House of Representatives
17 August 1976

30th Parliament · 1st Session

  1. House of Representatives
  2. 30th Parliament
  3. 1976

Mr SPEAKER (Rt Hon. B. M. Snedden, Q.C.) took the chair at 2.15 p.m., and read prayers.

page 1

MINISTERIAL ARRANGEMENTS

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

- Mr Speaker, I wish to inform the House that on 8 July His Excellency the Governor-General determined the appointment of Senator the Hon. Ivor Greenwood, Q.C, as Minister for Environment, Housing and Community Development. This action was taken, as honourable members would know, as a consequence of Senator Greenwood’s continued illness. I am sure that all honourable members will wish to join me in expressing good wishes to Senator Greenwood, his wife and family.

On the same day His Excellency accepted the resignation of the Hon. Kevin Newman as Minister for Repatriation and appointed the Hon. Kevin Newman and Senator the Hon. Peter Durack to hold offices of Minister for Environment, Housing and Community Development and Minister for Repatriation respectively. As a result of these changes the following alterations in representational arrangements will operate in the Senate: Senator Carrick will represent the

Minister for Environment, Housing and Community Development, and Senator Durack will represent the Minister for Employment and Industrial Relations (Mr Street), the AttorneyGeneral (Mr Ellicott) and the Minister for Business and Consumer Affairs (Mr Howard). Mr Newman will represent the Minister for Repatriation in the House of Representatives.

On 23 June His Excellency agreed to a change in the administrative arrangements order which placed the responsibility for child care matters under the Minister for Social Security (Senator Guilfoyle). I further inform the House that I have appointed the Hon. A. A. Street to assist me in women’s affairs matters and the Hon. A. A. Staley to assist me in matters concerning the arts.

I also inform the House that the Deputy Prime Minister, the Rt Hon. J. D. Anthony, left Australia on 6 August 1976 to visit Iran and Europe where he will be having talks on trade and economic matters with different governments. He is due to return on 24 August. In his absence Senator the Hon. Robert Cotton will act as Minister for Overseas Trade and the Hon. Peter Nixon will act as Minister for National Resources. Senator Cotton will be represented in his acting capacity in this chamber by the Hon. John Howard.”

page 2

DEATH OF LORD CASEY

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

- Mr Speaker, Richard Gardiner Casey died on 1 7 June. In the history of our country few men have attracted, or earned, the respect due and paid to Lord Casey. Not only was his public contribution one of great distinction and lasting value; he was also a man of integrity and enormous common sense. He was the kind of man who imparted stature to the institutions he served. The Australian people can count themselves immensely fortunate to have had him as a servant over such a long period.

When I became a member of this Parliament in 1955 I found that Dick Casey was always prepared to listen and to help. One of his great qualities was that he was always prepared to assist younger people and to share his experience with them. I first came to know R. G. Casey through my family. He and my father were close friends over many years. They grew up together and they went to school and university together. I recall that they were both interested in automobiles, a part of history that might not be widely known.

Lord Casey was an engineer by training, and proud of it. He wanted to understand how things worked and why. He always believed that the more engineers in Parliament the better it would be. At one stage my father and he became interested in a new engine designed by A. G. M. Michell. I am advised that at the time there were discussions about the engine with 2 major American firms but unfortunately, even though apparently the engine went very close to being sold to one of those firms, the sale did not quite come off. The Depression hit immediately afterwards, and that was the end of a radical new design motor. It was typical of Lord Casey that he would try to help someone with a good idea. They attempted to promote the engine. They were unsuccessful.

One of Lord Casey’s most impressive characteristics was his immense capacity for work. His industry was remarkable, and it was this extraordinary application that enabled him to undertake so many careers in the course of his lifetime. He was, at one time or another, a soldier, an administrator, a politician, a diplomat and a ViceRegal personage. In all of these careers he served with conspicuous success. In 1 9 1 4 he volunteered for the Australian Imperial Force and served with distinction at Gallipoli and on the Western Front. He was mentioned in dispatches, and for his valour he won the Distinguished Service Order and the Military Cross.

From 1924 to 1931 he served his country in the External Affairs Department as Australian political liaison officer in London. His political career commenced in 1931 when he became a member of this House for the seat of Corio, a seat he held until his first resignation from the Parliament in 1940. During the period of the great Depression he served in several portfolios. He was Assistant Federal Treasurer from 1933 to 1935 and Federal Treasurer from 1935 to 1939. As Treasurer he took an active role in the development of a national insurance scheme which, for reasons beyond his control, was never implemented. From 1937 to 1939 he was Minister in charge of the Council for Scientific and Industrial Research- an association he continued after the war and through his retirement and one of great lasting benefit to that organisation and to the nation.

