House of Representatives
23 October 1973

28th Parliament · 1st Session

  1. House of Representatives
  2. 28th Parliament
  3. 1973

Mr SPEAKER (Horn 3. ?. Cope) took the chair at 11 a.m., and read prayers.

page 2481

DISTINGUISHED VISITORS

Mr SPEAKER:

– I have to inform the House that we have present in the gallery today members of the delegation from the United Kingdom Branch of the Commonwealth Parliamentary Association led by the Honourable C. M. Woodhouse, D.S.O., O.B.E., M.P. On behalf of the House I extend a very warm welcome to the members of the delegation.

Honourable members - Hear, hear!

page 2481

PETITIONS

The Clerk:

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

Television

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled:

The humble petition of the undersigned citizens of Australia respectfully showeth:

That the undersigned men and women of Australia believe in a Christian way of life; and that no democracy can thrive unless its citizens are responsible and law abiding.

Your petitioners therefore humbly pray that the members in Parliament assembled will see that the powerful communicator, television, is used to build into the nation those qualities of character which make a democracy work integrity, teamwork and a sense of purpose by serving, and that television be used to bring faith in God to the heart of the family and national life.

And your petitioners, as in duty bound, will ever pray. by Mr Charles Jones, Mr Grassby, Mr Morrison, Mr Berinson, Mr Bury, Sir John Cramer, Mr James, Mr Lucock, Mr MacKellar and Mr Turner.

Petitions received.

National Health Scheme

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:

The humble petition of the undersigned citizens of Australia respectfully showeth:

Thatthey oppose the Australian Health Insurance Program and any National Health Scheme; That they wish to retain the right to choose their own medical care by selectinga General Practitioner, Specialist or any other medical classification of their own choice under the present conditions in private consulting rooms and also the right to choose an intermediate ward or private hospital of their own choice.

Your petitioners therefore humbly pray that the Government will take no measure to interfere with the existing health scheme.

And your petitioners, as in duty bound, will ever pray. by Mr Bonnett, Mr Jarman and Mr Killen.

Petitions received.

National Health Scheme

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.

The humble petition of undersigned citizens of Australia respectfully showeth:

That the proposed ‘free’ national health scheme is not free at all and will cost four out offive Australians more than the present scheme.

That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.

That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.

Your petitioners therefore humbly pray that the Government will take no measures to interfere with the basic principles of the existing health scheme which functions efficiently and economically.

And your petitioners, as in duty bound, will ever pray. byDr Everingham, Mr Donald Cameron, Mr Cooke, MrDrury and Mr McLeay.

Petitions received.

National Health Scheme

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled:

The humble petition of undersigned citizens of Australia respectfully showeth:

That the proposed ‘free’ National Health Scheme is not free at all and will cost four out of five Australians more than the present scheme.

That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.

That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.

Your petitioners therefore humbly pray that the Government will take no measures to interfere with the existing health scheme which functions efficiently and economically.

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

Petition received.

Education

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:

  1. Your petitioners believe in the principle that every Australian child, irrespective of the school he attends, is entitled to economic support for his basic educational needs from the funds placed at the disposal of the Australian government through taxation. Further, they believe that this economic support should be in the form of per capita grants which are directly related to the cost of educating an Australian child in a government school.
  2. Your petitioners believe that in addition to this basic per capita grant additional assistance should be provided in cases of educational disadvantage, but they believe that the appropriate instruments for reducing economic inequalities are taxation and social welfare systems which deal with individuals and families and not with schools.
  3. The reduction of the existing per capita grants will impose great hardships on many parents who have chosen, at considerable personal sacrifice to send their sons and daughters to independent schools. Indeed the curtailment of the said grants will create divisions in the community.
  4. Some independent schools of high educational standards will be forced to close with the consequences that children attending those schools will have to attend government schools already over taxed and under staffed.
  5. Some independent schools have been encouraged to lower standards in order that their parents may continue to receive per capita grants.
  6. Parents should be encouraged to exercise freedom of choice of the type of school they wish for their children. The proposed legislation will penalise parents who try to exercise this choice, and discourage them from making a vital financial contribution to Australian education over and above what they contribute through taxation.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should acknowledge the right of every Australian child to equal per capita grants of government money spent on education.

And your petitioners as in duty bound, will ever pray. by Mr Gorton and Mr Jarman.

Petitions received.

Education

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully shows:

  1. Your petitioners believe in the principle that every Australian child, irrespective of the school he attends, is entitled to economic support for his basic educational needs from the funds placed at the disposal of the Australian government through taxation. Further, they believe that this economic support should be in the form of per capita grants, which arc directly related to the cost of educating an Australian child in a government school.
  2. Your petitioners believe that in addition to this basic per capita grant additional assistance should be provided in cases of educational disadvantage.
  3. The reduction of the existing per capita grants will impose great hardships on many parents who have chosen, at personal sacrifice, to send their sons and daughters to independent schools.
  4. Parents should be encouraged to contribute to education. The proposed legislation penalises those who do contribute, and endorses the aparthy of those who do not contribute.

Your petitioners therefore ask that the House of Representatives in Parliament assembled should acknowledge the right of every Australian child to equal per capita grants of government money spent on education, and so instruct the proposed National Schools Commission.

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

Petition received.

page 2482

NOTICE OF MOTION

Mr SNEDDEN:
Leader of the Opposition · Bruce

– I give notice that at the next sitting I will move:

That the Government no longer possesses the confidence of the House because of its mismanagement of the nation and, in particular:

its failure to exercise proper economic management,

its disastrous handling of the mining industry,

its neglect of national security and defence,

its failure to exercise influence in the maintenance of industrial stability,

its disregard for the proper role of the States, and

its mismanagement of the national Parliament.

Mr WHITLAM:
Prime Minister and Minister for Foreign Affairs · Werriwa · ALP

– I wish to inform the House that I accept the notice of motion given by the Leader of the Opposition as a motion of want of confidence in the Government for the purposes of standing order 110.

Suspension of Standing Orders

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

That so much of the Standing Orders be suspended as would prevent the Leader of the Opposition moving forthwith the motion of want of confidence in the Government of which he has given notice for the next sitting.

page 2482

WHITLAM GOVERNMENT

Want of Confidence Motion

Mr SNEDDEN:
Leader of the Opposition · Bruce

– I move:

That the Government no longer possesses the confidence of the House because of its mismanagement of the nation and, in particular:

its failure to exercise proper economic management,

its disastrous handling of the mining industry,

its neglect of national security and defence,

its failure to exercise influence in the maintenance of industrial stability,

its disregard for the proper role of the States, and

its mismanagement of the national Parliament.

This socialist Government has given the Australian people 11 months of hard labour. Its achievement has been to prove itself the most incompetent government Australia has had for over 40 years. Its bungling in so many major areas has been reckless beyond reason. It has demonstrated beyond any doubt that it simply does not have the capacity to govern this country. It is chained by ideology, laced with mediocrity and sustained only by demagoguery. The public is fearful of just where this socialist Government is taking Australia. Business and industry are unable to plan for the future. Nationalisation remains a constant threat until it is taken out of the Labor Party’s platform. The economy is in a shambles. Inflation has soared with no prospect of early relief. Industrial lawlessness is the rule. Australia’s defence system is threatened to be reduced to a mere token gesture. Our relations with many countries have been torn by dissension and mistrust.

Our stable and prosperous democracy has degenerated into a divided and bitterly disillusioned nation. Yet the Government merely continues along its bumbling and arrogant way, caring nothing for the welfare of the people who elected it. It consistently fails to reply to the questions being asked of it by every group in the community. Just yesterday I asked the Treasurer (Mr Crean) a question concerning the Government’s monetary policy. He refused to answer it, even though his name is Frank - poor old Frank. I asked the Prime Minister (Mr Whitlam) for a statement on the Government’s future actions about inflation. All he did was to repeat the same old list of past measures which have been such an abysmal failure.

This Government has been rightly referred to recently as uninitiated, inexperienced twits, by a leading member of the business community. The Government simply does not care about the astonishing damage it has done and will continue to do to Australia. It is squeezing the economy and burdening every Australian taxpayer. Collections from income tax on individuals will increase by more than $ 1,000m this financial year. With 6 million taxpayers in Australia this represents an increased income tax payment of over $160 a year for each taxpayer. Average earnings are estimated in the Budget - estimated by the Government - to increase by 13 per cent. It takes little mathematical ability to realise that the average wage earner at the end of 1973-74 will have suffered a huge price and tax increase and that he will be worse off than at the commencement of the financial year.

This irresponsible approach is typified by the Minister for Minerals and Energy (Mr Connor) who is strangling the mineral and oil industries. His actions sum up so well what the Whitlam Government is slowly doing to Australia. Secretive, incompetent, deaf to any views but his own, he has ‘plans’ - in inverted commas - which are alarming, unworkable and downright dangerous for the country. He is the symbol of the socialist Government’s maladministration. It is he who has the gall to describe journalists, fulfilling their responsibilities, as the apes of the” Press. The Australian economy is in tatters. Inflation is running at a staggering 14 per cent. Strikes by unions have been allowed to get completely out of hand. The people who are suffering most from these results of the Government’s policies are those who can least afford it or protect themselves from it - the pensioners, the superannuitants, people living on life savings, students on scholarships and others on fixed incomes. The housewife recoils at the prices on every visit she makes to the supermarket. But she is powerless to do anything about the situation. Her husband demands more pay to compensate for rising prices, and the whole cycle is repeated.

There is virtual industrial anarchy. Sydney has been plunged into chaos by the power strike in support of a 35-hour week, in which the Minister for Minerals and Energy played such a discreditable role. The recent airport stoppage, transport stoppages, garbage strikes and building bans have been imposed on the city. Honourable members opposite know all about the garbage strike. Sydney and other major centres have been hit with strikes covering everything from postal services to the meat industry. A colossal 860,000 working days were lost in the 3 months to 30 June this year, compared with 536,700 in the same period last year. The figures for the September quarter will certainly be worse. Many strikes attract little media attention simply because nowadays a strike has to be dramatic to be noticed, because it has to compete with so many others. This intolerable situation exists under a socialist Government which claims a special relationship with the trade union movement; which claims to be the friend of the workers. With friends like that this country could not afford to handle enemies. All its task forces are civilian. Its military exercises rely on phantom companies and make believe battalions.

To compound the almost daily disasters of this socialist Government, its Ministers cannot even work in harmony with their departments or with each other. There is constant bickering, contradictory statements coming from different Ministers and obvious basic divisions within the ministerial ranks. The Prime Minister has been rebuffed and overruled by his Caucus on the referendum proposals. First it forced upon the Prime Minister a prices referendum that he did not want. His public relations team said: Well, it is like the words of that Irish song “Kathleen Mavourneen” - it may be for years and it may be for ever’. Within a week he had brought legislation for a prices referendum into this House. The Caucus refused to include incomes with the prices proposal. Then, after the Prime Minister had delivered his plea, the Caucus decided that it may as well throw in an incomes referendum for good luck. Now the unions, led by the Australian Labor Party President, have decided to oppose the incomes referendum.

We have had the situation of the Prime Minister announcing revaluations without consulting or even informing the Minister for Overseas Trade (Dr J. F. Cairns). He has announced increases in interest rates. That was a much more powerful decision. That involved not only the Prime Minister and the Treasurer but it has the powerful economic influence of the Deputy Prime Minister (Mr Barnard) in consultation. The Prime Minister has ‘been rebuffed again by Caucus on interest rates. The Minister for Minerals and Energy does not even bother to announce his policies, let alone consult his colleagues. The takeover of the North West Shelf, with its enormous implications for the taxpayers, was announced at the end of a company report and not by the Government or the Minister.

It is totally irresponsible for a government to allow these elephantine exercises of an obsessed man like the Minister for Minerals and Energy - this sweet prince who has visions, but he does not tell his Cabinet colleagues about the visions. He has visions of a national pipeline grid, visions of a uranium enrichment plant, visions of this and visions of something else which have an ideological framework and no practical bases. One might ask: ‘What is the cost?’ He cannot tell us. Where are the feasibility studies which are the basis of his decisions? He has not had any. He cannot even answer a question straight in the Parliament. I asked him the cost of a national pipeline grid and we had some extraordinary answer, quite irrelevant, about the extension of the pipeline from Gidgealpa to Palm Valley. He appropriates the products - oil and gas - of the north west shelf; no price is stated. Then he announces that he will control all movements downstream. There is no pipeline downstream. Not even feasibility studies have been carried out and there is certainly no design for ships to transfer the product. All Ministers are having trouble. The Prime Minister shuffled his pack of cards a little to paper over the difficulties in his Ministry. But nobody was impressed with that, least of all the Ministers who were concerned, and those winds are still blowing around that lean-to of the Ministry. The Minister for Labour (Mr Clyde Cameron), the man who virtually guaranteed industrial peace and stability under a Labor Government, appointed the former member for Sturt - stormy Normie - to be his troubleshooter. He would be at the spot before a strike solidified and then he would advise the Minister how to solve it. We have not heard of stormy Normie and the Minister has not solved a single industrial dispute. The record speaks for itself and the honourable gentleman tries to laugh it off. On 3 October-

Mr SPEAKER:

-Order! The Minister for Labour will come to order and the right honourable gentleman will resume his seat. Ample opportunity will be provided to both sides to debate the motion before the Chair. I ask for complete silence. I call the right honourable Leader of the Opposition.

Mr SNEDDEN:

– Then there , is the Minister for Social Security (Mr Hayden) and his misshapen national health scheme. He has fathered a funding proposal but there is little indication of when he is going to deliver it. We do not know what is proposed. We do know that the direct contribution that very many people, particularly the working wives in the Australian community, will be asked to pay will be an increased contribution. With inflation at the rate it is today, it is no wonder that there are many working wives. We also know that the cost to the taxpayer will grow very significantly. The health scheme has been chopped and changed to the point where nobody can be certain just how bad it is going to be. The Green Paper which the Minister proposes to produce will be merely a passing reference. The Minister persists in telling us what the scheme will not do rather than what the scheme will do. He has succeeded in having a first-class row with the medical profession, although not over fees because his own tribunal upheld the fees claim. The medical profession does not accept the imposition which he intends to heap on it. With the background of a governmentmedical profession confrontation, how can a health scheme work? This is compounded by the fact that the private hospitals threaten to close if the scheme is put into effect. The patient - nobody else - will suffer.

In the field of education the Government has made a completely unrealistic and discriminatory decision. The Minister for Education (Mr Beazley) achieved a confrontation with State education authorities as soon as he came into office, and then by refusing the per capita grants to the children in the private schools he broke a promise made by the Prime Minister, by the Deputy Prime Minister (Mr Barnard) and by himself. This should not happen. Children at school - at whatever school they attend - should have a per capita grant. That is the policy that we on this side of the House have.

Both foreign policy and defence have become matters of controversy since 2 December. We are no longer understood by our friends and allies, and we are treated with suspicion. Diplomacy is a 2-way process. Friends are not won or attained by unilateral jingoistic proclamations. Obviously independence of action is essential to the foreign policy of any country, but that cannot be the independence of the rogue elephant. We have pointed out in this House the inconsistencies of the Labor Party’s foreign policy - how it has insulted the Americans, the British and the Singaporeans, and confused the Japanese, the Indonesians and the Filipinos and created apprehension and fear in Papua New Guinea. Even New Zealand has disagreed totally with the policy of this Government to withdraw unilaterally from the Five-Power Agreement even though it pretends, by words, that it will continue with it.

Then we had the most extraordinary situation of eight of the Prime Minister’s Cabinet Ministers and 36 other members of the Labor Caucus sending a telegram to the Chilean Ambassador in Australia referring to the new Chilean Government as illegal and indicating that they would undertake to help the Chilean people to regain their freedom. The Prime Minister should make it clear that those 8 Cabinet Ministers and 36 other Labor members have withdrawn what they said in the telegram or else there is no meaning in the Prime Minister’s announcement of recognition of the Chilean regime.

So the confusion grows. At least the Prime Minister has decided to abandon the task of the foreign affairs portfolio. We might hope that somebody else will do a better job, but with the ineptitude of and continual interference by other Ministers in the job of administering foreign affairs, it seems a rather forlorn hope. After all, the Minister for Overseas Trade is still available to lend a helping hand in foreign affairs. Do honourable members remember when the Prime Minister said: From now on there will be only one voice in foreign affairs’? The Minister for Overseas Trade, stripped of his responsibilities in respect of secondary industry for the favoured Mr Enderby, will now have more time to concentrate on helping Senator Willesee with his foreign affairs efforts.

I turn now to defence and the hapless Deputy Prime Minister. In no field has the Government misled the Australian people to the extent it has in defence. It has cut back defence spending and manpower in our defence industry contrary to the wishes of the Australian people. To make promises and plans for national welfare and growth while neglecting national security is an absurdity. Last year the Labor Party promised to spend 3.5 per cent of the gross national product on defence. This would have meant an expenditure this year of more than $l,600m. In fact, in the first Budget brought down by the Treasurer, the Minister for Defence succeeded in achieving an expenditure appropriation of only $ 1,266m. This is a clear, straight breaking of a promise. In fact, by the end of the year the expenditure will probably amount to only 2.6 per cent of the gross national product, a drop of almost a full 1 per cent below that promise. At the same time units and sections of the armed forces are being dismantled by stealth, without public announcements and with false assertions that the morale of our forces has not been seriously weakened while officer resignations soar. The Minister for Defence will not answer questions on these matters. He has become incompetent to the amusement of the Opposition. His- incompetence is manifest. Last week he stood at the dispatch box to answer a question. He felt pleased with himself because he had a written statement but he misread it to the extent of including as Latin American countries the United States of America, Canada and several European countries. Because we laughed we were called larrikins. There was no larrikinism about it; it was our sheer amusement at the incompetence to which the honourable gentleman has sunk. However I am glad to say that his mistake has been corrected in Hansard. This is typical of the way this Government works - blunders followed by cosmetic patching.

I turn now to the Government’s handling of the economy. In the December quarter of 1972 the previous Government had managed to reduce the rate of inflation to an annual rate of less than 5 per cent. During the whole of 1972 prices had risen by only 4.5 per cent. In just over 10 months of office this Government has managed to treble the rate of inflation in Australia. It is now at the rate of 14 per cent a year and the Treasurer expects the December quarter to be as high. Not only are costs out of control but also runaway demand inflation has arrived. It is being reflected in widespread shortages throughout the economy. Industry cannot get labour which is adding to wage pressures. Companies cannot obtain raw materials in the quantities they require, steel and aluminium are in short supply and the building industry is facing material shortages. The figures released for August by the Commonwealth Statistician show up this trend in regard to production. The Government knew all about it. It was warned of it by the Reserve Bank and by the Treasury. But the Treasurer did nothing about it in his Budget. Either the Government deliberately wants to deflate the private sector and sponsor the public sector In accordance with its socialist ideals or it does not understand. The tragedy is that both of these factors are true.

The Government continues with rampant spending. If it had bothered to take note of reports, it would have known what it was in for. Only the other day, the Prime Minister’s economic adviser, Dr Coombs, told .the National Press Club that the members of the community had to pay for the Government’s budgetary measures. He said that they could pay either through taxes or through inflation. Dr Coombs suggested higher tax rates. Despite the fact that the Prime Minister last year assured the country that the rates of taxation need not be increased at any level to implement the Government’s program and despite his assurances that taxes were already high enough, he has now refused to give the Parliament an assurance that tax rates will not be raised. We all know that the promise not to increase tax rates was broken in the Budget. This Government is a cynical government as well as an incompetent government.

The Prime Minister has been assisted by the Minister for Overseas Trade. He claims that spending by private companies is no less iiflationary than spending by government. That is a completely inaccurate view. If a private company spends money it must get it out of shareholders’ funds or borrowed funds. A dollar spent by a private company is a dollar less spent somewhere else. But if the government goes on spending and creates a deficit in the Budget to finance it, it is creating inflation. We are now paying the cost of such actions. There are a number of matters which should be dealt with. Time does not permit this because the Prime Minister has indicated that he wishes to leave the House by 12 noon and I wish to accommodate him in this regard as a matter of courtesy. However, some things really must be said because it is in the interests of the Australian people to do it.

There is the claim that all our inflation is imported. Have honourable members heard this rubbish and nonsense? But Dr Coombs - yes, the same Dr Coombs - has pointed out that the failure of the revaluations of the Australian dollar to stem inflation makes it difficult to argue that imported inflation is the major cause of our problems in Australia. Dr Coombs’ view is also supported by the facts. The argument that inflation is imported implies that the volume of money has been increase by the acquisition of foreign exchange and gold. But an examination of the latest Reserve Bank Statistical Bulletin shows the opposite to be the case. In the first 9 months of 1973 the volume of money increased by 13 per cent. Yet, in the same period, the value of gold and foreign exchange holdings of the Reserve Bank fell by $73 8m. The imported inflation hypothesis simply does not stand up as an adequate excuse for the Government’s complete failure to deal with inflation.

High rates of inflation overseas did not prevent the Liberal-Country Party Government from achieving a rate of inflation low enough to be the envy of almost every other industrial country. The Labor Party - the low interest Party - has forced the interest rate on long term bonds from 6 per cent to 8i per cent in just 7 months. With its advisers predicting a higher-inflationary situation in 1974 unless urgent measures are taken, the Government has chosen to place all of the burden on the people of Australia and on private businesses through the monetary policy of interest rates. The probability is that the process which raised the bond rate to Si per cent, overdraft rates to 9i per cent and home loans by 1 per cent - if one can get them - will continue. It has not ended yet. Money will become even scarcer and dearer, adding to the costs and the personal burden of the people of Australia. The Government should be condemned for its economic policies. At a time when Australia is concerned with the problem of inflation it has brought down an expansionary Budget, it has supported excessive wage claims, it has supported claims for a 35-hour week and the Minister for Minerals and Energy is in the process of committing the Government to further enormous expenditures, without consulting the Cabinet and without any indication of any feasibility or cost-benefit studies having been made. The country cannot afford this type of economic management for much longer.

I now come to the Labor Party’s attempt at a dirty tricks campaign. The current campaign is born of electoral fear and has 2 elements which have been linked together - first, built a fear of the bogy of the multi-national corporation and then allege that money is pouring into the free enterprise parties’ coffers. This campaign has all the subtlety of a Saturday night stoush at the Trades Hall, and the allegation of a Sim fund from foreign interests reflects those are the sorts of people who are running it. The mentality of the men who have been entrusted with the odious task of pursuing it, even if it is a puerile role for them. The allegation of a $lm fund is false. It was to be expected. The Prime Minister and the Minister for Labour have this magnificent obsession about multi-national corporations. The Minister for Immigration (Mr Grassby) and Labor’s Minister for electoral survival - the Minister for Services and Property (Mr Daly) - have joined in the conspiracy.

It is a time honoured political stratagem for a government, when in trouble, to blame foreign interests for all its troubles. History is full of these idiotic appeals to nationalism. It is one of the basest political motives to whip up a xenophobia when the government itself is to blame for the economic situation, the confusion, the industrial chaos, the foreign affairs shambles, the defence backtracking and the administrative inability. It is as old as history itself to do that. The multitude of precedents does not make it any more valid; indeed, the multitude of precedents shows that a government which whips up this sort of thing fails and is thrown out of office. Under our democratic system, fortunately, it will be done peacefully. But there is no merit in the Government propagating these false claims in order to hide its own inadequacies. This invention and the new inventions which have yet to be trotted out today - I can guarantee that new inventions will be trotted out today - are all part of the same dirty tricks campaign. The dirty tricks will become bigger and bigger lies as the Labor Party’s performance in government worsens, for it will have greater need to protect its flanks.

Multi-national corporations do operate in this country and in every other country. Was it the multi-national corporations that put the Wilson Government out of office in Britain?

Mr Cohen:

– Yes.

Mr SNEDDEN:

– It was! Now we know the absurdity and stupidity of the claim. Not only do honourable members opposite allege it in relation to us but also they allege it in relation to the Conservative Party and say that it was the multi-national corporations that put the decrepit Wilson Government out of office. Does this Government deny that multi-national corporations will continue to operate in Australia? If it denies that they will continue to operate, let it say so now. (Extension of time granted.) Multi-national corporations do operate in this country and will continue to operate in this country. If the Government denies that, let it say so now. If it does not deny it, as it will not, let it stop slandering the multi-national corporations in Australia.

Mr Mathews:

– You send back the next cheque.

Mr SNEDDEN:

– With the change of government, the multi-nationals and other foreign investors will not be continuously slandered. The honourable member for Casey spent his time learning his dirty tricks from the Prime Minister as his private secretary. The honourable gentleman knows that by a fluke he won Casey last time. On this occasion it is surprising to see a man who normally is well behaved get involved in the conspiracy of these dirty tricks.

Last year the Prime Minister was claiming that he was receiving great support from business. This year he cannot get even a bob. This year the only donations will be donations by the trade unions, and we know, that the trade unions put conditions on the Labor Party when they give donations to it. The allegation made by the Minister for Immigration was disgraceful. There is not a skerrick of truth in it. It does the Government no credit to continue to make these false allegations. All it does is make clear that the Government knows how much trouble it is in. Will the Government come into this House and make a statement about what it will do to tackle inflation? Not a bit of it. Ask questions of any of the Ministers and they avoid answering what they will do about inflation. Get a Dorothy Dix question about this dirty trick campaign and they are lyrical about it. They know the untruth of it. Any man on the Government side who insists on perpetuating this untruth, this falsehood, this base lie, deserves to be known as a liar.

We would change the method of approach to foreign investment in this country. We recognise that foreign investment will help Australia to grow. We realise that it will bring greater standards of living to the Australian people. We will not slander it; we will welcome it. But what we will do is state the grounds and conditions upon which it can operate in Australia. That will be done in the interests of the Australian people. We will not conduct it on the basis of slander, we will not conduct it on the basis of refusing to state the rules. The tragedy is that it is not that the Ministers refuse to state the rules, they just do not know the rules. They do not ‘ have the intellectual capacity to write them down.

This Government is a complete nothing. It is a group of mediocrity which has failed the Australian people. No government in such a short time has polarised the community with so much confusion, uncertainty and doubt. No government in over 40 years has failed so miserably. The Australian people are fed up with this Government. The Australian people are afraid of where this Government is going to take them. The Australian people want the Government out. The Australian people would welcome an election on 8 December along with the referendum proposals, and the Opposition parties would likewise welcome it. If honourable members on the Government side had any decency they would vote for this motion of no confidence because they know that, while they temporarily have a majority in this House, if we were counting the votes of the people instead of the votes of the members of the Labor Party Caucus to the last inch the majority of the votes would be for this coalition of the Liberal Party and the Country Party. The Government lacks the confidence of the Australian people and it ought to lack the confidence of the Parliament.

Mr SPEAKER:

-Order! Is the motion seconded?

Mr Anthony:

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

Mr WHITLAM:
Prime Minister and Minister for Foreign Affairs · Werriwa · ALP

– Mr Speaker, the whole of the Australian people will understand why there has been such an air of uncertainty and unreality in Australian politics for the last fortnight, because we first heard a fortnight ago that this motion of no confidence was going to be moved. I think we all must applaud the efforts of the Leader of the Opposition (Mr Snedden) for the speech he has prepared and delivered with so much force. I would be less than usually frank with the Australian people if I did not confess to the apprehension with which I would enter upon a campaign against the Leader of the Opposition, because he has had 2 weeks to prepare this speech. What a smashing, stunning effort he has made in 2 weeks. There was no secret about it. There is open opposition. We all knew on Wednesday week that consideration was being given to this no confidence motion. There were party meetings in the Opposition, separate and joint. There was a great deal of discussion as to what subjects or what speakers there should be - these wandering players in search of a play. But nothing happened on the Wednesday. We were prepared. We thought: “There is worse to come, it will come on Thursday - Grievance Day. What better day?’ But it did not come. Then there was the whole of last week. There was the Monday. Nothing happened.

Mr Sinclair:

– Suspense.

Mr WHITLAM:

– The suspense was shattering. Then there was Tuesday but nothing happened. Then there was another Party meeting, a series of meetings, joint and separate, conclaves and cabals. And on Wednesday nothing happened. Why? It did not happen because the Senate was on the air. But then there was Thursday. We were on the air last Thursday in the morning, the afternoon andat night. But the Queen was here, so it would have been unseemly to declare no confidence in Her Government. At any rate we come back yesterday but still nothing happened. In the meantime I read that there would be raised the general subject of foreign affairs and defence. I was right in the line of sight. 1 was going to be one of the principal victims. The Young Liberals were told that the whole field was to be added.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Young Turks?

Mr WHITLAM:

– No, not young Turks. They are not in any fight at the moment. They are not in the Middle East show. I appreciate the honourable gentleman’s assistance. Nevertheless, since the subject of foreign affairs has been raised let me mention the patriotic contribution the right honourable gentleman is making to the affairs of this country. On Thursday night next I am to go to Japan and China as Prime Minister and as Foreign Minister. I will be accompanied by the Minister for Overseas Trade (Dr J. F. Cairns), the Treasurer (Mr Crean), the Minister for Minerals and Energy (Mr Connor), and the Minister for Primary Industry (Senator Wriedt). I will then be asked whether all the things that the right honourable gentleman has said today, what various people who get a guernsey will say later today or what they have said over recent months is the view of the Australian Government, the view of the Australian people or would be the view of any alternative Australian government. I am going there leading the most prestigious and powerful team of Ministers ever to have left this country. We are leading to Japan the second ministerial team concerned with Japan-Australia relations. The first came from Japan to Canberra last year and it went away more confused about Australian policies than when it arrived. It could not get any indication from our predecessors what the attitude was to be about Japanese trade with Australia, Japanese investment in Australia or Japanese relations in general. There were things going back-

Mr Gorton:

– I rise to order.

Mr WHITLAM:

– He is not getting a guernsey so I will let him take a point of order.

Mr Gorton:

– I realise that the Prime Minister has great need to convince those on his side of the House, but would he occasionally speak to us?

Mr SPEAKER:

-Order! I think that the Leader of the Opposition also turned his back on the Speaker. The same thing is happening now as happened when he addressed the chamber.

Mr WHITLAM:

– Which particular section of the Opposition does the right honourable gentleman wish me to address? Am I to address the Country Party enclave or the Liberal Party in general, because last night we saw what a happy government they would form once again? There was a division last night in the House which showed that on a matter which has been discussed for years in the Australian community - in the business community and the producing community in particular - the Liberals and the Country Party still cannot agree. Can we now expect that when it comes to protection, assistance or favours - that is, indigenous favours, indigenous assistance, indigenous contributions - the Liberals and the Country Party still cannot agree? What a happy economic theme it would be if our predecessors were to be restored to office. It is even possible that my immediate predecessors as Prime Minister cannot agree. I hesitate to say that in some features of the Fairfax Press I see what one says about the other in the form of a frank interview and what the other says about the first in the form of an article the proceeds of which he contributes to charity, so we are told. I will not be diverted in addressing myself solely to the former Government.

Mr McMahon:

– The first part is untrue and you know it.

Mr WHITLAM:

– Is it a personal explanation? Take a point of order. Let my 2 predecessors at least agree on taking a point of order. Since I am going to Japan let me refer to the last remarks that the Leader of the Opposition made after a recent visit to Japan in a long interview published in the prestigious ‘Australian Financial Review* on 13 July last. The article states:

Japan is taking advantage of the timidity forced on it as a result of the history of the 1941-45 war,’ Mr Snedden said yesterday.

It is making a virtue out of telling those countries affected by that war that its Constitution won’t let it spend more on defence.’

What I’m saying is that they can’t throw a moat around themselves without picking up some of the tab for the region’s peace and security’, he said. They are making a virtue out of abstinence. The Japanese are economic animals. They are not anxious to engage in military expenditure’.

Those were the words of the Leader of the Opposition, not mine. I may well be asked in Japan before this week is out if that represents the view of the Australian Government. 1 shall of course say emphatically and unequivocally that it does not. I shall be asked if it represents the views of any significant part of the Australian electorate. I shall say, and I believe I shall be correct in saying, that it does not. I shall be asked if it represents the views of. any future Australian government - the sort of government which might come into power if this motion were carried and, at the subsequent election, the government changed. I shall give an Australian answer and only hope that I am correct in speaking for the Liberal Party when I say as I shall say that no Australian government, even one led by a weak and susceptible man, would ever encourage Japan into courses of revived militarism.

I shall then go to Peking. There, too, 1 shall have to waste valuable time apologising for the Leader of the Opposition, giving assurances that he does not represent the other half of the Australian people or the Liberal Party or, at least, its best and not indecent part. Perhaps the Australian Ambassador will not on this occasion exactly be sitting on the edge of his chair as the Leader of the Opposition described him when he had the happy task of accompanying him in his interviews in Peking earlier this year. The Chinese, 1 trust, will simply say to me about the Leader of the Opposition: ‘Forget that unfortunate man, but we would rather not see him again’. This is the gentleman who talks about damaged relations with other countries. Let me deal briefly with these great matters. Had there been no change of government, our nation would have been the last to have been dragged - forced - out of Vietnam. These things are easily forgotten. It is easy for young Liberals to forget what is was like less than a year ago. A year ago we were still in Vietnam and had it not been for the change of government, this nation-

Mr McMahon:

– That is not true and you know it.

Mr WHITLAM:

– There were still advisers, there were still military supplies going to Vietnam. Would you send them back if you were in government again? Would you send military supplies or advisers to South East

Asian countries? Make your attitude plain. Come clean with the Australian people. Had it not been for the change of government, this nation would still have been committed to that awful blunder of our civilisation of intervening in Vietnam. A year ago, men were being conscripted for Vietnam. The Leader of the Opposition includes in his motion something about the defence forces. Every young Australian should realise that if the Party the Leader of the Opposition leads should ever return all those things will return including conscription. Nobody denies that it would return.

Mr Snedden:

– Mr Speaker, I take a point cf order. The statement has been made that nobody denies’. I will deny it. What the honourable gentleman has said is a farrago of untruths. If it must be denied it will be denied.

Mr SPEAKER:

-Order! There is no point of order involved. If the right honourable gentleman has been misrepresented there will be ample opportunity later for him to explain his position.

Mr WHITLAM:

– If that is not what the Liberals are worried about, what is the meaning of their complaints about defence? The Liberals always preached the prescription for conscription; let that be known to every Australian young man. After all, there was a Minister for the Army, .the honourable member for Barker (Dr Forbes), who in September 1964 denounced conscription as inappropriate in our situation. The following month the Government introduced it.

The Liberal Party, the Opposition, rests upon the complete pretension that people forget. I rest, my Party rests, my Government rests upon a great faith in the memory and intelligence of the Australian people. People do remember. People do know what the Liberals were like in government. The Australian people do not want the Liberals back - certainly not in their unredeemed, unforgotten unforgiven, leaderless state, and certainly not with, what they have to offer as the leaders of this nation. Are we to return to the old days - it was not very long ago, a mere year ago - when this nation with its leadership was a standing joke? Is this nation to substitute that old joke for a new one, a weaker one? I do not believe the public would have a bar of it.

I do not believe that the Liberal spokesman on foreign affairs, the honourable member for Kooyong (Mr Peacock), will get a guernsey in this debate. But on 1 October he appeared on the television program ‘Monday Conference’, when he described the Government’s recognition of China as common sense, and later as eminently sensible. He said he had no quibble with the recognition of North Vietnam. He said he welcomed the recognition of East Germany.

Mr James:

– Who said this?

Mr WHITLAM:

– Mr Peacock, the honourable member for Kooyong, who is the Liberal spokesman on foreign affairs. He also said that the stress that I place in foreign relations today is on the whole change from the bi-polar approach of communist against anticommunist to the multi-polar approach of today. This, he said, is why it is so necessary to break down the habits of outmoded thinking. He went on to say. ‘We would adopt exactly the same attitude on South Africa and Rhodesia’. He also said he would like to see the South East Asia Treaty Organisation revised and added: It is going to be revised’. All the significant things that we have done but for which some elements in the Liberal Party have criticised us are in fact endorsed by the Liberal spokesman on foreign affairs.

The Leader of the Opposition was kind enough to acknowledge that I have to go presently to the airport to meet the Premier of New South Wales so that we can fly together to Albury-Wodonga where we are to meet the Premier of Victoria. I notice that included in the grounds of complaint against this Government in the motion there is this allegation: its disregard for the proper role of the States.

I am happy with the timing of this motion; could there be a more dramatic, practical, timely illustration of the co-operation which the Australian Government now seeks and secures from the major State governments, even though they may be of different political persuasion? In Albury-Wodonga on 25 January last the 2 Liberal Premiers and I agreed to make plans to develop Albury-Wodonga as another inland city. We saw the fact that the Commonwealth’s participation already in that area, as well as its situation between the national capital and Melbourne, made it the natural site for another inland city. This was the first initiative taken in this regard by the national Government for more than 70 years, and today, 9 months later, we are consummating the arrangements by exchanging the documents. Does this show a lack of consultation or co-operation? Everybody talks about decentralisation or regional development but it took the change of government in this Parliament for something to be done about it.

Yesterday while all the refinements were being made to the text of the no confidence motion, while the last script was being prepared, while the scenario was being perfected, my Minister for Urban and Regional Development (Mr Uren) and his 6 State counterparts agreed in Melbourne on a communique which concludes in these terms:

The Ministers also noted that comprehensive urban planning and development takes place over a substantial term and requires the certainty of continuing funds and effort. The Ministers welcomed Mr Uren’s assurance that the Australian Government recognises this and is prepared to commit substantial financial assistance to fund continuing long-term programs.

The State Ministers accepted that there will be Australian Government co-operation in urban planning and research and there was agreement that continuing consultation between the Australian Government and the States, particularly at officer level, would be most welcome, would contribute to a sharing, exchange and understanding of views and problems and would be of long-term mutual benefit.

The timing of this -no confidence motion on that issue falls completely to the ground because there is a more positive, practical cooperation between the Australian Government and the State governments now than there ever has been before. The areas where there has been bad government in Australia - in particular the metropolitan areas of Sydney and Melbourne are now being redeemed because the national Government is concerned and local government as well.

Not only is Albury-Wodonga significant because it is the next - the first for 60 years - of the great inland cities of Australia but also because it is situated on Australia’s greatest river system. Last March the 2 Premiers whom I mentioned, together with the Premier of South Australia, and I gathered to discuss for the first time for 58 years the matter of the Murray system. For all that period heads of government had never discussed the Murray system. We got together there and tackled the new problems. The quality of water is more important even than the quantity. But, co-operation! Could this not be illustrated better in the events of yesterday and today than by any other thing! Would this have happened under any of my predecessors? Would it have happened under the present Leader of the Opposition if he was leader of a government?

The most interesting thing about this motion is the man who has moved it and his motives. It is the motion of a man who, a year ago, was

Treasurer of Australia. One year ago unemployment stood at 130,000. One year ago the seeds of the current inflation had been sown. Inflation was actually running at the highest level Australia had known for 2 decades. One year ago the Australian economy was just recovering from the slowest rate of growth it had known since the war - a disastrous 2 per cent or 3 per cent. One year ago business levels in the general community were sagging. One year ago, the Australian dollar was grossly undervalued. The then Treasurer - the present Leader of the Opposition - knew it. He knew its dangers. But he allowed himself to be bludgeoned by Country Party pressure into allowing the danger to remain.

By contrast, today there is full employment. There is a 7 per cent rate of growth. There are record profits. There is a strong dollar. True, inflation remains the greatest danger to the problem of economic management. But the mover of the motion opposes the Australian Government possessing the full range of powers to deal with inflation. This full range of powers is possessed already by every other national government in the world, including federal governments. He has returned to his position of one year ago. Then he opposed a prices and incomes policy. In August this year he discovered the need for one. Now he opposes the granting of constitutional powers which could be the basis for a just and rational policy. His much vauted freeze of 90 days turned out to be a 90-days wonder.

