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House of Representatives
2 April 1974

28^th Parliament · 2^nd Session

PETITIONS
- National Health Scheme
- Whales
- Human Rights Bill
MINISTERIAL ARRANGEMENTS
QUESTION
- AMBASSADOR TO IRELAND
QUESTION
- OBJECTION TO RULING
PARLIAMENTARY REFRESHMENT ROOMS
PROPYLENE OXIDE DERIVATIVES
- Tariff Board Report
PRICES JUSTIFICATION TRIBUNAL
ROYAL AUSTRALIAN AIR FORCE VETERANS’ RESIDENCES TRUST
INDUSTRIES ASSISTANCE COMMISSION
INDUSTRIES ASSISTANCE COMMISSION
AUSTRALIAN WINE BOARD
PRICE DIFFERENTIALS IN THE MEAT MARKET
TOURIST MINISTERS COUNCIL
PERSONAL EXPLANATION
UNIFORM DISCIPLINARY CODEWORKING PARTY REPORT ON DRAFT BILL
ASSENT TO BILLS
QUESTION
- AUSTRALIAN UNIVERSITIES COMMISSION REPORT ON COURSES IN SPECIAL EDUCATION AT UNIVERSITIES
QUESTION
- HOUSING
MINERAL INDUSTRY
- Ministerial Statement
- Dear Mr Crean,
INTERNATIONAL MONETARY REFORM
- Ministerial Statement
WOOL INDUSTRY BELL 1974
- Second Reading
- In Committee
- The Bill
- Third Reading
AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974
- Second Reading
QUESTION
- PARLIAMENTARY REFRESHMENT ROOMS
QUESTION
- [POVERTY IN AUSTRALIA
AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974
- Second Reading
APPROPRIATION BILL (No. 4) 1973-74
- Second Reading
- Second Reading
AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974
- Second Reading
ADJOURNMENT
- Shipping: Carriage of Oranges to New Zealand -Senate Election - Political and Civil Rights

Mr SPEAKER (Hon. J. F. Cope) took the chair at 11 a.m., and read prayers.

page 803

PETITIONS

The Clerk:

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

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 many citizens more, particularly single people and working wives.

That the proposed scheme is in fact a plan for nationalisation of health services which will lead to impersonalised and mediocre standards of medical care, the creation of a huge new bureaucracy, and will limit the citizen’s freedom of choice.

That the present health scheme can be amended to overcome existing deficiencies, and that the proposed scheme is totally unnecessary.

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. by Mr Drury, Mr MacKellar and Mr McLeay.

Petitions received.

Whales

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 whale is an endangered species and should be protected by international agreement.

That whalemeat and all other whale products should be excluded from all Australian manufactured goods.

That no whale products should be imported into Australia.

Your petitioners therefore humbly pray that the Government will form appropriate legislation to protect the whale from commercial exploitation.

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

Petition received.

Human Rights Bill

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

The humble petition of the undersigned citizens of Australian respectfully sheweth:

That for the exercise of complete religious freedom and for the promotion of a liberal and egalitarian society, Church and State need to be kept separate.
That this principle is recognised in Section 116 of the Australian Constitution.
That the taxing of any citizens to propagate or support any religion is contrary to this principle and a violation of human rights.

Your petitioners humbly pray that Part 11, Section 3, of the proposed Bill of Human Rights, which now reads:

No one shall be subject to coercion which will impair his freedom to have or to adopt a belief or religion of his choice, be amended to read further: and no revenue derived in any way from any Australian citizen shall be appropriated by the Australian Government, or by a State Government, or by a Municipal Government, for the propagation or support of any religion.

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

Petition received.

page 803

MINISTERIAL ARRANGEMENTS

Mr WHITLAM:
Prime Minister · Werriwa · ALP

– Mr Speaker, I inform the House that the Minister for Tourism and Recreation, the Honourable Frank Stewart, is attending the 23rd Annual Conference of the Pacific Area Travel Association in Indonesia. He is expected to return on 6 April. In his absence the Minister for Services and Property, the Honourable Fred Daly, is Acting Minister for Tourism and Recreation. The Minister for Science and Minister Assisting the Minister for Foreign Affairs in matters relating to Papua New Guinea, the Honourable W. Morrison, is attending an Economic Commission on Asia and the Far East conference in Colombo. He is expected to return on 3 April. In his absence the Minister for the Environment and Conservation, the Honourable Moss Cass, is the Acting Minister.

– I rise on a point of order, Mr Speaker. The Hansard record is a report of the proceedings of this House. It is a full report of the proceedings of this House. I ask you what authority you have to order that part of the proceedings of this House be eliminated from the records of the proceedings.

Mr SPEAKER:

-Order! There are no proceedings of the House unless the Chairman or the Speaker, as the case may be, gives the call. You were not given the call. You did not take a point of order. You just got up and straight away said that it was a shameful thing to do. This is the time for questions without notice.

page 804

QUESTION

OBJECTION TO RULING

Mr SNEDDEN:
Leader of the Opposition · Bruce

– I move:

– Mr Speaker, may I speak to the point of order. There have been occasions in the past when actions of the Chair and actions of a political party have been virtually indistinguishable. If my memory serves me correctly, on one occasion Mr Speaker Rosevear left the chair to enter a debate because he felt so seriously about the matter. I suggest that on the basis of that precedent there is no substance in the point of order.

Mr SPEAKER:

-I ask the Leader of the Country Party to keep to the motion before the Chair.

Mr ANTHONY:

– As I said, the Leader of the Opposition, when he was trying to prise information out of the Government as to what the attitude was to this question, reacted and said that it was the most shameful act any government had taken. Surely the Leader of the Opposition is allowed to make a remark like that; yet you, Sir, said that he cannot.

When it gets to the point that the Leader of the Opposition cannot speak up and state a point of view it is a very sorry day for the Australian Parliament. If anybody ought to be given latitude by you, Mr Speaker, it is the Leader of the Opposition. And, of course, I hope that the Leader of the Country Party will be given a little latitude occasionally because I have a party to represent and I have a point of view to put. If you are to be so precise, so narrow and, if I may use the words, a bit pedantic on the rules of this House, you cannot help but get a very savage reaction from the Opposition and there will be turmoil and trouble. We do not intend to cause that, but at least we on this side of the House want to see fair play. Your actions and your ruling today can only cause a great deal of disquiet amongst the members of the Opposition. I hope that a lesson will be learnt from the events this morning. Much time has been taken over this question, but there would not have been any reaction at all, and the words spoken would not have been included in the Hansard report if you, Mr Speaker, had not been so hypersensitive to the question. I can understand you, Mr Speaker, being sensitive to this issue as I know all the members of the Government are sensitive to it. Government supporters will be a lot more sensitive when this issue gets out to the Australian public and the facts are known.

That the question be now put.

Question put:

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

AYES: 60

NOES: 47

Majority 13

AYES

NOES

Question so resolved in the affirmative.

Original question put:

That the Speaker’s ruling be dissented from.

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

AYES: 47

NOES: 60

Majority . . . . 13

AYES

NOES

Question so resolved in the negative.

page 814

PARLIAMENTARY REFRESHMENT ROOMS

Mr SPEAKER:

– I desire to inform the House that, due to industrial problems associated with the Parliamentary Refreshment Rooms, I have been informed that meals will not be available in the House during this week.

page 814

PROPYLENE OXIDE DERIVATIVES

PERSONAL EXPLANATION

Mr DOYLE:
Lilley

– I seek leave to make a personal explanation.

Mr SPEAKER:

– Does the honourable gentleman claim to nave been misrepresented?

Mr DOYLE:

– Yes. I have been seriously misrepresented by reports which appeared in the Queensland Press following a dinner engagement that my colleague Senator Georges and I had with the Minister for Aboriginal Affairs, Senator Cavanagh, at a Brisbane motel on Thursday evening last, 28 March. The misrepresentation arose from reports which followed a question that the Country Party member for Burnett, Mr C. A. Wharton, addressed to the Queensland Premier on 29 March 1974 in the State Parliament. Reports relating to this question were published in newspapers of provincial cities on 30 March and contain an allegation that the Minister for Aboriginal Affairs, Senator Georges and I walked into the motel dining room but left when we saw the Queensland Premier with guests there.

Mr Donald Cameron:
GRIFFITH, QUEENSLAND · LP

– That is what it said. Mr DOYLE - I am quite aware of what it said. The report appearing in the Brisbane

Courier-Mail’ on 30 March 1974 contained a direct statement, which reads as follows:

On Thursday night, Senator Cavanagh and two Labor colleagues refused to eat in the same motel dining room as the Premier.

As Senator Georges and I were named in the ‘Courier-Mail’ of the previous day as Senator Cavanagh’s guests on Thursday evening, there can be no doubt about the identity of the 2 colleagues referred to in the Press report of 30 March. The allegation that I walked into the motel dining room with Senator Cavanagh and Senator Georges and left when it was seen that the Premier was there is absolutely incorrect. The outright statement published in the ‘Courier-Mail’ of 30 March that with my colleagues I bad refused to eat in the same dining room as the- Queensland Premier is also definitely untrue.

In explanation, I point out that on Thursday evening last I had an arrangement with the Minister for Aboriginal Affairs and with Senator Georges to meet at 7 p.m. to discuss a matter which was concerning several of my constituents. I arrived at the motel at which Senator Cavanagh was a guest at 7.10 p.m., having been delayed en route. I had never visited this motel previously and upon arriving I enquired of a member of the motel staff whether Senator Cavanagh was in the dining room. While this staff member was informing me that Senator Cavanagh had not yet entered the dining room for dinner, Senator Georges called me to a table in a lounge which adjoined the dining room. The Minister was at a small table and we joined him. We discussed the matter I wished to raise and other matters and later we entered the dining room. At no time did we walk out and at no time did I refuse to eat in the dining room.

The suggestion that I would snub or be openly rude to a person whether he occupied a very high or not so high position hurts me’ deeply. I have always endeavoured to be courteous to all people, irrespective of their status or politics. That a member of the Queensland State Parliament would ask a question which contains damaging references to elected representatives without first checking the facts h unbelievable. If this State member deliberately misrepresented me I believe he should hang his bead in shame. I conclude by pointing out that at no time was I contacted by any person, whether a parliamentarian or a’ representative of the Press, for the purpose of checking the facts. 1 trust that the newspaper concerned will correct the injustice that has been done to myself and to my colleagues.

Mr Katter:

– Mr Speaker, I seek leave to make a very brief statement on the same matter.

Mr SPEAKER:

– Order! Is leave granted?

Mr Katter:

– I want to say something very nice, actually.

Mr Daly:

– No.

Mr SPEAKER:

– Leave is not granted.

page 815

UNIFORM DISCIPLINARY CODEWORKING PARTY REPORT ON DRAFT BILL

Ministerial Statement

Mr BARNARD:
Minister for Defence · Bass · ALP

– by leave - For the information of honourable members I present the report of the 1973 Working Party on the Defence Force Disciplinary Code. The report which has been presented to the AttorneyGeneral (Senator Murphy) and myself by the Working Party has annexed to it a draft - and I stress the word ‘draft’ - prepared by the Working Party of a proposed Defence (Discipline and Justice) Bill. At present the. main disciplinary provisions relating to the Australian Services are contained in United Kingdom legislation as applied and modified by Australian legislation. Honourable members will be aware that work on the development of uniform disciplinary provisions for the Australian Services has been going on for quite a number .of years.

Because of the different rules and procedures of the 3 Australian Services, it has not been easy to reach agreement on uniform disciplinary provisions. I would therefore like to pay a tribute to the Chairman, Mr A. R. M. Watson, and members of the Working Party who have now developed proposals for a disciplinary code which is modern in concept and which the Working Party considers to be suitable for application to the Australian defence force. At the same time I would emphasise that the report has not yet been considered by the Government. Indeed, both the Attorney-General and I ‘have some reservations on the treatment given by ‘the Working Party to some of the issues raised in the report. For example, we are somewhat concerned with the manner in which the Working

Party has dealt with the obligations of servicemen in relation to obedience of superior orders and we will be giving further consideration to this question.

However, in the interests of open government, the report is being tabled to enable honourable members and others, including members and former members of the defence force, to study the draft provisions and to submit any comments they may wish to make on them. These comments will be fully considered by the Government before formal instructions are issued to the Parliamentary Counsel for the preparation of appropriate legislation which I expect to introduce for debate during the Budget session of this Parliament.

I present the following paper:

Uniform Disciplinary Code - Working Party Report on Draft Bill- Ministerial Statement, 2 April 1974.

Motion (by Mr Daly) proposed:

That the House take note of the paper.

Debate (on motion by Dr Forbes) adjourned.

page 816

ASSENT TO BILLS

Assent to the following Bills reported:

States Grants (Technical Training Fees Reimbursement) Bill 1974.

Social Services Bill 1974.

Repatriation Bill 1974.

Seamen’s War Pensions and Allowances Bill 1974.

Airlines Equipment Bill 1974.

page 816

QUESTION

AUSTRALIAN UNIVERSITIES COMMISSION REPORT ON COURSES IN SPECIAL EDUCATION AT UNIVERSITIES

Ministerial Statement

Mr BEAZLEY (Fremantle- Minister for

Education) - by leave - In June 1973 I asked the Australian Universities Commission to conduct an investigation on the provision at universities for the training of teachers of handicapped children, and to report on the grants which should be made to ensure that adequate provision was made for the training of such teachers. The Commission reported in November and its recommendations were subsequently considered by the Government and accepted. I announced the Government’s decision on 25 February.

The program approved by the Government provides for a total grant of $lm in 1974 and 1975 to be used in 7 universities to provide specialised courses, and higher degree and research programs in special education. Two universities, Macquarie and Monash, will receive capital grants to enable them to expand substantially their commitment to special education. The necessary legislation will be introduced during this session. This action represents the creation of what I might call an apex to action taken under the Karmel and Cohen reports, which provide respectively about $53m and $1.5m for special education of the handicapped. I point out to honourable members that the figure of $44m which is contained in the circulated statement omitted $9. 38m for teacher formation for special education. In accordance with the Government’s standing policy and to encourage interest in this important area, I present the following paper:

Australian Universities Commission on Courses in Special Education at Universities - Ministerial Statement, 2 April 1974.

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

– by leave - The Opposition would support a provision which would provide for better and more extensive training for teachers of handicapped children, taking ‘handicapped’ in its broadest terms. This is an area where additional attention has been required and 1 am glad to see that what the Minister for Education (Mr Beazley) did when he commissioned the special report of the Australian Universities Commission in, I think, the middle of last year was in conformity with actions that had been taken by the previous Government. I am glad to note that the Minister has extended to the university area decisions that we had taken in the middle of 1972 concerning colleges of advanced education. I remind the House that in that year the then Government decided that the Commonwealth should share in the financing of all government teachers colleges on the same basis as it shared in the financing of universities and colleges of advanced education. Under the arrangements then existing, capital and recurrent expenditure were shared and advice was to be tendered to the Commonwealth on the additional resources that would be needed for teachers colleges which previously had been financed totally by State governments. When I was Minister for Education I asked the Australian Commission on Advanced Education to establish a special committee to look into the needs of the State teachers colleges. In speaking to the House and announcing that program in August 1972, I said in part:

I propose to ask the Commission to look in particular at areas such as the training of teachers of the handicapped and special remedial teachers. While substantial progress has been made in many areas of education in recent years, I am concerned that further development should occur in meeting the needs of those children who are handicapped or who have special learning difficulties. The training of greater numbers of specialist teachers is the factor which will make the greatest impact in these areas and the Government sees its new program of assistance to teacher education as providing opportunities for the introduction of additional special courses as well as assisting the development of teacher education in general.

That was said on 17 August 1972, and effect was given to that intention in the terms of reference of what became known as the Cohen Committee, which was required to report to the Government by 31 March 1973. The term of reference that had particular relevance to that was 2(d), which stated:

Pay particular attention to the means by which the training of specialist teachers notably for handicapped children may, be improved.

Mr SPEAKER:

– I announce that the suspension of the sitting for lunch today will be extended and will be from 1 o’clock to 2.30 in lieu of 2.15.

page 817

QUESTION

HOUSING

Discussion of Matter of Public Importance Mr SPEAKER - I have received a letter from the honourable member for Herbert (Mr Bonnett) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The failure of the Government to provide adequate housing for the Australian people.

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

Mr BONNETT:
Herbert

– My introduction to this matter of public importance on the failure of the Government to implement its 4 main policies on housing for the benefit of the Australian people is not a frivolous undertaking but pinpoints one of the more serious of the Government’s administrative failures since it became the Government. At the outset let me state clearly that I do not doubt that the Minister for Housing and Construction (Mr Les Johnson) has been attempting to do something about this situation, but it is the manner in which he and the Government have approached the problem, which affects so many Australians at present and will do so in the future, that has the Opposition concerned.

Might I remind the Government and the people of Australia that the Australian Labor Party went to the polls in December 1972 with 4 main policies on housing. I will discuss these policies as I mentioned them. Firstly, the present Government said: ‘We will reduce inflation in Australia’. There is no doubt in anybody’s mind that inflation affects housing policy. Let me again remind the Government and the people that since December 1972 the Government has converted a 4.7 per cent inflation rate into one of 14 per cent, and that probably will rise to 20 per cent by the end of this year. There is no doubt in my mind that the Minister, in his reply to me, will state that his Government inherited a problem in the sphere of housing, but after 15 or 16 months these excuses are becoming more than just a trifle weak. What his Government inherited was a very healthy economy which should have helped the Minister come to some positive decision on short, medium or long-term planning to ease the housing situation, but the Government’s failure in this regard together with a tremendous increase in inflation rates adds up to failure No. 1.

The Government during its election campaign said: ‘Labor will deliberately plan to reduce interest rates wherever practicable’. Might I remind the Minister again that he is very fond of saying that his Government ls a low-interest government. This has been a thread throughout all his statements on housing. This, of course, everybody knows to be completely incorrect. Interest rates are the highest we have ever known, and the Minister and his Government must realise that it was the introduction of higher interest rates that accelerated the housing crisis as we know it today among middle and low income earners. Thousands of young home seekers who had their approval for loans and who were waiting to start building, were priced completely out of the market by the higher interest rates that were imposed by this Government. This is not a fallacy; it is a fact that can be substantially proved. The additional moneys that the young home seekers would have had to pay each month because of the introduction of the higher interest rates made it impossible for them to continue with their plan to own their own home. This I claim to be failure No. 2.

The Labor Party’s policy speech prior to its becoming Government included this promise: We will make a massive attack on the problem of land and housing costs’. The answer to this problem was given by the Treasurer (Mr Crean), who has publicly stated that in 1973 land and housing costs rose by 20 per cent, and by other prominent Government men, including the Prime Minister (Mr Whitlam), who have promised housing interest as a tax deduction and have said that through this means the people of Australia “buying homes would be saving money. This statement also was entirely incorrect. Building authorities have stated through the Press that of all the people in Australia who will be seeking to acquire homes this year fewer than half will be able to do so because they have been priced out of the market - and they have been priced out of the market because of inflated costs in 1973. We should remember the words of the Treasurer that the cost of a house has gone up 20 per cent, which means that the cost of what was formerly a $20,000 home, which would be just a modest type if home, has gone up to $24,000 and the cost of what was formerly a $25,000 home has gone up to $30,000. So as a result of the actions of the Government in relation to interest rates and its ignoring of the inflationary trends, the people of Australia will have to pay much more for their houses and certainly will not be saving money. That I classify as failure No. 3.

Let us deal now with the fourth policy promise of the Government on housing, that is, the tax deductibility of interest rates. The Government has increased interest rates by an average of 2 per cent. Most loans for the purchase of a home from a society or a banking institution extend over a period of 25 years. So it is not hard to imagine how much extra the action of this Government in raising interest rates has cost the average Australian who is seeking to purchase his own home. Let us take a simple example in this respect. The Government has said that the scheme is an attractive one. It looked as though it was when it first appeared in the Press. The Government has stated that those people who have an actual income of S4,000 a year will get a tax deduction of 100 per cent of their interest rates. That sounds good.

But the average weekly income of a man earning $4,000 a year would be approximately S77. Anyone who knows anything about the borrowing of money for the purchase of a home knows that the only loan which would be made to a person who is earning $77 a week, on the basis of a maximum repayment of a quarter of his weekly salary, on $19 a week, would be approximately $10,000, which in my opinion would be enough to build only a decent sort of garage. From where does the Government expect this sort of person to obtain the other $10,000 to $14,000 to build a home? Does it expect him to save it from his earnings of $77 a week?

Let us take the case of a husband and wife who both work. If he is in receipt of the average wage the husband would be earning approximately $6,500 a year. Let us say that the wife earns $4,000 a year. The combined income of the husband and the wife would then amount to just over $10,000. That would be their actual income. What would the Government do by way of the granting to them of a tax deduction? If the husband and wife earned $10,000 between them they would be able to get a rebate of 40 per cent of their interest payments. That means that the husband and his working wife will have to pay about $320 a year in higher interest rates and will get a rebate of $230. That, the Government claims, is saving money. So much for the statement of the Treasurer and the Prime Minister that home owners in future will be saving money.

The only people who would be likely to benefit from this tax deductibility scheme are those who are higher up on the income scale. In fact, it offers a considerable inducement for those people to start to trade in houses. I am surprised that the Government should bring in this sort of scheme without first explaining it properly. It will be of the greatest value to those who have recently obtained loans. A person with an old loan would be better off starting again, either through trading or expanding to a more expensive house, which would also be eligible for tax deductibility under the Government’s present scheme. I cite that as failure No. 4. As a matter of fact, one very well read and respected newspaper has called the last named housing policy I have mentioned ‘Gough’s tax lurk’.

Everyone will remember that in the first few months of the present Government’s administration there was a tremendous flurry regarding housing. Investigating committees were formed and statements were made as to what would happen to ease the situation. We well remember the ill-feeling that was created by the Federal Government among the States over the Commonwealth-States Housing Agreements loans. I am not going to repeat what has been mentioned before in this respect. We know that task forces were instituted by the Government to investigate all manner of things dealing with housing. Since the initial excitement has died down we have heard nothing about what these task forces or investigating committees have achieved. At one stage I asked through the Press for a 5-year investigation to be conducted into all aspects of the housing industry and the association of government, including the State goernments, with the industry to find a reasonable basis from which to launch a program that would assist. It was very gratifying a fortnight later to hear the Minister for Housing and Construction suggesting a similar scheme, only on a 3-year basis.

There is no denying that Australia does have a crisis in housing which has been equalled, if my memory serves me correctly, only by the crisis in the immediate postwar period. It has become apparent that the Government’s intention is to dampen down the demand in order to control the housing problem. This it has done successfully, but by doing so it has not solved the problem in any way. It may have dampened down the demand but the need is still there. If the dampening down of the demand (had been made in order to give the Government a breathing space and to try effectively to assist the industry it would have been understood if the Government had come up with a successful or satisfactory answer to the problem. But the price of homes and of the land on which homes are built has increased by thousands of dollars in the last 12 months. I feel that this has been brought about largely because the Government has failed to take any positive action.

I am a bit concerned about whether the Government has heeded the advice that has been given to it by organisations involved in the building industry. For instance - I mention this quite sincerely - a survey was undertaken during January 1974 by one of the largest and best known organisations in Australia that embraced contractors in every State throughout the housing, home units, flats and commercial, industrial and civil engineering sectors of the industry. It sought opinions on the state of the industry during the December 1973 quarter and on the outlook for the March 1974 quarter. The survey was done in co-operation with the Master Builders Federation of Australia and the Australian Federation of Construction Contractors. The results of the survey could be summarised as follows: Builders reported a sharp decline in the availability of housing finance in the December quarter. The level of inquiries by home seekers during this quarter fell to well below the level of the September quarter. There was a sharp decline in the proportion of home builders expecting to commence more houses in the current quarter. There was a reported decline in working capital. Credit facilities declined in the December quarter.

All categories reported an increase in the availability of labour, especially unskilled labour. However, many builders were reporting shortages of reliable and skilled labour and sub-contractors. There was a continued shortage of materials in the December quarter. Structural and reinforcing steel remained difficult to obtain, while there was some improvement in the availability of bricks and timber. There was a feeling that because of the Government’s actions the crisis would increase rather than the demand be moderated. There was a genuine feeling running throughout the survey that the maintenance of stability within the industry for the second half of 1974 would depend upon the response of the Government and the action taken by the Government towards the situation in the next few weeks. It was reported that the cost of servicing a new loan, because of the creation of higher interest rates and the increase in the qualifications required before a loan is approved, has caused a downturn in demand. The survey concluded that for those reasons forward work can be expected to decline. Yet the need still remains.

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

– I have been saying that for 6 months.

Mr BONNETT:

– Let us do something about it. I know that the Government has been meeting with the industry at quarterly intervals and at times more frequently, but surely some notice should be taken of those people who comprise the housing industry and who are in a position to advise the Government. I know that the Minister realises that the need for home building is very real. After inheriting a healthy economy the Government has proved, over the last 15 to 16 months, that it would like to have the control of all housing concentrated in Canberra. In other words, the nationalisation of the housing industry, housing finance corporations and other institutions which will have a severely detrimental effect on our way of life will find no support whatsoever from the Australian people.

Mr Les Johnson:
Minister for Housing and Construction · HUGHES, NEW SOUTH WALES · ALP

– The honourable member for Herbert (Mr Bonnett) in the closing stages of his address made some references to the attitude of the various sections of the building industry to the current building situation. He may or may not be aware of the fact that this Government has regular meetings periodically with the building industry. The Government keeps itself very well informed about current trends in that industry. The Government, in fact, identified as long as 12 months ago the claim by a number of sectors of the building industry that more money should be made available for housing purposes. Often there is a tendency to scream wolf prematurely. Of course, if the Government had acted on such overtures and requests more money would have been released. As a consequence of such action inflationary trends in the building industry would have increased. The honourable member for Herbert may laugh. But he must concede the point that the building industry cannot build more houses than the building force can provide. At this stage in 1974, we have full employment in the building industry.

We have listened to the honourable member for Herbert spearheading the Opposition’s socalled attack on the housing situation. His remarks were not only unconstructive, negative and condemnatory but he also failed in every way to provide any firm alternative to what the Government is doing. The problems of the industry as they exist now represent the legacy left to the Government by its predecessors. I notice that the Deputy Leader of the Opposition (Mr Lynch) has come into the chamber. He may not be here too long. I say very firmly to him that he must be regarded as one of the guilty men who brought about the present housing situation. If the building force is operating at full steam and the housing shortage is not eased, obviously the size of the building force is inadequate. The blame for the present housing shortage can be placed on no one more squarely and more firmly than on the previous Minister for Labour and National Service.

I venture to say that even at this time the Deputy Leader of the Opposition is unable to say, as he was unable to say when he was Minister for Labour and National Service, how many carpenters, bricklayers, plasterers, plumbers or any other tradesmen there should be. The fact of the matter is that no planning for the future of the building industry was undertaken by the former Government and especially by the former Minister for Labour and National Service. Similarly, no planning was undertaken in regard to the flow of materials or, certainly, in regard to the flow of money. The Leader of the Opposition (Mr Snedden), who was Treasurer in the previous Government, is yet another former Minister who must bear the brunt of the blame for the present problems in the housing industry. If there is one characteristic which still plagues the housing industry as it has done right from the time the present Government took office, and when our predecessors left office, it is that there is an excess liquidity demand on the building industry. I think honourable gentlemen opposite know some of the relevant figures. The value of housing loans by the savings banks in 1970-71 was $567m. In the following year the figure for housing loans rose to $671m. In 1973 it stood at $l,104m. That is to say, in that 3 year period the previous Government allowed savings bank lending for housing purposes to increase from $567m to $1,1 04m, clearly an act of gross irresponsibility. Trading bank housing loans in the same period increased from $234m to $751m. In 1970-71 loans by the permanent building societies totalled $420m. That figure in the 3 year period increased to $1,1 39m. The present national housing situation was created by the former Government supported by the honourable members who sit opposite now and who dare to criticise that situation.

We have heard honourable members opposite talk about inflation. Yet I have heard no proposals from any honourable members opposite as to how they would arrest inflation. The fact of the matter is that the Opposition has opposed every initiative that has been taken in this direction. It opposed the 25 per cent across the board tariff cuts which were certainly antiinflationary. The Opposition opposed the Government’s moves to regulate the inflow of overseas investment which is certainly an anti-inflationary move. It even opposed our referendum to gain control over prices of land and building materials. Opposition members have not shown any enthusiasm for the establishment of the Prices Justification Tribunal or the Joint Parliamentary Committee on Prices.

Some mention was made of the homes savings grants scheme. I ask the honourable member for Herbert: Does the Opposition oppose the new scheme which replaces the homes savings grants scheme? I refer to the proposal by the Government to make interest payments on home mortgages tax deductible. Is it the intention of the Opposition, if ever it is returned to government, to eliminate the tax deductibility proposed by that scheme? Let me illustrate to the House what our scheme means in contrast to the provisions of the scheme that it is replacing. Expenditure under the homes savings grants scheme amounted to approximately $21m a year. The scheme which will replace it will provide taxation deduction benefits aggregating $120m a year to home owners. Approximately 40,000 grants were made each year to home owners under the homes savings grants scheme. More than one million families will benefit from the tax deductibility scheme, not on one occasion only but every year they have a mortgage. The only benefit from the former Government’s scheme averaged out at $520 and was paid on one occasion. Our scheme will operate in perpetuity.

Honourable members will know of the complaints that they receive from their constituents to the effect that a lawyer is needed to establish eligibility under the complex homes savings grants scheme which imposes barriers with respect to age. and valuation qualifications. Honourable members know how that scheme aids affluent people with a capacity to save but does not assist those without that capacity to save. So, in every respect, this Government’s proposal, that interest on mortgages shall be tax deductible, is a tremendous improvement on the scheme that prevailed previously. But our proposed scheme is being disparaged by the Opposition.

Some comment has been made about this Government nationalising the building industry and the homes industry. No statement could be more irresponsible. What we are intent on doing is to correct that imbalance that has occurred among the 3 ingredients in the building industry - manpower, materials and money.

I do not know whether the honourable member for Herbert is aware of the tremendous proliferation of financial organisations which our predecessors failed to regulate in any way. The thought that they could wave a wand and bring about automatically the synchronisation of manpower, materials and money. How absurd that belief was. Why, the Treasurer (Mr Crean) said recently that Australia has 1,000 finance company groups, 400 insurance companies, 200 permanent building societies, 750 credit ‘unions, between 50 and 80 merchant banking corporations and 27 trading banks with 5,000 branches as well as a number of other credit unions and terminating building societies. How much money these bodies would be allowed to raise for housing was not even determined. For the first time in the history of this nation, we are setting out to determine that matter by way of our legislation relating to financial corporations. I hope that the Opposition supports the Government in that legislation. If it does not and if the Bill is not passed, the stop go nature of the building industry which prevailed in the 23 years of Liberal-Country Party Administration will continue. That is the situation in this nation with respect to housing,

Let me quickly give some figures regarding the current state of affairs. I believe that the facts have been misconstrued to some extent. The facts about the current situation show that the Labor Government inherited a situation of rapidly developing inflation. The LiberalCountry Party Government left it with this problem which resulted from reckless overstimulation of the economy. Certainly 1973 proved to be the best year on record from the point of view of housing activity. But in that year we also witnessed a far too high level of cost growth. The prosperous obtained their houses, but the workers suffered. We did not wish to disrupt the industry so we moved relatively slowly to curb the excessive flow of finance into the industry. Even now builders are still choked with orders and many builders are refusing further business. However, the basic facts are simple. Labor’s first year was better than the Liberal’s last year when 145,000 houses were completed. In 1973, Labor’s first year, 152,000 houses were completed. In 1972 the number of houses commenced totalled 155,000 whereas in 1973 the number was 176,000. The Government thought that last figure was too high, not because of the need but because it brought excessive inflation. That is. why the Government took action. I ask the honourable member for Herbert and those speakers who follow him whether they would have taken no action in this situation.

On the loan side, far from discouraging and impeding home ownership, Labor’s record is obvious. In 1972, the Liberal’s last year, 204,000 loans were granted by the major lending groups to a value of $2,222m. In 1973 - Labor’s first year - 244,000 loans were granted to a value of $3, 039m. Each of the figures achieved under ‘ ‘Labor represents a record. If it is simply a matter of pushing the numbers higher, Labor can show a trimuphant lead over the Liberals. However there can be too much of a good thing. By half way through 1973 the Government realised that the Liberal’s blessed rain of money had become an immense flood brought oh by lack of control by the Liberal Government of their friends and- the lenders. Too many builders and land salesmen joined in the game of pushing up prices, so the Government began the introduction of a higher interest policy to reduce the pressure of liquidity. I give the House three easy indications of the bad things that resulted. Firstly, construction time for dwellings rose from 24 weeks for all types of houses in March 1972 to 27 weeks in December 1973. Secondly, the average cost of home building, excluding land costs, rose in 1973 by anything between 15 per cent and 20 per cent. The number of dwellings under construction rose from 65,000 in March 1972 to 93,000 in December 1973. Unfortunately the losers were the poor.