Lord Casey was a Liberal in the full sense. He was a man of progressive instincts, not fearful of change. He welcomed the challenge of a new circumstance, a new job. He was often ahead of his time and keen to play a part in defining a new role for his country. He represented Australia to the world in a critical period of our history. In 1940 Lord Casey resigned from the Parliament to become the first Australian Minister to Washington. He used his great energies in making sure that Australia’s position was well known to the American Administration and the President of the time, Mr Roosevelt. In 1942 at the request of the British Prime Minister, the late Sir Winston Churchill, Lord Casey assumed the position of Minister of State for the Middle East and had the rank of Cabinet Minister in the British War Cabinet. Speaking in the early part of this decade about the controversy that surrounded his acceptance of such a post, he remarked that such an appointment in the Middle East was far more important than the post he had left in Washington. He appreciated the need for Australia to recognise that its security depended on events in a number of areas of the world.

In 1943 he took up his first Vice-Regal position as Governor of Bengal. During his time there from 1943 to 1946 he experienced at first hand contacts with leaders of the Indian nation which would stand him in good stead when he assumed responsibility for Australia’s foreign policy. In 1949, in that vital election for Australia’s future, Lord Casey returned to active politics as the representative for the seat of La Trobe. He held the seat until his retirement from politics in 1960. In 2 tasks which he undertook following the 1949 election he showed again the importance he placed on looking to the future and his concern that Australia should develop into a strong outward looking and tolerant nation. Immediately after the election he became Minister for Works and Housing and continued his involvement with the CSIRO, being Minister in charge from 1950 to 1960. It was in 195 1 that he became Minister for External Affairs and he held the post until his retirement. Looking ahead as always, he worked to establish a new set of relationships with the countries of our region. His permanent head at the time has recently recorded that Lord Casey’s statements during his visit to Japan in 1 95 1 marked the first real movement from enmity to close co-operation between Australia and Japan. He appreciated the great significance of Australia’s location close to the new states emerging in Asia and moved rapidly to expand our representation in the region. Earlier than most, he foresaw the importance of bringing China into the international community. He was always a realist about the world and never feared to see facts as they were. His advice was wise, his judgment sound.

Lord Casey’s career showed that deep patriotism could be combined with an outward-looking and humane international perspective. In 1965 he assumed a post for which he was superbly equipped- the Governor-Generalship. He had much of value to say. He used the position to dignify Australia and to symbolise the standards of public and private behaviour we all should strive to achieve. In his life he was assisted at all times by his wife, Lady Casey- a remarkable woman in her own right. She was to him, in all of his careers, a great comfort and a point of courage. This was exemplified by her devoted action of daily attendance at his hospital bed after his serious motor accident in 1 974.

Richard Gardiner Casey upheld the highest standards of public life and in his private life was unfailingly generous and kindly. What he achieved he earned by his industry, his courage, his integrity and his humanity. He loved Australia, and because of his life we have a better sense of ourselves and what we can become. To Lady Casey and to her son and daughter I extend, on behalf of the Government, my deepest sympathy at the loss of a husband and a father. Australia has lost a devoted servant. I move:

That this House expresses its deep regret at the death on 1 7 June 1 976 of the Right Honourable Lord Casey, Baron of Berwick, Victoria, and of the City of Westminster, England, K.G., P.C, G.C.M.G., C.H., D.S.O., M.C., K.St.J., a former Governor-General of the Commonwealth of Australia from 1965 to 1969, a member of this House from 1931 to 1940 and from 1949 to 1960, and a Minister of the Crown from 1 935 to 1 940 and from 1 949 to 1 960; places on record its appreciation of his long and meritorious public service; and tenders its profound sympathy to his widow and family in their bereavement.

Mr E G Whitlam:
Leader of the Opposition · WERRIWA, NEW SOUTH WALES · ALP

- Mr Speaker, I support the motion. Lord Casey was a man of the greatest distinction and the highest distinctions. He was the most far-sighted and accomplished Liberal Foreign Minister Australia has produced in the post-war era and one of the most eminent Australians of his generation. He had a greater international reputation than many British contemporaries. He was better known in imperial and global councils than many fellow Australians who were to rise to higher office in his own country. In 1969 the Queen made him a Knight of the Garter, the highest honour she can award on her own initiative and the most ancient secular honour still awarded in the world. He was the 936th knight in over 6 centuries.

He was a man of unquestionable integrity, high principle, singular urbanity and personal charm, with valuable gifts as a diplomat and politician. No criticism one could make of him, even on this occasion, can alter our judgment of him as a great Australian. Indeed, it would do slight service to the memory of a man of such attainment if the shortcomings of his career or any limitations in his vision or judgment were glossed over in perfunctory tributes. His career had 3 main phases- that of the war and post-war years, then as Foreign Minister and finally as Governor-General. The first prepared him for the second, and the third was a reward for the other two. His 4 years as Treasurer, his membership of the British War Cabinet and his war service as Governor of Bengal equipped him with an all-round experience of political and administrative office which was probably unrivalled in this country. If he seemed a trifle out of touch and a trifle out of place in the Australian Parliament, there was no denying his capacity or experience.

He was one of the first Australian statesmen to recognise the importance of Asia to Australia. His great achievement during his 9 years as Foreign Minister from 1951 to 1960 was to establish deep and lasting goodwill between Australia and Asian countries- a foundation of friendship which was happily to survive the stresses placed upon it throughout the 1960s and even, one fears, beyond. He had a regard, almost a love, for Asians which was free of sentimentality and rooted in a knowledge of their history and the diverse cultures of the region.