He also opposes our 2 revaluations. You would never get them through with the Country Party and the Liberals in the one government. He opposes our tariff cuts. You would never get them through with the Country Party and the Liberal Party in the one government. He opposes our cutting of wasteful expenditure, pursuant to the suggestions of the Coombs Task Force. He opposes our monetary restraints. He opposes all of these specifically Australian measure to deal with the Australian part of this international problem of inflation. He changed his policy with his advisers. Honourable members will remember that when he was Minister for Labour and National Service his advisers convinced him of the merits of a prices notification program. Then he became Treasurer. He changed his advisers and he changed his policies. Now that he has lost his advisers he has lost his policies. But yesterday, in a very smart phrase - I do not know how long he worked over it - he referred not to a prices noti fication tribunal, which he had advocated as Minister for Labour and National Service, he referred not to the Prices Justification Tribunal, which is the statutory term; he referred to a prices exemption tribunal. This was all appropos the response of the Broken Hill Pty Co. Ltd to the recommendations of the Prices Justification Tribunal.

The honourable member had forgotten, of course, that he was not in the talks about the amount that BHP wanted in February last year and the then Prime Minister I think lost part of the letter but he was very coy about tabling it. Let me cite to honourable gentlemen the increases which BHP has made in its average steel prices. In January 1970 the increase was 3.7 per cent, in January 1971 it was 8 per cent, in February 1972 it was 5.3 per cent, in March this year it was 3 per cent and in November, next month, the increase will be 5.5 per cent. We in fact did something about this matter. Representatives of BHP saw me, we discussed what should be done and in advance of any statute the company agreed to have its claims reviewed. Instead of getting 7.1 per cent it got 3 per cent. This time the statute was in force. Instead of getting 9.4 per cent it got 5.5 per cent. Imagine what it would have got if the old Government was still in office, because the biggest rise BHP ever got was 8 per cent in January 1971. If there had been a Prices Justification Tribunal then or early last year, is it not likely that the increase in the price of steel which flows through the whole community, secondary and primary industry, would have been half as much as it was? But, of course, the honourable member now rubbishes the Tribunal. He makes a few snide remarks about it. Let him make up his mind what he would do about prices.

A week ago the honourable gentleman produced something which one assumes is the Liberal program against inflation. It was vapid and meaningless, not surprisingly because the one real measure of a Liberal policy is the one which he must at all costs conceal, the one which he dare not announce to the people - that is unemployment. That is the one course that the Liberals would pursue, as indeed’, as Treasurer, he did pursue. That is the one course which this Labor Government will not take. Yet be does disclose his hand by his attacks on Public Service employment. He says that he would sack thousands of public servants. But more, he says by inference that he would create new unemployment amongst this-

Mr McMahon:

– He said he would not increase the numbers.

Mr WHITLAM:

– Well, I would have thought that even such a redoubtable numbers man as my immediate predecessor would have known that if you have fewer public servants that can only be achieved by sacking them or by recruiting none. By inference the Leader of the Opposition would create new unemployment amongst this year’s school leavers by closing to them the avenues of employment that this Government opens to them in the Public Service. Every public servant, every parent and every school leaver now should realise the implications of the remedy of the Leader of the Opposition - it is unemployment. What are his motives? He wants to avert some of the pressure from his rivals to hide the lack of policies. What are the new Liberal policies? The Liberal Party has set up a think tank. It is so empty that there has not been a single leak from it. He wants to prevent debate on real issues. He wants to throw a bone to his foreign and business masters.

Mr Speaker, I do not have the time to devote to the influence that multi-national corporations have on the Liberal Party that the Leader of the Opposition had. This was the only interesting part of the speech. What is his sensitivity on this particular issue? You know, Mr Speaker, in another great English speaking democracy recently there were people who were protesting that they would brazen it out; the dirty tricks could not come home to them; they would survive; they would go to the parliament; they would go to the people. Where, alas, are those men now?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– You mean Spiro Agnew?

Mr WHITLAM:

– I am too compassionate to identify people in other countries. But the real issues are what this Government has done on education, cities, health, consumer protection, social welfare and foreign investment, and it is this last subject which is the nub of the matter. It was only when this Government’s policies on foreign ownership began to bite that we began to hear these cries of protest against the Government’s policies and performances. In 1972 the issue was whether Australia’s resources were to fall into foreign hands. At any election from now on the issue is whether the Australian Government is itself to fall under foreign control. Nothing would guarantee that more certainly than a govern ment led by the present Leader of the Opposition - and I refer not only to this pathetic performer who would nominally lead the Opposition but also to all these exhausted volcanoes, these old geysers opposite, the old guard, but not a single engine driver amongst them.

Mr SPEAKER:

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

Mr SNEDDEN (Bruce - Leader of the Opposition) - I wish to make a personal explanation.

Mr SPEAKER:

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

Mr SNEDDEN:

– Yes, Mr Speaker. I have been misrepresented constantly and deliberately. However I will speak on only one of the misrepresentations because what I have to say will illustrate the nature of the whole speech made by the Prime Minister (Mr Whitlam). The Prime Minister said that when I was Minister for Labour and National Service I advocated a prices notification tribunal. That is true - I did advocate a prices notification tribunal. The honourable gentleman referred to that as a change of mind when I was Treasurer about a prices justification tribunal. There is’ a vast difference between notification and justification, and the honourable gentleman knows it. When he persists in putting this misrepresentation he only compounds the untruth that he constantly puts out. The Prime Minister sought to use some alliteration to say that I had gone from notification tribunal to justification tribunal. I have always opposed a justification tribunal.

He said that I had referred to a prices exemption tribunal. I did refer to the Prices Justification Tribunal as being a prices exemption tribunal and I did it for this reason: Since 7 August the Government has gazetted 340 separate notices exempting companies from section 18 of the Prices Justification Act. The companies involved are well in excess of that number. The goods excluded cover an extremely wide range. It is appropriate to call the Prices Justification Tribunal a prices exemption tribunal.

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

– I second the motion moved by the Leader of the Opposition (Mr Snedden) that this Government no longer possesses the confidence of this House because of the mismanagement of the nation and because of a number of other matters. I believe that the Leader of the Opposition has this morning devastated the Government with an annihilating list of issues on which it has completely fallen down in its duty to the Australian people. I listened to the Prime Minister (Mr Whitlam) replying, not as we might think a Prime Minister would reply, but replying with all the overtones of a demagogue. It is quite obvious that the pressure of work is getting too much for him. Never have I seen the Prime Minister make so many hysterical outbursts as he did this morning. I can fully understand his concern and his desperation when he sees divisions between his Party and between the trade unions; when he sees the ineptitude of his own Ministers in handling their portfolios; when he sees every single by-election either on a State level or a Federal level moving against the Labor Party: and when he reads the public opinion polls which show the Labor Party going down lower and lower. It is no wonder that he stands up and makes a speech such as the one he made this morning.

All the Prime Minister really did was to make smart aleck remarks, as a Queen’s Counsel does when he has not a substantial case to present before the court. Only in the latter moments of the Prime Minister’s speech did we hear him refer to the big issues facing this nation, but they were treated in a most frivolous manner. One such issue is inflation which is reaching a serious state for the nation. We heard little about our relationships with other countries, although the Prime Minister did make an imputation - I thought it was a disgraceful imputation - against the American people in relation to the problems that confront them at the present time. Here was another instance of a Prime Minister being prepared to make smart remarks and forgetting the very serious consequences which those remarks, have in our relations with a very great nation with which we want to retain very close relations.

No amount of shuffling of the old dog-eared pack of ministerial cards will hide the fact that the Government is falling apart. It is crumbling, and this is the reason why we heard such a high pressure speech by the Prime Minister this morning. This Government has earned the contempt and the distrust of the Australian people for its inept management of the nation’s affairs and the general state of uncertainty, worry and fear that it has created.

The bright promise of the morning of 3 December of last year has faded. The rot which began to set in before the end of that month and which has accelerated throughout this year is now producing such a state of decay that this Parliament must express its concern. For the past 10 months we have seen the morning newspapers creating morning sickness, and now we seem to have given birth to a monstrous Government which is leading this nation to rack and ruin.

We are all realistic enough to know that this motion will be defeated. We know that the Labor back benchers, despite their alarm at the disastrous activities of some of their Ministers, despite their horror at the scandals that have rocked this Parliament, despite their anger with some, of the Prime Minister’s decisions which they have been forced to overturn, and despite their disgust with the Government’s hopelessness in dealing with the savage inflation that is wracking this nation, will vote against this motion. Despite all those things, we know that not one member of the Labor Party will have sufficient moral courage to join in this censure motion against the Government which is doing a terrible job in the interests of this nation. Not one Labomember will show the conviction to stand up and admit that the Caucus system has dumped in this nation’s lap a collection of Ministers who have seriously damaged Australia’s standing in the eyes of many nations, who have so antagonised, insulted and sabotaged industry of all kinds that there is an almost complete breakdown in communications between industry and the Government, and who have alienated the goodwill which the Australian people were prepared to extend to a new and untried Government.

The Ministry is presiding over the nation at a time when there is staggering inflation and the nation is suffering the crippling effects of strikes. What did the then Opposition say last year? It said that there would be fewer strikes under a Labor Government. What a joke that has turned out to be. It said: ‘We will not be reducing expenditure on defence’. What a lie that has turned out to be. Last year Labor said: ‘We will be bringing maturity to our foreign relations’. What a tragic reality has emerged.

The week before last the Australian Country Party met to consider what its response should be to the tremendous feeling being expressed by country people across this nation that something should be done about this disastrous Government. Country people feel that they are under constant and growing attack from this Government. They have been kicked and bashed with a savagery and a viciousness never before directed against any section of the Australian community. What they fear most and what the Government does not understand is that when the time comes, as it surely will, when conditions in the rural sector get tough again, the real impact of the Labor Government’s anti-rural bias will begin to bite. These people have turned to their political voice the Country Party with a plea to do something, to do anything, to get rid of this Government before it does any more damage.

From our contacts with other sectors of the community with the people trying to buy land and build homes under the devastating policies of this Government; with manufacturing industry which provides the economic backbone of the economy but which is being bashed unmercifully by this antibusiness Government; with the mining industry which has seen the beginning of the process of seizure and confiscation which every socialist government employs; with people in all walks of life who are being hurt every day by uncontrolled inflation fed by Labor’s own reckless spending our impression of the feelings of all these people is that ‘it’s time’, time to call a halt, time to opt for responsibility instead of ratbaggery, time to seek sanity instead of socialist paranoia, time to get Australia back on the rails. This overwhelming wave of public bitterness and fear prompted my Party to tell the Australian people quite clearly and unequivocally where we stand. We believe that the Government deserves a resounding censure and that the people should be given an opportunity to express themselves at an election. The anger against the Government in country areas, and the abject failure to speak for their constituents of those Labor members who claim to do so, means that the Country Party would be very strongly supported.

But it goes much deeper than that. We believe it will be bad for Australia if this Government is allowed to remain in office any longer. We believe that this is the view of vast numbers of Australians, including many of those who last December thought they would give Labor a chance. Labor has had its chance, and now the people have ‘had’ Labor. As I mentioned, every by-election, State and Federal, has demonstrated how concerned the people are with the present Government. If there is one thing that has become very clear in the last week or so, it is that the Government is scared stiff of an election. It is terrified out of its wits at the prospect of having to answer to the people for its actions after having so often and so shabbily failed to answer questions in this Parliament. The evidence of the Government’s panic is the campaign of fear and hysteria being drummed up by the Minister for Immigration (Mr Grassby) and the Minister for Services and Property (Mr Daly). They are naive enough to believe, apparently, that they can convince the Australian people of the existence of a gigantic and sinister plot to overthrow the Labor Government and place Australia under the control of nasty foreign multi-national corporations. How silly can they get? If this is the best they can do, it is no wonder this Government is in such a mess. What a pair the Government has chosen to lead this campaign the Parliament’s clown princes! Fancy the two least credible people, with records aslong as your arm for wild, unsubstantiated, wrong and stupid statements, leading a campaign like this.

Mr Speaker, we could talk all day about the reasons why this Government should be thrown out of office. We could talk about the utter contempt which the Prime Minister shows towards the Parliament. We could talk about the disgraceful situation in which we have a Prime Minister who, through no fault of his own, cannot have his word accepted and trusted because his statements and his decisions are so often challenged and rejected and disowned by the Caucus which controls him. We could talk about the infamous ASIO affair. We could note the strained relations which this Prime Minister has provoked with our very good friends and allies, the United States of America, Great Britain, Singapore and Thailand. We could talk about his meddling with the exchange rate and with the interest rates. He treats these as trivial, of course not understanding the enormous impact that they have on the whole economic life of the country. We could talk at great length about the obsession of the Prime Minister to move towards central government and to bring to an end federalism, or at least to make the State governments nothing more than pawns in the hands of a socialist Prime Minister. We could even quote actions and statements displaying the ultimate objective of our socialist Prime Minister to make Australia a republic, to overturn our established British parliamentary system although it must be admitted that the Government is doing a pretty fair job of prostituting open and free debate in this Parliament by gagging and guillotining procedures.

But let me concentrate for a moment on what I consider to be our most serious immediate economic problem - a problem reaching disastrous proportions - intiation, increasing costs and prices undermining the social welfare of ordinary Australians, families, young and old; inflation with its crippling costs bearing down on industry and services; inflation undermining the morals of the people and leading to inevitable restlessness and industrial troubles. This country is suffering the worst inflation for over 20 years and the situation is deteriorating. The Government quite obviously is incompetent and impotent in the face of this serious economic evil.

From the last December quarter, the annual inflation rate accelerated from 4.8 per cent to 8.2 per cent in the March quarter, to 13.2 per cent in the June quarter and now to 14.4 per cent in the September quarter. We must reach a frightening figure well in excess of this - perhaps 18 per cent or 20 per cent in the December quarter. At the present rate we can take pride of place as the developed nation with the highest rate of inflation. That is something for this Government to be proud of, is it? If anyone objects to the inflation rate being stated in these terms, let us take the figures for the percentage increase each quarter on the same quarter in the previous year. That is the way the Treasurer works it out. But no matter what way you do it, the story is just about the same, and just as serious. The increases each quarter on this basis have been December 4.5 per cent; March 5.7 per cent; June 8.2 per cent and now in September 10.6 per cent. Nothing you can do with the figures can hide the fact that we are in an inflationary crisis.

Of course we are yet to feel the effects of the Government’s increased indirect taxes - petrol, postage, excise and so on - higher interest rates and the effects of the States having to raise their payroll tax to meet their increased costs. Over-full employment and competition for labour in the cities are increasing unit production costs. The unemployment in the country is costly and wasteful. Industrial stoppages are at a record level. Increasing costs are aggravating shortages of materials and goods. All of these things will be contributing to a worsening inflation situation in the immediate future.

But the most serious thing of all is the attitude of the public, who have lost confidence in the Government’s ability to tackle the problem seriously. How can a government have any honesty of purpose when on the one hand it is taking measures to control inflation, and on the other hand is pumping up government expenditure, bosting the size of the Public Service and using it as a pace-setter for wage increases and better conditions, such as a 35- hour week? How right the public is to show desperation when this Government moves into the New South Wales power generation dispute and supports the unions to help force a 35- hour week by using blackmail tactics.

The law of expectation relating to inflation is now operating with full force. People are trying to protect themselves against further inflation. They are spending beyond their means to avoid paying future higher prices and they are investing in speculative areas such as land and buildings, trying to hedge against cost increases. Long term sound investment in the wealth-producing industries is being avoided. This whole economic mess will ultimately create great hardship and ruin for many people when the boom bursts. For this, the Government must stand condemned. But the greatest long term consequence of Australia’s number one evil - inflation - is the way it is reducing the competitiveness of our export industries and of our domestic industries against imports. Rising costs to our export industries are as bad as a fall in export prices. For domestic industries, the effectiveness of tariff protection is reduced. It seems that the Government thinks that the present high commodity prices and general tight market situation for the supply of goods will last forever. This never has been and certainly never will be true. Already wool prices are weakening, as are metal prices. Next year we could see industry in a scissor-like situation with costs going up and prices coming down. This will produce an impossible situation for primary and mining industries and, likewise, for manufacturers.

Certainly governments can offset some of the hardship caused to pensioners and government employees. But in the long run, the only secure basis for a nation to improve its lot is the productivity of its industries and the standard of living that is derived from increasing productivity. Yet everything this Government does seems to be directed towards reducing the incentive to produce and to lift productivity. Primary industry has been viciously attacked by this Government. At a time when the cry should be production, this Government is doing all it can to remove the incentives to production and productivity. At a time when there is an outcry against allegedly dear food, this Government is taking away incentives to grow more food, and thus help to keep prices down. The mining industry is being savaged by a marauding Minister tor Minerals and Energy, whose distorted view of what constitutes national interest is bringing severe damage to the industry. At a time when our critical shortage of energy resources is causing real concern, the Minister is acting in such a way as to frighten people away from investing in the search for new resources. We need to be doing all we can to find new deposits of gas and oil, yet the Minister is seizing the deposits we already have. Who is going to risk money in looking for further deposits and resources under this Government?

Mr SPEAKER:

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

Mr CREAN:
Treasurer · Melbourne Ports · ALP

– I wish to devote most of my time to talking about the first prong in this devastating attack that has been launched from the Opposition. The first prong is that the Government no longer possesses the confidence of the House because of its failure to exercise proper-

Mr Snedden:

– I apologise for interrupting. I think you said ‘this devastating attack on the Opposition’. I think you meant ‘this devastating attack on the Government*.

Mr CREAN:

– No, I was being sarcastic. I said ‘the devastating attack from the Opposition’. I was quite clear in what I said, but lnc right honourable gentleman does not always see the joke. I begin by saying that we did nol inherit a good economy despite what the former Government, the present Opposition, might say. I want to give one or two illustrations of that and then I want to go on to talk for the most part about the question of inflation, because I think it needs to be talked about. Yesterday I was given some figures which deal with the latest figures available for what is described as civilian employment in Australia, that is, total employment of males and females in all sorts of employment, public and private, manufacturing and service, and so on. These figures showed that between August 1972 and August 1973 the number of persons in civilian employment increased by 183,000. I asked my officers, as a matter of interest, to give me the increase in civilian employment from August 1971 to August 1972, and I got the answer that the increase for that period was 46,400 as against 183,000, an increase of 46,400 in an economy that ought to have been finding close to 200,000 new jobs. In the month of August - this August - alone the increase was 19,500 - in one month as against 46,400 in 12 months, the record of the previous Goverment. We on this side of the House at least believe that it is better to have full employment than unemployment. Another figure worthy of consideration is that for gross domestic product expressed in what are called constant prices. If one took the first half of the financial year ended June 1973, which was the period of the previous Government, and took the index for gross non-farm product, which was running at 2.9 per cent increase for that 6 months, one sees that at June 1973 it was running at 4.4 per cent. I am not going to multiply each of those by two to draw the sort of conclusions that are drawn in this House by taking the figures for the quarter or the month that best suit one’s argument.

I want now to talk about inflation, and I acknowledge, as should everybody in Australia, that inflation is a serious problem. Inflation is not a new problem. For those who want to continue to look at the consumer price index, the main difference in the rate of inflation in the last 2 quarters as against the 2 previous quarters - if you want that comparison - is made up by increases in food prices. And I would say that the last people in Australia who should talk about staggering inflation aTe the members of the Country Party because they represent those who are the recipients of the increased income that comes from higher food prices.

Mr Hunt:

– Do you object to that?

Mr CREAN:

– I am not objecting to it. What I am objecting to is the cant and the humbug of those who want to look to the consumer price index and say to us: ‘What are you going to do about it?’ If the members of the Liberal and Counntry parties who reckon everybody else is so short on solutions will come up with a solution between themselves as to how they can stop the CPI from rising-

Mr Malcolm Fraser:

– You have said that you cannot stop it.

Mr CREAN:

– Of course you cannot unless you do certain things and take certain actions. I thought, until a few weeks ago, that the Leader of the Opposition had found a new word; he seemed to say it very quickly - 4–:—,- 6—-, Now when it is suggested that separate powers should be given over prices in one area and incomes in another, he does not want to have anything to do with it. I have said before, and I will say again that I can understand there being laws for prices. I can understand, in some context, that there can be laws for incomes, but I am blowed if I know what laws about prices and incomes are. They are 2 sides of the social syndrome and the Opposition wants to look at only one of those sides. We on this side of the House say that the major part of incomes in Australia- that is, wages - is subject to some sort of regulation and justification, but no such arbitration, justification, notification, call it what you will, applies to prices. If ever there is to be what can be called a prices and incomes policy in Australia we will not get it until we show that we want to do something about prices. That is what we have sought to do.

The Leader of the Opposition is a great one for asking: ‘What are you going to do about inflation?’. Yet he pours cold water on every single thing that has been done. Revaluation did have some impact. As I said in answer to a question recently, coincident with revaluation was a rise in world prices. That, to some extent, camouflaged the effects of revaluation, but the circumstance would have been even more serious on prices had revaluations not taken place.

Mr Cohen:

– The retailers had passed their margins on.

Mr CREAN:

– That is a part of the questions I want to deal with as well. Much has been said about imported inflation. This is a term that can mean different things to different people. Inflation partly is imported. One of the reasons for high food prices, for instance, in Australia at present is the rising demand outside Australia. One does not sell inside Australia at a price different from the prices outside unless there is some method of subsidy or something of that kind. As I said the other day, America, in the face of there no longer being any banana republics left in the world, has to pay higher prices for its raw materials, including energy, and this in turn impacts upon the prices of goods and services that are purchased from America, from Japan and from other parts of the world. This situation is not unique to Australia, yet it is suggested that it has happened only because of what the Opposition describes as the mismanagement of the last two or three months. The Leader of the Opposition this morning carefully selected, as he always does, some figures from the Reserve Bank about the value of money. He said that according to the figures for the last 9 months for which figures were available the volume of money had increased by 13 per cent. He should have gone back a little further in search for figures because in the period July 1972 to December 1972 the volume of money rose by 17 per cent. That was in a 6-month period. At least there has been some abatement to the 13 per cent for the 9 months he mentioned. I wish that sometimes he would do his arithmetic completely.

You can terrify people, I suppose, by harping too much on inflation in relation to the consumer price index. Perhaps as a truism it ought to be said that inflation never bankrupts a whole country. What inflation does is to work unevenly on certain sections of the community. Two of the areas at the moment in which the balance is shifting is between those who eat food and those who sell food. It can be argued that those who sell food have not been receiving the price they should have received in previous years. But if they receive the price they should receive, the last thing that honourable members opposite should complain about is that the consumer price index figure has gone up and that as a consequence other people are seeking increases in their income to maintain the sort of standards they previously had.

If we could have obtained some serious contribution to this debate from the Opposition then perhaps the censure motion could have proved worth while. But as usual, it is a shabby attack based on selective statistics and represents an ignoring of the problem. Nobody needed to be a prophet to know roughly what would be the increase in the consumer price index figure that was released a few days ago. For the most part, it was based on prices as at 15 August 1973. The next consumer price index figure to be released will be based mainly on prices as they operate on 15 November 1973, which is not very far off. As I said yesterday, if anybody can tell me of anything that has fallen in price substantially between the-

Mr MacKellar:

– Shares.

Mr CREAN:

– They are not reflected in the consumer price index, nor, fortunately for me, is the price of spirits. All I am saying is that honourable members opposite want to look at the position a little more closely sometimes, get behind the camouflage and look at the substance. Something can be done for some sections of the community who cannot look after themselves with the rage of inflation. That group consists of those who receive social service payments. We have done this even with respect to those who are retired public servants by tying their payments to an index that reflects the cost of living.

But what substantial contribution has come from honourable members opposite today in any way suggesting that the consumer price index when it comes out early in January will show an increase of something like 3 per cent? Let us assume that it does. Is the country going to fall down in the next 3 months because of that? Is not our job to try to get right priorities and balance in the economy? I am intrigued that we are told that we are spending too much on Government expenditure. Yet the right honourable gentleman opposite wants to increase defence expenditure by $300m because it would represent some mythical figure cited as 3.2 per cent of the gross domestic product. This country since 1963 - during 10 years of which period, honourable members opposite were in office - has spent SI 0,000m on defence. It was all built around that marvellous bird called the F-111. Thank God our potential enemies were gentlemen and did not attack us whilst we did not have it. Now we have it, we have to find different enemies because the aeroplane will not fly to where it was supposed to have flown in 1963. Who are honourable members opposite to arraign this Government for what it has not done in 10 months? During that 10 months what we have had in defence has been largely what we inherited from them as it will be for the next 2 or 3 years.

That is also true about the economy. The direction of an economy cannot be changed shortly. The former Government laid the seeds of inflation in the first 6 months of the first Budget of the former Treasurer. It was reflected in the rapid increase in the volume of money. I said to him the other day that in my view he was the supreme blasphemer because he now uses against the present Government the very things upon which he justified his own existence. I believe that the public of Australia see through that threadbare sort of situation. There are more people in employment in Australia today receiving higher wages than they received before and they have more purchasing power than they had before. The backbone of an economy is not the particular section that produces the food or raises the wool. The backbone of an expanding economy is, in the long run, rising consumer purchasing power in the hands of the great majority of the people.

It is no easy task to get equity between all the sections that combine in making up the national product. That is one reason why the Government believes that on 8 December the Opposition and the population of Australia should support the giving to the Commonwealth Government of powers which, at the moment, are shared and which, because they are shared, are not used. What was there to prevent any State government in Australia from doing something in the last 5 or 10 years about regulating the price of land? Whatever can be said about interstate trade, there can be no interstate trade in land. We can have, of course, the stupid situation which exists at the moment where it does not matter if locusts are allowed to breed in one State but if they infest another State it becomes a national problem. Why could the States not have done something in the past about retail prices? As I said yesterday in answer to a question from my colleague the honourable member for Macquarie (Mr Luchetti), where the hurt is felt most from increased retail prices is where the majority of the people buy, that is, in the 2 great cities of Sydney and Melbourne. Those are matters about which the States can do something and could have done something. They have the facades of consumer protection legislation, but they have given it neither financial assistance nor teeth. Whenever any problem occurs in this respect they say it is a problem for Canberra. If it is a problem for Canberra, for heaven’s sake let the people give us the powers that are necessary to grapple with it.

We have taken systematic approaches to the economy since 2 December. I have said over and over again and I am going to repeat that in my view the budget ought not to be regarded as the central economic event of the Australian year. The budget is a parliamentary performance. It simply sanctions what money can be spent and authorises from where to get it.

Mr Whittorn:

– It sets the pattern, though.

Mr CREAN:

– It sets the pattern partly. It can correct distortions, but it can move only slowly. Three-quarters of what takes place in the economy takes place outside the framework of the Budget. What we have to have in Australia, because of the magnitude of the capital investment involved, are priorities and the only regulator in the finish of what the priorities should be is government in the name of the people as a whole and not the predatory instincts of those who wield economic power. That is why the next 10 years are not going to be the same as the last 10 years. They would not have been the same if honourable members opposite had been in office. They would have had to grapple with these problems. The reason why honourable members opposite are no longer in office is largely that they did not grapple with them when they were emerging. I say to any honourable member opposite who talks, after the 10 months in office of the present Government, about the sorts of things he would have done in office that they are the sorts of things he could have done without any resistance whatever. Honourable members opposite did not even have the ally in another place that they have now. In my view a mockery will be made of democracy in Australia if it is not acknowledged that the place in which governments are made and unmade is the House of Representatives. Government is not a series of gallup polls taken every 3 weeks about some particular action; government is responsibility and responsibility requires time to work itself out.

Mr SPEAKER:

-Order! The Treasurer’s time has expired.

Mr LYNCH:
Flinders

– The irresponsible approach of the Prime Minister (Mr Whitlam) to this censure motion is a clear reflection of his total inability to command effective national leadership in this country. He spoke in this House not as a great Prime Minister concerned with the basic problems facing Australia but rather as a man devoured by his own vanity and arrogance - a man whose vaudeville performance in this House is one of contempt for the Parliament and contempt for the people at large. His was the approach of a cheap demagogue, not of a national leader. This man sought to clown his way through the debate by using personal insult and cheap political diatribe.

Whatever factors foreshadow the demise of this Government in the short period ahead - and there are many of them - the Prime Minister’s vanity, conceit and absolute preoccupation with his own sense of self-importance will undoubtedly be to the forefront. He clowns in this Parliament while, outside, significant groups of the Australian community are being hurt very badly indeed. They are hurt by the hapless failure of the Prime Minister and the Government to provide solutions to the major problems facing Australia. He struts on the national stage like a popinjay, prepared to evade, to ignore and to avoid the real issues of concern. The only major difference between the speech made by the Prime Minister and that made by his Treasurer (Mr Crean) was that it was obvious that the Prime Minister does not really care and that his Treasurer, his chief economic adviser, does not know. The speech made by the Treasurer must go down as a pathetic apology for the Governments total mismanagement of the nation, lacking one single initiative as to what this Government is prepared to do to solve these problems. If there is one fact which this Government is apparently prepared to ignore, it is that the Government has the responsibility, because it is the government, to provide solutions.

It is clear that this Government has lost the confidence of the Australian electorate. That loss of confidence is demonstrable not simply in the form of national opinion polls, of which the Treasurer spoke, but also in the results of State and Federal by-elections in recent months and in the increasingly hostile comments of organised groups in the Australian community. No government which, by its own direct actions, causes such economic dislocation can legitimately expect popular support. This Government, in a short period of 10 months, has created a massive erosion of confidence in the Australian economy; has allowed inflation to reach levels unprecedented in the past 20 years; has generated the highest level of interest rates for the past 100 years; has allowed industrial unrest and turmoil in the industrial jurisdiction to reach intolerable proportions; has dishonoured a series of major promises; has deserted disadvantaged groups in the Australian community; has destroyed the future development of the mineral and mining industries; has sought to squeeze the private sector and the State governments and, to compound those felonies, has run this Parliament in a manner contemptuous of all its forms, all its precedents and its effective functioning.

The Australian economy is now threatened by super inflation of a magnitude which has not been equalled throughout 2 decades of government. The level of inflation calculated to the 12 months ended last September equals almost 11 per cent. An assessment based more closely on the indexed movements of the past 6 months, and taking account of the huge accelerative movement in the consumer price index, clearly demonstrates that the notional rate of inflation is now in excess of 14 per cent per annum. This assessment is made with the full knowledge that the effects of the recent Budget have yet to become apparent. In this Parliament or throughout this country there should be no doubting the seriousness of Australia’s inflationary difficulties for which this Government stands indicted. However, it is a matter of absolute concern that the Government, at a time when inflation has assumed such tragic proportions, has not only failed to take corrective action but has sought to understate the seriousness of the problem. Even worse, it has deliberately contrived to claim that the major causes of inflation are beyond the control of domestic economic policies. This cynical misrepresentation is surely beyond all the limits of Government responsibility and integrity.

The Prime Minister has consistently misled the Australian public by claiming that the Government has adopted effective antiinflationary policies and that further action is largely dependent on the success of the prices and incomes referenda. The Treasurer and the Minister for Overseas Trade (Dr J. F. Cairns) have consistently misled the Australian public by asserting that inflation is primarily caused by external economic influences.

Sitting suspended from 1 to 2.15 p.m.

Mr LYNCH:

– As I emphasised before the suspension of the sitting, the cynical misrepresentation by this Government is surely beyond all limits of government responsibility and integrity. The Minister for Labour (Mr Clyde Cameron) has consistently misled the Australian public by stating that the massive increase in strike activity and industrial unrest is attributable to the Commonwealth Conciliation and Arbitration Act and not to his administration. The Minister for Immigration (Mr Grassby) has consistently misled the Australian public by claiming that there is no shortage of skilled labour as a result of the immigration cutback. The Australian public has been subjected to a form of collective apologia by these Ministers who share the major responsibility for economic decision making.

This is a government which has contrived to lay the blame for economic mismanagement everywhere except where it really lies - with the Government itself. No amount of pretence and evasion by the present Prime Minister can hide this simple fact. The Government .must accept the responsibility. It is clear that the Australian public is not prepared to tolerate anything less. If the Government continues to abrogate its responsibility it will be dealt a salutary lesson by the electorate at large. Yet, incomprehensibly the Prime Minister is not prepared to grapple with the problems before him. What the Australian people want from their Prime Minister is not simply purple prose and rhetoric, not personal abuse and diatribe, not a vaudeville performance in this Parliament, but a serious attempt to come to grips with the problems facing Australia, and this he has been unprepared to do.

This country is now experiencing super inflation. This has severe and adverse effects on many sections of the community, particularly on those persons who are already subject to comparative economic disadvantage. These effects are direct and immediate. However, it should be made absolutely clear that inflation is an economic malaise which carries with it long term economic consequences. In the absence of effective action by the Government we can expect the following direct consequences: First, a decline in the community’s propensity to save and incentive to produce; second, a consequential slowing down in the real growth rate, which means a diminution in the growth of real per capital income for fixed income earners, pensioners and lower wage earners; thirdly, a transfer of resources away from growth industries to those industries serving current consumption; fourth, an intensification of industrial unrest as labour and capital compete for a national income which in total falls far short of total aspirations.

These factors will exacerbate the current economic disequilibrium and give rise to an increased level of economic instability. Already economists have predicted medium term recessionary tendencies. These tendencies, which would make the economy vulnerable to downward external shocks, could arise from a falling demand in investment in capital goods industries since a transfer of resources to meet current consumption cannot practicably be made in such a way as to ensure the continued full employment of resources; a falling demand for consumption goods as in the face of declining real income, people exhaust their savings, and a transfer of all their foregone consumption cannot in practice be made to higher income groups; Community uncertainty which could further curtail real investment expenditure already depressed through Government policies. Whether Australia continues with the present rate of super inflation, coupled with excess aggregate demand, or whether current circumstances foreshadow a medium term recessionary period, urgent action can no longer be avoided. The response of the Treasurer (Mr Crean) has been nothing less than pathetic. He said: ‘We have to acknowledge that there is unlikely to be any substantial fall in prices. What we have got to do is to abate the rate at which inflation increases - and that certainly does not look likely to happen very quickly’.

This is a truism which is hardly an adequate response from a Federal Treasurer. The Opposition Parties consistently have called upon the Government to adopt a multi-policy approach to combat inflation; that is, the utilisation of all the available economic policy instruments which are at the disposal of the central government. The Government just as consistently has avoided the adoption of a multi-policy approach and has continued with a series of ad hoc initiatives. The initiatives have been largely ineffectual, piecemeal and fragmented.

The Government’s principal economic adviser, Dr Coombs, has foreshadowed fiscal action by the Government. A reasonable expectation of new fiscal measures would entail a long awaited reduction in Government expenditure proposals. But, as has been indicated by the Prime Minister, fiscal initiatives mean increases in personal taxation to be announced in conjunction with a mini-Budget. Thus the Government’s anti-inflation policies will take the form of a further squeeze on the middle income earner. The middle income earner, already seriously affected by rising interest rates, is to be further disadvantaged by increases in personal income tax. This foreshadowed policy is a logical result of a Government which obdurately refuses to accept that its own expenditure has placed an intolerable strain on domestic resources. The Government has shown clearly its incapacity to manage the Australian economy. It has failed to exercise proper demand control measures; its own spending has placed an intolerable strain on domestic resources; it has deliberately sought to repress the private sector and to expand non-productive segments of the public sector; it has caused a massive loss of confidence in the economy; and it has refused to take effective corrective economic measures in the face of runaway inflation.

The Government’s industrial relations policies have been totally counter-productive to the national interest. The promised era of industrial peace under Labor has turned out to be a myth. Instead of providing industrial peace, this Government has generated industrial confrontation. Wages lost through industrial disputes were a record $23.7m during the first 6 months of this year - a full 80 per cent higher than for the same period in the previous year. Quite simply, the Government has failed to provide effective national leadership to curb industrial unrest. The Prime Minister has sought to blame the existing industrial legislation for the increase in strikes by his totally misleading statements that most disputes arise from demarcation issues. The simple fact is that such disputes accounted for significantly less than 10 per cent of all disputes in the June quarter. The legislation is the same this year as it was last year. The difference lies in the administration of that legislation.

The Government itself has been the prime mover in the wage and salary pressures which are having such direct and severe effects on cost pressures throughout the community. The Minister for Labour in particular - by his personal endorsement of major strikes, the pacesetter principle for the Commonwealth Public Service, flat rate wage increases, the 35-hour week and the claims put by the Australian Council of Trade Unions in the national wage case - has contibuted personally to the accelerating rate of inflation in this country. Instead of calling, with a sense of national responsibility, for that type of restraint which is essential in a full employment economy, he has provided a direct impetus to the build-up of inflationary psychology.

Australia’s natural resource industries, of course, have suffered a series of severe shocks at the hands of the Minister for Minerals and Energy (Mr Connor). His failure to articulate detailed policies and his ideological commitment to the principle of government exploration, production-

Mr Mathews:

– Australian ownership.

Mr LYNCH:

– . . . and ownership of the Australian oil and minerals industry have caused a massive loss of confidence. The honourable member for Casey might well dwell on the impact which that loss of confidence has had on the total Australian community. The Government apparently has planned to spend at least $5,000m of taxpayers’ funds without any detailed financial analysis. Export contracts and exploration and mining leases have been subject to the capricious veto of the Minister without proper public explanation. The forward investment plans of many exploration and mining companies have been either substantially curtailed or shelved. A significant downturn in investment will have serious long term implications for the real growth of the Australian economy. The great irony of this Minister’s frenetic activity and personally hostile attitude to this industry has been the severe damage and losses caused to Australian owned companies and their Australian shareholders. It is quite clear that this Minister no longer has the confidence of the industry, the House or the Australian people and in the interests of this country’s future development clearly he should resign.

I turn now to the manner in which the Government has clearly abused Australia’s federal system of government. State governments have been denied .an adequate level of funds with which effectively to carry out programs in their constitutional areas of responsibility. The Government has sought to interfere in an unprecedented way with the conduct of State administrations. This is a centralist government which plainly does not believe in a federal system and by its policies is intent on paving the way for a unitary system of government. This is not the responsible path of constitutional alteration but the irresponsible and dictatorial method of duress. In the field of defence the Government has deliberately dishonoured its pre-election commitment to maintain Australia’s defence expenditure above 3.5 per cent of the gross national product. In fact, defence expenditure has been reduced to 2.9 per cent of the gross national product. The Labor Party’s expenditure commitment was so consistently emphasised in the pre-election period that defence was not a major issue at that election.

Mr Katter:

– Utterly dishonest.

Mr LYNCH:

– It was totally dishonest. The electorate was satisfied that a Labor government would adequately maintain our armed forces. Indeed, that now discredited election pamphlet ‘It’s Time’ stated this:

An Australian Labor Government would allocate not less than 3.5 per cent of Australia’s national product for defence in each annual Budget.

Of course, that promise has been totally dishonoured and the Opposition has on other occasions detailed the dramatic cutbacks in Service equipment, training and manpower. The severity of these cutbacks has caused a massive drop in the morale of the Services. The number of resignations and the low enlistment figures demonstrate the seriousness of the morale problem throughout the 3 Services. The Government has tried to buy loyalty and high morale by increasing Service pensions. This clearly has failed and it is quite clear from the number of leaks and direct information coming from senior officers in all of the 3 Services that morale is at a very seriously low ebb.

I say finally, Mr Speaker, because this is a point that will not be lost on you, that this Government has treated the national Parliament with a degree of contempt not seen in recent parliamentary history in this country. This House has not been able to operate according to its prescribed constitutional and democratic functions as a forum of legislative review. The Australian Labor Party in fact has demonstrated the underlying authoritarianism of its ideology in the conduct of the Parliament. The Government has introduced 77 Bills into this House during the session and 66 of those have been passed. A total of 200 Bills has been foreshadowed for the session, as if this Government believes that the concept of volume of legislation in the House is one that will persuade people outside the House that this is a government that is legislating in a responsible fashion. But the Australian people will not be fooled by the anti-democratic procedures which have been adopted. I instance the number of guillotines which have been moved consistently in every major and significant debate in this House. It is pertinent to remind the House that prior to this Government, the last guillotine moved was as long ago as 4 May 1971. Not one guillotine was moved during the whole of 1972. In short, this is a government which no longer has a mandate to govern. That mandate has been effectively withdrawn by the electorate. This is a government which the nation can no longer afford.

