy an existing anomaly. Under the existing legislation private servants other than those serving the Head of Mission may be subject to the jurisdiction of the Australian courts in respect of acts performed in the course of their duties if they are foreign nationals or foreign residents but immune if they are Australian citizens or residents. The amendment places all such servants on the same footing. Section 13 of the Diplomatic

Privileges and Immunities Act 1967 was inserted to enable appropriate immunities in respect of official acts to bc accorded to members of non-diplomatic posts in Australia established by the governments of British territories. The immunities considered appropriate were based on the consular standard. In view of this, clause 9 repeals section 13 - such persons now being dealt with under clause 9 of the Consular Privileges and Immunities Bill.

The remaining Bills propose amendments to the customs tariff, excise tariff, income tax, sales tax, Territory payroll tax and Australian Capital Territory stamp duty legislation. Each of the Acts to be amended contain taxation exemptions in relation to consular posts, but once the Consular Privileges and Immunities Bill becomes law it will grant the taxation privileges now contained in the separate Acts. Accordingly, the 6 Acts that are the subject of the remaining Bills are to be amended by the omission of provisions that will become redundant on the enactment of the comprehensive Consular Privileges and Immunities legislation. The provisions of the last 4 of the remaining Bills are dealt with in more detail in an explanatory memorandum which is being circulated for the information of honourable members. The Government considers that the Vienna Convention on Consular Relations represents a balanced and realistic approach to the subject, particularly in respect of privileges and immunities. It also sees considerable advantage in removing existing uncertainty on consular immunities in Australia and establishing the internationally accepted standards of privileges and immunities set out in the Convention. I commend all 8 Bills to honourable members.

Debate (on motion by Mr Crean) adjourned.

page 3012

LIGHTHOUSES BILL 1972

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

Second Reading

Mr NIXON:
Minister for Shipping and Transport · Gippsland · CP

– I move:

That the Bill be now read a second time.

This very straightforward Bill provides for a further step in the Government’s progressive transfer of powers to Papua New Guinea. Since 1949, the Department of

Shipping and Transport has exercised the entire responsibility for planning, installation and maintenance of aids to marine navigation in the Territory. The Administration is now able to see its way to accept this responsibility in the near future, and the Administrator’s Executive Council has agreed in principle. The only question remaining is the precise date of transfer, and so this Bill provides for amendment of the Lighthouses Act from a date to be proclaimed. That date will be set according to the wishes of the Administrator’s Executive Council.

It should not be thought that with the transfer of responsibility our interest will cease. We shall continue to provide whatever assistance the Administration may request for as long as desired. It is already agreed, for example, that an executive officer, selected by the Administration, will come to the Department of Shipping and Transport for a period of familiarisation. The skilled crew of the New Guineabased lighthouse tender, MV ‘Noel Buxton’, will remain until such time as the Administration can replace them. Training of lighthouse technicians will be provided as soon as the Administration can engage indigenous tradesmen. Technical servicing of equipment such as the flashing mechanisms of lights will be provided until such time as the Administration has made its own arrangements. Advice on the planning of systems will always be available.

Thus the responsibility for decisionmaking is going over to Papua New Guinea, but assistance in whatever area and in whatever measure the Territory desires will continue. To regularise this transfer, it is necessary to remove reference to the Territories of Papua and of New Guinea from the Commonwealth Lighthouses Act. I commend the Bill to the House.

Debate (on motion by Mr Crean) adjourned.

page 3013

STATES GRANTS (PRE-SCHOOL TEACHERS COLLEGES) BILL 1972

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

Second Reading

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

– I move:

That the Bill be now read a second time.

Honourable members will recall that the Commonwealth introduced legislation in 1968 allocating $2.5m to organisations in the States responsible for the training of pre-school teachers. The purpose of the grants was to enable the organisations to construct and equip the facilities necessary for them to double the capacity of existing pre-school teachers colleges. Last year the principal Act, which was due to expire on 30th June 1971, was amended so that the prescribed period during which the Minister may make grants to the States was extended to 31st December 1972. The purpose of this Bill is to amend further the prescribed period so that it will terminate on 31st December 1973 instead of 31st December 1972. It has become necessary because the difficulties of the pre-school teachers colleges in acquiring land and obtaining planning permission which led to the need for the present extension have not been overcome as quickly as hoped. Except in Tasmania, where the State Government accepts responsibility for the training of preschool teachers, the organisations in the States responsible for pre-school teacher training are private organisations. As private organisations they do not have the powers compulsory to acquire land necessary for their expansion.

Melbourne Kindergarten Teachers College has encountered difficulties in acquiring land and in obtaining permits from the local government authority to use land already owned. As a result the trustees of the Melbourne Kindergarten Teachers College have been unable to start the approved project. They have just recently received advice from the local government authority that a building permit will be issued subject to certain conditions being met. The trustees have accepted the conditions. The Melbourne Kindergarten Teachers College will not be able, however, to complete its construction programme by 31st December 1972. The Sydney Day Nursery Association has been able to proceed with its approved project but has met difficulties in purchasing additional land necessary to meet the planning requirements of the local government authority. A statement has been made available to honourable members setting out the progress on the various projects and the expected impact of the programme. The proposed extension of the prescribed period is necessary to enable the programme to achieve its full purpose. I therefore commend the Bill to the House.

Debate (on motion by Mr Beazley) adjourned.

page 3014

AGRICULTURAL TRACTORS BOUNTY BILL 1972

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

Second Reading

MrCHIPP (Hotham Minister for Customs and Excise) (8.34) - I move:

That the Bill be now read a second time.

The purpose of the Bill now before the House is to extend the operation of the Agricultural Tractors Bounty Act 1966- 1970 for a period of 6 months to 31st December 1972 unless an earlier date of cessation is specified by proclamation. Under the existing Act bounty will cease to be payable after 30th June 1972. The Tariff Board has completed an inquiry into the industry but its report is not expected to be submitted to the Minister for Trade and Industry (Mr Anthony) before expiration of the bounty. In these circumstances the Government considers that the present level of assistance should be maintained until the Tariff Board report has been received and examined by the Government. Accordingly the agricultural tractors bounty legislation is being extended until 31st December 1972 or to an earlier proclaimed date. I commend the Bill to honourable members.

Debate (on motion by Mr Crean) adjourned.

page 3014

APPROVAL OF WORK - PUBLIC WORKS COMMITTEE ACT

Naval Support Facility, Cockburn Sound

Mr CHIPP:
Hotham Minister for Customs and Excise · LP

– I move:

That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Construction of naval support facility, Cockburn Sound, W.A. (H.M.A.S. Stirling).

The proposal involves the following works: maritime works, wharves, workshops, stores and offices to support 4 escorts and 3 submarines; a large ships wharf, small boat camber and slipway to accommodate ships of the fleet and support craft; barracks, recreational and medical accommodation; armament depot; armament jetty with special facilties for arming submarines; operations headquarters; and communications facilities. The estimated cost of the proposed work is $30m.

In reporting favourably on the proposal the Committee recommended: If tests and evaluations justify the use of carpets as an economic floor covering and if there is no doubt about its suitability, it should be used in single cabins at HMAS ‘Stirling; service scales and standards of accommodation should be amended to provide carpet as a floor covering in single cabins; the advice of experts on environmental problems should continue to be sought and implemented during development and occupation of the naval support facility; because of the widespread nature of community interest, day to day care and management of areas of Garden Island open to the public should be a State responsibility. The recommendations regarding carpet as a floor covering have been referred to the appropriate authorities for attention. The advice of experts on environmental matters will be sought during development of the project and in any further development in the future. The matter of day to day care and maintenance of public areas will be referred to my colleague, the Minister for the Navy (Dr Mackay), to take up with the Western Australian Government. Upon the concurrence of the House in this resolution, detailed planning can proceed in accordance with the recommendations of the Committee.

Mr BEAZLEY:
Fremantle

– Whether the development of this naval base in the Fremantle area will be a major contribution to Australian defence depends on the nature of the warfare involving the installation. There has been a tendency for the sake of points of political propaganda to speak of Cockburn Sound as a major counter to Soviet naval influence in the Indian Ocean. If one assumes that naval warfare between the United States of America and the Soviet Union takes place, and the world has reached that point of disaster, it is quite possible that the war would be nuclear warfare. We may as well face the fact realistically that in this dire case Cockburn Sound would be a concentrated target, a naval base, the city of Fremantle, an oil refinery, a steel works and all the facilities that will be constructed on Garden Island. In nuclear warfare this naval base may not be the great defence asset claimed. If we are talking in terms of conventional warfare against some lesser powers, we doubtless go back to the historic position. In 1911 Admiral Henderson reported that Cockburn Sound was the natural site for a naval base. In terms of conventional warfare it is a contribution to Australia’s defence. However, in the Second World War it was found expedient to have a naval base on the western coast in the Exmouth Gulf area.

As this project has developed there has been very penetrating criticism of it from the environmentalists. There has also been criticism from various sporting bodies which once had the use of Garden Island. For a long time it appeared as if the whole of Garden Island - not to be confused with Sydney’s Garden Island - was to be taken over by the Navy, but the Prime Minister (Mr McMahon) on his recent visit to Western Australia said that 1,800 acres would be left for recreational facilities. That was a very palatable statement to the people of Western Australia, but I think that certain chillies were put on the palatable plate when the statement was made that the day to day care and management of the area of Garden Island that would be open to the public should be a State responsibility. Since the Commonwealth was making the gesture of allowing a park of about 1,800 acres to remain on Garden Island it would have been an elegant gesture if it had carried the financial responsibility for the development of the park as some return to the Western Australian community for the loss of what was once a very great natural area of pleasure. However, the Western Australian community should appreciate the fact that 1,800 acres are to be left to it and I suppose we may rejoice that the State Government will have a recreation facility even if it must carry the expenses of developing the recreation facility.

The other point to be welcomed is the statement that the advice of experts on environmental matters will be sought during the development of the project in the future. I am not qualified to comment on all the submissions made by environmental experts about the change in currents and so forth as a consequences of the construction which is going into the development of this naval base. But the fact that the Commonwealth is interested in continuing to consult with environmental experts is something new and welcome. I suppose we must balance the claims of defence - even if one may regard this as not being the best site in Western Australia for a naval base - against the other claims. The Commonwealth has achieved some balance in allowing part of Garden Isla.id to be left for recreational facilities and no doubt will achieve further balance in its consultations with the environmentalists.

The feature clearly welcomed in Western Australia is the development of defence on the western coast. This need was recognised first in the days of Lord Kitchener and Admiral Henderson, who were brought out by the Fisher Government in 1911 to report on Australia’s defence. Henderson reported on the possibilities for a naval base in Cockburn Sound. Actually it had begun to be developed before the First World War. Of course in those days Australia envisaged the development of quite a large fleet. That was in the days when fleets consisted of gun ships and not rocket ships. It was believed in 1911 that by 1920 Australia would have quite a considerable Navy. The Washington Treaty of 1921 left what were then called the dominions with comparatively meagre naval forces. Under the terms of the Washington Treaty the United Kingdom held the preponderance of naval power on behalf of what was then called the Empire. So the Cockburn Sound base was never developed.

At this point in time - 61 years later - we pick up again the general ideas if not the specific recommendations of Admiral Henderson in the era of Lord Kitchener and that, I think, is generally welcomed in Western Australia, although there are very distinct reservations in the minds of some people who believe that the naval base should be Exmouth Gulf or at some other point on the coast, and in the minds of some who hold the view that navies should have nuclear propulsion - I am not speaking about weapons - which would render them independent of these inflexible and vulnerable bases. The view is that this is essential in modern warfare because fixed bases will without doubt be vulnerable targets. There was keen criticism from those who think almost exclusively in terms of the environment. Generally speaking, however, the majority public opinion in Western Australia welcomes the development of a defensive position on the west coast of Australia.

Mr KELLY:
Wakefield

– This debate springs from a report of the Joint Parliamentary Committee on Public Works on the HMAS ‘Stirling’ facility at Cockburn Sound. As Chairman of the Committee, I would like to comment on some of the matters contained in the report. The first matter on which I wish to comment is the reference by the Minister for Customs and Excise (Mr Chipp) to the fact that the use of carpets is going to be considered by the Government. I hope carpets will be used. The Committee first referred to this matter in 1970. Since then it has been pressing continually for Service scales and standards to be revised to enable the installation of carpets in the quarters of officers and of senior personnel generally. It is, strange as it may seem, more economical to use carpets instead of vinyl tiles, particularly when the cost of maintenance is taken into account. The Committee is at a loss to understand why the Government is unable to come to a decision on what seems to the Committee to be a comparatively simple matter.

There were 2 areas of disagreement within the Committee on which I know the honourable member for Hughes (Mr Les Johnson) will comment. As Chairman of the Committee, I think I have a duty to comment on them also. The first is the location of the armament depot. Those honourable members who have read the Committee’s report will know that Senator Poyser proposed that the armament depot be situated on the mainland. The problem here was that it would be necessary to have a safety area embracing the armament depot and another area embracing the armament jetty which, as it was for naval purposes, would obviously have to be adjacent to Garden Island or attached to it. That would have meant that there would have to be 2 safety areas. It would also have meant that in time of war - of course, the reason why it is necessary to have a Navy is to defend oneself in time of war - ‘the servicing of a fleet with armaments would have had to be done through a very closely built up area.

Another area of disagreement was the proposal by the honourable member for Hughes that the armament area be built adjacent to or just north of the barracks accommodation. The general feeling of the Committee was that that would not be wise for 2 fundamental reasons. Firstly, it would have precluded expansion and development of the facility in the future, if necessary. Secondly, it would have meant the disturbance of a very erodable group of sandhills that would have required a great deal of stabilising after the large amount of disturbance that the construction of an armament depot would have caused. The justification for that proposal - I guess the honourale member for Hughes will spell this out with more eloquence than I can summon - was that it would have rendered unnecessary disturbance of the 32 houses which are in the area in which the Committee recommended the safety area of the armament depot should be. I wish to point out that it has always been known by those people who have built these houses, shacks, cottages or whatever one may call them that they had very limited tenure on the land. Some had the land on annual licences and others on even less. They always knew that they would have to go if the Navy needed the area. The houses were usually built of second hand materials.

The Committee weighed the matter up and, for the reasons I have spelt out, said that the armament section that the Navy had asked for should go into the area. There was some dissent. The honourable member for Hughes and Senator Poyser disagreed. The honourable member for Leichhardt (Mr Fulton), Senator Jessop, the honourable member for Hunter (Mr James), the honourable member for Balaclava (Mr Whittorn), the honourable member for Maranoa (Mr Corbett) and I agreed with the location of it as submitted to the Committee.

Let us turn to a grave matter of principle which concerns me as the Chairman and the Committee in general. Yesterday the honourable member for Hughes spelt out the traditions of the Public Works Committee. I would substantiate his remarks. I do not take particular pride in this. T am not responsible for the traditions of the Committee. They have been formed by the performance of the Committee in past years. There are, however, several traditions to which the honourable member for Hughes referred. One of them is to proceed with all due. and sometimes we feel undue, expedition with inquiries. The second is that we do not play party politics in the Committee. The Committee is proud of the fact that it arrives at its decisions divorced from party politics. The third tradition is that we are punctilious in that we do not divulge evidence that has been given during the course of our inquiry before the report is published. Events have occurred which have disturbed the Committee and which have certainly disturbed me as Chairman of the Committee. Let me spell out what happened. The Committee travelled to Perth on Easter Monday, in keeping with its tradition of pressing on with all expedition.

Mr Cope:

– You get overtime, do you not?

Mr KELLY:

– No, we do not. The Committee heard evidence in public on 4th, 5th, 6th and 7th April. On 7th April the Navy witness said that the Navy could agree to the release of 1,250 acres and approximately 7 miles of coastline for the use of the public. That evidence was given in public. On 19th April, after the Committee returned to Canberra, It received a letter dated 18th April from the Department of the Navy saying that it had reason to revise its decision as to how much land could be made public. The letter, which was addressed to the secretary of the Committee, then said that 1,800 acres of the 2,920 acres on Garden Island could be made available to the public. That evidence was considered in a private session of the Committee. The Committee formed its conclusions on 20th April after having received this letter.

The report proceeded to the drafting stage, and this considerable task was set in train. But the Committee’s mind was made up on 20th April. Now this is where the matter of some public concern arises: On 4th May the Prime Minister went to Perth and, at a Press Conference, he dealt specifically with the matter which had been received by the Committee in private, as it thought. The Committee always regarded it as private information. The Prime Minister then made a public statement thereon. I can understand how easily this could have happened. The Minister for the Navy (Dr Mackay) - I have occupied that post and I understand some of its problems - would have been unaware that the Committee had sat on that day in private. The Prime Minister, even more so, would have been unaware that the Committee had sat in private. Nevertheless, the Prime Minister made a public statement about the evidence that had been given to the Committee, as it thought and still considers, in private.

I repeat that I can understand how easily this could have happened. I am not saying that anybody is in any way trying to take advantage of anything, but I want to spell out the particular problem that this exemplifies. Let us assume that the Committee had not come to its conclusion on the date I suggested - 20th April. If the Prime Minister bad gone to Perth and had made a public statement saying that more land was going to be made available to the public and assuming that the Public Works Committee thought in its wisdom that it ought to recommend that less land be made available, it would have been very difficult for the Committee to make such a decision after that statement had received so much acclaim. That is the problem I am concerned about. It is never easy, particularly for politicians, to kick against the wind of public opinion. To kick against the wind of public opinion that is fanned, however inadvertently, by the statements of politicians makes the problems of the Committee very great in arriving at non-political decisions as indeed it must if it is not to be false in its trust to this House.

Imagine the difficulty that the Labor members of the Committee would have faced if the Committee had not made its decision. In this case the Committee had made its decision. If it had not, it would have been very difficult for the Labor Party members of the Committee then to take a stand that was directly opposite to the public statement of a Minister or the Prime Minister. For that reason I want to make a plea to the Government and to the Ministers in particular that it is a good ground rule that, in the time between the reference of a work to the Committee and the tabling of its report, there ought not to be any statements by politicians in general or by Ministers in particular dealing with the substance of the Committee’s inquiry. If that happens you tend to inhibit the decisions of the Committee and stop it from behaving, as indeed it must, as a non-party political committee.

I understand how this position arose in this case. I am just using it as an illustration of what we ought to do in the future. Politicians in general and Ministers chiefly ought not to make statements about what ought to be done in relation to a public work after the matter has been referred to the Committee until the committee’s report is received by this House. The matter ought to be regarded as sub judice so that there can be a proper opportunity for the members of the Committee to bring down the kind of report which the House expects them to bring down. As Chairman, I am proud of the traditions of the Committee. I am proud of the staff of the Committee. I am particularly proud of the tradition that this Committee is above party politics. This tradition will live long if this Government and future governments accept as a good ground working rule that politicians in general and Ministers in particular should not make statements about public works that have been referred to the Committee between the time of reference and the time of report.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

– 1 am indebted to the honourable member for Wakefield (Mr Kelly), the Chairman of the Committee, for bringing this matter to the House in such a frank and forthright fashion. I would have hoped that the Prime Minister might have been here to make his own explanation, because doubtless the parliamentary grapevine has operated in such a way as to cause him to know of the concern of the Public Works Committee. I would be unhappy to feel that if the Prime Minister were aware of this reaction, he might not be treating it seriously.

The honourable member for Wakefield talked about the traditions of the Committee. It is fair to say that during his period of office as chairman the traditions of the Committee have been upheld. The Public Works Act was enacted in 1913. If one takes the trouble to walk into the Public Works meeting room, one can see photographs of the Committee members over that period of time, and it is not long after one joins the Committee that the message starts to come through about the impartiality of the Committee in the performance of its work.

Contrary to what the honourable member for Wakefield predicted, I am not going to go over all the pros and cons of the HMAS Stirling project. Honourble members have before them a report that summarises the transcript of evidence. The transcript of evidence is a voluminous document. It was a most extensive hearing. I understand that some 32 witnesses appeared before the Committee and most of them represented organisations of significance in Western Australia. They included conservation groups and the representatives of residents, government representatives, local government representatives, historical and recreation interests, among others. The very heavy burden of the evidence put before the Committee was about this vexed question as to how much area should be made available to the public.