The State housing authorities increasingly have failed to spend the money they asked for and which the Government gave on better terms than they had had for many years under its predecessors. The Liberals already had undermined their position by the courses of action that I have already outlined. Government house completions in 1971 were 18,800; in 1972 they fell to 14,600; and in 1973 they dropped to 11,600, despite 26 per cent more money than the authorities had received in the previous year. This money was provided at 4 per cent over a 53-year period. We must retrieve the position and make resources available to the housing authorities. Under the housing agreement we gave the States a record $2 18m. The Liberals had given them only. $1 69m. It was a new deal but the housing commissions have found that they cannot spend the money. Contractors are spurning their offers in favour of the high end of the market. Our advisory committee from the housing industry tells us openly that contractors are getting out of the lower end of the market and concentrating on more expensive houses. The Government does not intend to destroy the industry but it certainly means to restore stability and sanity to the industry and to cut out excessive profiteering. Would the honourable member for Herbert have it otherwise? If the laissez faire policy were continued housing costs would go right through the roof and $25,000 houses would become $40,000 bouses next year.

I indict this so-called attack as the height of irresponsibility. I do not have time to recount the initiatives already taken by the Government. The first innovation was a planning concept for housing. This and many other important initiatives will bring stability to the industry. It is the aim of this Government to make home ownership available at the lowest possible cost. In order to do this the Government intends to remove liquidity demand from the industry. It will plan the industry through its indicative planning processes, and through many other processes which the Government hopes will bring benefit to the home seekers it hopes to assist in every possible way it has open to it. I indict this attack as an irresponsible criticism of the present Government. Its predecessors must accept responsibility.

Mr DEPUTY SPEAKER (Mr Scholes:
CORIO, VICTORIA

– Order! The Minister’s time has expired.

Sitting suspended from 12.56 to 2.30 p.m.

Mr LYNCH:
FLINDERS, VICTORIA · LP

– Prior to the suspension of the sitting the House was discussing a compelling matter of public importance - the plight of the housing industry. This matter was capably presented by my colleague the honourable member for Herbert (Mr Bonnett). Sixteen months of Labor administration has resulted in a crisis in the Australian housing industry. The Government’s ill-conceived economic policies and its failure to implement a rational housing policy have in large measure created the present crisis. The Minister for Housing and Construction (Mr Les Johnson), under seige from vigorous attacks by the Opposition, the Press, State Housing Ministers and the housing industry, clings desperately to the self-imposed delusion that his mounting problems are but relics from the past. Of course nothing could be further from the truth. The Minister for Housing and Construction has in fact consistently misled the public and the Parliament in a vain attempt to obscure the facts. He is doing for the housing industry what Jack the Ripper did for blind dates some years ago. On 25 December 1973 the Minister said:

Major initiatives already taken and others in the process will restore stability to home building and bring home ownership within the reach of the average citizen in 1974.

But on 14 February this year the national president of the Housing Industry Association - a man with a very sound knowledge of matters relating to this industry which is critical to Australia - warned that this country faced a crisis in housing not paralleled since the immediate post-war period. He said:

Demand for housing has increased suddenly and greatly due largely to the big rise in numbers in marriageable age groups; for the first time in many years a serious shortfall has occurred In the supply of major building materials; the endemic shortage of skilled tradesmen has become drastically accentuated; housing finance has become dearer and the supply has shrunk; and homes and homes sites have escalated in price by thousands of dollars in 12 months.

That statement - which you, Mr Speaker, with your wide experience would appreciate - is well supported by facts. What are the facts? Building approvals for houses and flats fell 13.2 per cent in February 1974 compared with the same month last year. Seasonally adjusted building commencements for private dwellings fell 11.7 per cent in the December quarter. The Housing Industry Association estimates that there will be a 7 per cent decrease in the number of housing commencements this financial year. Building society loan approvals were 51.9 per cent lower in January 1974 compared with the same month last year and the cost of building materials increased by 15.1 per cent between December 1972 and December 1973.

In fact what is occurring in Australia at the present time is that the home ownership dream of the average Australian has been shattered and that process is continuing under the mismanagement of the present Labor administration. In spite of statements to the contrary by the Minister for Housing and Construction the facts indicate that some 50 per cent of those seeking homes this year will be unable to make a purchase. We of the Liberal and Country Party Opposition believe this is a very firm indictment of Government policies. This Government came into office with some promise but it has not been fulfilled, Mr Speaker, and I can see by your mirth that you agree with me. It came into power promising that it would deliberately plan to reduce interest rates wherever practicable. Notwithstanding that promise this Government has forced up the interest rate structure to the highest level since federation. It was said that this Government was a party of low inflation, low taxation and low interest rates. But the record now after IS months shows high taxation, high inflation and the highest interest rates in the history of the Commonwealth of Australia. Last month the Minister for Housing and Construction made a statement to the Parliament. The Minister is sitting on the front bench: I hope he recalls this statement. If he does he will recall it with a sense of great embarrassment. He said:

We know that people have been affected by the high interest rates. We want to restore lower interest rates as quickly as we can.

Mr Martin:

– And we will.

Mr LYNCH:
FLINDERS, VICTORIA

– I am glad that the honourable member interjected because the Minister went on to say:

We are taking steps towards that end.

– I thank the House. I have spoken about the legacy left to us by the previous Government in the building industry and about the legacy of inflationary land prices. The third great legacy the previous Government left us was its failure to accept any responsibility for catching up on the backlog of essential services in our major cities. The most obvious one of these was the provision of sewerage. The previous Government refused to provide money to catch up on the sewerage backlog. Does anyone here suggest that we should allow communities to be formed and that we should allow houses to be constructed without at the same time providing water and sewerage as essential services for those new communities? Yet the previous Government failed to do anything about this critical problem. In Sydney over 15 per cent of the population lives in unsewered areas. In Melbourne the figure is roughly 16 per cent and in Perth it is 50 per cent. I might say for those smug Queenslanders on the back benches that 84 per cent of that so-called affluent society on the Gold Coast live in unsewered areas. One in six of the people of our cities in Australia do not have sewerage services.

In our first Budget we began the great task of making up this backlog by providing$30m to the States for this purpose. It was only the first step. Is this matter not interconnected with housing? Do honourable members opposite still want to put their heads in the sand and think that they can deal with housing in isolation? Unlike our predecessors in government we do not equate housing with shelter. It is not enough to erect acres of houses in social and environmental wastelands. We must recognise that if we are to put houses, and therefore people, into an area we must also have the responsibility to provide all the facilities and social opportunities along with the original development. That is why this Government’s policy recognises the interconnection amongst urban investments. That is why this Government is seeking the co-operation of each State Government to establish land commissions.

Under these commissions large tracts of land can be acquired ahead of development. Before the area is rezoned from non-urban to urban the land should be acquired by a public authority. This land could then be made available at fair prices for comprehensive development to developers, individuals and housing commissions. I personally favour the Else-Mitchell report which recommends that residential land should be freehold with the development rights maintained by the development authority or the State, but in the case of commercial or industrial land it should be leasehold as it is here in Canberra.

In our first Budget we set aside$30m to the States for land commissions to invest in land. We set aside$33m for our new cities alone. Most of that money was to acquire land. Under the policies proposed by the Australian Government we would no longer need to build new suburbs without jobs, transport, shops, schools, parks and social and community centres. We are offering the States the opportunity through the land commissions not only to improve dramatically the standard of urban living. Through our related policies on roads, on making up the sewerage backlog, on urban public transport investment, on the environment, on education, on social welfare programmes and on health we are also seeking to bring an end to the isolated and incomplete development of new urban areas. We want to involve people in our planning and in our new communities so that the people themselves know what they want. Personally, 1 do not believe there can be any push button solutions to urban problems from Canberra. We need the skill, awareness, concern and courage of men and women of goodwill if we are to succeed in overcoming our urban problems. We need the involvement of people. We need men and women of goodwill to work in the spirit of partnership and co-operation.

Our initiatives in urban and regional development are designed to create a new and improved working urban relationship amongst all levels of government and amongst all levels of people. What is the new trendy or untrendy approach of the Opposition? It is arguing in its narrow concept as it has been arguing year after year after year. It has found no solution to the problem, particularly the former Minister who preceded me in this discussion. There was no preparation of the building and construction industry which is now so short of supply of both men and materials. It ls not unusual for the Leader of the Opposition (Mr Snedden) to advocate inefficient policies. The previous Government was notorious for such policies.

Mr Speaker, I say that we are aware of the problems, the grave problems, in the housing construction industry. We are aware that the have-nots’ have suffered for too long. We are seeking by an interconnected policy to reverse this pattern of development.

Mr SPEAKER:

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

Mr McVEIGH:
Darling Downs

– The most celebrated fraud of an epoch of frauds since the Labor Government came to power has been in housing. This area is in utter chaos. We have acute shortages of the essential elements - manpower, materials and money - in this field. The seeds of disaster sown by the socialist philosophies will grow into the despised fruit of socialism unless we get rid of the greatest disaster that has ever afflicted our society. The Labor Government’s legislation in housing has been both deceptive and treacherous. Its thin veneer of concern for the welfare of the Australian people has been readily exposed by the honourable member for Herbert (Mr Bonnett) who is the shadow Minister for Housing, and the Deputy Leader of the Opposition (Mr Lynch). We aim, in this debate, to splinter their scheme to nationalise our housing. Their moves are a betrayal of the trust that has been placed in them. They have aggravated the scarcity of housing and they have conspired by devious means to restrict credit for the purposes of home ownership.

The Australian Country Party and the Liberal Party stand for home ownership for all Australians - the rich and the poor, the young and the old.

Dr Klugman:

– What about the National Alliance?

Mr McVEIGH:

– Look, will you keep quiet. Your head is so full of egotistical gas that when someone pricks it it explodes into a vacuum of hot air. We stand foursquare behind the concept of ownership of homes, rather than rental of homes. We maintain that the latter is a leakage of economic resources and at the end of a period the lessee has nothing concrete to show for his financial outgoings over the years. It can be, and is, a complete wastage of funds, and whilst there are some areas where rental is unavoidable, we stand for the encouragement of home ownership.

Our view, of course, is one of deep psychological difference with the socialists on the treasury bench - we realise that the greatest safeguard against any ‘ism’ in this country is to have a high percentage of home ownership which develops as a natural pride in one’s own little bit of Australia. Let those who sit opposite stand up and be counted. How many really practise what they preach? How many of them rent rather than own homes? Yet that is what they wish on the people of Australia. But they will not wish it on themselves. They submit a curious plurality of values.

Mr Hallett:

– How many of them have swimming pools?

Mr McVEIGH:

– My colleague asks how many of them have swimming pools. I would like to know the answer to that question. The Housing Agreement Act of 1973 introduced a new program of Australian Government financial assistance to the rates for the period 1973-74 to 1977-78. Under the arrangements, 30 per cent of the advance paid to each State is to be allocated to a home builder’s account while the rest goes to the State housing authority. But within the framework of the legislation, it is specified what the conditions are for the allocation of dwellings made available through the use of advances to the State housing authorities. This is another area about which we voice our objection, the iron clad fist of control of centralist Government on the States, dictating to them how their money shall be spent on housing.

For the first time on record, States are being dictated to in this highly sensitive area. Again there is a ceiling put on the amount that can be sold over the 5-year period of the Act - 30 per cent in every State except Tasmania, which is allowed a higher percentage on a reducing basis. This restriction is undeniable and positive proof that the present Labor Government is keener about fleecing people through rents which have no final equity, rather than the selling of State housing authority dwellings, which lead to home ownership.

It is absolutely necessary to give guidance to people who have the perennial problem of distributing their funds. Let us analyse how the present Government is sabotaging this right by its unilateral guidance towards housing rental. This policy was reinforced with the musical chairs played with the interest rates. The banks were unable to obtain sufficient funds to satisfy all those wishing to borrow for home buying since the interest rate offered to bank depositors of 3 J per cent was left far below the increased rates offered by other lending organisations. In fact the rate of growth in savings bank deposits slowed rapidly between October and December 1973.

The drying up of bank deposits, together with the increased demands for home loans due to the preferential interest rate policy, meant that banks had to ration their limited supply of funds among the prospective applicants. Similarly, the building societies were placed in the same invidious position. In Queensland, on account of the effects of being out of gear with the prevailing money market, the net inflow of funds in November dropped to a dangerously low level of $6m. Dangerously low in that it was an all time low during the period that traditionally the funds should have been gaining strongly to counter the traditionally lean period of February through to May.

Following an assessment of the situation and the resultant increased rate of interest offered to investors from li per cent to Si per cent being approved by the Queensland Government, the December figures improved dramatically, the December inflow being $28.826m.

But the net result will be that building societies in Queensland will be able to continue only a moderate lending program bearing in mind that with the increased cost of houses the average loan has increased by $3,000 in the last year. For February 1974 the figure is 1,150 loans for a little over $20m. The net result is crystal clear, fewer loans at increased cost - again prejudicing the right of home ownership.

By these many nefarious moves, the Labor Government has imposed its will in a rather elusive manner - but a manner which has been effective in its execution. We of the Country Party, on the other hand, bring dispassionate judgment to issues such as this and state that the progressive enfeeblement of the administration of the Minister for Housing and Construction (Mr Les Johnson) cannot be lightly shrugged off. That is why we are supporting this discussion of a matter of public importance.

Costs have gone up particularly as far as materials are concerned. The wholesale price index on materials used in housing in Brisbane for the period December 1972 to December 1973 shows an increase of 13.7 per cent against the average of the 6 capitals, an increase of 15.1 per cent. Of course, it is pertinent to point out that Queensland is very capably led by a Country Party Premier. The increase in price for the 6 capitals for the period December 1971 to December 1972, the last year of the free enterprise government, was only 5.9 per cent, compared with a staggering 15.1 per cent now. Similarly, house price and repairs maintenance for the 6 capitals was a staggering 12.7 per cent increase in the 12-rnonth period.

I turn now to the lip service given by the Labor Government to a promise of a ‘limited tax deductibility scheme for housing interest payments’. How does this measure up to the needs of Australian housing and our traditions of social welfare? Under this scheme mortgage interest payments will become a taxation deduction for actual incomes between $4,000 and $14,000. Mr Whitlam promised ‘this tax concession will be concentrated amongst the groups which bear the greatest burden’. This is merely nice sounding rhetoric, pleasant words by an artful campaigner - but completely ignoring the substance. To prove the substance I seek leave to incorporate in Hansard a table which shows that the greatest benefit of this loan deductibility will be to the single man and not the man who has dependants or family responsibilities.

Mr SPEAKER:

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

Mr McVEIGH:

– The penalty of children will be present at every level of income dependent on the size of the loan and the income received. We maintain that the children of Australia are entitled to decent housing and that adequate help should be given to the families of those children to achieve that end. The Country Party, of course, has never been accused, even by its most severe critics, of being destructive. Rather, it has a hard-earned, well-recignised reputation for being constructive. With this end in view, there are certain propositions that we . would like to advance to encourage and aid home ownership to counter the problem of inflation which is so savagely reflected in the housing arena. We aim to ease the burden in the early years of marriage, when money is scarce and responsibility is high. With this end in view we suggest that the present principle of loans being spread over the whole period of the mortgage at a fixed rate of repayment should be changed so that the loans will be spread over a period of 25 years with repayments based initially on a period of 40 years. This would allow those people whose income has increased over the years to meet their commitments more easily.

Mr SPEAKER:

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

Mr MATHEWS:
Casey

– Nobody in this House would expect objectivity from the honourable member for Darling Downs (Mr McVeigh) or from the Deputy Leader of the Opposition (Mr Lynch), who preceded him in this debate, but we have come to expect from the honourable member for Herbert (Mr Bonnett) a thoughtful, constructive and above all fair-minded contribution to the debates in which he takes part. It is therefore the more to be regretted that he chose to involve himself today in an attempt to palm off on this Government the blame for the shortages of housing by which so many Australian families are currently disadvantaged. The honourable gentleman attributed the housing shortage so overwhelmingly to interest rates which are simply a tool which all governments - including governments he has supported in the past - use to keep demand for housing within the resources available to meet it. I regret that he did not cut to the heart of the’ natter - to the shortfall of resources such as skilled labour, building materials and land, which is the real cause of housing difficulties at this time. I regret that because the honourable gentleman, in taking this line, was treating the subject in a superficial manner which was unworthy of him.

The housing shortage in this country is too serious, too long-standing and above all too costly in terms of human misery to be exploited in an insincere and partisan manner for purely political purposes. Honourable members opposite who imagine that there is some sort of advantage to be gained, either inside this chamber or elsewhere, by blaming the Government for problems which not only arise but which also generally seen to arise from its inheritance and not from its actions, are deceiving .themselves. It is not the Government that they bring into discredit, but themselves.

Last week we heard the Leader of the Opposition (Mr Snedden) put forward what he called the Liberal Party’s policy on housing. We have heard that policy put forward again today by .the Deputy Leader of the Opposition. Those two gentlemen said that a Liberal Government would provide government assistance for those purchasing their first home; that a Liberal Government would establish a housing guidance bureau in co-operation with the States; .that a Liberal government would investigate the implementation of a home repayments scheme to guarantee loans and restructure loan repayments for low and middle income earners; and finally that a Liberal government would reduce interest rates.

I find it difficult to believe that the honourable member for Herbert, as the Opposition spokesman for housing and as a man who has taken some trouble to inform himself on the problems of the housing industry could have been shown these proposals before they were announced by the Leader of the Opposition. He would have recognised that they were a cruel hoax on the people of this country who are attempting to find homes. I do not believe that he, as a man of honesty and some compassion, would have associated himself with a hoax of that kind. The record shows very clearly that the Liberal Party has been incapable of stepping up the rate of supply of housing in this country by as much as a single dwelling. The Liberal Party is now promising govern ment assistance for couples buying their first home in the certainty that, if it were returned to office, there would be no homes available for very many of those couples as there were no homes available for very many of the couples who wanted them throughout the last 23 years. The Liberal Party is offering to set up a home guidance bureau, but that home guidance bureau will have nothing to show its clients. The Liberal Party is promising lower interest rates when it knows perfectly well and has been reminded by events as recently as last year that, in the absence of increased supplies of housing, lower interest rates simply mean soaring prices and a widening deposit gap.

I find it remarkable that the Liberal Party spokesmen, including all three of the honourable members opposite who have contributed to the debate today, should have concerned themselves so exclusively with the market end of housing - with the acts of purchasing a home and obtaining a loan for a home - to the complete neglect of the crucial question of how extra homes are to be constructed. The Economic Research Department of the Housing Industry Association has placed the blame for housing shortages where it belongs - on the fact that under successive Liberal governments this country paid far too little attention to increasing the supply of skilled workers in the building trades, too little attention to increasing the capacity of the industries which produce building materials, and too little attention to increasing the .supply of subdivided serviced land on which houses could be built. I am not surprised that the honourable member for Herbert failed to mention the shortages of skilled labour, of materials and land which are stopping so many young Australians from acquiring the homes of which they dream, because all those shortages arose under governments of which he was a supporter. Whereas the Housing Industry Association estimates that at least 10,000 additional skilled building tradesmen are needed each year, the number actually made, available to the industry by our predecessors in their last year of office was barely 7,000. The number of building trades apprentices who completed their indentures in the last year of Liberal-Country Party coalition government was actually lower than it was in 1969 or 1970. The number of skilled building workers recruited overseas has been falling steadily. In 1969 it was 6,493; in 1970 it was 5,584; in 1971 it was 4,217; and in 1972 it was a miserable 3,100.

Honourable members have rightly expressed concern over the fact that the price of a block of land has risen since 1960 by 369 per cent in Sydney, by 167 per cent in Melbourne and by 131 per cent in Brisbane. But we should be equally concerned - perhaps more concerned - by the fact that, as the Housing Industry Association has told us, ‘supply of serviced allotments in many major growth areas is now little more than half annual demand by home builders’. I hope that the honourable member for Herbert would not attribute this situation to the Government or suggest that it has arisen for the first time in the IS months since the Government has been in office. The Housing Industry Association, which is an objective analyst in these matters, has apportioned the blame where it belongs - on the failure of State governments to provide the sewerage, drainage and other reticulated services upon which the availability of residential land depends, and the failure of successive national governments to make available funds for mis purpose. It has pointed out that ‘withholdings related to speculation and investment withdraws land from the market, limiting supply for genuine home builders’. I remind the honourable member for Herbert that traditionally speculators in urban land have been the friend and patrons of his party and not of this Government.

The Whitlam Government, has taken action across the board to confront the real problems of borne building in Australia. In order to supply additional building workers it has fostered apprenticeship, fostered retraining of workers from areas in which redundancies are occurring, fostered a world wide search for tradesmen who can be brought to this country as settlers, fostered an inquiry under Mr Justice Aird into the issue of permanency which has driven so many skilled building workers out of their field over recent years. In order to improve the supply of building materials, we have augmented the capacity of the local industry with imports. The revaluations that members opposite have so fiercely opposed and the 25 per cent tariff cut has allowed imported building materials to become available in this country at prices competitive with local products-

Mr SPEAKER:

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

page 831

MINERAL INDUSTRY

Ministerial Statement

Debate resumed from 21 March (vide page 705), on the following paper presented by Mr Connor:

Mineral Industry: Australian Equity - Ministerial Statement, 21 March 1974- and on motion by Mr Daly:

That the House take note of the paper.

Mr FAIRBAIRN:
Farrer

– In order to frighten the public into believing that it was losing control of its minerals and energy resources, the Minister for Minerals and Energy (Mr Connor) concocted a figure which purported to show that 62 per cent of Austraia’s mining industry was ‘overseas owned or controlled’. Most people took this to mean overseas owned. Even the Prime Minister (Mr Whitlam) fell into this trap and used the figure ‘62 per cent overseas owned’ at last year’s Australian Mining Industry Council annual dinner. He was of course corrected immediately.

But the Minister believed that if, Goebbels like, he continued to use this figure, the public would eventually come to believe it. Unfortunately for the Minister in the last 10 days 2 different expert sources have shown the Minister’s figures to be a travesty of the truth. Mr Noakes, an Assistant Director of the Bureau pf Mineral Resources, in a discussion paper on Australian equity within the mineral industry, which was tabled in this House on 21 March, gives the overall overseas equity weighted by value of output1 as 35 per cent. He does this using the definition which the Bureau of Mineral Resources has always used of the mineral industry, namely, mining and processing of minerals. He points to the absurdity of the basis used by the Commonwealth Bureau of Census and Statistics which, for example, ‘placed the mine and concentration mills at Mt Isa in the mining industry and the copper smelter, lead smelter and zinc oxide plant on the same mine lease, as well as the copper refinery at Townsville in the manufacturing industry.

Under the definition of the Commonwealth Bureau of Census and Statistics overseas ownership is in value of output slightly higher -42.4 per cent in 1968. No newer figures were available to the Bureau of Census and Statistics, but Mr Noakes said that the level of Australian equity would be expected to have fallen rather than risen since 1968. So there you are. You can take your pick. Overseas equity is 35 per cent if you use the definition of mining used by the Bureau of Mineral Resources in, for example, the Australian mineral industry quarterly and annual review and other publications. Or it is 42.4 per cent if you use the definition of the Bureau of Census and Statistics on value of output, or 44 per cent on value of production. And to back up this figure the President of the Australian Mining Industry Council announced on Monday night of last week that the figure available to the Australian Mining Industry Council only, because it refers to 1973 returns not yet available to either of the Bureaus, is 39.6 per cent of the industry’s production attributable to overseas ownership.

How then did the Minister for Minerals and Energy and the Prime Minister push this up to a figure of 62 per cent. It was done simply by taking the worst figure available - 44 per cent - and adding to it companies in which a foreign company held a 25 per cent or greater interest. It was then deemed to be foreign controlled’, even if it was 75 per cent Australian owned and completely Australian managed. This of course is ludicrous. Thus this 62 per cent figure is shown to be quite unrealistic and fictitious. I want to make only 2 points. Firstly, we should not forget that the final control of any mining project lies in the hands of the Commonwealth Government, without whose permission to export no company - overseas or local - could proceed. If the Minister complains about overseas control he is in fact complaining that he is unable or unwilling to use the extensive power that he has available to him. Secondly, when the Minister for Minerals and Energy answered my question in the House on 12 March which led to the tabling of these papers, he said, to the plaudits of his backbench followers:

Mr Noakes, who was responsible for the report, will be shown when I produce it and table it in this House, to have agreed that probably the ownership and control overseas of Australian assets is in excess of the 62 per cent that was quoted.

Honourable members will have had an opportunity of reading Mr Noakes’ paper fully. They will note that nowhere in the paper does he use a figure of 62 per cent. He uses only 2 basic figures - Bureau of Mineral Resources figure in 1971 of 35 per cent overseas ownership and a Commonwealth Bureau of Census and Statistics figure in 1968 of 42.4 per cent. How can he be taken to have agreed that there has been an increase in a figure that he has never used, and with which he is almost certainly in disagreement? This is just another example for which Mr Connor is becoming famous - or should I say infamous - of handling the truth carelessly.

In the short time available to me I propose to deal with only one aspect of overseas investment, namely, the search for and production of crude oil in Australia, and the crass, ignorant and destructive policies on overseas investment being pursued by the present Minister for Minerals and Energy in this field. When the Labor Government came to power in December 1972, it fell heir to the oil search and oil production policies initiated by the previous Liberal-Country Party Administration. Let us take a look - a hard-headed look - at those policies and disregard temporarily the stupid, doctrinaire Connor approach which long-term threatens our self sufficiency in oil which has enabled us to ride out the prevalent world crisis in oil supplies better than most countries in the world.

It is about time some frank speaking was done. Let us use the Esso-BHP operation in Bass Strait to illustrate my point, because it has been the main target of the Minister’s malice and hatred. Australia has, throughout its history, been plagued with periodic balance of payments problems. Our problem was to build up funds overseas to pay for imports. One of the major items of our import bill was oil. Our commonsense reasoning was, firstly, if oil was found in Australia we would save heavily on our import bill and, secondly, we would not be at the mercy of overseas producers.

So, we took steps to encourage oil search by incentives. And one of the things we got was what the Minister would call a foreign controlled company - Esso-BHP. But we ako got, firstly, access through Esso to technological ability and know-how that was and still is, available to Australia on a limited scale only; secondly, risk capital of $309m from Esso and $189m from the Broken Hill Proprietary Co. Ltd without a dollar of taxpayers’ money imperilled, and, thirdly, above all we got the Bass Strait oil and gas fields, a cheap source of supply of crude oil, and the knowledge that on known Australian reserves our supplies are assured until at least the early 1980s, and a position of being one of the few countries in the world unaffected by the recent oil crisis. We are currently saving almost $ 1,000m a year in terms of oil imports.

But what is this stupid man’s response, the response of this Minister for Minerals and Energy? Trembling with anger, he points with horror to the $61m over 3 years which Esso has remitted to its parent company in the United States. That is $20m a year. He makes it sound like a lot of money. But is it? Would any Australian object to a service charge of S20m a year in return for what we got - the savings we made in overseas payments, and the freedom from the recent oil crisis? The Minister for Social Security (Mr Hayden) recently revealed in reply to a question from my colleague, the Deputy Leader of the Opposition (Mr Lynch), that since Labor has come into power his Department alone has added over 1,800 public servants to its staff, and as a consequence more than $10m annually to the Department’s costs. That is only one department. Which is more valuable - public servants producing more paper or ensuring the supplies of a commodity essential to our economy?

I turn from the past to the future - a bleak longterm future for Australian production of crude oil in the rigid, incredibly shortsighted policies of the Minister for Minerals and Energy are accepted by his colleagues, who appear to have been mesmerised by his misinformation. What has the Minister achieved? Firstly, he has prodouced a situation in which companies like BHP and Esso and Australian companies are turning from Australia to search for oil outside Australia, taking with them the technical knowledge that Australia was amassing. Their confidence is being undermined. Who can blame them with a Minister so supremely malicious or ignorant that he accuses BHP virtually of evading taxation when he well knows - or should know and has since been forced to admit - that it has made a $32m provision for current income tax on oil profits.

Secondly, he wrongly states that only 40 offshore wells have been drilled in the past 10 years, when the figure up to the end of 1973 was 189 by mobile rigs with a further 100 development wells drilled from off-shore platforms. Thirdly, his own policies have led to a reduction in on-shore drilling for oil from 85 wells in 1972 to a proposed 36 wells this year, while we have now only one marine seismic vessel left in Australia. Fourthly, he says that government exploration is to be substituted for the efforts of people - both Australian and overseas - who have a reservoir of technology, experience and knowledge which would be extremely difficult for any govern ment department to match. But, as the president of the Australian Petroleum Exploration Association said last week, what are the alternatives for Australia? We can use public money to explore for oil and develop it, or we can spend public money importing our oil from overseas, or we can use other people’s risk money and share the rewards, if any, on a sensible basis.

When it comes to encouraging the search for oil in Australia the Minister immediately reveals that he has all the imagination and the capacity for commonsense thinking of a block of concrete. In the search for oil and minerals the Minister says: ‘I do not want any overseas money to come into Australia in any circumstances.’ Even the Australian ownership which he says he is aiming at turns out to be not Australian shareholders’ ownership but Australian Government ownership. So the inevitable result of the policies the Minister has been trying to justify is coming to pass. People who have vast technical knowledge plus some risk capital and who are not wanted in Australia are going overseas to where they are wanted. Over 270 Australian geologists recently applied for 9 jobs advertised in Brazil. The following list supplied to me 3 months ago by a Western Australian firm of consulting technologists is a list of companies in Australia which are reducing their search for minerals and oil in Australia:

Tenneco (United States) - mid 1973 closed down completely in Australia.

International Nickel - laid off nearly all staff and now on a watching brief since late 1973.

Amax Exploration - laid off 40 per cent of staff Sept 1973, mostly Australian.

Mitsubishi Metal Mining - senior technical staff returning to Japan, one observer remaining.

Trend Exploration, United States - minerals and oil - stopping all work in Australia, transferring activity to Indonesia.

Freeport of Australia Inc. - stopped exploration in Australia.

Pechiney - senior staff returned to France; remainder on uranium only.

Anaconda - recalling staff to United States of America and transferring Australians to South Africa.

Kennecott - concentrating activity in Indonesia - holding operation only in Australia.

Cominco - transferring activity to Philippines and Indonesia, apart from running Aberfoyle group taken over here.

Australian Inland Exploration - (Texas Gulf Sulphur) marking time because of 33± per cent deposit clause.

Consolidated - turning attention to the Philippines.

Jododex Aust. - 90 per cent shutdown Nov 1973.

Small genuine Australian explorers:

Woods Reef Mines - asbestos production New South Wales - difficulties from revaluation and importation of capital.

Base Minerals - in voluntary liquidation because of refusal by the Minister to approve a joint venture.

Endeavour Oil - active almost entirely in South East Asia - recently announced withdrawal from Western Australia, despite share in Forrestonia nickel with Amax.

Hawkstone Minerals - retained 2 senior technical staff only because of long term contracts.

Valley Exploration - very small but very effective - closed down because cannot get joint venture approved, or get cash back to continue exploration.

Minops - joint venture with Tenneco - trying to bring in a tin mine in Tasmania and spending all other effort in Indonesia.

Alliance Oil and Minerals - minerals shut down about September 1973; oil section continuing with reduced staff.

I do not doubt that one could continue a good deal further. The search for oil and minerals must go on. It is vital. But the man who has the ministerial responsibility for seeing it goes on is discouraging it and is crippling it. He is a national tragedy. Let us hope that Australia does not pay too high a price for his occupancy of this key post.

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

– I commend the honourable member for Farrer (Mr Fairbairn) for his very enlightening speech and the information he has given to the Australian people on the disastrous consequences of the present policies of the Government. My purpose today is to speak to the statement that was made in the House by the Minister for Minerals and Energy (Mr Connor) relating to Australian equity in the Australian mining industry. The evidence we are considering on foreign participation in the minerals industry shows clearly that the Australian Labor Party has been basing policy on the wrong premise. From a study of available evidence it is clear that the degree of overseas participation in the minerals industry has been completely misrepresented by the Government and that statistics based on supposition have been the basis for a dogmatic policy in relation to this question.

The subject of foreign participation is, of course, an emotional one, and I suppose it is only right that there should be instincts within us all wanting to preserve Australian ownership of Australian resources. Of course it is not unimportant that we talk about this issue, but we should be careful to distinguish between emotion and logic. If over the years Australia’s approach to foreign capital had been adamant and dogmatic we would not have achieved anything like the development we have recorded over the years. Overseas capital has played a significant role in the development of this nation. Overseas capital in the mining industry has been one of the greatest contributing factors in recent years to decentralisation and the establishment of nev/ townships, particularly in inland Australia and the remote northern region, where there would not have been any development had it not been for the courage of foreign investors to invest in some of the mining ventures in these areas. Overseas capital has developed ports and roads. With the development of new townships and roads we have seen ancillary developments in agriculture and tourism, and many other ventures. It has created jobs for Australians; it has increased our technology and knowledge in relation to mining. Above all, it has brought a tremendous amount of income into this country. It has strengthened our overseas balances; it has given us a broader base for our operations and has meant that we are not so vulnerable to changes in commodity prices and seasonal conditions in this country; and it has enabled the revenue of this Government and the State governments to be greatly enhanced. Al! this has given the governments of Australia a greater capacity to look after th3 many other essential needs of this country.