Mr SPEAKER:

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

Mr RIORDAN:
Phillip

– This must be one of the most remarkable debates that this Parliament has heard. The great criticism by the Opposition of the Government falls into a single category. It is a demand that the Government should reduce expenditure and spend more money. That is a most remarkable situation. The Opposition spokesmen so far have demanded that more should be spent on defence, that more money should be given to the States and that there should be a restoration of funds and benefits for the rural sector of the economy. In the very same breath, in a completely unashamed manner, they try to shrug off the illogical aspect of their argument and demand that Government expenditure be reduced. These are truly remarkable people. They are the descendents of those who gained government by promising to put value back into the pound and set Australia off on the highest rate of inflation which it has ever experienced. No previous government in Australia’s history has been so prepared to attempt seriously to rebuild the new society that our citizens desire and need to improve the quality of life.

The want of confidence motion is insincere and cynical, and it is sponsored by people who are desperate and politically opportunistic. Honourable members opposite are truly strangers in a strange land. They have been overwhelmed by the speed of progress and the pace of change, and they are unable to cope with everything that is occurring. I should say at this stage that honourable gentlemen opposite should realise that noise is no substitute for logic, and to carry on with idle chatter like one would expect from a cage full of halftrained cockatoos will not impress the Australian electorate and will not get honourable members opposite back on this side of the House. They have to do much better than that. The carping criticism, the destructive criticism of the Government’s actions without one single positive suggestion as to how current economic problems may be overcome is useless and will gain no support from the Australian people. But the masters of the Opposition are upset and concerned about the change in national emphasis. They had plans to continue the erosion and the ultimate elimination of Australian ownership and control of Australian industry. The plan was to reduce the Australian people to the position of being unprotected tenants in their own country.

A great deal has been said about strikes and about the outbreak of industrial disputes, so called. I am the last to suggest that the present situation is satisfactory. I am one who believes that the ultimate objective of this Parliament and of any government which sits in it should be to eliminate the cause and need for industrial disputes. I for one am quite disgusted to hear the nonsense which is preached from the other side of the House, with the possible exception of the rare speech which emanates from one or two individuals and which is constructive in its suggestion. I include the honourable member for Wannon (Mr Malcolm Fraser) who made a speech during the second reading debate on the Conciliation and Arbitration Bill which I, for one, believed might herald a new era in this House and a new standard of debate on industrial relations. We have seen today a degeneration of those lofty principles down to the level of cheap political opportunism.

What are the facts of the. present situation? The Leader of the Opposition (Mr Snedden) referred to 860,000 working days lost. The Government’s Bill, which proposes to amend the Conciliation and Arbitration Act and which is designed to give effect to the mandate of the Australian Constitution to prevent as well as settle industrial disputes, is still awaiting the approval of the other chamber. When the Bill passed through this House some months ago it was opposed and the Liberal-Country Party coalition succeeded in convincing the Senate to reject the Bill in its totality. It is no use honourable gentlemen opposite now disclaiming any responsibility. The measures contained in that Bill are designed to put the emphasis on conciliation for the prevention of disputes. It is no use honourable members opposite trying to ridicule what the Minister for Labour (Mr Clyde Cameron) has said in respect of this matter. They know what he has said is the truth and that the responsibility is theirs. They are the guilty men.

Let us look at the working days lost in Australia. In the year ended June 1971, 1,328,600 working days were lost through industrial disputes. In the year ended June 1972, 1,422,300 working days were lost- in other words, an increase of less than 100,000 days in the whole year. Let me remind honourable gentlemen opposite that all production lost is a loss to the Australian community, particularly in this period when there is a shortage of goods and services. As a result of accidents in New South Wales alone, in the year ended June 1972, 1.9 million working days were lost. That is the figure for one State alone; figures on a nation-wide basis are not available to me.

The number of days lost through industrial disputes pales into minor insignificance when compared with the number of days lost through the disastrous economic policies of the previous Government. For example, at June 1972, the seasonally adjusted figure for unemployment was 105,000. Many more people than that were actually out of work, but that was the seasonally adjusted figure. That figure means that 4.25 million working hours were being lost every week at that time. The Leader of the Opposition, who was then the Treasurer - the architect behind and the man responsible for that disaster - has the gall and the nerve to try to convince the Australian people that this Government is responsible for a loss in production of some 860,000 working days. He caused approximately as much loss of working days every week through his own direct and deliberate action. That is serious. The fact that in that period some 4.25 million working hours were lost every week is a direct cause of the shortages of goods and services that wc are experiencing today. Let us face this fact: The position today is that we are short of goods and services because of the increased consumer demand which is existing, as well as certain other factors.

What about this question of industrial relations? Has a really constructive and practical proposition been put forward by the Opposition? Certainly not. Do we in this Parliament understand that there is a real problem of communication in the work place? Let me take one simple example of this. In the course of the recent Ford dispute, the President of the Conciliation and Arbitration Commision made a judgment. At the end of that decision, for the first time since Federation and for the first time since the end of the Second World War when our great immigration program commenced, the President directed and found it necessary to order formally that his decision be printed in several languages, because he thought it proper that everybody affected by that decision should be able to read it and understand it. How do we truly expect to improve communication and industrial relations if in some industries the majority of employees cannot even read the conditions under which they work?

The previous Government did nothing at all in that regard, but members of the former Government Parties, now in Opposition, criticise the Australian Government - the best Australian Government since the Second World War - in this respect. They seek to blame the Prime Minister (Mr Whitlam) and this Government for the power strike in New South Wales. The Leader of the Opposition, driven in his desperate anxiety to head off the challenge to his leadership, even attempted to blame the Prime Minister for the garbage strike in Sydney over last weekend. We could do with a garbage strike in this House from time to time to try to cut out some of the garbage which comes across the centre table.

The power dispute was a classic example of a government deliberately attempting to provoke an industrial dispute to subject the people of New South Wales to misery and suffering in order to gain some form of political advantage. During that strike the Prime Minister of Australia same forward with the only positive, concrete, sensible suggestion that was made in the whole dispute. And what did the Premier of New South Wales say? When he read the message and received the suggestion from the Prime Minister, fearful that this would settle the dispute, he told the Prime Minister: ‘Go away and mind your own business. I do not want anybody settling the disputes that I am creating.’ That was the sort of attitude he adopted. Now his little puppet here, the Leader of the Opposition, stands up and attempts to place some criticism on the Australian Government. This no confidence motion is conceived in hypocrisy. It is born in political opportunism. It deserves to be rejected by this House. I share the confidence of the Leader of the House (Mr Daly) that it will be rejected overwhelmingly by this Parliament.

Let us look at the consumer price index. It shows an increase of 10.6 per cent. That is too high. The Government knows it is too high. The Government is determined to reduce as far as possible the rate of increase in prices. In fact the Government has taken action to reduce prices. But let us look at the facts. Do not let us just run away with statistics. There are some important facts to be looked at, and members of the Australian Country Party should be the first to look at them because when they stand in this Parliament and demand that action be taken to reduce the rate of increase they are demanding that their pets in this community should have their incomes reduced. Half the cost of living increase is attributable to food, and the great bulk of that is related to the rapid and substantial increase in the cost of meat and potatoes. Their hypocrisy is exposed every time we look at what they say.

On the one hand they demand that there should be a free market situation. No matter how the market is controlled by private investors, they say there must be no government intervention. ‘Do not touch the meat prices. Do not have a meat tax,’ they say. The Government listened to them. ‘Do not restrict the export of meat from Australia which is causing the great increases at the present time. Leave all that alone so that we can then come along and attack you for doing nothing.’ That is their attitude. It is well for them to see and it is well for their electorate to understand what they are arguing for here today. When they say that the consumer price index rate of increase must be reduced they are advocating action to reduce the price of meat in this country and the price received by the producers.

The only answer the Liberal and Country parties of this country have had for a quarter of a century is that when they achieved excess demand they say: ‘Let us reduce the demand.’ This Government takes exactly the opposite view. It says: ‘Let us increase the supply.’ And that is what we are going to do. If it means we have to put up with the carping, nonsensical criticism of the Opposition in the process we will do it. If the Opposition succeeds in misleading some of the Australian people and we suffer the consequences of that, we will accept that too. But we are not going to be diverted just because of their criticism from what is right and from the positive steps to reconstruct this country so that all of its citizens have equality of opportunity, so that all of its citizens have a better life style.

The Opposition’s system is to create a massive pool of unemployment. Honourable members opposite regarded it as a disaster if the number of unemployed fell below 100,000. If it fell below 100,000 they were running around trying to find how to get it back up to 100,000 again. What did the previous Government do in terms of its manpower policy? It said: ‘What is that?’ The previous Government did not have a manpower policy. Its only manpower policy was to create unemployment. Today home buyers are bearing the brunt of the situation which developed in the building trade. The result is chaos because the previous Government allowed a situation to develop in which there were no training facilities available for young men and young women who wished to enter the skilled trades in the building industry. Only a year ago we saw a situation where there was massive unemployment in this country. The former Government did nothing to retrain those unemployed workers - not a thing. It did nothing to attempt to regulate the price of land. Unemployment was rife a year ago, and the then Prime Minister was almost on his political knees begging the Australian community: ‘Please spend some money - anything, one cent, $1, $10. Please spend your money’.

The Opposition today says that this Government does not have the confidence of the Australian people. The people have too much confidence. People are spending all their savings. They have absolute confidence in the future. The old idea of keeping your money because you do not know whether you will be out of a job next week is gone and people are now prepared to spend. That means that we have a great demand - a demand which cannot be satisfied because of a number of factors, one of which is directly attributable to the lack of manpower policy of the Opposition. The present Minister for Labour, contrasted with the previous Minister for Labour, is the first man since the Second World War to undertake a manpower survey in this country. He has positive suggestions to make which I understand will be forthcoming in the near future. Confucius said: Study the past if you would divine the future’. In other words, have a look at the track form before you have a bet. That is what the Australian people will do. When they look at the track form of the Opposition and look at how it has gone in previous races they will see what the Opposition’s attitude is. It opposed price regulation. It is opposed to legislation to regulate restrictive trade practices. It has opposed revaluation of the currency. It has opposed the restrictions placed by this Government on foreign capital investment. It has opposed tariff reductions. It has opposed the Australian Industry Development Corporation legislation, a substantial part of which is designed to encourage citizens to save their money and to invest it in Australian industry. Of course, the Opposition does not want the ordinary people in Australia to invest their money. It does not want the ordinary citizen to have a stake in the future of this country. It wants to keep it for its rich and powerful friends - the overseas monopolies, the international cartels and the multi-national corporations. It has opposed land price stabilisation.

It says: ‘Gut expenditure’. I suppose it means that we should reduce the money for education; that it is wrong for us to want to make a massive investment in the future so that there will be in Australia better trained people, people with better understanding, able to develop a better quality of life. Reduce pensions is the other possibility. We could put them hack to where the former Government had them in the poverty class, trapped in the poverty trap. That is where they would be - caught in the poverty trap forever perhaps. It is interesting to note that although the consumer price index increased by 10.6 per cent, pension increases granted so far and projected and promised will mean an increase of 14 per cent in the pensions payable to the elderly citizens of Australia. We will not deny those who built this economy. We will not leave them in a state of misery as the former Government did in its cynical and callous way. The consumer price index is an indicator; it is not conclusive. It has been well established that as prices rise so consumer habits change. I am very sorry to say - I know it has no effect on some honourable members opposite - that because of increasing meat prices the consumption of beef in Australia is falling. It means that some are going without red meat. What a ludicrous situation we are in because of the attitude of the Opposition when it was in government for far too long.

This motion is a desperate attempt to drag this Government down. It is all part of the plan. It started when this Government started to question the role of the multi-national corporations. The Australian people will not be fooled. They know who the agents of the international monopolies are in this place, and they will not be fooled by the smokescreen that is drawn out. Neither will we. As Cicero said, the good of the people is the chief law. That is what we will abide by. We will not abide by the greed and avarice represented by members opposite. We will not bow the knee to the god of the multi-national corporation and the international cartel.

Mr SPEAKER:

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

Mr FAIRBAIRN:
Farrer

– The Opposition today has taken the strongest action that an Opposition can take in a parliamentary democracy. It has moved that the Government no longer possesses the confidence of the House and the Opposition has spelt out the ways in which it believes it has mismanaged the nation. The Government has sought, of course, not to answer those charges but to try to draw a red herring across the trail by referring to what the Opposition is alleged to have done in the past and what is alleged it will do in the future. However it is the Government that is under attack for its sins of omission and commission. It is the Government which has lost the confidence and support of the public for its actions. Disaster follows disaster for the Government in successive byelections and successive gallup polls.

No one believed on 2 December that the incoming Labor Government would fall apart at the seams so quickly. No one believed, not even I, that it would have been quite as inept and as bad as it has turned out to be. For this reason the Opposition has listed the major points on which the Government has failed. Any person who is not a dyed-in-the-wool Labor supporter would have to agree with these points. Let me refresh the minds of honourable members by restating them. The Opposition has moved that the Government no longer possesses the confidence of the House because of its mismanagement of the nation and, in particular, its failure to exercise proper economic management. No one would disagree with this. What a failure the Government has been. Inflation is more than 3 times higher than it was when the Government came into office a matter of only 9 or 10 months ago. Interest rates are at an all time high and yet the Government is meant to be a party of low interest. The Opposition, in its motion, mentions the Government’s disastrous handling of the mining industry. I shall return to this matter later. It mentions also the Government’s neglect of national security and defence. It has been recalled that the Labor Party has broken its promise to continue to spend 3.5 per cent of the gross national product on defence. We have had falling recruiting; there are fewer people in the Services; resignations have been received, particularly from senior officers who can ill be lost; projects have been cancelled, the DDL has been cancelled, the Cockburn Sound project has been cancelled, the Neptune replacement cancelled. Where are the fighters which the Minister for Defence (Mr Barnard) went overseas to look at but which he knew beforehand he would not buy. No new tanks will be bought. Even such petty little things as the sacking of local bands has occurred. There is to be no cadet corps. Troops have been withdrawn from Singapore and morale in the Services is at an all time low.

In its motion the Opposition also refers to the Government’s failure to exercise influence in the management of industrial stability. We have heard already from my colleague, the Deputy Leader of the Opposition (Mr Lynch), who spoke earlier and who said that industrial unrest in this country has risen by 80 per cent in one year. The Government disregards the proper role of the States. The Prime Minister (Mr Whitlam) this morning was trying very hard to justify the fact that he occasionally sees the Premiers but we know that the Government has ridden roughshod over many of the States on many occasions. The Government does not believe in State governments. It believes in a federal system with all power in the Federal Government. We have seen this attitude in the field of national development. The Government has overridden the States in education. It is bypassing the States by making loans to local government. It is interesting to note that the Prime Minister said how great conditions were between him and the State governments, especially when we hear of the Redcliffs affair, to which I shall refer later, but in respect of which the Labor Party leader of the Government in South Australia said that the Federal Minister for Minerals and Energy (Mr Connor) was inaccurate and misleading.

The Opposition also criticises the Government for its management of the national Parliament - not only its management but also the fact that it is misleading the national Parliament. I hope that before I sit down I will be able to show some of the areas in which the Government has deliberately misled the national Parliament. Let me start by quoting an answer by the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) to a question asked of him by my colleague the honourable member for Herbert (Mr Bonnett) before the Minister went overseas. Incidentally, I believe that we are lucky to have the Minister with us for a few days as he is going overseas again. The Minister said:

When this Government came to power some of the first things I called for were the progressive reports on the Federal evaluation of the Burdekin proposals. I got nothing.

Any person would think that this meant that the Federal Government had done nothing in this area. Surely the Minister must have been aware that between 1966 and 1971 hydraulic model studies of the Burdekin River at Burdekin Falls were carried out by the Snowy Mountains Hydro-Electric Authority and later the Snowy Mountains Engineering Corporation to determine a river rating curve for high flows. I know that he is also aware, because he lives in the area, that between August 1967 and April 1969 there was an investigation by the SMA of 2 sites on the Broken River, the tributary of the Burdekin River. Those sites are located at Urannah and at the irrigation diversion site. Investigations for these sites were carried on to the stage of the completion of a preliminary design.

The Minister also would know that between August 1969 and January 1972 there was a reconnaissance of 60 miles of the upper Burdekin River by the SMA and later the Snowy Mountains Engineering Corporation to narrow down available dam sites to 2, at Greenvale and Lake Lucy. He knows also - I am certain he does, but I do not know why he has ignored it - that between April 1972 and December 1972 a preliminary investigation by the Snowy Mountains Engineering Corporation was carried out of one dam site on the Haughton River, which flows into the sea south of Townsville in the vicinity of the Burdekin delta. The Minister also knows that between February 1973 and August 1973, as a result of a decision by the previous Government and the Queensland Government, a reconnaissance by the SMEC was undertaken of 60 miles of the central Burdekin River to narrow the available dam sites down to 2 or 3, located possibly at Hells Gates, Mount Fullstop and Mount Foxton and that this work is still in progress. The Minister also knows that as a result of a decision by the previous Government and the Queensland Government between February 1973 and October 1973 a preliminary investigation by the SMEC has been carried out of one dam site on the lower Burdekin. The work on this site will be carried to the stage of completion of the preliminary design.

If those are the facts, and I am sure they are, why did the Minister answer one of the two questions he asked himself - namely: What did the previous Government do about the development of the Burdekin River for the last 23 years? - by saying ‘precisely nothing’? That was a complete and deliberate attempt to mislead the House. Ministers of the Crown have a duty to ensure the highest degree of correctness and integrity in their replies. If they find that they have made a wrong reply it is up to them immediately to inform the House and to ensure that it is corrected. But will we see a correction of that statement? Not at all. Because it has gone over, the Minister thinks: Good. I hope they did not hear the explanation of it’.

I come now to the greatest disaster of all, that is, the area of minerals and energy. I was going to say that scarcely a week has gone by without there being some new example of the ineptitude of the Minister for Minerals and Energy (Mr Connor), but I will have to reduce the period because a week is too long. I will have to say that every day his ineptitude comes forward. Let me give a few examples of how he is reeling from disaster to disaster like a punch drunk boxer. Firstly, there is the Don Dunstan affair and the Redcliffs petrochemical project. There is the uranium leases affair involving Queensland Mines and EZPeko. There is the national mapping affair. We have been told that the Government is not going to continue the system of letting tenders, which has worked very well for a long time past. It will have to take on another 75 cartographers - if it can find them - to do this work of national mapping. We have been told by a former member of Parliament that foreign control is increasing and that it is due mainly to the present Minister. We have the Sir William Pettingell affair in which Sir William Pettingell was called impertinent and in relation to which the Minister has said that a pipeline to Sydney will be completed by January 1976 but the people who are building the pipeline - East Aust. Pipeline Corporation - say it will be completed 6 months earlier. Who is correct? If there is to be that difference it will cost an extra $6m.

Not a day goes past without some sort of problem. Look at the Redcliffs project. Here is a case where the State Government, after discussion with the Federal Government, was finalising a project in which 30 per cent Australian equity was to be allowed. We are now told by Mr Dunstan that the project is in jeopardy. Mr Dunstan himself said that Australian firms did not have the necessary technology and that this $300m project will be in jeopardy unless the Minister for Minerals and Energy agrees to it. For it to proceed the Minister has to agree to it because it is dependent on exports and on capital imports, which he can block.

But here we see an incredible situation. I have been a member of this House for 24 years. I see an honourable member on the Labor side of the chamber look up. He came in at the same time as I did. Neither of us have ever seen a similar occasion on which a Federal. Minister had a motion of no confidence passed in him by a State Government. Every member of the Australian Labor Party in the South Australian Government voted in favour of that motion. It states:

That this House express deep concern at the actions of the Commonwealth Minister for Minerals and Energy in relation to the proposed Redcliffs petrochemical department, and urge the Government to take all possible steps to resolve the present threat to its establishment.

This was a motion of no confidence carried by Mr Dunstan and every member of the Australian Labor Party in South Australia. The Minister for Minerals and Energy went on to say that South Australia’s gas reserves were doubtful, that they would not cover demand for more than 12 or 14 years. Mr Dunstan’s comment on that statement was that it was both inaccurate and misleading. Again, what a statement be made by a responsible Labor leader and one of the confidants of the Prime Minister. We know that that statement of the Minister for Minerals and Energy was completely inaccurate. I have already said in the House that a firm from Texas certified that there is sufficient gas in the Cooper Basin to supply Newcastle, Sydney and Wollongong for 30 years. The firm issued a certificate to this effect. Yet the Minister came in here with these completely inaccurate and misleading statements.

One wonders whether he can ever get a statement correct. We are fast coming to realise that any similarity between statements that the Minister makes and the true facts is completely coincidental. In fact what he should do is get the Bureau of Mineral Resources to write his statements for him and read them making certain that he does not change them. This is a case of intervention on the part of the Minister ostensibly to help to increase Australian equity. It reads oddly in the face of a recent statement by an ex-member of Parliament, who one cannot claim to be any supporter of ours, that foreign control is increasing. I refer to a statement by Mr Edward St John, Chairman of the Association for Retention of Australian Ownership. He told the Association’s conference that the Minister for Minerals and Energy was partly to blame for this state of affairs, bis manner had been unduly abrasive, his intentions had not been made clear and that he had created unnecessary confusion and uncertainty.

What has brought this about? Foreign control is increasing because of the actions of this Government. First of all, the abolition of incentives to encourage investors was a cause. We believe in the small Australian industry and in encouraging people to get a stake in their country. This system has been abolished. There has been a freeze on the import of capital. So an Australian company cannot borrow money overseas and bring it in without having to freeze 25 per cent of it. The oil search subsidy has been abolished. Off-shore this was availale to Australians only and to the extent that there was Australian equity Australians got a share and the multi-nationals which we are alleged to support did not. The small Australian industry feels the effect of such actions first. How can such companies possibly float new shares?

There is not enough time to go into all the depths of this Government’s actions in the minerals and energy field. But I come to the uranium leases. In order to justify his refusal to renew leases or to grant tides to Australian companies - Queensland Mines and EZ-Peko - the Minister used 3 excuses. Firstly, he said that the areas were Aboriginal reserves and therefore he could not grant leases although he would like to. Secondly, he said that the price for the uranium was not high enough now and that we should wait until it gets higher, which surely will happen later according to him. Thirdly, we will only export enriched uranium which is more valuable. I state firstly that EZ-Peko’s find at Ranger is not on a reserve so the Government could do anything it likes in renewing those leases. The Government likes to stress the fact that it is speedy in making decisions. Yet it has known for 10 months that these leases were expiring and has done absolutely nothing about them. There are very few Aborigines on these reserves. One of the deposits at Narbarlek is the richest known deposit in the world for quality and grade of its ore. Is the Government suggesting that these deposits on which millions of dollars of investors money has been spent should not be developed for the benefit of the nation? What is the reason for this delay. The Minister said that the price is not high enough. We lost the chance to participate in contracts, as everyone knows, worth some $600m which are just closing with the Japanese. We undoubtedly would have got a share in those contracts had it not been for the direction of the Minister to the company concerned to withdraw its offer. Now this opportunity has gone for ever. To justify his refusal the Minister stated:

Uranium contracts which were entered into prior to the recent elections had unsatisfactory prices, the best of which was US$7.25.

This is completely untrue and the Minister knows it. He ought to be man enough-

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Is that price per lb?

Mr FAIRBAIRN:

– Yes. It is US$7.25 per lb for U308. The Minister knows because he has received the same telex from EZ-Peko as I have received, that the lowest of their contracts are equivalent to US$8.10 per lb and the highest is US$10.83. When I first became a Minister under Sir Robert Menzies, if a Minister made an incorrect statement he immediately came into the House and corrected it when he became aware of the mistake. But do honourable members think for a moment that we will see this Minister correcting this mistake? If he is man enough to say that he is wrong he should get up and say that he is wrong and we will give him leave to correct his mistake. But of course he will not. He will sit on his fat bottom and brazen it out.

Mr SPEAKER:
Mr Connor:

– You are just downright bloody impertinent.

Mr FAIRBAIRN:

– Like Sir William Pettingell.

Mr SPEAKER:

– Order!

Mr Connor:

– You are just a silvertail lout with a veneer of sophistication and good manners.

Mr SPEAKER:

– Order! I think the remark of the honourable member for Farrer is quite uncalled for.

Mr FAIRBAIRN:

– I withdraw that remark. The Minister will sit there and refuse to correct his statement.

Mr SPEAKER:

– Order! No honourable member should refer to the avoirdupois of another honourable member.

Mr FAIRBAIRN:

– Why is it that the Minister thinks that we will get higher prices later? Again he was incorrect in his figures and again he has been told that he was incorrect. I will show him the United States Atomic Energy Commission’s assessment which shows quite clearly that where the Minister said that America anticipated a shortfall of 850,000 tons of uranium by 1985, this figure is at variance with what the United States Atomic Energy Commission said, which set the anticipated shortfall in 1985 at 174,000 tons, not 850,000 tons as the Minister said. Of course this 174,000 tons shortfall includes any development from now on or any new discoveries. So again the Minister has been completely wrong. If he wants to see the Atomic Energy Commission’s report he has only to get it or I can make it available to him.

His third excuse for not granting the leases was that we will export only enriched uranium. Does he intend to delay because of this? We know that we cannot enrich uranium or have an enrichment plant, which will cost $2,700m. We cannot have one until well into the late 1980s. Does the Minister intend to prevent any company from exporting uranium until that time? He has not said how the money is being raised. He has not said what is the potential market. He has not said what sort of investigations have been carried out of the necessity for this sort of thing-

Mr SPEAKER:

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

Dr PATTERSON:
Minister for Northern Development and Minister for the Northern Territory · Dawson · ALP

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

Mr SPEAKER:

– Does the Minister claim to have been misrepresented?

Dr PATTERSON:

– Yes. I listened over the communication system to the speech made by the former Minister for National Development, the honourable member for Farrer (Mr Fairbairn). He said that I deliberately misled the House. In a statement I made earlier this year I said that when the Government came to office I immediately called for the Feder.nl evaluation analysis report on the Burdekin River basin, including the Urannah Dam project and I received nothing. I still have not received anything because there is not anything to receive. A technical evaluation of dam sites is quite different from an evaluation analysis. The honourable member for Farrer, of all people, ought to know that an evaluation analysis includes an economic analysis in respect of a project on which any government has to make a decision. There has never been any evaluation analysis in relation to the Burdekin basin. There has never been any evaluation analysis in relation to the Urranah

Dam project. I have not yet received one because it has not been carried out. A technical study of the hydrology or geology aspects of a dam site is, as the honourable member well knows, far different from an economic evaluation analysis. In this instance there has never been an evaluation analysis. The previous Government did not carry out such an analysis. It still has not been carried out. The previous Government is the one that must take full responsibility for the delay in the development of the Burdekin basin.

Mr CONNOR:
Minister for’ Minerals and Energy · Cunningham · ALP

– In reply to the member for Farrer (Mr Fairbairn) - I would not call him ‘honourable’-

Mr DEPUTY SPEAKER (Mr Scholes:
CORIO, VICTORIA

– Order! The Standing Orders provide that members will be addressed in a certain way. I suggest that the Minister comply with the Standing Orders.

Mr CONNOR:

– I will comply with the formality, but in a very formal manner. He was a tragic Minister in his day. He was described by a former Prime Minister as being very pedestrian. His tirade has been not merely pedestrian but also offensive and incorrect. I would not waste any part of my 20 minutes on him. Nevertheless, he was responsible for the biggest sell-out in Australia’s history when he gave away the graticular system and so gave away Australia’s chance of saving something of our off-shore mineral wealth. There was a gentleman named Gulbenkian who used to arrange oil deals. He was known as Mr Five Per Cent - that was his percentage. The honourable member for Farrer is Mr Fifteen Per Cent, not because he arranges oil deals but because he has come out as the champion for Woodside-Burmah Oil NL. It is not good enough for the present Government to talk in terms of 15 per cent as being a good deal for Australia. That is precisely the situation.

When we came to office we found, firstly, that the former Government had never done its sums; it had never kept statistics. As a matter of fact, the statistics on foreign ownership and control of Australian mineral resources were only up to 1968. We have had to extrapolate since that time, but it is quite clear that at that time 62 per cent of Australia’s mineral wealth was owned and/or controlled by overseas companies, by the multinationals, by the friends of the honourable member for Farrer, by the people whom he champions or by the people to whom he belongs because that is his class, that is where he comes from and he could not think otherwise. What was the minerals policy of the former Government of which he is an outstanding example? It was one of neglect, benign neglect if you like, or benevolent neglect - one of ‘Come here and get it’. Eightynine per cent of the capital infrastructure that was needed to develop Australia was supplied by Australian people from their savings. The other 11 per cent came from overseas. But it was instantly directed - they came homing in like homing pigeons - right to where the profits were, namely into minerals, into primary industry, into secondary industry and into commerce, with the complaisance, the neglect and the co-operation of the members of the former Government parties. They should be ashamed of themselves.

In the place of that situation we have substituted benign supervision. For the first time in Australia’s mineral history there is a government which is prepared to take the Australian viewpoint. If there is one thing that is outstanding in the record of this Government and its ideology, it is that we stand for Australia, we wave the Australian flag and we give allegiance to the Queen of Australia. We are proud of being Australians and we still stand in the light of the multi-nationals. They will never get their hands on any more of our resources. The Prime Minister (Mr Whitlam) has said so. He said it at the Australian Mining. Industry Council dinner last February. All my efforts and the efforts of the Government have been directed to ensuring that the present devastating ownership will gradually be reduced. Reduce it we will. Our policies have been directed towards achieving that purpose. We have discharged truly national functions. We speak as Australians. We do not speak as synthetic imports with an allegiance overseas. We are Australians first and foremost. It is a concept that the Liberals would never understand.

Our major customer is Japan. For the first time we are dealing with the Japanese in a proper, businesslike way. The so-called government of extreme socialists in fact is capable of doing a better job than the so-called businessman’s government. For the first time we have adequate information. Export controls were imposed, as the House well knows, for the purpose of obtaining information, and we have information on prices, quantities, times of delivery and, above all, the denomination of currency in which contracts are written. I have had major companies come to me cringing because they were too stupid and the previous Government also was too stupid not to have their contracts written in Australian currency. This applies to some of the major companies. I certainly will not commit a breach of faith by disclosing their names, but they do exist. What have been the results of our activities? In the minds of members of the Opposition, we have committed an unpardonable crime. We have, been a commercial success.

In the case of iron ore there has been a price increase just short of 17 per cent as an offset to world currency revaluation. This represents a little matter of $90m extra income for Australia in a year.

Mr Fairbairn:

– You did not get that. The companies got it.

Mr CONNOR:

– I got that all right. I got that from Tanabe, and the honourable member well knows it. In regard to coal, one company alone in Queensland, which has a long term contract, as a result of our activities will benefit to the tune of extra income amounting to $107m. We told it to try harder and to do better, and we made sure that it did. It is now receiving increased prices.

In respect of the coal export trade as a whole, we are receiving at least another $100m a year in income because of our ability to inform the different colliery companies of the going price for coal overseas. No longer can overseas buyers come into Australia and play one company off against another. I am ashamed of some of the Australian companies for their stupidity. They could have obtained better prices by sticking together. For a change, we have imitated the imitators. The Japanese have worked through the Ministry of International Trade and Industry. In turn MITI has carefully controlled or co-ordinated the buying by Japan. I give MITI great credit for what it has done. I have told the Japanese that we will do exactly the same and that it will be on the basis of willing sellers, willing buyers and a fair deal to both sides. In future Australia will not adopt a low posture to any other country. We will stand erect. We will look people in the eyes and we will ask for fair terms and give a fair deal because this is a stable country. We are just as capable of honouring a contract as is any other form of government, and honour contracts we have and honour them we will. The tactics of divide and conquer have gone out the door. We have thrown them out quite deliberately.

As for the other alleged disasters, we have taken action to ensure that for the first time there will be a complete survey of Australia’s resources of energy because for the future it is energy that counts in this world. We have energy in most respects. In the case of crude oil we are lacking, but there again we will do what the Opposition was not capable of doing or conceiving when in government. We will ensure that every form of liquid hydro-carbon is reconstituted into motor spirit or to other petroleum derivatives. We have provided for it in the Pipeline Authority Act and as for it being a pipe dream and as for what the honourable member for Farrer had the impertinence to say to the House just recently, let me remind him that on television the other night I produced the document signed by Sir William Pettingell, Mr Butters and myself in which it was recognised that we would be the constructing authority for the pipeline, that the pipes were ours and that we were going ahead with the job. The tenders close on 29 October. We will decide who the successful tenderer is to be and we will proceed to build the pipeline. We have had quite enough of Sir William Pettingell and his nonsense. We tried it the quiet way but from now on we will play it tough and hard, but, nevertheless, it will be fair because the Australian Gaslight Co. has its rights. We told them that we would stand in their shoes with respect to the transmission of natural gas from Gidgealpa.

As for the peculiar alliance between the honourable member for Farrer and the South Australian Premier, let me repeat what I said in answer to a question from the honourable member for Barker (Dr Forbes) yesterday. The policy of our Party is that there should be at least a 51 per cent Australian ownership and, more than that, we will ensure that every gallon of motor spirit that can be extracted from the Gidgealpa natural gas will be extracted and used for Australia.

Mr Fairbairn:

– Why did you not tell him this when he was negotiating?

Mr CONNOR:

– He has been told and he will stay told. No longer will any State premier usurp the functions of a national government. No longer will any State government be hieing itself off overseas and negotiating contracts in respect of national assets. That will be done through the Australian national Government.

It is being done and it will continue to be done.

I refer now to uranium. I do not have much time left. I had hoped to make a full statement on uranium. However, what the honourable member for Farrer has said has been an absolute tissue of misrepresentation and I will refer to my prepared speech concerning uranium in refutation of the nonsense of the honourable member for Farrer. In a recent report in the ‘Australian Financial Review’ it was stated that I was considering a plan for uranium contracts to be fulfilled from the Mary Kathleen uranium mine, which has been closed for some years-

Mr Fairbairn:

– I did not say anything about that at all.

Mr CONNOR:

– The honourable member for Farrer has had his say. This plant is deteriorating and, unless the mine is quickly reopened, it will be useless. The whole implication in the article, however, is that I conceived the proposal. The facts are that on 14 June 1973 and at their request, I saw Messrs Carnegie and Madigan, of Conzinc Riotinto Australia, who have substantial uranium interests. At this meeting, they put forward the possibility of rationalising the supply to meet existing uranium contracts.

Mary Kathleen has current export contracts for 5,362 short tons. Their company-stated resources of uranium are 10,700 short tons. The former Government, in the period between 8 and 30 November last, approved of export contracts for an additional 4,300 short tons. It had also approved of an export contract on 24 August 1972 for 2,230 short tons. These contracts could all have been substantially met by the complete extraction of the Mary Kathleen reserves. In a subsequent letter addressed to me of 28 June, Mr Carnegie said:

I hope that, when you decide on the appropriate national uranium sales policy, we will have an opportunity to suggest some practical rationalisation of the industry, designed to meet the objectives of both the Australian Government and the companies involved. We appreciate, of course, that you would not expect this to result in any overall increase in overseas ownership of Australia’s mineral resources . . .

On 17 August last, I saw, at their request, Mr Carnegie and Mr Espie, Chairman of Mary Kathleen Uranium Ltd. In the light of the June discussion, I inquired whether there would be any scope for Mary Kathleen Uranium Ltd to help out other firms with approved contracts. Mr Carnegie then referred to some discussions earlier in the year with

Ranger, about some sort of merger. In his letter of 24 August, again addressed to me, Mr Espie said:

You explained to us that, in the case of some producers, their approved contracts do not give them sufficient assured production to justify the opening of a new operation. You said that you were seeking a way in which Mary Kathleen Uranium could participate in a rationalisation of the industry. Possibly, Mary Kathleen Uranium could reopen and, in negotiation with other potential producers, arrange to provide a product which could satisfy their contracts. . . .

Mr Espie then went on to say that his company had entered into discussion with Ranger and Queensland Mines and hoped to indicate progress within the next month. He further said that previous discussions on rationalisation of the industry had suggested that some merger of equity interests might be required to obtain a workable solution which would be fair and equitable to all shareholders concerned.

In a further letter of 6 September, Mr Espie advised in terms which suggested they were unlikely to achieve the rationalisation which they had originally contemplated. My part in this proposal has been quite maliciously and stupidly - I repeat, stupidly - attacked by the Opposition as being in some way an attempt to nationalise the industry by expropriation. The “suggestion is, of course, an absurd one. Using a similar Press sounding board, Mr Millner of Queensland Mines, has attempted to indulge in some journalistic arm twisting. I sent him a reply by telex which has been quoted before in this House and I will not repeat it. I want to reaffirm that at all times I have pressed and will continue to press for the fullest mining of all uranium in the Northern Territory, with due regard to environmental restoration, and other interests, such as Aboriginal rights. No Labor administration will be responsible for denying to the respective discoveries of uranium in any areas, the subject of the Woodward Committee’s terms of reference, proper rights under the Northern Territory mining ordinances for their ultimate development.

The Australian Atomic Energy Commission reports that in the Northern Territory where all our richest uranium deposits are, excepting Yeelirrie, the total expenditure for uranium prospecting during 1973 is expected to be $2.6 lm in 29,600 square miles held under prospecting rights. Of this area, 6,800 square miles are held by foreign owned companies, and 9,000 square miles by wholly Australian owned companies. The balance is being prospected under ‘farm-in’ arrangements, with 19 groups having beneficial Australian interests ranging from 25 per cent to 65 per cent.

Our predecessors in office operated export controls on uranium. They lifted certain of them in the approving of export contracts, totalling some 11,600 short tons. Over 7,900 short tons of this total were approved in the final 5 months of office. We will honour these to the letter, despite the colourable circumstances. The Deputy Prime Minister (Mr Barnard) in the first days of office gave an asssrance to Queensland Mines that existing titles would be honoured. This will also be done. Australia, Sir, has world-ranking resources of uranium oxide. In aggregate tonnages of all cost types we probably rank second only to Canada. The Australian Atomic Energy Commission, whose advice I have followed very closely throughout my period of office and which has this statutory responsibility to advise me, informs me that our reserves are to a point to justify consideration of the first stage of a centrifuge-based enrichment plant. I believe that the Japanese and Australian Governments should agree jointly to commence a feasibility study of establishing in Australia a uranium enrichment facility, utilising Japanese technology and finance, which will be owned by the Australian Government, and which will enrich a proportion of our uranium reserves for the Japanese market under a long-term contract.

Our forthcoming ministerial visit to Japan is therefore of vital importance to our future uranium policy and discussions there will be on the basis of high national interest. The various uranium producing interests in Australia have been told specifically to await our return from Japan. We know and sympathise with the energy needs of Japan as our best trading partner. We intend to see that they are met on a proper basis. Equally, we will maximise Australia’s financial returns from uranium while providing full energy security in this resource from Japan. We seek to strike a balance between the national interest on the medium and long term policy bases, while also ensuring a reasonable return to local uranium interests and their shareholders in the shorter term. Uranium is a strategic material of great significance and is the most highly concentrated naturally recurring energy material in commercial use today.