The honourable member for Fremantle (Mr Beazley) has mentioned the strategic necessity of the base, the suitability of the base, and matters of that kind. I do not intend to traverse those matters here because that was first done in the Committee at the time the causeway was under examination, the causeway that is to cost $9m. This second leg of the project is to cost $30m. Obviously, once we decide on the causeway - and the fact is that the causeway is well under construction - we can hardly argue about whether or not the base itself should be there. But we did argue about it very considerably in the Committee when the causeway was under investigation. Indeed, we brought that report back to this Parliament and had a debate here. I expressed my view about the unsuitability of the Cockburn

Sound base on that occasion. However, I will bypass that, and I will bypass many other matters, some of which are quite significant, including such issues as the ones of which the chairman made some brief mention, concerning the new motel accommodation that is to be provided there which is a departure from the scales and standards that generally prevail. Carpets are being put in - sensibly enough, I think - but nevertheless without proper authority according to the prevailing scales and standards. There are many matters about which one could talk and take up the time of the House. If honourable members are interested in these things, and in all the pros and cons of the project, I suggest that they read the transcript of evidence. I shall concentrate my remarks on what was said by the honourable member for Wakefield.

The heavy burden of evidence was about the question of public access to Garden Island. In many respects, the people of the west are tranquil by the standards that prevail in the east. Such an issue would probably provoke public demonstrations and a lot of agitation if it occurred in Sydney, and possibly in Melbourne. Indeed, in Perth and Fremantle there was a lot of concern, as was indicated by the incidence of ear stickers around the place, about the need to preserve Garden Island for the public. There was a parade through a part of Perth, and there were other manifestations of public concern. All the time the Committee was sitting there were a considerable number of people in attendance, nearly all of them of a representative nature-; they were representing the substantial organisations.

The Committee was inundated with representations about the need to preserve the history of the area. Of course, it is an historical place. The island is the location of relics of the historical settlement in 1829. The Committee was inundated with requests for environmental protection, to avoid erosion and to safeguard the limited and vulnerable vegetation, and lots of similar issues. However, the Committee had evidence mainly from the recreationally oriented groups, the fishermen and the boating clubs, saying that this island is terribly important to the people of Perth and

Fremantle because, unlike many other parts of Australia, there are not a lot of safe harbours for their boats, and so on.

The Committee gave this matter a lot of thought. If honourable members read the transcript of evidence, they will see that there was an enormous amount of intelligent interrogation about the prospects of making extra land available for the public. Of course, we were unable to disclose what our inclinations were about this matter. The Navy subsequently came back near the end of the inquiry in Perth, on 7th April, and told us, in effect, that it had given earnest thought to the submissions made, and to the obvious concern of many members of the Committee about the fact that the island was to be substantially restricted for public use, and that about 150 cottage people looked like being moved off the island. The Navy representative said, We think it is possible to make available 1250 acres for public purposes’.

That information was made available in public, whereupon the Committee went into committee and it received a letter from the Navy, a letter privy to the Committee, dated 18th April, saying that 1850 acres could probably be made available. This was not public knowledge at all. To our amazement, without the public having any opportunity to know about this offer by the Navy, which we might even have rejected for one reason or another, the Prime Minister made a statement, which was not just a mere aside but a preconceived statement and the subject of a Press release, and so jettisoned one of the most highly regarded traditions of the Public Works Committee. A report of the Prime Minister’s statement appeared in the ‘West Australian’ on Friday, 5th May 1972. It was given a banner headline on the front page - ‘More Garden Island to be for Public’. The report goes on to spell it out. It includes a lengthy Press statement, and the part I want to read is a quotation from what the Prime Minister released:

We had the Commonwealth Public Works Committee examining the problems, and they will shortly be submitting a report to us.

The Prime Minister knew that the Committee had not yet submitted a report. I think the suggestion was made that the

Prime Minister might not be aware of this, but in this statement the Prime Minister said:

  1. . they will shortly be submitting a report to us. And I also got the Minister for the Navy himself who became directly involved, and we have decided in the last few days, without actually moving to a final decision, to increase the size of the coastline that could be used from 7 to 10 miles out of the total of 14 miles. And we’ve also decided to increase the acreage that could be used by civilians under the control of the Navy from 1,250 acres to 1,800 acres. In other words, we’ve taken another step forward, and I believe that this will meet with a great deal of satisfaction from the people of Perth.

The effect of this statement is, of course, to pre-empt the decision of the Public Works Committee, and the Prime Minister in the same release has indicated that he is quite aware that this is the wrong thing to do.

Let me establish the truth of what I am saying. Reported in the same paper is an account of his comment about the Randall Committee. He was asked to express some views about this matter. In regard to the Randall Committee, which is concerned with woo] marketing, he said this:

I believe it would be wrong if, having asked the committee to meet and it has spent a lot of time and a prodigious amount of effort we were to turn round and foreclose on any of the options open to the committee.

What an incredible thing! The Prime Minister is prepared to pre-empt so far as the Public Works Committee, which has also engaged in a prodigious amount of effort, is concerned, and is able, to use his words, to turn round and foreclose on the options of the Public Works Committee; but in the same breath he said that he would not be prepared to do that in regard to the Randall Committee. Who are we in this Parliament? It is only a committee of the Parliament that he is prepared to preempt.

Mr Duthie:

– It was sheer politics.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

– Of course, as the honourable member for Wilmot said, one could draw no other conclusion than that it was sheer politics because the Prime Minister had learned of the concern of the people of Western Australia about this matter.

I do not have much time to talk about this matter, but I want to let the Parliament know what would be the conse quences of this kind of action if other people were to take it. I refer to the Public Works Committee Act 1969, which says this about evidence given in private to the Public Works Committee:

Where evidence is taken by the Committee in private otherwise than at the request of a witness, a person (including a member) shall not, without the authority of the Committee under the next succeeding sub-section, disclose or publish the whole or a part of that evidence.

The Committee may, in its discretion, disclose or publish or, by writing under the hand of the Chairman, authorise the disclosure or publication of, evidence taken in private before the Committee, but this sub-section does not operate so as to affect the necessity for the consent of a witness under sub-section (4.) of this section.

Nothing in this section prohibits -

the disclosure of evidence by Sectional Committee to the Committee;

the disclosure or publication of evidence that has already been lawfully published; or

the disclosure or publication by a person of a matter of which he has become aware otherwise than by, reason, directly or indirectly, of the giving of evidence before the Committee.

In other words, the Act says that anyone who discloses evidence given in private to the Public Works Committee is committing an offence. Do honourable members know what the penalty for this offence can be? If anyone other than the Prime Minister of Australia committed such an offence the penalty could be a fine of $400 or imprisonment for 12 months. The fact of the matter is that the Prime Minister of this country has committed an offence which could attract that penalty. I am not suggesting that the Prime Minister should be sent before the Privileges Committee of the House; I am not suggesting that he should be fined $400 or that he should be sent to prison for a year not at all. However, I believe that it is important to emphasise this very important consideration for the benefit of all parliamentarians, including the Minister for the Navy (Dr Mackay) who obviously has transgressed, in some degree, in the same manner as the Prime Minister. I think that the Minister for the Navy had better have a look at the Press report to which I have referred, because it contains an implication that his Department also was involved in the disclosure of information.

I hope that the Prime Minister has learned his lesson. The Prime Minister said that he hoped to avoid making any mistakes before the next election. He has made a very serious mistake in treading in such an indelicate way in regard to this matter. If any Committee member had made this faux pas or mistake, he obviously would have been censured by the Public Works Committee. The Public Works Committee is not a mere sycophant bunch to act as a rubber stamp and to acquiesce with the Prime Minister. It is there to do an earnest job; it is not there just to toe the Fine and to show its preparedness to engage in a facade of democracy. If this Parliament is to delegate serious work to a committee which can examine all the evidence on the matter and bring down a useful and reliable report, we must ensure in the future that the Prime Minister, the Minister for the Navy and every other parliamentarian come to understand the independent nature of the work to be undertaken. So, I express concern that the Prime Minister has transgressed in this way. I hope that he will give an explanation, if not an apology, to the Public Works Committee and to the Parliament for the manner in which he has violated the great and important traditions of the Public Works Committee.

Mr WHITTORN:
Balaclava

– As a member of the Public Works Committee, I feel that I should say a few words. This subject was discussed by the Committee. We reached the conclusion that the Chairman of the Committee should carry out the exercise which he has carried out tonight. One of the reasons why I am making a contribution to this debate is the effort made yesterday by the honourable member for Hughes (Mr Les Johnson). I believe that he went through the realm of fantasy then and again tonight by pointing out the penalties which can result if certain action is taken and if information which should not be disclosed is disclosed. Actually, the information was given to the Committee - this was mentioned by the Chairman of the Committee, the honourable member for Wakefield (Mr Kelly)- on 18th April and the conclusions of the Committee virtually were reached on 20th April. Before the final conclusions were arrived at, the Prime Minister (Mr McMahon) did not make a statement, as the honourable member for Hughes said; but on 4th May he did answer a question. I believe that Prime

Ministers have a right to answer questions when they are posed to them. The document from which I quote is headed: ‘Segment from Press Conference, Parmelia Hotel, Perth, WA, 4th May 1972’. The questioner said:

Prime Minister, Garden Island has been much in the minds of West Australians over the past few years. How much land will people be allowed to enter when the Naval Base is completed? Can you tell us if anything more has been decided?

The answer by the Prime Minister indicated that he had taken a personal interest in this matter. However - this was mentioned by the honourable member for Hughes - he also said:

So I gave instructions to the Navy that they ought to begin to be as generous as they possibly could be. We had. the Commonwealth Public Works Committee examining the problem, and they will shortly be submitting a report to us. And I also got the Minister for the Navy himself who became directly involved, and we have decided in the last few day.s, without actually moving to a final decision, to increase the size of the coastline that could be used from 7 to 10 miles out of the total 14 miles. And we’ve also decided to increase the acreage that could be used by civilians under the control of the Navy from 1,250 acres to 1,800 acres.

My assessment of the information given to the Committee by the Department of the Navy on 18th April in the form of a letter is that it was public information. I really believe that the public relations officer of the Department of the Navy could have given copies of the letter to the Press throughout Australia after it had been received by the Commitee, and that the letter could have been printed in the national news media and broadcast on radio and television if the news media thought it worth while.

Mention has been made of the fact that we took this evidence - this letter - in private. The honourable member for Hughes quoted the relevant section of the Public Works Committee Act 1969. On my interpretation of that section, which he read and which I am about to read, the information which was given to the Committee by the Department of the Navy and which was authorised by the Minister for the Navy and mentioned by the Prime Minister 16 days after it was written was neither private nor confidential. Let me read section 23 (2.) of the Public Works Committee Act. The side note says:

Evidence to be given in public in respect of certain cases.

The sub-section states:

Where, in the opinion of the Committee, any evidence proposed to be given before, or the whole or a part of a document produced or proposed to be produced in evidence to, the Committee relates to a secret or confidential matter, the Committee may, and at the request of the witness giving the evidence or producing the document shall:

take the evidence in private; or

direct that the document, or the part of the document, be treated as confidential.

The Department of the Navy did not mark this document as private. We, as a Committee, were not instructed to use this information as private or confidential information. We, as a Committee, did not decide between us that this information should be private and confidential. Since the honourable member for Hughes (Mr Les Johnson) made his contribution yesterday I have had a look at the Act, and my interpretation is that everything that has been done has been properly done.

As the Chairman of the Committee has said, we, as members of the Committee, discussed this matter quite extensively in committee in this Parliament House. I agreed then, as I said earlier, that it ought to be brought to the attention of the Prime Minister (Mr McMahon) and other Ministers that they should not and must not preempt the decisions of the Public Works Committee. It has never been done before and it should not be done now. But in this case I believe that the Press could easily have been given this information, and the news media could be said to have preempted the final decisions of the Committee.

The Chairman of the Public Works Committee went into the realm of speculation when he spoke about the possibility that information from the Department of the Navy could have indicated that rather than have more land available for public use at Garden Island, there could have been less. This, of course, would have been of real public interest, particularly to people in Western Australia. But I do not think that it would have been pf much interest to the Prime Minister, and therefore he should not have been accused as he has been tonight. No, I do not agree that the Prime Minister should be put in the stocks and threatened with being brought before the Bar of the House because he has transgressed, so far as the Public Works Committee is concerned.

I feel that several errors have been made, not only by the members of the Committee but also by other people. I believe that if the Committee had decided that this information was confidential it should have made this decision public immediately so that all concerned would have known. I feel there is some justification for the answer to the question which the Prime Minister gave on 4th May because it was 16 days after the information had been conveyed to the Public Works Committee. I really do not see very much justification for this debate. I believe that it is a storm in a teacup.

Mr BRYANT:
Wills

– I would just like to add a word. Am I to understand from the petulant way in which the Minister for Customs and Excise (Mr Chipp) sat down that he does not think that people ought to stand up and express their views when a matter such as this is before the House? Of course this is what we are discussing - whether the Ministry owns the ways and works of the Parliament or whether the Parliament does. All I want to say on behalf of the ones to whom the Public Works Committee belongs is that I support in their entirety the remarks made particularly by my friend, the honourable member for Hughes (Mr Les Johnson), and the attitude that he has expressed.

The Public Works Committee has been going for 60 years. It belongs to this Parliament. It does not belong to the Prime Minister. I suppose that one of the errors we have made is that we have not paid enough attention to the reports of committees, such as the Public Works Committee and Public Accounts Committee, when they have come before us. In fact we ought to be devoting more time to these reports, but perhaps we ought even to have a better way of reporting and a more intimate way of considering the reports. I believe that the Prime Minister (Mr McMahon) has done the whole system a disservice, and the least he could do is perhaps come into this House and apologise. I presume that he will not do that because one of his great deficiencies is that be in fact is not a parliamentarian. He entered this Parliament in 1949. He was a Minister from 1951-

Mr SPEAKER:

-Order! I do not think the Prime Minister is under discussion.

Mr BRYANT:

– I must have been listening to a different set of speeches.

Mr SPEAKER:

– Order! Because one honourable member gets away with something which was irrelevant to the question it does not mean that another honourable member should get away with it. The question before the Chair is the endorsement of the Public Works Committee report on the naval support facility at Cockburn Sound.

Mr BRYANT:

– With deference to your ruling or to your judgment in this matter, Mr Speaker, I will desist from those remarks and simply say that the Public Works Committee and its reports and the way in which it has been treated by Ministers, the Prime Minister or anybody else is an important and fundamental question for the Parliament. I hope that we will get some response from the right honourable gentleman as a result of the complaints which have been made by members of the Committee.

Dr MACKAY:
Minister for the Navy · Evans · LP

– I would just like to speak very briefly, appreciating what has been said by the Chairman of the Public Works Committee and other speakers from this side of the House. The Prime Minister (Mr McMahon) did use publicly a portion of a briefing that I personally provided for him before he left for Western Australia, in reply to a question from the Press. If there was any impropriety in its contents, I accept full and complete responsibility for it. But I deny that there was anything improper because, as has been explained to the House, this was a letter that was not intended or conceived to be sent as a private or privileged document. It was simply a letter confirming, after further review publicly made and publicised statements that the area to be made available for public use could, in the Navy’s opinion, be slightly extended. That is the full story. There is nothing more nor less to it than that.

The matter was considered by the Navy, and I was most astonished, when answering a question recently, to have the hon ourable member for Hughes (Mr Les Johnson) draw my attention to the fact that he thought I was pre-empting, in some way, the activities of the Committee. This was far from my mind or intention. I believe that what the Chairman of the Public Works Committee has said is perfectly correct, that it is highly desirable to have no action from the Executive pre-empting the decisions of the Committee. But nevertheless, the basis on which this inquiry began was the taking of public evidence and the giving of the public statement by the Department of the Navy of what its requirements were. It was my duty, I believe, to see that this was accurately stated.

The letter that was received by the Public Works Committee was not marked confidential. I had no knowledge it was received in a private sitting. Therefore, I just want to explain to the House that I am personally responsible if the Prime Minister made certain statements that the Public Works Committee regarded as having been received in private and therefore as being privileged. That certainly was not in my mind, and I had no knowledge that the Committee had been sitting in private. It was never intended that that letter should be so received, as has been explained. I personally believe that the Prime Minister has nothing whatsoever to answer.

Mr GRAHAM:
North Sydney

– I should like to make a very brief reference to this matter. My colleague and friend, the honourable member for Wills (Mr Bryant), has referred to the Public Accounts Committee in relation to this matter. All I wish to say - and it is relevant insofar as you, Mr Speaker, have permitted the honourable member for Wills to make this comment - is that in the days of the Labor government there was no Public Accounts Committee because in those circumstances the due judgment of the right honourable member for Macquarie at that time was that this Parliament would be better off without a public accounts committee. I find it to be an extraordinary political comment on the part of the honourable member for Wills who, with great continuity and great fervour-

Mr SPEAKER:

-Order! The honourable gentleman must address himself to the motion. I remind him that the motion deals with approval of the works, and the question is that the motion be agreed to.

Mr GRAHAM:

– I would like to support everything that the honourable member for Wakefield (Mr Kelly) has said. I merely bring to your attention, Sir, that the reference to the Public Accounts Committee was not only unfortunate but also, with great respect, irrelevant.

Mr CORBETT:
Maranoa

– As a member of the Australian Country Party and of the Public Works Committee I want to support what has been said tonight by the honourable member for Wakefield (Mr Kelly), who is Chairman of that Committee, about its impartiality in looking at these problems, and in particular the matter that is now before the House, I would like to have spoken at greater length on this matter but I have agreed to make my speech short. I simply want to associate myself with what has been said in the House tonight.

Question resolved in the affirmative.

Repatriation General Hospital, Hobart

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

– I move:

That, in accordance with the provisions of the Public Works Committee Act 1969, it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Construction of new ward and paramedical building at Repatriation General Hospital, Hobart.

The proposed building will accommodate 60 patient beds together with supporting medical and paramedical facilities and will replace two existing wards of timber construction which have deteriorated to the stage where they need replacing. The estimated cost of the proposed work is $2. 2m. In reporting favourably on the proposal the Committee also commented on parking facilities. The Committee reported that although the new building will not create any significant additional demands on parking, more on-site parking space should be provided and this would be possible when the adjacent Repatriation branch office is demolished. The report of the Committee has been noted. Upon the concurrence of the House in this motion, detailed planning can proceed in accordance wilh the recommendations of the Committee.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

– Like the Minister for Customs and Excise (Mr Chipp), I am pleased that this new ward and paramedical building are to be constructed. The only evidence to which I wish to refer is that of a very important departmental witness who indicated under questioning that the time might not be far distant when the concept of repatriation hospitals as we understand them will not be the best concept to follow in that field. In Hobart the situation is different because of the limitations of the regional hospital in Tasmania. However, I suggest particularly to the Minister for Repatriation (Mr Holten) that the evidence given by that departmental representative is very much in keeping with the view of many honourable members on both sides of the chamber. When further repatriation hospitals are contemplated the Minister might well have a good look at the advisability of incorporating them into the regional hospital situation.

Dr SOLOMON:
Denison

– I take the point of the honourable member for Hughes (Mr Les Johnson). In a general sense it is well made. At the same time, while it is sensible to look to the future, it is true that a general inquiry is proceeding into repatriation benefits, the future repatriation structure, and all that area of social provision. It is also fair to say that part of the hospital concerned, which is in the middle of my electorate, is far from reaching in structural condition the standards acceptable these days in public hospitals of any kind. As far as I can remove myself from the issue in an impartial sense, I find it entirely appropriate that a couple of million dollars is to be spent on a new part of the total complex on this site.

To return to the point made by the honourable member for Hughes, the site still has considerable room left for expansion without undue pressure being placed on the land area, in contradistinction to the city block which houses the Royal Hobart Hospital. That site has housed Hobart’s general hospital since the early 1800s, a few years after the beginning of settlement. It is now almost totally covered with buildings, to the point where it may well be quite dimcult in future, even though it may be desirable as a matter of general principle, in practice to house a future repatriation hospital or part of it.

I have made that comment only because I think it is of consequence to the people of Hobart and in particular to those people housed in the present repatriation hospital there. I am sure that the Minister ibr Repatriation (Mr Holten) will bear that equally in mind when the matter is in front of him. do not think it is in issue at the moment because the matter has been approved and appears likely to go further by any normal standards of procedure. Nevertheless, I think the point made by the honourable member for Hughes sounds quite a cautionary note for future operation in this policy area. But as far as the particular structure is concerned I believe that its construction is entirely deserved and timely.

Question resolved in the affirmative.

page 3025

INCOME TAX ASSESSMENT BILL (No. 2) 1972

Second Reading

Debate resumed from 17th May (vide page 2688), on motion by Mr Snedden:

The the Bill be now read a second time.

Mr GARLAND:
Minister for Supply and Minister Assisting the Treasurer · Curtin · LP

– May I have the indulgence of the House to raise a point of procedure on this legislation? Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House for a general debate to be held covering this Bill, the Income Tax Assessment Bill 1972 and the Income Tax (International Agreements Bill 1972 as they are associated measures. Separate questions may of course be put on each of the Bills at the conclusion of the debate. I therefore suggest, Sir, that you permit the subject matter of the 3 Bills to be discussed in this debate.