When 1 think of some of the great projects undertaken throughout Australia in which there has been foreign participation I wonder what is so very evil about foreign participation and why such a picture is being painted about it by the Government, especially by the Minister for Minerals and Energy (Mr Connor). I think of the great coal fields in the Bowen area of Queensland which some years ago Peabody, in association with Mitsubishi and an Australian firm, Thiess, decided could be developed by open cut means. That had never been attempted before by Australians. Those organisations had the know-how and the courage to develop the enormous coal deposits in central Queensland. They have helped to develop that part of Australia. Without foreign capital, in the first place, and the know-how of those organisations and their confidence that they could succeed that area would not have been developed. The great Mount Isa mine is a typical case of foreign capital coming in and developing a resource. The ore body in the Mount Isa area was discovered by an Australian firm in the 1920s. That firm went broke. It could not get Australian money to keep it going. Nobody was prepared to invest in the Mount Isa project. An American company called Osarko came in and hacked that mining venture for 17 years without taking lc in profit out of it. It had confidence in the venture succeeding. For 17 years it developed that mine. It was not until the 1950s that it really succeeded and made a profit. The Mount Isa mine is today one of the finest mines that one will find anywhere in the world and it is adding enormously to the economy of Queensland and has opened up the north-west of Queensland.

Let us look at some more recent ventures. The development of bauxite at Gove in the Northern Territory is a good example. Alusuisse, a foreign company, decided thatthe ore body in this area could be developed. It had great difficulty in finding any Australian partners who were prepared to come in and take a substantial share of the equity. Eventually an arrangement was made whereby it would put in 70 per cent of the capital and Australian partners would put in the remaining 30 per cent. On a cost-benefit analysis of the scale of the original scheme it was found that it would have to be increased very considerably in size if it was to be an economic proposition. When Alusuisse talked about doubling the size of the project the Australian partners said: ‘We cannot find the money. We are not prepared to put money into it; it is not profitable enough’. What happened? Alusuisse, a foreign company, lent the Aus tralian partners the money to make up their contribution and special arrangements were made with the Government for the export of bauxite so that- they would have a quick cash flow and the Australian partners would be able to pay off their loans.

One has only to look at the great iron ore developments in Western Australia. The first projects that were suggested were too big in their thinking for Australian participation. Australian companies were not prepared to put in the hundreds of millions of dollars required for the development of the area. One can look at the North West Shelf where encouraging deposits of gas have been found and where I hope oil will be found. In this case Woodside, an Australian exploration company, wanted to go and explore the area. It had the lease rights. It peddled them around the world trying to find a partner. The only partner it could get after a year was Burmah, which was looking for development projects, having had its industry nationalised in India. Burmah was an overseas company which had the know-how and the capital. They came together and discovered gas. Much the same sort of story can be told about the Gippsland Basin oil deposits where Esso eventually came in and joined BHP. BHP had found difficulty in finding a partner who was prepared to put in the risk capital required to look for oil.

All this talk about foreign capital being evil and being bad is highly exaggerated. Of course it should be the objective of every Australian for us to own as much of our country as possible. But it has to be kept in balance, it has to be sensible, it has to be logical and it has to be worked out as to what is in the best interests of Australians as a whole. It is easy to equate the percentage of equity or control with abstract fears, such as the loss of sovereignty. It is also easy to oversimplify carefully defined results into broad political judgments.

Some time ago the Bureau of Statistics published a document that attempted to measure the degree of overseas participation in the Australian mining industry. In assessing this degree of overseas participation the Bureau excluded mineral exploration activities as well as smelting and refining processes and some infrastructure. The Bureau’s paper was concerned with overseas ownership and overseas control. In assessing the degree of overseas ownership the Bureau considered direct investment in Australian companies in which at least 50 per cent of the voting stock is held by overseas interests or where at least 25 per cent of the voting stock is held by one overseas company or a group of associated companies. It also considered investment and ordinary shares of Australian companies as portfolio investments. The subsequent degree of overseas ownership of individual companies was used to provide aggregate figures for the Australian industry on the basis that if, say, 85 per cent of the voting stock of a company is held by overseas investors then 85 per cent of the activities of that company was attributed to overseas ownership.

On that basis the percentage of Australian ownership associated with the value of output of the industry has fallen from 71 per cent in 1964 to 58 per cent in 1968. The Bureau also attempted to measure the degree of overseas control and a statistical convention was used in which if 50 per cent of the voting stock was held in one overseas country or 25 per cent by one overseas company the mining establishment was classified as controlled from overseas. On that basis the percentage of value of output controlled from overseas rose from 39 per cent in 1964 to 56 per cent in 1968. However, these ‘control’ percentages have severe limitations for, as the Bureau pointed out itself, ownership of less than 25 per cent of the voting stock could be sufficient to achieve effective control of a company’s activities.

The Bureau of Mineral Resources has since undertaken a further study to update these calculations. In doing so it has widened the definitions to include the subsequent processing of raw materials into metal or a similarly upgraded product. Dr Fisher has indicated that these calculations are based only on figures published by the Commonwealth Statistician or obtained from the BMR’s own investigation. As a result of this BMR study it was found that the overall Australian equity in the mineral industry was 65 per cent. But it should be noted that this covered a large number of selected minerals and did not cover petroleum. It is important to note that the Bureau of Mineral Resources comments that to extend the compilation to cover the entire industry would raise rather than lower the overall figure for Australian equity. The Australian Mining Industry Council subsequently published a paper which indicates that among its membership the percentage of overseas ownership is only 40 per cent.

The main conclusions to be drawn from this picture are that, during the middle 1960s when a set of calculations was made, the percentage of overseas ownership and control of the minerals industry, as carefully defined, increased. Taking a broader definition of the scope of the industry later calculations by the Bureau would suggest that at least two-thirds of the mineral industry in terms of value of output is owned by Australian interests and that this is probably an understatement. Those are the words of the Bureau of Mineral Resources. This also means that the calculations by the Bureau considerably understated the extent of Australia’s participation in the industry. What I am saying is that the Minister for Minerals and Energy is deliberately misleading the Australian people and is concocting an emotional issue which does not stand up to examination. His figures are exaggerated. I am not pretending that Australian participation should not be-

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

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

– Mr Deputy Speaker-

Mr Giles:

– Is he closing the debate, Mr Deputy Speaker?

Mr CONNOR:

– I did not move that the House take note of the paper; the Leader of the House (Mr Daly) did. The then Government, when the Bureau of Census and Statistics in 1968 directed its attention to certain aspects of foreign investment in Australia and foreign control of the minerals industry, received a very rude shock. The information that it received showed - I quote from table 6 at page 29 of the report headed Overseas Control of Mining: Statistics’ showing the value of total mining production by establishments of direct overseas investment companies - that the increases were from 39 per cent in 1964 to 58 per cent in 1968. The position became so alarming that the government of the day decided to put a damper on it all and the keeping of statistics was abandoned after then. I have pleasure in informing the House that I have here a copy of a letter from the Acting Commonwealth

Statistician dated 1 April 1974 and addressed to the Treasurer (Mr Crean). The Acting Commonwealth Statistician states:

Dear Mr Crean,

As mentioned during my telephone discussion with Mr R. Q. Freney- that is the Treasurer’s private secretary: . . this morning, the statistical study of foreign ownership and control of the Australian mining industry in respect of 1971-72 has not yet been completed. However, our work to date indicates that, after adjusting the 1971-72 results to a basis comparable with that used for earlier studies, it is likely that the overall results for 1971-72 will be broadly similar to those previously published in respect of 1968.

So much for the nonsense that has been advanced by the 2 speakers on behalf of the Opposition in this debate. The letter continues:

The 1968 study showed 48 per cent of the Australian mining industry as being foreign owned and 58.1 per cent as being foreign controlled. A copy of the bulletin containing the detailed results of the 1968 study is enclosed for your information.

I have no objection to the above indication of the likely results of the 1971-72 study being publicly quoted. The bulletin containing detailed results of the 1971-72 study will not be available for a few weeks yet.

Copies of this letter are being sent, for information, to the Prime Minister, the Minister for Minerals and Energy and the Secretaries of those Departments and of the Treasury.

In other words, the Bureau of Statistics stands its ground.

Now, as for this celebrated study paper which was circulated for discussion within the Department by Mr Noakes and which somehow, mysteriously or otherwise, came into general circulation, this is the final quelch. In a letter of 28 November 1973 the Acting Commonwealth Statistician, referring to the draft paper of Mr Noakes entitled ‘Australian Equity Within the Mining Industry’ and after outlining the objections to it, concludes by saying:

On balance, I do not consider that the results are likely to be sufficiently accurate to warrant publication. If you do proceed with publication, I would prefer that reference to the discussions with the Commonwealth Bureau of Census and Statistics and comparability with Bureau statistics (paragraph 6 of the paper) be deleted.

In other words, the Bureau washed its hands of those statistics. Let us examine in. more detail this particularly pathetic document. We find that Mr Noakes in his concluding remarks in regard to these 2 sets of figures - one of course based on mineral production to the point of the concentrate and the other to the full processing of the minerals - states: it is by no means suggested that one is right and one is wrong. Within limits of error, they are both right but differ because of different bases and definitions. Admittedly, they are based on statistics for different years and the BMR figures based on statistics for 1971 refer to selected minerals only -

I emphasise those words:

. refer to selected minerals only and do not include the whole mineral industry, excluding petroleum.

There are very good reasons why petroleum is not included. To do so would have distorted the whole pattern.

Somewhere, somehow, a rescue operation had to be mounted. It was being done foolishly - very foolishly indeed - through the Bureau of Mineral Resources. I have here - time will not permit me to read it in total - a full report from Mr T. M. Fitzgerald who is a special investigation officer of mine and a former financial editor of the ‘Sydney Morning Herald’. He is a man of outstanding repute in economic circles. In this report, Mr Fitzgerald simply rips to pieces the phoney statistics advanced on behalf of the Australian Mining Industry Council. In particular, he has this to say:

They are playing games of ins and outs.

They are picking what suits them and dismissing what does not. Even Mr Noakes in his report said that he was not satisfied with his own statistics. He said: ‘We have not published an article on equity because we are not yet satisfied with our figures although we believe them to be good approximations at the time of compilation’.

Mr CONNOR:
ALP

– This was said by Mr Noakes himself. He is the gentleman whose discussion paper - mark you, a discussion paper and not a report - is being advanced as a prop by those advocates of foreign investment and foreign control. The whole exercise is a phoney one. It is completely phoney from beginning to end. I do not wish to indulge in backbiting and name-calling; I will leave that to Colonel Blimp from Farrer.

On the question of overseas control and its dangers, let me quote from the report by Mr Fitzgerald. He stated:

The Australian Mining Industry Council implies that mere 25 per cent holdings represent a substantial part of the companies designated by the Statistician as being under overseas control. In fact that is not so. In the Statistician’s last bulletin on overseas participation covering the period to 1968 he recorded that the total value of Australian mineral production by his definition was $597m. Of this, $347m or 58 per cent was under a degree of overseas control. Of the $347m no less than $328m represented overseas holdings of <0 per cent or more in the mining companies. Only $19m of the $347m was represented by holdings of less than 50 per cent. It seems rather disingenous to make much play on a 25 per cent figure when the information I have mentioned is clearly set out in the Statistician’s bulletin.

I might mention that no less a person than a former Prime Minister introduced legislation to ensure that takeovers of shares by foreign interests that exceeded IS per cent of the share holdings in a company were to be examined by a special committee. The Commonwealth Statistician has been quite modest and quite tolerant in using the figure of 25 per cent. What answer does the Opposition have to that? It does not have any. I seek permission to have incorporated in Hansard the total report of Mr Fitzgerald. I will make make it available to the Opposition.

Mr DEPUTY SPEAKER (Mr Berinson)Order! Is leave granted?

Mr Fairbairn:

– Not yet.

Mr CONNOR:

– In addition to that-

Mr DEPUTY SPEAKER:

-Order! I am still seeking to have clarified whether leave is granted for the incorporation.

Mr Lynch:

– This is a 5-page document. We do not want to be unreasonable but I suggest that the Minister table it.

Mr DEPUTY SPEAKER:

– Leave is not granted.

Mr CONNOR:

– I will have the document fully published. Not only that, very special reference was made to the wonderful boons being conferred on Australia. Mr Fitzgerald is also doing a special survey on the actual benefits that the Commonwealth revenue allegedly is receiving from the activities of the mineral industry. His report, which I will also table, indicates that during the last 6 years the concessions granted have been greater than the taxation received. I will table that also to the embarrassment of members of the Opposition and they can pick it to pieces, if they can. Mr Noakes commenced his paper by saying that his survey did not cover the petroleum industry. He did this for the best of reasons. If one were to accept Mr Noakes’s concept of dealing not only with the concentration of ores but also going right through to the processing, he would have found himself in tremendous difficulties with the equity ownership of the Australian petroleum refining industry, which is 85 per cent overseas controlled. This would have completely distorted and destroyed the whole impact of this discussion paper. It was only a discussion paper and never anything else. It still remains a discussion paper with which the Commonwealth Statistician himself would not be associated. The figures that the 2 spokesmen for the Opposition choose to cavil at and attack and disagree with are being repeated by a man of professional integrity. I am not attacking Mr Noakes, who is not here io defend himself; I am simply pointing out his diffidence in the whole matter. Another reason why petroleum would not be included in the discussion paper is that there is a mark-up of about 140 per cent in the value of the finished product from the time it enters the refinery until it is on its way to the tank of the consumer from the refinery.

The Opposition, of course, will snatch at straws. It is capable of stooping to anything and saying anything to bolster a case for its discredited sponsorship and championship of these people who have the best of Australia’s assets. We heard a lot about the North West Shelf from the Leader of the Country Party. I remind the House that 3 months before the last Federal election my predecessor in office, Sir Reginald Swartz, wrote to the WoodsideBurmah company suggesting that it should disclose what it had found and expressing his concern at the low Australian equity in the company. It is 15 per cent at present and it might rise to as high as 18 per cent if the shares of the current float can be sold. He expressed his concern that Australia was losing even this tenuous grip. Even Bass Strait oil is only 41.5 per cent under Australian control. The Broken Hill Pty Co. Ltd is only 83 per cent Australian owned and although it has a half interest in the Bass Strait oil deposits, 41.5 per cent is the total Australian equity. If one considers the whole picture of our mining industry, it is pathetic.

Let us examine the Australian Mining Industry Council itself. It has 91 members but only 30 are Australians. It is the biggest and best spokesman of all for overseas interests. It is a pressure group and operates as such. I give it credit for that, but I do not always give credibility to its statements, particularly those concerning the activities of some of its lobbyists and officers, because within the report of Mr Fitzgerald, which, of course, the

Opposition would not be prepared to accept, are the really devastating facts as to why this aspect has been skirted around. There is an old story that figures cannot lie but that liars can sometimes figure. That is precisely what members of the Opposition have done on this occasion. I fling their charges back in their teeth.

Mr GILES:
Angas

– I welcome the chance for a few minutes-

Motion (by Mr Hansen) proposed:

That the question be now put.

Mr Lynch:

– Mr Deputy Speaker, I rise on a point of order.

Mr DEPUTY SPEAKER (Mr Berinson:
PERTH, WESTERN AUSTRALIA

– Order! There is no point of order in respect of a motion that the question be now put. It must be put forthwith.

Mr Lynch:

– May I take a point of order in the sense that it is my understanding that the Deputy Opposition Whip was called by you before the motion was moved?

Mr DEPUTY SPEAKER:

– A motion that the question be now put can be moved at any time.

Question resolved in the affirmative.

Original question resolved in the affirmative.

page 839

INTERNATIONAL MONETARY REFORM

Ministerial Statement

Debate resumed from 20 March (vide page 633), on the following paper presented by Mr Crean:

International Monetary System: Meeting of Twenty -Ministerial Statement, 20 March 1974- and on motion by Mr Daly:

That the House take note of the paper.

Mr LYNCH:
Flinders

– The Opposition Parties welcomed the statement to this House on 20 March by the Treasurer (Mr Crean) concerning the recent developments in regard to international monetary reform. We recognise that this was the third such statement by the Treasurer on this matter. I believe that all parties appreciate the Treasurer’s actions in keeping the Parliament informed on a regular basis as to the course of the negotiations. However, it is a matter of some concern that, up until now, there has been no opportunity for debate. Despite repeated requests to the Government during the last session no debate was permitted. It is therefore appropriate, I believe, to consider the Government’s general attitude towards inter national monetary reform during the course of this debate.

The Opposition believes that the central issue facing the world’s developed nations is the maintenance of balance of payments equilibrium between individual nations. The success of any international monetary system must be judged by the extent to which this principle is realised. Any workable system must be based on a broad concensus of agreement. As the Treasurer has indicated previously, such a concensus has been difficult to develop. Understandably, all countries participating in international monetary discussions seek to maximise their own comparative advantages. Countries in deficit on their external accounts naturally view negotiations from a quite different perspective to those in surplus. However, if worthwhile improvements in the present international monetary arrangements are to be effected, the nations involved must adopt less intransigent attitudes to negotiations, and be prepared to reach agreement by concensus and compromise. Theoretically it is within the ambit of each nation to maintain a balance of payments equilibrium by its own exchange rate policies. Until very recently, however, we have seen major trading nations like the United States of America and Japan disinclined to correct their persistent deficit and surplus positions. This, in itself, highlights the need for a workable international agreement.

The need for improvement and reform of the international monetary system has been the subject of continuous discussion during most of the past decade. Since 1970 a series of currency crises have developed as a result of a long period of imbalance in payments relationship between the major industrial countries. The problems associated with adjustments to such imbalances are critical to ordered international monetary arrangements. The size and duration of surpluses and deficits on the balance of payments accounts of individual countries - which determine the demand for world liquidity - are, in fact, dependent upon the efficiency of the adjustments mechanism. Measures were taken by the United States and other deficit countries during the 1960s to limit deficits - but these were basically ad hoc devices which merely delayed ‘the inevitable crises. The par value system of exchange rate alteration, developed in the context of the Bretton Woods Agreement of 1944, was intended to allow exchange rate alterations if it was felt that unacceptable repercussions such as severe inflation or unemployment would result from reliance on domestic policies to correct an imbalance. However, prior to the Smithsonian Agreement of December 1971, it was widely assumed that an adjustment to the par value of the United States Dollar was impractical, primarily because of the predominant role played in the system by the United States. This inflexibility of the United States dollar’s par value was not significant in the immediate post-war periods. As the United States reserve position progressively weakened, exchange rates adjusted against the dollar became increasingly inappropriate. Further, as increases in international reserves were almost exclusively in the form of increased dollar holdings, demand for world liquidity was able to continue only as long as surplus countries were willing to accept United States dollars in their holdings of foreign exchange reserves. But these, of course, emanated from continuing United States deficits. Despite the introduction of special drawing rights, this method continued to prevail.

In August 1971, the United States suspended its pledge of formal convertibility of dollar balances into gold. Surplus countries were then forced to take the initiative and alter their exchange rates. Notwithstanding this situation, imbalances persisted simply because the corrective actions taken were insufficient and exchange rate relationships remained out of line. This is where the Smithsonian Agreement essentially broke down, although it did at least alleviate the rigidity of exchange rates, which had been one of the primary weaknesses of international monetary agreements prior to 1971, and led to the realisation that adjustment could be facilitated by widening the limits to variations around fixed par values. The Smithsonian Agreement widened the permitted margins for fluctuations of spot market exchange rates against the dollar to a total margin of 4i per cent. A number of governments in this more flexible situation have chosen a system of floating exchange rates for a transitional period to achieve exchange adjustment. Realistically, the floating of world currencies can at best only provide a breathing space to permit functional reform measures to be formulated.

The Opposition believes that Australia must be prepared to participate in any reasonable international monetary system, although we recognise that Australia must, in principle, con tinue to exercise a degree of self-determination and autonomy in monetary policy. For this reason we would not be prepared to endorse unconditionally any system based upon auto.maticity of exchange rate adjustments. In the same way we would not favour a mandatory requirement for conversion to special drawing rights without some degree of flexibility. In general, we favour the move to reduce the role of reserve currencies to enable special drawing rights to become the primary reserve asset of the future. If this proposal is to be realistic, the questions of the volume and the quality of the SDR are of critical importance. Unless the SDR can gain initial acceptance, within the ambit of any new agreement, as an asset at least as strong as any alternative asset in terms of its value and interest yield, any such proposal is bound to break down. The Treasurer referred to the task now being undertaken by the Executive Board of the International Monetary Fund designed to formulate a system for valuing the SDR in terms of a ‘basket’ of currencies. The International Monetary Fund proposal to maintain the value of the SDR in terms of other major currencies would, of course, allow the SDR to maintain a constant relative value. Clearly there are detailed technical matters which will have to be determined by the Executive Board. For example, it cannot necessarily be assumed that a basket of 14 key currencies represents the most effective balance. The Treasurer made no comment about the effects a proposal of this type would have on the Australian dollar or its implications with respect to the Government’s future exchange rate policy. The proposal to use the Australian dollar as one of the component currencies of the new system would involve Australia in a totally new capacity in the process of international settlement. The Opposition believes that a far more comprehensive statement on this aspect of the negotiations is warranted. Passing reference to a matter which has such far-reaching implications is clearly unsatisfactory.

The Treasurer failed to note the Committee’s views favouring the international adoption of exchange rate policies which it referred to as a ‘stable but adjustable form’ of exchange parity. The view held by the Committee is closely compatible with the Opposition’s commitment to the exchange rate which is not based on a fixed parity with the United States dollar. The Opposition views the decision to wind-up the Committee of 20 as appropriate.

In our view the Committee has proven to be a cumbersome piece of administrative machinery. Questions of international monetary policy are, of course, extremely delicate and sensitive. We would hope that the more streamlined Council of Governors will prove a more effective vehicle for negotiation. However, we regret that the most recent discussions were substantially affected by the recent oil crisis. Although this did serve to emphasise, more than any recent international circumstance, that the world’s economic problems do not originate with the mechanisms of international exchange.

Notwithstanding the immediate problems arising from the oil crisis, we welcome the new spirit of flexibility and pragmatism in international monetary negotiations which has arisen as a result of the Rome deliberations. The test of any international monetary system is not so much the structure of formal rules, but rather its capacity to evolve acceptable standards of behaviour and channels of effective communication in the very testing periods of negotiation that still lie ahead.

Our major area of difference with the Government derives from 2 different approaches to exchange rate policy. There is clearly no justification for continuing to maintain a fixed parity with the American dollar. Movements in the Australian exchange rate should not be based on the monetary policies and balance of payments developments in the United States. As a first step, the value of the Australian dollar should be determined on a trade-weighted basis. The currency rate would be calculated as a weighted average of the currencies of our major trading partners. The Reserve Bank could then set the exchange rate on a daily basis by announcing rates of exchange against other currencies which keep the trade-weighted exchange rate at the desired level. Movements in the exchange rate would be determined in consultation with the Government, but would respond to market forces. The Government, of course, would have ultimate control over any decisions made. Excessive fluctuations could be avoided by setting limits within which the rate could move in a specified time period. The precise limits should be announced after consultation with the Treasury and the Reserve Bank. The limitations of fluctuations to a band between 3i per cent to 5 per cent on either side of the initial rate within a 3-month period would be a suitable constraint. This would be wide enough to permit adequate flexibility but narrow enough to prevent destabilising movements. A new 3-month period would begin each day when the new daily rate is set. The aim of such a limitation is to minimise short term fluctuations, not to impede longer term adjustments in response to market pressures.

The determination of a daily rate by the authorities would eliminate destabilising speculation which can occur when a central rate is set, around which fluctuations can occur within defined limits. In these circumstances speculation can force changes when the rate moves to the outer limits of the band.

The adoption of these arrangements would eliminate the uncertainty which now exists. While uncertainty would be minimised with a truly fixed exchange rate system in the world, in present circumstances this appears unlikely to be achieved until international monetary policies are more integrated. The adoption of an independent rate for the Australian dollar would allow Australia to avoid inflationary influences by setting up an appropriate exchange rate in trade-weighted terms. There is no need to maintain the United States dollar link to achieve this. It would not, however, be a panacea for our inflationary problems. The responsible domestic policies that the Labor Party has so far refused to implement are still very much required and will be increasingly so in the future.

The Liberal Party also believes that the advantages of a more fully developed foreign exchange market should be considered. The adoption of an independent rate for the Australian dollar would be a first step towards establishing a foreign exchange market. We see substantial advantages in developing such a market. It reduces the need for government administration of exchange rate policy, and allows market forces to obtain some influence. It would necessitate and facilitate the development of a more adequate forward exchange market. This, of course, is most important in a world of floating currencies. Finally, the Australian dollar would tend to be used to a greater extent than at present as a trading or vehicle currency, and would encourage foreigners to use Australian insurance, discounting and other banking facilities. (Extension of time granted.) I thank the House for its indulgence. It should be noted that the development of a foreign exchange market does not necessarily mean a free float of the Australian dollar. It does, however, enable market forces to influence the rate of the Australian dollar. In any event, the Reserve Bank would still intervene to place limits on the short-term fluctuations of the Australian dollar.

The Opposition attaches high priority to the current discussion of international monetary reform. For a major trading nation, such as Australia, it is critically important that problems of exchange and international monetary settlement be resolved as expeditiously as possible. We cannot isolate ourselves from the progressive deterioration of the international monetary system. It is therefore in Australia’s interests to participate fully in the determination of a comprehensive program of reform. In this regard, the Australian Government should adopt a more flexible approach to exchange rate adjustment. In this context also, it would be irresponsible for the Government to hold off any decision on exchange rate policy until forced to do so by significant deterioration on our external account.

In summary, we welcome the Treasurer’s statement and the active participation of the Government in the process of international monetary reform. However, we believe that the Government must take action to change its present policy towards Australia’s exchange rate along the lines which have been foreshadowed in this address.

Mr HURFORD:
Adelaide

– I was interested to hear the Deputy Leader of the Opposition (Mr Lynch) once more expound this extraordinary new found policy of the Opposition in relation to exchange rates. He did so in this short debate arising from the report of the Treasurer (Mr Crean) of the last Committee of Twenty meeting which took place in Rome. I say that this policy is extraordinary because we all know that when the Australian Labor Party took over in December 1972 it was faced with a crisis exchange rate position. It was faced with the position of money flowing into Australia at an enormous rate and Australia’s balance of payments running in a very surplus form. Indeed, our currency was so undervalued that it almost was not true. We are today suffering from the aftermath of that situation. We are suffering from the poor financial leadership of the previous McMahon Liberal-Country Party Government. I think that this is pretty well recognised; even, it would seem, by some former Ministers in that Government. They are now turning a complete somersault and coming to the point of view that there ought to be more flexible exchange rates.

I am not entering into the argument at the moment as to whether our exchange rate should be tied to the American dollar. I believe that it creates great administrative difficulty for a small country like Australia if its currency is not tied to some major currency. I believe this is the reason for the delay and I accept the difficulties which have been outlined, not just by spokesmen from the Opposition but also by people on this side of the House, in the time of changing exchange rates. But I am bound to point out once again the extraordinary metamorphosis that has taken place in the Opposition parties from the position where they should be condemned for the situation they created in the Australian exchange rate history arising at the time of the Smithsonian agreement, when I believe that probably the Australian Country Party wagged the Liberal Party tail. I should not be too harsh on the Liberal Party, but if it is prepared to take the Country Party into coalition it deserves what it gets from doing that.

I shall not speak for long in this debate because I realise that there is a tremendous amount of business to transact in the House today and that spokesmen from the Opposition have been asked to curtail their speeches. But in the short time that I am debating this statement in the House I wish to place emphasis on the fact that Australia’s inflationary problems are so much due to the international transmission of inflation. I believe that it is absolutely vital that our Treasurer should attend such meetings as he did in Rome. I congratulate him for reporting so promptly to this House after we resumed on what took place in Rome. I am glad to note - I think he has made this public, but if not I am sure he would confirm at the first opportunity - that he will be attending the next meeting of the Committee of Twenty in June. As the Deputy Leader of the Opposition pointed out, at this meeting the Committee of Twenty will be terminated but only because it will convert itself into the Council of Twenty. The words contained in a Press release by the Treasurer at the time of the Rome conference emphasise how great is this international transmission of inflation and how great is this interdependence between the economies of the various countries. The Treasurer stated:

In the last 25 years … no single event has dramatised the interdependence of the world economically as what we currently call ‘the oil problem*.

I want to talk also about just how the interdependence occurs with inflation. There are 4 methods by which inflation is transmitted from one country to another. The first one is on current account. When one country, say, Australia expands its demand, then its imports increase. This of course places great strains on the countries from which the imports come, thereby increasing real demand in those other countries. This is one way in which we are so interdependent Another way is of course on the capital account When one country changes its interest rates this causes capital to flow. If it raises its interest rates, capital flows inwards. If it decreases its interest rate then capital flows outwards unless it has some other direct methods of controlling thai capital movement. This, of course, has a tremendous effect on the volume of liquidity of a country and has an effect on the inflation rate in that country. Then, in some countries, particularly where some countries are near each other such as in Europe, there are common wage claims which cross borders. So if there are tremendous wage claims in one country these are transmitted, particularly within the same industry, to another country. The fourth way in which inflation is transmitted is by means of what I call common sociological and other pressures in the various economies. What happens in one country very definitely affects what is happening in another.

Arising from that point I want to say that it was the persistent and massive monetary expansion originating from the United States at the time of the deficit-financed escalation of the Vietnam war that has caused such a tremendous increase in inflation in the world. There is no doubt, if we want quickly to define inflation, that the simplest and most accurate definition is too much money chasing too few goods. This does not apply only within the borders of one’s own country; it also applies in the international sphere. If there is too much liquidity internationally chasing a lack of goods and services representing that liquidity then there are problems in the world. It was because of deficit financing, I assert, in the United States that this international liquidity did grow at such a tremendous extent and has caused the sort of inflationary problems we are suffering today. In addition to that, there are cyclical changes which take place. The world economy becomes more buoyant and vice versa. If one studies economic history one can see these changes. Unfortunately, such a cycle has exacerbated the situation caused by this very great increase in international liquidity.

The next point I wish to make arising from this is the effect of exchange rates, which brings me back to the statement of the Treasurer and the reason why the Committee of Twenty meets. The major link between prices across countries is the exchange rate. Breaking that link usually requires variation of the exchange rate. A rigid exchange rate tends to guarantee that a country shares in the broad trend of world prices. Countries may resist such trends by steady revaluation combined with a degree of monetary restraint. Attempting to resist world inflationary trends without revaluation causes the domestic currency to become overvalued and this then generates speculative inflow. The resulting increase of liquidity ultimately aggravates domestic inflation as firms and individuals take advantage of the abundance of credit and purchase additional goods, bigger and better houses and so on. That is precisely the situation that this country has suffered in 1973 and now in 1974, due to the lack of action on the part of the previous Government to regulate properly our exchange rates at the time of the Smithsonian Agreement - that was at the end of 1971. Instead we had to wait until we had a Labor Government in 1972. When it happened our political opponents yelled from the rooftops that this was going to cause tremendous disaster in this country. Now they have gone through such a metamorphosis - I repeat the word - that they believe that we ought even to untie our exchange rate from the United States rate and have more of a floating exchange rate. This is a complete change in attitude. Thank goodness a spell in opposition has done them some good, although it is hard to find any other areas where this applies.

So to the meeting. There were 5 purposes set out by the Treasurer in his statement, which I will not repeat. It was an honest statement because he pointed out how the ball game has changed from that which applied at the meeting of the Committee of Twenty previous to the one in Rome. The old picture was one of the United States in deficit and Japan and Europe in surplus. Australia was in surplus. The Treasurer has said time and again, and he repeats this in the statement, how necessary it is for each of the individual countries to get their own house in order. A declaration of what sort of international value should be fixed for drawing rights, or SDRs, will not cure the international problems. We need to cure this problem in our own country. The Australian Labor Government can be proud that it did take measures to cure our own problems - our own chronic surpluses. We became a good neighbour for the rest of the world. We can now go to the Committee of Twenty meetings, hold our head up high and talk to these other nations in these important councils. If we are to do anything effectively about world inflation we need to hold our head high and say that we have done something about our own chronic problem when we upvalued our currency, indeed even when we cut our tariffs. We can implore others to do what we have done. We must declare, of course, that the United States did take measures as well which have borne fruit.