Mr MALCOLM FRASER:
Wannon

– The Minister for Minerals and Energy (Mr Connor) has described his administration as one of benign supervision. I think we need to look only at some of the words he used in not answering the Opposition’s case made by the honourable member for Farrar (Mr Fairbairn) to see how benign his own administration might be. He made it quite plain that he has great pride in forcing Australian companies to cringe before him. They are not my words; they are his own words. The Minister apparently has pride in the fact that Australian companies, in his terms, have behaved with great stupidity, and he likes to relate that all around the world. Whether that fulfils his own political philosophy of benign supervision I do not know, but he shows it in a strange way. He has been offensive to Japan and in his recent speech he talked of imitating the imitators. He knows quite well that he was referring to Japan when he said that. He has said that he will honour contracts, but I will indicate in a few minutes 10 election promises which have been broken by the present Government. Is not an election promise a contract with the people of Australia? If a contract with the people of Australia is to be broken, a contract between this Government and a particular company will have even less worth.

Even this morning the Minister indicated that he would table legal opinions concerning the validity of the Pipeline Authority Act. When does he intend to table those documents? The Minister has said that he will act regardless of legal opinion. I would like to know what precedent there is for not awaiting a High Court decision in these particular matters. He made it quite plain that he was trying to find ways and means of getting Mary Kathleen Uranium Ltd to fulfil the uranium contracts of other companies. He said he would fulfil and honour the agreements with other companies, but at the same time he has made it plain that he is looking for ways in which Mary Kathleen Uranium Ltd might be able to fulfil those contracts which would in fact be a denial of the agreement and a denial of the letter written by the Deputy Prime Minister (Mr Barnard) before Christmas last year. The Minister, full of contradiction, said that he places great reliance on the Australian Atomic Energy Commission. It is only a week or two ago that he said that so far as the Snowy Mountains Council is concerned he did not care a damn and that he would do what he wanted, irrespective of the decisions or recommendations of the Snowy Mountains Council. Of course, in relation to the Snowy Mountains

Council matters the Minister had his marching orders from the power unions of New South Wales.

The honourable member for Phillip (Mr Riordan) a little earlier in the debate said that he thought that there ought to be industrial debate without temper. I think in most of his speech he might have tried to follow that particular tenet, but not in all of it by any means. He indicated that the strikes and lost time would not have occurred throughout this year if the industrial legislation of the Minister for Labour (Mr Clyde Cameron) had been passed through this Parliament. What would that have done to the power disputes in New South Wales, to the mail dispute and to the radio technicians dispute which hamstrung Sydney (Kingsford-Smith) Airport, with domestic and international transport, for so long? In those circumstances the Government could have acted quickly. It has the powers under the Public Service Act. The Minister’s legislation does not touch the Public Service Act but the Government waited for days and for weeks before finally acting. Rather, it was not the Government that acted; it was the President of the Australian Council of Trade Unions who with one hat supports the Prime Minister but with the other opposes him vigorously and strongly. In this particular instance the honourable member for Phillip suggested that the New South Wales Premier should have accepted the Prime Minister’s offer of a Conciliation and Arbitration Commission judge to help in the dispute. The honourable member for Phillip would know quite well that New South Wales could not accept that offer. The bench of the New South Wales Industrial Commission would probably have resigned if the offer had been accepted because it would have been a vote and a mark of complete no confidence in the New South Wales industrial jurisdiction. That view is held by significant parts of the trade union movement in New South Wales.

Mr Riordan:

– Name one.

Mr MALCOLM FRASER:

– Would not the honourable member love one to be named. He would be chasing them and dumping them in Sydney Harbour as fast as he could go.

The Prime Minister (Mr Whitlam) did not answer one point made by the Leader of the Opposition (Mr Snedden). He needed to reassure his own supporters. He spoke only to his own supporters. He has been overruled in Caucus too often in the last two or three months and the polls are beginning to show it. Only 39 per cent of the people of Queensland support this Government and the Australian Labor Party. The President of the Australian Council of Trade Unions was in the Parliament this morning, I think when the Prime Minister was speaking. I do not know in what sense he was sitting in the gallery. I do not know whether it was as President of the Australian Labor Party or as President of the Australian Council of Trade Unions. But we all know which hat this man believes to be the most important - that of the Australian Council of Trade Unions. It is not surprising because he also would know and so would the Minister for Labour that the doctors and academics, the strength of the present Labor Party, do not understand and have no comprehension of the problems of the average Australian. If they had any comprehension of these problems they would do something effective to control inflation and something effective to protect the position of the average family person in Australia. So far they have done nothing at all.

It will be interesting to find out what happens when the President of the Australian Council of Trade Unions recognises publicly that a referendum on prices will include the power to control wages. Will that mean he will then oppose the referendum on prices as well as the referendum on incomes which he is presently committed to oppose? Recent legal decisions in South Australia make it quite inevitable that power to control prices will include power to control wages. The Prime Minister admitted that fact in his talk to the nation when introducing the referendum subjects. This Government is condemned for its lack of economic management. It revalued twice, before and after Christmas, without consultation with appropriate Ministers and departments. In the winter the Government cut tariffs. It used the Budget merely as an instrument of social and political change and advocated economic responsibility. It decided to spend an extra $2,000m and despite promises to the contrary it increased personal income tax by nearly $1,1 00m in 1 year. The failure of the Budget as an instrument to control an even balance of the economy was recognised 3 weeks after the event with a further revaluation decision and another quite disgraceful decision which is making interest rates higher than they have been in 100 years of Australia’s history. This has come from a low interest rate party. The farmers were to receive $500m at 3 per cent from the terrier from the Riverina. Not one cent was made available under about 10 per cent interest. That is the Government’s attitude to low interest rates and to a pre-election promise of that kind. The present interest rate is the highest for 100 years.

In the December quarter last year inflation was running at not much more than 1.1 per cent; at the second quarter of this year it was running at 3.3 per cent and at the third quarter at 3.6 per cent. In each of those quarters inflation, as a result of this Government’s policies, was running at a greater rate than the average for the total period of Liberal-Country Party Government over 23 years. That, in itself, is a condemnation of the Government’s policies. In total the revaluations resulted in a 25 per cent change in the value of the Australian dollar in relation to the United States dollar and sterling. The Government has shown that it is prepared to use tariff changes and revaluation as an instrument of short term economic policy. This leads to uncertainty, difficulty in planning and difficulty in providing continuity of employment in business.

You will remember, Mr Deputy Speaker, that this morning the Prime Minister indicated that Broken Hill Pty Co. Ltd, under the control methods of this Government, had had a 3 per cent increase and 5.5 per cent increase in its prices. He tried to compare those increases unfavourably with the 8 per cent increase that occurred in January 1972 when we were in power. But I rather think that 3 per cent and 5.5 per cent make an increase this year of 8.5 per cent rather than an 8 per cent increase as was the case when we were in power. If inflation continues at its present rate, the next Autumn increase no doubt will be 8.8 per cent, with a 16 per cent increase perhaps next year, as a result of the Government’s policies. But, despite that and because of steel profits being low, because of the time lost through strikes and because of the changes in wage rates, it is unlikely that there will be new investment in this industry or in many other industries. Because of the policies of the present Government business decisions are being cancelled and new investment is not taking place. Once the expansion of the Public Service ceases to hide that fact, increases in unemployment will be greater than we have seen in Australia for many years.

The Commonwealth Public Service has been used as a pacesetter through the provision of 4 weeks annual leave, wage increases and the promise in relation to the 35-hour week. But, of course, we all remember the occasion when the Minister for Labour (Mr Clyde Cameron), who is now sitting at the table, told a slightly red faced Prime Minister that he could not have it both ways. That was a surprise to this Prime Minister because he is so used to trying to have it both ways. But the statement by the Minister for Labour was an honest one and I respect him for it. I hope that it might be the first sign of some sanity in Labor policies generally. I hope that the Minister for Labour will be able to stand up to the Federal President of the Australian Labor Party who is also the President of the Australian Council of Trade Unions, in introducing this kind of sanity into labour relations. It will be difficult to see who wins. But the contest will be interesting because they are both formidable people.

In relation to the New South Wales power strike, the Minister for Minerals and Energy (Mr Connor), who has now left the chamber, played a shameful role. Me wrote a secret letter to the Deputy Chairman of the Snowy Mountains Council, basically instructing that power be cut and provided in conformity with the demands of the power unions. I have asked the Minister, as other people have asked him, to table the minutes of the last 4 meetings of the Snowy Mountains Council. But we have not had that. We have had what purport to be the minutes of the last 4 meetings of that Council, but the Minister has skilfully forgotten to table or has avoided tabling - I suggest quite deliberately - the record and the minutes of the meeting held on Sunday, 23 September. That was the critical meeting, the decisions of which the Minister overrode by his directive. In that instance, he gave support to the 35-Hour Week Committee against industrial law, against the New South Wales Government - that is not surprising - and also against the people of New South Wales. It was in an effort to cover his Minister’s moves that the Prime Minister offered the services of a judge to the New South Wales Government.

Before 2 December, Australia was promised industrial peace. The result of the election of this Government, as we know, is that time lost as a result of industrial disputes has increased greatly and the amount of wages lost has almost doubled. The attitudes expressed by this Government have contributed to that result. The industrial proposals of the Minister for Labour are interesting. Two years ago he had a policy which, I think, some of us on this side of the House might almost have supported - at least in part. Sanctions and penalties were to be even. A $20 a day fine was to be imposed on unionists. That policy lasted 36 hours. It was taken straight out of Part X of the Act which the Minister has sought to have repealed. My hope was that he would not have it repealed. Well, he will not repeal it because it is one of our amendments which he has decided is sensible and ought to be accepted.

In autumn last, there was one-sided legislation involving the removal of penalties from one of the parties to industrial disputes but leaving penalties on the other party. I hold the view that the great majority of people in Australia believe that governments ought to behave even-handedly in these matters and that if penalties are to be available for application against one party they ought also to be available for application against another who breaks an agreement or an award. One of the proposals from the Minister for Labour which will be found to be unworkable and which will not assist the cause of industrial peace is his proposal for industrial democracy. It would pose significant problems for many unions in relation to the employment of their own employees and would be quite impossible of application in the Minister’s own old union, the Australian Workers Union, in relation to the approval of agreements. Be that as it may, there is no evidence that what the Minister has proposed would lead to greater industrial peace.

I come to the catalogue of broken promises from this Government. I have mentioned one - industrial peace. In May and June of last year, the present Prime Minister promised quite categorically to maintain aid for independent schools and to maintain aid in any form already existing. One of his promises was made before 4,000 people and a record of his words is available. Letters to the National Council of Independent Schools towards the end of last year confirmed those views. The terms of reference for the Karmel Committee gave some confidence to people who otherwise might have been concerned about that promise. Then, the Minister for Education (Mr Beazley) tabled a copy of a letter that he had written to Professor Karmel on 13 April. We are not sure whether there is a letter from the Prime Minister to Professor Karmel, giving indications of Government policy to Professor Karmel, on or about the same date. Yesterday, the Prime Minister was quite unable to answer the question whether he had or had not written such a letter. His equivocation and evasion on that issue surely would indicate that there had been communication. That, at least, is what the public will believe until the Prime Minister is prepared to come clean and to table the letters, if there have been such letters.

We know of the broken promise in relation to defence in that 2.9 per cent and not the promised 3.5 per cent of the gross national product has been allocated for defence purposes. Decisions made in this area have been decisions to defer, to cancel or to postpone certain defence requirements. By 1980, there will not be 3 escorts that the Navy can keep permanently at sea. Even now, troops cannot be moved by sea from Melbourne to Perth. We were promised no increase in taxation. But personal income tax has been increased by $l,100m. We were promised that inflation would be controlled. But inflation is running at nearly 15 per cent. We were promised low interest rates. But interest rates are the highest for 100 years. Rural industries were promised protection. They have had wonderful protection! They have been raped by this Government and by those people who, before the election, had done most to suggest that a Labor government would be concerned for the wellbeing of our rural communities.

In autumn last, we were promised a double dissolution on legislation relating to industrial matters and also electoral matters. Where now are the confidence and the zeal? Where now are the hopes for the new society which Labor said it wanted to establish? There will not be any double dissolution on either of those issues because the Government knows quite well that the power and seats will come to our parties and to the Leader of the Opposition at the first chance that is available. The Government promised funds for local government. There are no funds for local government. The Government promised consultation and co-operation with our near neighbours. Prime Minister Harry Lee has shown that that promise is as broken and as abandoned as much else that this Government has done.

The Prime Minister has shown contempt for the Parliament. Statements have been made outside the Parliament which in other days would always have been made in the Parliament. He has refused to make policy statements in the House and prefers to make such statements to the Press. It is quite unprecedented, on an occasion such as this when a major censure motion has been moved against the Government, for the Prime Minister to speak and then to leave the Parliament. The Prime Minister has abandoned the Parliament. He has abandoned the Government. He has abandoned his supporters.

Mr Riordan:

– He is in Albury.

Mr MALCOLM FRASER:

– What he is doing there is more important than the fate of the Government. The censure motion on the Prime Minister and the Government is a matter of major importance. In the short time that I have been able to look at the matter and that the parliamentary library research service and other experts have been able to look at the matter, I can find no record of any other Prime Minister walking out on a censure motion the way this Prime Minister has walked out on this censure motion.

There is disillusion and uncertainty in the general community. When Government members go back to their electorates there is a great deal of disillusion and uncertainty amongst them. Why was there not a double dissolution on the original industrial legislation or on the electoral legislation? There are fears for the future in the minds of many people. In the long term there are fears for the very jobs on which people depend because they know that investment is running down. There is fear in the motor industry because of the invitations to Nissan and Toyota. In Caucus there is distrust of Cabinet. Many decisions have been overturned. In Cabinet there is distrust of the Prime Minister. We all remember the decision that all 27 Ministers had to be in Cabinet at once. This will be a one term government. Whenever an election is held - whenever the Government is game to go to the polls - Bill Snedden, Leader of the Opposition, will see that the Government is put out of office and that the coalition parties are put back into office.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I hope that the Opposition moves a censure motion like this every week because the Government has been far too modest about its achievements in the past. This debate has given the Government the opportunity to say what it has done and to remind the public how the Opposition parties, now seeking to become the Government again, sold out Australia to their foreign backers and how their only solution for industrial unrest and for inflation was to pursue fiscal policies that cause massive unemployment. The Leader of the Opposition (Mr Snedden), whose job it was to attack the Government, spent most of his extension of time in the futility of trying to convince the Parliament that the Liberal and Country parties are not the paid creatures of agents of foreign multi-nationals willing to sell the country’s birthright for a mere bagatelle.

The Leader of the Australian Country Party (Mr Anthony) talked about morning sickness. He looked sick as he said it. The honourable member for Wannon (Mr Malcolm Fraser) also looked sick. He was not his usual confident self as he stood to speak in support of the Opposition motion. The Leader of the Country Party made a feeble but very unconvincing attempt to satisfy the Parliament that his Party is not the captive of foreign interests seeking to steal and to ravage Australia’s mineral and energy resources and to impose excessive tariff burdens upon the man on the land who has to sell his production at prices governed by world parity while being forced by the Country Party to pay through the nose for everything he has to buy, because of the excessive tariff policies of the Country Party.

The Deputy Leader of the Opposition (Mr Lynch) had the gall to talk about industrial confrontation when he himself is known to be the one who did everything possible to cause confrontation between the unions and employers in the oil industry last year. It was not his fault that this country was not brought to its knees in one of the greatest industrial disasters we have ever seen. He talked about lost time due to strikes but he was as silent as the grave on the 20 million man-days lost annually through the massive unemployment which the Liberal-Country Party Government deliberately created as a means of controlling inflation and of preventing industrial unrest. He, like the 2 Opposition speakers who preceded him, showed an extraordinary degree of sensitivity to the charges that the Opposition parties are now the hirelings of foreign corporations bent on capturing control of Australia’s mineral and energy reserves. He actually had the audacity to attack the Minister for Minerals and Energy (Mr Connor) for what he is doing to preserve the natural heritage of the Australian people. The honourable member for Farrer (Mr Fairbairn) also put the case for his party’s multi-national masters by criticising the Minister for Minerals and Energy for safeguarding Australia’s national reserves.

I think the honourable member for Wannon was wise in not referring at very great length to the question of industrial unrest and industrial relations. I am surprised that he referred to unemployment, however, because when his Government was in office it deliberately followed policies, which I have already mentioned, which led to the creation of unemployment that reached the staggering total of 130,000 men and women. He did not touch upon the Australian Parliament’s limited constitutional power to intervene directly in industrial relations. He dodged the issue because he is an intelligent and widely read man who knows perfectly well that the Australian Parliament has no power to deal directly with labour relations. Unlike the Parliaments of the 6 States which have unlimited powers to deal with industrial relations and labour disputes, the Commonwealth power over industrial maters can be exercised only through the Conciliation and Arbitration Commission in accordance with the powers which the Australian Parliament may confer on the Commission.

Even the Parliament’s power to confer powers on the Commission is severely limited by the Constitution. The Parliament cannot just confer upon the Commission whatever powers it thinks the Commission ought to have to do its job. It is severely limited in the powers it can confer upon the Commission. For example, the Parliament cannot give the Commission power to deal with intrastate disputes like the recent New South Wales power strike, the recent garbage strike in New South Wales or all these other strikes for which the Commonwealth Government gets the blame - strikes that occur in industries working under State awards. The Commonwealth Parliament has no power to intervene in these disputes, the Government has no power to intervene in them and the Arbitration Commission has no power to intervene in them. Only the State governments can do that.

Even in the case of interstate disputes the Australian Parliament is severely limited by the Constitution in the kind of powers that it may confer upon the Commission. It cannot grant power to settle disputes caused by issues like union membership, demarcation disputes and managerial policy. The High Court has held that these are not industrial matters and are therefore outside the scope of the Commonwealth Parliament’s power. Almost half of all strikes are caused by non-wage issues in relation to which neither the Australian Government, the Australian Parliament nor the

Commission has any constitutional power to settle or intervene. If these disputes occur in industries covered by State awards they can be settled by the State government, the State parliament or the State industrial tribunal if they wish to do so wherever the strikes occur. But neither the Australian Parliament, the Australian Government nor the Commission can take any constitutional action to intervene in disputes covered by State awards or agreements.

It is complete dishonesty or ignorance on the part of people who try to saddle onto the Australian Government responsibility for disputes occurring in industries covered by State awards. Even in the industries covered by State awards, the State parliaments and State governments concerned, which have unlimited power to intervene if they wish to, never have moved and will not move to intervene. Sixty per cent of all employees in the work force are covered by State awards and cannot be touched by the Australian Conciliation and Arbitration Commission. Only 38 per cent of strikes occur in industries covered by Federal awards. The rest occur in industries that are the responsibility of State governments. Of the 38 per cent of strikes that occur under Federal awards, more than half are due to disputes over union membership, demarcation disputes or matters concerning managerial policy. Disputes over union membership have declined rapidly since the Commission’s decision to grant preference to unionists in the clerks’ case, which is a feather in the cap of the honourable member for Phillip (Mr Riordan), because employers now know that it is better to accept preference to unionists than to have compulsory unionism forced upon them by job action.

The honourable member for Wannon talked about pre-election promises as contracts that should not be broken. Yet his Party is now using its control of the Senate to prevent the Government from honouring its contract to reform the Conciliation and Arbitration Act. The Government has a clear mandate for the amendments its Bill seeks to section 5 of the Act to inject some common sense into labour relations by preventing victimisation of employees, which is another cause of endless disputes. It has a clear mandate to make the amendments proposed in its Bill that seek to encourage the settlement of industrial disputes by agreements in such a way as to ensure the observance of those agreements by the employees affected, that is, by ensuring that no agreement can be registered unless it has been endorsed by the persons affected by it. What could be fairer that that? The Government has a clear mandate to amend the Act to give full-time union officials easier right of entry than is now possible. The Opposition should not talk about wildcat strikes and the trouble that is caused by shop committees if at the same time it prevents full-time union officials from having ready access to jobs during any part of the day. The Government has a clear mandate to establish an efficient arbitration inspectorate.

All of these things are contained in the Bill now before the Senate, and all of them have been opposed or will be opposed by the Opposition parties. The Government cannot achieve its aims for a healthier climate in labour relations while the Senate withholds approval of the vital ingredients to the Government’s program for industrial peace. No government could have acted with greater alacrity than has the Whitlam Government. I introduced a Bill containing 74 clauses within 6 sitting weeks of the new Government facing its first Parliament. That Bill was rejected by the Senate without even bothering to debate any one of its clauses. The same thing is happening with the Government’s second Bill. The Senate is threatening to so emasculate the Bill as to render it useless as a means of bringing greater sanity to the labour scene. The situation will get worse. Industrial relations will get worse unless our Bill is passed. They cannot, of course, get better while the defects and shortcomings of the existing Act persist. The Government has no power to act in labour relations. The Parliament cannot act of its own accord directly in labour relations, and it is unfair to expect the Conciliation and Arbitration Commission to do its job if we are to deny it the new powers which the Government’s Bill proposes.

I turn now to the question of industrial agreements. The Government believes that industrial agreements must be encouraged and must be observed and honoured. 1 have said that time and time again and I will keep on saying it. The principle is enshrined in the policy of the Australian Labor Party. The Government’s Bill does this. It makes an important contribution towards the observance of industrial agreements -

Mr Sinclair:

– By employees?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Yes, by employees.

Mr Sinclair:

– As well as by employers?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– Yes, by employees and employers - by requiring the Commission to satisfy itself that such agreements are understood and have been endorsed by the employees affected by an agreement. You will never get the rank and file of any union to honour a sweetheart agreement that sells them short. The short term advantage of such an agreement to an employer is always offset and always will be offset by the long term disadvantages that follow when his employees strike in repudiation of an agreement that sold them short. It is far better to ensure that any agreement made is understood and endorsed by those employees affected.

The people who negotiate the agreements are not the ones who work under them. What they know about them and understand and accept is not the issue. The important question is whether the people who work under an agreement understand the agreement and whether they are prepared to honour it. My experience as a union official - as secretary of a union and as a court advocate - has always been that you can win if you can say to the rank and file: ‘This is not my agreement I am asking you to honour until the 2 year or 3 year period, whatever the duration of the agreement might be, expires. I am asking you to honour your own agreement, an agreement which I put to you a year ago which you all voted to support. That is what I am asking you to honour’. When you can say that to a group of men you can win. You can win them always. You cannot win them when you say: ‘I know you were not consulted. I know that this agreement was made behind closed doors without your being brought into it at all. I know that it sold you short but I am going to force you to carry it out’. They will tell you to go to hell and you cannot blame them for it either. You have to put agreements to the membership for their approval or you might as well not have an agreement.

The days of sweetheart agreements have gone. Why on earth the Opposition should have been so shortsighted as to have rejected these most sensible of all amendments is completely beyond me. As I say, what we have to do is satisfy the membership that the agreements made on their behalf, signed on their behalf and registered on their behalf are agreements to which they themselves are parties, and this can be done only by giving effect to the very sensible provision contained in the amendment which the Bill seeks to introduce.

Mr Cooke:

– What if they disagree later?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– That does not matter. I am telling the honourable member that as a union official of long experience my experience has always shown me what happens if you can go to a factory site and talk to a meeting of men and say: ‘Comrades, I am not asking you to honour my agreement, something that I made behind closed doors; I am asking you to honour your own agreement’. When you talk like that and when you can truthfully say that to a group of men, that is what gives a union official his power to implement and honour an agreement. But you take the power away from him the moment you allow agreements to be registered that have not been ratified by the rank and file. The Government’s Bill recognises this well-known fact of industrial life and seeks to ensure that no agreement can be given the force of an award unless and until it has been ratified by those who are expected to sell their labour at the price fixed and under the conditions agreed upon by that agreement.

Another thing that must be understood in labour relations is that a lot of wage demands relate to the fact that in 1953 the Conciliation and Arbitration Commission abolished automatic cost of living adjustments to wage rates. Compensation for rising prices now has to wait until the Commission’s annual wage case, with the result that unions find it impossible to hold back the pressure of wage increases, and demands for adjustments take the form of claims for payment of over award wages as well as the annual review that is called the national wage case. Because unions have to make claims that will anticipate 12 months’ price increases in advance the net result of this sitaution is that it creates much unrest that could be obviated by a return to wage indexation of some form that will take care of price increases as they occur. What is happening in industry today is that we are trying to hold the lid on a boiler of steam that gets higher and higher in pressure with each increase in prices that occurs until in the end, long before the national wage case comes around, the thing blows up and then demands are made and arc enforced upon employers in the form of over award wages when what the employees ought to be given are quarterly cost of living adjustments. The Australian Government therefore will support the Australian Council of Trade Unions in any move that it makes for the introduction of wage indexation along lines that will, in the Government’s view, relieve the existing pressures for wage rises to compensate for price increases. The precise manner by which the wage indexation should be applied is a matter, of course, for the Commission to determine, but the Government will act upon its mandate to intervene in the proceedings of the Conciliation and Arbitration Commission to support wage indexation.

The guaranteed maintenance of real wages isolates and removes a source of grievance which otherwise may lead to damaging industrial confrontations and inflationary wage claims. Indexation facilitates long term agreements which should reduce the incidence of large’ scale industrial conflict. Indexation enables periodic collective bargaining to concentrate on longer term issues of wage structure, increases in real wages and wages share of national product. The introduction of quarterly adjustment could enable a trade union to concern itself with increasing real wages and thereby creating a climate suitable to encourage productivity bargaining within industry if the parties to it want that kind of bargaining. As compensation for price increases is bound to be a factor in wage negotiations, it appears better if compensation is made regularly and moderately rather than abruptly. Wage indexation would not mean that no other steps need be taken against inflation; in fact there may still be need for further strong, possibly unpleasant, measures against inflation. Consideration would, of course, need to be given to the form and mechanism of wage adjustment. More specifically, on the question of the manner in which adjustment might take place, one approach would be adjustment corresponding to the whole of the quarterly price rise, as occurred prior to the 1952^-53 decision of the Commission. While this seeks to provide for perfect adjustment, it can be markedly influenced by seasonal factors and there may, indeed, be a case for seeking to minimise this seasonal influence.

Another approach, which has found favour in some overseas countries, is to adjust wages only by certain minimum amounts. In other words, wage adjustment would apply only when there is a rise, or an accumulated rise, or fall in the consumer price index leading to at least, say, a given or an X amount adjustment in the weekly wage. This is not unlike the approach taken in adjusting social service pensions. Personally I do not favour the method I have just mentioned, but it is one which can be thought about.

Consideration would need also to be given to the extent of the application of adjustment to wages. It is surely beyond dispute that at least the minimum wage must be protected. The reasons for this, surely, are self-evident. However, given the basic economic argument, namely, that the introduction of wage indexation should be a force against inflation because it would remove one major argument used in wage claims, the concept of indexation could hardly be restricted to the minimum wage alone. The protection against inflation that indexation offers would need to-

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

Mr SINCLAIR:
New England

– The barometer of a government’s popularity is always a little hard to assess. One reads the public opinion polls and sees that the degree to which the popularity of the present Prime Minister (Mr Whitlam) and the Labor Party is declining. One looks at the stock exchange and sees the appalling consequence of the interventionist attitude of this Government on the private sector in the erosion of the value of the savings that are represented by stock on that exchange - the savings of the little man in this community. But the best gauge is some of the comments that are being made by people around the community. I believe that the Leader of the Opposition (Mr Snedden) has perhaps been a trifle modest in the range of disabilities that he has itemised in the motion which I support this afternoon and which refers to the want of confidence that the community has in the Government. The community as a whole is not only disappointed by this Government’s handling of the nation in the specifics to which the Leader of the Opposition has referred but also is disappointed in respect of the whole range of ministerial responsibilities. Mr Scholes, I believe that it is worth while looking to some of the outside comments that are being made.

Mr DEPUTY SPEAKER:

-Order! I suggest that the honourable member refer to the occupant of the Chair as Mr Deputy Speaker.

Mr SINCLAIR:

– Mr Deputy Speaker, I beg your pardon. I refer first to the President’s report issued at the recent annual general meeting of the Federal Grape Growers Council. There perhaps is epitomised the concern of one man with the administration of this Government. An extract from that report states:

For over 20 years a Liberal Government has been in charge and in December 1972 a changeover to a Labor administration took place. Naturally over the years some understanding of the policies of the Liberal Government has been achieved. While it is not my part to personally criticise the present administration, the main effect of the change has been to confuse our thinking.

In addition to the need to grasp the effect of the political philosophy of the new Government on our industry, it has been necessary to try to reach a basis of understanding with the personalities involved.

The annual report of Tancred Brothers Industries Ltd, which is signed by G. O. Tancred and M. E. Baume, as directors, in the section headed ‘Outlook’ states:

Although seasonal conditions and cattle prices would normally indicate that the Company faced a period of satisfactory earnings, the uncertainties created by continual adjustments to exchange rates, removal of export and investment incentives, increases in export tax and other taxes and threats of action to restrict exports and continual wage claims have all combined to create a measure of uncertainty over the immediate future. Attempts to influence market prices by artificial controls tend to be counter-productive; to resolve problems of high prices, there is no real substitute for the market’s own solution of encouraging increased production by offering higher returns.

There again is evidence of a feeling of confusion and uncertainty. Where is this Government leading Australia? I believe that the principal concern of the community is with the credibility of the Government. I believe that it is in the reflection of the attitude of the Government to this motion that we perhaps see epitomised its general attitude towards anyone expressing concern at where it is leading this country and where it is distorting the patterns of government since its election 1 1 months ago. This socialist Government, as the Leader of the Opposition said, has given us 11 months of hard labour. It is hard labour in every sense - in economic mismanagement, in national leadership and in the disruption of the goals which every Australian sees as being the principal objectives that should be followed by a responsible government looking after the affairs of a growing country at a time when there have never been better prospects ahead of it.

If we examine the actions of Ministers we can perhaps best identify some of the problems. It is interesting that this motion comes before the House only a fortnight after the Prime Minister himself acknowledged some of the difficulties that he has, because he then saw the then Minister for the Capital Territory (Mr Enderby) running into a position where there was no prospect at all of his te-election and the Prime Minister sought to move him. Because some problems still remained unresolved in the field of Aboriginal Affairs and which members on this side of the House listed in an urgency motion the other day there was the necessity to move that Minister from his portfolio. Of course, since then the position has arisen where the present Minister for Aboriginal Affairs (Senator Cavanagh) has had the Aboriginal community rise in opposition to him. So, that mini-shuffle of a fortnight ago created almost as much uncertainty as the appointment of the first Whitlam-Barnard Ministry - the 2 men, the 2 individuals who administered the whole range of affairs of Australia in such a way as :y are still being quoted in areas such as mat raised the other day by my colleague, the honourable member for Gwydir (Mr Hunt), when he referred to a letter written by the then Secretary of the Department of the Interior - before that Department became known by another name - to Queensland Mines Ltd giving firm guarantees by the Whitlam-Barnard Ministry to the company on the basis on which it would be able to operate in the future.

Mr Hunt:

– A company with a 90 per cent Australian equity.

Mr SINCLAIR:

– As my colleague says, that is a company with a 90 per cent Australian equity. That company is still awaiting word as to whether licences will be issued in accordance with that letter which was written nearly 11 months ago. The company is still waiting to hear whether compensation will be paid to it if it is unable to meet the payments to which it is committed in accordance with the arrangements made on the basis of that letter. That, of course, is only the tip of the iceberg and I want to talk about some aspects of that part of the motion moved by the Leader of the Opposition. However, before I do, I want to refer to each of the Ministers and point out to the House how each one in his own way has been culpable of leading this nation astray. Even today we heard the Prime Minister castigate, by innuendo, the American people. The Prime Minister prances and takes unto himself a posturing attitude which does little credit to a man who is Prime Minister of Australia. Unfortunately his own ideas of his importance do not parallel those of other members of this House or of the nation. It is true that in the field of foreign affairs he has alienated the people of Thailand, Singapore, Indonesia, Japan, the United States of America and the United Kingdom. He is a man who has led this country away from the close filial ties which we have preserved with those countries - the United Kingdom and the United States in particular - which have been so important to the establishing of the present level of prosperity in our country. It is he more than any other member of the Whitlam Ministry who is responsible for the misguidance of the economy of this country. It is he who has failed to give leadership when leadership has been necessary. It is he who has come into this House today and debased by personal innuendo against the Leader of the Opposition a motion of tremendous importance in the life of a government. I deplore the inability of the Prime Minister to stand up as a man and acknowledge blame where blame is due. I deplore the inability of the Prime Minister to act as a responsible leader and guide this nation at a time of inflation and of very real concern about where the little men of this country are going.

The next on the list is the Deputy Prime Minister and Minister for Defence (Mr Barnard). I think it is deplorable that a man who is responsible for the defence forces of this country should have pioneered the complete dismantling of our defence capacity. It was he and he alone who did that. He decided, in his recommendations to the Government prior to the budgetary discussion, that there should be a writing down of the ability of this country to maintain a reasonable naval force. He has failed to attend to the re-equipment needs of each of the 3 armed forces. It was he who participated in the dismemberment of the ANZUK agreement with our colleague countries in South East Asia. It is he who has created such a disruptive state of morale that the incidence of resignations among senior officers of the armed forces has risen to an unprecedented level.

The Minister for Overseas Trade (Dr J. F. Cairns) is the third on the list. He should be called the Minister for Chinese Trade. He comes into this House with great aplomb because he has negotiated a long term agreement for the sale of wheat to China. Perhaps he does not realise that the honourable member for Moore (Mr Maisey), in an earlier capacity, was one of those who pioneered the first contract for the sale of wheat to China. The Minister for Overseas Trade is apparently now giving some credit to the Australian Wheat Board for negotiating the sale of 170 million bushels of wheat to China, but he claims the principal credit. Perhaps he does not realise that the 170 million bushels which he has negotiated to sell to China over the next 3 years represents less than 60 million bushels a year. Does the Minister realise that the previous Government, in association with the Wheat Board, last year sold 40 million bushels to China and that the Wheat Board said it could have sold twice as much if it had had the wheat to sell?

Does he realise that Australia has sold up to 82 million bushels of wheat to China in previous years? Where does the 60 million bushels come out in a parallel with those earlier sales? At what price was it sold? What were the terms and conditions of the sale? How are we really placed? One has only to look at the way in which the Minister for Overseas Trade administers other areas of his portfolio - for example, the Australian Industry Development Corporation legislation about which we spoke the other day - to see that he is endeavouring not only to assert the socialisation of industry but also to take into the hands of Government in a frightening way the control of development. One also has the very real problem of whether it is he who is the principal spokesman for the Government on foreign affairs or whether in the past it was the Prime Minister and in the future it will be the Minister for Foreign Affairs, who will be a member of another place.

The fourth on the list of the Ministry is the Minister for Social Security (Mr Hayden). If there is ever an area of public responsibility in this country which is falling into disarray it is under the administration of this man, who has failed to create any certainty in the minds of the Australian public as to what is the new health policy of the Government. He has certainly told us what it is not. He has certainly got himself into constant arguments with members of the medical profession. But he has not come down in any way with a firm policy which shows us what it is going to cost the taxpayer, what benefits the taxpayer is going to receive and how the citizen who is completely content with the contributory scheme which is now available is going to be better off by having to pay increased taxes and with the unreliability of the type of services which the Minister suggests will be the result of the changes he foretells. This man has not given us a positive health policy; I believe he has given us a negative health policy. I believe it is impossible for us to have the significant changes which are envisaged in the health system of this country without our having a positive statement of how these changes are going to affect the average citizen. I do not believe we have received that in an adequate form to date.

From the Treasurer (Mr Crean) we have had a Budget which has seen the complete dismantling of significant areas of assistance to private individuals engaged in productive industries in Australia. I refer not only to the primary sector, although there the cost will be about $160m, but also to the extractive industries, the mining industry and the manufacturing industry. In those 3 sectors we are now seeing the generation of uncertainty and a failure to provide funds for the future development of industry. Mineral exploration, for example, is almost at a halt. As a result of the Budget which this man introduced we have seen the principal economic adviser to the Prime Minister come out and say that we have 2 alternatives - either we increase taxation or the Australian taxpayer will pay through increased inflation. The principal economic adviser to the Prime Minister has now asserted that he believes that the budgetary tactics of the present Federal Treasurer were incorrect. So that we are now in the position where the man who presented the first Labor Budget for 23 years has come out with a wet squib.

We have then the Leader of the Government in the Senate and Attorney-General (Senator Murphy). All one needs to do is to cite the deplorable Australian Security Intelligence Organisation exercise to recall how this man, in an endeavour to protect his colleagues in the left of his Party, was prepared to breach every area of ministerial responsibility by taking one of the groups responsible to him - the Commonwealth Police Force - into the offices of another, the Australian Security Intelligence Organisation, in order to pursue what I suspect was only a personal vendetta. I believe it is deplorable that in such a direct and irresponsible action this man could so have disrupted the security capacity of this country.

I move down the list to the Minister for the Media (Senator Douglas McClelland). Perhaps all I need say of him is that in this morning’s ‘Australian Financial Review’ it was said that his contribution to the media of this country is as great as Jack the Ripper’s to a blind date. I believe that is a fair assessment of the contribution of this man. The next on the list is the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson). Here we have a man who seems to be in constant disagreement with his colleagues in the Ministry. We have in him a man whose uncertainty and leadership are such that most people in northern Australia are concerned about just where they are heading. Under the previous administration there was certainty that the Northern Territory was moving towards independence. Under the administration - albeit he is a new Minister - of the present Minister for the Northern Territory, a person who in the past has been responsible only for the portfolio of Northern Development, we are apparently going to persist in the trend towards regional control and local government control and deny to the people of the north any prospect of ultimate responsibility for their own administration.

Moving down the list - I do not have time to canvass all of the Ministers on the list, but there are things that can be said about all of them - we have the Minister for Services and Property and Leader of the House (Mr Daly). We have seen his buffoonery before. He has been responsible for the moving of more gags and the guillotining of more debates in this House than any Leader of the House in the last 5 years. It is he, more than anyone else, who is preventing adequate public debate and adequate scrutiny of the significant changes to the legislative base upon which the Government is moving towards a socialising program. It is he who is denying us the opportunity of an adequate scrutiny in so many areas of the measures which come before us. He provides us with a laugh but with no common sense. Is that a basis upon which a country or a Parliament in particular should be led?

We have just heard from the Minister for Labour (Mr Clyde Cameron). We have heard how he supports the program which the Government has introduced. But he has not told us how he is going to overcome the incidence of industrial disputes, which has been 65 per cent greater in 1973 than it was in 1972. He has told us nothing of how he is going to ensure that his colleague, the Minister for Minerals and Energy (Mr Connor), does not pursue his claim in support of those who are striking in power homes throughout New South Wales for a 35hour working week. He has told us nothing of how he will try to ensure greater productivity in this nation. He has told us only that he has an industrial legislation Bill before the House and that he disagrees with a number of amendments which we propose not the reasons for his disagreement. He has told us only that if only we would accept his amendments all would be well. It is the Minister for Labour as much as anyone who must take responsibility for the increasing number of industrial disputes, for the considerable increase in man days lost and for the consequential shortage of goods which is accelerating the inflationary forces of this country.

I have no time to speak about the Minister for Urban and Regional Development (Mr Uren) and his intervention in State affairs and how he has claimed that he does not believe that expressways should be proceeded with or how he has arbitrarily identified individual growth centres and denied the States the opportunity to participate in furthering reasonable developments for all centres outside the major capitals. There is no time to go through the interventions of the Minister for Minerals and Energy (Mr Connor). My colleague the honourable member for Farrer (Mr Fairbairn) this afternoon has told us something of his concern. If each one of these Ministers, as irresponsible as they are, continues to guide this country we unfortunately face an extremely bleak future. I conclude with a parody on the 23rd Psalm which a constituent of mine forwarded to me. It reads:

Whitlam is my shepherd, I shall not work, He maketh me to lie down on park benches. He leadeth me beside the still factories, He restoreth my faithin the Liberals and the Country Party. He guideth me in the paths of unemployment. Yea, though I walk through the valley of the soup kitchens for his Labor Party’s Cake. I shall still be hungry. I feel evil for they are against me. Crean has anointeth my income with taxes and my expenses over runneth my salary. Surely poverty and hard living shall follow me all the days of the Labor Administration.