Mr SPEAKER:

-Is it the wish of the House to have a general debate on the 3 Bills? There being no objection, I will permit that course to be followed.

Mr CREAN:
Melbourne Ports

– While these measures are being considered together, they are rather different as far as particular technical matters are concerned. They propose important amendments to what are very technical sections of this vast compilation, the Income Tax Assessment Act 1936-1971. It now runs with its index to over 500 pages and with these amendments another dozen or so pages will be added. My colleague the honourable member for Banks (Mr Martin), who is widely experienced in the intricacies of the tax law, will concentrate on some of the esoteric fields such as dividend stripping and chains of companies. I want particularly to deal with the third of these measures which is described as a Bill foi an Act to amend the law relating to income tax with respect to income derived from the sale of shares. The amendment is proposed to a section which is quite simple in. its wording but one that has been very complicated in its operation.

In many respects the amendment that is before us in respect of sub-section (a) of section 26 is perhaps an unsatisfactory solution and something in the nature of a half-way house for what has really been quite a difficult situation. The sub-section provides:

The assessable income of a taxpayer shall include -

profit arising from the sale by the taxpayer of any property acquired by him for thi purpose of profit making by sale, or from the carrying on or carrying out of any profit making undertaking or scheme;

I have been helped somewhat in my remarks in this debate by quite an interesting and comprehensive article of about 40 pages which appeared in the Melbourne University Law Review Volume 8 No. 2 of August 1971. The article is headed ‘Aspects of Section 26(a) of the Income Tax Assessment Act* and was written by 2 Melbourne barristers and solicitors, Mr J. Mci. Walter and Mr A. J. Myers. I think of what they say in the latter part of their article - if I might quote it first. They say:

Section 26 (a) was introduced in haste in 1930 to counter the concept of income of the House of Lords in Jones v. Leeming. It was based upon words used in Blockey’s case and other cases. These cases were inconsistent among themselves and internally. From that humble beginning section 26(a) has had a pervasive effect, especially over the last 10 years, being used by the Commissioner as the other prong to section 260 in his offensive against tax avoidance. In some circumstances it has proved more successful than section 260.

The learned gentlemen conclude by saying:

Section 26 (a) has operated to catch capital gains despite what appear to be the expectations of its farmers. If capital transactions are to be taxed then a capital gains tax would appear to be a more sensible solution than section 26 (a). One of the harsh aspects of the operation of section 26 (a) is that the whore of a realised profit is brought Into assessable income in the year the profit is realised. A capital gains tax would be at a lower rate than a tax upon income or an allowance would be made for the period during which the asset realised has been held by the taxpayer. What the amendment purports to do is to resolve the uncertainty that has arisen out of the interpretations or the discretion that has been placed in the Commissioner in deciding what section 26 (a) means in what the learned authors describe as the first limb of the section - that is the section dealing with profit arising from the sale by the taxpayer of any property acquired by him for the purpose of profit making. Again, as the 2 learned gentlemen pointed out, one of the great difficulties in this question of the Income Tax Assessment Act is that the Act reveals that the provision is concerned primarily with a tax upon income. Yet nowhere in the Act is ‘income’ defined, nor is its antithesis ‘capital’ defined.

Part of the difficulty, both in this measure and in the other Bill with which my friend will deal, is in deciding whether certain things are income or whether they are capital gains. In the kind of matters that my friend will examine there is the very subtle attempt by lawyers and accountants in combination - and it is a pretty devious combination sometimes - to turn what is obviously income in the first instance, into capital, in the second, with the prospect that this income shall avoid tax. For my part I have neither sympathy nor mercy for people who attempt to do these things. I believe that taxation should be equitable in its incidence and that it also should be reasonably certain m its imposition. Most people in the community who are taxpayers - wage earners and recipients of relatively small incomes - have very little opportunity to convert their incomes into anything else or to avoid one cent of the tax that is legally payable by them. I know that on many occasions there is a great deal of sensitivity displayed about what on one side is called ‘avoidance* of taxation and on the other side is called ‘evasion’ of taxation. Evasion apparently is regarded as dishonest:

Avoidance is regarded as clever. Sometimes I think that the clever people are less honest than the people who are sometimes accused of being dishonest. After all, this is what we are attempting to restrict in some of these measures before us.

What I am concerned about principally - as the article I have referred to suggests - has occurred mainly in the last 10 years and has been surrounded by the inclination of more people to buy and sell stocks and shares or the sorts of things in which dealings take place on the stock exchange. No doubt the stock exchange can play a very significant part in mobilising capital and also in making certain ownership of property much more liquid than it would be without the existence of the stock exchange.

I now refer to the first of a series of 2 articles - the second of which has not yet been published - which appeared in a rather interesting economic journal produced in Western Australia. In the October 1971 issue of ‘Economuc Activity’ Mr Ross McLean, in the first of these articles, deals with the Perth Stock Exchange in particular. I have checked in the Parliamentary Library and have found that the latest issue which is dated January 1972 is available but Mr McLean’s second article has not yet appeared. The first article was entitled ‘The Economic Functions of the Stock Exchange’, and in it Mr McLean, by way of introduction, stated:

During the late sixties the Australian share market engaged the interest of a wider spread of the Australian population than at any other stage in its recent history, if not since its inception.

Interest in the share market became a national pastime. The interest was purely speculative, with investment horizons stretching no further than a couple of days. Turnovers and price fluctuations on the Australian stock exchanges broke all records, and fortunes were made and lost.

I suppose one need not cite anything other than the ill-fated Poseidon float. The article continued:

While many consider that the share market of recent months is completely depressed, and gloom is the prognostication of many in the industry, it probably reflects no more than a return to normal conditions.

It seems that in that abnormal period the Commissioner of Taxation began to exercise his discretion, under an interpretation of section 26(a) in relation to what in more tranquil times he had not bothered with or thought worth pursuing, namely, whether certain investments were made to return income only in the form of dividends or interest or whether they were investments acquired for the purpose of profit making through capital gains.

A great deal of doubt intrudes in these matters. Again, the learned authors of the first article which I quoted indicate some of the criteria on which the lawyers and accountants, representing their clients in negotiations with the Commissioner of Taxation, base their suggestions that their clients had no intention other than of earning income through dividends and that they had not acquired investments for the purpose of profit making by sale. We reached the stage where nobody was certain. People who were described as traders are excluded from these transactions and are taxed on their turnover, stock in trade and so on. But if a man operating in a small way bought shares in Poseidon today and sold them in 2 or 3 days time there could not be much doubt that he bought or sold the asset for the purpose of making a profit. However, if the person held other kinds of investments, or had held them for some time, the question would then be whether he was just a careful investor or whether he was a speculator looking for a profit.

It appears that there has been an intrusion into the operation of section 26 (a) of a kind of capital gains tax by default. I do not want to argue this evening the proposition in relation to a capital gains tax. I believe there is a great deal of sentiment in favour of a capital gains tax because many people feel that, because most people are not in a field where they get windfalls or other gains of this kind, it is not equitable that those who profit in this way should not be required to make any payment to the revenue. I regard this as a separate matter to be looked at systematically. Perhaps it is not quite so simple as it sounds. If I were asked for my philosophic view about it, I would say that, for the most part, capital gains are not ethical and that they go without any great ment to those who achieve them. They are achieving them at the expense of the rest of the community. Capital gains should not be milked when they do occur but we should try to do something to prevent them from occurring. Insofar as they do occur they lead to a maldistribution of the social product and, insofar as they are largely built around real property and personal property of this kind, they can create very distinct social problems that ought at least to be adjudicated upon.

Mr Garland:

– That is not the reason why there is some sympathy for it.

Mr CREAN:

– No, and it is not the reason why we should have invoked section 26 (a). This is the point I am trying to make. It seems to me that it was not an equitable way to do this. I have no sympathy tor those who claim to be careful investors when in fact they are nothing but sheer speculators who try to resort to an interpretation of that section to protect themselves. By this amendment there is an attempt to say that if a share has been held for a period of more than 18 months, which is a pretty arbitrary time limit in any case, it can be presumed that the share is in the careful investment field rather than in the reckless speculative field, but that if it is sold after that time and if it is a share acquired after 12th April 1972 it shall not be subject to tax in terms of section 26 (a). The battle with the Commissioner still has to go no regarding anything which is not held for 18 months. That is the purpose of the amendment.

I want to point out what I regard as one or two unsatisfactory elements of this amendment. The first is the rather arbitrary nature of the 18-month period. I suppose it has been set at 18 months to get over the difficulty of a tax year being only 12 months. I can see some advantage in setting a period of 18 months, but I draw the attention of the House to proposed section 6d(2.) of. the Act which states:

Where a taxpayer has duly . notified the Commissioner under section fifty- two of this Act that property acquired by the taxpayer, being a share or an interest in a share, has been acquired by him for a purpose specified in that section, the last preceding sub-section does not apply. . . .

According to the explanation given by the Minister in his second reading speech the amendents will not apply where, on or before lodging the first return after acquiring particular shares, a person has notified the Commissioner of Taxation that the! shares were acquired for the purpose of profit making by sale. It has been pointed out to us that this would at least allow what might be called the shrewder person, if he found that a share which he had thought would improve looked as though it would fall in value, to notify the Commissioner that he had bought it for the purpose of profit making by sale, knowing of course that he was not going to make a profit but would incur a loss which he would be able to claim in terms of section 52. We regard this as a weakness in this section.

For argument’s sake, a man who buys a share on 1st July has until 30th June to watch the fortunes of that share. If it looks like coming good he says nothing about it, but if it looks like going bad he simply notifies in his return that he bought the share for the purpose of making a profit at sale, knowing that he is not going to make a profit but will be able to deduct a loss. I regard that as a weakness in the legislation as propounded. I realise that there is a difficulty in setting an arbitrary period. I have had some representations suggesting that the term is too long and others suggesting that the term is too short. I realise that there is a difficulty in simultaneously resolving that sort of situation. There are plenty of people who wanted to do the same sort of thing in regard to exchange rates. They wanted something which would suit our trade with Japan but which could also suit our trade with Europe, yet the circumstances were quite different. This seems to me to be a real difficulty in this legislation. I hope that the Minister will at least be able to advise me on it.

In regard to the period of time, I am afraid that there would be real difficulty if there were a capital gains tax. If we were to say that anything earned in the taxable year would be treated as income, whether it came from interest or from capital appreciation, we would get a dwelling of business on the day before and the day after the end of the tax year. We would get the same kind of situation at the end of an 18-month period. There would be what is called ‘a bunching of transactions’ at the end of the 1 8-month period. As we are all aware from what was called bond washing, as distinct from dividend stripping. In the case of bond washing there were what I always regarded as nefarious decisions which were regarded as shrewd commercial transactions. In those cases somebody who could claim a loss would sell a bond at a loss to somebody who was not taxable even if he made a gain. There was an attempt to remedy this kind of situation by legislation, but the same kind of thing can happen in regard to the 18-month period.

When the Minister introduced the Bill he indicated that this was more in the nature of an experiment. He said that the operation of the proposed amendment would be carefully watched, and should experience show that it was tending to lead to the devising of arrangements to avoid or to minimise taxation, the Government would have no hesitation in introducing such further amendments as might be thought necessary to prevent systematic income tax avoidance. All I can say is that I concur heartily with him. I would certainly do the same thing if we were in a similar position, as we may be in a few months. I think that in these matters legal cleverness or accounting shrewdness can sometimes quite ruthlessly override what is undoubtedly the spirit of the law.

Mr Garland:

– It can also come unstuck.

Mr CREAN:

– It can come unstuck, causing a great deal of litigation. Sometimes it does not come unstuck, as was shown in a number of recent cases which the honourable member for Banks will delineate. As I said, the endeavour is made to convert income into capital or to claim that what the Commissioner suggests is income in fact is capital, and so on. 1, suggest that a lot of this uncertainty should be gradually resolved. 1 think that probably in many respects people tend to do a little dabbling in the stock market in much the same fashion as those of the generation of the honourable member for Mallee (Sir Winton Turnbull) in their younger days indulged in following horses. It gives them a certain sense of satisfaction. The only point about horse racing is that if one person wins we know that many people have lost. The bookmakers testify that they are shrewder people than punters are. I am afraid that the same principle applies to the stock market. Most stock brokers seem to live better than their clients. But be that as it may, what has emerged in recent times from the security and exchange inquiry in another place shows that there is need for a great deal of regulation in matters relating to the stock exchange. The article to which I referred earlier suggested that there should be some criteria as to what a stock market as an allocator of resources should be. It stated: the closer the share markets correspond to the model of perfect competition the more efficiently will the market allocate capital.

I do not think there is much doubt that in recent times it has been very doubtful whether some of the floats of very large mining companies in Australia have been models of perfect competition. There are plenty of examples of people who had inside information and who bought shares at a low value when the float was made and got out when the shares increased in value, leaving somebody else holding what was supposed to be the mine. These events reminded me of what was apparently a typical enough event, according to Shann’s Economic History of Australia’, which contains a footnote to the effect that on one occasion in De Bernales days in Western Australia a sample of ore was sent to London to show what a magnificent venture was being undertaken in Australia. One day an urgent telegram arrived stating ‘For God’s sake send us back the mine’. I think this was proved true of some of the ventures that were floated in Australia in recent times. They were made to appear 10 times as good as they really were.

Dr Klugman:

– Ten times?

Mr CREAN:

– Many more times perhaps. 1 would suggest that it was a thousandfold in one case. Had the amendment which is proposed in this Bill been in operation 3 or 4 years ago certainly a lot more revenue would have been netted. If people had had in mind that any profit that was made might be subject to tax they might not have been so enthusiastic about dabbling in a venture. I am sure that many people would have been better off had that been the case. I simply cite that to indicate the context in which one has to evaluate the present situation. Unfortunately we are getting to a stage in Australia when share hawking is once more becoming an occupation for people. These people go from door to door - they usually get quite substantial commission for so doing - persuading people that certain ventures are just the kind of investment that they require. 1, think that sometimes in these matters we have to save fools from their folly. I hope that the operation of this amendment will be looked at, as the Treasurer (Mr Snedden) says it will. As I see it, at least it is an attempt to do something, but it is in the nature of a half way house. We ought to be facing up to the proposition of having in Australia a systematic capital gains tax. Administratively such a tax might take a year or two to evolve. In these matters it is not easy to say that we will change this section today and introduce something else tomorrow, but the attempt was made via section 26 (a) to introduce a captial gains tax by stealth. I do not think that is quite the way that capital gains should be treated.

Mr GILES:
Angas

– The cognate Bills we are discussing tonight are the Income Tax Assessment Bill (No. 2), the Income Tax Assessment Bill and the Income Tax (International Agreements) Bill. The one I personally wish to refer to tonight is the Income Tax Assessment Bill (No. 2), which, as the honourable member for Melbourne Ports (Mr Crean) has said, deals with a question which in my state of South Australia at any rate became a very vexed one some time ago, the question of section 26 (a) of the Income Tax Assessment Act. At the risk of wearying the House or perhaps even boring the House, I shall quote some words I put together on 16th September last year and again on 7th October last year. In passing raigh t I say that these speeches by no means have been the only approach I have made to solving the problem of section 26 (a). On the first of those dates I said in this place:

I suggest that section 26(a) of our current income tax legislation is not, as presently worded, capable of giving the type of interpretation which today’s needs dictate. It is a restrictive section which breeds doubt in the minds of investors and conveys a state of affairs that bears no relationship to the requirement of a modern dynamic society. I beseech the Government and the Treasurer (Mr Snedden) in particular to have a look et the vast potential that exists in the ordinary Australian’s pocket today, which could be used to help that Australian to become a partner in Australian enterprises.

I went on to mention the types of ventures that are referred to as risky or speculative or what other term the honourable member for Melbourne Ports sees fit to use to describe them. I was a little disappointed with the honourable member for Melbourne Ports because he dealt unduly tonight with equity as he saw it. He said that stockbrokers lived better than their clients, a statement with which I cannot argue at this moment. I would be inclined to think that that suggestion is not only logical but possibly correct. They would have far greater expertise than would their average clients. But I hoped that the honourable member would also see the other side of the argument. I think I have put the other side of the argument quite fairly by quoting the words I spoke back in September of last year.

It is surely a matter of whether we intend to use the resources of our people in Australian enterprises. Members of the Opposition may think I am biased, that I am incorrect or that I am not thinking on sound economic lines. That is their right but I believe it ls very important for the government of a nation such as Australia, which is still m so many ways a developing country, to try to use the resources of its people to build up an equity. I am sure that the honourable member for Blaxland (Mr Keating) - I have heard him talk in this vein before - will go along with that idea. I hope that is not damning him with faint praise. But it seems so terribly important to me that the Government should take that action; and, of course, it has.

The first indication we had of that was the ministerial statement of 11th April of this year by the Treasurer (Mr Snedden) in which, as the House will remember, he spoke of a reduction from 5 per cent to 2£ per cent in the levy on personal income tax. The House will also remember that the standard rate age, invalid, widow and Service pensions were increased by $1 a week. At that time there was also the announcement of an inquiry into taxation. Let us face it; the sort of argument that the honourable member for Melbourne Ports has put forward tonight is very germane in many ways to the sort of inquiry that obviously will develop. Later in my speech I may return to the matter of equity and the matter of a capital gains tax. But I wish to point out now that the time to which I have referred, that is, 11th April, the Treasurer foreshadowed the Government’s intention to legislate to vary the operation of section 26a of the Income Tax Assessment Act. He said at that time that the assessable income of a taxpayer should include profits arising from the sale of any property acquired by him for the purpose of profit making by sale. The Treasurer said that much had been said about the operation of this section recently, which was certainly true at that time. He went on to say:

The Government has decided that the basic principle of section 26(a) is proper and that it should be maintained. However, in order to provide greater certainty on the part of people having stock exchange transactions in shares it is proposed to amend the law so that profits or losses arising from the sale of shares which have been held for 18 months or more will not be taken into account for taxation purposes.

There are, of course, exclusions from that provision, some of which the honourable member for Melbourne Ports has mentioned. For instance, persons who are declared to be traders will be excluded. So the amendment will not apply to them. It will also not apply in respect of transactions which have been the subject of notifications under section 52 of the Act. The Treasurer said:

Transactions in shares falling within the 18- month period will continue to be treated on the basis of the current provisions of the law.

Further details were announced after that statement was made and this legislation is designed to bring into effect these amendments to section 26a of the Act. The honourable member for Melbourne Ports dealt with the desirability as he saw it of a capital gains tax. There will be those on the other side of the House who will in some instances see merit in a capital gains tax. I have stood in this place before and suggested that, irrespective of whether one considers a value added tax, a capital gains tax, a net worth tax or any of the many other forms of taxation, in all probability one can get better equity in the system if there are 3 variables instead of 2 with which to juggle.

Leaving aside indirect taxation, let us consider the direct burden of death duties on the costs of production on what is largely a rural estate. Every time the property changes hands there is a built-in extra cost on the production of that farm. This is a serious matter. It was perhaps not so serious 5 years ago, but it is very serious today because no margin is left on so many rural properties. In fact, as the honourable member for Robertson (Mr Cohen) undoubtedly understands, for the first time ever, the average wage of a person on the land having an average investment of $30,000 is clearly behind the wage of the average wage earner in this country. This is the first time that that has happened. I do not know of it happening in any other country in the world at the present time. It may well have happened elsewhere before, but it is new to this country.

I am not against a capital gains tax as such, but I do not know - nor do many honourable members in this House know - precisely what it means. I am all in favour of any inquiry which will look in depth at the implications of such taxes and advise governments, no matter what colour they are, what they should do in relation to them. If I may return to the matter of death duties on rural estates, I point out that if one could juggle death duties and income tax against a third form of taxation I am quite certain that there would be better equity than one is able to get today. It may well be that it would be necessary to spell out clearly the variations from one to the other, which is a concept that this country has not noted in the past. But, whether or not that is the case, I think that any triangular approach to taxation problems has advantages in elasticity and advantages in equity far exceeding those of the present situation.

If, for instance, a government were to suggest that rural estates be exempted from death duties in the federal sphere one would also have to look very seriously at the problems of other estates. That is obvious. It would be quite unfair to discriminate in favour of one section and against another. But as a proposition in economics I invite the Opposition to look carefully at what I am suggesting. The old system of taxing the blazes out of someone who dies and so adding to the cost of production of a rural estate is something that I do not believe should be allowed to exist unless the situation is balanced in some other way. For the sake of the future of this nation - I hope I am not making in a biased fashion - I do not believe that it is a tenable proposition to tax economic rural properties out of existence any more than that it is to tax any other section of the community out of existence. Times change from one year to the next in terms of the seriousness of any proposition. It may be that 5 years ago, as I have already said, my proposition would not have merited serious thought, but it does today.