So we have this new ball game. The picture in Rome was very different because the United States now has moved into surplus and Japan and Europe into deficit. The ball game has also been made very different because of the oil crisis. So the exchange rate adjustments become the means of reforming the world currency situation rather than the more institutionalised means. To use the Treasurer’s words in his statement, there was a ‘vindication of pragmatism in economic policy making’. I now come to the oil crisis and what that has caused. I am an optimist. I believe that although we cannot expect the prices of oil charged by the various Arab nations to be reduced in any way, the Arabs will, I hope, out of these surpluses help the underdeveloped countries. In the past it has been up to the Western nations to give aid of all sorts to the underdeveloped countries. Now the rich nations - the nations with the surpluses - will be the oil producing nations and they have a responsibility to help underdeveloped countries such as India and Pakistan which are not oil producing countries.

I will not say more about the Rome meeting other than to repeat my congratulations to the Treasurer. I believe that we must ask the Press of this country to take a new look at the important meetings that are going on around the world instead of stirring up the emotionalism that exists among people who do not understand these affairs, such as stories about somebody taking yet another trip abroad. They should put the emphasis where it is due, and that is on the great importance of these international meetings. Nowhere is this clearer than in meetings of the Committee of Twenty and meetings of such bodies as the International Monetary Fund, because so many of our problems of high prices in this country are directly related to the world financial situation. So the world financial scene is a rapidly changing one, and co-operation based on consultation seems to have more chance of success than a policy based on the acceptance of a firm and detailed book of rules. So meetings such as the meeting of the Committee of Twenty have to be held. Of course, we must send our top financial men to such meetings. In this country the top financial man is the Treasurer, and he is the person who should attend the meetings. The Treasurer was at Rome. I am glad that he is to attend another meeting in June. I am glad that he has reported fully to this House.

Mr GARLAND:
Curtin

– The honourable member for Adelaide (Mr Hurford) made a party political speech which was a hotchpotch of economics and misrepresentation. I would like to take up 2 major points which he made. Of course Australia today has an over-full surplus in its trading account, particularly for the conditions of today, which are very different conditions from those which applied IS months or 18 months or 2 years ago. The question of attendance at finance meetings is nothing new. For years Treasurers have been, quite properly, to meetings not only of this Committee of Twenty but also associated bodies. I read the Treasurer’s statement carefully and I heard him make it. I believe that in general it is a good statement and I congratulate him upon it. It is not particularly full, bearing in mind the complexity of the issues involved. To take the issues into account fully would require a statement of very great length which I think would be tedious for many honourable members. The Treasurer has tabled the speeches which he made at meetings of world finance bodies, and those speeches are available for perusal. He might consider tabling a document on some of the issues which have been taken up today - particularly by speakers from the Opposition side; I do not think that he has yet received any suggestions from honourable members on his side - so that we may see what are the major and immediate policies of the Government.

I have undertaken to speak for no longer than S minutes today so I regret that I will have to be reasonably brief. The first matter to which I shall refer is the speech of the Treasurer last week. when he said, referring to the Executive Board of the International Monetary Fund:

Meanwhile work will proceed on other main aspects of reform with a view to having all work completed by June 1974. These aspects include rules for floating, tits role of gold, the link between SDR creation and development finance, and so on. It will net be possible to reach agreement on all these matters by June 1974 but I do not believe that should necessarily be regarded as a bad thing.

A little later on he said:

Monetary reform will become a matter of evolution rather than declaration and we have always believed that is the way it should be.

Earlier he said:

This is not to say that monetary reform, as such, has been forgotten. Work will continue on it. But priority will be given to those aspects of reform relevant to recent developments in the world economy.

I can say only that it is an extremely tactful way of referring to monetary reform to say that it has not been forgotten. One can say only: ‘Yes, but it is very far off.’ There is certainly a great body of opinion around the world, particularly in Europe to my certain knowledge, that there will not be any real monetary reform. Indeed as the Treasurer has said, as it has been said widely in Europe in recent months, anything that had been agreed - supposing that there had been the will to agree - before the oil crisis of OctoberNovember last year would have had to be scrapped.

In December and January last I had the opportunity of visiting and speaking with governors of central banks and with senior executives of commercial banks in all the major European capitals and in Washington. Therefore I am able to compare the Treasurer’s statements with their views. I am happy to say that, in the main, his views are in agreement with their assessment of the situation. Further, there is some belief in the IMF that the 2 questions raised at the January meeting which has been referred to were really the 2 smallest issues that could have been put on an agenda. What is in fact happening is a lot of talk which has, I suppose, the appearance of genuine negotiation but which is not achieving very much and is not likely to achieve very much. Therefore it is inescapable to conclude that there is to a large extent an_avoidance of real issues. The Committee’s position on exchange rate policy, which has been referred to as ‘stable but adjustable par values’, only underlines that this is a formula as a result of trying to put together in one statement conflicting views, which are in fact unresolved conflicts. The greatest advocate of fixed parity - France - is now floating its currency. So flexibility is on the rise, but what restraints are left?

So one can ask: What will be the standard of the on-going discussion? How much real attempt and political will is there to reach an agreement? There have been discussions for many years, and certainly nothing will be determined by June 1974. There never was a chance of it. The Treasurer’s statement about managing and adapting the monetary system’ must be seen against that background. Nevertheless I think that the Treasurer’s statement shows concern about the position and his own desire to have some improvements effected. I recognise that he cannot be any more blunt than he has been in putting forward views which are compatible with Australia’s interests, considering the weight of the office which he holds.

Mr SINCLAIR:
New England

– I want to add just a few words to this debate. Like my colleague the honourable member for Curtin (Mr Garland) I want to take up some of the statements made by the honourable member for Adelaide (Mr Hurford), who preceded him. The honourable member emphasised the degree to which inflation is transmitted from country to country. Statistics show that under this present Government there has been a marked escalation in inflation in Australia. If the honourable member for Adelaide cares to refer to a series of 3 articles by Professor Hogan, Professor of Economics at the. University of Sydney, which were printed in the ‘Sydney Morning Herald’ in recent weeks he will see a fairly convincing argument which demonstrates that, irrespective of inflation overseas, as a result of currency appreciation and shortages of commodities in Northern Hemisphere countries Australia cannot claim that inflation here is in any way related to inflation elsewhere.

The substance of the statement made by the Treasurer (Mr Crean) is not the same as that of the honourable member for Adelaide. The first thing I want to say about the Treasurer’s statement is that everyone who is in any way concerned with the productive industries in Australia is becoming more and more alarmed at the implications of this Government’s policies towards those industries. Productive industries operate in two ways. Certainly they are the producers of wealth - the wealth that enables this country to live and survive, to finance the high and rising standard of living which we enjoy. But productive industries do not produce only goods for consumption within Australia. They contribute significantly to the generation of funds earned overseas. I do not have time to go into all the aspects of this matter. One aspect is the generation of overseas funds and the other is the degree to which, by selling abroad, those commodities are subjected to a lot more competition than they would have if they were sold on the domestic market and, because there is a greater volume of production, the individual unit costs of production are reduced.

Productive industries have been very hard hit in a number of ways by policies of this Government and in no way more than through currency changes and currency instability. Currency instability is not the result of actions of this Government but it is true that at the moment Australian currency is at too high a figure in relation to most of our international competitors and certainly in relation to the net returns for those who are the producers of wealth in this country. I am concerned that in this statement the Treasurer has not adverted to what seems now to be an inevitable step - that is, the freeing of the Australian dollar from its tie with the United States dollar. Nor has he adverted to the sorts of measures which I believe are necessary to set up a stable major international unit of exchange currency. When referring to special drawing rights the Treasurer mentioned that he sees in them the main reserve asset of the reformed monetary system. I accept this. But I believe that special drawing rights can and should have a role far more extensive than that. Obviously in the present world environment there is a major disability in excess dependence on either the United States dollar or the pound sterling as units of currency for international trade contracts.

Fortunately there has been a growing acceptance of the use of Australian dollars for the sale of Australian commodities abroad. Regrettably, the Australian dollar cannot be used in every circumstance. Let me advert to one such instance - the sale of asbestos overseas, which is set by a Canadian company which largely dominates world trade in asbestos. The trade is based on Canadian dollar prices, and world prices relate to the Canadian dollar levels. It is of no use selling in Australian dollars as the world price is set by another currency and the relativity of Australian dollars to Canadian dollars is the determinant of the actual price that the producers in Australia might receive. Of course, the same can be said of many agricultural products. It is of concern that the Treasurer, who is a member of the Committee of Twenty, which is about to be known as the Council of Twenty, has not taken an initiative to see whether some new basis of international exchange can be established. I believe that statutory drawing rights are one such vehicle.

Two other aspects of the Treasurer’s participation in the Committee need to be spoken of. One is that as a result of Australia and other countries becoming members of the Committee of Twenty, it would seem that the Europeans are no longer as concerned with the operations of the Committee as they once were. Its nomenclature change may indicate no more than an enhanced status, but I do not believe that it will have an enhanced function. I believe rather that the Europeans are perhaps turning to other means by which they can determine the relativity of their own currency and their own trade patterns with those of other countries. The whole position is of course being aggravated by the oil crisis to which the Treasurer has referred. However, I believe that it is unfortunate that there is this apparent refusal of the Europeans to give to the Council of Twenty, as it is about to become, the significance which such an international forum deserves.

There is a second aspect of the Treasurer’s participation in the Committee of Twenty to which I wanted to advert. I think it is time that the Treasurer, representing Australia, took a stance that was a little more aggressive than the one he seems to have taken or that this statement would indicate. It is an extraordinarily important area to this country. After all, at the moment we are either twelfth or thirteenth in volume of trade in world areas. This body is the group through which the payment to Australian industry and Australian producers is determined. The value of Australia’s currency is most important to everyone who is selling goods overseas and to a country like Australia, with a marked dependence on overseas markets, this Committee becomes all the more important. I do not believe it is sufficient for the Treasurer merely to take a fairly neutral line. I think it is important that he becomes an aggressive participating member of this Committee and I suspect from the general tone of this statement that that has not been so.

The third matter to which I wanted to refer is that, in his approach within the Committee, I would hope that the Treasurer does not look at the situation just in terms of correcting the international balance of payments. I certainly accept the general concept that he has advanced of the role that he has suggested the Committee should have in restoring equilibrium to the international balance of payments situation. However, I see the Committee as having a far greater significance in world trade patterns than this statement alone would suggest. I would hope that the Treasurer might take note of the tremendous importance to a country like Australia of stability in currency relativity and perhaps be prepared to raise some of the needs of Australian export commodities in the deliberations which will take place in June.

Finally, I do see and accept much of the merits in the concern which is expressed about the difficulty of establishing the value of statutory drawing rights in terms of a basket of currencies. I recognise the problems in assessing a rate of interest acceptable both to those countries that are prospective creditors and those that are prospective debtors. Yet 1 believe that concept of statutory drawing rights is imperative of resolution both in terms of statutory drawing rights becoming a main reserve asset of a reformed monetary system and also a possible alternative currency of international exchange.

As to the oil crisis and the impact that this will have on the establishment of some equilibrium, it is quite apparent that the oil crisis has upset - indeed, it has reversed - the pattern to which the Treasurer referred in the beginning of his statement of those currencies which have had a chronic balance of payments problem. In this reversal, one would hope that there is not a tendency by countries to devalue their currencies to too great a degree in order to reverse this trend. It is quite apparent that, in the depreciation that some currencies will suffer as a result of the oil crisis, there could be a tendency for countries to panic and, at a time when there is no real currency equilibrium, countries like Australia, which as I have explained are still so dependent on having a reasonable currency relativity to those countries with which we trade and with which we are competitors, will need to recognise the impact that marked depreciation can have on our own economic position. But to an even greater degree there is an adverse impact on those countries which are, to use the current phrase, the lesser developed countries of the world. These countries all come out of a world imbalance of payments and currency depreciation far worse than the industrialised countries do.

A very interesting article is contained in the September 1973 issue of ‘The Economic Record’. It was contributed by M. Polasek on the ‘IMF Special Drawing Rights and Economic Aid to Less Developed Countries’. In that article, he draws out some of the disabilities which he sees in the present system regarding less developed countries. He suggests in a form which I am afraid I would not support, the use of a change of the basis of allocation of SDR units to enhance development purposes. I think that this would have little merit as it relates to Australia. However, in this article Mr Polasek also points, quite validly I believe, to the implications of currency instability on the lesser developed countries of the world. It worries me that, in the deliberations of the International Monetary Fund or the Committee of Twenty, the consideration does not seem to have been given to the position of these less developed countries which I believe is necessary. Currency is vital to international trade. I believe these developing countries, which are essentially dependant on aid flows from the developed countries and which are selling largely unprocessed agricultural commodities, will be very severely affected economically if there should be aggravated currency instability which seems to be emanating from the world oil crisis. I would hope that, in the efforts the Treasurer undertakes at the forthcoming meeting of the Committee, he might pay some attention to this aspect of currency instability.

I believe that the Committee of Twenty is very important to Australia and that the action that has been taken in establishing statutory drawing rights to be worth while. I would hope that an extension of the role of statutory drawing rights might permit them to be not only the means by which there can be a restoration of international balance of payments equilibrium, nor only that there might be a new worth while reserve asset of a reformed monetary system, but that also there might be a new valid, available and stable international unit of currency which can be used in international trade arrangements.

Question resolved in the affirmative.

page 848

WOOL INDUSTRY BELL 1974

Second Reading

Debate resumed from 20 March (vide page 667), on motion by Dr Patterson:

That the Bill be now read a second time.

Mr HALLETT:
Canning

- Mr Deputy Speaker -

Mr Daly:

– Would you mind if I threw a can?

Mr HALLETT:

– I did not hear the comment from the Leader of the House. I will have to ask him to speak louder if he is referring to this debate. This debate has resumed from 20 March and relates to the Wool Industry Bill 1974 which makes certain moneys available for the purposes of research and promotion in the wool industry and for the administration of the Australian Wool Corporation. Up to this point, the debate has been concerned mainly with research and promotion. We have heard many debates in this House in relation to these activities. No doubt research and promotion are important in most aspects of life. It has been proved beyond any doubt that research and promotion will not hold the wool industry, if I can use that term. We have seen millions of dollars spent on these 2 aspects over the years. Over the last few years we have seen the wool industry in dire straits, although millions of dollars has been spent on research and promotion. Everybody was saying how important research and promotion were. They are important, but they alone will not maintain a stable wool industry in this country.

The most important feature of the Bill is the provision that finances the Australian Wool Corporation. It was obvious from past experience that without a sound selling policy and some organisation such as the Australian Wool Corporation to look after the interests of Australia and wool growers in general throughout Australia and supervise prices, about which I intend to say something before I sit down, the wool industry would return to the doldrums in which it Has been in the past, and all the research and promotion in the world by themselves would not save the industry without a sound selling policy and a government standing behind that policy.

There has been some change in the levy that is to be placed on wool growers throughout this country. It is presently 2.4 per cent of the value of shorn wool, for 1974-75 it will be 2.75 per cent, but the Bill provides for a maximum rate of 3 per cent. This means in effect that within a period of 12 months there will have been 2 increases to be borne by the wool industry, and there could well be a third increase to bring the levy up to the maximum of 3 per cent if the price of wool is allowed to drop below the price at which it has been selling in the past.

Nobody doubts the wisdom of research in any industry. It is important. I am not saying that it is not important. It is important, depending upon what sort of research is taken on. Nobody doubts the importance of promotion, but I have often wondered about some of the promotion which takes place in the wool industry. For instance, promoting some high fashion by Dior in Paris will not, in my opinion, assist the wool industry to any great degree. The majority of wool that is absorbed in the world is not in this area; it is in the common garment of the day, and I would suggest that very little of this wool sees any promotion. We know that a lot of money is spent on promoting high fashion and selected garments in the major cities of the world. I very much doubt the wisdom of that, but that is another subject.

Today I want to speak mainly about the operations of the Australian Wool Corporation as associated with the present Government. It is interesting to note that on 20 March the honourable member for Wilmot (Mr Duthie) mentioned that the Australian wool industry was in agreement with the proposals being put forward by the Government in this Bill, and he quoted as his source the Australian Wool Industry Conference, which he said was in agreement, and he suggested that therefore the industry was in agreement. This is a complete somersault by the Government on what it was saying when in opposition. We find this so often. When in opposition, the Government would not accept the findings of the Australian Wool Industry Conference on the ground that its views were not a true reflection of the views of the wool industry in Australia, but now we find the reverse. The Minister for Northern Development and the Minister for the Northern Territory (Dr Patterson) in his second reading speech made a similar observation to that of the honourable member for Wilmot, so the Government has changed course in relation to recognition of the Australian Wool Industry Conference.

There has been a severe drop in the price of wool in more recent times. This is giving considerable concern to the wool industry. In December 1972 the average price of wool was 173.06c per kilo greasy. It continued very strongly right through 1973, when it was between 190c and 200c. In January-February 1974 it started to drop. The latest information which I have shows that in the week ended IS March - not so long ago - it had dropped to 157.32c, and it still seems to be declining. We have seen this happen previously, and that is why the Wool Industry Act 1972 was brought into being. As I said previously, all the research and promotion in the world were not doing anything as far as the industry was concerned. In 1970 the price of wool was down and so the original Act was brought in. It was very successful and was upgraded in 1972. Section 41 of the Act is important. That deals with what is termed the flexible reserve price scheme operated by the Corporation. It sets out the details of the scheme. I say quite frankly that this section of the Act gives all the power that is required to see that the price of wool is maintained at a reasonable level. I claim that at the moment the price is going down to an unreasonable level. Section 41 (3.) of the Act states:

The Minister shall, from time to time, after consultation with the Treasurer, inform the Corporation in writing of the policies and principles that the Government of the Commonwealth considers should be followed and applied by the Corporation in the operation of its reserve price scheme.

Sub-section (4.) states:

The Minister may, on behalf of the Government of the Commonwealth, if he thinks it necessary to do so, give a direction in writing to the Corporation with respect to the operation of the reserve price scheme of the Corporation, and the Corporation shall comply with the direction.

It is interesting to note that sub-section (3.) provides that the Minister ‘shall’ and that subsection (4.) provides that the Minister ‘may’. This is the whole crux of what I have been arguing in this House for so many years. Of course I do not know what the Minister or the Government has done in relation to section 41 of the Act. I would like to ask the Minister and the Government several questions. Firstly, has the Minister carried out his responsibilities under section 41 (3.) of the Wool Industry Act 1972? Secondly, how many times has the Minister written to the Corporation as provided for under this section since December 1972? Thirdly, what directions have been given by the Minister to the Corporation relating to the reserve price? Fourthly, what undertaking has been given by the Minister relating to the capital requirements of the Corporation? Fifthly, what direction has the Minister given to the Corporation under section 41 (4.) of the Act? If the Government and the Minister responsible will answer those questions we might know something of what is going on and whether the Government is supporting the Corporation.

The capital that the Corporation had when the previous Government went out of office was substantial. It was made available by the previous Government when it was required by the Corporation, which operated with great success to bring the industry back on to its feet. I do not know what the Government ls doing, but I do not know that the price of wool is going down. Has the message been received by the Corporation from the Government as to what it is to do? The wool industry should know that it is not only the Corporation that is responsible for the carrying out of this Act, which is quite correct, but also the Government, which also is quite correct. The Government is also involved because the wool industry is so large. It is Australia’s greatest industry; so much money is involved and so much capital is required. Let me say here and now that all the capital borrowed by and made available to the Corporation in one form or another - loans underwritten by the Government or moneys allocated under legislation passed by this House - has been repaid by the Corporation and interest has been paid on it. So it was a good investment for the Government of the day. All I want to say to the Government is that it is still a good investment. But what is the Government doing now?

I would like the Government to tell the wool growers of this country where the Industries Assistance Commission fits into the picture. We know that the Industries Assistance Commission is charged with the responsibility of investigating the granting of assistance to industry. Has the situation developed through the enactment of the Industries Assistance Commission Act whereby the Government has to ask the Industries Assistance

Commission to determine whether the Corporation is to have some capital backing? I would say that that is a totally impossible situation in which to put any industry. It is fairly obvious that that is the position in this respect because in putting forward its marketing plan the Australian Wool Corporation left out the major issue, that is, the financing of the plan. It did not leave it out entirely; it made some suggestions to the effect that it might be a.bh to get its money from private sources. Of course, no plan for this sort of operation can function successfully if it does not have the sound backing of the government’ of the day.

The Corporation, in its choice of what words to use in relation to that section of its report to the Government, said that it could possibly get finance from private sources. It gave no indication in its report that it wanted backing from the Government. I have no doubt that it had in the back of its mind the situation in relation to the Industries Assistance Commission and knew in its own mind - it probably had legal advice on this aspect - that if it asked for assistance from that source it would have to go before the Commission to get it. I say here and now that the Corporation cannot possibly work unless the government of the day is prepared to stand behind it, as it did prior to 1972. It was only the Bills that were put through this House and the other measures that were adopted by the government of the day that broke the stranglehold on the industry itself.

That brings me to a statement which I read in the ‘Australian’ of 2 April, which is today’s date, headed ‘Rural industries must stand on own feet: PM’. The Prime Minister (Mr Whitlam) has obviously made a speech in which he has stated that he expects the rural industries to stand on their own feet. That is fair enough. I have said in this House on many occasions that the wool industry can stand on its own feet. But what does the Prime Minister mean when he says that? Does he mean that he will lend it no money but that it must stand completely on its own feet? Does that statement mean that the Government will not support the wool industry at all? What does the Prime Minister mean?

The Prime Minister is reported as having gone on to say: ‘We want fair prices for our wool and a stable system of marketing*. Unless the Government is prepared to back the wool industry with capital on a sound basis that situation will not be achieved. Surely experience has shown that to be the case. I would like some interpretation of what was meant by the Prime Minister when he said that. Of course he has also said that all subsidies will go. We have found that out in the short period in which the Australian Labor Party have been in government. All subsidies are going out of the window very smartly. All assistance is disappearing. Does the Prime Minister expect the rural industries to stand on their own feet in the true sense of the term? Will the other industries in Australia also be expected to stand on their own feet?

Mr Calder:

– What about the shipbuilding industry?

Mr HALLETT:

– The shipbuilding industry is another classic example. Will it be expected to stand on its own feet? There are many industries in this country that receive high rates of protection. I am not arguing for or against protection at this moment. Whether it is or is not high is a different matter. The protection of industry is one subject that we could debate for a long time. The rural industries will be expected to stand on their own feet, as the headline suggests, but will the other industries in Australia also be expected to do so? Is tariff protection to be cut out entirely? That is what that statement means. Will all industries have to stand on their own feet? I can imagine what the unions will be doing around this country before very long if that situation develops. If this term were to be applied to the wheat industry I should expect that the Australian consumers would be called on to pay the world parity price for their wheat, which would be about double what they are paying at the moment. Is that what the Prime Minister means when he says that rural industries will be expected to stand on their own feet? Many industries would be in much the same position. These things have not been explained.

Getting back to the subject matter before the Chair at the moment, I would like to see some statement made by the Government as to what it intends to do with respect to the wool industry. The Australian Labor Party made a lot of statements before December 1972 as to what it would do with the wool industry if it were elected to office. I could spell them out, but I do not think that that is necessary. The whole of the industry and everyone in this House knows what was said at that time. What is important now is not what the Government will do in relation to new legislation, although that may be of some importance, but what it will do in relation to the legislation that is on the statute book in the form of the Wool Industry Act 1972, which gives to the Government and the Corporation all the power in the world to do what needs to be done at the moment in relation to the provision of finance, which is what this Bill is all about. Is the Government prepared to stand by the sections in that Act? Is the Government prepared to stand up to the pressures from overseas.

It should be remembered that 95 per cent of the wool clip is sold overseas. Pressure is being brought to bear by overseas countries to force the price down. They know only too well when the situation is getting a little weak. They try the market. If the Government is not prepared to stand up to them it will be an absolute tragedy for the wool industry of this country. I hope that some responsible member of the Government - the Minister for Primary Industry (Senator Wriedt) is not a member of this House - will stand up and make some statement as to what the Government is doing to stand behind the Corporation or will make a statement that the Government will not allow the wool price to descend to a lower level than at present. In my opinion it is too low now. If the Government allows the deterioration in the price of wool to continue and if the price of everything that the wool grower has to purchase today continues to increase it will be another tragedy for this great Australian industry. I ask somebody in authority - preferably the Prime Minister - to come into this House and tell us what the Government intends to do in relation to section 41 of the Wool Industry Act 1972.

Mr FISHER:
Mallee

– This Bill, which seeks to amend the Wool Industry Act 1972- 73, is a most important and significant piece of legislation. It is important firstly because its provides for the projected cost of wool research and promotion as well as the cost of financing the marketing and administrative expenses of the Australian Wool Corporation. The significance of this Bill is that the basis of the Government to grower contributions has been changed. In the past the producers have made contributions on a dollar for dollar basis. This legislation seeks to change that basis. As a result of its implementation the contributions will be closer to $3 from the industry and $2 from the Government. While on this point I would like to quote from the speech that was made a fortnight ago on this Bill by the honourable member for Wilmot (Mr Duthie). The honourable member complained that members on this side of the House were grizzling. He said that they were splitting straws over a difference of $400,000 between what the industry will contribute and what the Government will contribute. This is not the fact at all. The amount is not $400,000 but $23. 6m. To emphasise the point, may I place on record in Hansard what is contained in the second reading speech of the Minister for Northern Development and Minister for the Northern Territory (Dr Patterson). The Minister stated that in the first year of the program the industry contributes $22.9m. The Government’s contribution will be $21. 3m. The difference is $1.6m. In the second year of the program, the industry contribution will be $29.9m. The Government will contribute $19.2m. The difference is $10.7m. In the third year of the program the industry will contribute $32.2m. The Government will contribute $20.9m. The difference is $ 11.3m. As I said earlier, the total difference is $23.6m. I do believe that the credibility of the honourable member for Wilmot on this matter has to be doubted. We are not grizzling about $400,000. The amount involved is $23.6m.

Research and promotion within any industry, manufacturing or primary, is essential if modern techniques of production, of handling or of marketing are to be developed. At this stage, I must emphasise the appreciation of all Australian wool producers of the valuable and dedicated research carried out by the Commonwealth Scientific and Industrial Research Organisation. The gains that have been made at the producer level in techniques to increase wool productivity and quality over recent years by this efficient research organisation are incalculable. The research and techniques developed by CSIRO have not only meant large increases in wool production per acre but also the technological advances made in the manufacture and use of woollen products have enhanced wool’s place as the world’s number one fibre. This is a fact that I do believe the general population is now recognising.

The Australian Country Party supports this Bill. But I wish briefly to canvass 2 points that I regard as vital in any program of Government involvement in co-operation with an industry, whether primary or secondary. In this Bill, as I have suggested, the support given by the Government to the next 3-year program will decrease. On the basis of a $ 1,000m wool clip, the new levy of 2.75 per cent will bring an excess of funds which will correctly be carried forward for expenditure in future years by means of a trust account. The desirability of this action, I might point out, was stressed by my Party in the course of the debate on the Bill to give effect to meat industry levy charges. It is pleasing to see that the Government has recognised the necessity for a trust account to carry forward officially this increase in expenditure.

The rate of levy struck in this instance is geared to a total clip of $850m. The returns for wool during 1973 were at record levels. But, since October, as the honourable member for Canning (Mr Hallett) has pointed out, wool prices have dropped by 70c a kilo. This gives rise to my first query of the Minister for Immigration (Mr Grassby) who is at the table. Will the Government give an undertaking that, if wool receipts drop beyond the extent of the levy, the Government’s contribution will rise automatically? Wool promotion and research

have been financed from money provided by the Australian Government and by levy on the gross value of all wool shorn and sold whether at auction or otherwise. Contributions from the Federal Government approximately doubled between 1969-70 and 1970-71. As from 1 August 1970 grower contributions to promotion and research were reduced from 2 per cent to one per cent of the value of wool sold. The Wool Industry Act 1973, introduced by this Labor Government, increased this tax to 2.4 per cent, effective from 1 July 1973. Now, the Wool Industry Bill 1974, again introduced by this Labor Government, proposes to increase the tax on growers to 2.75 per cent of the value of shorn wool from 1 July 1974 for the following 3 years. At this stage, I ask for leave to incorporate in Hansard a table showing the amount of industry and Government contribution to wool research and promotion from 1968-69 to 1976-77.

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

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

Mr -FISHER - I thank the House. This table shows, I believe, that the former LiberalCountry Party Government obviously took into account the economic state of the industry at the time when research and promotion legislation was introduced. I impress that fact upon the Government.

My second query concerns the promotion of wool locally and internationally. It is my genuine belief that adequate Government participation in promotion finance is vital for 2 reasons.

The first reason is that the advantages of promotion expenditure spread to groups other than wool growers. The advantages spread to textile industries, to employees and employers in those industries, and, of course, to our sales outlets. Secondly, and probably more importantly, Government support gives incentive to the contribution of wool producers. I believe that if this Government incentive is not available we will find that wool producers will not have the same incentive to contribute towards the costs of promotion and research. I wish briefly in relation to promotion to comment on 2 speeches made a fortnight ago by, firstly, the honourable member for Wilmot (Mr Duthie) and, secondly, by the honourable member for Macarthur (Mr Kerin). These 2 rural members of the Parliament sit side by side but they have different views about the International Wool Secretariat. For instance, the honourable member for Wilmot, referring to the wool clip, said:

This production would not have been sold automatically just because it was wool or just because it was wool which came from Australia. It is misleading to say that we have sold our wool in total year by year if we do not pay a tribute at the same time to the fact that the promotion activities of the International Wool Secretariat and other groups have made it possible to get rid of our total production. What we have to sell must be publicised, advertised and promoted vigorously and with dedication.

The honourable member for Macarthur, in a speech in which he was referring to a Mr A. S. Watson of the Melbourne University who worked for the International Wool Secretariat for 3 years, pointed out that Mr Watson claimed that promotion policies of the International Wool Secretariat ‘have probably made wool prices more unstable’. Those are the views of those 2 honourable members who sit together in this House and represent rural electorates. Their views as to the value of the International Wool Secretariat are entirely different.

I wish also to mention the comments made in relation to the Industries Assistance Commission by the honourable member for Wilmot. I quote again from his speech made on that same day in which he said:

I hope that the Commission will look at promotion. What I really hope is that the Commission has the expertise to look at these things. 1 am still very suspicious of the Industries Assistance Commission when it comes to rural industries. I wonder whether the Commission knows the difference between a bag of wheat and a bag of oats. The Commission consists of a brand new team. I do not know of any champion rural man on that team. I have great suspicions about the Commission’s capacity to handle rural industry.

I wonder what happened to the honourable member for Wilmot and other rural members of the Australian Labor Party when we debated the Australian Industries Assistance Commission legislation some months ago. I wonder why at that time they did not stand on their feet and say exactly the same things as the honourable member for Wilmot is now saying, perhaps in an attempt to clear himself as an election looms on the horizon.

This Government has not endeared itself to the heart of rural communities. It would be fair to say that those comments are polite in the extreme. Government backing is necessary to give stability and confidence to all industries but in primary industry, where market prospects and prices rely heavily on supply and demand coupled with favourable climatic conditions, such Government support should be fundamental. No primary industries which are almost totally dependant on export sales can be expected te operate without protection in a developed and high cost country like Australia. In the past the wool industry has not asked for excessive government funding. It ha: not placed any unnecessary burden on the taxpayers. In fact the wool industry has played a leading part in developing the nation to thi benefit of the total population. It will continue to do so given satisfactory government recognition. I agree entirely with the honourable member for Canning who pointed out that financial backing for the Australian Wool Corporation is vital to the future of the wool industry. I seek an assurance from the Minister representing the Minister for Primary Industry in this House that his Government is giving adequate financial support to the Australian Wool Corporation to enable it to continue as a viable force in stabilising the price of wool at a satisfactory level.

Mr GRASSBY:
Minister for Immigration · Riverina · ALP

– in reply - In closing the second reading debate on the Wool Industry Bill 1974 I should like to thank honourable members from all sides of the Parliament for their contributions to the debate. It is rare that we have before the Parliament a measure which has the unanimous support of the industry and the unanimous expressed support of all sides of the Parliament. This is a matter of gratification to the Government and is especially welcome since this Bill is designed to provide for financing the projected cost of programs of wool research and promotion and for financing the marketing administrative costs of the Australian Wool Corporation during the 3 years commencing July 1974. The Government’s commitment to contribute to the 3-year program of wool research and promotion will provide an immediate and sure base on which forward programs can be developed.