I completely endorse the condemnation of this Government moved by the Leader of the Opposition and believe that this House should support it in its entirety.

Mr DEPUTY SPEAKER (Mr Scholes)Order! The honourable member’s time has expired.’

Mr DALY:
Minister for Services and Property and Leader of the House · Grayndler · ALP

– I am also prompted to become a little lyrical by the final words of the honourable member for New England (Mr Sinclair). I quote to him some words from Edmund Burke’s ‘Observations on “ The Present State of the Nation “ published in 1796. They are:

It is a general popular error to Imagine the loudest complaint’s for the public to be the most anxious for its welfare.

Does that not apply to those opposite today? I am pleased that the honourable member for New England dwelt on the members of the present Ministry because later on in this speech I intend to devote a little of my time to the exmembers of the Ministry on the other side of the Parliament. Then I will ask for the fair minded judgment of all the people of Australia to see whether the guilty men who sit on the other side are not responsible for the situation in Australia today not the brilliant men who today lead this country from these front benches.

Before I do so, however, very briefly in the time at my disposal I shall deal with the final section of this censure motion moved against the Government. Section (f) states that the Government is to be condemned because of its mismanagement of the national Parliament. Even though I might not be that astute, I think that section refers to me as Leader of the House. I shall give honourable members opposite the record of this Government in respect of the administration of the affairs of this Parliament and all again may judge how it has gone. Any fair minded honourable member will agree that under this Government the proceedings are conducted in accordance with the Standing Orders and the highest traditions of Parliament. They exemplify dignity, respectability, patience, tolerance, fairness and justice.

Mr Nixon:

– You do not mind if I leave do you?

Mr DALY:
GRAYNDLER, NEW SOUTH WALES · ALP

– Let me tell the honourable member before he goes the midnight special when he was in government what we have done. We have had no sittings after 11 p.m., except on one occasion caused by Opposition tactics. The adjournment debate has been conducted three or four nights a week, except on one occasion due to Opposition frustration of the Standing Orders. General business has been called on on every occasion and with one exception taken to a vote. That matter will be voted on tomorrow. Grievance day has been called on all occasions, but this has been interrupted by delaying tactics by Opposition honourable members who interfered with private members’ business. Adequate time has been given for debate on all important measures, except when delaying obstructionist tactics were engaged in by members of the Opposition Parties, particularly the Australian Country Party. There have been no sittings after midnight. The guillotine and the gag have been applied only in most extreme circumstances due to obstructionist tactics by the Opposition going beyond what could be called reasonable conduct in the Parliament.

To summarise, because of the lag in effective legislation due to the previous Government’s incompetence, a record number of Bills has been introduced. In addition, there has been no suspension of grievance day or general business during the Budget session. Under the previous Government they were never called on at any stage during the Budget session. There have been longer sitting hours certainly, and more sitting days because of the legislative program. Within this scope the Government has allowed adequate debate and used to a minimum the Standing Orders to stop debate. Despite earlier obstructionist efforts by Opposition members they have not been denied their right as private members to move the suspension of Standing Orders, as we were prevented from doing under the previous Government and which every honourable member sitting opposite voted for. The Parliament has been conducted democratically and in accordance with the highest traditions of this august House.

Now let us have a look at the sorry record of those who sit opposite. In 1970, 1971 and 1972 the gag was moved 163 times by those who sit opposite. I think the Deputy Liberal Party Whip moved it 160 of those times. The Deputy Leader of the Opposition (Mr Lynch) said today that the guillotine was applied only once in 1971 by the previous Government. But the Liberals did not muck about when they moved it. They put 17 Bills through in 19 hours under the one guillotine. These are the democrats. Look at the Bills they put through, and particularly the Australian Country Party members, these defenders of the rural man. The Loan (Farmers Debt Adjustment) Bill 1971 for all stages was allowed 5 minutes - 5 minutes those fighters for the cockies gave it. The Seamen’s Compensation Bill was also allowed 5 minutes. The AngloAustralian Telescope Agreement Bill was also allowed 5 minutes. The previous Government telescoped that one right enough. The Air Accidents Bill and the Compensation (Commonwealth Employees) Bill were allowed one hour. Looking through the list of the Bills guillotined one sees that 17 Bills were put through in 19 hours. That was the real degradation of the Parliament under those who sit opposite. So do not let them talk to me about the guillotine. I should like to have incorporated in Hansard for all to see for all time the damning record of those who sit opposite in respect of the conduct of this Parliament.

Mr DEPUTY SPEAKER (Mr Scholes:

– Is leave granted?

Mr McMahon:

– No.

Mr DEPUTY SPEAKER:

– Leave is not granted.

Mr DALY:

– Of course not. The Opposition has always got to run away from its crimes. When they are put on the record everybody knows about them. Grievance day has been called on on every occasion except once when the Opposition did not want to debate it and stopped private members from doing so. General business has been considered on every occasion. There have been no sittings after midnight. Let us compare that with what happened under those who sit opposite. In 1967 we sat till 5.7 a.m.; in 1968 we sat on till 2.42 a.m. on one occasion; to 2.39 a.m. in 1969; to 4.42 a.m. in 1970; to 6.22 a.m. in 1971; and to 1.43 a.m. in 1972. As I said before in this Parliament, under the previous Government we went home only when the pimps, the prostitutes and the police were on the streets. That is the way it ran the Parliament.

The number of sittings so far this year total 58, and we will create a record by the end of the year. Bills introduced total 197 and there have been 30 hours debate on the adjournment, as compared with 26 hours last year. Private members’ Bills and motions, that were not considered by the previous Government, totalled 11 in 1972 and there were 18 debated and not finalised when the Parliament was dissolved and the former Government disappeared into limbo. What a rotten and contemptible record for people who condemn this Government.

Let us have a look now at what the former Prime Minister, the right honourable member for Higgins (Mr Gorton) did. On 25 November 1969 the right honourable member called the Parliament to meet for one day. Just prior to that, on 26 September the Parliament had gone into recess. After it met on 25 November 1969 for one day it went into recess until 3 March 1970. When the Parliament met again the Governor-General’s Speech lasted 59 seconds and the 21 -gun salute took 3 minutes to go off. The honourable member for Henty (Mr Fox) moved the adoption of the Address-in-Reply in 2 minutes. Then the honourable member for Maranoa (Mr Corbett), in one of his most brilliant speeches, seconded the motion in 20 seconds. Six gags were moved in the debates that day.

On that day we did everything that one could remember in Parliament. The Parliament assembled; the Address-in-Reply debate took place; the members were sworn in; the Speaker was elected; the Deputy Speaker was elected; the Ministry and ministerial changes were announced; the Whips were elected; there were condolence motions; the committee to prepare the Address-in-Reply - that Government knew when its speakers spoke for only 2i minutes that they were not too bright - was elected; the motion for the adoption of the Address-in-Reply was moved and seconded; and then, like bats out of hell, Government supporters ran out to the GovernorGeneral and at 5.45 p.m. gave him the 2±-minute Address. Then we had papers presented, committees appointed and petitions presented, and a censure motion which was moved by the then Leader of the Opposition was disposed of in just about 60 minutes flat. We got home early on that occasion after the adjournment debate finished at 12.57 a.m. For the next 3 or 4 months the democrats who now sit opposite disappeared into the wilderness and did not bother bringing the Parliament together in that time. What humbug it is to hear honourable members opposite growl about the way this Parliament is being run.

I would like to mention that a former Prime Minister, the right honourable member for Higgins - I tell this to honourable members opposite who misused the Parliament - is reported in Hansard of 25 November 1969, when speaking about the moving of the gag, as having said on that memorable day:

If it-

That is the then Opposition - is going to seek hour long debates on the motion that the House should adjourn to a time to be fixed and other hour long debates on the motion that leave of absence should be given during those adjournments, then clearly it is not really advancing the cause of parliamentary government in those debates at all. . . The alternative to what he has suggested is a wrong thing to do would be to have unlimited time for debate on whether the House should adjourn and whether leave should be given during the period that the House has agreed it should adjourn.

In other words, the right honourable member for Higgins indicated in that speech that if honourable members frustrate the will of the duly elected government they must expect to have their efforts curtailed by the use of, as it is popularly called in this place, the gag.

So today I do not want to hear snide complaints being made by the Deputy Leader of the Opposition about his inability to control those who sit on the opposite side of .the House. How can we make arrangements for debate with honourable members opposite? The members of the Country Party are talking to the Liberals only by the use of braille. In other words, there is no means of communication known to man which they use - only the secret signals that they give. Whatever the Liberals want is not wanted by those who sit in the Country Party corner of the House. Last night we saw in this Parliament the glorious unity of those who seek to achieve office again in this nation. The members of the Liberal Party rambled over to this side of the House, making a total of 86 on this side, while the members of . the Country Party sat in their corner of the House. How can we make arrangements? As soon as we make an. arrangment it is broken by one party or the other because of the disunity that exists.

Having said so much, I place on record without any apology the attitude of this Government towards parliamentary democracy and the efforts we have made to ensure that the people opposite get the right to speak, as they should. Let us have a look at the exMinisters on the other side of the House. Let us run through a few of those who on this occasion seek to take office in this country. I have not a very high opinion of the Leader of the Opposition (Mr Snedden) as a politician. He seeks to lead this country. Senator Gair, one of his colleagues in days gone by, has views in regard to him. Senator Gair is on record as saying: ‘Mr Snedden could not make an impression on a soft cushion’. Where do you go with that one? Senator Gair is not on his own in that respect. Right down the line honourable members will see that pattern continuing. I have with me newspaper cuttings to which I will refer later.

Look at the new Ministry that will be formed if the Opposition gains office again. The right honourable member for Lowe (Mr McMahon), a former Prime Minister, when he plucked up enough courage, kicked the right honourable member for Higgins out of his Cabinet. But now the Leader of the Opposition has the right honourable member for Higgins sitting on the front bench. The only good thing about it is that the Leader of the Opposition does not seem to take any advice from him. But the question is: Will the right honourable gentleman be in the Cabinet if the Oppositionhappens to win office again? Where is the Opposition’s joint executive? The Country Party has its executive in its corner and the Liberal Party has its own executive. It is impossible for them to agree on everything. No matter whether it is fish and chips or primary industry, when somebody makes a statement 2 views have to be expressed from that side of the Parliament. The Country Party goes one way and the Liberals go another. Let me refer to an article in the ‘Age’ on Monday, 22 October. It is a report of an interview given to a Melbourne student newspaper by the right honourable member for Higgins. It quotes him as saying:

The future must lie with the Chipps. If it lies with the Greenwoods there won’t be any future.

Senator Greenwood was one of the Liberal’s senior Ministers. In that interview the right honourable member for Higgins was not too complementary to the right honourable member for Lowe, another former Prime Minister. He was asked:

Mr McMahon prays about politics; have you ever dreamt about politics?

The right honourable member for Higgins is reported to have said:

I don’t think I can remember dreaming about politics, and I don’t think I’ve ever had as much need to pray as Mr McMahon.

Will they not make a hillbilly Ministry? Will it not be good when they sit down in the Cabinet room and talk over old times? They might occasionally pick up a copy of the Age’ and read these things. Will that not be lovely? In that interview he was asked:

Do you think McMahon will make a comeback?

The right honourable member for Higgins replied:

Have you ever heard people walking around the streets lately saying ‘I wish McMahon was back as Leader of the Liberal Party’. He’s got a nuisance value still, he rings people up all day long. I think he’s a completely spent force myself.

But they both will be in the one Ministry, happily chopping along, wrecking the economy again as time goes on. Then, the honourable member for Wannon (Mr Malcolm Fraser) and the honourable member for Farrer (Mr Fairbairn) - 2 ex-Ministers - are on record as saying that they would never serve in the same Ministry as the right honourable member for Higgins. But those 2 honourable gentlemen are both on the front bench again.

The right honourable member for Higgins returned the compliment by saying, as reported in the ‘Daily Telegraph’ of 28 May 1973, that if the honourable member for Wannon ever became leader ‘it would be a disaster’. Cannot honourable members imagine the happy gathering in the new Cabinet if the Opposition gains office again? It will be glorious as the members sit around and have their first scotch and soda together. I imagine that, far from being a Ministry, it will be more like Alexander’s Ragtime Band. The question to be asked is: ‘What kind of a government would it be and who would be in it?’ The honourable member for Wannon is on record as saying that the former Prime Minister, the right honourable member for Higgins, is ‘unfit to hold office’. Honourable members can go right down the line and see this continuing pattern. But members of the Opposition have given the present Leader of the Opposition the imprimatur of support. They have said that they will support him again if they have an election, provided he does not lose by too many votes. Are they not the kind of supporters a leader would want to have behind him? They really exhilarate a leader.

I now come to the former Treasurer, the honourable member for Wentworth (Mr Bury), who, in complaining about the McMahon Cabinet, said: ‘The Cabinet leaks like a ruddy sieve’. The people about whom I am speaking will be members of the new Ministry that is about to be formed! I am reminded about another comment in regard to the Leader of the Opposition. I quote another of the famous Gair statements. Senator Gair is on record as saying that the Leader of the Liberal Party is ‘a lightweight who could not go 2 rounds with a revolving door’. Who would not say that about the Leader of the Opposition who complained about ‘a mangy deal’ and ‘who was churching the old whore now’? Can one blame Senator Gair for making that comment? That is the situation albeit. Then we have to bring in the members of the Country Party because they make a few statements. I reckon one would put the Country Party Ministers in the same category as ‘Dad’s Army’, I will refer now to an article in the ‘Australian’ of Friday, 3 August 1973, entitled ‘Anthony’s “thickhead” jibe at Libs’. The article states:

The Liberal-Country Party split in Victoria is leaving the way open for Labor to rush into a double dissolution, the Federal leader of the Country Party, Mr Anthony, warned last night.

Speaking in Melbourne after a special meeting of the Victoria Country Party State central council, Mr Anthony bitterly attacked the Liberal Party State executive as ‘thickheads.’

I reckon I am a bit with him for once. Then he gave real vent to his feelings, as reported in the ‘Daily Telegraph’ of 3 August in an article headed ‘Snap poll: ALP would romp in*. He is the Leader of the honourable gentleman who just resumed his seat. The report states:

Labor would ‘romp in’ if a snap election were called now and if the rift between the Country and Liberal Parties continued, Mr Doug Anthony warned yesterday.

Why some of those thickheads don’t realise this I don’t know’, he said.

When one thinks about it, one realises that they are a couple of the most sensible statements he has made for a long time. One can go right through all the statements. Honourable members opposite complained about our Cabinet changes. On 4 August there was a newspaper report headed ‘Snedden remakes Liberal Cabinet’. The members of that Liberal Cabinet were elected only about 3 months before that date. What kind of a leader would he be? The headline in the Melbourne Age’ of Tuesday, 13 February states: ‘Party’s divided: Snedden’. Another headline states: A house divided’. Another headline from the Melbourne ‘Sun’ of Tuesday, 13 February, states: ‘Libs “plagued” by split . . .’. This was the Leader of the Opposition talking. Heavens above! I refer to the honourable member for Moreton (Mr Killen) of Baron Muenchausen fame. He writes for a journal. I do not want to offend him but I am one of his few readers, because he puts me in a good mood. He writes some sense, sometimes, like the articles in the ‘Courier-Mail’ of 21 July this year which was headed:

Killen blasts CP. ‘humbug’

Joint Senate Ticket Plan

My word, there are some Liberals waking up. We find that the most bitter attack of all was made by a former member of Parliament, Mr St John, who said: ‘Lies defeated the Liberals’. I have just given honourable members in the time at my disposal a quick run down of these newspaper articles. Let us have a look at another newspaper article. It is headed: Liberals set for take-off - where?’ I could continue reading these articles. Another article is headed:

Liberals’ chief calls for younger men as MPs Many are too old for jobs, says Southey

As I see the slumbering shadow Minister on the front bench, I do not wonder at these articles. I do not have time to run through the volumes of notes that I have. But I ask the public to take their pick - the brilliant men who sit on this side, backed up by the men behind them with a policy for the Australian people or the discarded guilty men who sit on that side in their rightful place in this Parliament.

Mr McMAHON:
Lowe

- Mr Deputy Speaker, just about this time last year-

Motion (by Mr Nicholls) proposed:

That the question be now put.

Mr DEPUTY SPEAKER (Mr Scholes)Order! The question is: That the question be now put. All those of that opinion say ‘aye* to the contrary ‘no’-

Mr McMahon:

– Mr Deputy Speaker, I take a point of order. Earlier today I discussed with the Leader of the House the question of how long he was prepared-

Mr DEPUTY SPEAKER:

-Order! The honourable gentleman is as aware as I am that arrangements made outside the House-

Mr McMahon:

– It was not made outside; it was made inside the House.

Mr DEPUTY SPEAKER:

– or inside the House have nothing to do with the Chair. The Chair has to comply with the Standing Orders and the Standing Orders provide that a motion that the question be now put may be moved at any time. It has been moved and I must put the question.

Mr McMahon:

– Again, I should like you to hear what I have to say.

Mr DEPUTY SPEAKER:

-Order! It is not a matter of my wanting to hear what you have to say. The closure has been moved-

Mr McMahon:

– You are stifling debate.

Mr DEPUTY SPEAKER:

– Order! I am not stifling debate, I am carrying out the Standing Orders of the House. I would ask the right honourable gentleman to resume his seat. There is no substance in his point of order. He has risen on a point which can be raised at an appropriate time. The question is.

Mr Giles:

– On a point of order, Mr Deputy Speaker.

Mr DEPUTY SPEAKER:

– I call the honourable member for Angas.

Mr McMahon:

– Could I again raise another point involving the integrity.

Mr DEPUTY SPEAKER:

– Order! I have called the honourable member for Angas who is taking a point of order.

Mr Giles:

– On a point of order, Mr Deputy Speaker, I appeal to the Leader of the House. As the Minister has been so rough on the right honourable member for Lowe he should in all fairness be allowed to reply.

Mr DEPUTY SPEAKER:

– Order! The honourable gentleman will resume his seat. That is not a point of order and he is well aware of it.

Question put:

That the question be now put.

The House divided. (Mr Speaker - Hon. J. F. Cope)

AYES: 59

NOES: 54

Majority . . . . 5

AYES

NOES

Question so resolved in the affirmative.

Question put:

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

The House divided. (Mr Speaker- Hon. J. F. Cope)

AYES: 55

NOES: 60

Majority . . . . 5

AYES

NOES

Question so resolved in the negative.

page 2532

ABORIGINAL AFFAIRS

Notice of Motion

Mr HUNT:
Gwydir

– I give notice that on General Business Thursday No. 10 I shall move:

  1. That, in the opinion of this House, a royal commission should be appointed to inquire into and report on the operations of the Council for and the Department of Aboriginal Affairs.

  2. That, without prejudice to the generality of the foregoing, the commission should consider and report on the following specific matters:

    1. The extent to which the operations of the Council for Aboriginal Affairs undermines the principle of ministerial responsibility to Parliament for the functions of the Department.
    2. Whether the programming and expenditure by the Department, and in particular expenditure on the account of the Aboriginal Advancement Trust Account, the Aborigines Benefit Trust Fund and the Capital Fund for Aboriginal Enterprises is responsible to the Minister.
    3. Whether such programs, projects and requests for assistance are properly considered and controlled.
    4. Whether the programs and proposals for expenditure are adequately scrutinised by the Department and Treasury.
    5. Whether the expenditure and the completion of programs and proposals are adequately supervised by the Department and by the Auditor-General. (0 Pursuant to the above the commission should report on:
    1. the affairs of Applied Ecology Pty Ltd and Aboriginal and Islander Marketing Pty Ltd, and

    2. properties purchased for or by Aboriginal communities with particular regard to whether the purchase price was higher than the official valuation.

    3. The operation and functions of the Aboriginal Legal Aid Service. Pursuant to the above the commission should report on the circumstances surrounding the removal of the child Nola Brown from the care of her foster parents with a view to determining whether an officer or officers of the Legal Aid Service acted, or advised action, contrary to law.
    4. The circumstances in which 4 senior officers of the Department (referred to in the Senate on 9 October 1973) were promoted without prior advertisement.
    5. Whether under the present composition of the Council for Aboriginal Affairs, it is competent to advise the Minister and the Government on matters concerning Aboriginal custom, law and opinion.

page 2532

QUESTION

QUESTIONS WITHOUT NOTICE

Mr CREAN:
Treasurer · Melbourne Ports · ALP

– I ask that questions without notice be placed on the notice paper.

page 2532

PERSONAL EXPLANATION

Mr DAVIES:
Braddon

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

Mr SPEAKER:

-Does the honourable gentleman claim to have been misrepresented?

Mr DAVIES:

– Yes. The ‘Examiner’ newspaper of yesterday’s date, 22 October 1973, contains a letter from an A. G. Rockliff of Forest, Tasmania, in which he states:

At an ALP meeting at Burnie on October 16th, 1968, Mr Davies stated that dairymen would lose their subsidy if a Federal Labor Government was elected.

I have checked my attendance in this House and I find that on page 2046 of Hansard of 16 October 1968 I am recorded as a teller in a division that took place at approximately 10.45 p.m. on that day. This is a clear indication that I could not have attended the meeting referred to, which supposedly was held on the same night in Burnie, as was stated by A. G. Rockliff. I have requested my solicitor to take the necessary legal action.

page 2532

EXPORT PAYMENTS INSURANCE CORPORATION

Dr F CAIRNS:
Minister for Overseas Trade · Lalor · ALP

– Pursuant to section 32 of the Export Papyments Insurance Corporation

Act 1956-1972, I have pleasure in presenting the seventeenth annual report of the Corporation for the year ended 30 June 1973, together with financial statements and the AnditorGeneral’s report on those statements.

page 2533

TARIFF BOARD REPORT

DrJ. F. CAIRNS (Lalor- Minister for

Overseas Trade) - For the information of honourable members, I present a Tariff Board report on expandable polystyrene beads and coated paperboard for use in the manufacture of disposable hot drink cups bylaw, dated 19 July 1973.

page 2533

TWENTY-EIGHTH ANNUAL MEETING OF THE WORLD BANK AND THE INTERNATIONAL MONETARY FUND

Ministerial Statement

Mr CREAN:
Treasurer · Melbourne Ports · ALP

by leave - I have recently returned from Nairobi where I attended the twenty-eighth annual meeting of the World Bank and the International Monetary Fund, as the Governor of those institutions for Australia. Of the 126 countries represented at Nairobi, over 100 were developing countries. They had a particular interest, of course, in the discussions on the work of the World Bank group.

The President of the World Bank, Mr McNamara, was able to report that the financial institutions for which he is responsible had achieved the goal which he had set in 1968 of doubling the Bank group’s operations in the course of the ensuing 5 years. In the 5 years to March 1968 financial commitments totalled $US5.8 billion. In the 5 years to March 1973, financial commitments totalled $US13.4 billion. In real terms, the increase was 100 per cent. Mr McNamara has recently been reappointed President of the Bank for a further 5 years and over this period he plans to expand the group’s financial commitments by another 40 per cent in real terms. This would bring new commitments over the 1974- 78 period to $US22 billion a truly prodigious figure. Whether or not such a figure will be achieved remains to be seen. The number of donor countries in the Bank group is few and the support of some of the larger donors is uncertain. The World Bank, however, is clearly destined to continue to dominate the international scene in terms of financial flows from multilateral institutions to developing countries.

What the World Bank will be paying particular attention to over the period ahead, however, is not so much the quantity of its disbursements, as the quality. There is now a belated recognition that one cannot measure progress solely by the rate of growth of gross national product. It has been estimated that 40 per cent of the population of the developing countries of the world is living in absolute poverty. It is important that the benefits of financial flows to developing countries should reach that lower 40 per cent of the income earning population. Henceforth the Bank will be identifying the concentrations of poverty in developing countries and directing investments in such a way as to bring some direct relief to the poorest people. In particular, there will be more emphasis on improving the productivity of small scale farmers. All this is to the good.

However, there are critical problems ahead for the developing world. Three of these problems were highlighted in Nairobi. They are:

  1. The growing burden of external debt
  2. The impediments to the development of export earnings
  3. The inadequacy of development assistance.

It was a matter of some satisfaction to me that I was able in Nairobi to point to Australia’s efforts to be helpful in these matters. I was able to say, for instance, that virtually the whole of Australia’s official aid has been given on a grant basis and that we are not therefore adding to the debt burden of the developing countries.

I was able to remind other governors of the steps we were taking to facilitate imports from developing countries. I referred to improvements made to the preferential scheme involving periodic cuts in duties on imports from developing countries. I also pointed out that these cuts were superimposed on the recent 25 per cent cut in general tariff rates on imports from all countries. Finally, on the matter of official aid, I was in a position to say that, notwithstanding what was happening in some other donor countries, there was no slackening in Australia’s official aid effort and we remained in the top three or four in the world aid tables.

That Australia has a favourable record in understanding the problems of developing countries and taking action to assist them must be a matter for satisfaction to the whole House.

I recognise that the Government which preceded us laid a good foundation for Australia’s aid efforts. The present Government has built upon that basis and moved further along the road. Whatever is done to assist developing countries, however, the fact remains that die vital contribution has to be made by the developing countries themselves. In this respect, if there is one firm impression I could bring back from Nairobi, it is that the people of Africa have all the qualities necessary to make a success of their future development. They deserve support.

I turn now to what was the major subject of discussion at Nairobi - the issue of international monetary reform. Honourable members will recall that I made a statement to the House on this subject on 12 April 1973. At that time I gave honourable members some of the background to the establishment of the Committee of Twenty, of which Australia is a member, and I outlined some of the main issues as they then stood. At the subsequent meeting of the Committee of Twenty held in Washington on 30-31 July, the general atmosphere was favourable and some progress was made.

In contrast, however, the most recent Committee of Twenty meeting held in Nairobi on 23 September did not advance matters a great deal further. The Committee of Twenty was able to refer to Governors a ‘First Outline of Reform*. After this speech I propose to table the full text of it. However that outline is clearly not a complete blue-print for a reformed monetary system. There are many major issues yet to be resolved. Of course it would be wrong to be too disappointed at this apparent lack of progress in the September discussions on reform. For one thing, I have never been over-impressed with the notion that some re-writing of the rules of the International Monetary Fund would suddenly solve all our international financial problems. Assuming that the rules are good rules, the question still remains whether countries when they are under pressure will abide by the rules. Recent history is not too comforting on that point. The essential thing, as I see it, is to establish the fact that observance of certain codes of behaviour in the international financial field are in the interests of all. Cooperation, not coercion, should be the basis of the monetary system of the future. If the will is not there, the rules will not help a great deal.

Another thing to bear in mind is that financial crises, dramatic as they are, and important as they are, are not the whole story. Dr Witteveen, for instance, the new Managing Director, was able to record a strong economic recovery in the main industrial countries of the world after a 2-year period of economic slowdown. Notwithstanding recurrent financial crises, world production and world trade have been growing strongly over the past 12 or 18 months. The output of industrial countries was more than 7 per cent higher in real terms in the first half of 1973 than in the second half of 1972, and world trade was no less than 12 per cent higher in real terms in the first half of 1973 than it had been a year earlier. Developing countries have benefited from this increase in world economic activity, along with developed countries.

Nevertheless, international financial problems are important in their own right and have implications for other areas of economic policy. For instance, the continued growth of international liquidity has had consequences for domestic liquidity in member countries and for the battle against inflation - an issue which concerns all of us. It is desirable therefore that we should press ahead with the program of monetary reform as fast as possible. It is for this reason that the Committee of Twenty, in referring the First Outline of Monetary Reform to Governors, placed a time limit of 31 July 1974 for the settlement of remaining issues on monetary reform. Whether such a time limit will prove to be realistic only time will tell. What are these outstanding issues? The basic issue is how to achieve a greater degree of equilibrium in the balance of payments between industrial countries. If there is one single reason why the monetary system has failed it is because individual countries, confronted with persistent surpluses or deficits, have not taken early and sufficient action to correct those surpluses and deficits. This is a simple point, and yet it is fundamental, and quite critical, to the reform discussion.

Australia has stressed the importance of individual action to correct balance of payments disequilibria. It has been able to do so in the knowledge that the present Government’s policy is impeccable in this respect. The exchange rate actions and the tariff actions which this Government has taken have been noted and commended throughout the world. However, the United States and the Europeans tend to look to new rules to bring about this quicker adjustment. The monetary reform discussions to date have, to some extent, been a debate between the United States on the one hand and Europe on the other as to what rules would best achieve this result. The United States, for its part, places emphasis on what it calls ‘objective indicators’.

The United States believes that the present system is one-sided in that there will always be pressure on deficit countries to devalue because they run out of reserves. As they see it there is no equivalent pressure on surplus countries to revalue. The United States system of objective indicators would essentially involve establishing a normal range within which each country’s reserve figures would be permitted to move. If reserves rose above or fell below those limits, the country concerned would be required to take action to restore reserves to a figure within the permitted range. The Europeans, for their part, would place more emphasis in monetary reform on restoring the principle of convertibility or, as it is sometimes called, asset settlement. They see the monetary crises of recent years as having their origins in the failure of a large persistent deficit country - the United States - to take action to correct that deficit. The United States has been able to continue financing this deficit because other countries - either willingly or because they could not acquire a more preferred asset - have held more and more United States dollars in their reserves. Unlike most other deficit countries, the United States has not run out of reserves.

The Europeans would put an end to this by reducing the role of reserve currencies in the monetary system. They would replace reserve currencies with special drawing rights as the major asset of the future. They would impose upon the United States an obligation to convert other countries’ holdings of dollars into special drawing rights whenever the United States ran into deficit. It has been agreed that objective indicators should have a role to play in the future system. But it has also been agreed that considerations other than reserve movements would need to be taken into account in determining whether or not a country should take action to correct balance of payments surpluses or deficits. What all this amounts to is that a good deal of the automaticity has been taken out of the original United States proposals for objective indicators. Australia welcomes that development, which has been in accordance with our own view of the matter throughout. What has not been agreed is whether pressures should be put upon countries if they do not take balance of payments action which reserve indicators suggest they should have taken. There has been less of a convergence of views on the issue of assets settlement. It has been agreed in principle that the role of reserve currencies should be reduced and that the SDR, as appropriately modified, should become the primary reserve asset of the future. It has been agreed in principle that countries maintaining par values should settle in reserve assets those official balances of their currencies which other countries present to them. But it has not been agreed whether this process should be mandatory so far as the countries holding the balances are concerned or whether it should be voluntary. Australia, for its part, has indicated its willingness to consider participation in any agreed system but has expressed a strong preference for the principle of voluntarism. In other words, if Australia earns United States dollars it should be up to Australia to decide whether it wishes to convert those dollars into SDR or whether it wishes to continue to hold the dollars. We have taken the same attitude in respect of both existing holdings of reserve currencies and new receipts of reserve currencies. This is all consistent with our overriding view that we wish to see a maximum of flexibility and co-operation in the system and a minimum of compulsion and coercion.

A second basic issue of major importance is the volume and quality of the SDR. If the SDR is to be the primary reserve asset of the future then it must be a strong and not a weak asset. This means that it must not be in over-supply. It must be as attractive as, if not more attractive than, any alternative reserve asset in terms of its ability to maintain its value and in terms of the interest rate it yields. Countries tend to take positions on this issue depending on what role they see themselves playing in the period ahead. If they see themselves as prospective debtors they tend to favour a ‘soft’ SDR. If they see themselves as prospective creditors they tend to favour a ‘hard’ SDR. This matter is still under discussion. But it is my firm view that if the SDR is not fully accepted and firmly held, the reformed monetary system will fail.

I have been speaking in terms of differences of view on basic issues between some of the major industrial countries or groups of industrial countries. There is one particular issue which has been raised by the developing countries. They believe that monetary reform should operate to increase the flow of resources in their direction. To this end they have suggested there should be a direct link between the issue of SDR and aid to developing countries. The problem some developed countries and, I might add, some developing countries also see in this proposal is that the SDR has to be accepted by the world as a whole as a reserve asset of the first quality. There are legitimate fears that such a link may introduce other than monetary considerations into the question of the volume of issue of SDR and the valuation and rate of interest of SDR. Australia has an open mind on this matter. We are anxious that the operational aspects of the link should be examined thoroughly, along with monetary reform proper, in order to ascertain whether some form of link can be devised which can safely be accepted from the point of view of monetary reform. It has occurred to us that it may be better to establish the SDR as the centre of the monetary system, and when the SDR is working effectively, to consider then whether or not there should be a link. In the end this may well be the most productive approach for all concerned.

Monetary reform is a complex matter and has many aspects. I have touched on only a few of the main issues here. However, should honourable members wish to pursue these issues further I present to them the first outline of reform which has been referred to governors of the International Monetary Fund by the Committee of Twenty and which contains a more complete account of the state of discussion at this point of time. I also present to the House a revised version of the glossary of terms which I previously provided to honourable members on the occasion of an earlier statement to the House on these matters. I present the following paper:

Twenty-eighth Annual Meeting of the World Bank and the International Monetary Fund Ministerial Statement, 23 October 1973.

Motion (by Mr Stewart) proposed:

That the House take note of the paper.

Mr Lynch:

– I have indicated to the Treasurer (Mr Crean) that we would wish to debate this statement in detail during the week after next. I understand that is acceptable to the Government. I simply mention that questions upon notice No. 755, dealing with the adoption by the International Monetary Fund of an auto matic exchange rate adjustment process based on objective indicators, and No. 756, concerning the desirability of allocating any general issue of IMF special drawing rights initially to underdeveloped countries, have not yet been answered. They were placed on the notice paper on 22 August. I seek the concurrence of the Treasurer in providing information on those questions before his statement comes on for debate so that the information provided can be taken into account.

Debate (on motion by Mr Lynch) adjourned.

page 2536

STATES GRANTS BILL 1973

Second reading

Debate resumed from 23 August (vide page 338), on motion by Mr Crean:

That the Bill be now read a second time.

Mr DEPUTY SPEAKER (Mr Drury:
RYAN, QUEENSLAND

– 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 LYNCH:
Flinders

– The States Grants Bill seeks to replace the States Grants Act 1971-72. As the Treasurer (Mr Crean) pointed out in his second reading speech, the present financial assistance arrangements were originally settled at the June 1970 Premiers Conference and were intended to apply over the 5 years to 1974-75. The fact that the original arrangements have been subject to quite substantial revisions principally by the provision of additional grants and by the adjustments which accompanied the transfer of payroll tax to the States, now makes it appropriate to introduce an entirely new Act. The Bill before the House provides for that new Act. The States Grants (Capital Assistance) Bill seeks to authorise capital grants to the States in 1973-74 of $278,307,000. This represents the grant component of the States

Loan Council programs for this financial year. The Bill also provides for the payment of grants in the first 6 months of 1974-75 pending the passage of similar legislation in that year. Payments under this legislation may be made from the Consolidated Revenue Fund or from the Loan Fund.

Before dealing with the revisions to the financial assistance grants arrangements made between the Commonwealth and State governments at the Premiers Conference in June I want to make it quite clear on behalf of the Opposition Parties that we regard the present financial arrangements as entirely unsatisfactory. All State Treasurers at the recent Premiers Conference stressed the extreme financial difficulties being experienced by State governments during this period of unprecedented and rapidly escalating salary bills for government employees. In spite of the obvious needs, the States were informed firmly that it would be out of the question to consider giving them an increase of more than 9 per cent in their tax reimbursements because of the difficulty the Commonwealth would have in providing the funds concerned. In addition, the Prime Minister (Mr Whitlam) made it clear to the States that the Commonwealth did not intend to provide further general revenue assistance to the States in this financial year and would contemplate providing such assistance only if the States were to face undue difficulties because of factors beyond their control which could not have been foreseen at the time the State budgets were brought down. It is clear that the dramatic worsening of Australia’s inflationary problem, although it could have been foreseen under this government, already warrants additional financial assistance.

At the Premiers Conference the New South Wales Government foreshadowed a Budget deficit of almost $100m. The other States all reported likely deficits of a similar magnitude. Notwithstanding this position, the Commonwealth was not prepared to offer any improvement in the existing arrangements beyond a S25m additional grant to be distributed amongst the States. This forced the States into a position where they had no alternative but to announce an immediate increase in payroll tax of 1 per cent.

In his second reading speech the Treasurer (Mr Crean) speaks of ‘agreement’ between the Australian and the State governments on the special financial assistance of $25m for 1973- 74 over and above the grants calculated under the formula included in the Bill. The additional $25m was not a result of any agreement in the true sense of that word. It was, in fact, a unilateral decision taken by the Australian Government. It represented only a token contribution toward meeting the substantial deficits facing the States this year as a result of heavy wage and salary awards and inflation generally without any corresponding and compensating increases in State revenues. The States had no option but to accept the contribution which was offered.

The Australian Government was budgeting for a 25 per cent increase in income tax receipts in 1973-74 but it was prepared to restrict the States to an increase of 9 per cent in their tax reimbursement grants, including the effect of an additional $25m. The States have been left to raise taxes and charges in the fields open to them, which are, by nature, limited and regressive. The Victorian Government was forced to introduce higher taxes and charges to provide an additional $66m this financial year. If the Victorian tax reimbursement grant had been increased by the same percentage as Commonwealth income tax receipts, its tax reimbursement grant would have been $66m higher - the amount of new revenue which it had to find. In other words the Victorian Government has been forced to tax instead of the Commonwealth because of the unsatisfactory basis of sharing the access to income tax.

The Treasurer also referred to the Prime Minister’s statement to the Premiers Conference that he and his Government did not intend to provide further general revenue assistance to the States this financial year except in the event of the States having ‘undue difficulties’ because of factors beyond their control which could not have been foreseen at the time their Budgets were brought down. This statement raises 2 issues. Firstly, the Budget difficulties and the heavy deficits facing the States in 1973- 74 arose very largely from factors outside their control. The pressures on State Budgets flow from wage and salary awards handed down by independent tribunals and from the effects of Commonwealth monetary policy. The rate of interest on Commonwealth bonds was already at a record level at the time the State Budgets were being prepared and the Government has now caused bond yields to rise to an all time peak. The other issue relates to the problem of coping with continuing cost increases during the year. There is no doubt that there will be increasing wage and other costs in 1973-74 after the State Budgets have been introduced. What, therefore, is to be the Australian Government’s attitude on what are ‘undue difficulties’?

The States already have battled hard in framing their Budgets for 1973-74 to cope with cost pressures to date within the limited revenue fields open to them. They cannot cope from their own resources with the effects of rapidly rising wage and cost levels of uncontrolled inflation after their Budgets have been passed by their Parliaments. Clearly the Commonwealth chose to assert unwarranted constrictions. If, in fact, the basis of the Government’s policy approach to the States had been based on a desire for overall restraint in spending by all governments in Australia it may have had some justification. However, quite contrary to any concept of general restraint, the Federal Treasurer brought down a Budget which increased Federal spending by 18.9 per cent.

Mr Stewart:

– That is not accurate.

Mr LYNCH:

– It is entirely accurate. If the Minister for Tourism and Recreation wants to deny that point let him provide the facts. I am waiting for an answer. He shakes his head. This was an unprecedented increase in the level of public spending and more than twice the increase determined for the States. The Federal Budget provided absolute evidence of this Government’s centralist trend. It is generally accepted that the most efficient and expedient means of destroying Australia’s federal system of government is the exercise of financial domination by the Commonwealth. As indicated by the Treasurer in his second reading speech, the Prime Minister, in his opening speech at the Premiers Conference, stated as his Government’s policy that where the national government undertakes new or additional commitments which relieve the States or their authorities of the need to allocate funds for expenditures at present being carried by them, there should be adjustments in the financial arrangements between the two levels of government to take account of the shift of new financial responsibilities. In practice this policy means that the Commonwealth Government will use its dominant fiscal powers to replace general purpose allocations with specific purpose payments, thus further eroding the financial autonomy of the States and further restricting their capacity to determine their own priorities in the composition of their expenditures. The States already are tied to maintaining a specific proportion of their expenditures on education and if, at the same time, their general purpose allocations are to be reduced in this manner they will finish up in a position where they will have practically no freedom of movement at all in meeting their other expenditure responsibilities.