I shall conclude my remarks, which I said earlier would be confined purely to section 26a of the Act, by commending the Government, with all the sincerity I can muster, for what I regard as a very great breakthrough indeed. It will result in the use of the resources of people who do not even know that their resources are being used. It will result in the use of the unquestionable wealth of, for example, the honourable member for Prospect (Dr Klugman) for, I hope, the good of the community. It might be invested in an Australian enterprise and result in a higher proportion of Australian ownership in risk areas. Australians have always been pretty good at taking a punt, unless they have some physical barrier in their way. Let us face it, the old section 26a left so much uncertainty that it was, I maintain, a physical barrier to the ordinary person to invest.

I would like to take the honourable member for Melbourne Ports a little to task on one comment that he made. He said that the people of Australia, in his opinion, were not great investors. This may well be so, but I think of the office staff in the area in which I work, I think of the office staff in other areas and I think back to some years ago when the ordinary people of Australia were putting their 10c where their mouths were. One may have an opinion as to whether this was healthy or unhealthy. They were putting up cash to back Australian speculative investments. I see merit in that, and I believe that any political party that ignores the right of people to invest as they think fit or that does not encourage people to take a proper interest in Australian enterprise is probably not on the right road. I conclude by congratulating the Government for this great breakthrough. I regard it as unimportant in that it does not affect many people, but I regard it as tremendously important insofar as it is of benefit to Australian enterprise.

Mr MARTIN:
Banks

– My colleague, the honourable member for Melbourne Ports (Mr Crean) confined himself to the attitude of the Opposition to the

Income Tax Assessment Bill (No. 2) 1972 which covers the provisions of the amendment to section 26a of the Act. I will confine myself largely to the attitude of the Opposition to the Income Tax Assessment Bill 1972. The Australian Labor Party supports this Bill because it sets out to remedy weaknesses in the present law which have enabled taxpayers to avoid large amounts of income tax which it was intended that they should pay. We on this side of the House oppose what is commonly called ‘legal tax avoidance’. Any measure which has the effect of closing up these gaps has our full support. It should not be necessary for me to point out that if the liability for taxation is escaped by one section of the community it has to be borne by another section of the community. Who do we find has to bear that additional load? It is that section which can least afford it. The wealthier section of the community is transferring its share of the burden to the poorer section. In elementary justice this situation should never be allowed to prevail.

As it is, the present taxation legislation is heavily loaded against the average and middle income group section of the community. There is no way out for them. It is a case of pay up and shut up. The tax is taken out of the wage earner’s pay packet before he even receives his income. But this is not the case for the man with big income and capital to go with it. He can employ skilled legal advisers and accountants to devise ways and means of minimising his taxation commitment. In fact this practice has almost been given a degree of respectability. The previous Treasurer, the honourable member for Wentworth (Mr Bury), gave it respectability when, in reply to a question from me on 8th May 1970 in regard to taxation avoidance, he said:

It is open under the law for any citizen to operate the laws as be can best to his advantage.

The then Treasurer was sharply in contrast with one of his own top administrators, Mr P. J. Lanigan, Second Commissioner of Taxation, who in a paper he delivered at the Conference of the Taxation Institute of Australia in May 1969 described tax avoidance as what it is - a social evil. Rather than condone tax avoidance, this

Government should be doing everything it can to stamp it out. Why has the Government taken so long to stamp out these and other tax avoidance schemes? Since I first became a member of this Parliament, in October 1969, I have in speech after speech in this House pointed out the manner in which taxation avoidance has been practised. In all of those speeches I have been specific about these taxation avoidance schemes. I have named them and categorised them. This Bill is now attempting to close up the loopholes to which I first drew attention some 2 years ago. If the Government had taken notice of me then, when I first raised this subject, the Commonwealth Treasury would have gained many more millions of dollars from that section of the community which could afford to pay it.

The Income Tax Assessment Bill 1972 which is now before the House deals with 3 methods of tax avoidance: Firstly, dividend stripping; secondly, private companies masquerading as public companies; and thirdly, the practice of share trading companies manipulating the value of their trading stock to obtain the benefit of the rebate under section 46 of the Income Tax Assessment Act and also to make tax free a proportion of their income. By way of illustration it is necessary to explain the devious nature of these tax avoidance devices. The practice of dividend stripping was officially revealed for the first time in August 1971 when the High Court announced its decision in the case of the Federal Commissioner of Taxation and the Adelaide based merchant banking group, Investment and Merchant Finance Corporation Ltd. I can understand the honourable member for Angas (Mr Giles) saying that in South Australia it is a vexed question. Apparently South Australia did not restrict itself to using section 26a to its best advantage, because it obviously used other sections of the Act also, as other States do.

The facts of the case to which I have referred were that in 1963-64 the Corporation, which was a money lender, an underwriter and a share dealer, bought 70 per cent of the shares of another company called MacGrenor Investments Ltd for $86,504. This latter company had $122,000 accumulated profits available for distribution to shareholders as dividends.

MacGrenor Investments Ltd then declared a dividend of $81,900 payable to Investment and Merchant Finance Corporation which was virtually tax free. The reason it was tax free was that it was subject to a rebate under section 46 of the Income Tax Assessment Act. To complete the scheme Investment and Merchant Finance Corporation in the following year sold its shares back to the people from whom it bought them - -MacGrenor Investments Ltd - for $21 and then claimed a loss of $82,931. When the Commissioner of Taxation disallowed that loss the Corporation appealed to the Full High Court which unfortunately - I say ‘unfortunately’ advisedly - upheld Ms appeal. That completed the cycle of the stripping of the dividends. This is the reason why this legislation is being brought in.

The type of transaction which I have just mentioned has not been an isolated one. It has been availed of by some of the biggest share trading companies in Australia. During the course of the inquiry by the Senate Select Committee on Securities and Exchange h was established that Patrick Corporation, an extremely large share dealing organisation and merchant bank, had paid only $7,400 - a minimal amount of income tax - on its profits of $S.6m. That is a farcical situation. Many other large finance companies were able to achieve a similar result. One can only guess at the total loss of revenue which has eventuated from this type of transaction. This Bill has the effect of closing the gate after the horse has got out. But closed it now is, I hope. However, the question to be asked is: Why has it taken the Government so long to close up this type of loophole? Why have people who can ill afford it been forced to pay a higher rate of tax to make up for revenue losses caused by financial corporations juggling their incomes? Let the lesson be learned now. Whenever a loophole appears the Government should close the gap by legislation immediately and not wait for the court to confirm that a loophole exists. It takes years for a case to come before the High Court and in that time millions of dollars of revenue, which could be put to much better use, is lost. The pensioners of this country could have benefited years ago from a further increase in their pensions if this additional revenue had been collected.

As it is, the lost revenue has found its way into the pockets of those who need it least, and the needy have suffered.

A similar situation applies to private companies masquerading as public companies. The Bill now being discussed seeks to close a gap which was revealed when the High Court disallowed an appeal in the case of the Commissioner of Taxation v. Casuarina Pty Ltd. This decision disclosed a gap in income tax legislation enacted in 1964 following recommendations of the Commonwealth Committee on Taxation in 1959-61, known as the Ligertwood Committee. It relates to the statutory definition of a public company. It was intended by legislation enacted in 1964 that companies which were in a real sense private companies should be taxed as such. However, the loopholes were soon exposed, and skilled taxation consultants set about taking advantage of them. The tax revenue involved was substantial, as was admitted by the Treasurer in a statement to this House on 28th April 1971. But once again, the same tortuous process was followed. Instead of immediately bringing in amending legislation to close the gaps, the normal processes of the law were followed - years of waiting, years of procrastination, with millions of dollars of lost revenue.

My remarks about what could have been done with the revenue lost from dividend stripping techniques apply with equal force to the revenue lost from this type of tax avoidance scheme. There are still many other areas of tax avoidance about which nothing is being done. I name but a few. The purchase of loss companies, with resulting tax saving, is still a flourishing racket. Tax havens are still allowed to operate. Norfolk Island is a case in point. At 30th November 1971 there were 1607 companies registered on Norfolk Island, and the numbers are growing every week. These companies were set up with only one purpose in mind - tax avoidance. The thing that galls the average taxpayer is the inconsistency of the Government’s attitude. The little man who overclaims medical expenses or some other deduction is made an example of, is taken to court and fined; but the big man or financial corporation is allowed to get off scot free. It is no wonder that the average Australian has lost faith in this Government.

Dr SOLOMON:
Denison

– It is not my habit to talk on taxation matters but I want to say just a few words about the one of these 3 cognate measures which has been most talked about tonight, in particular by the honourable member for Melbourne Ports (Mr Crean) and also by my colleague, the honourable member for Angas (Mr Giles). I do not want to talk at any length, but I think that one should say at least this much: This is a commendable move in Income Tax Assessment Bill (No. 2) 1972, relating to section 26 (a) of the Income Tax and Social Services Contribution Assessment Act, in so far as it seeks to define - and I hope successfully - with somewhat greater precision an area that has been so much left to the Commissioner of Taxation to make judgments about.

One of the problems in this country about taxation decision-making, I think, is that there are in fact many areas of discretion available which could, on the whole, be somewhat more closely curtailed in order to reduce the discretion and to make it a little more straightforward in the minds of the people who are being taxed. By the same token, I think it might well be something for the Taxation Office to bear in mind as time goes on that some of these things might be, as it were, advertised in advance in the form of published guidelines, which are none too readily available, except on application by particularly interested groups or people.

I must not stray too far from the matter in hand. What I want to say is that I think there is often a considerable underestimate - and I doubt that anybody really knows the true figures - probably by the public at large, and certainly by honourable members opposite, of the extent to which small trading in shares is a function of the general populace. I think it can readily be said that the average working man does not have much truck with share dealings, although there would be exceptions to that. However, certainly in the vast area of the middle class, there is a great deal more smalltime investing in shares than is generally believed. One has to look only at the structure of certain companies, which need not be named at this stage - although there are many examples - to see that quite substantial proportions of their total capital are found to be in the hands of relatively large numbers of small shareholders as compared with the small number of large shareholders. It is the fact in numerous instances and, therefore, we are not talking here necessarily about the privileged or the affluent.

In that sense, it seems to me very wise to define the situation, in terms of this Bill, in respect of 18 months of share ownership. Under that period of ownership the shareholding may be suspect, as it were, in terms of its being sold for possible profit. If the shares have been owned for longer than 18 months, then in the terms of this Bill it is concluded that unless they are an adjunct to business, incidental to the carrying on of business, or unless they are declared to be held for the purpose of profit-making by sale, then the ownership makes the shares not normally subject to taxation if any profit is made, nor to the reverse if a loss is incurred. That seems to me to be a good thing and. something that should, and I hope will, encourage the small shareholder to take up small parcels of good, bad, blue chip, or whatever sorts of shares are on offer on the stock exchanges of this country.

Considerable mention has been made in the course of the last few speeches of matters such as tax avoidance, tax evasion and the differences between the two. That does not deserve further airing at this stage, except that as we are touching on the area of capital gains as distinct from shares held for dividend earning, in the same way as one might hope to get a continuing return or a recurring return from any other sort of investment, and seeing that we are talking about something which is in the field of capital gains, I think it might well be the place to register my current doubts about other areas of taxation relief which I believe have a certain anachronistic flavour about them these days. It is nothing new to say it, I know, but it worries me somewhat that at the present time at least some people who are investing in rural development probably have the sole purpose of tax avoidance in the legal sense, and are in fact carrying on an operation which is no longer of the same benefit, if indeed it is of any benefit, to the country as it was at the time that the provision was made. I do not intend to dilate upon that further. However, I think it is worth making the point in relation to this discussion about capital gains or not, according to the provisions of the Bill.

I The honourable member for Angas talked about section 26(a) as having been a vexed question in South Australia. I cannot admit to the same degree of problem having arisen, at least to my notice, in my own State of Tasmania. It may well be that certain individuals find vexation of the same kind as expressed by the honourable member for Angas. However, I think that, whatever the case there, in the logic of the matter if not in practice, he is right in saying that the previous provisions, until the introduction of this Bill, have in fact provided doubts for the man who is a small and certainly unpractised, unprofessional investor, and in that sense also have constituted something of a physical barrier to investment.

As this is, to my mind, a good thing - that is to say, that the small investor, as distinct from the highly affluent or professional investor, should be encouraged to take a stake in the community where he might find it not only for his good but also for the good of the community - I believe that the eradication of that assumed barrier and the removal of those apparent doubts is in the best interests of the country.

The only other point I make - it may be a somewhat amateurish observation - is that it seems to me that the very considerable focus of my friends on the other side of the chamber on profits, whether large or small, but particularly large, and on high incomes in particular, whether they be of conciliation commissioners or anybody else and however deserved or undeserved they might be - I think they are often undeserved - is sometimes ill placed. If I were somewhat to the left of this side of the chamber - certainly, if I were on the other side of the chamber - I would take a much greater interest in the means by which taxation can be a great leveller. The honourable member tor Melbourne Ports (Mr Crean) and other honourable members well know this. It seems to me that that could be a function of taxation, in the proper sense, which would still allow people who believe that they are doing a highly valuable job in the community to take the level of income they receive and to derive whatever benefit they do from the status accruing from that job, and yet to be kept within reasonable bounds in relation to the general level of the population m their net incomes. That, to me, seems to be an area deserving of considerable focus.

I know that people are not unaware of this point, but I think it is deserving of more focus in relation to the other side of the question than in fact it receives. I do not know whether honourable members opposite will choose to take my advice on that matter. I presume that almost certainly they will not. However, that strikes me as being the area in which, if we wanted to do it this way, people could be brought down to something nearer a common level and yet be allowed to exercise their particular attributes and, might I say, energies, because the question of hours worked and energy input is something which is hardly irrelevant to this aspect. It is not just a question of the level of job that is being operated. I believe that that is not entirely irrelevant to this whole question of taxation. I will not take up the time of the House further by digressing at any greater length from the immediate provisions of this Bill in relation to section 26 (a) of the Act.

Mr KEATING:
Blaxland

– I would like to speak for only a few minutes on the Income Tax Assessment Bill (No. 2), in relation to section 26 (a) of the Income Tax Assessment Act, in order to cover one or two aspects of the Bill. I think that the Act is to be changed mainly in an attempt by the Government to buy off the stock exchange interests and the large investors and to get them off its back because the turnover in most Australian stock exchanges has dropped drastically since the share boom of 1969 and 1970. One of the express intentions of this piece of legislation is to allow people to buy shares and then sell them without paying income tax, if the shares are purchased and sold through the stock exchange. People cannot buy shares in private companies and have the sama qualifications applied.

Therefore, I put it to the House that the whole premise for this piece of legislation is wrong. We should not be supporting the stock exchanges in this sense, because when one looks at the history of the Australian stock exchanges it will be seen that it is not a history of which anyone could be proud. During the share boom of 1969, 1970 and 1971 we witnessed the fall of stocks such as Mineral Securities Australia Ltd, Leopold and others in respect of which the stock market just watched the small investor do his money while the large investors - the smarties who were company directors and who were making decisions amongst themselves before board meetings of half a dozen interested investors - were able to sell their stock at the right time before geologists reports and the like. They were capitalising upon investments made by the small investors. In my opinion, the stock exchanges have not acted as responsible organisations in Australia and should have been dealt with by this Government at an earlier stage in their development instead of being pandered to as they are in this legislation.

Frankly, I cannot see any reason why we should not leave the Act as it presently stands, with the discretion on share profits being left to the Commissioner of Taxation. I think that, when people who are dealing in shares submit an income tax return and either claim a loss or seek to evade the paying of tax on profits, we can bet London to a zack on that the assessor who is handling the taxation return will know whether the person’s claim is genuine and, with some preliminary investigation, it would not take very long to establish whether that person is trying to pull the wool over the eyes of officers of the Taxation Office. As the situation stands now, the criteria laid down in this Bill are that tax will not be payable if:

The shares in question were listed on a stock exchange at the time of acquisition by the person, or within 3 months afterwards.

The person had not acquired the shares as an Incident of a business carried on by him and had not formally notified the Commissioner of Taxation that they had been acquired by him for the purpose of profit-making by sale.

The person had continued to be the owner of the shares for a period of 18 months or more.

The shares were acquired by the person on or after 12th April 1972.

I think that the Government hastened to add the last provision in the statement by the Treasurer (Mr Snedden) when introducing this legislation a couple of weeks ago. When he first gave notice of the legislation, he omitted to say that it would come into effect as from 12th April 1972. Of course, the thousands of small investors who now are taking advantage of the provisions of section 26 (a) with a notification under section 52 natuarlly would have been denied the tax reduction on losses that they had made on shares if this Bill had not been operative as from 12th April. I think that the Government realised that it would have lost a packet of votes had lt not amended the legislation in this way.

However, the legislation is open to a lot of abuses. One of them may be that now the Commissioner has been told that he must interpret the Act in a certain way and, if a person holds shares for more than 18 months and does not notify the Commissioner that they were bought with the intention of resale at a profit, the Commissioner may feel in respect of all assessments coming before him that shares sold after being held for less than 18 months can be viewed more or less as speculative purchases and therefore the fine discretion previously applied would not now be necessary. So, an investor would have to prove to the Commissioner, if for instance he had to liquidate his shares before the period of 1 8 months had elapsed and he had not notified the Commissioner, that he had bought the shares for investment and not for resale at a profit. Similarly, if for some reason he had to liquidate his shares before 12 months had elapsed and had happened to buy the shares at the start of the financial year and had not then notified the Commissioner, under the terms of this Bill he would have the onerous task of trying to convince the Commissioner of Taxation that the shares were a genuine investment and were not just bought with the intention of resale at a profit. So, I think that a number of very bad aspects will result from this piece of legislation.

Perhaps the main bone of contention by the Opposition about this legislation will be the manipulation of this amendment to the Act by the big investors. I think it is fair to say that the individuals who make money out of shares are the people who are able to buy up growth stocks or who buy stocks that are likely to appreciate in value. These stocks could provide large investors with a windfall after the 18 months has elapsed. One of the curious aspects of this Bill is that it does not require a person buying shares to notify the Commisisoner before the end of the financial year in which he buys them. So, if the investor buys his shares early in the financial year and lodges his return at the end of that year, he has had 12 months to see how the stock is progressing. If it does not look as though the stock will be of any value, he can then tell the Commisisoner that he intended to sell the stock for profit. If the stock goes bad he can claim a loss. Of course, he has had 11 or 12 months in which to look at the position, and if it looks as though the stock will be all right he goes very quietly, waits for the other 6 months to pass and then gets a nice little increment from it.

The only people whom this legislation will help will be the large investors - the sort of shonky dealers behind Patrick and Co. and Queensland Mines Ltd. One can see such people right across the scene in the stock exchanges, particularly in Sydney and Melbourne. One does not have to be a taxation expert to wheedle them out. Reading through some of the stories in the Australian Financial Review’ one would be well aware of the people who have worked most of the lurks. What we are really doing with this piece of legislation is trying to bolster those rotten stock exchanges when, in fact, we should have been cutting them down to size. So I think that this is a bad piece of legislation for that very reason.

It should be left to the discretion of the Commissioner of Taxation to decide whether certain stock was bought for resale at a profit or whether it was bought for investment - I think that he would be able to make a correct assessment - rather than to have this provision which supposedly is designed to attract the money of the small investor. We all know that the small investor has never made money; it is the big investor who makes money. It is he who makes the windfall. The big investor is always protected, and always has been protected by this shabby Government. Whether this legislation will benefit the stock exchanges or the large investors, we can bet that the little fellow will not get a look in.

Section 26(a) in itself is a dubious provision. As the honourale member for Melbourne Ports (Mr Crean) said earlier, it provides for a capital gains tax by stealth, and if we are going to look at the question of capital gains, we should look at it in a comprehensive way. But as it is now, we have the worst of both worlds - a capital gains tax and a sort of selective capital gains tax where the lurk merchants can get away with a windfall without paying tax. The people who are not familiar with section 52 of the Act - the butcher and the greengrocer who buy shares in share booms - are the ones who lose their money and do not get any gains or concessions at all.

Although the Opposition has decided not to oppose the Bill, I think that it contains very bad provisions. It is just another example of this Government’s attempting to introduce legislation to help its cronies and those who support it financially at election time. This is the main reason why the legislation has been introduced - not to clear up the Income Tax Assessment Act, but to help the stock exchange attract more unsuspecting investors.