During the course of the debate a number of points were made, although there has been no opposition to the Bill itself. There has been some minor criticism that the Government has not stated whether it will ensure that research objectives will be met if growers’ incomes fall in the future. Also there have been some general criticisms about the Government’s policies in the rural sector. Concerning the first point, the finance arrangements have been based on what can be regarded at present as only reasonably conservative expectations of returns from wool sales over the period 1976-77. In the second reading speech it was mentioned that the wool tax in 1974-75 could possibly result in some surplus being added to the reserves of the Wool Research Trust Fund. This reserve will be available, to draw on if necessary in the future. The Australian Wool Industry Conference has not suggested that the expectations on which financing is based are unrealistic. That, I think, covers the points that have been raised during the course of the debate. Arrangements beyond the 3 years provided for in the Bil! are likely to be subject to increased forecasting problems. In this regard Senator Wriedt, the Minister for Primary Industry, has already announced the Government’s intention to refer to the Industries Assistance Commission proposals for future programs of wool research and promotion beyond 1976-77. This would seem to be in line with what the Australian Farmers’ Federation particularly has been keen to see, namely, an examination of these matters outside the realm of purely party considerations or purely political considerations and based on a proper assessment of what is needed by industries.

Reference has been made as to whether industries will be able to stand on their own feet. It is not a bad idea to remind ourselves that the sum total of protection and bounties paid to all Australian industries - primary, secondary and tertiary - amounts to in excess of $3, 000m every year. It is interesting that of that amount something of the order of only $300m under the policies of past governments has been available for the rural sector. This is one-tenth of the total. This seems to me to indicate the inadequacy of previous arrangements. We now have new arrangements which are operative at this time. The Minister for Primary Industry has indicated that under the new arrangements the new Commission will be able to study the forward needs and requirements of Australia’s greatest single industry beyond 1976-77.

– It was criticised by the then Opposition.

Mr HUNT:

– I am coming to that. The former Liberal-Country Party Government took that decision in the light of very severe criticism from practically every metropolitan newspaper throughout Australia. Almost every editorial writer had written off the wool industry and the wool growers of this country and wrote in terms of a restructuring of the industry and about doing away with the small wool growers because the wool industry was finished. There were Labor members of the then Opposition who also condemned the Government for having bought in almost one million bales of wool. This happened to be up to December 1971. It was entirely the operations of the Australian Wool Commission, financed and backed by the government of the day, that prevented the wool industry in this country from collapsing completely, and that is the truth of the situation.

It is no use trying to make political capital because wool prices went up to some record figure last year. Wool prices are now 57 per cent below the price peak at this time last year, but I am not going to blame the Labor Government for that. This happens to be a world market problem. The Japanese have gone out of the market for reasons best known to themselves. I am sure that the Minister for Immigration, who is sitting at the table, would not want to take the blame for the current fall in wool prices. Conversely it is not right for people in this Parliament, where the truth is expected to be told, to try to convey an incorrect interpretation or an incorrect presentation of the reasons why the wool market collapsed in those dreadful years. It does not become anybody to try to make cheap political capital out of an event that has passed. I make no apology whatsoever for the steps that the former Liberal-Country Party Government took to try to see the wool industry through one of the worst crises in its history. But for the assistance that was given thousands of wool growers around Australia would have left their farms for good. So let the record show that it was the actions that were taken in association with the wool growers of this country that time which enable us to talk even today or to debate a Bill like this because the industry is still in existence.

I hope that if the wool market should start to fall again - as indeed it is - at an escalating rate this Government will have the same courage and fortitude as did the former Government in the face of public criticism to back the Australian Wool Corporation and the wool industry with the funds that will be needed to buy up the wool and hold it in reserve until demand increases. I thank you, Mr Deputy Speaker, for giving me the opportunity to try to put the record straight.

Mr GRASSBY (Riverina- Minister for Immigration) - I wish to make a personal explanation.

Mr DEPUTY SPEAKER (Mr Luchetti)Order! Does the Minister claim to have been misrepresented?

Mr GRASSBY:

– Yes. I was misrepresented by the honourable member for Gwydir (Mr Hunt) who said I had made a dishonest statement in relation to deficiency payments. I repeat what I said. I stated that the deficiency payment in 1970-71 was 36c per lb which is 79.37c per kilo. That is what it was and that is where it stands.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

In Committee

The Bill

Mr GRASSBY:
Riverina · ALP

– Minister for Immigration (5.40) - I refer to clause 12 which reads in part as follows:

Section SI of the Principal Act is repealed and the following section substituted: -
The amendment made by sub-section (1) does not affect the remuneration payable to a member of the Australian Wool Corporation, or to the deputy of such a member, before his remuneration is determined by the Remuneration Tribunal.

I move:

In sub-clause (2) leave out ‘Corporation’, insert Testing Authority’.

This small amendment to the Bill is necessitated because of a simple error in the printing of the Bill which was undetected prior to the distribution of the Bill to the House.

Mr STREET:
Corangamite

– The Opposition accepts that this is an error in the Bill, not so much in drafting as in printing. We have no objection to the amendment.

Mr GILES:
Angas

– Two of us, I think, have agreed to say a few words at the Committee stage rather than take up the time of the House in the second reading debate on the Wool Industry Bill 1974. Of course the Opposition has no particular dispute with the Bill for the very good reason that the industry by and large accepts all the factors that are brought forward in this Bill before the House for debate today. However, because of the fact that various pastoral finance companies and houses are finding more money for loan funds in this industry, and of course others, I thought it only right, in view of the incredible remarks of the Minister for Immigration (Mr Grassby) a moment ago, to remind him again - it must be 3 months since I have - that it was his promise during the last election campaign to make $500m available at, from memory, 3 per cent per annum interest.

Mr Grassby:

– I rise on a point of order, Mr Deputy Chairman. I have dealt with this matter several times, but it is not germane to this particular Bill.

Mr GILES:

– Thank you, Mr Deputy Chairman. It is very easy to tie this matter up, if need be, if the Minister is going to become over-sensitive about it. The whole purpose of this Bill is to rearrange growers charges in relation to the 2 areas of promotion and marketing. Speaker after speaker from this side of the House has reminded the Government that if the gross proceeds of wool sink below the budgetary level, a levy of 3 per cent will be necessary to meet that budgetary level. The statutory provisions of this Bill do not provide for such a situation and the Opposition gives notice to the Minister that we will require more help for the industry. The Minister has not commented on this; the Government has not commented on this. The industry would do well to note that there has been no such comment. In fact, of course, there is no legal provision either.

If the Minister wants to try to draw a fine point between advances made to the wool industry on the one hand, and the cost incurred by producers by the provisions of this Bill on the other, it would be a very fine point. I know, Mr Deputy Chairman, that you would have the perception to perceive that that is so. Returning to the provisions of the Bill, let me now refer to finance companies - I refer to pastoral houses, State banks and the whole range of such organisations - now making finance available. In September 1972 in Victoria, for instance, $78.2m was borrowed from such finance companies by rural producers compared with $57m in the corresponding period in 1971. The same sort of situation applies through the various States. The finance from those sources is loaned at high interest rates. It would be nice if the Minister’s statement or so-called statement or alleged statement made to primary producers in some sectors of Australia at the time of the last election campaign were true. He made the statement that $500m should be made available if a Labor Government were elected to office. I think from memory that the interest rate was to be 3 per cent a year.

The present situation is that the very people with whom this Bill is concerned in many instances are paying 15 per cent interest on the money borrowed to buy their plant. This is germane to the overall problem of the financial position of wool growers throughout Australia. The figures that can be gleaned from advances made recently to the wool industry support the fact that growers are still going into debt in spite of never having had it so good, as I think the Prime Minister said prior to taking away the superphosphate bounty. Yet the fact of life is that in this current day and age there is no guarantee in this Bill as to what would happen if the gross wool return sank too low. There is the financial implication that the Minister for Immigration should wake up to, even if he cannot see it.

The only other thing I want to say - I trust, Mr Deputy Chairman, that I will not be ruled out of order on this because I shall speak directly on the same point as the Minister did a few moments ago - is that the Minister had the unmitigated nerve to get up in this House and by implication say that primary producers are better off because of the advent of a Federal Labor Government. Nothing could be quite as absurd as this contention. We are all accustomed to the Minister’s hokey-pokey and the fact that he can tell 5 stories at once. Some members of the Press told me the other day that they are so confused that they just print his Press releases because they cannot find out where he stands.

The DEPUTY CHAIRMAN- Order! I remind the honourable gentleman that we are considering the Bill, not the Minister.

Mr GILES:

– Just a few minutes ago he made the statement by implication that the primary producers are better off because he is sitting there as Minister for Immigration. This is just past belief. In fact it is so hilariously funny that it is hard to keep a straight face while he tells the world how his red tie or purple suit have had something to do with the increase in income and the beneficial position of primary industry today.

The DEPUTY CHAIRMAN- Order! The honourable member is straying very far from the Bill.

Mr GILES:

– I would be the first to agree with you, Mr Deputy Chairman, but the Minister made these remarks and I am just paraphrasing them. If it were not so amusing it would be very serious. Once again I say that I am not too sure that the industry has not been too lenient with this Government in agreeing to the proposals contained in this Bill. I hope that I do not live to see the day when the industry regrets taking what seems to it to be a properly responsible point of view. But if that position were to occur there will be people in the Opposition who will remind the Government of this and hold it as best they can to proper responsible action for the sake of an industry that certainly in the last 12 months has gone a long way towards again providing the back on which the social services program and other programs of this Government ride.

Mr HURFORD:
Adelaide

– The honourable member for Angas (Mr Giles) in his closing words said something to the effect that he hoped the industry would not rue the day that it had agreed to the propositions contained in the Wool Industry Bill 19.4. I think the fact is that members of the Opposition parties, whether they are Australian Country Party members or Liberal Party members like the honourable member for Angas, do not give the rural industries of Australia and the people of those rural industries the credit which they deserve for being good Australians and for not just looking out for their own self interest. I am glad to have the opportunity to say that the whole essence of this Bill throws up the interdependence of the primary industry sector, the rural sector, on the one hand, and the rest of the community on the other. This is a clear example of the Australian Labor Government getting together with this great rural industry - the wool industry - and recognising its worth. I believe that a tragic myth has been allowed to grow up that this Government does not recognise this interdependence. We recognise it just as much as the rural people of this country recognise it. In my view it is a myth that must be killed. That is why I am glad to stand here and to seek to do so on this occasion.

Certainly the Government has recognised that if we all are to increase our standard of living then change is necessary. People who live in the rural districts recognise just how great is the need for the changes. The changes not only relate to seasonal changes but also to market changes. I am pleased to have spent a great deal of my life in the rural areas. Indeed I spent much of my professional life before coming into this place as a chartered accountant looking after rural clients. I know their worries. Even though I represent a city seat I know their hopes and their worries very well. In fact, I reckon, although as I have said I represent an urban seat, that in this place I exemplify the interdependence of people who live in cities with those who live in the country, whether they are in the wool industry, the wheat industry or the barley industry of my own State of South Australia. My fortune, my income, has been very much, related to theirs.

Because change is necessary it is good that we have a government that does not wait for change to take place before measures are taken. This has been the history of the previous Government from 1949 until 1972. That Government waited for change to take place and then acted belatedly. That is not the case with this Government. Changes have to take place if we are to increase the standard of living of everybody. The changes carried oat by this Government have been made across the board. There has been no discrimination one way or the other against rural industry or any other industry. Certainly I accept that the removal of the superphosphate bounty of course has hit the rural industries in particular.

But this is not the only across the board subsidy that has been removed.

Mr Grassby:

– It has not been removed yet.

Mr HURFORD:

– Let me correct myself. Of course it has not been removed. The fact is that the previous Government wrote into the legislation that the bounty should be phased out by the end of this year and all the signs are that if the Opposition parties were in power they would be removing the same subsidy. I know, Mr Deputy Chairman, that you want me to get back to the Bill.

The DEPUTY CHAIRMAN (Dr Jenkins) - Very much so. The honourable member for Adelaide should know that we are at the Committee stage.

Mr HURFORD:

– I am being removed from the Bill, Mr Deputy Chairman, by interjections from members of the Country Party and to a lesser extent from members of the Liberal Party and I was forced to go chasing that hare. The fact is that this Bill does show the interdependence, and so do the clauses that we are debating during the Committee stage. I just wanted to make the point in passing that even though notice has been given that the superphosphate bounty is not going to be renewed, similar sorts of across the board input subsidies have been removed in other industries. I only have to point to the 25 per cent tariff cut or what has happened to the subsidies in regard to oil exploration. These are across the board decisions and they are consistent with other decsions taken by the Government. There is no discrimination against rural industries. These are measures which are taken in order to increase the standard of living of us all and to ensure that industry is not being propped up. I think that just as the rural people of this country will recognise this in the long run, even if in certain sectors they do not recognise it now because the opportunities for the message to get across are far and few between, so it is that they will recognise that rationality is behind the clauses of this Bill which we are discussing at the moment.

Although I was unable to be in the House when the honourable member for Corangamite (Mr Street) led for the Opposition on this Bill when making his second reading speech, I am pleased that he took a bi-partisan approach. I trust that he will adopt the same attitude if he speaks during the Committee stage. I have just had pointed out to me that a mem ber of the Country Party interjected that there will be more Forrest Places soon. I trust that this was not so. If it was so I hope that the member concerned will identify himself, because I believe that the great majority of farming people in this country totally reject what took place in Forrest Place.

As I have said, this Bill does show the interdependence of city and country areas. Where the community interest is involved, the clauses of this Bill are written in such a way that the community pays three-quarters of the cost. Where there is less of the community interest involved and the industry itself is totally involved, in regard to the promotion side, the industry is involved in three-quarters of the cost. We have had too much of pork barrel politics, and I think that many people in the country recognise this. We have to get down to principles. We have to look at the total community. We have to look at the welfare of the total community. That is what this Government is doing. That is what this Bill does and that is what the clauses of the Bill do. That is why I am pleased to support this legislation at the Committee stage.

Mr KING:
Wimmera

– I claim to have been misrepresented. The honourable member for Adelaide (Mr Hurford) just made the accusation that he heard an interjection from members of the Country Party to the effect that we were starting another Forrest Place. As far as I am concerned - and I think that I can speak of all members of the Country Party - there was no interjection from this side of the House at all in regard to Forrest Place. Rather, the interjection was made by the honourable member for Casey (Mr Mathews) who is a member of the party to which the honourable member for Adelaide belongs.

Mr Kerin:

– I rise on a point of order. I was quite clear from my hearing that the interjection came from the other side of the House and I am not going to dob in the honourable member who made it. It was not the honourable member for Casey.

The DEPUTY CHAIRMAN- It is not for the Chair to adjudicate whether disorderly interjections were made or not.

Mr GRASSBY:
Minister for Immigration · Riverina · ALP

– One or two points were raised by the honourable member for Angas (Mr Giles). I was not sure whether I should reply or take the honourable member seriously because he confessed that he was joking and was speaking for a laugh. But I suppose in case anyone thought he was serious I had better just make a clarification which apparently the honourable member overlooked at the second reading stage. The honourable member talked about the financing arrangements if in fact the incomes of growers fell. I would like to make the point again, seeing that he apparently missed it in the second reading debate, that the financing arrangements have- been based on what can only be regarded - and again I say this to him and I hope that he is paying attention to me at present - as reasonably conservative expectations of returns for wool over the period concerned. Also the wool tax in 1974-75 can possibly result in some surplus being added to the reserve of the Wool Research Trust Fund, and this will be available to draw on if necessary in the future. So if the honourable member did not hear this the first time I hope that he has heard it now.

Secondly, I would like to say that the previous Government in fact refused to give, and never at any time gave, any guarantee that any shortfall in growers’ contributions at any rate of tax would be made up by the Government. Of course what has been put forward now is something which the previous Government did not in fact do. I think this is something that has to be acknowledged. The honourable member for Angas referred to rural credit. During the reign of his administration, and in particular towards the end of it, there was no rural credit available at all. All the channels had dried up, and he was a deliberate party, with his colleagues, to accepting that there would be an imposition of 24 per cent on many items of machinery through hire purchase and other loans. He accepted it and in doing so was a guilty man.

I said during the course of 1972 and previous to that that it would be possible to make available $500m at 3 per cent and, what is more, I said that we should be aiming in that direction. It is interesting to see the situation after 15 months. When I last checked there was $350m available in rural credit in all forms from 4i per cent upwards. There was more credit available than there were takers. I have come to the conclusion that the only man who has been suspect in the present situation is the honourable member for Angas because he has been most concerned. If he likes to make some personal representation I am sure that we can service even him. I want it to be quite clear that the only man out of step in this debate has been the honourable member for Angas. If he has any integrity in this matter and opposes it I invite him to vote against the Bill. Otherwise I am delighted to see the degree of unanimity on this important measure concerning the greatest industry we have in Australia today.

Amendment agreed to.

Bill, as amended, agreed to.

Bill reported with an amendment; report - by leave - adopted.

Third Reading

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

page 860

AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974

Second Reading

Debate resumed from 12 March (vide page 279), on motion by Mr Whitlam:

That the Bill be now read a second time.

Mr PEACOCK:
Kooyong

– The Opposition supports the Australian Development Assistance Agency Bill. It also supports the appointment of Mr Leslie Johnson as the first director of the Agency. Some 18 or 20 months ago the Prime Minister (Mr Whitlam) described him as the final and finest of our Administrators in Papua New Guinea. I can do little better than reiterate those words and say that the Opposition has complete confidence in the appointment of Mr Johnson to this particular Agency. But I want to express some concern that Opposition members have about the way in which the Agency will work. The concept is acceptable to us but we are concerned that adequate consultation and in particular co-ordination of programs shall be effective. Questions not answered by the Prime Minister in his speech when introducing the Bill included’ one as to how the special preference scheme for imports from developing countries is to be carried out. I understand from correspondence flowing between the Leader of the Opposition (Mr Snedden) and the Prime Minister that it will continue to be determined and administered by the Department of Overseas Trade. The same applies to educational aid. We do not want a bureaucratic morass which bogs down the implementation of cur aid programs. We want to see that aid becomes more effective than it has been in the past.

Regrettably also the principles to be adopted by the Agency were not enunciated in the Prime Minister’s second reading speech. I would have thought that in the time since the office was formed prior to the Bill being introduced into the House there would have been adequate time for general principles to have been discussed and to have been included in the Prime Minister’s speech. So I trust that those who are charged with the responsibility of the Agency and its board will be enunciating those principles as soon as possible. The silence of the Government in this area is akin to its silence in many other areas of foreign policy. That might seem a strange statement to make when the Opposition has criticised the Government so frequently for statements that have been made without regard to the consequences. The symbolism and the endeavours to obtain credit on the cheap are epitomised by the establishment of this Agency. Nothing was put to the Opposition in relation to the principles to be adopted by the Agency. I trust that we will hear about it in the future.

After all, developing countries in the world have never faced’ a greater crisis than they are facing at present, not merely because of the energy crisis, not merely because of oil prices, not merely because of oil inflated prices, but also because of the difficulties that many countries have with nitrogenous fertilisers. I will be developing principles that the Opposition will be taking in regard to the administration of an aid agency but I should have thought that we would have heard from the Prime Minister on this. As for the Minister for Foreign Affairs (Senator Willesee), who sems to do little more than bag carry for the Prime Minister and who rarely enunciates anything, there is no more silent Minister in this Government. It is not that the Government does not seek to obtain some credit from its morass of foreign affairs relationships and initiatives, but we have heard virtually nothing from the Foreign Minister about aid programs alone. Those who saw the front page of the ‘Age’ today would have seen what I meant when I said that the Government has endeavoured to obtain credit on the cheap. There are stark photographs of the effect of the famine in Ethiopia. This can be seen in other areas of Africa. Of course some statements have been issued to the Press gallery by the Foreign Minister but insufficient advice has been given to the Opposition.

An over-abundance of grandstanding and symbolic gestures is symptomatic of the methods by which the Government conducts its foreign policy and, regrettably, its aid policy. The famine in Ethiopia and the appalling situation extending beyond Ethiopia have attracted miserable and paltry assistance from the Government. Not just Ethiopia but other parts of Africa are affected. Government members who come into this chamber and speak to the nation fondly about establishing rapport with Africa do not even produce in the most practical way solutions to one of the most tragic problems facing the world. The Government’s stance is even less creditable when it proclaims concern but it is not accompanied by sufficient assistance, which this country can afford. The Government is not credible in many areas of foreign policy but I do not wish to dwell on those alone. I want to urge a more sympathetic and humane approach to the current disaster facing the developing countries in particular.

It is of no good continuing the attitude of even the previous Administration when it was in power. It is simply not good enough to compare percentages of the gross national product. That is not what aid is all about, The gross national product is there only to measure the extent of goods and services in a given community at any moment of time. It serves little purpose to engage in comparisons with other countries. Let us hear from the Government whether it is carrying out any form of reappraisal. Will it continue large scale economic development to enhance productivity alone or will it adopt a proper balance in relation to the extent of the aid program so that there will be a continuing development posture through large-scale development and also through village and rural development schemes that strike at the role of people in a community? We have not heard anything about this. As I said, it is all very well to form an agency, but we want spelt out precisely what it is to do.

I would have thought that, taking the example of the energy crisis that I mentioned, we would have to look again at the nations at whom we are directing our aid, some of whom within the whole context of developing countries will benefit to some extent by the energy crisis. Indonesia and Malaysia will receive greater prices for oil. We may well have to look at the effect of other developing countries as a greater priority in the short term. I do not say that we should diminish our aid to Indonesia but there will need to be a reappraisal of the priority and the humane approach that is to be given to countries that are facing stark difficulties at present. I have indicated the concern that my Party has about simply trotting out figures relating to aid as a percentage of the gross national product. The fascination of this country, as of many other countries in the developed world, with the favourable comparison of, for example, Australia’s performance as a donor country has tended to obscure the real nature of development and its relevance to Australia’s foreign policy, security and external economic interests. It has tended to obscure the most disturbing features of the development problem itself - the complexity of the tasks of promoting effective development, the disappointing results of the efforts made so far by both developed and developing countries and, as I say, the urgent need for a reappraisal of the objectives of development and the strategies that should be adopted by both recipient and donor countries. This is the sort of message that should have been contained in the second reading speech of the Prime Minister.

For Australia, the development issue is one of fundamental importance. The fact that Australia is the only rich donor country to be located on the periphery of Asia - that region of the world which is experiencing the most pressing and seemingly insoluble development problems - calls for an involvement of a deeper kind than the prevailing level of concern in many donor countries throughout the world. There is, of course, more to our external relations than involvement in development strategy but in the long term there are few other single issues more compelling or of more peculiar significance to Australia than the development issue in its broadest perspective. It carries implications for the whole range of our external relations in the long term. It may be as some observers have pointed out that foreign aid has not always promoted national well-being and stable political conditions. But the proposition that the development issue and Australia’s security are quite unrelated and therefore our development assistance efforts will have no impact on our long term security is misleading, if not untenable. The proposition should really be that ineffective development assistance does nothing to promote Australia’s security interests in the long term. The fact is that if the efforts to promote development have fallen short of their objectives, it is not the idea of development assistance that is at fault but the inadequacy and the ineffectiveness of the approach to the problem by both the developing countries and the donor countries. An effective aid program will help to promote national well-being and stable political conditions and, as such, an improvement in such a program can only enhance regional security.

What is the present situation in developing countries? I have touched on some aspects of this. To put it bluntly it is disastrous. Apart from the work of the Development Assistance Committee of the Organisation for Economic Co-operation and Development, the World Bank and other international bodies, there have been several major studies on development problems undertaken during the last 5 years and a great deal more is now known about the situation and the extent to which the efforts made so far have been successful. The picture that unfolds is profoundly disturbing. The annual reviews of the Development Assistance Committee, the reports of the World Bank and other accounts such as the Pearson report and the Jackson report tend to differ in emphasis, but in their central message they are united in the conclusion that the economic situation in the developing countries is deteriorating and that developed countries have an obligation to do more than has been done in the past. The gap between the living standards of the developed countries and the developing countries as well as the gap between the living standards of the rich and the poor in the developing countries continues to widen, despite the efforts so far directed towards closing it. While it is true that the net flow of financial resources, to developing countries from the donor countries has increased greatly in size - it amounted to 1971 to $US18,000m - the impact of this expenditure has been undermined to a significant degree by such factors as the world inflationary movement, the energy crisis, the international monetary crisis and by burgeoning population growth in the developing countries themselves.

Sitting suspended from 6.1S to 8 p.m.

Mr PEACOCK:

– I wish to continue the remarks that I was making prior to the suspension of the sitting. I was saying that, according to the 1970 report on the world social situation by the United Nations Economic and Social Council, some 70 per cent of the world’s population of approximately 3,630 million lived in the developing regions, with Asia alone accounting for a fraction over 50 per cent of the world total. Given present trends, the proportion of the world population in a developing condition will have increased to more than 80 per cent by the year 2000. The present per capita income for Asia is about $100 per annum compared with, according to statistics of at least 12 months ago - these figures, of course would need updating with the inflationary trends - per capita income of $4,000 per annum in the United States and $2,800 in ustralia. On present trends, by the year 2000 the incomes will have risen to about only $200 for Asia, with the United States level being between $8,000 and $10,000 per annum. As Mr Robert McNamara has said:

The basic problem of poverty and growth in the developing world can be stated very simply. The benefits of growth are not equitably reaching the poor. And the poor are not significantly contributing to the growth. Despite a decade of unprecedented increase in the GNP of our developing member countries, the poorest segments of their population have received little benefit. The estimated income of nearly 800 million individuals - 40 per cent of the 2,000 million total - is (in US purchasing power) only 30c a day. This is poverty in the absolute sense ….

Mr McNamara pointed out that in a typically developing country the upper 20 per cent of the population receives 55 per cent of national income compared with 5 per cent for the lowest 20 per cent. Essentially, this inequality is a problem for the governments of the developing countries themselves but, as Mr McNamara points out in his conclusion to the address from which I have quoted, the developing countries can in fact contribute to the eradication of absolute poverty by expanding the wholly inadequate flow of official development assistance.

On the basically important question of population control, there has been steady progress but no noteworthy new breakthrough or assessment in the field of demography and family planning As the Development Assistance Committee of the Organisation for Economic Co-operation and Development reported in 1972:

There is increasing evidence that sufficiently widespread motivation for limiting family size cannot be produced without more families becoming aware that their standard of living is rising, including benefiting from a higher level of education, especially for women.

In India, for example, the population has grown by more than 100 million people in 10 years, during which time a fairly concentrated family planning program has been under way.

A very serious problem in developing countries is that of growing unemployment, which is itself a by-product of the population explosion. At present, India has more than 100,000 new entrants to its labour force each week. This number will increase to at least 140,000 by 1980. Unemployment is further complicated by the increasing use of capital-intensive technology and the flow of people from rural areas to urban areas. The problem is particularly serious amongst young people, including the educated. During the First United. Nations Development Decade, namely the 1960s, a tremendous increase in unemployment accompanied a sharp growth in gross national product. A further increase in the GNP is therefore no answer to this explosive problem. Unemployment, apart from its human misery, presents a serious threat to political stability ir developing societies. As Mr Robert McNamara described it during an address to the Board of Governors of the World Bank in September 1970:

The marginal men, the wretched stragglers for survival on the fringes of farm and city, may already number more than half a billion. By 1980 they will surpass a billion and by 1990 2 billion.

He then went on to say:

Can we imagine any human order surviving with so gross a mass of misery piling up at its base? A by-product of the population explosion, the unemployment problem, will require tremendous creativity and resourcefulness throughout the 1970s if the Second Development Decade is to have any meaning to human society.

Mr Edwin Martin, Chairman of the Development Assistance Committee, in his 1972 review made a gloomy comment on the question of unemployment. He said:

No special section on “job creation’ will be found in this year’s report . . . because I cannot find that anything significant has happened.

The needs of developing countries are wideranging and complex. They need more food, more jobs, better distribution of income, new labour-intensive technologies and better access to health and education facilities. They need not merely more resources, but a better redistribution of resources within their society. Developing countries need strong political and social assistance to facilitate the redistribution of benefits, and at the same time achieve high economic growth rates. During the past couple of years, attention has become more sharply focused on the kind of social and economic inequalities as described in the quotations of Mr McNamara. Experience has demonstrated that the poor will not obtain a better share of the benefits of growth until the character of growth is radically altered. This alteration can be brought about only as part of a major political transformation. Yet few developing countries have managed to come to grips with this problem. I might say, that from a reading of the Prime Minister’s second reading speech this particular country has not yet enunciated a view on this matter.

I read in the ‘Canberra Times’ - it seems to me that Opposition members these days rely on information in the Press rather than on dissemination by departments, but more particularly by the politicians allegedly being the Government of the day who should be giving information either to the Parliament or to the people - that an in-depth examination is being made on the question by the office that has been filling the role of the Agency until the Agency has statutory clearance through this House and through the Senate. Perhaps it is again about time that the Minister for Foreign Affairs took both this House and the Senate, let alone the Australian people, into his confidence and told us what he is doing in regard to guidelines for aid programs on behalf of the Australian people.

I meant to mention before the suspension of the sitting that the need for better nutrition is self-evident. One obvious consequence of malnutrition is limited mental and physical capacity. Job creation requires a massive, co-ordinated attack in conjunction with overall plans for economic growth. Other subjects which have attracted considerable attention at recent meetings of the United Nations Conference on Trade and Development - UNCTAD - are the transfer of technology to developing countres and the creation of more favourable access for their exports. We are now in the fourth year of the Second United National Development Decade, the objectives of which are set out in a strategy which was adopted at the United Nations General Assembly on the occasion of the 25th anniversary of the founding of the World Health Organisation. From a development standpoint the strategy has so far proved to be more notable for its promises than its actions. That tends to ring a rather relevant note so far as this Government is concerned. However, that the strategy was agreed to is in itself an indication of significant progress, for 127 countries representing many different stages of development, political and economic assistance, acknowledged the importance of specific social and economic goals.

Although it would be naive to promote a greater development effort at the expense of defence responsibility, it is nonetheless a sad commentary on the state of international relations that the financial resources made available for the constructive role of development assistance represent only a fraction of the amount spent on military expenditure. In 1968, for example, developed countries spent $168, 800m on defence while a mere $8,500m was spent on all forms of economic aid. Honourable members will note that the preface to those remarks was that it would be naive to promote a greater development effort at the expense of defence responsibility. Nevertheless those amounts ought to be compared.

In order to give a more complete picture of the realities of development it is necessary to mention the shortcomings in the performance of the developing countries themselves. The pledges to use their resources to improve the wellbeing of their impoverished citizens are often not being implemented. To quote Mr Martin, ‘National pride, desire for personal gain or political power, weak bureaucracies, have all contributed in varying degrees in many countries to the waste of scarce resources, more often their own than ours’. In the view of Mr Martin, regimes in developing countries have often spent heavily on purposeless military establishments.

It would be wrong to depict the developing countries as being generally unaware of or insensitive to their own shortcomings. Frequent access to the ‘Times of India’ will reveal writings by Indian scholars on this subject. For example, one who wrote in the Times of India’ last year said:

It is easy to transfer from the advanced to the underdeveloped countries, the institutional framework of a modern society. But it does not mean the automatic transfer of the spirit and the values animating those institutions in the countries from which they have been borrowed.

To sum up, the present world development situation is characterised by a gigantic gap in the living standards between the rich nations and the poor nations - a gap which is unlikely to narrow by the end of the century because, to use again the words of Robert McNamara, the industrial base of the wealthy nations is so great, their technological capacity so advanced, and their consequent advantages so immense’. Is the Minister for Overseas Trade (Dr J. F. Cairns), who is continually interjecting, quibbling with Mr McNamara’s figures?

Dr J F Cairns:

– Of course I am.

Mr PEACOCK:

– The Minister for Overseas Trade has revealed himself as being almost an antediluvian theorist on questions not only of aid but also of economics. If he had wanted to single out and be critical of the preMcNamara World Bank I may have agreed with him, but he should recognise the role that McNamara has played.

Dr J F Cairns:

– Even you have changed.

Mr SPEAKER:

Mr PEACOCK:

– I will address my remarks to you, Mr Speaker. The Minister for Overseas Trade has been dabbling in the machinations of industrial development in this country for the last 16 months and has ignored, for example, the speech of the President of the World Bank to the Board of Governors of that Bank in Nairobi in September of last year. It would warm not only his aspirations but also his heart if he were to refer to it and to recognise the emphasis that Mr McNamara has put on people. If there is one person I will defend in this Parliament it is Robert McNamara. There is no comparison between the trifling remarks of the Minister and the aspirations that are called forth by Mr McNamara.

Dr J F Cairns:

– You will get a couple of trips.

Mr SPEAKER:

– Order! The Minister will cease interjecting.

Mr PEACOCK:

– It puts him in context, Mr Speaker. I repeat the words of Mr McNamara - ‘the industrial base of the wealthy nations is so great, their technological capacity so advanced, and .their consequent advantages so immense’. But I think the objective that Mr McNamara believes in would be attainable if, for example, countries such as Australia were to lend their weight to the cause that he is proffering to the developed countries. I want to conclude my speech with a quotation from a speech by Mr McNamara, as I believe so strongly in the role that he has had adopted by the World Bank. It is not the nonsense that is implicit in the remarks made by the Minister about subscribing simply to large scale economic problems but a re-orienting of aid which has an emphasis on those people who are not benefiting from the aid programs themselves.