We can discern 3 main trends in the Australian Government’s attitude to financial arrangements with the States. Firstly, the Australian Government has held back from the States a reasonable and equitable share of the growth in income tax receipts for 1973-74 for general revenue purposes. Secondly, it has offered a substantial increase in tied grants to the States and seeks to dictate the terms and conditions under which such grants are to be spent. For 1973-74 general revenue assistance grants to the States are estimated to increase by SI 53m while specific purpose grants already approved, or on offer to the States, will increase by no less than $720m. In addition to directing resources to the States to carry out its Canberra-determined policy, the Australian Government states its policy that where its decisions relieve the States of the need to allocate funds to a particular area of activity for which the State has had responsibility there will be appropriate adjustments to the financial arrangements between the two levels of government.

In the case of tertiary education this policy meant that the tax reimbursement grants to the States would be reduced from the beginning of the 1974 academic year by the amount of expenditure of which the States had been relieved. As a result of the Government’s assumption of full responsibility for financing tertiary education from 1 January 1974, this Bill seeks to deduct from the financial assistance grants the estimated amounts of recurrent expenditure previously undertaken by the States. The reductions from the revenue grants for 1973-74, totalling $11 1.8m, represent estimates of the half-year savings to the States. The amounts for 1974-75, totalling $229. 7m, represent the estimated full-year savings. ‘In view of this it was a matter of deep concern to consider the dishonest presentation of the Government’s expenditure on education in the recent Federal Budget.

Mr Stewart:

– That is unfair.

Mr LYNCH:

– The Government sought to claim an increase in expenditure of 92 per cent. In response to the interjection by the Minister for Tourism and Recreation, let us examine the extent to which that comment was unfair. I put it to the Minister that the real figure is 60 per cent simply because of the $11 1.8m reduction in this Bill and the $32.8m reduction in the States Grants (Capital Assistance) Bill. Thus the increase resulting from this manoeuvre is exactly nil. It is quite improper to take $145m of tertiary education money from the States and then claim it as a figure for additional Commonwealth expenditure.

Mr Stewart:

– Sixty per cent is not bad.

Mr LYNCH:

– If the Minister at the table is becoming a little upset by the exposure of these facts, I simply say to him: Please tell the truth in the presentation of Budget figures.

Mr Stewart:

– Do you agree with a 60 per cent increase?

Mr LYNCH:

– Of course I agree with a 60 per cent increase.

Mr Stewart:

– That is good enough; I am satisfied.

Mr LYNCH:

– The Minister might be satisfied, but there is a credibility gap of some 30 per cent. I should have thought that the Minister would regard that credibility gap, against the background of what the Treasurer said in his Budget Speech recently, as being entirely unsatisfactory. That is the sort of point which has been worrying people outside of this House who thought that the Australian Labor Party believed in open Government. They have found that when it comes to the presentation of figures of this type the Government is subject to a very serious charge because the figures represent a totally dishonest presentation.

Over the years the States have been determining the allocation of the overall resources available to them between the various activities for which they have been responsible and have been financing such activities from both their revenue resources and from general revenue grants from the Commonwealth. The policy to which the Treasurer has referred in his second reading speech suggests that where the Commonwealth takes over a field of responsibility from the States there will be a corresponding reduction made in the total amount of the tax reimbursement to the States. Tax reimbursement grants are, of course, the fastest growing item of revenue available to the States, even though they do not grow as fast as total income tax receipts. In these circumstances the announced policy means that the States will be left progressively with their own limited fields of taxation and charges to cope with the growth and development of other State activities.

The trends which are evident have far reaching implications for the federal system of government. The Opposition Parties believe strongly in the retention of Australia’s federal system of Government. We do so because this system is most conducive to the progress and well-being of Australia and most conducive to the democratic protection of the freedom of the individual. Contemporary federalism in Australia, as a result of judicial interpretation and Government policy, is far removed today from that contemplated by the Constitution. There are a number of clearly recognisable features of the present system. First, there is a financial dominance by the central government because of its effective near monopoly situation in respect of revenue raising and because of the dependence by the State governments on the central government for the greater part of the moneys they spend. Second, the existence of the taxing power of the Commonwealth and the unlimited use which may be made of section 96 of the Constitution render it possible for the dominance of the central government to increase.

Third, the inability of the State governments to raise revenues, with minor exception, independently of the central government has created an electoral pressure on the central government to undertake responsibilities in diverse areas which are constitutionally the spheres of State responsibility. Fourth, the growing sense of nationalism and the increasing assumption of responsibilities by the central government have promoted a unity which tends to make many Australians sceptical of the value of State borders. Fifth, the dependence of the State governments has consequentially submerged or limited the ability of the States to promote significantly major local developments and initiatives in matters of common interest to all Australians. And sixth, there is a growing uniformity in many activities of legislation and regulations. This arises not only from the enunciation by the central government of programs in such areas as health and education, but also from the increasing fields of uniform Satte laws and the tendency for the areas in which uniformity is desirable to increase.

Most of these features have become evident over the past 30 years. They challenge the spirit of the constitutional division of powers and call into question the efficacy of a framework which serves merely to limit the tendencies which have been developed and which demonstrably cannot check them. But the flagrant determination of the present Labor Government to exploit the weaknesses in our constitutional framework in order to maximise the dominance of the central government clearly calls for a reappraisal of CommonwealthState financial arrangements. That reappraisal must be sought on a co-operative basis. It is to be hoped that the Constitutional Convention will provide a satisfactory response to the existing difficulties. I do not wish to pre-empt the conclusions of that Convention or to comment in detail on the substance of the matters now being considered by the working parties. However, it must be made clear that the Liberal Party of Australia is committed to a viable federal system. Therefore any formula which sought to make adjustments significantly towards a unitary system of government would be unacceptable. Equally, we believe that the Commonwealth Government must have that degree of economic authority which is necessary to facilitate the effective management of the economy as a whole. Consequently, any constitutional alteration which sought to diminish the efficacy of the Commonwealth’s economic management would also be unacceptable.

The Liberal Party does not accept that there should be any interference with the Commonwealth’s income tax collecting authority. On the other hand there is merit in a further examination of revenue sharing systems. In this regard the sharing of income tax revenues in fixed proportions between the Commonwealth and the States would have real advantages. We also consider that there is merit in seeking limitations in the application of section 96 of the Constitution to restrict the nature of the conditions which the Commonwealth can impose on grants made under this section. The present Government has substantially abused the powers under section 96 by endeavouring to impose such terms and conditions as are entirely unwarranted and designed to impose detailed controls over State administrations.

In conclusion, the provision of the Bills before the House demonstrate, without qualification, the need to reappraise existing Commonwealth-State financial arrangements.

The funds provided by this legislation are totally inadequate and, as the rate of inflation continues to worsen and the administrative costs of State governments continue to rise, their inadequacy will become a matter of very serious concern. We have considerable reservations about this legislation but, because of the financial assistance it will provide to the States, the Opposition parties do not oppose it.

Mr LUCOCK:
Lyne

– This legislation provides an opportunity for me to express my apprehension over the direction in which the federal system of finance is heading. I do not claim that the present position is entirely due to the Labor Government, although the progress towards centralism has quickened markedly under its administration. What I think must be of grave concern is the direction in which we are headed and, more immediately, the undesirable features of the present federal financial arrangements. Before World War II, payments by the Commonwealth to the States were mainly of a marginal nature confined to specific aspects. Since then there has been a marked increase in the kind and scope of Commonwealth assistance to the States in relation to independent State revenue raising capabilities. Erosion of State financial independence and authority has been gradual but inexorable. It has been the product of a combination of financial circumstances and economic growth. In this respect the centralist attitude of the Labor Government is a more extreme extension of a long term trend that has developed to a point where reassessment is essential. The facts are clear. Over the 22 years from 1948-49 to 1969-70 the net indebtedness of State and local authorities increased by nearly $ 12,000m while that of the Commonwealth authorities decreased by over $6,000m.

The financial and constitutional position which has developed in Australia is one of imbalance between the Commonwealth and the States in the allocation of revenue and responsibility. The revenue collected by the States during the 1960s totalled just under one-fifth of that collected by the Commonwealth whereas expenditure by the States amounted to four-fifths of the size of the Commonwealth expenditure. While the Commonwealth has become financially dominant there has been no corresponding transfer of functional activities. The States have retained their constitutional responsibility for important services such as education, hospitals and roads and the control of leading public utilities such as railways and electricity.

The previous Government, of which I was a supporter, was conscious of the deteriorating position, and initiated remedial action to remove some of the more burdensome aspects of State government financial burdens. At the 1970 Premiers’ Conference the Commonwealth agreed to provide an interest free grant of $200m in 1970-71 to be used for non-income earning works - for example, schools. This sum was to increase in future years at the same rate as total works and housing programs. The Commonwealth also undertook to assume the interest and sinking fund burden of an additional $200m of State aid over the 5 years. Thus, by 1974-75 the Commonwealth would have assumed responsibility for existing State aid totalling $ 1,000m. The importance of the interest-free capital grant was that previously these funds had been provided by the Commonwealth in the form of loans and interest had been charged on them. It is important to understand that position in 1970 to bring into context the Bills that we are now debating.

The Loan Council program for State governments represents the major source of funds available to the States for capital works. They had always been general purpose programs, although from 1945-46 to 1971, as a matter of procedure, the Loan Council agreed to the allocation of an equivalent part of the total program to the Australian government as an approved borrowing program. When this arrangement expired in 1970-71 specific revenue grants were introduced in lieu of that arrangement. At the Premiers’ Conference this year advances for housing were made outside the Loan Council arrangements. In addition the Commonwealth Government is to take over full responsibility for financing tertiary education from 1 January 1974. As a result the Loan Council program is $115m lower in 1973-74 than last year. Therefore, this year we have seen the Commonwealth taking over the tertiary education area, and taking the housing program outside the Loan Council area as a separate program with many strings attached. It can of course be argued persuasively that the States agreed to these arrangements, but this is not the point. The point is that the States have been . financially weakened to the extent that they are in no position to refuse money from the Commonwealth and in no position to raise it alternatively for themselves.

We are seeing the ultimate culmination of a long process which has been gradually and greatly accelerated under the Labor Government. More specifically, one less publicised feature of the 1973-74 Federal financial arrangements is the increased emphasis in Commonwealth assistance to the States of specific purpose allocations and the decreased emphasis on general revenue assistance. A few facts may illustrate this point. The document Payments to or for the States 1973-74* attached to the Budget papers shows that general revenue payments to the States in 1973-74 by the Commonwealth will increase by only 9 per cent while specific purpose revenue payments and specific purpose capital payments will increase by nearly 50 per cent and 100 per cent respectively in one year. Loan Council borrowing programs are down 20 per cent. I believe that these are disturbing facts, not from a narrow political point of view but from the broad viewpoint of the health of our political system. I believe in a Federal system of government. It is my view that the division of power and responsibility is a means both of preserving the liberties of the individual and of providing a better quality of government for people.

Government should be responsive to the people and the extent of that responsiveness is to a large extent dependent upon the closeness of government to the people it administers. It is a duty of State and local governments to interpret the community’s demand for services in the areas for which they are responsible and to determine the extent to which their taxpayers are willing to meet the cost of continued expansion. Under existing arrangements however, State and local authorities are unable to discharge this responsibility because of limitations of their power to raise taxes or borrow for capital works. At present no government is discharging the vital role of government - arbitrating between the taxpayer and those who call for more expenditure on government services. Both Commonwealth and States can disclaim responsibility for the level of State and local services. The practical effect is that many services are inadequately provided. The difficulty is that while the States can make an evaluation that more should be spent on State and local services, they do so without the restraint of having to raise the taxation to finance any increase; but while the Commonwealth may make an evaluation that taxation is high enough already it does so without any direct responsibility for the level of State and local services.

I believe that the Commonwealth government should retain overall control of the direction and nature of economic growth. However, the present financial relations are deficient in that the States’ constitutional powers and electoral responsibilities are not matched by financial independence and authority. Both the loss of independence and dissipation of responsibility could be lessened if either the States passed over some of their powers or alternatively gained a new measure of independence. The third alternative is for the States to continue to have extensive powers but for the exercise of those powers to be determined in detail by the Commonwealth through its financial leverage. The Labor Government is using the financial power of the Commonwealth to impose conditions on State government decisions and is therefore guilty of undermining the entire concept of Federal government. If it wishes to centralise power in Canberra, it should openly press for the constitutional amendments that are necessary to accomplish its purpose. Such a policy would, I believe, be unacceptable to the Australian people for the very good reason that in a country as geographically extensive as Australia, the Federal system is the best. Indeed, current experience is that Federal systems overseas are tending towards a greater dispersal of authority. I believe that what must happen is that the States must be given the financial sinews with which to exercise their constitutional responsibility. I oppose very strongly the centralist attitudes which pose such a fundamental danger to the Australian community.

I believe that the more consideration we give to this matter and the greater our understanding of it is, the wore we will realise the dangers of centralised control. I say that irrespective of what political party may happen to be in control of the treasury bench in Australia. Because of Australia’s geographical situation, because of the problems that confront us, and because of the difficulties that we have in development and progress, I believe that the best system is the federal system. It is a system which has been proved in the past, although admittedly with some difficulties and some problems. But, despite those .difficulties and problems, I think the federal system is a far better system than the centralised form of control which would centralise things in Canberra to the detriment of the progress and development of Australia.

Sitting suspended from 6.12 to 3 p.m.

Mr WENTWORTH:
Mackellar

– I do not intend to take up the time of the House for long in regard to this measure but there are a couple of propositions which I think should be put. I am not sure that they will be altogether pleasing to either side of the House.

I think that the Liberal Party might perhaps be considering some of the basic financial propositions which underlie budget control. It seems to me that it is time we acknowledged some of our past errors and looked forward to some kind of new policy because, after all, I am sure that when we get back into power, which will not be long, it will be necessary for us to have a different kind of financial policy in some, though not all, respects.

The legislation that is before the House relates to capital advances and in order to put this into perspective I should like to say something about the Federal Budget and the capital advance content of the Federal Budget. I believe this is quite crucial because it embodies an error which has been intensified by the present Government but which was I think inherent in the financial policies which have been developed over the years. It was said in this House earlier that when the Government spent, it was different from private capital spending because if the Government created a deficit it would be adding to the inflationary fires in that it would be adding to the amount of money in circulation. This is an obvious truism. But what is not realised is that if the Government raises a loan it reduces the money in circulation in exactly the same way as if it imposes and collects a tax. In relation to the amount of money in circulation, the raising of a loan is equally efficacious to the collection of a tax in reducing the total quantum of money supply. Therefore, if the Federal Government raises a loan it reduces the money supply in exactly the same way as if it collects a tax.

What has happened over past years has been that Federal governments have been paying for capital works out of taxation. They have been collecting taxation and using that money to pay for capital works, very largely through advances to the States. This has meant that in order to maintain financial equilibrium, the Federal governments have either to raise loans, which they have not done, or to impose extra taxation. I put it as a major proposition that the incidence of taxation in Australia very largely has been determined by the failure of governments to raise adequate loans to cover the capital works program.

The extent of this is not always realised but it is easy to make a first approximation of this from the figures which are published in the Budget papers. I think that the amount of revenue which has been used for capital works can be reasonably ascertained in the following way: Firstly, we add together the capital works in the Federal Budget as shown in the Budget; secondly, we add to that the grants to the States for specified capital purposes as shown in the Budget papers; and, thirdly, we add the net capital advances to States and other bodies as shown in the Budget papers, all coming from Federal revenue. We take from that I think we should the Budget deficit as shown in the Budget papers. This will give us the amount of taxation which is allocated to capital purposes. It is an approximation because the result probably understates the position due firstly to the excess provision of sinking fund and, secondly, to the lack of allowance for capital appreciation of Commonwealth assets. There are also a number of minor adjustments but

I do not think they would affect the general picture.

Using the official figures as I have pointed out, I have compiled from the Budget papers a table showing the development of this practice in the last 20 years and particularly the very big advance which was made in the amount of the allocation for capital works in the last year, as shown in the Budget papers. It is not usually realised that the net amount allocated in the Budget papers of this year for capital works is $2,062m - a very big proportion of our income tax. In other words, if we reverted to the normal principles of finance which we should be following we could reduce income tax very significantly or, alternatively, we could reduce excise or one of the other taxes, if and only if we could raise this additional amount by loan and thus reduce taxation without adding to the net monetary supply. I should like permission to incorporate in Hansard a table showing these details.

Mr SPEAKER:

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

Mr WENTWORTH:

– I thank the House. This is not a table which will commend itself to either side of the House because what I am suggesting I suggest it with some responsibility is that there has been a consistent and accumulating error in the policy of the

Commonwealth Treasury and that this error is compounded and exacerbated in the Budget that is before the House. As I said, I say this with some sense of responsibility because I think of all the people in this House I have had the longest association with public finance. In the mid-1930s I was the officer from New South Wales who was very largely concerned with the Australian Loan Council. In fact, I drafted with my own hand a number of the constituent documents which are accepted today in the Loan Council. I have had a consistent familiarity with public finance longer than any person in this House.

Mr Martin:

– Were you not the adviser to Tubby Stevens?

Mr WENTWORTH:

– That is right; the honourable member for Banks is perfectly right in saying that at that time I was perhaps the person most advocating the policy of using public works in order to get out of the depression and using public credit in order to prevent unemployment. I think at that stage, a long time ago, I was perhaps the most consistent advocate of that policy.

I certainly put forward that policy at the meetings of officers and so on of the Loan Council at that time. I can well recall being concerned with the formulation of the policy which led to the creation of what is known as the Gentleman’s Agreement on local government and regional borrowing. I was responsible, to some extent, in drafting that agreement which was riot altogether a good thing but which was an ungovernable reaction to the sentiments which were then prevalent in the Loan Council and which had to be accepted as such.

Let me return to my earlier point. What I am saying is that there has been an accumulating error. If only we could make the loan market reasonable we could reduce taxation without causing inflation. In fact, in those circumstances, and only in those circumstances, the reduction of taxation might itself be an antiinflationary measure, particularly if the reduction were taken in the form of a reduction of excise and some of the other things which bear most hardly upon the cost of living. The sum of $2,000m is involved.

In my belief the Government made a great error this year because when it wanted to reduce liquidity in the banking system, instead of raising loans, as it should have done, and reducing taxation, it chose to go fiddling with credit and exchange rates and it chose to drive foreign capital overseas, instead of anchoring foreign capital here in the form of government bonds which would have enabled taxation and other costs to be reduced. As I have said, I put this forward knowing that it will not be pleasant to either side of the House. Nevertheless, I believe it to be a truth and I believe that it is this reform in the financial system which will eventually be the nerve of the future Liberal approach to the problems of budget control, the problems of proper financial control and the avoidance of the kind of impasse which we have.

Let me turn to the questions which arise in these 2 Bills by which we are making advances to the States. I agree with my friend the honourable member for Lyne (Mr Lucock) who spoke today on the way in which the State budgets have been hamstrung. I believe that this is true for New South Wales. I speak of New South Wales, more because I know what occurs there than because of a belief that New South Wales is different from other States in this regard. I am sure that the State Government in New South Wales would have been able to do even better than it has done if it had been given more sympathetic treatment by the Federal Government. I think that some of the charges which the State has been called upon to impose in order to meet its financial obligations would have been avoided if the Federal Government had been a little more sympathetic to its needs.

Let me speak particularly of one thing which is inherent in State budgets but which is not yet receiving the attention that it should receive. I refer to the transport system. Because the finances of the Federal Treasury for many years have been lax and easy, whereas the finances of the State treasuries have been tough and tight, an inadequate amount of money has been available for the development of the public transport system. This is part of our troubles in the cities, it is part of our troubles with urban development and it is also, I think, part of our troubles with the matters of country transport and particularly , transport of primary products. Surely in all common sense we should be using our existing assets in public transport, particularly rail transport, where additional use requires very little in the way of additional expenditure. We will be saving hundreds of millions of dollars if we make proper use of our public transport assets. For this purpose it is only reasonable financial prudence to reduce to marginal cost the charges which are made to users of the railways and those public transport systems where extra use does not involve much in the way of extra cost. If we could do this the sum total of the national income would be very much augmented.

In place of this, what has happened? Because the Commonwealth Treasury rides the States with too tight a rein, a State like New South Wales - and I daresay every other State, but I speak of New South Wales because I know it and I do not know the other States, although I would imagine their problems are exactly the same - puts up its fares and freights. In consequence traffic is diverted to other means of transport, the usage of the railways falls, the railways losses accumulate and then in the name of what we call financial prudence - it is actually financial extravagance - fares and freights rise again at the behest of the Commonwealth Treasury. And so the vicious circle goes on. One sees it in its clearest form in metropolitan transport where the system of public transport languishes through under-use all the time because, as the number of pasengers carried by train or bus tends to decline as a proportion of total movement in order to make good the losses fares are raised, fewer people use the transport systems and, naturally, more people divert to private transport. Once again, not only are greater losses incurred on the public transport but, what is even more important, these losses are built permanently, or quasi-permanently, into the system because the pattern of residence in relation to employment, the commuter problem of people travelling to work, gets distorted from what it should be because people do not use public transport sufficiently and public transport, because it is not used sufficiently, does not become available.

Mr Speaker, I have trespassed on your patience and on the patience of the House to raise some of these very fundamental issues. I will come back to the point that I am making that we on this side of the Parliament believe in the States. We believe, that the States in a federal system should have a proper function. In the past - I have to confess our sins perhaps a little - we on this side of the House have paid lip service to that proposition. I believe that for the future this Party will pay to that proposition not lip service but a true adherence. In so doing we on this side of the House will differentiate ourselves from the Australian Labor Party Government on the other side of the House which really, in the final analysis, is devoted to the cause of centralism and wants to use the Treasury as a means of destroying the States. We, with all our professions - let us confess it - have allowed this to happen in the past. I am sure that we on this side of the House will not let it continue for the future. An antiinflationary policy includes something sensible along these lines, in contradistinction to the comparative madness which has infected the Federal Treasury for so long.

Mr HALLETT:
Canning

– The Bills before the House are very important to the States. We know that, over the years, the States have always been short of funds. This is nothing new. Lots of people are. The honourable member for Mackellar (Mr Wentworth) has made certain suggestions in relation to the types of funds that should be used. If I understood him correctly, he said that more loan moneys and less grant moneys should be used. I cannot go all the way with him in that proposition. One of the major problems in financing has been that the States and local government authorities have had great difficulty in servicing loans. Had the honourable member for Mackellar made his suggestion in 1927 - probably he was not here at that time - and had a more businesslike management of loan moneys commenced at that time, the States would not be faced with the problems which they have today.

All the loan moneys borrowed over the years by the Commonwealth have been made available to the States. The Commonwealth for its part has used the revenue about which the honourable member for Mackellar has spoken for works within its works system. Also, as he said, some of the grants from taxation revenue have been made available to the States for the purpose of making up loan deficiencies. The main point is that over the years that this loan program has been in progress the States have run themselves into tremendous troubles. One of the principal problems is that, in the early years of the operation of this scheme, the States amortised each loan over the total period in which the loan was repayable to the Commonwealth, that is, 53 years. In the first few years of the loan program, the transport system, for instance, which the honourable member for Mackellar mentioned was a very cheap system indeed. But as the loan program progressed, with the States adopting this amortisation program, costs got out of hand. This is the basis of the problem today. These costs are completely out of hand.

This was the reason why the previous Government in 1970, 1 think it was, agreed to pick up $ 1,000m over a 5-year period - $200m a year - and to service loans on behalf of the States to get them out of the dilemma they were in. The major problem within the financing system of the States is that the revenue that they are collecting through various State taxation charges and from the Commonwealth was going largely to repay earlier loans from the Commonwealth. The move commenced by the previous Government to pick up $ 1,000m of loan repayments over a 5-year period undoubtedly has helped the States tremendously. In his second reading speech on the States Grants (Capital Assistance) Bill 1973, the Treasurer (Mr Crean) states that arrangements have been settled to provide: . . a portion of the State Government Loan Council programs in the form of interest free grants in lieu of what would otherwise be borrowings by the States. The grants are designed to help the States finance capital works from which debt charges are not normally recovered, such as schools, police buildings and the like.

This is another step towards alleviating the problems that the States have been experiencing over the years. This action should have been taken many years ago. I believe that loan moneys can be used in relation to those enterprises which return something to the States. Railways, for instance, if financed on a sound basis, should return a reasonable amount with which to repay and service loans. This is the major problem. Had the honourable member for Mackellar put up his proposition many years ago, it would have been OK then. But, at this stage, I think that it is necessary to continue with this program of assisting the States to service their loans. They must be assisted to meet the backlog in the servicing of those loans. The need to revise policies for the future is mentioned in the Treasurer’s second reading speech.

The other point that I wish to make in relation to local government authorities throughout Australia is that the position of these authorities is even worse. Local governments do not have the opportunity to borrow through the Loan Council in the same way as the States do. State Treasuries have the opportunity to borrow cheaper money, as I call it, through the Loan Council. This is money collected by the Commonwealth and made available by it to the States. Local authorities in Australia have only borrowing rights at the Loan Council level. They have the right to go outside and borrow in any form in which they can obtain the money that they need. The cost of borrowing that money is considerably dearer than the cost of borrowthe money made available through the Loan Council. This is one problem faced by local government. The further problem in relation to the dearer money that local government borrows is that of servicing the loans in question.

The present Government has suggested that local authorities in Australia will have access to the Loan Council. Precisely what the Government means by that statement has never really been explained. I do not quite know what it means. Local authorities today have access to the Loan Council. They do not sit at the Loan Council table - that is true - but the moneys made available for borrowing by local authorities in fact are agreed to at the Loan Council. I say again that, if the only difference is to be that local authorities will have representation at the Loan Council but they will still be obliged to borrow dearer money, they will not be any further ahead.

What is required is action to alleviate the problems faced by local authorities in servicing their loans. Some grants of that nature are what is required for the purpose either of helping them to service their loans or of helping them in some other field. The real trouble affecting local authorities arises from borrowing moneys at dear rates of interest. Local authorities have great difficulty in collecting sufficient revenue within their shire or local council areas generally to service their loans. If one looks at the statistics in relation to these matters, one will see that Australian local authorities on the whole are falling further behind than the States are in servicing loans. I do hope that, if local authorities are given a seat at the Loan Council, some method different from that operating at present will be found to provide them with money.

I direct the attention of honourable members to that section of these Bills which relates to education. The agreement between the States and the Commonwealth, as I understand it, is that the Commonwealth will take over tertiary education responsibilities from the States. This is reflected in the legislation by a reduction in revenue grants to the States for 1973-74 totalling $11 1.8m, representing the estimated savings to the States for the half year from the time when the Commonwealth assumes this responsibility. The reduction for the financial year 1974-75 totals $229.7m and represents the estimated savings for that full year to the States from the Commonwealth’s action. It is obvious that, following agreement apparently reached between the Commonwealth and the States, those sums are to be deducted from the total amount made available from the Commonwealth to the States, as a result of the Commonwealth assuming responsibility in this field. Therefore, those amounts will appear in the education program of the Commonwealth and no longer will appear in the State programs.

A Bill has been passed through this House relating to regional authorities. It is the intention of the Government to make certain moneys available to regional authorities. I hope that in the near future the Government will explain precisely what will happen in that field. The Government’s intentions in relation to forming these regions have not been stated clearly. We do not know what amounts of money will be made available and on what terms and conditions they will be made available. I believe that, having legislation before the Parliament, the Government should make its position clear. It is obvious that the local authorities throughout Australia have to draw up their own budgets in the same way as the States and the Commonwealth have to do. So they are anxious to know precisely what this Government has in mind.

The Leader of the House (Mr Daly) has indicated that he wants to move on to the next order of the day. I agreed to take only about 10 minutes of the time of the House. I repeat that these Bills are important to the States. The States have their rightful place in the government of this country. I hope that they will be allowed to continue to function in that field in the future in the same way as they are functioning now. I hope also that we can improve their situation in relation to their financing by a more equitable arrangement regarding the servicing of various loans which have been made available. The previous Government made a move in that direction by picking up $ 1,000m. The present Government has indicated that it can see the problem. I certainly hope that it intends to continue in that direction.

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 Dr Cass) read a third time.

page 2547

STATES GRANTS (CAPITAL ASSISTANCE) BILL 1973

Second Reading

Consideration resumed from 23 August (vide page 339), on motion by Mr Crean:

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 Dr Cass) read a third time.

page 2547

ABORIGINAL AFFAIRS (ARRANGEMENTS WITH THE STATES) BILL 1973

Bill returned from the Senate without amendment.

page 2547

QUESTION

MINISTER FOR OVERSEAS TRADE: TRADE DISCUSSIONS

Ministerial Statement

Debate resumed from 15 October (vide page 2067), on motion by Mr Daly:

That the House take note of the paper.

Mr EDWARDS:
Berowra

– The activities of which the Minister for Overseas Trade (Dr J. F. Cairns) gives an account in this statement arose in connection with the Minister’s visit to Tokyo for the initial meeting in connection with the next round of negotiations of the General Agreement on Tariffs and Trade. I am bound to say that the Minister’s account contains much of dogma and prejudice tempered, as one would expect of the Minister, with a little idealism and of unreal expectations. For example, it expresses the idea of this country moving into products and processes out of which the Japanese have moved what products and processes are these? The statement contains much wishful thinking for example, that there can be effective or beneficial entry by the Japanese into motor car manufacture here. The statement includes also contradiction and some self-congratulation.

At the outset I should say - this also is a disappointment - that there is very little in the statement about the great matters which - or a beginning to which were to be the focus of the Tokyo meeting. I refer to negotiations to reduce non-tariff barriers and agricultural protectionism as well as industrial tariffs as barriers to the growth of international trade, and the future systems of safeguards and adjustment assistance in the event of real progress towards a reduction of barriers. In the statement the Minister speaks in a way typical of this Government, as if his side of the House has a monopoly of concern for the potentially adverse social consequences of change and adjustment with a freer flow of international trade. I refer to the need for employees to find and train for new jobs, and for firms to turn to new avenues of production and investment. This matter was well canvassed in the discussions and preliminary papers preceding the meeting in Tokyo. So concern for these matters is hardly the monopoly of the Minister, although a casual listener to his statement might have gathered that impression. As a matter of passing interest, the Japanese have had an adjustment assistance law in being since 1 971 .

The Minister made no reference at all to the problem of the so called link between the reduction of barriers to international trade, tariffs and non-tariffs, and an effectively functioning and adaptive pattern of relatively stable exchange rates - in short, an adequate international monetary system. The reduction of barriers to international trade and the development of an adequate international monetary system go hand in hand in promoting an expanding, balanced and equitable flow of world trade - one that is mutually beneficial to developing and developed countries alike. This problem of the ‘link’ has been widely acknowledged in the world’s financial Press as being perhaps the most tricky issue facing the Tokyo conference. But there was no reference to that in the Minister’s statement. Perhaps it would have been appropriate for the Treasurer (Mr Crean) to have joined with the Minister in making a joint statement, or do they belong to different wings of the Government party? At all events the Treasurer made such a statement before the suspension of the sitting for dinner.

Rather than focussing on the great if frustratingly difficult issues of trying to find constructive ways to make the world trade and financial system work better, the Minister early in his statement adopts the typically Anti’-prejudice, if I may call it that, that the developing economies have gained little from past trade and aid programs. He says that they have not achieved much and that we need to look more realistically at the major issues - with the presumption that this is not being done. The Minister takes a swipe at the developed economies of the world when he refers to ‘the usually non-competing enterprise system which characterises the developed countries and which operates to the disadvantage of the economically weak economies and less well-organised and more highly competitive enterprises of the developing world’. To say that the enterprise systems of the developed economies are usually noncompeting is just plain factually incorrect. I am set to wondering just how close the Minister has ever got to the problems of making sales of manufactured products in the shifting conditions of modern trade and variable exchange rates. He ought to talk to some of the developed European countries about the difficulties of competing effectively with a new undervalued United States dollar. I hope that the Minister for Minerals and Energy (Mr Connor) takes some note of that in the light of some of his earlier statements.

The sort of stance that is taken at this point in the paper - of the disadvantageous impact of the developed economies on the developing - is no doubt influenced by hoary arguments, such as the extent to which the prices of manufactured goods are held to have increased much more favourably relatively to the prices of primary commodities which figure so heavily in the trade of the developing countries. This particular bit of folk lore in fact is not proven, even over the long stretch prior to the rises in commodity prices that we have witnessed in recent years. Be that as it may; what I stress is that in the very process of competition between the developed, the advanced countries, the development of secondary industry in the developing countries is assisted. The fact is that increasingly firms from the industrialised developed countries have shifted into the developing economies, and this has helped the expansion of the developing - that is the poorer - economies’ trade in manufactures. It is this indeed which has been a major factor in making enterprises in the developing economies more competitive in international markets and has fuelled the increased rate of growth of their exports of manufactures. And as I stressed in a recent speech in this House, the thrust of the overall expansion of world trade is the growth of trade in manufactures as between the advanced industrial countries of the world, as well as between them and the developing economies.

If, even so, progress in development is too slow for the Minister’s liking as well as for my own, what we have to recognise is that one of the present facts of life is that the quantum of trade in manufactured goods by the developing economies is quite small. However, it is also a fact that those economies have been growing more rapidly than those of the developed countries and the socialist countries when it comes to manufactured goods. That has to be recognised. The trouble is the small base - so that even with a relatively high rate of growth, the impact on the development and overall trade of the developing economies can only be small. Realistically this situation will remain for the rest of the decade. But it is wrong to imply that the operations of the developed countries screw down on, necessarily operate to the disadvantage of, the developing economies.

What I would like to put as strongly as possible is that we also should increasingly be part of the process I have described - that is, participating in the development of secondary industry in the developing countries. In his statement the Minister makes a passing reference to discussions with Nissan and Toyota and to the fact that the Government welcomes them to engage in the manufacture of motor vehicles in Australia. I note that there was no reference to the key problem in this industry of too many separate motor vehicle plants in this country, and to the problems of achieving economies of scale and efficiency which would be exacerbated by the simple addition of Nissan and Toyota to the list. What is essential is that policy with respect to Nissan and Toyota should be combined with some trade within the East Asian region, involving Australia exporting components and parts as well as importing other components and parts from the developing economies or from Japan, to mutual benefit in the realisation of economies of scale and thereby lower end prices.

In general terms, what I am trying to say is that what the Government should be seeking to foster as part and parcel of promoting world trade and development is our own overseas investment; investment by Australia in foreign countries, particularly in the south and east Asian regions. To assist in and foster the activities of Australian enterprises in this process is, I suggest, a proper role for the Australian Industry Development Corporation - even an expanded AIDC - but not, I believe, the potential cancerous incubus that was proposed by the Bills before this House last week. I am led to make that reference to the AIDC because the Minister himself referred to it in his statement, in connection with overseas investment in this country. I can only say that I am gratified by the drift of the Minister’s statement just prior to that reference where he welcomed overseas investment as a vehicle of new technology and know-how in this country.

I am greatly in favour of the fostering of our own overseas investment, so that as one of the rich countries of the world we contribute - and I would hope on an increasing scale - to the growth of living standards, particularly in the developing world. I noted, therefore, with particular interest the Minister’s words when discussing his visit to South Korea - ‘the Republic of Korea. He declares it to be Government policy that we would welcome investment by Australian firms in that area. I cannot quote the statement precisely, but that was the effect of it. However brief, we have there a statement relating to the requirements as the Government sees them for Australian foreign investment - something which, as I have said, I should like to see more of.

I had proposed to refer to the Minister’s statement in relation to his’ visit to North Korea. The possibilities referred to there are the exchange of Australian mineral products for North Korean manufactures. There are then possible difficulties for our own manufacturing industries that that could give rise to in the future. It is the sort of problem that we have foreseen in relation to our trade with Japan. I think that is indicative of the sort of troubles that the Government is likely to get itself into in trade problems with this personal and ad hoc - not to say ideologically directed - approach, country by country, of the Minister.

To return to the main theme, the Tokyo meeting was the beginning of a round of negotiations which is to be the successor of the earlier and very successful Dillon and Kennedy rounds. I wish the Minister a successful participation in what I hope will be a successful round of negotiations. If they succeed, the end result will most likely be a never-ending round of negotiations designed to combat barriers to trade between nations, with permanent machinery to deal with specific problems. If they should fail, there is a strong chance that the world would break up into rival protectionist groupings to the detriment of the whole world and not least of the developing world which is close to the interests of both the Minister and myself.

Mr O’KEEFE:
Paterson

– I desire to take part in this discussion on the statement which has been made by the Minister for Overseas Trade (Dr J. F. Cairns). I note with great interest his journeys in Japan, Korea and China and the discussions that he has had with the leaders of those countries. Japan, of course, is one of our most important customers. I have had compiled for me our latest trade figures with Japan. For the year ended 30 June last Australian exports to Japan were worth $1,933,946,000. This figure represents a tremendous increase over the previous years. We purchased in return from Japan $738,633,000 worth of goods. So there is an imbalance in our trade with Japan, and I have no doubt that the Minister discussed this point with the Japanese.

It would be a mistake to believe that the Minister’s statement represents the established views of the Australian Government. It could be even more of a mistake to assume that the Minister for Overseas Trade was able on his trip overseas to speak with authority about the Australian Government’s policy. As a result it is difficult to distinguish in this statement between official thinking and the personal inclination of the Minister. This uncertainty is understandable and well founded. The Minister visited Tokyo and spoke with Government officials and leading businessmen. He told them that he approved Japanese equity in Australian enterprises provided there was Australian majority control and maximum processing in Australia. During his speech he said that the Australian Government recognises the value of foreign investment and technology. He admitted that the Government would wish to see a high level of Australian ownership, especially in uranium, oil, gas and coal. His message was one of qualified assurance and reassurance. Unfortunately there seems to be very poor liaison between the Minister for Overseas Trade and his less communicative colleague, the Minister for Minerals and Energy (Mr Connor). The Minister for Minerals and Energy will be visiting Japan in the very near future and he has said that all overseas investment in minerals and energy enterprises must be channelled through the Australian Industry Development Corporation. He sees no need for Japanese participation in the Pilbara development or the Redcliffs development. The Minister for Overseas Trade said in his statement:

I see this concern for assurances with respect to the supply of raw materials as a legitimate concern on the part of the Japanese and one in which this Government is prepared to co-operate fully in helping to meet.

Once again there seems to be a breakdown in Cabinet communications. The Minister for Minerals and Energy is refusing the export of natural gas from the North West Shelf. We all know that. The Prime Minister (Mr Whitlam) defends action which prevents the securing of long term contracts for uranium exports from the Northern Territory to Japan. We thus have a very peculiar position of a Minister for Overseas Trade preaching goodwill and reassurance in Tokyo while his Cabinet colleagues back at home undermine his efforts. The Japanese are now in for an instructive lesson in open government. Labor style. The Minister for Minerals and Energy intends to embark on a lecture tour of Japan to explain his policy guidelines. I am sure he will have an attentive audience. Will he reiterate to the Japanese the attitude of the Minister for Overseas Trade that direct Japanese equity investment is permissible in our minerals and energy industries? Will he assure the Japanese in his incomparably soothing manner that we recognise the importance of the unimpeded supply of raw materials? I do not think so.