Mr BUCHANAN:
McMillan

– I had no intention of saying anything on this Bill until I heard the speech of the honourable member for Blaxland (Mr Keating). It was such a disgusting speech that I thought it was up to one of the back benchers on this side of the chamber to answer it, because I do not believe that the Minister for Supply and Minister Assisting the Treasurer (Mr Garland) will answer it. I support the proposal contained in the Bill for a number of reasons, one of which is that I have been asking the Government for the last 5, 6 or 8 years, as Secretary of the Government Members Mining Committee, to take away this discretion that was abused by the Deputy Commissioners of Taxation in several States.

The honourable member for Blaxland called this Government a shabby Government, and I object vigorously to this. He said that we have introduced this legislation in order to protect the big speculator as against the small man and this shows how little he knows about the speculative world, stock exchanges or anything else that I have ever heard him talk about.

Mr Martin:

– I think it is shabby to say that the Commissioner of Taxation took advantage of it; I think that is a shabby statement.

Mr BUCHANAN:

– I did not say that he took advantage of it at all. I said that it was at the discretion of the Deputy Commissioners of Taxation who, because they had this discretion, harassed people. They had no guidelines. I have been asking for guidelines to be laid down for the last 5, 6 or 8 years - I have forgotten just how long. Most of the Deputy Commissioners of Taxation wanted guidelines laid down. Just to put the record straight for my friend, the honourable member for Blaxland - and this is really where I started my speech - the big speculator is classed as a professional. He pays his tax and he incurs his losses.

Mr Cope:

– Poor fellow.

Mr BUCHANAN:

– I agree with that, too, because in recent years the losses have been very heavy. It is all very well to say that people who invested in Poseidon and the other mining ventures have made a lot of money. Most of the people who saw those stocks rise held onto them, but the stocks went down again. There were people who came in and made big money out of stocks. But obviously no-one would entertain the idea that those professional men, because of their position, were buying these stocks just as an investment. Obviously they were bought as speculative stocks, and no-one could argue about that. But there were thousands of people who saw fit, at the time of the mining boom, to come along and say: ‘We will put a bit of faith in Australia; we will try our money’.

It was spare money. They might have taken it to the races, and they could have lost or won but it would have had no effect on the Commissioner of Taxation. But because they chose to have a bit of a punt on some oil or mining shares which have gone bad, the imputation is that they will now try to cash in on their losses. If these people had to pay tax on their gains, I maintain that they should be allowed to claim a deduction when they sell out and make a loss. But the reason why the Government has introduced this legislation is because the speculative risk money is drying up.

Mr Keating:

– That is right.

Mr BUCHANAN:

– Yes, and Australia wants risk money. Australia wants people to come in and take a gamble on whether these mining or oil ventures will come good. You will never get anywhere in this country unless you are prepared to really get in and go after the resources that we have. Something should be done to encour age the people who have been prepared to put their money where they felt it would do some good for them and for Australia. They did not invest their money with the idea that they would make some money. They knew that if the ventures in which they were investing came good they would be very beneficial for Australia.

Mr Foster:

– And for themselves.

Mr BUCHANAN:

– And for themselves, and why not? All I want to point out is that the reason the Government has introduced this legislation is not to give some great benefit to the professionals who have always been in the game, who always will be in the game and who are prepared to take their losses without grumbling because they know that they will have an opportunity to make it up again, but to encourage the small people whose risk money has dried up. What are these people doing now? They are putting their money into the bank where it is not doing anybody in Australia any good. That is the reason why bank balances are so high today. The Government is to be commended for trying to give the small investor an opportunity to participate in a field which, prior to the mining and oil boom, was left entirely to the large investors.

Mr GARLAND:
Minister for Supply and Minister Assisting the Treasurer · LP

– in reply - Honourable members will recall that public scrutiny of the Bill was invited when it was introduced into the House on 9th December 1971. Some requests for changes in the provisions of the Bill were received in response to this invitation.

Some criticism was made of the discretionary powers that the Bill proposes to confer on the Commissioner of Taxation both in determining what is a dividend stripping operation and in applying the tests governing a public company subsidiary for income tax purposes. Some representations were to the effect that the proposed public company tests and associated safeguarding measures are to an extent retrospective in their application. There was also some criticism of the provisions to prevent the use of options as to trading stock valuations as a way of using the dividend rebate to obtain other kinds of income free of tax.

The Government has considered these representations carefully. In general, however, there have been no matters raised for consideration that were not fully examined before the Bill was introduced. On the first matter - that of administrative discretionsexperience has shown only too clearly that some degree of discretion is essential if the intention of Parliament is to be given full effect. The discretionary powers that the BDI proposes to confer on the Commissioner will go no further than is regarded as absolutely necessary to safeguard the results intended by the legislation. I also remind the House that the way in which these powers may be exercised is subject to review by Taxation Boards of Review and by the courts under the ordinary processes of objection and appeal. The anti-tax avoidance measures in the Bill could not be expected to operate successfully without discretions.

It is not proposed to change the Bill in a material way concerning the discretions, but in relation to dividend stripping an amendment Wm be moved in Committee. This will set out in the law matters to be considered by the Commissioner in forming an opinion as to whether a dividend stripping operation has been carried out. As to the second matter on which representations have been made, no change is proposed in the provisions of the Bill that will remove the opportunity to enlarge rebates on inter-company dividends by the revaluation of trading stock. The last matter concerns the suggestions of retrospectivity. In substance, the provisions complained of will simply prevent private companies from extending artificial tax avoidance arrangements far into the future. The provisions are not retrospective and no change in them is proposed. The review of the representations on the Bill has shown that its provisions may be deficient in unusual cases where companies have adopted irregular accounting periods. Amendments of a drafting nature will be required to overcome these deficiencies but the intended effects of the Bill will not be changed. The amendments have been circulated and will be moved in Committee.

I wish now to refer to the remarks of honourable members, and particularly those of honourable members opposite. Firstly, the honourable member for Mel bourne Ports (Mr Crean) referred to the case of a person who, purchasing shares, would have the opportunity of waiting for 12 months. He was referring to the arbitrary cut-off time of 18 months provided for, as giving a chance for someone to watch the situation. He asked for my comments. It is certainly possible, but it does require a number of factors to combine in order to assist such a purchaser. Obviously no-one buys anything thinking that he will make a loss. I believe that such a person as he alluded to is likely to be a trader if he engages in many transactions, certainly in the number of transactions to which ;he honourable member referred when he mentioned someone turning the shares over in one or two days. That would disclose to the Commissioner that the person was a trader. Traders, of course, are not relieved by these proposals of paying tax in any way.

The honourable member mentioned that this would apply to a capital gains tax and that is quite true, but I repeat that it is the result of making a fixed period. The honourable member also referred to the situation in which somebody makes a statement under section 52. I say that that does not automatically give a deduction, if the relevant facts indicate that the shares involved are acquired primarily as a capital investment. The honourable member for Melbourne Ports and other honourable members referred to ‘taxation by stealth’, and this has been referred to outside the House. Reference was made to a capital gains tax in effect being achieved by an assessment by use of section 26 (a). I certainly do not believe that that is so.

As I understood the honourable member, he suggested that the amendment to section 26 (a) of the Income Tax Assessment Act was a form of capital gains tax by stealth. In fact the amendment will not result in tax being imposed on any profits which are not of an income character and which are not already taxable. Speculative profits on shares sold within 18 months of purchase will as at present be taxable; capita] profits realised within the period will not be taxable. As to the quick turnover of shares - the honourable member referred to turnover in 2 days - the Bill will not vary the present operation because a person engaged in such activity would be a trader, as I have said. I would add that in my experience as a tax agent and chartered accountant I found that in practice it is not very difficult to separate a trader from an investor. Of course, where there is doubt the matter may be discussed with the Taxation Office. If necessary, an appeal can be made to a Taxation Board of Review or through the courts. But a study of proceedings before Boards of Review and the courts shows that very few cases involve listed shares, which are the subject of these Bills.

The honourable member for Melbourne Ports and the honourable member for Angas (Mr Giles) referred to a capital gains tax but I do not think that this is an appropriate moment to consider again this general economic question. The Government’s policy has been that on balance it is not economically desirable and I suspect that many people who advocate a gains tax I do not include the honourable member for Melbourne Ports in this opinion do not fully understand the consequences of such a tax.

The honourable member for Banks (Mr Martin) showed a thorough knowledge of the subject matter of this debate, which is more than I can say of the honourable member for Blaxland (Mr Keating) judging from his remarks. The honourable member for Banks showed that he had done a good deal of reasoning about tax avoidance schemes but I have enough respect for his former occupation and experience to believe that he does know better than some of the propositions he put to the House. Taxation avoidance has been going on since the beginning of time and will continue for as long as human ingenuity continues. But this is not to say that the Government is complacent in any way. Indeed, it has made a very great effort to reduce tax avoidance by amending many taxation provisions. Many amendments have been presented to this House over the years.

Where it is believed that the law will defeat some of these schemes, that has to be tested and the loopholes to which the honourable member referred have to be examined. The 2 major areas of legal tax avoidance covered by the Bill concern dividend stripping and the use of artificial public company subsidiaries by private company interests. The 2 recent High Court cases involved the 2 avenues for exploitation and the amendments close off those avenues and will have a practical effect, as shown from the date of the public announcements made by the Treasurer (Mr Snedden). The amendments were proposed shortly after the High Court handed down its decisions, so there has been no delay in closing off the loopholes. The Bill is designed to take away the opportunity to devise tax avoidance schemes, in the light of the High Court’s decisions.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3040

SUSPENSION OF STANDING ORDERS

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

That so much of the Standing Orders be suspended as would prevent orders of the day Nos 2 to 5, Government Business, being called on.

page 3040

INCOME TAX ASSESSMENT BILL 1972 (1971)

Second Reading

Consideration resumed from 9 Dec ember 1971 (vide page 4455), on motion by Mr Snedden:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

In Committee

The Bill.

Mr GARLAND:
Curtin Minister for Supply and Minister assisting the Treasurer · LP

– I seek leave to move together amendments to clauses 1, 4, 5, 6 and 12.

The CHAIRMAN (Mr Lucock:
LYNE, NEW SOUTH WALES

– Is leave granted? There being no objection, leave is granted.

Mr GARLAND:

– The clauses read in part:

Clause 1. (1.) This Act may be cited as the Income Tax Assessment Act 1972. (2.) The Income Tax Assessment Act 1936- 1971 is in this Act referred to as the Principal Act. (3.) The Principal Act, as amended by this Act, may be cited as the Income Tax Assessment Act 1936-1972.

Clause 4.

After section 46 of the Principal Act the following section is inserted: - 46a. - (1.) A reference in this section, other than a reference in paragraph (a) or paragraph (b) of sub-section (4.), to a dividend shall be read as a reference to a dividend in relation to which this section applies, and a dividend is a dividend in relation to which this section applies if the dividend was paid after the thirty-first day of August, One thousand nine hundred and seventy-one, and the payment of the dividend arose out of, or was made in the course of, a transaction, operation, undertaking, scheme or arrangement that the Commissioner is satisfied was by way of dividend stripping.

Clause 5.

Section 103 of the Principal Act is amended -

  1. by adding at the end thereof the following sub-section:- “(4.) For the purposes of this Division, a company shall be taken to have been a listed company at all times during a year of income of another company if the firstmentioned company was, by virtue of paragraph (a) of sub-section (2.) of section one hundred and three a of this Act, a public company for the purposes of sub-section (1.) of that section in relation to the year of income of that company that corresponds with the first mentioned year of income.

Clause 6. (1.) Section 103a of the Principal Act is amended by omitting sub-section (4.) and inserting in its stead the following sub-sections: - (4.) Subject to sub-section (4d.) of this section, a company is, for the purposes of this section, a subsidiary of a public company in relation to the year of income if -

  1. at all times during the year of income all the shares in the firstmentioned company were beneficially owned by a company which, or companies each of which, is a public company for the purposes of subsection (1.) of this section in relation to the year of income of that company (in this sub-section referred to as ‘ the corresponding year of income’) that corresponds with the firstmentioned year of income but which is not, or none of which is -

    1. a company to which paragraph (c) of sub-section (2.) of this section applies in relation to the corresponding year of income; or
    2. a subsidiary of a public company for the purposes of this section in rela tion to the corresponding year of income by reason of sub-section (4b.) of this section;

Clause 12. (1.) Subject to the next succeeding sub-section, the amendments made by paragraph (d) of section 3, by paragraphs (a) and (c) of section 5 and by section 6 of this Act apply to assessments in respect of income of the year of income that commenced on the first day of July. One thousand nine hundred and seventy-one and in respect of income of all subsequent years of income. (2.) Where-

  1. a company (in this sub-section referred to as “the spurious public company”) would, but for the enactment of this Act, have been a subsidiary of a public company for the purposes of sub-section (1.) of section 103a of the Principal Act in relation to the year of income that commenced on the first day of July, One thousand nine hundred and seventy, by reason that, before or during that year of income, shares in the spurious public company were allotted to, or otherwise acquired by, one or more companies that would, but for the enactment of this Act, have been public companies for the purpose of sub-section (1.) of section 103a of the Principal Act in relation to that year of income;
  2. the allotment or acquisition of those shares in the spurious public company was effected for the purpose, or for purposes that included the purpose, of ensuring that any dividend that might be paid to the spurious public company by a company that was a private company for the purposes of Division 7 of Part III. of the Principal Act in relation to the year of income in which the dividend was paid would be treated for the purposes of that Act as having been paid to a company that was a public company for the purposes of sub-section (1.) of section 103a of that Act in relation to that year of income;
  3. shares in another company (in this subsection referred to as “the private company “) thatwas a private company for the purposes of Division 7 of Part III. of the Principal Act in relation to the year of income that commenced on the first day of July, One thousand nine hundred and seventy, were allotted to, or otherwise acquired by, the spurious public company for the purpose of enabling the private company to pay a dividend in respect of those shares; and
  4. either the allotment or acquisition referred to in paragraph (a) of this sub-section of shares in the spurious public company or the allotment or acquisition referred to in the last preceding paragraph of shares in the private company took place after the twenty-eighth day of April, One thousand nine hundred and seventy-one, and before the first day of the year of income of the spurious public company that commenced on the first day of July, One thousand nine hundred and seventy-one, the amendments made by paragraphs (a) and (c) if section 5, and by section 6, of this Act apply to any assessment in respect of income of the spurious public company of the year of income that commenced on the first day of July, One thousand nine hundred and seventy. (3.) Subject to the next two succeeding subsections, where, if the period that is the relevant period in relation to a company were a year of income, the company would be a subsidiary of a public company for the purposes of section 103a of the Principal Act as amended by this Act in relation to that year of income by virtue of sub-section (4.) or sub-section (4b.) of that section, that company shall be deemed to be a subsidiary of a public company for the purposes of that section in relation to the year of income that commenced on the first day of July, One thousand nine hundred and seventy-one, by virtue of that sub-section. (4.) The last preceding sub-section does not affect the operation of sub-sections (4d.) and (4b.) of section 103a of the Principal Act as amended by this Act but, in the application, in relation to the year of income that commenced on the first day of July, One thousand nine hundred and seventy-one, of those sub-sections in respect of a company to which the last preceding subsection applies, a reference in those sub-sections to the year of income shall be read as a reference to the period that is the relevant period in relation to that company. (5.) Sub-section (3.) of this section does not apply in relation to a company to which paragraphs (a), (b) and (c) of sub-section (2.) of this section apply if the private company referred to in paragraph (c) of sub-section (2.) of this section paid a dividend to the firstmentioned company after the commencement of the year of income of the firstmentioned company that commenced on the first day of July, One thousand nine hundred and seventy-one, but before the commencement of the period that is the relevant period in relation to the firstmentioned company. (6.) For the purposes of this section but subject to the next succeeding sub-section, the relevant period, in relation to a company, is the period commencing at the expiration of one month after the commencement of this Act and ending at the expiration of the year of income of the company that ends on the thirtieth day of June, One thousand nine hundred and seventy-two. (7.) For the purposes of this section, the relevant period, in relation to a company, shall be deemed to include any period (in this sub-section referred to as “the earlier period”) during the year of income that ends on the thirtieth day of June, One thousand nine hundred and seventy-two, that immediately preceded the period (in this sub- section referred to as “ the later period “) that is the relevant period in relation to that company by virtue of the last preceding sub-section, where, if the earlier period and the later period together constituted a year of income, the company would be a subsidiary of a public company for the purposes of section 103a of the Principal Act as amended by this Act in relation to that year of income by virtue of sub-section (4.) or sub-section (4b.) of that section. (8.) The amendments made by paragraph (b) of section 5, and by section 7, of this Act apply in relation to dividends paid after the ninth day of December, One thousand nine hundred and seventy-one.

I move:

  1. In clause 1, omit the clause, insert the following clause: - “ 1. - (1.) This Act may be cited as the Income Tax Assessment Act (No. 3) 1972. “ (2.) The Income Tax Assessment Act 1936- 1971, as amended by the Income Tax Assessment Act 1972t and by the Income Tax Assessment Act (No. 2) 1972, is in this Act referred to as the Principal Act. “ (3.) Section 1 of the Income Tax Assessment Act (No. 2) 1972 is amended by omitting subsection (3.). “ (4.) The Principal Act, as amended by this Act, may be cited as the Income Tax Assessment Act 1936-1972.”.
  2. In clause 4, in sub-section (1.) of proposed section 46a, before ‘ paragraph (a) ‘, insert ‘ subsection (1a. ) or sub-section (1b.), or’.

  3. In clause 4, after sub-section (1.) of proposed section 46a, insert the following subsections: - “ ‘ (1a.) A dividend paid in respect of shares in a company shall not be taken to be a dividend in relation to which this section applies unless the shareholder acquired (whether alone or jointly with another person or other persons) those shares or other shares in that company (in this section referred to as “the relevant shares”) as trading stock or in such circumstances that any profit that would arise from a disposal of the shares would, in whole or in part, be included in the assessable income of the shareholder or any loss that would arise from a disposal of the shares would, in whole or in part, be allowable as a deduction to the shareholder. “ ‘ (1b.) In considering whether the payment of a dividend by a company arose out of, or was made in the course of, a transaction, operation, undertaking, scheme or arrangement by way of dividend stripping, the Commissioner shall take into consideration -

    1. whether the effect of the payment of the dividend by the company to the shareholder, or the effect of that payment and of the payments of any other dividends that have been or are likely to be made by the company to the shareholder, has been, or would be, to reimburse the shareholder wholly or substantially for the amount or amounts paid by him in respect of the acquisition of the relevant shares;
    2. whether the value of the relevant shares -
    1. in the case of shares held by the shareholder at the end of the year of income at that time;
    2. in the case of shares disposed of by the shareholder during the year of income immediately before the disposal; or

    3. in the case where a distribution was made to the shareholder during the year of income by a liquidator in the course of winding up (he company - immediately after the distribution was made, was substantially less than the value of those shares at the time when they were acquired by the shareholder and, if so, whether the reduction in value was wholly or mainly attributable to the payment of a dividend to the shareholder by the company;

    4. whether the right to receive dividends in respect of the relevant shares is, by reason of any provision in the constituent document of the company or of any agreement, arrangement or understanding (whether formal or informal, whether express or implied and whether or not enforceable by legal proceedings), limited as to the total of the amounts that may be paid as dividends in respect of the shares or as to -the source of the profits ‘ from which, or the period during which, dividends may be paid in respect of the shares; and
    5. any other relevant matters.”.

  4. In clause 5, omit proposed sub-section (4.), insert the following sub-section: - “ ‘ (4.) For the purposes of this Division, a company shall be taken to have been a listed company during a period that was included in a year of income of another company (in this subsection referred to as “ the relevant year of income”) where -

    1. if the period was included in the year of income of the first-mentioned company (in this sub-section referred to as “ the corresponding year of income “) that corresponded with the relevant year of income - the first-mentioned company was, by virtue of paragraph (a) of sub-section (2.) of section one hundred and three a of this Act, a public company for the purposes of sub-section (1.) of that section in relation to the corresponding year of income; or
    2. if the period was included in the year of income of the first-mentioned company that immediately preceded or immediately followed the corresponding year of income - the first-mentioned company was, by virtue of paragraph (a) of sub-section (2.) of section one hundred and three a of this Act, a public company for the purposes of sub-section (1.) of that section in relation to that preceding or following year of income, as the case may be.”.
  5. In clause 6, after paragraph (a) of proposed sub-section (4.), insert the following paragraph: - “ (aa) the corresponding year of income, or each of the corresponding years of income, referred to in the last preceding paragraph ended on the same day as the year of income first-mentioned in that paragraph;”.