It might be helpful if the Minister were to update himself from the 1950s to the challenges that lie beyond the decade with which we are faced at the present moment. Mr McNamara has said that he believes that the objective he has set will be attainable. He said:

I believe it will for a very compelling reason. And that is that we are all living in an era in which the extremes of privilege and deprivation are simply no longer acceptable. In the remaining decade of this century I believe that people everywhere - the affluent as well as the poor - are going to grow less and less tolerant of those extremes. The human degradation of absolute poverty as its massive dimensions become better known and more immediately perceived, will be recognised for what it really is: An unbearable assault on human decency, and on the decency of society itself, and ultimately on the decency of each one of us.

It is that sort of remark that the Minister for Overseas Trade challenges. It is with those sorts of aspirations that he cannot associate himself because of his blind antagonism to those whom he regards in a Neanderthal approach to capitalism that is the premise in all his philosophic attitudes. He should update himself and recognise that not only in the domestic sphere but also in the sphere of international aid he has a duty to the people not merely of Australia but of the developing countries to give a guide as to the form of aid programs that ought to be taken up by the Government - a guide that was not contained in the second reading speech of the Prime Minister, a speech in which he merely gave us the machinery details and that is all, of the aid agency that is being created by the Government.

I have indicated the Opposition’s support for that Agency. I have also indicated that there are serious gaps in the statement by the Prime Minister, of all people, who was not prepared to indicate the guidelines that would be adopted either by the agency or by himself. I have confidence in those who will be working for the agency. Fortuitously many of them served me well in the Department of External Territories and others served the previous Government well in the Department of Foreign Affairs. But to feel that one can introduce a Bill into this Parliament that deals only with machinery details at a time when the world is crying out for assistance and is faced with the impoverishment that was so well illustrated by the front page article in the Melbourne ‘Age’ of today concerning the problems of Ethiopia, and to think that the Opposition will tolerate the snide remarks of an outdated philosopher such as the Minister for Overseas Trade, is not to take the Opposition seriously. If the Government were to recognise that its own socialist philosophy was outdated decades after it wrote it into its platform it might also recognise that its attitudes to aid programs also is out of date and that it is about time it informed this House and the Australian people of the way in which it is going to approach the provision of assistance to developing countries at their time of greatest need.

Mr SPEAKER:

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

Debate (on motion by Mr Kerin) adjourned.

page 866

QUESTION

PARLIAMENTARY REFRESHMENT ROOMS

Mr SPEAKER:

– I desire to inform the House that a union meeting of the staff of the Parliamentary Refreshment Rooms held this morning decided that all members of the Federated Liquor and Allied Trades Union would stop work immediately and would not return to duty until 9 a.m. on Friday, 5 April. At 10 a.m. on that day a further meeting of union members will be held to consider a report from union officials. This dispute arises out of negotiations that have been taking place since late last year with the Federated Liquor and Allied Trades Union over an agreement that was sought by that Union to cover wage rates and conditions of employment of casual refreshment rooms staff employed during parliamentary sessions. In past months a number of discussions have taken place, some between union representatives and departmental officers and ‘some with the Presiding Officers, and in these a substantial measure of agreement, including new rates of pay for casual employees, was reached. The basis of the verbal agreement was as follows:

The offer of the Presiding Officers was to meet a union request for improved conditions for casual or, as it is referred to, sessional’ staff.
The Presiding Officers were aware of the problems of obtaining casual labour to meet the exacting and difficult operation of this particular support system of Parliament and the difficulties associated with recruiting staff to work only intermittently with the Parliament and after long discussion either alone or with the union the Presiding Officers decided to offer the union the following:
1. Increased basic salaries for all of the sessional staff of the Refreshment Rooms.
2. Introduction of a new re-engagement bonus to encourage sessional staff to re -engage for work in successive sessions.
3. Retention of a loading of 124 per cent on basic salaries which has applied for some years to sessional staff.

In addition, I may add that we also made it possible for equal pay to be paid to all employees in the Refreshment Room. The total cost of these proposals was estimated to be of the order of $35,000 in a full year. It was agreed that the new conditions would not be varied for 12 months and that letters confirming the verbal agreement would be exchanged. At no stage were the Presiding Officers making a wage determination as to permanent staff of the Refreshment Rooms who are not subject to the disabilities associated with irregular work as are the sessional staff and who have especial rights such as superannuation, etc.

However, at the last meeting held on 21 March, the union claimed that the benefits of the new agreement being negotiated, which was expressed to apply to the sessional staff of the Refreshment Rooms only, should be applied to the permanent staff also. The Presiding Officers pointed out that the permanent staff of the Refreshment Rooms are appointed under the provisions of the Public Service Act and that, in common with the staff of all parliamentary departments, their rates of pay and conditions of employment were as specified in the Public Service (Parliamentary Officers) Regulations. In determining the salaries of permanent officers of the Parliament, the Presiding Officers had always sought the advice of the Public Service Board and so, if any variation in rates of pay or conditions of employment was to be made, it would be necessary to discuss these with officers of the Board.

This morning before the stop work meeting was held, officials of the union were advised that at the invitation of the Presiding Officers the Public Service Board would be ready to discuss these matters with them as soon as a mutually convenient time could be arranged, Thursday or Friday of this week being suggested. Despite this assurance, the strike went ahead. The Presiding Officers believe that, when questions arise in relation to the salaries of permanent staff, whose rates of pay and conditions of employment are related to those of other staff in the Public Service proper, they cannot be placed in the position of determining standards for the whole of the Public Service. In the circumstances they believe it is essential that consultation with the Public Service Board must take place before any decision is made on the union request that the pay scales for sessional staff be applied to permanent officers of the Refreshment Rooms.

The Presiding Officers are of the further opinion that the Presiding Officers’ discretion is a local discretion to be exercised within the general policy determined over like conditions in the wider area of the public sector and that the Parliament should not be forced into the position df having to set standards ahead of those accepted for the country generally. I assure the House that, as soon as the staff return to work, the Presiding Officers stand ready to arrange immediately with the Public Service Board for discussions to take place.

Mr CHIPP:
HOTHAM, VICTORIA · LP; IND from March 1977; AD from May 1977

– I rise on a .point of procedure, Mr Speaker. The statement that you have just made is rather unusual. In case any Minister or I might wish to reserve his position on this matter, will the Government consider allowing a Minister to move that the House take note of your statement, Mr Speaker? The debate could then be adjourned. The debate may never be resumed. The statement that you, Mr Speaker, have just made is of some significance. I put that suggestion to the Leader of the House (Mr Daly) for his consideration.

Mr SPEAKER:

-Order! This is a matter for the House to decide. I indicate also that a statement similar to the statement I have just made in this place was made tonight by the President of the Senate. The matter of procedure is one for the Leader of the House to decide.

Mr Daly:

– With the indulgence of the Chair, may I state that what has been presented is not a paper. It wouid be an unusual circumstance if the procedure suggested by the honourable member for Hotham (Mr Chipp) was adopted. I do not think there is any precedent for that procedure being adopted and I do not think it is advisable on such short notice to create such a precedent. If the honourable member for Hotham gives me time to consider the matter, I will investigate it along the lines that he has suggested.

page 867

QUESTION

POVERTY I[N AUSTRALIA

Ministerial Statement

Mr HAYDEN:
Minister for Social Security · Oxley · ALP

– For the information of honourable members I table the Interim Report of the Australian Government’s Commission of Inquiry into Poverty, dated 11 March 1974, and entitled ‘Poverty in Australia’. I ask for leave to make a statement in relation to that report.

Mr SPEAKER:

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

Mr HAYDEN:

– I have now tabled the Interim Report of the Australian Government’s Commission of Inquiry into Poverty which is entitled ‘Poverty in Australia’. This report is the work of the Chairman of the Commission of Inquiry into Poverty, Professor Ronald F. Henderson. However, he points out in his foreword to the report that the other Commissioners of the Inquiry who are concentrating on specialist aspects of poverty - Dr R. T. Fitzgerald (Education), Professor R. C. Gates (Selected Economic Issues), the Rev G. S. Martin (Social-Medical) and Professor R. Sackville (Law) - have recorded their full concurrence with his recommendations. Perhaps I ought to commence by pointing out that the announcement by the last Government of Professor Henderson’s appointment to inquire into poverty in Australia was made in the House on 29 August 1972. He has produced this Interim Report, his first substantial report, some 18 months after his initial appointment and I understand he expects to present his final report to the Government in October of this year.

I shall not delay the House by enumerating Professor Henderson’s recommendations for they are succinctly put at page 7 of his report with estimated costs in the table on page 18. As far as can be calculated the total net annual cost of his proposals in mid- 1974 would be of the order of $800m. This figure is somewhat higher than that which would come from adding together the costs of the various proposals as outlined in Professor Henderson’s report. The variation arises because of a difference in the estimated cost savings associated with the abolition of taxation deductions for dependent children. Professor Henderson’s estimate was $260m; the Taxation Office, however, estimated the figure at $240m. This is really quite a minor point and justifies no quibbling at all.

Professor Henderson’s recommendations have not yet been considered by the Cabinet and when they are they will be considered in the forthcoming budgetary context. Nevertheless I would like to make some comments about a few of his proposals as an indication that there is need for further consideration of some of them at least before final decisions are taken. Before I do this, however, I want to put the record clear on one matter. I noticed some newspapers this morning asserting that the Government or I had ‘suppressed’ Professor Henderson’s Report. This sort of reporting has most unfortunate implications. Suppress’, according to the ‘Concise Oxford Dictionary’, means, inter alia, ‘put an end to activity or existence of or, again, ‘withhold or withdraw from publication, keep secret, not reveal’. Nothing could be further from the truth in this case or more unfair to this Government on its record so far in cases where reports, often of a highly controversial nature, have been submitted to it. All reports which the Government has commissioned have been tabled; for example, the Coombs Task Force report; the Priorities Review Committee report; the Green and White Papers on Health Insurance; the Aboriginal Land Rights Commission - First Report; the Protection Commission Inquiry; a report from the Social Welfare Commission concerning Aged Person’s Housing; the First Report of the Commission of Inquiry into Land Tenures; the Re-organisation of the Defence Group of Departments; the Care and Education of Young Children - a report of the Australian Pre-schools Committee; report of the Advisory Committee on CES Employment Statistics, and many others.

The fact is that this report could not be tabled before this time tonight for the simple reason that there were not enough copies available in Canberra to do so. While it is true that, in common with the Prime Minister (Mr Whitlam) and the Treasurer (Mr Crean), I have had a copy of this report in draft form for some weeks, it is relevant to point out that in receiving the draft report it was pointed out to me, on behalf of Professor Henderson, that it could not be used or released as it was subject to final review and there would be some areas at least where adjustments might be required. I received yesterday in Melbourne my first copy of the official report in the form in which it is now tabled. To enable the report to be tabled and sufficient copies of the document to be circulated in this House and to the Press Gallery, and to have some spare copies available for interested persons, steps had to be taken by my Department to have the copies air freighted to Canberra this day. I would also point out that, in conformity with proper parliamentary practice, it is appropriate for the report to be first tabled in Parliament as a courtesy to Parliament and parliamentarians of both Houses before it is released publicly. That is, in short, it can be seen that the tabling of this report has been carried out at the first available opportunity.

Many of the recommendations of the report will require further consideration. For example, there is the proposal to abolish concessional tax deductions for dependent children and with the savings thus made to substantially increase child endowment. As mentioned, the savings in the first year which would be diverted to increase child endowment would, according to Taxation Office calculations, be of the order of $240m. Disregarding this saving, this would mean that the total cost for child endowment would be of the order of $55Om this financial year if the proposal had been implemented for this period. In subsequent years savings from the removal of the taxation concession for dependent children will be of the order of $25m a year. If average weekly earnings were to increase by 10 to 15 per cent in the same year then to increase child endowment correspondingly would cost between $55m and $80m. The difference would have to be made up from taxation. While this sort of program of increases in child endowment seems to have attractions, the cost is such that further consideration of the proposals is needed.

I have been asked by a number of people the income effects of Professor Henderson’s proposals relating to child endowment and the removal of tax concessions for various family income groups. I have accordingly had a table prepared and I seek leave to have it incorporated in Hansard.

Mr SPEAKER:

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

Ms HAYDEN:
Minister for Social Security · OXLEY, QUEENSLAND · ALP

– I thank the House. Perhaps it might be handy for purposes of the record if I indicate here the order of costs involved in increasing child endowment, for example by $1 a week for all children according to their place in the family. I seek leave to have this table incorporated in Hansard too.

Mr SPEAKER:

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

Mr HAYDEN:

– I thank the House. As honourable members will note, to increase child endowment for the first or only child by $1 a week would cost nearly $100m and to increase child endowment by this amount for all children, nearly $2 10m.

On matters such as pension rates, we are pushing rapidly ahead. For instance the consumer prices index has increased by a little over 13 per cent since we entered office and average weekly earnings by about15 per cent according to the latest statistics. The standard rate of pension, however, has increased by 30 per cent. As I mentioned during the last week we were sitting, we are not quite half way through our first term of Parliament but we are more than half way towards closing the gap between the pension rate as a percentage of average weekly earnings, as it stood at the time we took office, and 25 per cent of average weekly earnings which is our stated goal. We are also committed to abolishing the means test. We took the first step towards this in the last Budget; the next step will be taken in the forthcoming Budget when all people 70 years and over will receive means test free pensions and we will take the final step in the next year’s Budget. I repeat quite firmly that, consistent with the Prime Minister’s recent statements, we will abolish the means test on age pensions for people 65 years and over and we will do that in the 1975 Budget.

I shall not canvass other recommendations because really these matters must be considered by Cabinet and, I repeat, will be considered in the budgetary context. But these are matters of such wide ranging effect that I sincerely trust there will be considerable informed public discussion. In this way there will be a better understanding by the commun ity of what is to be done and, hopefully, important increased support for the programs which we are finally undertaking. In October next I anticipate that there will be better information available when Professor Henderson’s final report is produced.

For the record, it will be instructive to have details included in Hansard of expenditures by the various Poverty Commissioners on research work and administrative expenses in support of this inquiry. I seek leave to have the appropriate table included in Hansard.

Mr SPEAKER:

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

Mr HAYDEN:

– I thank the House. Additionally it might be appropriate to draw to the attention of honourable members a question on notice which I answered in the Parliamentary Debates of 13 December last year giving more precise and extensive details on these matters. Apart from the final report of the Commission from Professor Henderson at the end of this year, there will be reports from other Commissioners in the future.

I am sure that this document of Professor Henderson’s will be seminal in its influence and valuable in the contribution which it will make to welfare programs in Australia and to the relief of relative poverty in the nation. His finding tabled at page 9 of his report in table 2 that every fifth adult income unit in Australia is poor is staggering. The level is much higher than any of us had expected. In table 1 he points out that, excluding farmers, every fourth adult income unit in rural areas is poor. This is a much higher rate than is the case for metropolitan areas or what he terms as intermediate areas. It seems that there has been long-term neglect of what has been referred to as ‘hidden poverty’. Poverty did not occur in Australia overnight. It has been with us a long time - too long. It was exposed in the 1966 survey by the Melbourne University - a survey headed by Professor Henderson. Nothing was done until August 1972 when Professor Henderson was appointed to carry out an inquiry into poverty. The first result of that - only the beginning - is the report which I have now tabled in the Parliament and which the Government will be considering in the context of the budgetary considerations it will be undertaking in the near future. I present the following paper:

Inquiry into Poverty in Australia - Ministerial Statement, 2 April 1974.

Motion (by Br J. F. Cairns) proposed:

That the House take note of the paper.

Mr CHIPP (Hotham) <8.38)- The report which the Minister for Social Security (Mr Hayden) has tabled is one for which all honourable members and all parties who are interested in social welfare have been waiting a long time. As the Minister said, this is an interim report. The final report is expected in October. I do not propose to address any deep remarks to this interim report for the same reason as that expressed by the Minister, namely, that the document came into my hands late this afternoon and neither I, my party committee nor my colleagues in the Country Party who, of course, also have expressed a great interest in this matter, have had time to consider its implications or ramifications in depth. I thank the Minister for Overseas Trade (Dr J. F. Cairns) for his courtesy in moving that the House take note of this paper so that the debate might be adjourned and resumed once we have examined our attitude to the very significant recommendations contained in the report.

I remind the House that this is a report of a commission which was appointed in 1972 by the Liberal-Country Party Government. Members of those parties, as much as anybody, have been looking forward to seeing its con clusions and recommendations. I content myself by making brief reference to one or two matters which are my own views and not necessarily those of the Liberal Party at this stage. The reason why we and no doubt the Government wish to consider this report in depth can best be demonstrated by referring to recommendation No. 1 of the inquiry which recommends fundamental changes in the amounts of child endowment to be paid. It recommends payment of the amount of $1.50 for the first child, $2 for the second, $4 for the third and so on up to $8 for the fifth child and subsequent children. A deep point of philosophy and even pragmatism is involved here because it can be well and truly argued that child endowment for the first child for different philosophical reasons should be higher than for, say, the second child because quite often the first child is far more costly to the family unit than the second child. Quite often the wife is forced to cease work and therefore the amount of income coming into the home on the birth of the first child is suddenly decreased by one-third or more and there is also the initial expense associated with the birth of the first child. I need not mention the details. This is one of the philosophical points to which all parties will have to consider their attitude in respect of the Commission’s recommendations.

Another point which is even more fundamental in terms of the taxation fabric in the society relates to taxation deductions for dependent children being abolished. I now speaking purely from a personal point of view. I belive that a very respectable argument can be mounted for the abolition of almost all concessional deductions. This Parliament spends hundreds of millions of dollars on all sorts of subsidies and welfare benefits. I believe that members of the Parliament and also the public should know exactly what is being spent and in which direction because there are so many hidden subsidies in the tax concessions system that the Parliament at no stage knows exactly by how much it is subsidising a family unit, the farmers or any other group in the community. Therefore, in philosophical terms this suggestion does not repel me at all.

What is not spelt out in the report and what the Government has not said in its response - and this is not criticism of the Government is that if taxation deductions for dependent children are abolished there will need to be a massive restructuring of the taxation schedules. That is not mentioned in the report. I can appreciate that this is an area which both Parties on this side of the House are giving a great deal of consideration in depth and one which the Treasurer (Mr Crean) has said that he is considering. If one wanted to be critical of the Government - and I do this with my customary mildness - one could refer to certain recommendations. I have said that I accept that the Government must look at them in a budgetary context. Recommendation No. 10 says that the amount of supplementary assistance for pensioners should be increased from $4 to $8 a week. Recommendation No. 11 - and I am sure this would have much support on this side of the House - says that the separate means test on supplementary assistance should be amended, namely, liberalised. For the benefit of listeners to this debate I point out that the supplementary assistance for pensioners is that additional amount of money paid to a pensioner who has no income other than the pension and who also pays rent. That is to say, a person who is on the bare pension, does not own a house, has no other income and is paying rent receives $4 a week at present.

The Government recently increased the basic rate of pension by $3 a week but left the supplementary assistance rate untouched. The mind does boggle today in regard to how, in view of the inflation that has taken place since this Government took office, a pensioner paying rent and with no income other than the pension can exist on $26 a week. One would have thought that if this Government shovels, as I said the other day, $3 onto the pension rate to cope with the inflationary rate consistency would demand that it also look immediately at the question of increasing the supplementary assistance. I ask the Government to look at ways to relieve the plight of those pensioners who are in that situation. As far as I am personally concerned - and I think I would find a good deal of support on this side of the House - I would applaud the separate means test on the supplementary assistance being liberalised. For a long time I have thought that it was monstrous that pensioners in this circumstance, pensioners who are living only on the pension and who pay rent in, for example, a home for aged people, pensioners who earn a few dollars a week by mowing lawns or doing some other odd job should have the supplementary assistance reduced by $1 for every $1 they earn in that odd job. The recommendation concerning the supplementary assistance is one which I would support. The Minister for Social Security could not resist his usual tilt at the Opposition in the last couple of sentences of his speech, the part of which he never gives me a copy.

Or 3. F. Cairns - He could not read it.

Mr CHIPP:
HOTHAM, VICTORIA

– That is less than charitable of the Minister for Overseas Trade. The Minister for Social Security suggested that it was great generosity on the part of this Government to grant a $3 a week increase in the basic pension rate. This was brought in during the last week of sitting. The Minister mentioned certain figures in his statement. I say this in a spirit of jest and it is not unparliamentary. The old saying is that figures never lie but liars can figure. I am not for one moment calling the Minister a liar. The point I am making is that one can produce figures to prove almost anything. The Minister said that the consumer price index has increased by a little over 13 per cent since this Government took office and average weekly earnings have increased by about IS per cent but the standard pension rate has increased by 30 per cent. Let the Minister ask any pensioner in this country who goes to a supermarket or who is paying rent whether he thinks he is 30 per cent better off now than he was in December 1972 or any percentage better off. The statistics which I presented to the Parliament in the last week of the last sitting were obtained from the Parliamentary Library and they indicated that with the $3 increase which was recently granted the lot of the pensioner when measured against the consumer price index is about the same as it was in December 1972 except that the pensioner who pays rent is, of course, worse off for the reasons that I have just given.

Mr Hayden:

– What did you say happens to figures?

Mr CHIPP:

– The figures I have produced are not out of my own head. They came from a source to which I would think the Minister would pay some respect, and that is the Research Service of the Parliamentary Library. If the Minister wishes to suggest - and I seek your indulgence by pausing, Mr Speaker - that that section of the Parliamentary Library lacks integrity, let him say so now.

Mr Hayden:

– It is a question of what happened to them between when you got them and when you delivered them.

Mr SPEAKER:

– Order! Private conversations will cease.

Mr CHIPP:

– This is not a private conversation, Mr Speaker. There was an interjection and I replied to it. It will be recorded in Hansard and I am satisfied with that. I am a little disappointed with this document although, with respect to Professor Henderson, I have not read it with the care that I would have liked to have applied had I been given more time. The Minister made reference to table 2 on page 9 of the report which shows that every fifth adult income unit in Australia is poor. This is something that I would have liked to have read more about, particularly how Professor Henderson and his Commission drew that magic line at $27 a week for a single pensioner. How does one arrive a: such an arbitary figure? I should have liked to have seen more backup evidence and information on how the Committee judges a person to be poor or not poor. I look forward to receiving some further information on that when the final report is brought down in November. In conclusion, I repeat that the Opposition’s position on this terribly important document is the same as the Government’s. We will look at it and consider its implications in a budgetary context and in a social context.

Debate (on motion by Mr Sinclair) adjourned.

page 873

AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974

Second Reading

Debate resumed (vide page 866).

Mr KERIN:
Macarthur

– At the outset I must say that I agree with much that the honourable member for Kooyong (Mr Peacock) had to say. I trust that he will be participating in the Walk Against Want being organised by Community Aid Abroad in Melbourne this Sunday. During the last week or so it has been my privilege to hear 2 speakers on matters very relevant to the Australian Development Assistance Agency Bill which is now before the House. Possibly the most eloquent speech was made by His Excellency Julius Nyerere of the United Republic of Tanzania in the dining room of this building. He spoke of his country and its problems. He itemised in detail the sort of problems that an underdeveloped country in Africa faces. Yesterday I heard from Mr Jack Westoby, formerly a forestry officer of the Food and Agriculture Organisation, who made 3 very pertinent points with respect to forestry policies in Australia and the way in which we should regard all of the world in terms of our trading relations. He made the point that in forgetting developing countries we forget our own consumers. This has a direct bearing on tariffs. He also said that poverty is directly linked with the affluence in the developed countries. He said too that more and more multi-lateral agencies were being squeezed.

The Bill before the House is one of the greatest importance and if the Australian Development Assistance Agency achieves onetenth of what many wish it to accomplish; if it achieves an understanding of even 2 underdeveloped countries; if it achieves complete acceptance by any recipient countries of its mode of operation, then it will have achieved more and will have done more to establish Australia as a country meaningfully concerned with world affairs than any other action the Government can envisage. The task is daunting but not overwhelming. The problem is not to spend money but to spend it wisely when there is little agreement on the best way to assist economically. So that people reading Hansard may get an idea of the dimensions of the Australian Government’s aid I seek leave to incorporate in Hansard a table from a report of the Auditor-General.

Mr SPEAKER:

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

Mr KERIN:

– I thank the House. This table shows for the years 1972-73 and 1971-72 the various areas of aid to which the previous Government allocated moneys. On the bottom the document shows an additional amount that was allocated by the present Government in 1973. In addition to this money some $877,000 was allocated by the previous Government to the Indus Basin project. I should like to spell out the dimensions of the task and the responsibility facing the developed countries. What are we to say to a world in which hundreds of millions of people are not only poor in statistical terms but also are faced with day to day deprivations that degrade human dignity to levels which no statistics can ade quately describe. I quote Robert S. McNamara,

President of the World Bank. He said: What are we to say to:

A developing world in which children under age five account for only 20 per cent of the population, but for more than 60 per cent of the deaths.

A developing world in which two-thirds of the children who have escaped death will live on, restricted in their growth by malnutrition - a malnutrition that can stunt both bodies and minds alike.

A developing world in which there are 100 million more adult illiterates than there were 20 years ago.

A developing world, in short, in which death and disease are rampant, education and employment scarce, squalor and stagnation prominent, and opportunity and the realisation of personal potential drastically limited. This is the world of today for the 2,000 million human beings who live in the more than 95 developing countries which are members of the World Bank.

By 1980, after the 25 per cent of the world’s people who live in the developed countries once again receive 80 per cent of the total increase in the world’s income, their per capita income will have risen by some $1,200. The comparable increase in the per capita income of the 75 per cent of the world’s people who live in the developing countries - even if the second development decade growth objective is achieved - will be less than $100. Granted these facts, are we seriously to say that these wealthy countries cannot reach the ODA (official development assistance) target of 0.7 per cent of their combined gross national products?

Here again I must agree with the honourable member for Gellibrand (Mr Willis) who said that Australia can achieve this figure and should do so now. It is a sad fact that less than half of the developed countries, it is now calculated, will not reach this development target, this level of assistance. Mr McNamara continued:

It is manifestly not a case of their being unable to afford it, nor in my view are the reasons for the serious short fall in ODA the lack of generosity of the people of the developed world or their indifference to justice. It is much more a matter of ignorance; a failure to comprehend the inhuman conditions which characterise the lives of hundreds of millions of people in the developing countries; a failure to grasp how severe the maldistribution of income actually is between the rich nations and the poor nations; and a failure to understand how modest are the amounts of the wealthy nations incremental income which, if made available to the developing countries, would make so great a difference in their ability to meet minimal growth objectives.

What of the distortions caused by massive military expenditure? A United Nations report published in 1972 showed that 6 main military spenders account for more than four-fifths of the world’s armament expenditure, namely, the United States of America, the United Socialist Soviet Republic, France, China, the United Kingdom and Germany. Except for the Middle East and Indo-China, developing countries spend less on arms and military personnel than the industrial world. The 6 main spenders allocated $171,000m to the military but provided only $5,600,000 to the Third World for development assistance. The 23 million people in the world’s armed forces cost $200,000m to feed and arm, which is more than the combined income of a third of the planet’s population, that is, the 1,300 million inhabitants of Africa, southern Asia and the Far East.

More than 6 per cent of the total world output is devoted to the military - 2i times what all governments spend on health, li times what is spent on education and 30 times what is spent on development aid. Military research devours $25,00 Om a year while $4,000m goes to medical research. The Committee on Foreign Relations of the United States Senate estimated that the full budgetary cost of the Vietnam war to the United States from 1965 to 1970 was $104.4 billion - a per capita cost of $500. In the fiscal year 1971 it cost a further $120 billion, making a per capita cost of $600. A sum of $3.5 billion in aid was spent in South East Asia of which $3 billion went to South Vietnam. Estimates of the killed in the war were 46,000 United States, 195,000 South Vietnam and 927,000 so-called ‘enemy’. This is for a so-called brush fire war. In World War II 2 million tons of bombs were dropped; in Vietnam a bit more than 7 million tons of bombs were dropped. Figures such as these lead me to believe that the meaning of the word ‘humanitarian’ is a a misnomer.

Having painted the broad picture of the problem and the actions of developed countries I want to make a few brief points on the Government’s proposal. The proposed establishment of the Agency marks the seriousness of the Government’s intentions in regard to aid. It is not simply a matter of administrative reform; it is the creation of an instrument to give expression to Australia’s obligations to the poorer members of the international community. As the richest’ nation in this part of the world we have an obligation in humanity to assist our neighbours. Not only is the gap between rich and poor countries becoming wider, so also is the gap between comparatively rich and poor within the poor countries. This latter trend has rightly caused much soul searching in the international development community. There is a growing recognition that development policies must be more directly oriented to reaching the greatest number of people and improving their way of life. Whether development reaches the masses will depend mainly on the development policies of their countries. It will also be affected however by the aid policies and practices of donor countries, and some of these are in need of review. Aid donors will need to give serious thought to the problems involved in this, in co-operation, of course, with recipient countries.

There is a need to devise new forms of aid which are more adapted to meeting the real needs of developing countries and which not only promote economic growth but also assist in spreading that growth widely among the people. Donors may need to think less in terms of capital projects, sophisticated equipment and high level training and more in terms of practical assistance in rural development, low cost urban housing and practical training. Australia has already taken some steps in these directions but its aid efforts have suffered from being dispersed among a number of departments. The creation of a single agency should mean that aid questions will be dealt with in a more coherent manner and long term policies devised to ensure that our aid has maximum impact on those who need it most.

There is growing concern at the debt burden of developing countries, currently estimated at SUS80 billion with annual debt service of approximately $US7 billion. Australia has not contributed to this burden. With minor exceptions, all our aid is in grant form. Opportunities exist, for example, in the discussions in the Development Assistance Committee, for Australia to urge other donors to improve the terms of their aid and the Agency should certainly take advantage of these opportunities.

A key factor in international development is the World Bank group which between 1969 and 1973 committed over $US13m in aid to developing countries. Under McNamara’s guidance the Bank has assumed the leadership of the international development community in stressing both the need for greater efforts by the developed countries and the need to tackle the problem of unequal income distribution within the developing countries. The Agency will be responsible for Australia’s relations with the Bank group; it can learn much and hopefully contribute something in this role.

The oil crises has hit developing countries severely. One estimate by the Development Assistance Committee of the Organisation for Economic Co-operation and Development is that they are likely to pay $US10 billion more for oil in 1974. This is more than all the aid they received in 1973. It will cause real problems for many of the countries least able to meet them. It will affect not only the balance of payments and fuel position but also the price and availability of fertilisers and consequently food production. For example, India faces a shortage of almost one-third of its fertiliser requirements. Primary responsibility for this situation rests with oil producing countries, but it is more important than ever that developed countries should keep up the flow of aid. The Agency should be deeply concerned with this situation, especially as it affects countries in our area, and should help to ensure that Australia plays a positive and constructive role in international consultations.

No country can maintain an effective aid program unless it has the support of the community. The legislation provides for a Development Assistance Advisory Board which will be widely representative of the community and will be a valuable means of keeping the Agency aware of community attitudes on development questions. The Agency should also undertake a program of public education in aid and development issues to make Australians more conscious of their obligations to other countries.

The majority of Australia’s aid will continue to be directed to Papua New Guinea for which we have a special responsibility which will not cease when it attains independence on 1 December 1974. lt is anticipated that our aid to Papua New Guinea will be at least $500m over the next 3 years and this must absorb much of our attention. It should not, however, divert us from the urgent issues which have to be solved in obtaining a greater and more effective flow of aid to other countries in our region.

At the time of the announcement of the $500m to Papua New Guinea I had some misgivings. Although I know how essential to Papua New Guinea was an assurance of our willingness to continue our obligation to their country, I was concerned that this could be pointed to as an example of neo-colonialism. However, I have a lot of confidence in Mr Johnson and that the Assistance Agency will perform extremely well in Papua New Guinea. It will be important for Papua New Guinea to nominate its needs and I am sure that there is much mutual understanding of priorities already. Bureaucratic, Treasury controlled structures do not work as aptly in developing countries as we would believe and the Assistance Agency will be at pains to avoid some of the perceived inefficiencies in the aid agencies of other nations. Government to government and business to business assistance throughout the world unfortunately tends to perpetuate privileged minorities and this leads to a lack of any real material progress being passed on to the mass of the people. The distributive effects of advances are often nil.