While in Japan the Minister for Overseas Trade discussed with the Nissan and Toyota motor vehicle companies the Government’s motor vehicle policy. This is a difficult task for any man to do. He made it quite clear that they would be very welcome to engage in the manufacture of motor vehicles in Australia. The whole matter of the Government’s motor vehicle policy is a fascinating one. The market for motor vehicles in Australia is limited. There is competition between domestic manufacturers in this country and importers of cars from overseas. Yet at a time when the Government is trying to encourage domestic manufacturers we have appreciated our currency against the Japanese yen by 10 per cent since November and we have cut tariffs by 25 per cent. The Minister made great play on his overseas tour of the fact that we had cut our tariffs by 25 per cent, which would have a bearing on Australian imports from all the nations with whose officials he spoke. I hope that this cut of 25 per cent in tariffs does not mean that we will have a great pool of unemployment in this country by reason of the effects that it will have on our own industries.

Car imports into the country are now surging ahead. Of course, there is the people’s car which the Government wants to manufacture using the unused capacity of the aircraft industry. At present there is considerable unused capacity in the aircraft industry, particularly in the Government Aircraft Factories and the Commonwealth Aircraft Corporation. Government policy towards the rationalisation of this industry is still undecided. The Minister for Labour (Mr Clyde Cameron) is opposed to private enterprise making money out of defence contracts. Yet although the Government’s attitude on this matter is unclear the Minister for Overseas Trade proposes the development of a people’s car in the factories that produce the Mirage aircraft. Perhaps this car should be similar in title. Once again there has been a breakdown of communications between the Minister for Overseas Trade and his Cabinet colleagues.

In his statement the Minister made a triumphant reference to the 3-year wheat agreement with China. In this House he has linked this agreement with the policies of the Labor Government. Presumably the implication is that the Chinese decision to sign a 3-year wheat agreement was brought about only by the election of a Labor Government in December 1972. This is absolute rubbish, because the Chinese over the years have purchased Australian wheat when the price has been right and when the quality of our wheat has been to their liking. In 1949 they purchased all our damaged wheat when we had wet harvesting conditions. They took the lot because it was cheap and the price suited them. This has been the pattern of their operation over many years. In carrying the argument a little further, it follows from what the Minister implied that those governments that have similar philosophies to those of the Chinese Communist Government have the best chance for trade with Australia. However, the Chinese are more pragmatic than that. They buy wheat because of market factors and quality and because it fulfils a requirement in their economy. I need hardly say that wheat sales to Communist China from Australia did not begin on 2 ‘December 1972. One has only to go back over our trade figures to find that there have been many sales of wheat to China over the years.

The Minister for Overseas Trade may be interested to know that the British Government and the Chinese Government are on the verge of concluding a massive industrial agreement. With the approval of the British Government, the Rolls Royce Co. in England is preparing to conclude an agreement with the Chinese Government involving the sale of about 800 Spey jet engines and the licence rights for the Chinese to manufacture this engine. Does the Minister really imagine that those negotiations have been brought about because of the sympathetic and compatible philosopies of the Heath Conservative Government? It is a pointless and futile exercise trying to extract political credit from a commercial agreement. It is also a futile exercise for the Minister to try to discredit the Leader of the Opposition (Mr Snedden) by quoting Chinese Ministers and their views. The only ones who could accurately say what the views of the Chinese Government are in this matter are the Chinese leaders themselves, and I would certainly not rely on the interpretation of the Minister for Overseas Trade to establish the facts. Perhaps one of the most controversial aspects of his trip was his continued contact with Prince Norodom Sihanouk. What did they discuss, and what authority did the Minister for Overseas Trade have to discuss relations between Cambodia and Australia with the leader of forces that are in military combat with the forces of the Government that Australia recognises? Was he discussing with Prince Norodom Sihanouk future trade relations? Was he discussing possible Australian investment in Cambodia? I think not. If he were discussing political matters, it is both an insult to the Government of Cambodia and to the Minister for Foreign Affairs of the present Australian Government.

I referred earlier to the confused state of Australian trade policy. To compound the confusion the Minister for Overseas Trade said on 6 September this year that the Government might set up an overseas trading organisation to buy Australian products and sell them overseas. Exactly what does this mean? The confusion is understandable when it has been previously thought that one of the key roles of the AIDC was the channelling of the flow of exports to developing countries. Exactly where does the shadowy Minerals and Energy Authority fit in with the concept of the Minister for Overseas Trade of the Australian Government influencing the flow of exports to see that the poorer countries are treated fairly?

What a confused perception of Australian trade policy must exist overseas as Government leaders and officials attempt to untangle the tangled web of Government policy statements and Ministerial pronouncements. I would, however, wish to assure the Parliament that the Minister for Overseas Trade, although not consulted about the latest revaluation of the dollar, is well able to speak with full authority on Government policy regarding multi-national corporations. He made considerable mention of these organisations in his statement and I feel that his speech to the American Chamber of Commerce in Sydney recently must be taken as the definitive Government statement on this matter. On this occasion he said to assembled businessmen on this matter:

This is too short a period for us to be able to tell you what we want. We will be able to show in 12-18 months what we want you to do.

He concluded on this reassuring note:

Australia has been too predictable in the past; this is not the case now.

I think that excerpt from his speech is a fitting comment on Government policy towards multinational corporations in particular and on trade and investment in general. Great play has been made on the statement with regard to our trade with China. Looking at the figures for 1972-73 I find that we have exported to China goods to the value of $62,849,000 and that we have purchased in return from them goods to the value of $49,924,000. It is quite understandable that these figures will increase. As I have said before, with the cutting of our tariffs cheaper textiles and goods will come in from China and textile industries in this country will be under threat unless the Government imposes quantitative restrictions or takes some action in this regard. Little Taiwan which the present Government booted out of this country when it took over purchased more goods from us than mainland China did. These are comments which I have been pleased to make concerning the statement of the Minister for Overseas Trade.

Mr WHAN:
Monaro · Eden

– The honourable member for Berowra (Mr Edwards) picked fairly peripherally on 2 issues in his criticism of this very important statement by the Minister for Overseas Trade (Dr J. F. Cairns). He made a point of the idea that products and processes were moving from Japan to Australia. He criticised the Minister’s statement on the ground that there was no demonstration of such a movement. Obviously he has not heard of the processes which are taking place in regard to the longest commodity trade relationship which we have with Japan, and that commodity is wool. The Japanese top makers are now moving in a very material way into this country. In fact, they have invested money in a top making mill at Orange. We can expect to see similar things happen with minerals in the various intermediate stages of processing in that industry as our relationship in this area develops. Again the honourable member for Berowra criticised the statement in the Minister’s report of his overseas trip about the enterprise systems of the developed world being noncompetitive. Has the honourable member for Berowra forgotten, for example, that the European Economic Community has erected an incredibly high tariff barrier against the products of our farmlands here? Has he forgotten that the United States has had a tariff on wool for some time which discriminates against this very important export product of this country? These are tangible demonstrations of the credibility of the 2 statements in the Minister’s report.

This statement by the Minister is, in many ways, an historic document. It opens vast and natural markets for Australia in Asia. In particular the statement establishes a strong basis for our General Agreement on Tariffs and Trade negotiations. It outlines our trade relations with Japan, South and North Korea and China. The historic visit of an Australian Minister to the Democratic Peoples Republic of Korea opened new trade possibilities. Under this Government our trade has been based on the fact that efficiency in trade depends on a competitive environment. It is ironic almost that we should be subject to criticism from the Opposition benches of a doctrine which they themselves claim is a very integral part of their economic philosophy.

It is ironic that this is the first government in 23 years which has, in fact, introduced real competition into both the external and internal economic mechanisms of our economy. This statement sets out a clear enunciation of our trading relationships with other countries, the basis on which our GATT negotiations are being conducted, a free trading position and a reduction in tariffs which is not just lip service. We go to these negotiations with a 25 per cent across the board reduction in tariffs. This is an historic action on the part of a government of Australia. We go there with a strong dollar because we were prepared to face up to the very difficult task of bringing the value of the Australian dollar into line with the realities of the world. We go there with a concern for the developing countries, recognising that a selforientated economy, a selfish approach towards these negotiations would, in the long term, be self-defeating and certainly antisocial.

No nation among the hundred represented at the GATT conference in Tokyo has anywhere near the record which this country has. We have established for ourselves a strong bargaining position for negotiating long term contracts for most of our commodities. Australia is indeed moving in the direction of currency values and tariff cuts set by GATT as an aim for all countries. We have adjusted our currencies. We have reduced our tariffs. These are facts. The performance speaks for itself now. We have not set quotas on exports nor taxed meat exports as the Minister told the Australian Farmers Federation today. Our record in trading is sound. In many ways the statement which we have just heard from the honourable member for Paterson (Mr O’Keefe) typifies the sort of uncertainty which is introduced into our trading relationships. Mischievous statements have been made from the Opposition which purport not only to represent the Government’s position but also to predict what the Government will do before the Government itself has the proper information on which it can come to a judgment.

We find that people in the Opposition such as the honourable member for Paterson base their analysis on newspaper reports. They are misinformed. They fail to analyse the situation. They fail to read quite straightly and correctly statements such as the one we are now discussing. The agreement to sell wheat to China is the best ever negotiated by an Australian

Government. It applies for only 3 years because of uncertainties created by the Opposition and because of its insistent criticism of the countries and governments of South East Asia. Its tendency to go to war with those countries at the drop of a hat naturally created uncertainty in the minds of the governments of those countries when they were negotiating long term contracts. Asia provides for the rural industries of Australia one of the most exciting and dramatic markets of the future. The Minister’s tour through Asia has helped to consolidate this market for the future for the farmers and citizens of Australia. I commend the statement to the House.

Debate (on motion by Mr Bury) adjourned.

page 2553

APPROPRIATION BILL (No. 1) 1973-74

In Committee

Consideration resumed from 22 October (vide page 2466).

Second Schedule.

Department of External Territories

Proposed expenditure, $193,932,000.

Department of Foreign Affairs

Proposed expenditure $124,736,000.

Mr MORRISON:
Minister for External Territories · St George · ALP

– This evening we are discussing the estimates for both the Department of External Territories and the Department of Foreign Affairs. I thought at this stage that I should make some introductory comments on the Department of External Territories. As has been pointed out by the Deputy Chairman when this matter was called on, Appropriation Bill (No. 1), which we are considering tonight, provides for $193,932,000 for the Department of External Territories. In the financial years 1973-74, Australia will provide economic assistance to Papua New Guinea amounting to $178,527,000. I have circulated for the information of honourable members detailed notes on Papua New Guinea. A breakdown of Australian aid is itemised in Appendix A on page 16 of that document. The aid figure of $178,527,000 for 1973-74 marks a substantial increase over the 1972-73 figure of $143,400,000. In addition the Papua New Guinea Government will receive a grant of$3 6m enabling it to purchase fixed assets such as buildings originally constructed for the use of Australian departments which no longer operate in

Papua New Guinea. These assets will become the property of the Papua New Guinea Government.

The level and nature of the aid is evidence that the Government recognises the special place of Papua New Guinea in its policies. Many people in Papua New Guinea had been wrongly led to believe that self-government and independence would mean that Australia would be getting out and leaving Papua New Guinea in the lurch. The Government has demonstrated by its policies and practice that this is clearly not so. The normal grant aid to Papua New Guinea in 1973-74 will be $127m compared with $119,500,000 in 1972-73. This aid will assist the Papua New Guinea Government to finance important development projects as well as to complement vital services such as education, public health, and law and order.

In addition, $51m has been provided for projects, in the main non-recurring, which are essential to the smooth handover and transfer of powers to Papua New Guinea. A total of $17m will be available to assist in the establishment of a Papua New Guinea Central Bank and a government commercial bank. Other special aid items include S 1,650,000 for the construction of a new runway and associated work at Port Moresby airport; $lm for the cultural development program; and $5m for direct expenditure by Australian departments in Papua New Guinea. A large item in our aid to Papua New Guinea is for emoluments of the Australians who were appointed to the Papua New Guinea Public Service by the Australian Government and whose services will be required after selfgovernment and independence until Papua New Guineans are ready to take their places. The maximum number of Australians in the Public Service reached about 8,000 although from now on the number will decrease as the localisation program gets under way.

At this stage when Papua New Guinea is in practice self-governing and only awaits amendment to the Papua New Guinea Act to become formally self-governing, it is interesting to recall the origin of Australia’s policy for the development of Papua New Guinea. Nearly 28 years ago a former Minister for External Territories, Mr Eddie Ward, when introducing the Papua New Guinea Provisional Administration Bill, said:

This Government is not satisfied that sufficient interest had been taken in the Territories prior to the

Japanese invasion, or that adequate funds had been provided for their development and the advancement of the native inhabitants. The Government regards it as its bounden duty to further to the utmost the advancement of the people and considers that that can be achieved only by providing facilities for better health, better education and for a greater participation by the people in the wealth of their country and eventually in its government.

Australian economic aid to Papua New Guinea for the past 10 years was provided largely as backing for development based on the concepts of a World Bank Mission of 1963. These concepts emphasised economic growth as a means of meeting the social needs and raising the levels of living of the people. One of the Mission’s basic principles was that expenditure and manpower should be concentrated in areas and on activities where the prospective return was highest and this meant that the benefits of development did not reach quite a large number of Papua New Guineans. The Papua New Guinea Government is now rightly concerned about this and the present inequalities between rural and urban populations, between expatriates and Papua New Guineans, between Papua New Guineans and between districts within the country. It is preparing its own plan for development and has decided that there will be a change of emphasis. The new plan - the basic plan - is to improve the lives of all Papua New Guineans, not merely to increase the gross national product. I support this aim which is consistent with views that we put forward in the Estimates debate on this subject in 1972. I repeat what I said then:

I think it is about time we measured our achievements in terms of people and welfare and not money and statistics.

The Australian Government is happy to support this basic purpose of the Papua New Guinea Government with an assurance of continuing economic aid. Our aid program for Papua New Guinea will be developed in cooperation and consultation with the Papua New Guinea Government. It will be worked out in the context of that Government’s improvement program.

It has always been Australia’s aim that Papua New Guinea should, as soon as possible, achieve a much greater degree of financial and economic viability than it now has, but the Australian Government has given the Papua New Guinea Government an assurance that, it is prepared to continue providing substantial aid not only up to independence but also beyond. The evidence that the Australian Government will live up to this assurance can bc seen in the estimates which we are considering tonight.

The degree of economic stability that Papua New Guinea has achieved is such that it was able to overcome the acute problems of the past 12 months caused by the laying off of workers on completion of the construction phase of the Bougainville copper project, the very low world prices for rural products and the effect of the rearrangement of exchange rates of its trading partners and exports competitors. There were also difficulties resulting from hesitancy on the part of consumers and investors. By the second half of 1972-73 the economy had shown that it could withstand these shocks without undue disruption and it could do this relying upon itself without any special outside assistance. With the improvement that occurred in world market conditions for coffee, cocoa and copra and the indications of restored investor confidence economic growth should resume its course.

It cannot be denied that Papua New Guinea will still face difficult problems as do all other countries. It is the responsibility of any government to make the decisions on priorities and the allocation of its resources. These kinds of decisions are the business of government. The important difference is that the decisions affecting Papua New Guinea are now being made by the elected representatives of the people of Papua New Guinea. We in the Government, and I am sure that here I can speak on behalf of the Opposition, have every reason for confidence that the Government which has emerged in Papua New Guinea has the ability to carry the country forward to viable nationhood.

Mr PEACOCK:
Kooyong

– The estimates having come on for debate now, somewhat earlier than I had anticipated, 1 will not make the address that I had planned to make. I want to take up one matter raised by the Minister for External Territories (Mr Morrison) and to compliment him on one portion of his speech in which he said it is time - to use his words I think - that we should measure the effectiveness of aid as it relates to people and their welfare and not merely by statistics. Of course, that was said in this House last year and it is being said increasingly around the world today. I would refer those so charged within the Department of Foreign Affairs to take note of what is being said in the international community on the question of assisting those in poverty throughout the world. The basic problem of poverty and growth, as has been said by other people in the developing world, can frankly be stated very simply: The growth is not equitably reaching the poor and the poor are not significantly contributing to growth. It is time that those nations contributing to the International Bank for Reconstruction and Development recognised that they must cease judging the effectiveness of aid programs on the basis of the percentage of the gross national product. The GNP was devised only to be a measure of the distribution of goods and services produced by an economy, and it does not relate to the sorts of needs of which I have just spoken. Perhaps one of the finest addresses in a continuing series that he makes was made on this very issue along these lines by the President of the World Bank Group, Robert McNamara, only last month.

Having produced a bouquet for the Minister I now turn to the other lame duck Minister who is associated with these estimates. I refer to the Prime Minister (Mr Whitlam) who vacates his portfolio as Minister for Foreign Affairs in a matter of weeks. In doing so he does the nation a service. The Minister for External “erritories - I do not put him on the same basis - goes with his Department on 1 December. He remains, I understand, as Minister for Science and will be looking after Papua New Guinea’s welfare on behalf of the Minister for Foreign Affairs. But essentially this is the last time that we shall be taking the estimates so presented with 2 Ministers being responsible for them. There will be one set of estimates through the Department of Foreign Affairs and the present incumbent, though he remains temporarily in the position of Prime Minister, will work himself out of the position of Minister for Foreign Affairs in a short period of time. I do not want to spend a great deal of time on what that gentleman said in a debate this morning about attitudes that I hold on foreign affairs, but in a deliberate endeavour to misquote he used quotations for convenience and in other erroneous manners, and in his concluding remarks alleged that I was in favour of most of the areas in which he has been operating as Minister for Foreign Affairs, leaving aside my criticism of the fracturing of relations with the United States, the United Kingdom, Singapore, Thailand and numerous other areas of the world. He said that all of the significant things the Government has done but for which some elements in the Liberal Party had criticised the Government are, in fact, endorsed by the Liberal spokesman on foreign affairs. That is not true. I have referred to some of those areas in which I have been trenchantly critical of the Government, and the one for which he takes more credit than anything else - China - I would like to refer to very briefly now. Of course, as he said, I accept the fact of recognition of the People’s Republic of China, and my Leader has said it and properly so. But we have been critical of the method whereby this Government recognised the People’s Republic of China. Methods and style may not be important to some but in the area of diplomacy they are an innate part of foreign relations. Britain is in fact the only Western power which pledged to remove its officials from Taiwan; yet Taiwan had no consulates in the United Kingdom and therefore was not placed in the difficult position in which we placed her earlier this year. Other Western powers were not as discourteous or as undiplomatic and their diplomacy will pay dividends. They have not consciously made enemies in Asia. For example, the images of West Germany, Canada and Austria are therefore satisfactory. Cutting all ties with Taiwan was, to me, illogical. This Government has recognised 2 Vietnams, 2 Koreas, 2 Germanys and one China and has given no explanation for doing so other than it had to be done. Others maintained the link with Taiwan but this Government chose not to do so. Furthermore, Australian policy is out of step with nearly all South East Asian countries, a factor that is important to this side of the House even if it is not important to the Government. Three states - Burma, Laos and North Vietnam - recognise Peking. Four states - Thailand, Khmer, South Vietnam and the Philippines - recognise Taiwan. Three others - Singapore, Malaysia and Indonesia - have Taiwan trade or consular office links. Enough said about the aspect of China.

In the few minutes of the Estimates debate that remain to me I would like to refer to a statement made by the Prime Minister in his policy speech last year. This relates to questions of significance. He said:

More than any foreign aid program, more than any international obligation which we meet or forfeit, more than any part we may play in any treaty or agreement or alliance-

I pause to say it could hardly be stated higher than that-

Australia’s treatment of her Aboriginal people will be the thing upon which the rest of the world will judge Australia and Australians - not just now, but in the greater perspective of history.

How has this Government conducted its affairs in relation to Aboriginal welfare? Last week we saw demonstrations outside this Parliament which revealed just how much of this Government’s policies are mere rhetoric but, as a consequence of that rhetoric, divisive; its policies have fractured relations around the world and have led to divisiveness within this country. The picture is one of muddled idealism, rhetoric and fractured relations. In regard to the most fundamental area mentioned by the Prime Minister before the election, we have seen the sacking of a Minister, namely the previous Minister for Aboriginal Affairs.

The DEPUTY CHAIRMAN (Mr Martin)Order! I would remind the honourable member that the estimates for the Department of Aboriginal Affairs have already been discussed.

Mr PEACOCK:

– With the greatest respect Mr Deputy Chairman, the Prime Minister has indicated to you that more than any other foreign aid program, Aboriginal affairs will be the thing upon which the people of Australia will judge whether foreign relations are effective or not. He went to the people on that basis.

The DEPUTY CHAIRMAN- You can work that particular part into the debate on these estimates.

Mr PEACOCK:

– I have mentioned it twice.

The DEPUTY CHAIRMAN - I will listen very attentively.

Mr PEACOCK:

– I appreciate the remarks. One Minister was sacked. The permitted misuse and wastage of funds within that Department all flow over to the judgment which we were asked to cast on this Government’s performance in foreign relations, and last week all members of this Parliament were greeted with screaming and frankly dissatisfied Aborigines. That is how successful this major thrust has been. It has been an utter disaster. Our foreign relations are in tatters. Papua New Guinea has been mentioned by the Minister. So many changes have been made by the Minister and his colleagues that one is never quite sure whether we have consistency in our relations there.

In the few minutes remaining to me I want to touch on the realities of Australia’s position in the world - the special position which a developed European nation on the periphery of Asia has - for this must be the starting point in the examination of our relations with South East Asia in particular and those countries that aTe nearest to us geographically. The only realistic policy is not to concentrate on vague amorphous international organisations, however important they are - and I stress again that they are important. The sole concentration ought not to be there. Our primary consideration must be given to developing our relations with the countries in our region and in our general area. We must always be conscious in these circumstances that Australia is dealing with developing countries, with countries which have different cultures - underdeveloped countries, if one likes to use that term. These countries require-

The DEPUTY CHAIRMAN (Mr Martin) - Order! The honourable gentleman’s time has expired.

Mr WILLIS:
Gellibrand

– In speaking to the estimates for the Department of Foreign Affairs, I address myself in particular to the question of foreign aid. This is an area of Government activity which is of increasing importance. It is, indeed, appropriate that that should be the case. The need of the developing countries for aid and assistance from the developed countries is certainly no less today than it was a decade ago. Indeed, it could be said to be greater. Yet real per capita aid to these developing countries is declining rather than increasing. According to the Organisation for Economic Co-operation and Development, in the area of official - that is, government - aid by developed countries in the last decade the level of real per capita aid to the developing countries has fallen by 10 per cent. One specific example of that which has direct relevance to the current state of international affairs concerns aid to Palestinian refugees, of whom there are about one million living in United Nations refugee camps. They are currently subsidised at the rate of 5c a day, which is half of what the aid was in 1964 in money terms, with no allowance for any decrease in the purchasing power in the intervening period.

At the same time as aid to developing countries is declining on a real per capita basis the gap between the haves and the have nots remain enormous and is in fact becoming much more extreme. The enormity of the gap is shown, by the fact that at the end of the United Nations first development decade - that of the 1960s - there were more than 50 countries with a gross national product per capita of less than US$200. Those countries contain 60 per cent of the world’s population. On the other hand there were 26 countries with a gross national product per capita above US$1,000, but they contained only 25 per cent of the world’s population. Australia’s gross national product per capita at US$2,300 was the sixth highest in the world.

The growing disparity between rich and poor is shown by the fact that throughout the first development decade the total world gross national product increased by the almost incomprehensible sum of US$1, 100,000m. Of that enormous sum 80 per cent went to countries in which the per capita gross national product is already above US$1,000, that is, it went to 25 per cent of the world’s population. Only a mere 6 per cent of that increase in the world’s gross national product went to the countries in which the per capita gross national product was US$200 or less, that is, to 60 per cent of the world’s population. Thus the countries with the richest 25 per cent of the world’s population received 80 per cent of the increase whilst the poorest countries with 60 per cent of the world’s population received only 6 per cent of the world’s increased income.

Deplorably, the situation will not be any different in the second development decade, that of the 1970s. The World Bank estimates that in the second development decade those 26 countries will again take 80 per cent of the total increase in the world’s income. These figures provide irrefutable evidence of the need for a much greater effort to be made by the developed countries to assist the rest of the world if this trend to growing inequality is to be arrested in any way. But unfortunately it is highly unlikely that much of an effort will be made. The developed countries of the world have shown a marked reluctance to provide even that level of assistance which is necessary to achieve the very limited objectives of the second development decade.

The international development strategy of the United Nations set a target for developed countries which provided for each such country’s official aid to reach 0.7 per cent of its gross national product by 1975. This was considered to be essential if the growth rate objective of 6 per cent per annum for developing countries was to be reached in the second development decade. However, the 16 countries which form the Development Assistance Committee of the OECD - a Committee which is comprised of nearly all of the world’s most developed countries - had reached an average level of official aid of only 0.34 per cent of their gross national product by the year 1972, that is to say, they were at only half the level which was being aimed for in 1975. I am pleased to say that Australia’s figure was 0.61 per cent, a figure which was exceeded by only 3 other countries. Even more disturbing in relation to the general position is that by 1975, it has been estimated by the OECD, only 5 countries will have achieved the UN objective for all developed countries. They are Norway, Belgium, the Netherlands, Sweden and Portugal. Denmark hopes to reach this figure shortly afterwards, as does New Zealand, which recently joined the OECD and announced its intention to raise its official development assistance to 0.7 per cent by the financial year 1975-76. I regret that unless present indications change Australia will not reach this objective until 1979 or 1980.

On 24 May this year the Prime Minister (Mr Whitlam) announced that the Government was working towards an official aid target of 0.7 per cent of its gross national product by the end of the decade. Although this means that we would achieve the objective by the end of the second development decade it still does not fully comply with the United Nations objective, which sets 1975 as the target year for this level of assistance. To my mind it is of great importance that Australia becomes one of the countries which will achieve the target in 1975 - not that that achievement will of itself make a great difference to the conditions of the developing countries as we are a relatively small country and our official development assistance is already near 0.7 per cent. However, it will set an example and place us in a position to castigate others who are reluctant to meet their reasonable obligations.

Chief among these are West Germany, Japan and the United States of America, all of which have a very large gross national product by world standards but which are allocating miserable proportions of it to official development assistance. Last year Germany allocated 0.31 per cent of its gross national product to this activity, Japan 0.21 per cent and the United

States 0.29 per cent. Thus they are all below average. Certainly Germany and Japan cannot claim any balance of payments problem as a reason for their poor performance. The United States does have a balance of payments problem but, because of the tremendous size of its gross national product, there is no hope of the United Nations target being anywhere near achieved unless the United States is prepared to arrange its affairs so that it does provide 0.7 per cent of its gross national product as official development assistance.

The critical importance of the United States in this respect is shown by the OECD’s comment that the average of 0.34 per cent for Development Assistance Committee countries in 1972 is unlikely to improve over the next few years, despite increased percentages by a number of countries. This, the ‘OECD Observer’ of August 1973 states, is largely owing to the lower disbursements that can be forecast for the United States’. I strongly urge the Government at least to adhere to the United Nations target and then to use its influence on other developed countries, particularly the United States, to make some effort to reach the 0.7 per cent in the not too distant future. Unless we announce our intention to abide by that target we will be in no position to point the finger at anyone else.

There are a couple of other matters to which I would have liked to refer, but, in view of the time available to me, I must content myself with referring to only one of those items. I would like to congratulate the Government on the excellent action it has taken in establishing a task force early this year to review our official foreign aid program. Following the receipt of the task force report, the Government has announced that it will establish an Australian development assistance agency which will gather up all our aid sections currently scattered through various departments and place them under a senior official, responsible only to the Minister for Foreign Affairs. It is surely imperative to ensure that our aid is efficiently utilised, particularly as 93 per cent of our aid is bilateral aid and therefore is not supervised by any outside expert agency as is the case with multi-lateral aid. One of the advantages of establishing an Australian development assistance agency in that our aid will be clearly administered in a more efficient manner than is currently possible with bits and pieces being scattered through various departments. It is also pleasing to note that the Government intends the agency to have a research and economic team, part of whose role will be to check that aid programs are working and that money and time has not been wasted. With the coming of self-government in Papua New Guinea and our continuing commitment to maintain substantial aid to that country, it is essential that our aid programs are rationally determined and efficiently administered. I agree with the honourable member for Kooyong (Mr Peacock) in his opening remarks when he said that the total amount of aid as a proportion of gross national product is not the sole determinant of a country’s criterion for efficient use of its aid. It should also be supervised and administered in such a way that the aid is seen to be going to the best advantage of the recipient countries.

Mr BURY:
Wentworth

– I will reply briefly to the honourable member for Gellibrand (Mr Willis) regarding foreign aid. Of course, what he says in the main is perfectly true. But in my view - and I think that if he considers the matter further he will recognise this - the main contribution which the rest of the world can make to this problem is to liberate the trade of developing countries. As far as Australia is concerned, much has been done just lately. But what these countries face, above all is a denial of their exports to the markets of highly developed countries. We and others have opened our gates to some extent, but always with the proviso that we limit the total imports and we reserve our right to change the arrangements should this be embarrassing to any of our industries. Of course the wage rates in these developing countries are low. Thus, they appear, quite falsely overall, as dangerous competitors to many existing industries. I will not pursue this matter because the debate on this matter has been closed for the night. But what these countries need even more than specific financial contributions is the ability to earn their own living and to increase their income by exporting to other countries those things in which they have a relative advantage. That is the root of the matter.

I rose chiefly to address my remarks to the serious declension which has taken place, as mentioned by the honourable member for Kooyong (Mr Peacock) in our relations with South East Asia and the near area to Australia. The Prime Minister (Mr Whitlam) some time ago made a statement which was quite right at that time, and still is - apparently it has been forgotten since by him - that our most impor- tant relationship if we take all the countries of the world is that with our nearest neighbour Indonesia. Indonesia is a large country, rich in resources, and with a tremendous potential if it can enjoy stable, reliable, regular government for a sufficient number of years ahead. Our relations with Indonesia have deteriorated. Reference was made by an honourable member during question time to the article which appeared recently in the ‘Financial Review*. That article said in substance what has been going around the traps for some time - that the position of Australians in Indonesia has gone back and that we are no longer regarded in the same basic warm manner as we were a few years ago.

We have received notable service in Indonesia from the Department of Foreign Affairs, including a number of quite outstanding ambassadors. They include men like Mick Shann and Mclntyre, who is temporarily the president of the United Nations Security Council. Over the years they have built up a tremendous personal relationship. The predecessors to this Government, of course, played an immense part at the time of the liberation of Indonesia just after World War II. But these relations, as the honourable member for Kooyong pointed out, depend very much on style. In this respect, headed by the Prime Minister, we have slipped back. This is largely because of the style of the Prime Minister. In everything, including diplomatic relations to which it is quite unsuited he likes drama, the big splash, the sensational reports, working up excitement and things of that character. This is in very ill accord with the current rulers of Indonesia. Unfortunately, their position does not seem to be understood clearly by members of the present Government and, even less, by some of their associates and friends.

One has to remember that the present regime in Indonesia arose originally in sharp response to a communist coup. Many of the present rulers narrowly escaped having their throats cut on the night of the uprising. So their rise to power was based on a very fortunate escape at the time. But since then, there has been a firm and economically sensible government. It managed to conquer very largely the acute problem of inflation in Indonesia at that time. It set the country right, developed the right economic patterns and generally adopted the correct postures all around the world. One has to remember that these people are naturally highly sensitive to and very rightly scared of communism. One may sit broadly on these matters. But with this tremendous movement which nearly took over Indonesia, the Indonesian authorities are very sensitive to relations with the People’s Republic of China and with the rest of the communist world. They see, as other people see, that the current changes in China have brought about a much more civilised type of government, if we may call it that, which is anxious to converse and have relations on a broadening basis with the rest of the world. At the same time, that government, or its agencies, continue to stir up propaganda and above all to encourage revisionist regimes in the rest of the world.

So the Indonesians do not quite understand our sudden love for the neo-communist international world. This makes them suspicious. Naturally, on that basis relations cannot proceed on the same basis of confidence which we have now built up over some years. The other things in which the Prime Minister indulged are also registering on the other countries of South East Asia. The Prime Minister’s remarks about Thailand and his attitude towards the South East Asia Treaty Organisation sow doubts in the minds of all the people of this area.

Mr Morrison:

– There has been a change of government in Thailand.

Mr BURY:

– Yes. But surely the honourable member does not claim credit for the change of government in another country, does he?

Mr Morrison:

– No, we do not.

Mr BURY:

– No. Certainly, after the remarks which the Prime Minister has made, his influence is not likely to wax in Thailand or in any other country of this area. But the fact is that the attitudes of other countries towards us have, of course, been changed quickly. The government has changed and so - has our posture. The Prime Minister has laid great stress on cultivating new relationships with African countries which in themselves, subtracting some of the notions that go with some of them, would be, per se, good things. But, in the United Nations he has changed our posture and run along with the uncommitted countries, and he has been to the kinds of conferences in the world which are basically hostile to our way of life. No doubt those countries and the people at those conferences are pleased with him. Probably they are delighted. On the other hand, this has been done at the expense of our old solid friendships with other countries in South East Asia, particularly with Indonesia.

In relation to Singapore and Malaysia, we have withdrawn our troops and so forth, thus leaving the feeling that we are unreliable people. When occasionally Lee Kuan Yew has pointed this out or our Press has pointed out the exchanges between the Prime Minister and Lee Kuan Yew, it has not interested the rest of the world very much. The Prime Minister says lightly and flippantly things which leave lasting smarting wounds in the minds of our friends in Malaysia and Singapore. When the Prime Minister engages in verbal thrust and tumble with Lee Kuan Yew, he comes out without many feathers left. When he is in this House, he turns his back on us and looks around to the cheering minions behind him - he is like the Himalayas amongst the sand dunes in that outfit opposite - and it is very impressive. But the fact that as our Foreign Minister he is doing the same kind of thing when he goes around the world leaves a very bad impression with our friends in Asia. I regret and I am sure the House regrets very much that all the good personal relationships which have been built up over the years - to a certain degree by honourable members of this House visiting the area - are now changed.

The DEPUTY CHAIRMAN (Mr Martin)Order! The honourable member’s time has expired.

Mr HURFORD:
Adelaide

– I cannot help contrasting the remarks of the honourable member for Wentworth (Mr Bury) with what I have read of the views of his colleague, the honourable member for Hotham (Mr Chipp), when it comes to attitudes to Indonesia. However, let me allow them to fight their own battles on that subject and let me say that, as far as I am concerned and I am sure my colleagues in the Australian Government are concerned, relationships with Indonesia have never been better. They are splendid. I am glad of the activities of Amnesty and other organisations in ensuring that as few people as possible will be behind prison bars anywhere in the world. If people are behind prison bars in Indonesia - I have no personal evidence of that - I trust that through Amnesty and other proper avenues we will see that tensions are broken down and as many people as possible are released to freedom. I want to make these points about Australia’s relationship with Indonesia: There have been harmonious conclusions to the negotiations on the border between Papua New Guinea and Indonesia since the Australian Labor Government took office on 2 December. Furthermore, the Indonesian Foreign Minister, Dr Malik, will visit Australia in November. We welcome his visit and we welcome every possible negotiation we have with his country. There are very close contacts, and these will be maintained through frequent visits of high level officials between our 2 countries.

However, in addressing myself to the estimates for the Department of Foreign Affairs I want to say something about Australia-New Zealand relations. In short, although there have been wonderful improvements in relaionships between the Australian Labor Government and the new New Zealand Labor Government, my message is that the 2 countries take each other far too much for granted. In other words, we must make much more effort than we have in the past to take note of each other’s point of view. In mentioning the improvements in relations I pay tribute to the Ministers of our own Government and the Ministers of the New Zealand Labor Government who have visited each other’s country and built up relationships since December last.

I had the pleasure of visiting New Zealand for 10 days early in September as a guest of the New Zealand Government. I had visited the country as a long-in-the-tooth student about 15 years ago but then for only 3 days and only part of the North Island of New Zealand. My trip in September was rather different. I want publicly to express my thanks to all those responsible for this most enlightening journey for me, and I hope for honourable members when I tell them about it. Before setting out to be an expert or pundit on this subject, let me state my credentials. I took part in a seminar on the subject of New Zealand-Australian Co-operation at the Victoria University in Wellington on the first week-end of my visit. The New Zealand Prime Minister, the Honourable Norman Kirk and the Leader of the New Zealand Opposition, the Honourable John Marshall, also were participants in this splendidly organised seminar which was sponsored jointly by the Victoria University Department of Extension and the Centre for Continuing Education at our own Australian National University in Canberra.

I then spent 3 days in Wellington conferring with Cabinet Ministers and senior public servants - mainly heads of departments. I express my thanks to all who gave their time to me and also to a senior journalist who was travelling with me. As an example of the cooperation that was shown, Mr Norman Kirk gave us an hour of his time, and that was much appreciated. The next day I was in Invercargill in the South Island, or more accurately at the relatively new aluminium smelter at The Bluff, near Invercargill - a good example of AustraliaNew Zealand co-operation. A number of Australians work at that aluminium smelter, where Australian resources, in the form of bauxite, are processed by the use of New Zealand power. The next day I spent as a guest of the City Council of Christchurch, the third city of New Zealand and the sister city of my own city of Adelaide, which I am proud to represent in this Parliament.

Mr Birrell:

– Laid out by the same fellow.

Mr HURFORD:

– It was laid out by the same fellow, as the honourable member for Port Adelaide so well knows. The next day and a half before I returned home I spent in Auckland, the premier commercial city of New Zealand and the largest city of that nation. Those are my credentials. Now for my views based not only on this experience but also on living and working with many New Zealanders and reading and listening to much on this subject.

In essence, Australians and New Zealanders, it must be said, are basically the same people. It is incredible how similar we are and how our aspirations are so much the same. To focus on the ridiculous, our national dishes are even the same - the good old meat pie for the main course and the pavlova for the sweet. As far as I am concerned, the only problem with New Zealanders is that they play rugby football instead of good old Australian rules. Yet, despite these similarities we take each other far too much for granted. Australians ignore New Zealanders. We are tpo preoccupied with areas to our north, to the neglect of those to our south and east. New Zealanders are far too apprehensive of Australians. They find us too brash. They worry about us swamping them with our uncouthness. At the expense of incurring the wrath of my friends in the United Kingdom, I am bound to say that New Zealanders have been far too ready to listen to the propaganda of the Brits. Honourable members of this House will be familiar with that propaganda or, if they have not heard it, will understand it readily. The old Anglo-Saxon smoothies of the northern hemisphere have been too fond of whispering in the ears of New Zealanders just how uncouth and brash we are and how we should be left alone. This has left its mark on those strong Anglophiles of that other part of Australasia.

I am getting away from my point. The point is that Australia-New Zealand relations have to be worked at - not neglected as they have been until recently. The fact is that to date far too much emphasis has been put on trade. Here, we in Australia have nothing of which to be ashamed. In March of this year when the New Zealand Minister for Trade- and Industry, Mr Freer, and the Australian Minister for Overseas Trade (Dr J. F. Cairns) reviewed the progress of the New ZealandAustralia Free Trade Agreement at a meeting in Wellington they reached agreement on retaining tariff preference by each country to the other. The need for this review arose out of the dismantling of the British preferential tariff system by both countries. The main basis of the Agreement was that Australia would preserve for New Zealand a margin of preference of 15 per cent in the Australian tariff while New Zealand accorded Australia a similar reciprocal benefit but only to the extent of a 10 per cent preference. This arrangement is one that should give a boost to New Zealand’s trade with Australia.