  6. In clause 12, omit sub-clauses (2.) to (8.), inclusive, insert the following sub-clauses: - “(2.) Where-

    1. a company (in this sub-section referred to as 1 the spurious public company ‘) would, but for the enactment of this Act, have been a subsidiary of a public company for the purposes of sub-section (1.) of section 103a of the Principal Act in relation to the year of income that commenced on the first day of July, One thousand nine hundred and seventy, by reason that, before or during that year of income, shares in the spurious public company were allotted to, or otherwise acquired by, one or more companies that would, but for the enactment of this Act, have been a public company or public companies for the purposes of sub-section (1.) of section 103a of the Principal Act in relation to that year of income;
    2. the allotment or acquisition of those shares in the spurious public company was effected for the purpose, or for purposes that included the purpose, of ensuring that any dividend that might be paid to the spurious public company by another company would be treated for the purposes of the Principal Act as having been paid to a company that was a public company for the purposes of sub-section (1.) of section 103a of that Act in relation to the year of income of that last-mentioned company during which the dividend was received;
    3. shares in another company were allotted to, or otherwise acquired by, the spurious public company for the purpose of enabling the other company to pay a dividend in respect of those shares and the other company was a private company for the purposes of Division 7 of Part III. of the Principal Act in relation to -
    1. a year of income of the other company in relation to which the period that is the prescribed period .within the meaning of that. Division is, in whole or in part, included in the year of income of the spurious public company that commenced on the first day of July, One thousand nine hundred and seventy; or

    2. a year of income of the other company during which a dividend to which sub-section (2.). of section one hundred and five a of the Principal Act applies was paid by that company to the spurious public company, being a dividend that was paid during the year of income of the spurious public company, that commenced. on the first day of July, One thousand nine hundred and seventy; and

    3. either the allotment or acquisition referred to in paragraph (a) of this sub-section of shares in the spurious public company or the allotment or acquisition referred to in the last preceding paragraph of shares in the other company referred to in that paragraph took place after the twenty-eighth day of April, One thousand nino hundred and seventy-one, and before the first day of the year of income of the spurious public company that commenced on the first day of July, One thousand nine hundred and seventy-one, the amendments made by paragraphs (a) and (c) of section 5, and by section 6, of this Act apply to any assessment in respect of income of the spurious public company of the year of income that commenced on the first day of My, One thousand nine hundred and seventy. “ (3.) Subject to the next two succeeding sub-sections, where -
    4. a period is declared by this section to be the relevant period in relation to a company in relation to a year of income; and
    5. if that period were a year of income, the company would be a subsidiary of a public company for the purposes of section 103a of the Principal Act as amended by this Act in relation to that period by virtue of sub-section (4.) or sub-section (4b.) of that section, the company shall be deemed to be, by virtue of that sub-section, a subsidiary of a public company for the purposes of that section in relation to the year of income referred to in paragraph (a) of this sub-section. “ (4.) The last preceding sub-section does not affect the operation of sub-sections (4d.) and (4b.) of section 103a of the Principal Act as amended by this Act but, in the application of those sub-sections in relation to a company in relation to a year of income of the company to which the last preceding sub-section applies, a reference in those sub-sections to a year of income shall be read as a reference to the period that is declared to be the relevant period in relation te the company in relation to that year of income. “ (5.) Sob-section (3.) of this section does not apply in relation to a company (being a company to which paragraphs (a), (b) and (c) of subsection (2.) of this section apply) in relation to a year of income if the other company referred to in paragraph (c) of sub-section (2.) of this section paid a dividend to the first-mentioned company after the twenty-eighth day of April, One thousand nine hundred and seventy-one, and after the commencement of that year of income but before the commencement of the period that is the relevant period in relation to the firstmentioned company in relation to that year of income. “ (6.) For the purposes of this section but subject to sub-section (8.) of this section, whichever of the following periods is applicable in relation to a company is declared to be the relevant period in relation to the company in relation to the year of income of the company that commenced on the first day of July, One thousand nine hundred and seventy-one i -
    6. if the day immediately following the expiration of one month after the commencement of this Act is included in that year of income of the company - the period commencing on that immediately following day and ending at the expiration of that year of income; or
    7. if the day immediately following the expiration of one month after the commencement of this Act is included in the year of income of the company that commences on the first day of July, One thousand nine hundred and seventytwothe period commencing on that immediately following day and ending on the first day of December, One thousand nine hundred and seventy-two. “ (7.) If the day immediately following the expiration of one month after the commencement of this Act is included in the year of income of a company that commences on the first day of July, One thousand nine hundred and seventy-two, then, for the purposes of this section but subject to the next succeeding sub-section, the period commencing on that immediately following day and ending on the last day of that year of income is declared to be the relevant period in relation to the company in relation to that year of income. “ (8.) For the purposes of this section, the relevant period, in relation to a company in relation to a year of income, shall be deemed to include any period (in this sub-section referred to as ‘ the earlier period ‘) that commenced not earlier than the first day of that year of income and immediately preceded the period (in this subsection referred to as ‘ the later period ‘) that is the relevant period in relation to the company in relation to that year of income by virtue of subsection (6.) or sub-section (7.), as the case may be, of this section, where, if the earlier period and the later period taken together constituted a year of income, the company would be a subsidiary of a public company for the purposes of section 103a of the Principal Act as amended by this Act in relation to those periods as so taken together by virtue of sub-section (4.) or sub-section (4b.) of that section. “ (9.) The amendments made by paragraph (b) of section 5, and by section 7, of this Act apply in relation to dividends paid after the ninth day of December, One thousand nine hundred and seventy-one.”.

With the concurrence of the Committee I will speak to each amendment now. All of the amendments are of a drafting kind. They do not change the intended effects of the Bill. A memorandum explaining technical aspects of each of them has been circulated to honourable members. In these circumstances I think I need now only briefly outline the broad purpose and effect of each. The amendment of clause 1 merely catches up with events. Other subsequent income tax measures have made it necessary to retitle the Act which this Bill will enact.

The amendment to clause 4 results from the Government’s consideration of representations about the measures in the Bill concerned with dividend stripping. The Government has decided that it would be desirable for the Bill to contain reference to characteristics of dividend stripping as that term is commonly understood rather than let the term stand alone. In the form in which it was introduced the Bill limits the tax rebate on inter-company dividends paid under an arrangement which the Commissioner of Taxation is satisfied is by way of dividend stripping. It is proposed by the amendment to provide specifically, in effect, that the limitation can apply only where the company receiving the dividend is entitled to the twin benefits - a rebate on the dividends and a deduction for the loss on the shares resulting from the declaration of the dividends - which are an incentive for a company to join in a dividend stripping operation. In addition, the amendment directs the Commissioner, in forming his opinion as to whether a dividend is received in the course of a dividend stripping operation, to consider matters which are common to this kind of operation - principally, an effective reimbursement of the purchase price of the relevant shares through the receipt of the dividend and a diminution in the value of the shares by reason of the declaration of the dividend.

The remainder of the amendments - those proposed to clauses 5, 6 and 12 of the Bill - relate to the proposed new tests to be satisfied for a company to be treated as a subsidiary of a public company for tax purposes. The technical amendments to clauses 5 and 6 are complementary and refer to the extraordinary case of parent and subsidiary companies whose corresponding years of income end on different dates. The purpose is to ensure that basic provisions of the Bill apply in the same manner in these cases as in the conventional case of identical balancing dates. I think the amendments to clause 12 - which deals with transitional problems - can be taken together. The first of the amendments relates to the artificial public company which was set up after 28th April 1971, the date of announcement of the proposed changes in the law. It will eliminate an apparent technical weakness in the present Bill and ensure that, as announced, no company set up after that date which, under the old law, would artifically have qualified as public, can be a public company for the income year 1970-71, unless it meets the new tests.

The Bill provides a period of grace for companies to comply with the new tests for the income year 1971-72, most of which has, of course, already elapsed. However, because of the irregular accounting periods of some companies, it would be the equivalent for them - as compared with what is being provided by way of a period of grace for companies with conventional balancing dates - to extend the period of grace into the income year 1972-73. The amendments proposed to clause 12 make the drafting changes needed to do this.

Finally, the amendments to clause 12 will ensure that, if private company dividends were received by an artificial subsidiary on or before 28th April 1971, the recipient company will not, for this reason, be denied a period of grace for compliance with the new tests. As the Bill is at present drafted, the receipt of dividends in these circumstances could, for technical reasons, unintentionally deny a period of grace to some companies with irregular accounting periods. I commend the amendments to the Committee.

Mr HURFORD:
Adelaide

– I rise merely to record my protest at the way in which these complicated amendments have been introduced. This Bill has been lying on our notice paper since 9th December 1971. I hope I am not at fault - I believe I am not at fault - but the first we have heard of these substantial amendments to a most complicated Bill has been tonight in this chamber. I have had a number of representations about these alterations. I would have talked earlier on the Bill except that these are the dying hours of the Parliament and others were anxious to speak. But nobody actually spoke on this particular Bill during the cognate debate on 3 Bills. However, extremely complicated amendments have been moved in this way and honourable members have had no opportunity to study them in depth and no opportunity of determining whether, indeed, they will achieve what the Government says it is hoping to achieve according to the speech we just heard from the Minister for Supply (Mr Garland). I will not detain the Committee any longer, but I record my protest.

Amendments agreed to.

Bill, as amended, agreed to.

Bill reported with amendments; report - by leave - adopted.

Third Reading

Bill (on motion by Mr Garland) - by leave - read a third time.

page 3046

INCOME TAX (INTERNATIONAL AGREEMENTS) BILL 1972 (1971)

Second Reading

Consideration resumed from 9 December 1971 (vide page 4455), on motion by Mr Snedden;

The the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3046

AIRLINE EQUIPMENT (LOAN GUARANTEE) BILL 1972

Second Reading

Debate resumed from 27 April (vide page 2103), on motion by Mr Swartz:

That the Bill be now read a second time.

Mr SWARTZ:
Darling Downs Minister for National Development · LP

– Mr Deputy Speaker, may I have the indulgence of the House to rake a point of procedure on this legislation? Before the debate is resumed on this Bill I would like to suggest that it may suit the convenience of the House to have a general debate covering this Bill and the Loans (Australian National Airlines Commission) Bill 1972 as they are associated measures. Separate questions may, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore that you, Mr Deputy Speaker, permit the subject matter of both Bills to be discussed in this debate.

Mr DEPUTY SPEAKER:

- (Mr Corbertt) - Is it the wish of the House to have a general debate covering the 2 measures? There being no objection, I will allow that course to be followed.

Mr CHARLES JONES:
Newcastle

– The Airline Equipment (Loan Guarantee) Bill 1972 relates to the provision ofcertain equipment for a domestic airline. The Loans (Australian National Airlines Commission) Bill 1972 seeks the approval of the Parliament for borrowing by the Commonwealth to assist the Australian National Airlines Commission to purchase aircraft and related equipment.

The Airline Equipment Bill seeks authority for the Commonwealth to guarantee loans raised by Ansett Transport Industries Ltd to the amount of $25m. The other Bill seeks the approval of borrowings by the Commonwealth to assist the Commission in purchasing aircraft at a cost of $28. 5m. In each case 4 Boeing 727-200 series aircraft will be purchased at a total cost to each airline of $35,600,000. The Opposition proposes to support the National Airlines Commission Bill. However, on behalf of the Opposition I shall move an amendment to the Airline Equipment (Loan Guarantee) Bill. I move:

That all words after That’ be omitted with a view to inserting the following words in place thereof - consideration of the Bill be deferred until Ansett Transport Industries Limited form a separate company to conduct airline operations and related activities approved of by the Parliament and provision is made for this company to report annually to Parliament’.

In speaking in this cognate debate on these 2 Bills there are several things which concern me. In the first instance, this Parliament once again is asked to approve substantial borrowings by Australian airlines. This has happened on previous occasions. In November of last year I raised this issue when this Parliament dealt with a loan to enable Qantas Airways Ltd to purchase 4 Boeing 747 aircraft. The Parliament is now being asked to approve the purchase of 8 aircraft at a total cost of $71,200,000. No case has been presented to the Parliament to show why these 8 aircraft should be purchased, what benefits will be obtained as a result of purchasing the aircraft or whether they are the most suitable aircraft to meet the requirements of the airlines. We have not had a cost benefit analysis presented to the Parliament to substantiate a case for their purchase. This Parliament has been treated with contempt by this Government and by the airlines concerned in asking it to approve of the propositions.

I would like to know what effect these 8 aircraft will have on the overall load factor of internal airline operations. Honourable members should bear in mind that the aircraft under consideration can be fitted out to 130seat or 156seat configurations as against the present 100 and 110seat capacity aircraft. The effect of having the additional seat capacity of these 8 aircraft will be to make available an additional 1,120 extra airline seats on the basis of one flight of each aircraft per day. In other words, based on one flight a day in one whole year this represents an additional 480,806 extra seats. Can the industry carry this increased seat capacity? Until this time our internal airlines have operated with a very good seat capacity. According to the latest figures available, in 1969-70 Trans-Australia Airlines had a load factor of 67.3 per cent and in 1970- 71 it had a load factor of 6S.2 per cent. Those percentages compared more than favourably with the figures released by the International Civil Aviation Organisation for 1970. In 1968 it was 54.8 per cent, in 1969 it was 52.3 per cent and in 1970 it was 51.6 per cent. Are we going to develop our industry and reach a stage whereby the load factor in our domestic airlines will be reduced? Will we have the luxury of plenty of empty seats but at the same time a high fare level? This is what concerns me.

In introducing these Bills the Minister for National Development (Mr Swartz) gave no information on this. The only information that we got in his airy-fairy speech was where the aircraft are to be purchased and how much they will cost. The Minister did not give the House any facts and figures as to what effect the purchase of these new aircraft will have on the internal price structure in our domestic airlines. I would like the Minister in his reply to give me some facts. What recommendations were made to the Government by the airlines concerned? What information has been made available on these aircraft? Will the purchase of these aircraft have a serious effect on the operations of our airlines so that we will have plenty of empty seats and high fares?

Another matter which concerns me is that over the next 2 years we are going to spend another $7 1.2m on American manufactured aircraft. This is in addition to the $360m which Qantas has spent in the last 10 years on the purchase of American built aircraft. Our own 2 internal airline operators have purchased other aircraft to the value of $175m. Taking into consideration the cost of the 8 aircraft which are now proposed to be purchased we will have spent $606m in the last 10 years on aircraft manufactured in the United States. These purchases have been made from either the Boeing company or from the Douglas Aircraft Co. What has been the return so far as offset payments are concerned? At the present time the Commonwealth Aircraft Corporation Pty Ltd has orders from the Boeing company to the value of 3340,000, the Government Aircraft Factories have orders to the value of $1,800,000 and Hawker de Havilland has orders to the value of $2.5m - a total of $4,640,000. Not a bad offset payment for $7Im which will be spent by Ansett and TAA over the next 2 years and the $145m which will be spent by Qantas as a result of its purchases between September of last year and about 1973! That is the best that this Government can do.

The Australian aircraft industry provides at the present time employment for about 6,000 men. Not all of these men are employed on aircraft production or maintenance; many of them are employed on other work associated with civil aviation. It is time that this Government did something positive to provide decent offset payments for the aircraft industry in Australia from overseas aircraft manufacturers whose aircraft we are purchasing. It would be different if there were only ohe country from which we could purchase aircraft suitable to our needs, but there is available the European Airbus and aircraft of the Boeing 727-200 series, which are miniature jumbos. It could be replaced quite easily by the European Airbus. Negotiations could be undertaken by the Government to ensure that the Australian aircraft industry receives some decent return, instead of the Government dealing with these matters in the way that it is at the present time.

Before I deal with the other aspect of the amendment I ask the Minister to give an assurance to the House. It has been announced by both airlines that the motors which are to be used in the 8 aircraft proposed to be purchased are all of the latest design and will include the latest noise reduction innovations which recently have been perfected by technical engineers and aircraft manufacturers. As the last aircraft will not be delivered until 1974, and taking into consideration the amount of progress that has been made in recent years in suppressing the noise level of aircraft engines, will the Minister give the

House an assurance that should the aircraft industry produce an engine with a reduced noise level the Australian airlines will be required to acquire these motors, which could be quieter than the ones they are buying? I want the Minister to give me an answer on that matter also when he replies.

I have moved that consideration of the Bill be deferred until Ansett Transport Industries Ltd forms a separate company for its airline operations. I have spoken on this matter over a period of 5 years, during which time I have been asking the Government to do something positive about requiring Ansett to form a separate airline company that will be charged with the responsibility of running the airline operations of Ansett and other operations which the Government or the Parliament considers to be related to airline activities. We do not support the present position in which Ansett Transport Industries stands. Its annual report shows that it is engaged in many diversified activities. I have not time to go through all the companies with which it is associated, but it owns at least 2 television stations, Channel 0 in both Melbourne and Brisbane, and has an interest in 3 other country television stations. Ansett General Aviation is the distributor for Piper Aircraft Corporation both in Austrafia and in Papua New Guinea. Ansair manufactures road coaches and other vehicles, office partitioning, aircraft seats and domestic oil heaters. Another subsidiary is Aviation Engineering Supplies, whilst Provincial Motors is engaged in automotive merchandising and repairs and is authorised Ford dealer for a number of country centres in Victoria. Ansett Freight Express operates interstate road freighter services as well as being air, rail and sea forwarding agents and customs agents. Ansett Roadways operates road passenger and school services in Victoria. These are just some of the activities of Ansett Transport Industries Ltd.

As a member of this Parliament, I want to know whether Ansett is using the lucrative return on his airline operations to subsidise all the operations to which I have referred and many others which I have not had time to mention. We cannot obtain from the balance sheet and financial statement put out by this company each year information as to what profits or losses are made on Ansett’s airline operations. Whilst the annual report states that 71 per cent of Ansett’s business comes from airline operations, it does not tell us what percentage of the profit results from airline operations. Whilst the Airlines Agreements Act provides that the Government may appoint someone from the Department of Civil Aviation to examine the finances and affairs of Ansett so long as the Government is guarantor for that company’s airline borrowings, the facts are that this Parliament is not advised of what the finances of this company are. We do not even know whether the Minister really knows what they are or whether the Government has appointed an investigator to check out the company’s finances, because we never get a report from him or the Minister on this aspect. So all round, to me, there is only one sensible and logical thing to do, and that is, as the amendment lays down, to require Ansett to form a separate company to conduct its airline operations and other activities which Parliament decides are related to its airline operations, and the company should be required to report annually to the Parliament.

At the present time a 2-airline policy is supposed to prevail and both airlines are supposed to operate on equal terms; yet when one examines the affairs of TAA and the operations of Ansett one certainly finds no comparison between the way these 2 airlines operate. I suggest to the Government that at this stage, before the 2-airline policy is reviewed, the Government should bring forward a paper on the 2-airline policy and let the Parliament debate what role the 2 airlines should be following. We of the Opposition do not oppose the 2-airline system; we accept it. But we do not accept it under its present terms and conditions. The Government should decide, firstly, whether the 2 airlines should be airline operators only. I think the Parliament should give some consideration to this question. There are shipping companies that conduct only shipping affairs and railways that are concerned only with the running of railways. Should the airlines restrict their activities wholly and solely to airline operations? In other words, should they be only carriers of passengers and freight? Should they be able to accept freight, distribute it and do the necessary associated work?

The other alternative is to lay down what are related activities and apply whatever is decided to both airlines. This is what the Government has not done over the years of the operation of the 2 airline agreement. We on this side of the House believe that under a 2 airline agreement both airlines should be permitted to operate hotels, motels and tourist activities, which will be part and parcel of their operations. We know that hotels, motels and tourist activities are an excellent means of attracting passengers and business for the airline operations. We have seen published over recent days statements by TAA - I am pleased to see that it is moving into this field - that it has been organising and is now prepared to accept charter arrangements and provide airline services for people to go from Melbourne to Sydney, Sydney to Melbourne, from Sydney to Alice Springs and such places for the weekend as part of the development of tourist activities throughout the Commonwealth and at the same time as part and parcel of the promotion of its own airline. This is something that should have been permitted long ago.