This raises the greatest difficulty of all. Australia cannot predetermine development in other countries in terms of our own priorities. Although the Assistance Agency will be under the aegis of the Department of Foreign Affairs I believe that it will establish an independent identity. I believe that the Director-General must be of the status and have the salary of a Permanent Head. I trust that the remuneration tribunal will accord that status. I believe that development aid is often better allocated via third parties such as the United Nations because it avoids the necessity of stating beliefs that might offend the recipient nations. How can we say that a country should follow a certain social policy for example, population programs? How can we realistically provide people with the choices to make development decisions themselves? Even if we recognise it, should we propose alternative or radical policies for political and social change? What if we find foreign aid reinforcing resistance to desirable changes? Some people say cruel capitalistic or socialistic models are the only way to really bring developing countries onto a development path. Economists such as Herman Kahn argue that we should not be too concerned about the gap between rich and poor countries as those countries which are now prosperous, and have become so in recent times, have been uplifted via their relationship to the major metropolitan economies. I believe that for many countries a socialist model is the most apt and I am not saying that the methods to be used would be popular or that hardship could be avoided. However, I somewhat pessimistically believe that with the exception of a few countries, the decisions about which in the future shall industrialise have been made. If all countries were at the level of the developed countries today, it has been estimated, there are only 2 years of resources left. So it is quite evident that many countries have missed the boat and they must adopt the sort of development models which suit their indigenous economies at the moment. If this is so, a more co-operative world is going to have to arise or we are all facing disaster in the long run.

When I mentioned 2 countries at the beginning of my speech I had in mind Papua New Guinea and Indonesia. I must say that I am concerned about the latter country. Whether or not Indonesia is now a military dictatorship does not seem to me to be as relevant as the fact that we are expending too much on defence aid to the country. Qf an aid program of $69m under the 3 categories of program aid, commodity aid and Colombo Plan projects, some S20m worth of defence aid is being offered currently. Australia and Indonesia certainly do have many defence problems in common. But increases in the sophistication of defence equipment gained by Indonesia may mean that her neighbouring countries may feel induced to spend also more on equipment. Dr Eldridge, a senior lecturer in political science at the University of Tasmania has also been critical of program aid to Indonesia. He says:

The impact of program aid on increasing Australia’s exports has been very dramatic.

The value of Australian exports to Indonesia has increased from under $14m to 1967-68 to almost $75m in 1972-73.

Roughly one-quarter of these exports have come directly within the aid program, but obviously the indirect effect of aid is very substantial in fostering Australian exports.

Dr Eldridge said also, however, that there was considerable controversy as to whether such an increase should be a legitimate aim of the Australian aid program or could be regarded as a legitimate side effect. I am equally certain that although some advances have been made by the Government of Indonesia in raising the gross national products by some 7 per cent, little by way of distribution has flowed to the people. I want to debate seriously the question: Do the classic economic models of engines of economic growth still hold? I do not know but I am sure that definitions of development which take growth as their hub are misleading, that emphasis, particularly in Indonesia, should be on increasing capacity in development of indigenous resources and that political stability need not be the main measuring stick of the levels of assistance we offer.

I would like to quote from an article recently written by Professor Feith of Monash University. I do not wish to imply that the Australian Development Assistance Agency will make the same mistakes as other aid bodies, but I would like to point out that there are massive problems in Indonesia that have been perceived by many professional observers. Professor Feith for example, said, that during his stay in Indonesia he became increasingly apprehensive about the conventional World Bank style or International Monetary Fund style approach to economic development to which Indonesia has become committed. He said that one had become disposed to see the mounting distortions of income distribution as of greater significance than the much vaunted increase in the national product. He said he had become increasingly inclined to see the power structure of Indonesia as the product of a dovetailing arrangement between the Indonesan Army leadership and the Western and Japanese business corporations pressing for access to Indonesia’s raw materials, and he had been struck more and more with the parallels between current patterns of technocratically rationalised exploitation and those which existed under Dutch colonialism before the war.

He said that he had come to see connections between these economic patterns and the current trends in the country’s political organisation, connections that challenged him to stop being a narrowly specialised political scientist who ‘leaves economic things to the economists’. He said that it had become clear to him that there was a close connection between rising inequality and the tightening of political control, that growing inequalities in cities and villages alike make harsher political controls necessary, that a situation in which the government effectively operates tight political controls is one in which it does not need to be accountable to popular forces and so can afford to allow inequality to grow further in a way which sets up a vicious circle. I have used 2 extensive quotations and the experience of 2 professional observers. I would like to point out that the Australian Government and particularly the Australian Development Assistance Agency we are talking about tonight will commence massive programs in the country nearest to our north other than Papua New Guinea.

Debate (on motion by Mr Sinclair) adjourned.

page 878

APPROPRIATION BILL (No. 4) 1973-74

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

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

Second Reading

Mr CREAN:
Treasurer · Melbourne Ports · ALP

– I move:

This Bil] seeks appropriations totalling $100,480,000 for expenditure in the current financial year on administrative expenses and other services in addition to the appropriations made by the Appropriation Act (No. 1) 1973-74. Although additional appropriations are being sought for the services specified in the Bill, it is expected that savings of about $ 104.2m will be available in other appropriations under Appropriation Act (No. 1). Honourable members will be aware that, as a matter of law, moneys appropriated by Parliament for specific purposes may be used only for those purposes and expected savings under existing appropriations cannot be utilised as an offset to reduce the total of new appropriations sought in this Bill to a net figure. To the extent that any annual appropriation is unexpended, it lapses at 30 June in accordance with section 36 of the Audit Act 1901-1973.

For the information of honourable members, a separate document has been provided listing the estimated savings in existing annual appropriations. I emphasise that these are estimated savings. The final expenditure under those appropriations cannot yet be predicted with certainty. Nor is it intended to imply that there will be no savings under other appropriations. The informtaion is provided by way of background to honourable members’ consideration of the additional amounts new being sought. Honourable members will note that this Bill does not provide for salaries and allowances. This year the additional amount required for salaries and allowances - $ 168.575m - was sought in Appropriation Bill (No. 3) which is currently before the Senate. The additional requirement for departmental administrative expenses is $29.4m. This includes $l.lm for the Department of Housing and Construction for fees of private architects and other consultants; $2. 8m and $4.5m for the Department of Services and Property for elections and referendum and for rent, respectively; $0.7m for the Department of Social Security for postage and telephone services following the easing of the means test; and $0.7m for the Department of Transport for payments to the State railway system for services rendered in connection with interstate passenger and freight traffic.

Additional appropriations of $47. 7m are required for other services of departments. These include $2.4m for the Department of Aboriginal Affairs to provide for award wage employment of Aboriginals formerly employed under the training allowance scheme in the Northern Territory; S5.285m for the Department of Education, including $l.lm for secondary grants to Aboriginals and $1.3m for assistance to isolated children; SI 1.5m for the Department of Foreign Affairs for payment under the National Wheat Agreement - Food Aid Convention; $5.1m for the Department of the Media for increased costs of the Australian Broadcasting Commission; S1.5m for the Department of Minerals and Energy for oil search subsidies; SO. 6m for the Department of Primary Industry for emergency adjustment assistance to the apple, pear and canning fruit industry; $2.2m for the Department of Repatriation for pensions to widows and other dependants of deceased ex-servicemen and for maintenance of patients in non-departmental institutions; $6. 5m for the Department of Services and Property for rent, property maintenance, furniture and fittings and running costs at overseas posts; and $0.9m for the Department of the Special Minister of State for expenditure on the International Exposition to be held in Spokane in the United States of America this year.

Further appropriations totalling $23 .4m are sought for the defence Services. Of this amount $5. 7m is required for maintenance of defence production capacity in government factories and industry. Deliveries made earlier than expected of stores and equipment for the Navy and increased costs of fuel for Royal Australian Navy ships and the Air Force require the provision of $4.2m. A further $4.2m is required to meet increases in general administrative and operational expenses. Production development requires $0.23m and repairs and overhaul of aircraft and military weapons $1.8m. Payments on new aircraft for the Royal Australian Navy and Air Force previously not expected to be made in 1973-74 require $l.lm and maintenance of Air Force elements overseas $lm. Other increased costs and miscellaneous activities require $3.1m. Estimated savings in other Defence appropriations amount to some $41. 3m and are due mainly to slippages, cancellations and rephasing of a variety of equipment projects. I commend the Bill to honourable members.

Debate (on motion by Mr Sinclair) adjourned.

APPROPRIATION BILL (No. 5) 1973-74 Message from the Governor-General recommending appropriation for proposed expenditure announced.

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

Second Reading

Mr CREAN:
Treasurer · Melbourne Ports · ALP

– I move:

That the Bill be now read a second time. This Bill seeks appropriations totalling $70,362,000 for expenditure in the current financial year on items of capital works and services, payments to or for the States and certain other services, additional to those made in the Appropriation Act (No. 2) 1973-74. Although additional appropriations are being sought for the services specified in the Bill, it is expected that savings of about $68. lm will be available in other appropriations. As I explained in relation to Appropriation Bill (No. 4), it is not possible to utilise such savings to offset additional expenditure under other appropriations.

When introducing Appropriation Bill (No. 4) 1973-74 I informed the House that savings expected in amounts appropriated by Appropriation Act (No. 1) 1973-74 had been listed in an information paper for the benefit of members. The information paper likewise contains details of savings expected in amounts appropriated by Appropriation Act (No. 2) 1973-74.

Of the $45.4m now sought for capital works and services, the major requirements are $2m for emergency classroom accommodation for the Department of Immigration; $l.lm for the purchase of residential properties at overseas posts; $33m for the Postmaster-General’s Department to meet the cost of new wage rates and improved conditions of service together with’ increases in the prices of materials; $7.2m for the Department of Services and Property, of which $1.7m is for acquisitions of freehold properties in the Australian Capital Territory and $4.1m for acquisition of properties for overseas posts.

Additional appropriations of $ 14.3m are sought for payments to or for the States. These include $9m for pre-school and child care centres; $1.7m for health services, of which $0.5m is for blood transfusion services and $0.7m for the school dental scheme; $lm for grants to the apple and pear and canning fruit industries; and $l.lm for assistance in relation to natural disasters in previous years. It is proposed that assistance to Queensland and New South Wales in respect of recent floods in those States will be appropriated under special legislation to be introduced shortly. Further appropriations of $ 10.5m are sought for other services of departments, including $6m to enable the National Capital Development Commission to meet contractual obligations under rise and fall clauses in current construction contracts. I commend the Bill to honourable members.

Debate (on motion by Mr Sinclair) adjourned.

page 880

AUSTRALIAN DEVELOPMENT ASSISTANCE AGENCY BILL 1974

Second Reading

Debate resumed.

Mr SINCLAIR:
New England

– I want to say a few words on this Bill. Aid is something which every honourable member of this House supports. The progressive allocation of financial assistance from Australia into the varying recipient countries has of course been a matter of continued discussion on each occasion the Budget has been presented to this House. It is quite apparent that Australia as a wealthy country has a continuing obligation to provide help to others. This Bill provides another form by which that aid should be administered. The speech made earlier today by the honourable member for Kooyong (Mr Peacock) outlined the Opposition’s view on the establishment of this agency. Let me again assert that from our point of view, were we in government, we probably would not have established this particular body to administer aid. However, we do not oppose its establishment and indeed can see some benefits flowing from its operation. In particular, we have a great deal of confidence in the personality and capabilities of Mr Les Johnson who is to be appointed under the terms of the Bill to be the first Director-General of the Agency. We believe that his long and close knowledge of the circumstances of Papua New Guinea will be invaluable not only for the direction of aid to that country but also in his ability to understand the needs of other developing countries which will be the recipients of Australian aid.

One of the reasons that we have reservations about the character of the proposed Agency is that aid comes in several forms. Aid in a normal expression sounds a very simple thing and one would expect that it might be simply defined. But it certainly involves in the positive sense multi-lateral and bi-lateral aid.

Then, in the negative sense, it involves a range of activities in which a government may be positively involved or may be involved simply because it takes no stand. Perhaps I might start by talking about negative aid programs and one of the difficulties that I see this Agency encountering in terms of the prevention of undue negative impact from this type of operation by a government. I think that the discussion we had earlier today on a statement presented to this Parliament by the Treasurer (Mr Crean) on his last visit to the Committee of Twenty perhaps best illustrates my concern.

Currency relativities obviously have a bearing on the receipts that a country obtains for goods sold abroad. A few moments ago, the honourable member for Macarthur (Mr Kerin) mentioned the assessment made by the Development Aid Committee of the Organisation for Economic Co-operation and Development as to the cost to lesser developed countries of currency changes and the general impact of the present energy crisis and the figure he quoted I think was $10m, presumably American dollars. There is no doubt that the impact of currency changes and of such international crises as the variation in oil prices does have a very significant effect on all those who are involved in international trade. However, it has a far greater effect on lesser developed countries and I think it is very important that in its international operations, be it in the International Monetary Fund, in the Committee of Twenty, in the United Nations Conference on Trade and Development or in any other international agency, a government be conscious of the indirect impact of policies which it might pursue in other areas but which have a bearing on aid itself. However I believe that in the positive sense there are principal challenges that will be met by this Agency and by the advice that will be tendered to it by the Development Assistance Advisory Board.

In the bilateral aid programs, of course, Australia has been providing specific aid to meet particular circumstances, and it is in this area that I believe we have been able to do more good in general than in many of our multilateral contributions. That is not to deny that in theoretical terms, multilateral aid programs are generally perhaps more dispassionately providing for assistance to those in need and to lesser developed countries in order to meet their social and economic difficulties. To my mind multilateral programs, in recent years, have suffered because of the proliferation of bureaucrats and different administrative headquarters. I mention only one body with which I have had some association - the Food and Agriculture Organisation. In Rome, there are something like 4,000 people operating the administrative headquarters of this food aid organisation of the United Nations. They represent the major number of persons employed by this international body. They spend a significant percentage - I recall that it is something like 40 per cent - of the funds that FAO has, supposedly to be directed towards aid programs. Regrettably, so many of our multilateral contributions are dissipated in the maintenance of bureaucratic hierarchies in different capitals of the world and in different administrative centres of the world. I would hope that this new Australian Development Assistance Agency does not become another bureaucratic morass. I am concerned that there is far too great a tendency for funds that are quite altruistically directed by governments on behalf of the Australian people towards the assistance of others to be dissipated through the creation of agencies and bodies, the employment of people and the creation of the trappings of office which seem to be part of such creation, rather than used in helping the people for whom, in fact, the aid is intended.

I think it is also important that Australia distinguishes between the different purposes of bilateral aid programs and multilateral aid programs. The Prime Minister’s announcement only a week or so ago that the Government has undertaken to provide for Papua New Guinea, which is about to become independent, a sum of approximately $A500m over the next 3 years indicates one of the ways by which bilateral aid can give to a country - in this instance one so close to Australia - a feeling of economic confidence which I am sure was material in Papua New Guinea being able to set a date for independence.

It is important that bilateral aid programs be maintained. There are, of course, within bilateral aid programs as in multilateral programs, still very real disabilities in determining the actual advantage to the recipients. One of the tasks which I hope this Agency may take unto itself is the establishment of a criterion by which the efficacy of fund contributions can be gauged. In the past, quite serious criticisms have been levelled against some bilateral and multilateral programs.

Equally, there have been considerable commendations of some programs. For example, I know that some of the road construction programs that have been undertaken in Thailand by past Australian administrations have provided not only the road, but also a measure of training of Thais in the operation of equipment, in the skills necessary for road construction, and the basis upon which future programs can be undertaken in this instance by Thais but in other instances by the nationals of the country in which similar aid is provided. This is a very effective way in which a country like Australia can provide not just physical benefits through the funds contributed but also personal benefits such as the passing on of skills, knowledge and knowhow, which in many instances are far more worthwhile for a developing country than just the construction of a road or the undertaking of some physical program. I believe that it is in aid projects of that character that most good has been achieved in the past. I would hope that in undertaking new aid programs and in the determination of the benefits of existing programs, this Agency institutes some scheme by which the efficacy of aid can be determined and the benefits identified in relation both to the people - importantly to the people - who are the recipients and to the Australian taxpayer who, after all, is digging into his pocket in order to provide aid, and in many instances without any understanding of the result.

Mr Lloyd:

– No mention of revaluation at all.

Mr SINCLAIR:

– There has been no mention of revaluation. As I mentioned before, I believe that the negative consequences of revaluation is one of the areas within which it is necessary for us to recognise the impact of what Australia is doing. The other problem which I can see emerging from our aid programs and which I would hope that .the Agency might turn to is that over the years, because of the nature of our Commonwealth involvement originally and then because of the constitution of a system which seems to have been successful, we have pursued a very extensive Colombo Plan aid educational program which has brought a great deal of opportunity to people who might otherwise have been denied it. Yet even there, within the Colombo Plan, there are problems about which we need to be concerned; for instance, the difficulties in ensuring whether the aid is providing for the country receiving the aid the sort of help that is needed. All we need to do is to revert to the dispute between the Prime Minister of Singapore, Mr Lee Kuan Yew, and the Australian Prime Minister in Ottawa to see one of the areas of difficulty. It will be recalled that the Prime Minister of Singapore said that Australia was retaining persons who had come to Australia for education and that those people were not going back to Singapore to help Singapore in its developing programs.

Part of the problem of the Colombo Plan is that the nature of Australian training does not always suit the employment opportunities in the country of origin of the people receiving the training. Let me illustrate this with a story that is unfortunately true. A young agricultural scientist who trained in Australia some years ago had considerable academic and practical success here. After his graduation he returned to his own country, having been away for some 8 years, and immediately took up a relatively senior appointment. After taking up this appointment he wrote that he appreciated his training and he believed it to have been excellent, but he had been away from his own country for so long that he would have to spend the first 5 years after taking up his appointment studying the agronomics of the local crops. He ended his letter succinctly in these words: ‘Imagine a specialist in wheat economy in an area with a rainfall of 200 inches and I haven’t a clue about ricegrowing’.

These are some of the anomalies of which I believe we need to be conscious and which one would hope that this aid agency might be able to correct. Obviously this will not be an easy task. There are many areas of fund allocations which are not perhaps capable of being changed easily. Particularly in our multi-lateral programs we have a long-term commitment. The undoubted merit of those programs cannot be questioned. Yet I believe that equally in the multilateral programs and in the bilateral programs there is a necessity for the actual merit of the aid contributed by Australia to be assessed. I would hope that on future occasions this Parliament might be given some assessment of the benefits that accrue from the funds provided each year by Australia towards the assistance of people in other countries. It will obviously be impossible to make an accurate judgment on the actual benefits to the people who receive the help. But I think that it is necessary for there to be a continuing reassessment on the personal level as well as on the national level of just what an aid program means. I hope that this aid agency will be able to ensure the revision of not only past programs but also future ones to ensure that the benefits far more than outweigh the costs.

As I have said, I have some reservations about the actual concept of the Agency. Nonetheless I believe that it is something that the Opposition should support. I hope that in its operations it will be able to overcome some of the conflict that has existed in the past between aid programs administered by different departments and that it will be able to regard itself as being responsible for not only the positive elements of aid but also those which cover, as I have suggested, the negative aspects - in other words, the implications that flow from actions taken by Australia in the international arena that do not necessarily pertain directly to aid but have such a profound bearing on it. I refer to currency relativity, to currency negotiations. I think it is also necessary that we make sure that no matter where our aid is directed it in no way and in no sense runs against Australia’s long term national interest. That does not mean that we should not pursue, as we did during the days of confrontation with Indonesia, for example, aid projects which lead towards the assistance of the people of that country, taking into account the long term view.

But I believe that it is necessary for Australian aid to be directed to countries in our region initially with which we are likely to be able to maintain beneficial relationships and not to countries which might lead in the long term towards a development or a division which might not be in Australia’s best interest. In particular I am concerned about the aid programs that have been undertaken in the short term with North Vietnam - aid programs that seem to run so contrary to actions that are still being taken by that country in South Vietnam. I believe that it is necessary for the politics of the country to which aid is being provided to be taken into account. One would hope that whenever an aid program is undertaken the long term interests of the Australian people will not be forgotten. It is certainly necessary to consider those of the recipient country. After all it is for that reason that we enter into any type of aid scheme. But Australia’s long term interests surely must be a significant part of any decision that is ultimately taken as to the direction, nature, quantum and character of aid provided. I support the Bill but believe that some of the matters to which I have adverted need to be taken into account in the operation of the Agency itself.

Mr LAMB (La Trobe) (9.43>- Australia’s aid abroad is largely a post-war phenomenon. Indeed the whole issue of foreign aid has no parallel in the pre-war experience. For the first several years Australia’s aid was channelled largely through multilateral agencies of the United Nations no doubt due to changing and unpredictable world events, the initiatives of Dr Evatt as President of the United Nations, and the Labor Government’s emphasis on the United Nations as a consequence. The principle of bilateral - that is nation to nation - aid rapidly became established international practice with the inception of the Marshall Plan for the reconstruction of Europe. Since then there have been 2 distinct streams of foreign aid - bilateral and multilateral. Australia’s aid has been overwhelmingly weighted on the bilateral side. In recent years the multilateral component has been well under onetenth of the total Australian aid bill. Now basic changes are to be made to Australia’s attitude towards aid and the manner in which development assistance should be administered.

Firstly, we will strive towards a target of official aid equivalent to 0.7 per cent of our gross national product by 1980. It is the strategy of the second United Nations development decade for aid donor countries progressively to increase their official - that is government - development assistance to -reach this target by the middle of the decade. Although it has not met the timing set by the United Nations the Government believes the target to be highly presentable by the end of the decade. However, I must agree with the honourable member for Macarthur (Mr Kerin) and the honourable member for Gellibrand (Mr Willis) that this is not wholly the spirit of the strategy of the second United Nations development decade. I agree also with the honourable member for Kooyong (Mr Peacock) that it is pointless to argue about international comparisons of aid performance by different donor countries. Anyway they are subject to numerous reservations because of conceptual problems and statistical difficulties.

A factor to Australia’s credit is that our official development assistance has always been provided on extremely liberal terms. We provide almost all our official development assist ance in the form of grants. We think it obvious that, insofar as developing countries are concerned, grants are preferable to loans. No matter how generous its terms are, a loan raises the problem of debt servicing. According to the figures issued by the International Development Association for the period 1965 to 1970 loan charges increased at a greater rate than total aid; in other words, by the tortuous logic of the aid game an apparent 16 per cent rise in donations turned out to be a 3 per cent drop in net receipts. Our continued policy of giving the great majority of our aid in grants has led to our being consistently ranked first among major Western aid donors in terms of the softness of official aid provided to developing countries. In 1972, 93 per cent of Australia’s assistance was in grant form. Further, most of Australia’s official development assistance has been and continues to be untied, with less than 25 per cent being formally tied to Australian goods and services. 1 believe that this situation should not only continue but that we should place more emphasis on untied aid.

The Government’s changes in administration was not an isolated decision - indeed, it was recommended in the report on Australian foreign aid of the Joint Parliamentary Committee on Foreign Affairs which was tabled in this Parliament on 6 March of last year. The report stated:

The existing structure involving dispersal of aid functions among several departments needs to be substantially reviewed in the light of the increased complexities and sophistication of development assistance and to accommodate the administration of aid to an independent Papua New Guinea.

I want to concentrate on 2 aspects of those complexities - foreign investment and world trade. We have indicated on several occasions our attitude to development aid. The Government’s policies on external aid were set down in detail in a special document entitled ‘Australia’s External Aid 1973-74’ that was published as part of the Budget Papers. A basic principle of our aid program is to provide assistance only in response to requests from recipient governments in accordance with the development priorities which they have established. The form of our aid can vary substantially from country to country, as the honourable member for New England (Mr Sinclair) said. It may take the form of 5 distinct types of aid - projects, experts, training, program aid or food aid. In co-ordinating this aid the new agency will be keen to have the benefit of the advice of interested members of the community. The advisory board to be set up will include members of the public, the trade unions, the business community and voluntary organisations interested in aid matters. This will enable the agency and the Minister for Foreign Affairs (Senator Willesee) to obtain advice and objective criticism on aid operations and to avoid the problems that many honourable members have raised in this debate. That is essential.

Developing countries cannot be viewed in isolation. We are all part of one earth and are all inter-related - not independent but interdependent. We must adopt a community view - a world view - if we are to avoid a deterioration in the relationship between rich and poor, lt is important to realise that we need a flexible policy towards aid in each individual recipient country. In the past Australia has been a vigorous exponent of orthodox Western development theory and has designed its aid and trade policies towards poor countries in accordance with such a theory. It will not be sufficient for us merely to increase our aid or toy with alternative bureaucratic alternatives, such as the formation of this Agency. It is time for a new approach to aid to developing countries. We have had an indication that there will be changes in our approach.

The Government recognises that the objective of economic development is not merely to record higher statistical indices of production and growth but to improve the wellbeing of human beings. On this point the Minister for Foreign Affairs, at the high level meeting of the Development Assistance Committee of the Organisation for Economic Co-operation and Development in November of last year, stated that we proposed to shift the emphasis in our aid program in future in favour of projects with a greater social impact on employment and income distribution, especially in rural areas. Around the same time, at the Tokyo conference the Minister for Foreign Affairs indicated that the Australian Government would be looking at ways in which some of its current aid effort, especially in areas of population, family planning, transport and communications, might be linked with the work of some of the regional projects sponsored by that Conference.

These are encouraging signs within the context of what amounts to a virtual revolution in thinking on development issues throughout the world. Australian policy makers must sort out in their own minds a set of priorities and a framework of action that is relevant to the realities. Certainly we cannot continue as we have in the past. The adoption of capitalist oriented, Western sponsored development programs has been a general failure in closing the gap between the rich and the poor countries and the gap between the rich and poor within those countries. That rapid growth in terms of orthodox Western theory does not necessarily produce, and has so far not produced, increased welfare or justice is by now widely recognised. I shall give some figures to support this view.

Eighty per cent of the increase of gross world product of SI, 100 billion went to countries where the average per capita income exceeded $1,000 and represented only 25 per cent of the world’s population. Six per cent of the increase went to countries where the average per capita income was less than $200. But they contained 60 per cent of the world’s people. Mr Robert McNamara, the President of the World Bank, showed that studies of income distribution patterns in more than 40 developing countries indicated that over the last decade the average share of the national income of the richest 20 per cent of the people was 56 per cent. But the share of the poorest 60 per cent of the people was only 26 per cent. The situation is further deteriorating.

It is extremely fortuitous that we have just received a visit from the head of a developing country, the President of Tanzania, Dr Nyerere. He summarised the need for new economic approaches when he said:

Even if we had been ideologically attracted to capitalism, in our circumstances this would not be compatible with the kind of development necessary in Tanzania, or with our national independence.

He went on:

Because of its poverty Tanzania’s only development by private investment would have to be through foreign private investment, but this would only result in an economy owned and controlled by non-citizens.

In advocating his brand of socialism as appropriate in his country, Dr Nyerere said:

Our first aim is the defence and extension of our independence. The second is the development of the people, not just of the national income statistics.

Dr . Nyerere said that lie wanted equality throughout the world and that he would work for fundamental reform of world trading and monetary systems, which now disadvantage poor nations to achieve economic and geographic equality. He outlined briefly, honourable members recall, the poverty in his own country. Dr Nyerere said that only half of Tanzania’s children attend primary school, infant mortality is ISO per thousand live births, and the per capita national income is only SA70 a head a year. We could not have been more fortunate in hearing such a succinct account of what’ is not an atypical country.

It is comforting to note that last year the Prime Minister (Mr Whitlam) said that the Government considers that Australia’s recent levels of assistance to African countries, made under the special Commonwealth Assistance Program, have not adequately reflected our interest in Africa. The Prime Minister said that the Government intends that there will be an expansion of aid programs to the African continent although, relative to South-East Asia and the Pacific, Australia’s assistance will still be modest. Most of our aid to southern Africa has been to the United Nations funds established to assist the educational development and other aspirations of the people of southern Africa.

I believe that the Agency must develop new world co-operative strategies to achieve the Government’s aim of greater social impact on employment and income distribution, especially in rural areas. I quoted earlier remarks made by the Minister for Foreign Affairs in this respect. Perhaps the starting point for determining the criteria of aid ought to be the promotion of economic equality between nations. To end this inequality the poorest nations should receive the most help. But in making need the principal criterion for aid it should not be simply measured by average per capita income, for this may conceal sharp contrast between the poverty of the majority and the relative prosperity of an elite, even if it does effectively measure the poverty or wealth of the nation as a whole.

An ideal measure of need ought to take into account at least the following indicators: Per capita consumption of food grain, opportunities for employment to all those who seek it and the fulfilling of the objectives of a self-reliant economy. Firstly, inequality of distribution problems would have been minimised because food grain consumption per head is less misleading, more meaningful and measureable than per capita income. There is a saturation limit of food grain consumption and it is likely that even the richest people would give away their surplus food grain to the less well off for consumption. This is not true in the case of income. Secondly, by emphasising the objectives of lull employment, a minimum income and participation by the labour force are assured. This would also ensure the degree of political stability which is essential foi economic development. Thirdly, the objectives of a self-reliant and self-generating economy would be strong enough to develop at a satisfactory rate without be.’ng dependant on foreign aid or foreign investment. The export diversification and import substitution programs of a developing country should be evaluated primarily in terms of their contribution to selfreliance and only secondly viz-a-viz the rate of growth of per capita income.

The mass of the people should be taken as the starting point. But to achieve this, it means taking the rural sector and therefore the agricultural sector as the priority. If we compare the individualist approach of India, Sri Lanka and Columbia with the collectivist approach of Cuba and Tanzania, we find the latter more effective because the collectivist approach does result in units of production which are viable and sensible. The peasants are involved in the organisation of their own advance, lt also results in a much higher level of savings for domestic investment. It is reassuring that the present Government recognises the desirability of such an approach for it has been the misfortune of poorer countries that the aid policies of developed countries have been shaped in their own image, on the basis of unquestioned faith in the virtues and effectiveness of private capitalism in the promotion of economic growth.

Another initiative taken by the present Government was announced by the Prime Minister 2 months ago. This statement expressed the Government’s earnest desire to prevent Australia’s investments abroad, particularly in Asia, attracting the antipathy that those of the United States and more recently of Japan have attracted. The Prime Minister declared:

It is the intention of the Australian Government to encourage investment which will meet the type of criteria applied to investment in Australia. It is the intention of the Australian Government to do all it can to ensure that Australian investment in overseas countries will benefit the people in those countries and will be favourable to ownership and control of enterprises by people in the countries in which it is made and will have advanced labour relations and environmental policies. It is exepected that all Australian investment will be in accord with the policies of the governments of the countries in which it is made.

The previous Government employed virtually no controls on overseas investment by Australians. Foreign investment by Australian based companies over the 1960s increased dramatically from $6m in 1961 to $57m in 1968. This investment is very small both in relation to foreign investment in Australia and to other foreign investment in South East Asia. Further, it is difficult to distinguish the Australian-owned component from the activities of foreign-owned companies with regional bases in Australia. It is difficult to find reliable estimates of the relative profitability of investment in Australia and overseas, but there can be little doubt that such a dramatic increase in direct Australian foreign investment has been in response to profits, which have been as much as twice the profit rate on domestic investment for most of that decade.

It is common for the spokesmen of Western governments to emphasise the benefits to all from direct foreign investments. The benefits which are supposed to accrue to the recipient country, according to standard economic arguments, from the provision of scarce capital, technology and management are not automatic especially when extensive tax concessions are granted for the early years of the investment. We need look no further than the earnings of Bougainville Copper Pty Ltd in Papua New Guinea. For example, monopoly conditions and. high tariffs in the industries in which the direct investment takes place can easily cause inefficiencies sufficient to lead to a net loss for the host country after foreign investment takes place. Another factor overlooked by the advocates’ of foreign investment relates to the net transfer of reinvestible surplus from the developing country to the investing country rather than the other way around.

As I have just noted, direct foreign investment brings with it a package of funds for investment, technology and management. All of these factors are assumed to be scarce in the developing countries so that direct investment brings benefits on all 3 counts. Yet it has been pointed out that the largest foreign investing country in the United States of America is actually a net importer of reinvestible surplus from developing countries.

These governments’ criteria for investment may go some distance towards satisfying the socialist’s views of overseas investment by countries as set out by the former Minister for Overseas Development in the previous

Wilson Government, Mrs Judith Hart. In her book, ‘A Socialist’s Study of Aid Policies’, she devotes chapter 3 to the role of private profit and comes to the conclusion that foreign private investment has no place in international aid targets - a view not far removed from that expressed by the Organisation for Economic Co-operation and Development. She correctly points out that if foreign investors, with their greater skills and resources, pre-empt the best investment opportunities the result may be a reduction of local investment. The techniques they introduce may not suit local conditions and in such circumstances the private foreign investment may well actually inhibit rather than stimulate effective development.

At any rate, the conditions imposed by this Australian Government, and the small amount of overseas investment likely to flow from Australia, should help Australia to avoid being lumped in the charge that in the name of foreign aid most advanced countries are doing profitable business and that foreign aid has become a method by which these rich countries are maintaining a position of influence and control around the world.