The trade relationships in themselves are not enough. The long and short of it are that there are over 2,000 items on the customs schedules which permit New Zealand goods to come into Australia free. In all, there are over 2,600 items on which a rate of 10 per cent or less applies to New Zealand goods and only about 540 which incur a rate of more than 10 per cent. I repeat that this trade relationship in itself is not enough. The NAFTA relationship has been in the doldrums. It has been somewhat short of real progress. There was a real opportunity at the talks at Wairakei in September between businessmen and government officials from both countries. That opportunity was grabbed by the New Zealanders who have opened their borders to a marked extent, as long as Australian traders have been given the time to take advantage of these opportunities. But more than that is needed. I was delighted to learn from New Zealand’s Prime Minister, Mr Kirk, while I was in New Zealand, that he is reviving his ideas of a few years ago of Australian and New Zealand parliamentarians and perhaps other parliamentarians, Ministers and backbenchers, getting together regularly. Bolder political decisions for our mutual benefit will certainly have to be made when we learn more about each other. The Prime Minister’s idea was that the Nordic Council in Europe should be used as a model. One necessary addition is that we ought to commission now a joint economic study by our Public Service and economic research institutes as a background paper for this meeting of parliamentarians. They will then be able to make the important decisions for a significant leap forward iri cooperation in our region, to our mutual benefit. Australia-New Zealand relations need a big leap forward. This will come only from political decisions of courage. Such political decisions will be made if we know each other better.

The DEPUTY CHAIRMAN (Mr Martin)Order! The honourable member’s time has expired.

Mr SINCLAIR:
New England

– I wish to make a few comments on the estimates of the Department of Foreign Affairs and the Department of External Territories. For the past 10 years there has been a marked expansion in our overseas posts. This has meant an increasing demand on the availability of accommodation abroad and has put real pressures on the Department of Foreign Affairs for personnel. The Department’s estimates cover significant increases in the expenditure for both purposes and reflect the size of the demand. At a time when our overseas reserves are high, I believe that there is a necessity for us to acquire more satisfactory premises for those who are stationed outside Australia. I am appreciative of the measure of inflation in other countries as well as ours and the degree to which it is difficult to acquire adequate and suitable land. Yet one must be conscious of the fact that Australia’s permanent interests abroad will best be served by having suitable accommodation and facilities in which to house those who serve this country outside its territorial limits.

It seems to me that a number of disabilities apply to personnel in the Department of Foreign Affairs. I have often felt that the parallel service provided by the Department of Overseas Trade, as it is now designated, provide for greater flexibility of employment and for greater opportunity of studying and keeping up to date with the trends in Australia. I see some validity in a thorough examination of the basis on which members of the Department of Foreign Affairs, particularly at the senior level, are employed. I believe that there is quite considerable merit in looking at the contractual basis on which our trade commissioners are employed. I believe that a number of persons could be employed advantageously to Australia in a similar way. I believe that if they were so employed we might be able to improve the general terms and conditions of some of those employees who are perhaps disadvantaged under the present structure of employment, as it is designated by the Public Service Board.

I think it should be said that there often seems to be a need for a re-examination of the functions and the roles of those who are employed in some posts. I know that in an examination of departmental estimates it is impossible to identify and to examine adequately or fairly individual posts. As one who has been involved in a number of missions overseas on behalf of past governments, I believe that there is a necessity for us to ensure that the range of services provided and the personnel employed are matched by the tasks with which they are charged. I believe that in some posts there is a complete understaffing in some areas in which the posts could advantageously be augmented. In other areas I believe that posts are overstaffed, perhaps because of the necessity to employ local staff or those who are Australian based.

In the employment of personnel in the Department of Foreign Affairs I believe that we need to get away from the present system which is tied exclusively to the Public Service Board and which, I suspect, places undue restraint on a department which has to exercise an increasingly important role in serving this country in future.

Obviously there is insufficient time to deal with all the items in the estimates. However, I wish to refer briefly to some. I believe that the expenditure of $100,000 prior to the engaging of legal counsel and the obtaining of scientific evidence to submit to the International Court of Justice in an effort to halt the French nuclear tests in the Pacific was excessive when compared with the results achieved. I believe that the survey undertaken by the Australian Academy of Science was unjustifiably avoided. It certainly does not appear to have been taken into account by the Attorney-General (Senator Murphy) at the time he presented the Australian case at The Hague. I see the $100,000 as being excessive to the requirements of that submission. I welcome the increase which is to be provided for drug abuse control. I see this as an area in which international co-operation is absolutely essential. I believe it is unfortunate that we have not done more in that area in the past.

I believe that in the aid field generally there are a number of items which need to be discussed. Firstly, I have long felt that we have in general provided a range of aid which has perhaps not always been used as advantageously as it might have been and that the terms and conditions on which it was provided may not have been justified. I suspect that we need some basis by which our foreign aid program can be assessed, in terms of the economic worth of the aid, in terms of the benefits to society - the benefits to Australia - and perhaps alternative ways in which money can be spent. I believe that, in the past, in a number of areas the aid, although certainly provided at the request of the recipient country, has been provided without any valid basis of determining whether the ultimate benefit to the community has matched the amount allocated in the Budget.

While I will not now mention the individual schemes which are set out in the estimates, there are 3 areas which I believe we need to look at in particular. Firstly, I do not believe that our armed Services have been used or apparently will be used to the degree that they might to supplement our aid program. I understand that the Canadians, for example, use their Transport Command to ferry various items of aid to some recipient countries. I think that perhaps the Royal Australian Navy and Royal Australian Air Force could well be used for this purpose. I believe that in the Australian Army, particularly in some of the professional corps, such as the Army Engineers, the skills which are available for development projects of a civilian character in overseas countries - I am referring specifically to civilian aid - could be used at times when there is not a high defence risk in Australia. I suggest that there is merit in applying that reservoir of technological skill, professional ability and manpower in an area which could supplement our aid program.

The second area of assistance relates to the Colombo Plan. I believe that it is perhaps time now for us to re-assess the direction of

Colombo Plan aid. I know some of the difficulties that have ensued for students who have been educated in Australia under the Colombo Plan. I believe that in many ways this plan has been highly successful. But one, of course, cannot be unconscious of the dispute that arose between the Prime Minister of Singapore and Australia’s Prime Minister (Mr Whitlam) at the last meeting of Commonwealth Heads of State held in Ottawa. I believe in general that times have changed to such a degree that we need to consider to a greater degree the measures of financial aid for educational programs in the countries of receipt of aid rather than in Australia. I think that there is a need for us to maintain an educational program in Australia but I believe that there is a need for us to ascertain overseas whether we could augment the character of our educational training and perhaps do more than we have done in the past.

In the field of aid I believe that we could do far more by way of agricultural aid than we have done. Where agricultural aid has been provided, in many instances we have found that the nature of the Australian knowledge, skill and experience has been far more suitable in South East Asia in particular, but also in other areas of Asia, Africa and South America, than European skills which, of course, are not based on a climate similar to our own and where the nature of farming and pastoral conditions are so different.

I have not referred to the Department of External Territories. The one item to which I did want to refer briefly is the retirement benefits to be paid to expatriate officers. These benefits have been increases very significantly this year. I believe that this is a very vital area of expenditure. Unless this Parliament is prepared to look after those who have served this country and the development of Papua New Guinea, I believe that our responsibilities as parliamentarians will not have been met properly.

The DEPUTY CHAIRMAN (Mr Martin) - Order! The honourable member’s time has expired.

Mr OLDMEADOW:
Holt

– ‘Despite the fact that international relations, foreign policy and diplomacy are, like economics, highly specialised fields of activity, they nevertheless form the backdrop against which an amateur of reasonable political intelligence feels that he has a duty and a right to enter the debate. This is both the peril and advantage of our democratic system. It is a peril because most of us have neither the experience nor the expertise to assess the situation on a broad enough basis. It is an advantage because free, open and frank dialogue at any level is the most potent and continuing force in education and communication. It is my intention to concentrate on the general area of controversy which, from time to time, rages in this and the other place. The degree of difference is, not surprisingly, reflected in the community at large, amply fed by a wide range of Press, radio and television media which is available. There is one matter of concern which I share with my colleague the honourable member for Gellibrand (Mr Willis) and that is the amount of aid we propose to give to developing countries. It would be my hope that as a Government we shall reach the target set by 1975, which was the year suggested by the United Nations, and not by 1979 as is the present plan.

I propose to refer briefly to the statement made by the Deputy Leader of the Country Party, the honourable member for New England (Mr Sinclair), in which he expressed concern in respect of the expenditure of $100,000 on the legal case put to the International Court of Justice in an attempt to stop the French nuclear tests in the Pacific. I would remind the honourable member that on that occasion we won the case and that the previous Government did nothing about such issues. This was the highest court of appeal in the world and perhaps the only regrettable feature of the whole incident was that the French failed to abide by the decision of the Court and proceeded with the tests. Criticism of the Government’s handling of international affairs has a curious antiquated aura about it. Cries of outrage amounting sometimes to hysteria echoed down the corridors of the conservative Party when early in its term of office the new Government recognised the People’s Republic of China as the only valid government of that country.

Again honourable members opposite prophesied disaster when within hours of assuming control of the nation’s affairs we honoured our election promise and removed the scourge of conscription for national service. They abused the Prime Minister (Mr Whitlam) when he effected a Government decision to establish diplomatic relations with the Democratic Republic of Vietnam, the German Democratic

Republic and the Vatican. In the light of emerging developments in the world economic and political scene, clearly discerned and plainly comprehended by the Prime Minister, would those members of the Opposition who formed this trenchant, vocal condemnation seriously suggest that they would now reverse the decisions which were made? Who from the other side would dare to campaign for the reintroduction of conscription, even amid the climate of misrepresentation and fear which has characterised the recent debate on defence, ignoring as they do the planned and streamlined policies on voluntary recruitment and career encouragement? Who apart from those in the other place, who seem to spend their time looking up the China references in the Hansard reports of the early 1950s, would fail to appreciate the more flexible and co-operative patterns of relationship which for so long have been advocated by Labor which, alongside other major powers including the United States of America, has accepted China’s role in world affairs?

The ideological catchcries of the past - the images of gigantic hordes assailing our shores from the north, although employed with a blatant appeal to naked fear prior to the general election in December by all 3 conservative parties, and having been a successful tactic during their 23 years of government - did not succeed in persuading the Australian people. They did not succeed then and they would not succeed now. The fruit of this Government’s total reversal of previous policy on China is seen not only because we have adopted a new stance based upon mutual trust, friendship, and, wherever possible, co-operation similar to that which we enjoy with other major powers, but also because of the practical benefits resulting from increased trade, particularly in the areas of sugar and wheat. The Minister for Overseas Trade (Dr J. F. Cairns), for so long a thorn in the flesh of the anti-China clique but himself a prophetic and hopeful interpreter of political realities, was able to move confidently following the decisions of this Government in respect of the People’s Republic of China to establish, despite a heavy load of responsibility, a special rapport with both China’s trade representatives and also with the leaders of industry here in Australia. Even the most bitter critics of the Minister for Overseas Trade would find it difficult to argue that his portfolio has not been handled with the highest degree of competency.

However, I would strongly suggest that this would not have been possible in the absence of a new and adventurous stance in foreign policy. Australia has acted as a mature and independent nation. Hitherto she had merely yapped like a well-trained poodle behind the powerful flanks of the great Dane, the American power bloc. This Government’s foreign policy is based upon the fundamental premise that Australia is worthy of a dignity and character of her own. When the Prime Minister returned from the United States of America, Canada, Great Britain and South East Asia the Opposition was quick to seize upon the few expressions of shock which followed his candid but eminently friendly indications of Australia’s redefined and forward-looking strategy. The sphere of our influence during the last quarter of a century has been so subservient to powerful friends and allies and therefore so predictable that the emergence of an Australian upon the international stage courageous enough and confident enough to represent a young nation rich in natural resources and equally rich in the talents, energies and abilities of its people has, not unexpectedly, taken them by surprise. If occasionally there are some frank exchanges of viewpoint, we should not be alarmed. Rather we should value the interchange as an acknowledgment of our importance and that the leaders of the world now respect a government in Australia determined to explore every opportunity within the framework of national independence and regional and international flexibility.

We are not hidebound by traditional methods. Events in the modern world move too quickly and with too much at stake to allow us the luxury of waiting for the big men to fly. We have shown ourselves willing to assess each emerging situation as it presents itself. We have been maligned for our handling of the Papua New Guinea issue. We have been cast in the role of the arrogant dogmatist. The recent statement by the Minister for External Territories (Mr Morrison) regarding the independence timetable clearly shows that, despite our eagerness to give an early opportunity for self-government and independence in Papua New Guinea, we are keenly aware of the need to co-operate with those whose responsibility it will be to effect the completion of the task. The Minister responsible has been commendably sensitive and co-operative.

Perhaps nowhere has our new foreign policy and international concern been more clearly and effectively enunciated than in our recent performance in the United Nations. On 6 October the Melbourne ‘Age’ had this to say:

Under previous governments Australia has occupied a grey area, declaring its devotion to UN principles but often backing off when the time came for counting the heads on specific issues.

In commenting upon the present Australian voice in the United Nations, the ‘Age’ went on to say: . . as one of the growing medium sized powers Australia can declare its loyalty and march in the front rows of the nations opposed to racial discrimination and international violence. Its world image has certainly improved in 1973.

If the ‘Age’ leader is right and our world image has improved in 1973 it is because, as the Prime Minister (Mr Whitlam) said in a preelection speech to the people of Australia on 13 November last year:

We stand ready to develop and carry through policies and programs which will take Australia forward to her rightful proud, secure and independent place.

I believe that this Government will continue to carry out that promise. Where it has been necessary to act with speed and directness we have done so. Where it has been necessary to speak with clarity and frankness, we have not shirked our duty.

Mr DEPUTY SPEAKER (Mr Scholes)Order! The honourable member’s time has expired.

Mr GRAHAM:
North Sydney

– I should like to make some comments about Papua New Guinea and one or two comments about the general issue of foreign affairs. I should also like to reply to a few of the comments made by the honourable member for Holt (Mr Oldmeadow). I find it interesting to ponder the expressions of members of the Australian Labor Party and to note the way in which they identify Australia’s independence as being manifested by some various form of international impertinence. Apparently it is their judgment that the people of Australia cannot feel independent unless they are cast in the role of saying to the United States, the United Kingdom and other countries that those countries are engaged in policies which are abhorrent and wrong. If we find ourselves in agreement with the policies of London arid Washington, apparently we are to regard ourselves, to use a phrase used in Peking, as running dogs of the imperialists.

When one balances these issues against the facts of life one can understand the attitude of mind with which I know the Minister is familiar because he has spent quite a considerable time in various parts of Asia. Why is it that we should have an attitude of mind in Djakarta, in Singapore, in Kuala Lumpur and Seoul with which our friends in the Labor Party find themselves substantially in disagreement? They find themselves substantially in the position in which they are saying to these governments of the Asian countries: ‘You people have nothing to be afraid of. You do not have to worry about the activities of those in Moscow and those in Peking of whom you have been afraid. You do not have to worry about them at all. We, with all of the wisdom that we bring from Canberra in 1973, are able to advise you that you have no problem and that you are living in a world of fantasy and fear.’ The truth of the matter is that in the last 3 decades the Philippines, Indonesia, Malaysia and Singapore have all been subject to a clearly identified communist subversion, a communist attack.

Honourable members opposite know, and the Minister knows perfectly, the story of Ching-Peng and the terrorist forces in Malaysia. The Minister can explain, although he may be embarrassed so to do, at very great length where the arms and equipment that were captured came from because he knows perfectly well that they were identified. He knows without question in his own mind that had the terrorist activities in Malaysia been successful they would have been carried on through Singapore, and if the efforts of 1965 had been brought to a successful conclusion, they would have carried through, with some form of collusion, some form of arrangement, to Djakarta.

All these things are true. Honourable members know what happened in Vietnam; they know what happened in Korea. If one is to be regarded as servile by believing that the governments of South Korea and South Vietnam ought to have been helped in their attempts to remain free, to remain in control of their countries, then I for one would like to be identified in that event as being servile, because I hold the view that if the attitude of mind that was expressed by the honourable gentleman is followed to its logical conclusion we could have been independent in our outlook only if the enemy had succeeded and if in fact South Korea had become a vassal state of North Korea and if in fact South Vietnam had become a vassal state of North Vietnam. One does not know that this particular trend of history will not develop. One does not know that within the next decade what was called the domino theory may not be seen to develop.

Turning to Papua New Guinea, with which the Minister has a very special relationship, I would like to say that as from 1 December, as has been already said to the House by the honourable member for Kooyong (Mr Peacock), there will be a substantial change in the responsibilities of the Minister’s Department. The title of his Department is to be abolished and the bulk of his advisers will, I presume, become officers of the Department of Foreign Affairs. The Minister will be operating under the Minister for Foreign Affairs and looking after the special relationships between the Australian Government and the Government of Papua New Guinea. Looking ahead to the next decade, I believe a number of things should be said to the Minister - I feel confident that he would not disagree with these things; I am not suggesting that he does disagree - in the hope that he will encourage the Government in Port Moresby to do all that it possibly can as speedily as possible to approach that wonderful light on the hill of economic viability.

One of the ways in which I believe this can be done, particularly in view of the propaganda that is going on at the present time about the world’s energy problems, is to invite or influence the Government in Port Moresby to try to accelerate the exploration programs that are being carried out within Papua New Guinea in an effort to identify the ore bodies, to find oil and to develop the resources of that nation. Development should be taken at least to the stage where it will be attractive for international companies to come in and carry out developmental programs, as has already been done in the island of Bougainville. There are great possibilities for the gas in the Purari River area at the north of the Gulf of Papua. I should have thought that if some of the hundreds of millions of dollars that would be necessary for a program of this nature could be secured, at the end of the next decade the enormous concentrations of gas at Barikewa might become commercial and they could be very significant in the future development of the Territory.

The Kennecott company has been developing a copper mine on the western side of Papua. If United States know-how through companies of this nature can be encouraged to an even greater degree to come to the Territory there may be some possibility of Papua New Guinea more quickly reaching the stage where it will be able to develop its own programs and to stand to a greater degree than ever before on its own feet in terms of financial assistance. However, from Australia’s point of view there can be no doubt about the fact that Australian financial assistance and Australian underwriting for future economic development in the Territory are absolutely vital.

I should like to repeat what I have said before. I do not wish to see the people of the Territory in the position where they have to waste money on military equipment. I believe Australians should have the courage, at least in relation to Papua New Guinea, to face the future and say: ‘We will stand with you and by some formal contract we will undertake to look after your defence, internally and externally, over the next 15 years’. I know people are frightened, in this international world, to be as direct as that. I point out that I regard the manifestation of this fear as a little more servile than that type of independence which was being referred to by the previous speaker, the honourable member for Holt (Mr Oldmeadow). I can see no earthly reason why we should have to apologise to anyone of any colour anywhere else, in any government in the world or in the United Nations, for our particular interest in Papua New Guinea and our particular obligation to see that that country is developed and preserved.

The CHAIRMAN (Mr Scholes:
CORIO, VICTORIA

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

Mr KERIN:
Macarthur

– I intend making a few theoretical points on the very complex issue of power. The Australian Government, in its foreign policy actions and announcements since December 1972, has placed Australia’s standing in the international community as one of having accorded to reality. There are initiatives that we well may make and in our enlightened self-interest in dealings with other nations that we will continue to develop and advance. We are not drifting into anyone’s orbit and our approach and actions on some recent matters have reflected maturity more than independence. However, in the future for the most part we will find that we are one actor among many and that more importance will be attached to even our minor moves with respect to issues as they arise by others rather than by people in our own country:

In short, I believe that our foreign affairs can now be run more by professionals and that some political moves will be more often postures for diplomats to use in their slow, constant task for negotiation, compromise and pursuit of international harmony. But I do not underrate the purely political moves. The slowness of foreign affairs is demonstrated by the way in which slogans attach to a world condition. If the condition changes quickly there is a long time before the change is perceived by the general community. Of more importance is that a certain stance by a major power or powers dictates events far beyond the time of the policy’s currency but this also can be exploited beneficially.

The latest slogan attaching to world conditions is that we have changed from a world strategic situation of bipolarity to one of multipolarity. The accepted version of this is that the United States of America and the Union of Soviet Socialist Republics alone no longer dictate the pattern of events, and that China, the European Economic Community and Japan are now significant in the ordering of world affairs. I am not sure that Japan yet fits into the league of America, Russia and China. At the same time I am of the opinion that forces other than military strength will be of more significance in the future. I do not believe that we have true multipolarity. We are certainly in a period of great flux. I think it can be said that this political flux displays on its diplomatic surface 3 interacting trends at present. Firstly, there is a breaking down of cold war coalitions; secondly, the rise of non-security issues to the top of diplomatic agendas, and thirdly, a diversification of friendships and adversary relations. These surface movements are evidence of very significant economic and social forces which, if successfully exploited by statesmen and diplomats, may change the ingredients of power itself in the future.

Both the United States and the Soviet Union are not as concerned today if smaller countries formerly in their orbit in the 1950s and 1960s move to non-alignment, neutrality or even to other coalitions mainly because military technology has limited the need for forward bases, not only for strategic deterrents but also for combat and reconnaisance. The impact of technology on strategy is of fundamental importance, as I see it. Although Eastern Europe is retained by Russia as a wall, this is more for ideological and political reasons than for military reasons. Smaller nations have been allowed to pursue more pragmatic independent lines in economic negotiations, and freer play has been given to conflicts in this area. When previously protection against a military threat was the main concern, coalitions of nations held and the subordination of special economic, political and cultural interests to the requirements of common defence was readily accepted. Although these requirements have not passed they are and have been breaking up for a considerable time, and I even see this process extending to the Warsaw Pact countries in the future.

The disintegration of global bipolarity has allowed greater interchange between countries formerly in the common defence bloc as before the superpower was always heavily involved. Previously non-aligned countries such as India and Indonesia played the field without the hope of the long-run success that they now have. Thus more and more divergencies in world view or differences in social systems are insufficient to bar cordial relations among countries. If these tendencies continue to mature along the lines stated, an international system whose characteristics are grossly different not only from the bipolar world but also from previous balance of power relations could emerge in the 1980s. It is possible, but always recognising the possibility of unpredictable contingencies at the same time, that the nature of international power itself will change. If power is defined as the capacity of a country to influence other countries to accede to its objectives, then in a system characterised by multiple and cross-cutting coalitions formed around a variety of issues, mainly economic, the political currency of international power will be promissory notes on the lines of a wheeling and dealing operation - ‘We will support you on this issue if you support us on that’. The power maximising country would be the one that could most successfully negotiate a situation where its pledges always would be honoured and valued. But such a system would allow poorer countries to have increased bargaining strength in terms of their own ability to form coalitions.

Although hitherto power has been in the form of promises to apply or withhold military capabilities - this still would be paramount in vital security issues - this will have little utility compared with other forms of power, even a negative effect, in bargaining over non-security issues. The threat of the use of military power may debase one’s bargaining currency.

Although America and Russia still will be best placed to be the most powerful, due to their control of resources, it will be constructive co-operation with smaller countries that will win them more votes in global and regional forums. The European Economic Community could well emerge as an equally powerful unit due to its techno-economic capability, cultural ties, geography and diplomatic skills. For example, the EEC can form a better bridge with the Eastern European countries and is well placed to develop its former colonies in Africa. Japan will remain behind the bigger three as it is resource dependent but the gaining of military capability will not help it. In fact, Japan is maximising power in future terms as I see them by skilled resource diplomacy. Japan has not the advantages of the European Economic Community in terms of historic community ties. To escalate a dispute over economic matters would surely alienate a larger number of her suppliers.

China also will have to rely on skilful diplomacy rather than an exchange of material assets. It may be able to champion third world countries and be their nuclear leader, but the limits of this will be the degree to which the other 4 great power blocs provide assistance to them. China can be expected to try to drive wedges between East Europe and the USSR for world communist leadership. But China will never be a large enough market or source of products to exceed most other regional groupings which will arise. I do not think that we will have a five sided balance of power, because the usable kinds of power are not commensurate. China and Russia pose the only serious military threat to world stability at present. In nonmilitary terms, the USSR and the Comecon countries are more in need of commerce than vice versa. Yet socialist countries may be able to manouvre more quickly in many commercial matters. There will be an enormous need to settle questions of access to space, ocean environments and ecological standards.

So rather than multi-polarity which implies hegemony, I believe we shall see a full blown system of multiple interdependence where power is exercised largely in the form of constructive exchanges of valued resources. The threat to this proposition, of course, is still the flashpoints present in the world’s trouble spots, for instance, the United States of America in South East Asia, the USSR in Czechoslovakia and the Middle East - all of which are well known to us. Great responsibility rests on the

United States and the USSR to exercise self restraint in their future demands, otherwise Japan, India, Brazil and other countries will go nuclear. The wealthiest countries will have to refrain from establishing competitive spheres of economic dominance in the countries that they will influence. Leading economic countries will have to allow more interdependence to develop amongst lesser countries. The world’s rich will have to do a little more about the world’s poor and new sets of international laws on environment and conservation issues will be needed.

All that I have said sounds rather idealistic. But the stark alternatives and conditions to which I referred earlier give some reason for hope. If we cannot break away from the anachronistic habits of the past 300 years of international politics all we face is more bloody wars with the final conflict merely forestalled for 20 years. It should be obvious from what I have said that Australia has a place in the world community where it can act constructively without assigning itself a role which becomes fixed. We are now exercising our diplomatic skills in attempting to form new coalitions. We are aware of the resource diplomacy game and our mutual interdependence with Japan. We are trying to extend more aid to developing countries. We are taking a lot more notice of the use and benefits of the United Nations. We are now in a better position to influence the United States of America, as a sympathetic and constructively critical friend. We simply do not want the United States to kill people in our region for the sake of our own too easily developed sense of reactionary ethno-centricity. It is for those reasons that I am so hopeful for the continuing success of our foreign affairs, our policy initiatives and Australia’s future in a hopefully more peaceful world.

Mr WENTWORTH:
Mackellar

– Not much time will be available for me this evening to develop what I would like to say in this debate, so I will introduce my topic with a few words now. I agree that we must look always to Australia’s interests first in regard to foreign policy. But there are certain matters in respect of which Australia’s interests are inextricably bound up with the interests of all mankind. I am afraid that we overlook the fact that, when we are speaking of power in the world now, foreign policy comes down still to nuclear policy and to the possession of the weapons which dictate the power balance and which allow the possessors of those weapons to stand in a situation quite different from that of the rest of the world and of those which do not possess those weapons. When this debate is resumed I shall draw attention to what has been said by Sir Philip Baxter in this regard, when he pointed out that at the present moment there is a great deal of-

The CHAIRMAN (Mr Scholes:

– Order! It being 15 minutes to 11 o’clock and in accordance with the order of the House of 1 March, I shall report progress.

Progress reported.

page 2570

ADJOURNMENT

Tibet - Opening of the Sydney Opera House

Mr SPEAKER:

-Order! I propose the question:

That the House do now adjourn.

Mr WENTWORTH:
Mackellar

– I wish to take this opportunity to make a constructive suggestion to the Prime Minister (Mr Whitlam) who, I understand, is to go abroad shortly to represent Australia in various countries and particularly in Communist China. As he says that he is a friend of all oppressed people, I suggest to him that he ask his good and trusted friend, the Chairman of the People’s Republic of China, to arrange for a deputation from this Parliament to visit Tibet. Mr Speaker, as you know, a great many stories are current about what has happened in Tibet. Some people say that there has been genocide on a grand scale, if ‘grand’ be the right word. Some people say that the Chinese communists have obliterated the Tibetan culture. There is some evidence for that in the fact that the Dalai Lama has had to flee his country and take refuge overseas. The stories we hear are shocking beyond belief, but we cannot verify them because nobody is allowed to go to Tibet.

I suggest that, if the Chinese communists want to clear their name, if they want to put an end to these stories if they be untrue, they have a very simple remedy. They should allow a deputation of members from both sides of this House to visit Tibet, with the necessary interpreters, and to see for themselves what has been happening there. If a communist country, or indeed any other country, holds incommunicado for many years a large section of the territory which it claims - as far as Tibet is concerned there is some reason to think that the claim is not a justified claim but in point of fact is a claim of aggression - that country leaves itself open to all sorts of suspicious if it refuses to allow objective observers to visit and to report at first hand. The Prime Minister considers the Chairman of the People’s Republic of China his friend. He has spoken of him in the highest and warmest terms. If this friendship is really as deep as the Prime Minister has suggested and if the distinguished chairman of the People’s Republic of China has nothing to hide, it will be a simple matter for the Prime Minister to ask him whether he would allow a deputation of members from this Houst to visit Tibet and, with the proper facilities for seeing affairs there, to observe for themselves what the conditions are.

If it be true, as some people in China say, that the stories relating to Tibet are utterly unfounded, it would be good for everybody, including the People’s Republic of China, for the truth to be reported. A visit by a deputation comprising members from both sides of this House would be a good way of establishing the truth. I know that many of the members of this House who are associated with Left wing movements and have participated in communist led agitation have professed that they are in favour of all sorts of freedoms, that they are - against all sorts of oppression and that they do not believe in genocide and murder. I am all with them on this.

Mr Cohen:

– We do not agree with multinationals like you.

Mr Armitage:

– Go back to sleep.

Mr WENTWORTH:

– Mr Speaker, am I to get no protection from the Chair when these kinds of remarks are made? I can understand how certain of the Left wing members of the Labor Party, who themselves have been associated with communist demonstrations, may feel a little tender on a matter like this. But if they are honest, if they really believe, as they say, that they are against all genocide and not just against the things which they profess to abhor in other countries which are not communist, they will come behind the suggestion that I have made and they, in their Caucus, will be asking the Prime Minister to allow a deputation to Tibet to take place.

If the communists have nothing to hide they will welcome a deputation from a body as objective and as well thought of as this House. If, on the other hand, they are unwilling to allow a deputation to see what is happening in Tibet, that of itself, to some extent, will substantiate the horror stories which we hear. Although these stories are not necessarily established because first-hand observers have not been allowed into Tibet, there is a great prima facie case for accepting the truth of these stories. We know that Tibetan refugees, including the most eminent Tibetan refugees - and I have spoken of the Dalai Lama - accuse the Chinese Communists - whether rightly or wrongly we do not know, but the accusation stands - of conducting a systematic assassination of the Tibetan people and of their culture. Charges of physical genocide and cultural genocide are made, and with some evidence.

If there is nothing to hide, I would think that the Chairman of the People’s Republic of China would welcome a visit from members of this House who would be able to assure themselves and the world that all is sweetness and light in Tibet. By the way, this is not my opinion but, as I have said, one has these opinions and they are based on fairly good evidence. But I suppose that they are not conclusive opinions until objective observers have been to Tibet and have been able to see for themselves what has been happening. I make this very constructive suggestion to the Prime Minister. I hope that when he visits the distinguished Chairman of the People’s Republic of China he will ask permission from him for a delegation from this House to visit Tibet so that the members of that delegation can see for themselves what is happening there and can make a report to the people of Australia and to the people of the world, because the people of the world surely should be interested in what is happening to a few million people on the roof of Asia.

Mr ARMITAGE:
Chifley

– The honourable member for Mackellar (Mr Wentworth) is as usual looking for Reds under the bed. This is his usual practice. Of course it is true that the Prime Minister (Mr Whitlam) has friendly relations with the Premier of China. I am glad that he has, because somebody has to do something about overcoming the damage of the past and endeavour to get some good relations and some understanding between Australia and China. But I think the honourable member for Mackellar should realise that the Prime Minister is also friendly with Mr Nixon, Mr Kissinger and Mr Heath. The honourable member mentioned climbing

Mount Everest. If he wants to climb Mount Everest, I will move in the Caucus that the Government pay the cost for him.

However, I want to deal with the opening of the Sydney Opera House last Saturday. The opening of the Opera House was a gala day not only for Sydney but also for Australia. It is a great building, a wonderful work of art which will give and is already giving Australia a symbol, an identity, throughout the world. However, unfortunately the opening was marred by the introduction of petty party politics by the .Liberal Premier of New South Wales, Sir Robert Askin. The most spectacular election campaign opening ever - that is what it was. It was greatly assisted by help from the Australian Government. This is what we gave to make it such a spectacular day not just for Sydney, not just for New South Wales but for Australia: The assistance of the Navy, helicopters, ships and bands. Most of the operations on the harbour were conducted by the Navy.

Mr Grassby:

– We gave the Fills.

Mr ARMITAGE:

– We gave the assistance of the Royal Australian Air Force, as the Minister says, in the form of the Fills.

Mr Cohen:

– It is the first time they have been able to do anything useful.

Mr ARMITAGE:

– Yes, and they stayed up. I have been told, although I could stand correction, that we even paid the cost of the fireworks. We gave the New South Wales Government the use of the whole Commonwealth car fleet to operate in the Sydney area to assist in the celebrations. Furthermore we gave them the television landlines, as the television industry had declared the opening to be an event of national importance. As I said, unfortunately petty party politics were introduced. I give an example. The Prime Minister was not allowed to sit on the dais.

Mr Cohen:

– He was not invited.

Mr ARMITAGE:

– He was not invited to sit on the dais; that is correct. He was left among the crowd during the official opening. He was also left among the crowd when the Premier and a large number of people accompanied the Queen to inspect the Opera House. I know that this would not worry the Prime Minister. He is a very broad minded man. He is not petty. But it was an insult to this Parliament and to Australia as a whole. Utzon, the original conceiver of the whole architectural proposal, received only a passing reference from the Premier. There was no mention of Labor Premier Cahill, who was responsible for getting the whole project originally accepted by the State Cabinet, the State Parliament and internally within the Australian Labor Party, and who took a great deal of criticism for his actions, particularly from the Liberal Party.

Mr Cohen:

– The Liberal Party opposed it.

Mr ARMITAGE:

– That is quite correct. It opposed it and made it very much an issue during the 1965 State election campaign, following which the Government was defeated. There was no mention of Mr Pat Hills, the Leader of the Opposition in the New South Wales Parliament, who was also of great assistance to Joe Cahill, the Premier of New South Wales at the time the Opera House was conceived, by helping Joe Cahill both to get the idea accepted within the Party and to select the site so that the site would be set aside for the Opera House. But it should be kept in mind that when Her Majesty was in Canberra last Thursday the Prime Minister called upon the Leader of the Opposition (Mr Snedden) to speak. He had the Leader of the Opposition put at the front table, not down among the crowd, and he made sure the Leader of the Opposition was allowed to speak. Sir Robert Askin made no mention of Mr Bob Heffron, a former Premier of New South Wales, now over 80 years of age, a man who must take great pride in the fact that he helped to continue the project. All that Sir Robert did was done on the excuse of protocol, but he ignored the fact that this was a day for Australia, not just for New South Wales.

Mr SPEAKER:

– -Order! It being 1 1 o’clock, the House stands adjourned until 11.30 a.m. tomorrow.

House adjourned at II p.m.

page 2573

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Taxation: Age Allowance (Question No. 738)

Dr Klugman:
PROSPECT, NEW SOUTH WALES

asked the Treasurer, upon notice:

What was the loss to the Commonwealth in tax receipts due to the age allowance during the latest year for which figures are available.

Mr Crean:
ALP

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

The cost to income tax revenue of the age allowance provisions in respect of the 1971-72 income year, the latest year for which suitable statistics are available, was approximately $13.0m. This amount, however, does not include the cost in respect of those aged taxpayers who had no occasion to lodge income tax returns for that year.

Tuggeranong Station: Stock Losses {Question No. 903)

Mr Hunt:

asked the Minister for the Capital Territory, upon notice:

  1. Is it a fact that workmen are causing damage to livestock and property on Tuggeranong Station which is being surveyed for the development of the new town of Tuggeranong. <2) Is it also a fact that the lessee of the property had had two stock horses, one valued at $1,000, shot dead, has lost three cows, and that at least forty sheep have been shot in the hindquarters. <3) If the position is as stated, is the lessee of the property regarded as a trespasser and are these actions deliberately designed to frighten the Mccormack family off Tuggeranong.
Mr Bryant:
Minister for the Capital Territory · WILLS, VICTORIA · ALP

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

The necessary information is being sought from the Departments responsible. When this is received I will make it available to the honourable member.

There is certainly no intention as is imputed in part (3) of the question. Indeed Tuggeranong Station was a fifty year lease until 30 September 1972 when it was withdrawn for Commonwealth purposes. The Australian Government however has an agreement with Mr Mccormack to use the buildings and structures on a rental basis and to agist the land for grazing of stock.

Atmospheric Monitoring Station (Question No. 920)

Mr Snedden:

asked the Minister for Science, upon notice: i(l) What will be the functions of the atmospheric base-line monitoring system which the Government has decided to establish.

  1. How many regional atmospheric stations will be established in Australia.
Mr Morrison:
ALP

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

  1. The Government has agreed in principle to the establishment of a Baseline Atmospheric Monitoring Station which would form one of a network of about 10 to be set up around the world. These stations would be placed in areas remote from all sources of pollution in order to monitor long-term global trends in atmospheric constituents and properties which may cause meteorological changes including alterations to climates.
  2. The number of regional atmospheric monitoring stations which would be established has not been decided, but preliminary studies have considered a network of nine stations.

Papua New Guinea: Japanese Investment (Question No. 982)

Mr Snedden:

asked the Minister for External Territories, upon notice:

When may I expect an answer to question No. 718 which I asked on 31 May 1973.

Mr Morrison:
ALP

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

I refer the honourable member to my reply to his question No. 718 (Hansard, 26 September 1973, page 1598).

Rabbit Farms (Question No. 994)

Mr James:

asked the Minister representing the Minister for Primary Industry, upon notice:

  1. How many domestic rabbit farms are there in

    1. New South Wales and
    2. other States.
  2. What type of rabbit is bred for commercial purposes.
  3. Has there been limited growth in this industry during the last 10 years; if so, why.
  4. Do Pasture Protection Boards usually oppose the breeding of domestic rabbits for commercial purposes.
  5. Are the rabbits commercially bred usually the large white species of New Zealand origin, and is it most unlikely that this species would become a menace if they were to go at large.
Mr Grassby:
ALP

– The Minister for Primary Industry has provided the following answer to the honourable member’s question:

  1. to (5) The question of controls on production of rabbits is, constitutionally, a matter for the States. It is understood that all States, with the exception of

New South Wales, have legislation which prohibits the breeding of rabbits. In New South Wales there are only two rabbit breeding establishments which supply rabbits for research purposes and, it is understood that no new licences are to be issued as there is strong pressure in all States to discourage further development of the industry.

The present attitude to this industry has arisen because of the harmful effects experienced in the past from this animal and its depredation of rural and grazing resources.

As the Australian Government has no direct responsibility for this matter it is suggested that, should the honourable member wish to pursue his inquiries, he should contact the Departments of Agriculture in each State.

Postage Stamp Sales (Question No. 1055)

Mr Bourchier:
BENDIGO, VICTORIA

asked the Postmaster-General, upon notice:

  1. Do the many small shopkeepers, who provide a service to the public by selling stamps as agents for his Department, receive any commission or margin on the sale of the stamps.
  2. If not, has his Department any proposals to provide some remuneration to these people providing this service.
  3. Is it a fact that this method of selling ls providing a good service to the public and that some remuneration would encourage more shopkeepers to provide the service.
Mr Lionel Bowen:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

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

  1. No.
  2. and (3) The question of the payment of a commission to persons licensed to sell postage stamps has been reviewed as part of a wide study made by my Department recently. Although the service provided by licensed vendors is appreciated, it is not proposed to pay them a commission. It is generally recognised that possession of a stamp licence offers some business advantage to the holder in that he is able to provide an added service for his customers.

Experience years ago, when a commission was paid, showed that some licences were taken out primarily to obtain a discount on postage. In addition, some vendors actively canvassed for stamp sales, without increasing the total business of the Post Office, and the reduced volume of sales at established Post Office outlets acted to the detriment of Post Office operations.

Cite as: Australia, House of Representatives, Debates, 23 October 1973, viewed 22 October 2017, <http://historichansard.net/hofreps/1973/19731023_reps_28_hor86/>.

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