The same thing can be said about road freighters and tourist coaches. If it is good enough for Ansett to have this type of operation, why does the Government not permit TAA likewise to branch out into this operation? It should either permit TAA to branch out or require Ansett to terminate its activities in this field. As far as shareholdings in other companies are concerned, it was brought to my attention only recently that 18 months or 2 years ago one of the largest freight forwarders in Australia approached TAA to set up a separate company to handle freight. This road freighter was prepared to accept the responsibility for the collection and distribution of freight. TAA was to carry the freight by airline from one place to another. Unfortunately for TAA this proposition that was put to it had to be rejected because of the limitation of its charter and the fact that the Government had made a ministerial decision that TAA was not to branch out into this operation. TAA could have been competitive with Ansett Transport Industries in this field, but because of a Government decision it was debarred from branching out into this field. We believe that TAA should be permitted to negotiate agreements and if necessary to form companies with other operators in business associated with and related to airline operations. If TAA had been permitted to set up a separate company and to be an equal partner in it some of the squabbles which have been taking place recently over the proposed takeover of Ansett Transport Industries by a certain operator may not have occurred.

TAA should be permitted to operate in other fields. It has some of the best technical equipment in the airline industry. TAA should be permitted to branch out and do work outside the airline industry. For example the State Dockyard in Newcastle, about which I know a fair bit, is not restricted to shipbuilding. It can engage in all sorts of engineering work. The State Dockyard’s machinery is used for shipping, for shipbuilding, for ship repairing and associated work as required, but it also engages in heavy and light engineering work wherever it can get it. Similar latitude should be given to TAA. Ansett has an open field of opportunity to contract and tender for whatever work it wants to do. TAA should be permitted to do likewise. In that way its equipment would be put to the maximum use.

Another matter which is of concern to me is the question of airline operations on intrastate routes. Queensland is the only State in which TAA is in full competition with Ansett. TAA has no intrastate operations in New South Wales. Ansett has a monopoly in Victoria, South Australia and Western Australia. From the Opposition’s point of view that is not in conformity with the general principles of a 2-airline system. Ansett and TAA should be required to share this business. If there is not sufficient business to warrant both airlines operating over the one route the business on that route should be shared. It could be on the basis of TAA being responsible for all of the intrastate business in Western Australia and Ansett being responsible for all of the intrastate business in South Australia and Victoria. I am not saying that that is the way in which the business should be divided; I am saying that after an examination and investigation the Department of Civil Aviation should be able to determine what is a fair and reasonable share of the business and allocate it accordingly. That would apply in cases where there is insufficient business to warrant both airlines operating over the same route. It is something which would be fair and equitable. It is also something that the Government has not been prepared to do so far. I hope that in the not too distant future the Government will change its policy.

On the question of the setting up of a separate company, it is totally impossible under the present arrangement to determine the components of the profits of Ansett Transport Industries. As I have said in this place on a previous occasion, any mug who is looking at the statements prepared by TAA can determine what its profits are, but it is totally impossible to work out the airline operation profits of Ansett. Rumours are flying around that these profits are used to subsidise other activities. It has been said that Ansett is pouring money into its television stations to try and keep them buoyant and that something like half a million dollars a year is being used to provide advertising time on the Ansett television stations. Ansett is the complete owner of 2 television stations, namely, Channel 0 in Melbourne and Channel 0 in Brisbane. This information would be made available if that company were required to separate its airline operations and thus be required to report annually to this Parliament.

Prior to the recent attempted takeover by Thomas Nationwide Transport, Ansett Transport Industries had been going along on the basis of paying a nice even dividend of 10 per cent, which cost it $2,670,000 a year. When TNT came along with its bid ATI was able to increase its dividend rate overnight from 10 per cent to IS per cent, which put an additional drain on its funds of $1,335,000. I want the Minister for National Development to inform me why the benefit of an increase of 50 per cent in the dividend paid to the shareholders of ATI just because TNT had attempted to take it over was not made available to the travelling public by way of reduction in fares or freight charges. I would like the Minister to give me some information on that matter because it is important. I think the average air traveller in Australia would like to know the answer to the question of whether Ansett h exploiting the airline business at the present moment. There is only one way to find out and that is to require Ansett to publish an annual report and statement on its airline operations. The Senate Standing Committee on industry and Trade, which investigated the takeover proposals of TNT, recommended that Ansett should prepare separate accounts. I do not think that this would be satisfactory. To me there is only one satisfactory solution and that is the setting up of a separate company altogether.

Another matter with which I would like to deal in the few minutes I have at my disposal is the question of parallel timetables. If ever there has been humbug on the part of both operators and the Government it has been on this subject. A Press statement was issued on it by the Minister for Civil Aviation (Senator Cotton) on 13th April. It was headed ‘New timetables for airlines. Statement by the Minister for Civil Aviation, Senator Robert Cotton.’ In it he said:

Of 216 flights from Sydney to Melbourne only 80 would be operated in parallel while from Melbourne to Sydney, of 212 flights only 94 will be operated in parallel . . .

In fact that grandiose statement by the Minister for Civil Aviation is all bunkum because only 24 flights between Sydney and Melbourne are not parallel flights. I have taken the trouble to check the timetables and that is what I have found. Anybody who checks them closely will find that on the daily flights between Melbourne and Sydney both airlines are still running at the same times and under the same parallel conditions as they did prior to this bit of bunkum being distributed by the Minister for Civil Aviation on 13th April. For example, aircraft leave simultaneously at 7 a.m., 8 a.m., 9 a.m., 10 a.m., 11 a.m., 1 p.m., 2 p.m., 3 p.m., 4 p.m., 5.30 p.m., 6 p.m., 6.30 p.m., 7 p.m. and 8 p.m. Then there is a mammoth change from 8.30 p.m. by one airline to 8.45 p.m. by the other and 9.40 p.m. to 9.45 p.m. In the morning TAA has a flight at 6 o’clock and Ansett has one at 6.20. Then there is a 7.15 a.m. flight by TAA and a 7.10 a.m. flight by Ansett.

That is typical of the timetabling not only between Melbourne and Sydney and Sydney and Melbourne but also between Sydney and Brisbane. The flights between Sydney and Brisbane by Ansett and TAA are at 7 a.m. by both airlines; 7.30 a.m. by one and 7.35 a.m. by the other; 7.40 a.m. by one and 7.45 a.m. by the other; 7.40 a.m. by one and 7.50 a.m. by the other; 8.40 a.m. by one and 8.15 a.m. and 8.40 a.m. by the other; 9.30 a.m. by one and 9.30 a.m. and 9.40 a.m. by the other; 12.40 p.m. by both; 3.40 p.m. by both; 6.40 p.m. and 7.10 p.m. by one and 7.10 p.m. by the other; and 8.20 p.m. and 8.10 p.m. by the other. I do not want to go to the trouble of having recorded in Hansard all the flight times by both airlines between the major cities. The fact of the matter is that if Ministers make statements they should be at least factual. They should not attempt to fool the public and they should not attempt to fool the Parliament. If honourable members were to take the trouble of checking the timetables they would find that there has been no real attempt to end the parallel system of timetabling.

I do not know why the 2 airlines do not establish the practice, for the benefit of their customers, of one flying on the hour and the other flying on the half-hour. Instead of having to look at timetables - I have quoted the flight times - one would know that almost every hour from the time they start to operate until they finish at night, a plane would be leaving. Why could there not be this separation? Why could they not work on the basis of one airline leaving on the hour and the other leaving on the half-hour? I do not care which one takes the hour or the half-hour. Where it was necessary at peak loading times they could put on a couple of extra aircraft. The Minister should at least be honest when he makes statements. He should not try to fool the public. When the Minister said that, out of 212 flights, only 94 would be operated in parallel he meant that 94 by each airline would be operating in parallel so we would finish up with only 24 that were not parallel flights. The Opposition is not satisfied with the way the operations have been conducted. We have moved an amendment and we will divide the House on it.

Mr DEPUTY SPEAKER (Mr Corbett:
MARANOA, QUEENSLAND

– Is the amendment seconded?

Mr Bennett:

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

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– I desire to oppose the amendment moved by the honourable member for

Newcastle (Mr Charles Jones). He has a history in this Parliament of opposing everything that represents private enterprise. He will stand up in this Parliament and claim that his party endorses a 2-air- line policy and yet he will make utterances which, if closely examined, will show that basically he is the spokesman for a party that is totally against the concept of a 2- airline polity. While he was speaking I took out a copy of the platform of the Australian Labor Party as approved at Launceston in 1971. I would like to read to the Parliament the section under the heading ‘Economic Planning’. Sub-section 3 reads as follows:

With the object of achieving Labor’s socialist objectives, establish or extend public enterprise, where appropriate by nationalisation, particularly in the fields of banking, consumer finance, insurance, marketing, housing, stevedoring, transport and in areas of anti-social private monopoly.

The Australian Labor Party and its official spokesmen always seem to jump up and down on the ground when the name ‘Ansett Airlines’ is mentioned. They think they have a right to do so because Ansett Airlines of Australia is in some way assisted by Government policy. I suggest that the Australian Labor Party, by proposing this amendment, is showing its true colours. What it proposes is but another contribution to the concept of centralisation

The honourable member for Newcastle suggested that because Ansett Airlines receives some form of protection from this Government it should be required to present to the Parliament each year an annual report stating that company’s activities. I seriously question the logic of the honourable member for Newcastle because what he is saying is that, because an industry is afforded some protection, it should answer directly to this Parliament by presenting an annual report. I ask the honourable member to consider all the other industries which, in various ways, are protected by government, whether they be secondary or primary industries. We provide subsidies for our rural industries. The Opposition’s spokesman on this subject is also its spokesman on shipping. I ask him whether every shipbuilding company in Australia that receives government assistance should be required, as a private company, to present to this Parliament each year an annual report. I ask whether every company or organisation that receives protection through tariffs should be required to do likewise.

Mr Foster:

– I rise to order, Mr Deputy Speaker. The honourable member for Griffith has been most misleading in his statements on ALP policy. I know he is not a very intelligent person, but he should read the civil aviation section of the ALP’s policy. He is quoting from the wrong one.

Mr DEPUTY SPEAKER (Mr Corbett:

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

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– Thank you for your protection, Mr Deputy Speaker, but what I have been reading is directly from the Australian Labor Party’s platform. That is the first member of this Parliament who has had the decency to stand up in this House and admit that the Labor Party’s platform is a misleading document. That is exactly what he has done. It is no wonder they call him ‘Stormy Normie’.

Mr Foster:

– The honourable member does not know what he is talking about.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– I do know what I am talking about. Even the printing companies in Australia which now receive a book bounty should also be required to produce an annual report to this Parliament, because every company that receives some assistance should be required to do so, if the honourable member’s approach is carried along to its logical conclusion. I notice that you are shaking your head, Mr Deputy Speaker, in disagreement with this because you know that the Parliament is subjected already to so many reports and things that this would be impractical. In the later part of his speech the honourable member for Newcastle spoke about the policy in relation to the flight times of airlines. 1 agree that the change that has been made is really not as great as the airlines are trying to make out. It has been interesting to watch the spokesman for Trans-Australia Airlines being interviewed by Roland Strong about these changes of schedules. They have made a big thing about these proposed changes. I am quite sure that the honourable member for Newcastle, who has spoken with obvious affection for the other airline, if he is as true as he likes to appear will draw this fact to that company’s attention. Australia is a large country with a small population. If we had a population the size of that of the United States of America we might be able to indulge in extravagances such as many airlines flying different times and different routes. But with a population of less than 13 million in a land mass of some 3 million square miles our policies must be designed to fit in with the environment and the population that we hold.

Mr BENNETT:
Swan

– I will be brief in my remarks because I understand that the honourable member for Adelaide (Mr Hurford) is anxious to join in this debate, and the time is limited. In looking at the amounts involved in these 2 Bills, one realises the immense investment in the airline industry and the immense cost to the community in indebtedness - $28.5m to Trans-Australia Airlines for four 727-200 jet aircraft - making a total indebtedness in this field by TAA of approximately $70.6m which will be outstanding, with an additional $25. 7m being proposed in these Bills to be further outstanding by Ansett Airlines of Australia. In all this section of borrowings there would be over Si 00m outstanding for this and previous purchases overseas, which in this case must be repaid at figures approximating 6 per cent interest. Who is paying the cost of overseas purchases? The money is coming out of the unending pockets of the taxpayer, who has to maintain the 2- airline system, which was begun and has been supported by this Government. An inflated fare structure is needed to maintain this system, but Ansett Transport Industries Ltd discloses no satisfactory cost structure in its annual reports.

I concede that in accordance with the terms of the loan Ansett Transport Industries Ltd is required to make financial records available to an officer authorised by the appropriate Minister. However, the results of these sightings are not reported to this Parliament or to anyone but the Minister, if that is what he desires. For all this, what service does the public get in return? The public cannot even travel direct from Perth to Canberra: they must take the tiresome course of going from Perth to Adelaide to Melbourne and then to Canberra, or from Perth to Melbourne and then to Canberra, or from Perth to Adelaide to Sydney and from there to

Canberra, or they must take some other circuitous route. No thought is given to the problem despite the huge investment of public moneys. The difficulty may be caused by the dual mainline routing of the airlines, and as lending is insufficient to warrant 2 aircraft on a direct route not even one is supplied. Recently, nominal recognition has been given to the problem by a minimum separate scheduling by both airlines, but I suspect that this arose after criticism by overseas travel agents who were holding a convention in Australia. Although the ridicule that arose from the incredulous observance by the travel agents of this farce may have led to the change, their severe criticism of the fare structure has not yet brought about a reduction or revision in that respect.

The Government is more than aware of the criticism made, yet here by these Bills it is proposing to guarantee millions of dollars to both airlines without receiving any reassurances in return that scheduling will improve. More important, we have no assurance that the economies of scale involved in the use of these larger aircraft - which carry more passengers, with a loading of up to an additional 50 per cent, and with little extra operating cost - will enable fare reductions to be made, bearing in mind that airline fares here are too high on world standards today, or that the comfort and convenience of the travelling public will be a first priority. No doubt this is most unlikely on past performances, for petty economies have been affected without consideration for passenger comfort or convenience.

As an example, TAA in Perth some time ago removed its older and more commodious transport vehicle used between the airport and the city and replaced it with a smaller and more uncomfortable unit obtained from a contractor. It could be driven by a woman. No doubt the overall cost was and is a saving to the airline, but it is a minor one, and the airline does not consider the public. If this type of thing is allowed to grow, it will set the standards of a particular airline, or of the industry, because the airlines compete on a similar basis and one seems to do only what the other does. We can merely hope that for the huge investment of public moneys in ancillary services, the little things that affect the little man who wishes to use what should be a public service - but is not to date - will receive the attention of the respective airline administrations.

More important, I hope that this amendment will be supported and carried by members of the Government parties. The amendment is in the following terms:

That all words after ‘That’ be omitted with a view to inserting the following words in place thereof: consideration of the Bill be deferred until Ansett Transport Industries Limited form a separate company to conduct airline operations and related activities approved of by the Parliament and provision is made for this company to report annually to Parliamenf.

The report of TAA to Parliament is in reality meaningless if the competing company’s cost structure is not available for examination and comparison, bearing in mind that the Government guarantee on the purchase of equipment by both airlines, the supply of facilities to both airlines through the Department of Civil Aviation, and the guarantee of some Government loading to be shared between the two.

How can the public be assured that they are getting true value for their money? It could even be said that one cannot compare the efficiency of the management and the costs of TAA without those of its nearest competitor being available. It is a common accusation against government and semi-government bodies and, in fact, a common criticism of Australian Labor Party policies on public enterprises, that those enterprises become top-heavy with a high cost structure and become unworkable. If Government members really believe this, they will support the amendment, for it seeks to provide a true comparison of costs. They should support it if for no other reason than that they believe in true competition and private enterprise based on fair dealing to all sections of the community, and to ensure that we discharge our duty as members of Parliament to sec that the taxes we collect are properly spent.

The honourable member for Griffith (Mr Donald Cameron) referred to Australian Labor Party policy on this subject. I point out to him that the civil aviation policy of the Labor Party, which the honourable member so conveniently omitted to detail, provides that we will examine the detrimental effects of rationalisation on the operations of TAA and on the travelling public and on the development of Australia; that we will support the policy of government business being carried by government-owned airways, and that a referendum seeking power for the Commonwealth Parliament to make laws with respect to aviation will be conducted. Nowhere does the Labor Party say that it rejects the 2-airline policy. In fact, our principal speaker in this debate has supported unequivocally the 2-airline policy. At all times on these matters the Australian public can rest assured that the democratic processes will be carried out and that referendums will be conducted.

Thursday, 25 May 1972

Mr HURFORD:
Adelaide

– It is after midnight and I am not now going to make the speech on this measure that I intended to make. I merely record my support for this important amendment as it gives clearly the attitude of the Australian Labor Party, as the alternative government, on the subject of a 2- airline policy. Members of the Opposition have stated in earlier debates that the 2- airline policy is here to stay. Indeed, all our airports are arranged for it. There is too much investment, too many good people employed and occupied in each of the airlines, and also there are some benefits from competition, even though, as the honourable member for Newcastle (Mr Charles Jones) pointed out, in so many cases, with parallel timetables, this picture of competition is a fairly false one.

We believe that where Government funds are being employed in an area such as this, there ought to be proper accountability for those funds. From the way in which Ansett Transport Industries Limited serves up its financial statements to the public at large - and Parliament does not get a financial statement specifically - there is no way of finding out just what is the profit, or indeed the loss, of the airline part of their enterprise. Much public money is invested in it, whether by means of post office subsidies or even by these guarantees. I will admit that the guarantees are not costing the taxpayer anything because they are to be repaid by the airlines over a period of time, but if anything went wrong with the airline industry, then the guarantor would have to bear the loss.

To that extent the Government is helping these airlines.

In these sorts of cases there ought to be proper accountability. I repeat, there is no such accountability at the present stage, and that is the purpose of the amendment. Public interest ought to be paramount at all times, and the Opposition cannot see where at the moment public interest is being taken care of in these circumstances. We know that Ansett Transport Industries Limited is conducting other enterprises - television stations to name just one. If one can get a guide from the operations of the fourth television channel in my own State of South Australia, one knows that profits have not been made for some time by that channel. That applies equally to Channel 0 in Melbourne. How can we come to any other conclusion than that public funds are being used to subsidise enterprises like that? In view of the purpose of the amendment that has been outlined, I am happy, even though the hour is late and even though my remarks have been few, to support it.

Mr SWARTZ:
Minister for National Development · Darling Downs · LP

– Mr Deputy Speaker, you will be pleased to know that I will take only a few moments. There are one or two points to which I feel I should refer. The honourable member for Newcastle (Mr Charles Jones) raised quite a number of matters. I can assure him that consideration will bc given to the points that he has raised. However, he did query generally the necessity for the purchase of these aircraft to increase the existing fleet and asked whether the purchase will have any impact on the usability factor and also on the viability of operations. Consideration was given to the expansion of the fleet on the basis of a traffic growth of 10 per cent. During the 2 years after the proposal had been approved, the growth rate was about 14 per cent per annum and, for the next 3 years, it is anticipated that it will be between 8 per cent and 12 per cent. So, even taking the growth rate at its lowest level of 8 per cent, there will still be a full requirement for the addition to the fleet.

Mr Charles Jones:

– Why did you not say this in your speech?

Mr SWARTZ:

– Well, the honourable member asked a question and I am providing the information now. The information was provided to the Department of Civil Aviation by the airline operators and it was on this basis that the decision was made to go ahead and provide the guarantee in one case and the loan in the other. The airline operators have indicated quite clearly that on peaks the additional capacity will be required. The larger aircraft will be required to meet the demand at that particular time and, of course, when they come into operation they will meet the requirement completely on a viable basis.

Another point that was raised related to the question of noise. The engines in the Boeing 727-200 series aircraft meeting the requirements contained in an annexe to the International Civil Aviation Organisation convention. The honourable member for Newcastle will recall that, at that time, I had the honour of leading the Australian delegation to the ICAO conference in Buenos Aires when we dealt with the convention in relation to the introduction of new standards on noise. I am pleased to say that those standards have subsequently been introduced in annexe 6. The engines of the 727-200 series aircraft will conform completely with that annexe. Of course, the present aircraft do not meet this standard, but it will be fully met by all the engines which will be in the new aircraft.

The only other point to which I want to refer before dealing quickly with the amendment is the question of offset arrangements. I think that the honourable member for Newcastle will be pleased to know that the Boeing Company has indicated that it will continue its offset programme and will be willing to expand it in accordance with the sales conditions and the Australian industrial capacity to reach the additional requirements. The company has 2 engineers stationed in Australia at present in connection with offset arrangements and they will remain here for at least another 5 years as far as we can see, and perhaps beyond that period. In addition to that, on 23rd April a high level mission from the Boeing Company, headed by a vice-president of the company, visited Australia to deal with this particular matter alone. I merely mention this to indicate that what the honourable member for Newcastle has in mind is being well and truly dealt with at present by the Department of Civil Aviation and the other departments concerned.