Over the last 10 years international trade has contributed to a steady widening of the gap between rich and poor nations. The ratio of trade between the rich and the poor countries actually declined from 2.75 to 1 at the start to 4 to 1 at the end of the decade. The reasons are not hard to find; the main one being that the rich have simply erected a mammoth financial fence around themselves to keep out the goods of the poor. We are rapidly moving towards a situation in which the call on the world’s resources will be overwhelming. Indeed, the honourable member for Kooyong (Mr Peacock) mentioned the high demand for oil, which is a diminishing world resource. Are the poor nations really going to sit by while the rich nations continue to enjoy a standard of living absolutely inconceivable to the majority of the world’s population? The only answer must be world economic equality if we are to avoid global conflict.

The main differences between the previous Government’s policies and those of the present Government lie in the establishment of the Australian Development Assistance Agency and its policy to direct more aid to the countries of the South Pacific and Africa. For Australia, as a rich white nation located in the area of the world’s most pressing development problems, the need to be deeply engaged in helping with solutions to these problems is far greater than for other wealthy donor countries. I believe that foreign aid should form a lesser part of conventional foreign policy and form part of a multilateral approach to the solution of the problems that threaten man’s survival - economic growth, distortion of the consumption of the earth’s resources, distortion in income distribution and the world’s ever-increasing population. I believe that this Government has initiated such a shift in emphasis in its policy of aid to the developing countries.

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

Mr COOKE:
Petrie

– Foreign aid is a sensitive subject. It is sensitive because whilst most people in Australia believe that we, as a relatively wealthy country, should contribute toward the betterment of social and economic conditions in neighbouring countries there can often be wide differences of opinion as to how that aid should be administered. I think it is probably generally recognised that the emphasis in any aid program should be on selfimprovement in the country to be helped. Our aid should provide a priming for the local pump. In fact the Prime Minister (Mr Whitlam) in his second reading speech looks to this new agency which the Bill establishes as developing innovative policies responsive to the needs of economic self-reliance and social justice in developing countries. That is a concept which no one in Australia would care to dispute, but when dealing with foreign aid in the long term what is needed is a high degree of tolerance plus a great degree of perseverance. If long term results are to be achieved on the basis enunciated by the Prime Minister we must approach the problem not only with idealistic views but also with practical concepts of the limitations that are placed on us.

While Australia may be relatively wealthy it is not a country that has an inexhaustible pocket. As the Minister for Overseas Trade (Dr J. F. Cairns) would appreciate, it is simple for a country to turn from a position of relative strength as a trading country to a country with a balance of payments problem in a short space of time. Not only is it sensitive in terms of the money to be spent but foreign aid also presents a dilemma for governments because ultimately the Government has to persuade its voters - the people of Australia who support the Government - that the program is worth while. The dilemma that then raises its head is that the more realistic the effort a country is making in meeting is own problems the less aid it appears to need but the more it may be said it deserves it and, conversely, the less able a fist a country is making of its own domestic problems or perhaps the more ambitious its plans for expansion the less aid it may be said to deserve but the more aid it actually needs.

If we are to consider aid programs in terms of the style of government which exists in the countries in our immediate region we again run into an extremely sensitive area because I venture to suggest that there are practically no political regimes in South East Asia which would meet with the universal support of Australians in general. There are regimes which are controlled by military juntas; regimes where Opposition parties are banned; regimes and governments which suppress newspapers and where people who speak against government policies are thrown into gaol. In our part of the world there is hardly a country which would have a comparable system of parliamentary government to that in Australia. Consequently if we were to restrict aid to countries that conformed to our concept of parliamentary democracy we would not be giving much assistance at all so I think that any consideration requires a large degree of tolerance. We must base our programs on the concept of trying to ensure social justice in the developing countries irrespective of the political complexion their governments may bear.

This brings me to another point which the Prime Minister made in introducing this Bill. He suggested that the proposed agency would ensure that greater attention would be given to the way in which our aid program would be administered in the countries to which it was given - that it would be examined to make sure that the effect of our aid was to promote the welfare of the people of those countries. One can find numerous stories of aid being abused in countries to which Australia, along with other nations, have given aid - countries where graft and corruption is ingrained into the political system and where aid does not go to assist the people who need it but to lining the pockets of government officials who sell the goods or sell the money on the black market for their own profit.

I think it is sensible that any aid program that Australia embarks on should have this check and safeguard imposed on it. We should be most concerned to make sure that our money is spent in the correct way and that it is benefiting the social wellbeing of the people in the country concerned. The other point made by the Prime Minister in introducing this Bill was that we should have an agency to conduct a continuing evaluation of the effectiveness of our various schemes. This again, I think, is a very sensible concept. Perhaps the Colombo Plan was very good when it started. The concept was that we would bring students to Australia and train them at the tertiary level so that they could then return to their countries and assist in their own local development. It has become apparent, I think, that students in Australia have been trained in a far more sophisticated environment than exists in their home countries and much of the training which they receive in Australia, while being very valuable to themselves personally, is not always able to be put to good use in their home countries when they return.

To take one example, a student trained in medicine in an Australian university or a medical teaching hospital would find medical practice in most Asian countries entirely different. What is needed for medical students in Asian countries is greater emphasis on matters of public health and community medicine where sophisticated surgery techniques and other drugs are not available and where some improvision in the basic practice of medicine is required. For this reason I think it is necessary to have a continuing evaluation of our program. It is necessary, for example, to be able to take the nettle in both hands and say: ‘Well, perhaps the program ought to be reversed. Perhaps we ought to be sending teachers into these countries from which we now draw Colombo Plan students. Instead of bringing students to Australia we should be sending professors and teachers to their countries to train them in their local environment so that they can then go out into the field without any dislocation caused by oversophistication in training’.

I will sketch one or two of the areas in which Australia can assist in overseas aid and these I think are basic areas. First is the field of food production. We are faced at the present time with wide scale famine in Africa.

These famines recur from time to time in that part of the world. Last year we faced a disaster of catastrophic proportions in India where famine and flooding caused widespread cholera and other diseases. These are disasters which occur from time to time. Undoubtedly Australia will always come to the aid of countries which are in this situation with emergency relief aid. But as well as providing emergency relief aid I think we ought to be looking for long term solutions. We ought, for example, to be looking to ascertain whether we can assist in building dams and irrigation works which would increase the cultivatable land in Africa. This would increase food production in some of the areas which are subject to the failure of crops. We ought to consider promotion of diversification and rotation of crops that may be grown in these areas to assist in times of need.

In the area of public health, once again a very basic area, we ought perhaps to be helping to bring elementary systems of sanitation into some of the very large cities of Asia where sewers empty straight into the gutter where the untreated effluent flows into the rivers that provide the water supply for the population of some very large cities. Perhaps we ought to be assisting in specific projects of public health in those areas and also in the general field of elementary education. I do not believe that we ought to be concerned either with secondary or with tertiary education but it is important, I believe, that we make an onslaught on the growing problem of illiteracy. Even though the western countries have had systems of universal education, for quite a number of years the problem of illiteracy in the world taken as a whole has not improved very markedly. This is something which I think we have to attack very strongly because our present Western style of living which is becoming increasingly desired by other parts of the world depends very much on a .literate people. If we have an elementary system of education which gives the people the basis of reading and writing we can build on it in future years.

These are basic areas in which Australia ought to concern itself. We are able, I believe, to provide assistance in the training of skilled workers, artisans and tradesmen who are desperately needed in their home countries. Once again I suggest that the appropriate way that we can do that is not by bringing trade apprentices and others to Australia but by sending teachers to teach more people in their home countries than our money would provide for if we brought them here. Australia can also assist in capital investment either in partnership with local capital or by contributing to a multi-national type of agency such as the World Bank or the Asian Development Bank. In the days when home ownership of economic assets has become a problem right around the world I suggest that it is probably more desirable that capital investment is channelled through a multi-national agency such as the World Bank and the Asian Development Bank where the capital can be marshalled and made available to the developing countries for specific projects and when the capital is paid back the home country ends up owning the industry.

Australia can also assist in providing managerial skills for industries in their early stages. We have been a beneficiary of this type of aid in the past. British and American companies have sent to Australia people skilled on the managerial side of the business and over a long period of time Australians have been educated and trained to take over managerial duties. We have in Australia at the present time, I feel, a reservoir of managerial skills which we can make available to developing countries in our immediate region. We can also assist in providing markets both for primary and raw materials of countries in our region and also later for manufactured goods when they move into the secondary industry field. We are, after all, a trading country. We depend on trade. We produce a remarkable amount of food and probably we could increase our food production in almost unlimited quantities if we could find the markets. I believe there are markets for food to our immediate north. The problem always has been whether they can afford to pay the prices for our food and whether the people are trained in their dietary habits to want it. I believe that with the increasing industrialisation of the countries to our north an increasingly wider market for agricultural products from Australia will open up but we must be ready to have a 2-way trading arrangement. No country wants to enter into a trading partnership and always be on the wrong end, with a deficit. So we must approach our trading relations with other countries in a fair and broadminded way not only in our own interests but in the interests of the region as well.

I express some disappointment that the Prime Minister was not more detailed about the type of aid which this agency is going to channel. I hope that in view of the request for military aid that appeared in the newspapers as coming from President Nyerere during his visit to Australia, the Government will give an unequivocal assurance to the House that this agency will not be used as a vehicle for providing military aid of any description to any overseas country. I think the decision to give military aid to other countries is one which ought to be debated separately by the Parliament and not simply left to an agency such as this to make. I hope that this agency will do nothing but distribute civil aid on the basis of the principles and program laid down by the Prime Minister in his speech introducing this Bill.

I also take issue with the Government on the desirability of creating this agency as a statutory body. I know that the Government is wedded to the idea of creating statutory bodies. Apparently it feels that this is the best method of dealing with quite a number of problems. On the other hand, I believe that this dilutes the responsibility of the Minister to the Parliament and in that respect I think that statutory bodies are undesirable. This is a typical example of where a statutory body has been chosen and in my view has been incorrectly chosen. Foreign aid must always be a subject of debate in this House. I think it is proper that the body ought to be directly responsible to a Minister who is himself directly responsible to the House. He should riot be shielded from his responsibility by interposing a statutory body between him and the Parliament.

Such a system also leads to a one-line appropriation of money once a year on the basis of past performance. It is hardly a good enough opportunity for Parliament to scrutinise what the Agency is doing if this is done on a once-a-year basis during the Budget debates. I think that this Agency could be quite adequately run as an advisory agency to the Minister. I agree, however, with the Government’s proposal to have an Advisory Board. I think it is good that the Government is thinking of bringing in other groups in the community which are interested in aid. Church groups, trade unions and others in the community who have involved themselves in voluntary aid programs ought to be consulted in devising a program for the Australian Government.

I hope that the Government, before this debate is finished, will give a clear definition of the aims which it has in this regard. I appreciate that it is difficult in setting up the Agency at this time to have any really detailed specific proposals of what aid programs it will carry out. But I think that the Prime Minister could have been somewhat more expansive than he was in his second reading speech. I should like an assurance with regard to military aid and also about the channelling of money into multinational funds, which latter has led to discontent in many parts of the world. It is, I believe, one of the prime causes of discontent in the United States at present because the United Nations and other multinational bodies have unfortunately injected a note of political bias into the way in which their programs are developed. If this is allowed to intrude too much, naturally the countries which are being called upon to contribute feel that they are not having an adequate say in how the money is being spent. If they feel that the money is being spent by the international agency contrary to their own political interests and their own national interests, they will react by dropping their payments to those bodies. So I think we ought to have some definition from the Government as to what multinational, programs are to be supported and what areas of bilateral aid are hoped to be explored.

Mr WILSON:
Sturt

– The Australian Development Assistance Agency Bill before the House is designed to establish an Australian Development Assistance Agency as a statutory body. I want to take up many of the points so constructively put to the House by my colleague, the honourable member for Petrie (Mr Cooke). The Prime Minister (Mr Whitlam) in his second reading speech did little more than explain to the House the organisational structure proposed for the Agency. Its purpose, according to the Prime Minister, is to unify by absorbing the aid functions now carried out by several departments. No indication was given by the Prime Minister on behalf of the Government in his second reading speech of the guidelines to be followed in the provision of Australia’s aid to developing countries, although the Prime Minister did point out that it was his hope that the Agency would, amongst its functions, formulate aid policies which will take up the challenges of the future.

I hope that the Agency takes up that challenge, but I express some concern. When I read the Bill I find that the advisory role of the Agency is to advise the Minister for Foreign Affairs. Ministers have staffs and departments which can advise them. Ministers then make their decision on the outcome of the advice they receive. But if one sets up a separate agency one likes to think that that agency will have an independence, an objectivity and a capacity to report to the Parliament and to express its views on the new dimension in aid policies. I hope that the Agency when appointed, and the Advisory Board when established, will not be content merely to give advice on the limited range of topics upon which advice may be sought by the Minister for the time being. I hope that the Agency and the Board will take up the challenge of reviewing the whole broad spectrum of Australia’s overseas aid to ensure that the countries that the Australian people seek to assist by the allocation, hopefully of increasing amounts of money in real terms, will achieve the maximum results from the money so spent.

The Prime Minister has pointed out that it is the Government’s intention continuously to raise the amount of aid granted until such time as official aid represents 0.7 per cent of the gross national product.- When this target is achieved, and as it is being achieved, our primary concern should be to ensure that the developing countries get the best value for the Australian aid dollar. In this regard I want to touch particularly in my remarks on the question of education aid. The Colombo Plan has been operating for more than 20 years. We have received into Australia many thousands of students from Asia, the Indian subcontinent and from the Pacific. The report of the Australian Universities Commission reads as follows:

The provision of places in Australian universities for overseas students, both sponsored and private, has been a significant element of Australia’s foreign aid program since the Second World War. In 1971 there were 6,199 overseas students studying at Australian universities. This is equivalent to the enrolment of a medium-sized university.

The report goes on to say that most of the students came from the developing countries of Africa and Asia and will return to their own countries on completion of their courses. The question that ‘I ask the House to consider, and I hope that the Agency will examine in great detail, is whether the direct and indirect allocation of resources to the provision of a medium-sized university here in Australia for Asian, African and Indian students is achieving the best value for the Australian aid dollar to the benefit to those countries. 1 believe that the time has come when we should be thinking of providing an Australian overseas university - the infrastructure of a university that could provide teaching facilities in the developing countries. That is not to say that receiving in Australia Asian students and students from other developing countries is not important for the development of those countries. It is not to say that it is not important for the development of Australian students by virtue of the experience they gain in rubbing shoulders as students with people from widely differing cultures. But that is a cost that should not be allocated against the aid provision by Australia.

Debate interrupted.

page 891

ADJOURNMENT

Shipping: Carriage of Oranges to New Zealand -Senate Election - Political and Civil Rights

Mr SPEAKER:

– Order! It being 10.30 p.m., in accordance with the order of the House, I propose the question:

That the House do now adjourn.

Mr GILES:
Angas

– I think that the Minister for Overseas Trade (Dr J. F. Cairns) for one will remember that last week I reminded the House, by way of a question asked of the Minister for Transport (Mr Charles Jones), that the export trade of citrus to New Zealand, primarily from my area and areas nearby, worth about $2.2m to the producers, was in a state of some jeopardy due to a series of facts. The facts as I remember them are these: The wharf labourers* union of New Zealand, in order to support the seamen’s union of New Zealand, has an embargo against the unloading of Australian crewed vessels on the Tasman trade. It is my information that they will, however, unload Israeli, Canadian and American ships on that same route. I believe that ore from the Northern Territory to New Zealand is in the same category as the export of citrus to New Zealand.

The trade has been carried for some years by a rather antique New Zealand vessel called the Tarawera’. The ‘Tarawera’ must be a very small vessel because I think it made 9 trips to New Zealand and back when the citrus export season was on. During the off season this vessel carted bananas to New Zealand from nearby islands. The banana trade is now finished. The ‘Tarawera’ rate as put by importers in New Zealand to the industry in Australia was to go up to a figure in excess of $3 a Bruce box - for those who know the type of packaging in the citrus export trade today. This is a huge increase on past shipping rates. The New Zealand importers of this produce therefore decided that they could not go ahead with this deal and informed the Australian shippers and the Australian industry accordingly. The importers were offered space on a roll-on roll-off vessel which did not suit the type of trade.

I gather that the Minister for Overseas Trade misunderstood the question I asked him 2 weeks ago. The Minister got up on the adjournment to correct his statement. His corrected statement was to advise the citrus industry that excess space existed on Australian National Line ships plying with Australian goods through New Zealand, not able to unload them, picking up more New Zealand goods, going on to America with them and offloading the goods there. This situation seems farcical enough. But the Minister for Transport assured me that there were possibilities that negotiations could be successfully concluded so that New Zealand wharfies in their attempt to protect the New Zealand seamen’s union and thus the New Zealand trade could be prevailed upon to accept the prospect of unloading Australian goods carried by ANL ships. The industry is not awfully impressed with this answer, because as far as it knows this is not a prospect at the moment. However, to my great relief I found that the Minister for Overseas Trade was heading to New Zealand on a Friday at the. end of the last sitting week and I asked him to do all he could to ensure that this trade which is so important to my electorate could be sorted out. Perhaps the ANL could be allowed to unload on Tasman crossings.

I am reminded that I have been speaking for some time on the adjournment debate. I conclude on the note that I hope that the Minister for Overseas Trade has some answer for me in relation to this matter, which is of very great concern to the citrus growing areas of Loxton, Renmark, Berri and Waikerie, the last with its fast-increasing production. As I say, the $2.2m worth of trade which is at risk is very important outside Riverland itself and to the entire Murray Valley. It may be important in terms of the Sydney citrus trade, but I am not aware of this being a factor. That is as impartially as I can put the case.

I would just complete my remarks by saying that I hope that the stupid regulations, brought about by wharf labourers in New Zealand in this case, that militate against the free trade between one nation and another to the advantage of both must surely be overcome by some means. I think I will leave it at that and hope that the Minister for Overseas Trade has some answer to this query which is now of 2 weeks duration.

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

– I will endeavour to clarify the position as quickly as 1 can for the honourable member for Angas (Mr Giles). It was not I who raised the matter by way of question, nor was it I who misunderstood the honourable member’s question. It was the Minister for Transport (Mr Charles Jones). It is true that about 20,000 tons of oranges are exported to New Zealand each year, very largely from the area with which the honourable member is concerned. The value of these exports is about $2.2m. I assure the honourable member that the Government has done and will do everything that is possible to assist in the continuation of this trade. I have a concern for the citrus growers just as I hope the honourable member has a. concern for the waterside workers and the seamen. I would not for one moment describe citrus growers as stupid.

The position is that the Union Steamship Company vessel, the Tarawera’, which has been carrying this trade is about to be pensioned off and it cannot continue to carry the trade without a SO per cent cost increase which is unacceptable to the New Zealand importers. That is a fact of life, that is the starting point and that is where the trouble occurred. If enterprise was what it is represented to be this ship would not have been continued in operation for nearly so long. The alternative, as the Minister for Transport pointed out on the adjournment debate of 20 March, is for an Australian National Line rollon roll-off ship to come into the trade to carry the 20,000 tons a year economically. It is not true that, as has been claimed by Riv-Sam Pty Ltd, which wrote to the honourable member on 18 March 1974, the ANL has been refused entry into the trade by the New Zealand seamen’s union. The position is that it has been agreed between the Australian and

New Zealand unions that Australian ships can enter the trade provided the ships are crewed by Australian or New Zealand seamen. If an ANL ship is available for this trade and is crewed by an Australian crew it will be quite free to enter the trade. The ANL has undertaken to see whether such a ship can be provided. The Department of Transport stated last week that it has asked the Department of Primary Industry to request Riv-Sam Pty Ltd to discuss this matter with the ANL and to see what can be arrived at. It is essentially an arrangement between the exporting company of the citrus fruit from Australia - that is Riv-Sam Pty Ltd- and the ANL. There is a very good prospect that the ANL will be able to take up the trade but it depends upon an arrangement like any other arrangement of a businesss nature between the company and the ANL. I think action has already been taken in the last several days so that suitable arrangements can be made. I have no further information than that, but I expect that a satisfactory arrangement can be arrived at. I see no difficulties provided ANL can make available a ship suitable for the trade. I expect that it can do so.

Mr WENTWORTH:
Mackellar

– It is not often that I remind the House of something that I said in a previous session. I propose to do that tonight.

Everybody knows that the Senate is the sole bulwark against socialisation for Australia. If it were not for the Senate, the brutal majority in this House would be able to carry through the extreme measures of socialisation which are so dear to its heart. The Senate is vital to Australia, and it is vital that we should have in the Senate a majority which will repress the extremism of the Labor Caucus which controls this House.

As you know, Mr Speaker, there is to be a Senate election on 18 May and there will still be half the Senate remaining in office. It is vital that that half should not be disturbed. Something that happened today has disturbed it. A casual vacancy has been created in the Senate through the resignation of Senator Gair. Let me quote what I said on 3 May 1973 in this House:

Casual vacancies can occur in. . 2 ways - either through the death or resignation of a senator or through the engineered resignation of a senator. It could he vital if the Labor Party could engineer, before the next Senate election, a casual vacancy for a long term non-Labor senator for either Queensland or Western Australia, which are the 2 vital States because these are the States where with 5 vacancies the split would be likely to be 3 to 2 against Labor, but with 6 vacancies the split would be likely to be 3 all. I do not know what will happen but I am ready to bet that the Labor Party will be making desperate efforts to engineer casual vacancies among the long term non-Labor Party senators for those 2 States.

Mr SPEAKER:

– I think the honourable gentleman should know that politicians are not allowed to bet on elections.

Mr WENTWORTH:

– Thank you, Sir. At that point the honourable member for Bowman (Mr Keogh) said:

I rise on a point of order. The honourable member is suggesting that members of the Senate could be corrupted.

I replied:

Let me say, so I may put the honourable member’s mind at rest, that I am not saying that ‘honourable senators could be corrupted. In my view they will withstand the offers of corruption that will be made to them. I believe that they are honourable men who will withstand these offers which will undoubtedly be made to them. I am sure that the long term senators from Queensland and Western Australia will be the targets of an attempt to corrupt by the Labor Party, but I feel equally that they will resist these temptations.

Mr Whan:

– You were wrong then.

Mr WENTWORTH:

– I was wrong. I went on to say:

I may differ from my honourable friend opposite on this, but I do not believe that these honourable senators are dishonourable men. I do not believe that they would takethe bait but it is essential, for the Labor Party plan to get control of the Senate, to get those 31 votes and it will not scruple to employ any such device for this purpose.

– That is the correct procedure to adopt.

Mr WENTWORTH:

– I will follow your guidance, Sir. I will endeavour to do so. 1 am sorry that the Government wants to waste my time. What I forecast on 3 May has happened. [ was wrong only in that I thought that no senator would take the bait. I speak about the Government now and not about the senator. From the point of view of the Government, this is one of the most shameful things that any government has ever done. It has endeavoured to disenfranchise the people of Queensand at the forthcoming election, because the split must be 3-3 and they will not be able to express their preferences for the Government or the Opposition by a split of 3-2 which is possible if there is an uneven number of senators to be elected. This is a move by the Prime Minister (Mr Whitlam) to dodge the latest mandate of the people. On 18 May the people will have a chance of voting. Because the Prime Minister, by these unworthy manoeuvres, will be able to affect the number of continuing senators in the Senate the people of Australia will not have a chance of making their vote fully effective in the Senate because the people of Queensland will be virtually disenfranchised.

I think this throws a lurid light upon the : character of the Prime Minister and the char- acter of the Government which he leads. The tact that they would stoop to this kind of corruption - I am not speaking of the senator now but of the Government - shows this. It is one of the most corrupt and shameful things hat any government has ever done. I know perfectly well that many honourable members opposite are ashamed of what their leader has done and want to disown him but they have not quite got the guts to do so. Once again the Prime Minister has shown himself to be the artful dodger of Australian politics.

Mr SPEAKER:

– 1 ask the honourable gentlemam to contain himself and to use proper words.

Mr WENTWORTH:

– Yes, I will, Mr Speaker: “Because of your ruling I will not refer to the Prime Minister, as I have done previously, as a plausible rogue. I would not use those words.

Mr SPEAKER:

-Order! The honourable gentleman is not going to get around my ruling by using that sort of phrase, I can assure him. I warn the honourable gentleman that he should use the correct language.

Mr WENTWORTH:

– Yes, Sir. The Prime Minister is the most honourable of men. So are they all honourable men. One cannot go further than .that. There is no need for me to do so because the facts speak for themselves.

Mr Giles:

– The manoeuvre stinks.

Mr WENTWORTH:

– Yes the manoeuvre stinks. Those are the words that the honourable member for Angas suggests to me and I am afraid they are very apposite words. The whole manoeuvre stinks. It is typical of the Prime Minister and typical of the Government.

Dr KLUGMAN:
Prospect

– I rise tonight to discuss a question which impressed itself significantly on me while I was overseas attending the United Nations Organisation as one of the parliamentary advisers at the last meeting of the General Assembly. I refer to the great lack of both political and civil freedom all over the world. Most of what I wish to say tonight comes from a publication called ‘Freedom at Issue’ which is published by Freedom House in New York. This organisation has studied 151 countries and 45 dependant territories and has found that of the total population of the world of 3.3 billion, 2.3 billion or two-thirds of the world’s population suffers severe political and civil deprivation and that only 32 per cent of the world’s population living in 30 per cent of the nations are considered to be free.

During the course of my remarks I shall give honourable members some details justifying this statement and explaining how a decision was made as to what was the status of freedom and what the political and civil rights were like in a particular country. We often talk about other countries and make assumptions about them as to whether they are or are not democracies without really knowing very much about them. Certainly, this is true in many cases. Freedom House is a non-party political organisation. It is political only in the sense that the people belonging to it are committed to democracy and opposed to any decline in democracy wherever it may occur. I have asked the honourable member for Kennedy (Mr Katter) for permission to include in Hansard a table titled ‘The Comparative Survey of Freedom: Table of Nations’ and I now ask for leave of the House to incorporate this table.

Mr SPEAKER:

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

Dr KLUGMAN:

– In incorporating this table, I should like to draw the attention of the House to certain points contained in the table. Of all the countries named - I think there are 151 countries - only 17 countries have what are called perfect scores. Each country receives a score for political rights and a score for civil rights. One is a perfect score and seven represents a complete absence of civil and political rights. I shall read to honourable members the countries which, according to the authors of this table, have complete political and civil rights. They are: Australia, Austria, Barbados, Belgium, Canada, Costa Rica, Denmark, West Germany, Iceland, Malta, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom and the United States.

I think it is important to point out to people who may criticise this organisation as being a right wing organisaton, because it certainly puts many of the countries under communist control very low in the scores, that this table which I have just incorporated in Hansard was drawn up in August 1973 at a time when Chile was still controlled by the Allende Government, yet Chile received an almost perfect score in relation to freedom. It received a perfect score of one for political rights and a score of two for civil rights. In other words, the score for Chile at that time was exactly the same, for example, as the score for France. I point this out to explain to honourable members that those people deciding on the method of scoring were not prejudiced by left and right inclinations. The organisation makes the following points:

A democracy requires civil and political rights. Civil rights are the rights of the individual against the state, rights to free expression, to a fair trial; they are what most of us mean by freedom. Political rights are legal rights to play a part in determining who governs or what the laws of the community are. Of course, to a degree the two kinds of rights are interdependent: civil rights without political rights are apt to be lost and political rights without civil rights are meaningless.

I shall quote from an explanation of the way the organisation conducted its surveys. The publication states: -

Four types of judgments are included in the Survey. For each nation or dependency in the world, these are: (1) comparison of civil liberties, (2) comparison of political liberties, X3) the balancing of these to establish the relative status of freedom, and (4) establishing current trends in freedom -

In other words, whether there has been no recent change or whether a change is positive or negative as it relates to freedom. The organisation’s account of its methods of deciding political rights is as follows:

When a country’s standing in political rights is analysed, attention is first directed to general elections. We want to know how recently there has been an election, and whether there was any competition. We want to know if there is a one-party, no party, or more than one-party system. A one-party system allows the least chance of opposition, while more than one party allows the most. In an election we want to know the percentage voting for a particular party or candidate for head of state. If contested, a vote with over 90 per cent for one side is probably meaningless, while majorities over 70 per cent seem suspicious. We also want to know how often the same results occur, and whether parties or leaders have replaced one another by democratic process. We are interested in whether there is regional or local elected government. Unless the country is very small, the more secondary elections there are, and the more power the winners gain by election, the more democratic we assume the society. In all elections we want to know what percentage of the people participate, and how exclusions are created.

To be ranked (1) in political rights it has to be assumed that the great majority of persons or families in the state have both rights and opportunities to participate in the electoral process. In addition, the right to compete for office has to be fairly general, and political parties can be freely formed for this purpose. The United Kingdom or the Netherlands are good examples.

Finally, of course, on the bottom of the scale one would find what are considered to be essentially tyrannies without any legitimacy either in traditional or in international doctrine. The publication goes on to discuss civil rights. It states:

Turning to civil rights, we are interested first of all in freedom of the Press. Is the Press critical? Does it support persons who might replace those now in power? Alternative systems? Is it independently controlled? Or privately owned? Beyond the Press, we want to know how much government control there is over television and radio. Unfortunately, even in countries where the Press is relatively independent and untrammelled, the often more popular radio and television systems are frequently under government control. Although this control may -be carefully hedged about with legal restrictions, only in a few states with long and continuous democratic conditions of democratic abstinence, such as Great Britain, are we reassured by legal guarantees of impartiality. Beyond the media, we look for other evidence of impartiality, particularly for a free judiciary. It also seems reasonable to consider freedom from harsh and unusual punishments and torture. Another evidence of civil liberties is offered by a defined and restricted sphere of government attention.

With a high level of civil rights, rights are safe for nearly everyone and nearly everywhere against violence or arbitrary action by police or mobs. 1 think that to be ranked one in civil rights means that the rule of law is unshaken. It also means that there is a variety of news media and freedom of expression is both possible and evident. Examples given in this report are Denmark and Australia. On the other hand, when we get down to the bottom end of the civil rights scale the publication states:

In states ranked (6) there are no generally accepted civil rights that are higher than the rights of the state. Nevertheless, criticism is often allowed to appear in limited ways, and a few favoured individuals are allowed considerable freedom. Examples are Greece and the USSR. In states ranked (7) the outside world almost never hears of criticism except through its condemnation. Citizens have no rights vis-a-vis the state. Examples are Albania and the Central African Republic.

I think it is important to encourage those who are interested in freedom all over the world to have a look at the table which has been incorporated. It is a significant table. It is a depressing table in that so many countries all over the globe are ruled by regimes which prevent the majority of the population having any significant political or civil rights. It was quite depressing to me when I was attending the United Nations to find that so many of the resolutions coming forward criticising other countries for an alleged lack of democracy and of political freedoms were often sponsored by countries which almost never exceeded the six or seven ranking, which represents the bottom of the possibilities for both political and civil rights, and that countries where the people obviously have no political or civil rights were continuously ranting about alleged interference with freedom in other countries that admittedly also had relatively poor rankings but which certainly were no worse off than the people who were criticising them.

Mr SPEAKER:

-Order! It being 1 1 p.m., tha House stands adjourned until 2.15 p.m. tomorrow.

House adjourned at 11 p.m.

Cite as: Australia, House of Representatives, Debates, 2 April 1974, viewed 22 October 2017, <http://historichansard.net/hofreps/1974/19740402_reps_28_hor88/>.

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House of Representatives 2 April 1974

PETITIONS

The Clerk:

National Health Scheme

Whales

Human Rights Bill

MINISTERIAL ARRANGEMENTS

Mr WHITLAM:Prime Minister · Werriwa · ALP

QUESTION

AMBASSADOR TO IRELAND

Mr SNEDDEN:BRUCE, VICTORIA

Mr WHITLAM:ALP

Mr SPEAKER:

Mr Snedden:

Mr SPEAKER:

Mr Snedden:

Mr SPEAKER:

Mr Snedden:

Mr SPEAKER:

QUESTION

OBJECTION TO RULING

Mr SNEDDEN:Leader of the Opposition · Bruce

Mr SPEAKER:

Mr SNEDDEN:

Mr Collard:

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr SNEDDEN:

Mr Mathews:

Mr SPEAKER:

Mr SNEDDEN:

Mr Bryant:

Mr SNEDDEN:

Mr SNEDDEN:

Mr Mathews:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr Mathews:

Mr SPEAKER:

Mr SNEDDEN:

Mr Mathews:

Mr SPEAKER:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr SPEAKER:

Mr SNEDDEN:

Mr Clyde Cameron:HINDMARSH, SOUTH AUSTRALIA · ALP

Mr SPEAKER:

Mr ANTHONY:Leader of the Australian Country Party · Richmond

Mr SPEAKER:

House of Representatives
2 April 1974

Mr WHITLAM:
Prime Minister · Werriwa · ALP

Mr SNEDDEN:
BRUCE, VICTORIA

Mr WHITLAM:
ALP

Mr SNEDDEN:
Leader of the Opposition · Bruce

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

Mr DALY:
Leader of the House · Grayndler · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP

Mr MALCOLM FRASER:
WANNON, VICTORIA · LP