Finally, I turn to the amendment. As I have indicated in this House before, I am not unsympathetic, and I know that the Minister for Civil Aviation (Senator Cotton) is not unsympathetic, to a proposal of this type; but there are qualifications involved in this matter. This is not the time to consider tying such a proposal to a Bill of this nature, because there is a degree of urgency. It is necessary that these 2 Bills be passed through the House during this sitting because of the guarantee and loan arrangements which must be finalised. All the negotiations have been in train and there is a limited time in which they must be finalised. So, it is essential that the Bills be passed on this occasion. However, I can assure the honourable member for Newcastle that the points he has raised in relation to this matter perhaps can be considered when the review of the 2airline policy is taking place. I certainly will ensure that the matter is referred to the Minister for Civil Aviation in another place. Perhaps the honourable member will be prepared to accept that; but, for the reasons I have mentioned, the Government cannot accept the amendment as it now stands because of the urgency of getting these Bills through the House.

Question put:

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

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

AYES: 46

NOES: 41

Majority . . . . 5

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Swartz) proposed:

That the Bill be now read a third time.

Mr CHARLES JONES:
Newcastle

– Mr Deputy Speaker, the Minister for National Development (Mr Swartz), in his reply to the second reading debate, said that the Government was unable to accept the amendment because of the urgent need to get the 2 Bills through the Parliament. The position is that the 2 airlines have not yet completed their negotiations for the loans, and they will not be required to take delivery of the aircraft for some time. In any case, the Opposition would have been quite prepared to withdraw the amendment provided the Minister gave an assurance that the terms of the amendment would be carried out, that is, that Ansett Transport Industries Ltd would be required to set up a separate airline company. We would have been prepared to co-operate with the

Government, but unfortunately the Government’s proposition was not acceptable to us.

Question put:

That the Bill be now read a third time.

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

AYES: 47

NOES: 41

Majority . . . . 6

AYES

NOES

Question so resolved in the affirmative.

Bill read a third time.

page 3057

LOANS (AUSTRALIAN NATIONAL AIRLINES COMMISSION) BILL 1972

Second Reading

Consideration resumed from 27 April (vide page 2106), on motion by Mr Garland:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Message from the GovernorGeneral recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3057

ADJOURNMENT

Social Services - Repatriation - Shipping Postmaster-General’s Department

Motion (by Mr Swartz) proposed:

That the House do now adjourn.

Mr COHEN:
Robertson

– I asked the Minister for Social Services (Mr Wentworth) to come into the chamber tonight because I want to raise 2 matters with him. The first matter concerns Mrs Marion Bowden of 63 Pacific Highway, Ourimbah. I have received her permission to raise this matter in the House. In a letter to the Minister I wrote:

Mrs Bowden is a British migrant who came to Australia 6 years ago with her 2 sons and is in receipt of a British widow’s pension of $34.29 per month. She also receives $8.60 per fortnight which is an indefinite sickness benefit payable in the United Kingdom. This latter pension is paid to Mrs Bowden owing to her incapacity due to 2 plastic valves in her heart. Once having left Great Britain, further increases in pension are not payable to recipients.

In recent years Mrs Bowden has been living at Ourimbah with her 2 sons and has been able to exist through some assistance from their salaries. However, one son has now married and the other one plans marriage in the next few months. This will leave Mrs Bowden with approximately $51 per month income of which she pays $40 per month in rent for her house at Ourimbah.

I recognise that under the Act Mrs Bowden is receiving her just entitlement. However, I think it is a weakness in the Act and in the arrangement between Australia and Great Britain that once a person in her situation leaves Great Britain there is no increase above the level of social service payments received from Great Britain and she is not entitled to an Australian pension until she has been here for 10 years. Mrs Bowden arrived in Australia on 18th February 1966. At that stage she had had one heart operation and she has had a second heart operation in Australia. Her cider son works for the New South Wales Department of Main Roads. He is aged 25 years and is to marry in September. Her younger son, aged 24 years, is married and works at the Gosford abattoir. I am sure that honourable members will be aware that young men working in those sorts of jobs would be on the minimum salary. The maximum they would be receiving would be between $50 and$55.

Mr Pettitt:

– At the abattoir he would get a lot more with overtime.

Mr COHEN:

– You arc quite wrong. Most of the abattoir workers are on bare minimum wages. Because there is a shortage of work the abattoir can get workers on the basic salary. I do not know whether he is a slaughterman, but I understand that he is on that sort of salary. Mrs Bowden was widowed at the age of 21 years. Her husband died when he was 21 years old. She has had a very hard life. Her 2 sons have been supporting her but can no longer do so. I do not know what can be done in this instance, but I have known of specific cases in which it has been possible to arrange for a woman to receive an extra payment. I have raised previously with the Minister the case of the grandmother of a German migrant who, strictly speaking, was not entitled to a pension. However, through the generosity of the Minister she received a pension of, I think, $10 a week. If anything can be done to help Mrs Bowden, I ask that it be done. It is inconceivable to me that in this country a woman can pay in rent $40 out of her monthly income of $51, leaving her with$11 a month to survive.

The other case I wish to raise is rather long and detailed and I hope that I can get through it in the 5 minutes remaining to me. I have not previously mentioned it to the Minister and I will forgive him if he does not have all the details with him. The woman concerned is Mrs Dorothea Kathleen Wright of 186 Scenic Road, Budgewoi. I wrote to the Minister for Repatriation (Mr Holten):

Mrs Wright, who is a ward of Legacy, is in receipt of a full war widow’s pension from your

Department. Mrs Wright’s 2 youngest children, Suzanne Mary (born IS.12.S7) and Paul Joseph (born 21.6.62) are also repatriation beneficiaries.

Some years ago it was discovered that Mrs Wright had been receiving both a war widow’s pension and a social services pension to which she was not apparently entitled, after the granting of the war widow’s pension.

On 2nd March 1966 Mrs Wright received a notice from the War Pensions Entitlement Appeal Tribunal informing her that the appeal relating to the death of her late husband had been allowed and that payment would be back dated to 15th February 1965 from when her appeal had been made. Apparently what happened was that due to a computer error by the Department an amount of $1,900 was paid to Mrs Wright without deducting $1,659.85 that had been paid to her as a civilian widow. Mrs Wright had contacted the Department and suggested that she had been overpaid but was informed that the amount she had received was correct. Some time later when the error was discovered and Mrs Wright’s story verified, it was decided by the Department to deduct moneys from her pension until the full amount had been recovered.

Initially Mrs Wright was employed and until 4th October 1967 an amount of $600 had been recovered leaving a balance of $1,059.85 whilst $12 of an education allowance she had also been overpaid was recovered, leaving a balance of $44.58. Since that date fortnightly deductions of $4 have been made due to the fact that Mrs Wright had stopped working. It would appear that Mrs Wright still owes the Department approximately $700.

I would appreciate it if you would give details of the exact amount owing by Mrs Wright . . .

I mentioned that Mrs Wright suffered 2 heart attacks and was in Concord Hospital for 3 weeks. I went on:

Her life has not been an easy one having brought up 3 children, 2 of whom are still of school age and also she has suffered the loss of her husband at the age of 38. Her husband had tor some 2 years prior to his death been an invalid pensioner . . ,

I believe there has been a serious mistake. I received a letter in reply from the Minister for Repatriation. He is net under fire now: the fact is that initially the matter went to the Repatriation Department and the Minister in his letter basically agreed with what I have said. He wrote:

Although the money was not deducted from her arrears by the Repatriation Department, the actual overpayment is a social services responsibility and any recommendation that the balance of the overpayment be written off would bc a matter for decision by the Department of Social Services.

I think it has been accepted that the overpayment was an error by the Department. Certainly there is no suggestion that Mrs

Wright was in any way deceitful. Mrs Wright claims that she contacted the Department but that does not appear in these letters. Neither the Minister for Repatriation nor the Minister for Social Services has disagreed with this proposition. I think there is a case for the outstanding amount of $647.85 to be waived. The final letter dated 30th November 1971 from the Minister for Social Services did in fact reject the request that the debt be waived. I believe that this matter should be further investigated because this woman has a tremendous task in front of her. She has had 2 heart attacks, she is a widow with 3 children and she is trying to survive on a very poor living wage.

Mr WENTWORTH:
Minister for Social Services · Mackellar · LP

– I shall be brief. I will have another look at the case of Mrs Wright, which the honourable member has mentioned. Of course I will do this entirely without commitment at the present stage but I assure the honourable member that the case will be looked at personally and I will confer with my colleague, the Minister for Repatriation (Mr Holten) about it. Regarding the first case the honourable member mentioned, I think that probably nothing can be done under the law. However, I draw one point to the attention of the House, namely, that it is not always realised by how much the Australian level of pensions exceeds the level of pensions available in the United Kingdom. This lady is geting what would be available to her in the United Kingdom. I think we might well stop for a moment to congratulate ourselves on how much better Australian pensions are than are pensions in the United Kingdom.

Dr SOLOMON:
Denison

– I wish to raise a subject which might, more appropriately, be raised during a grievance debate or a more general debate, but, in the absence of those debates for the time being, I raise it now. This matter concerns shipping in relation to the port of Hobart and the operations of the Australian National Line. There are factors operating which may be said to be both external and internal, but they are, I believe, closely related. In fact, there was an understanding between the Marine Board of Hobart and the Australian National Line some little time ago that there would be 3 return services per month between Sydney and Hobart by the passenger vessel, ‘Empress of Australia’ and that the terminal to be provided in Hobart for the purposes of the operation of that vessel would be used intensively and would be equipped in certain respects to make that operation better.

On the basis of this understanding the terminal complex was built at a cost of slightly more than SI. 25m. It is considered that the complex is of a standard equal to that of any in Australia. A rental was charged to the Australian National Line for the special facilities provided and the terminal building and the appurtenances thereto. In order to encourage increased use of the terminal a system of rebate on rental became operative and the Line, in fact, stood to benefit from increasing use of the terminal. The failure of the ANL to use this $ 1.25m terminal, even to approximate capacity, can be gauged from a number of factors. Prior to the withdrawal of the ‘Searoad’ cargo services a ship called at the terminal approximately once a week, thereby using the facilities one or perhaps 2 days out of 7. The relative tonnage of cargo handled at the port during the 3 years preceding this rates agreement with the ANL compared very unfavourbly with tonnages of cargo handled over the Seaway terminal by the Union Steamship Company. With the permission of the Minister for National Development (Mr Swartz), to whom I have referred this matter, I seek leave to incorporate in Hansard a 4-line table.

Mr SPEAKER:

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

Dr SOLOMON:

– I thank the House. That, in fact, is a very brief outline of the external situation in relation to the ANL’s handling of shipping in the port of Hobart. A factor which could be said to be internal is that there is operating a rail ferry service, incorporating in that, of course, the Tasmanian railways, through which there is a decided subsidy on goods moved from southern Tasmania to northern ports and vice versa. By examining the regular railway rate book and other matters which are relevant it may be easily seen that the statistics of the operation are in the order of a distinct subsidy.

The Auditor-General, in his 1971 report, said that the cost of the service to the Tasmanian Government Railways cannot be completely gauged because the common costs of the whole railway system are not apportioned to show the extent of the use of the general railway facilities by this particular rail ferry service, but it does seem that, even leaving that lack of appreciation aside, it is possible to designate a very definite subsidy in the matter. The Auditor-

General, in his comments regarding the cost of the service to the Tasmanian Government Railways, mentioned that with the limited information available there was an indication that a net railways revenue of $464,000 was involved and that towards gaining that revenue an expenditure of at least $311,000 was incurred, although if we added the correct proportion of the other general costs from the system as a whole to that particular service, as should be done, there would probably be seen to be a very decided increase in costs and probably a loss of revenue overall. In fact it is noted in the 1971 annual report of the Transport Commission of Tasmania that the figure for railway working expenses was 157 per cent of gross revenue and that the average revenue per ton mile was approximately 5ic.

Having regard to the train mileages from Hobart to the ports of Launceston, Devonport and Burnie, it is quite clear that there were heavy subsidies which were noted in the Hobart Marine Board’s submission, I think, to the Senate Standing Committee on Industry and Trade, which looked into the question of Tasmanian freight rates at the end of 1970. It is clear that this situation still operates, in fact, probably in a slightly worse sense because where the normal freight rate per ton on the railways to Launceston should be from $8.93 to $16.50 the rate charged is a flat $2.50 for interstate goods per ton by container. Devonport, a little further away, which should be charging a rate of $ 11.45c to $22.60, depending on the goods, is charging $2.50 for the interstate goods movement. Burnie, even further away, which should be charging a normal rate of between $12.50 and $24.45 is charging $2.50 for that service. So it is clear that a very considerable subsidy on the movement of goods inside Tasmania is taking place whereby goods are shipped from northern Tasmanian ports by the Australian National Line or other carriers instead of from the port of Hobart.

This would seem to be a matter which is of considerable concern not only to the ANL over which the Government has some jurisdiction but also to the Grants Commission which, directly or indirectly, is involved, because of the claimant State status of Tasmania, in the whole operation of the economy of the State. So it can be alleged - in fact I allege - that if the railways refrained from subsidising the imparl and export of interstate cargo via northern ports in Tasmania, direct shipments via Hobart would prove to be the most economical. Given the quite unusual physical attributes of the port of Hobart, in terms of depth of water and thai son of thing, coupled with the fact that it has the best port facilities in Tasmania, it would not be difficult to sustain that case. Such increase in direct shipment as that would almost certainly have the consequence of an increased frequency of sea services between Melbourne and Hobart and, one would hope, the introduction of an element of competition between ship owners and. thereby a better state of affairs economically from the viewpoint of merchants, manufacturers and people of that kind.

During the 12-month period from 1st April 1971 to 31st March 1972 the ‘Searoad’ vessels ‘Sydney Trader’, ‘Brisbane Trader’ and Townsville Trader’ made 23 visits to Hobart. Imports of a fairly considerable character were dealt with; likewise exports. But after approximately one year’s operation of that particular group of services the Marine Board was advised of proposed changes which were said to have resulted from an economic appraisal by the ANL of its total operations. So far as Hobart was concerned the effect of the change was that the ‘Empress of Australia’ was replaced by the ‘Australian Trader’, a passenger-cargo vessel of similar capacity. The extension of the fortnightly HobartMelbourne service by a ‘Searoad’ class ship which, after calling at Melbourne, would proceed to Brisbane and north Queensland ports, thus providing a means of direct shipment between Hobart and north Queensland also was proposed. But in fact this did not take place because the HobartMelbourneQueensland service was discontinued after only a few voyages and in its place the ANL substituted a conventional vessel, the Jeparit’, which is to operate a service to Brisbane only. There is now no ANL service from the mainland ports to Hobart other than a fortnightly call by the ‘Australian Trader’ and some 30,000-odd tons of imports have to be carried by other means.

I think 1 have got across in the limited time at my disposal the gist of the problem and have shown the external and internal factors which are operating. These two factors are integrated. I believe that there is a very definite case for the ANL or, ultimately, the Grants Commission to look at the heavy subsidising of freight involved in moving cargo through northern ports rather than through the first class port of Hobart and also the provision of a better service. In fact a greatly improved service by the ANL is much required in the interests of exporters and importers in the southern part of Tasmania.

Mr JACOBI:
Hawker

– I want to take up the cudgels on behalf of the thousands of full-time non-official postmasters. Firstly, I think that the current structure of salaries and conditions of employment for these officers is a public scandal, grossly inequitable and archaic. The conditions within the current determination are a legacy from the old original 1942 regulation which was made during the Second World War. At the outset let me say that what is crucial is a complete restructuring of the method and the basis upon which these officers’ salaries are determined. The wage differential between a NOPM on full-time service and a grade 1 official postmaster is currently $372. The NOPM receives $3,720 and OPs receive $4,092.

As an example of the assumptions to be made at this stage, if one accepts that a grade 1 official postmaster is the appropriate level, why is there a differential between an NOPM and an OP? Assuming the levels are comparable, the reason is presumably that the NOPM does not require the qualifications - academic or medical - which are required of a permanent official. This cannot be acceptable. Such an argument defies logic in marginal fixation. These requirements relate to the question of fitness to be a permanent officer and are basic to entry into the Public Service. At a base level these matters should not influence salary fixation. If one accepts the proposition that, generally speaking, an OP and an NOPM perform the same duties with the same efficiency, the backgrounds of the respective groups are irrelevant for wage fixation purposes. Judge Williams in South Australia had this to say in dealing with this question:

The employers argued that if I did award 28 per cent increase to the margin of any employees covered by this classification I should limit it to employees who had previously been fitters and allow only 20 per cent increase to those who had some different basis of training, e.g. as trainees.

To award different rates of pay to two different sets of employees doing similar work merely because they had different backgrounds of training would, in my opinion, be manifestly unfair and I refuse to adopt this course.

I challenge the Minister to refute this industrial dictum. The next step is to establish that the 100,000 work units per year, as contained in the NOP determination, is acceptable as the same quantum of work performed by the equivalent OPs. The equation of work-time relationship of the two is not just assumed. It is accepted that 125,240 units represent a 60-minute hour, a 40-hour week and a 52-week work year. To equate the two classifications the 125,240 units must be reduced to allow for the working year enjoyed by OPs. As an illustration let me suggest that if we multiply 60 minutes by 37 hours and then by 46 weeks, and take into account such matters as actual weekly working hours, annual and sick leave, public holidays, etc., the result is 102,120 minutes annually, which falls within the base range contained in the Public Service determination. The base grade full time service NOP accruing 102,000 work units gives the same work value in the same hours as the OP. Why the discrimination of salary. Why cannot the NOP claim salary parity?

I suspect that the existing work unit assessments are not wholly acceptable and that the assessments should be dealt with as separate issues. I suggest that the NOP should be related to the OP Grade 1 with a minimum salary of $4,092 in lieu of the existing relationship with $3,720. If the 2 groups are exactly equated at base, it follows that they must be equated with increments, overtime, leisure etc. If one assumes in general terms that a 100,000 unit NOP is now receiving the equivalent minimum salary for the OP, it seems clear that the Association covering NOPMs cannot simultaneously claim increments and salary differentials in 10,000 work unit steps. Surely it is logical that the NOP should receive paid assistance on the basis of a full time employee for each 100,000 work units and part time assistance on a pro rata basis. If one utilises this basis and takes it through the scale there is no reason why we cannot formulate a positive method of fixation up to the equivalent of grade 3 in the Public Service. Taking the question of overtime for NOPMs, on the facts as I see them the NOPMs appear to enjoy a very unique privilege in that if they work overtime they receive a lower rate per unit than they receive for ordinary work. This is preposterous. The NOPM determination should be brought into line with normal industrial standards and practices to provide for overtime with double rate provisions. Also a minimum payment of 100 units at the prevailing rate should be received for work at these times. Likewise the NOPMs are entitled, in my view, to claim annual leave, sick leave, public holidays and compassionate leave without restrictions for all members as applicable to ordinary public servants.

As to the question of rates of pay and conditions affecting full-time NOPMs. and so far as the scale of work units for NOPMs is concerned, will the Postmaster-General (Sir Alan Hulme) tell the House why a document dealing with these matters is labelled ‘Confidential’? Why can it not be tabled in the House? Why are employees subject to the determination and the salary it imposes not entitled to know precisely its details and how it is assessed? Is it a fact that the document sets out clearly the unit-earning value of every transaction performed in the non-official post offices and that work that is done this financial year forms the basis of calculating what the NOPM will be next financial year? Is it a fact that in the United Kingdom all suboffice postmasters are issued with a handbook to give a true and accurate guide to their unit earnings? Surely it is an indisputable fact that every employee is entitled to know what financial reward he will receive for his labour. Will the Minister give consideration to having the divisor used in the formula cited in the NOPM award for calculating such officers’ personal allowances varied to afford equity and some semblance of justice? Is it a fact that the present formula covering work and conditions of OP employees states:

When an office earns 124,000 units NOP the Postmaster shall be entitled to a full-time male assistant as a second-in-charge.

Is it a fact that this clause puts the work capacity of the OP and the NOPM on exactly the same basis? Why, therefore, has the NOPM to earn 200,000 units before he is entitled to assistance on a fulltime basis? These questions, I believe, demand a logical and constructive answer, if the Minister has one. I ask the leave of the House to incorporate in Hansard a schedule which sets out the discrimination at the 2 levels and shows the 1971-72 salary rates for NOPMs and assistants and the differential rates set in 1942.

Mr SPEAKER:

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

Question resolved in the affirmative.

House adjourned at 1 a.m. (Thursday)

Cite as: Australia, House of Representatives, Debates, 24 May 1972, viewed 22 October 2017, <http://historichansard.net/hofreps/1972/19720524_reps_27_hor78/>.

View PDF View XML View in Voyant