He was the most creative and farsighted of all the Liberals who have been responsible for foreign affairs. Even in the Cold War atmosphere of the 1950s, when the post of Foreign Minister ought to have brought out the worst in a man, he maintained a characteristic dignity and restraint. He at least shook hands with Chou En-lai at Geneva. He foresaw and strongly opposed the Anglo-French aggression against Egypt. He was years ahead of his fellow Australian conservatives in urging recognition of China. One’s chief regret must be that, for all the correctness and enlightenment of his views, there was something lacking in his ability to carry them through and embody them in national policy. The acute sense of lost opportunity one feels on reading his diaries was due perhaps to the realities of party politics in his day and the ascendancy of other more determined men around him. We must wonder what influence he might have brought to bear on the course of events and the tragic policy decisions that were to follow his departure from government.

Looking back, it is astonishing that not until 1965 could the Liberals bring themselves to appoint an Australian to the nation’s highest titular office. Lord Casey was the first Australian appointed Governor-General by the non-Labor parties. Labor governments had already appointed two, both of whom had filled the post with rectitude and distinction. When the Liberals did get around to choosing an Australian they opted for a party man. Lord Casey, like his successor, was transferred direct from a Liberal Cabinet to Yarralumla. But any misgivings this might have occasioned were rapidly removed by the qualities he brought to the office. He filled the post admirably. He received me many times as Leader of the Opposition. I was grateful for the courtesies he showed me then and I am grateful for the notes he sent me in succeeding years. He was a man singularly punctilious and courteous. I had been asked to write a review of his diaries. Some of my comments were somewhat sharp, but I received a handwritten note from him acknowledging many of the points and thanking me for the care with which I had reviewed his book.

He enjoyed the respect and affection of the whole community. For all that, however, his term as Governor-General was not entirely free of controversy. The choice of a successor to Prime Minister Holt in 1967 was a considerable test of his vice-regal judgment. The last person he called to Yarralumla was the Deputy Leader of the senior coalition partner. It is the only example of questionable vice-regal conduct in this country for which a precedent can be found in the actions of the monarch herself, for in 1963 the Queen chose Sir Alec Douglas-Home to succeed Mr Harold Macmillan when she might have chosen Mr R. A. Butler.

Lord Casey’s death removes one of the most colourful and distinguished Australians in our experience. He was one of the few engineersmaybe the only engineer- to be elected to this Parliament. He retained to the end of his life an expert acquaintance with and interest in all engineering, scientific and technical matters. There were many firsts to his credit- the first Australian overseas diplomat, liaison officer to London, Minister to Washington; the first Australian to serve as Minister in a British government; the first Australian to be a colonial governor; the first Commonwealth life peer. He had fought at Gallipoli. He became an audacious flyer. It is a career not likely to be repeated in our time for it belongs essentially to another age. Yet the best things about Lord Casey would be valued in any age and his achievements will be of lasting importance. He was above all and in the best sense of the word a man of fundamental and abiding decency.

On behalf of the Australian Labor Party I extend to Lady Casey- herself a figure of public distinction and high personal qualities- and to the members of her family our deep sympathy in the loss which they and the nation have sustained.

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– On behalf of the National Country Party I should like to associate the members of that Party in the motion of condolence to the Lady Casey and to the family of the late Lord Casey. In his many distinctions and degrees, the contributions which the late Lord Casey made throughout his long and distinguished career were very effectively and publicly acknowledged. There were three particular life phases which those of us who knew him well saw and respected. The first was of course his career. In the career outlined by the Prime Minister (Mr Malcolm Fraser) and by the Leader of the Opposition (Mr E. G. Whitlam) this afternoon, there is an array of distinctions which fe.w in Australia have attained- as an engineer, as a soldier, as a politician, as a diplomat, as a Minister, as Governor of Bengal and finally, as Governor-General of Australia. He, of course, represented not just Australia but ordinary people in a way that few other Australians have been able to do.

But it was not just in his career that he achieved such distinction. I think that all of us who knew him as a citizen respected him as one who had a continuing interest in the community around him. In his correspondence with those of us with whom he was associated even in the slightest way, he demonstrated a continuing interest in the world around him even in retirement. He was a man who retained not only a personal interest but one which was significant in the depth of its understanding. So often, having made a statement or a commitment on behalf of the Government, I found- and I know many of my colleagues found- that we would receive a letter from the late Lord Casey commenting upon that decision, sometimes asking for the reasons for it or explaining that he had some alternative point of view, and perhaps presenting it for consideration.

I think it was the extent to which he, unlike so many others, maintained a diary that provided an opportunity to see something of that very important period of development of Australia at an intimate level. I certainly admired the way in which he recorded for posterity some of the events in which he was a principal party. He wrote of those events with a measure of” personal insight and understanding that few others enjoy. It is of course through his diaries that so many others are able to share in something of the achievement of his own personal life. So firstly in his career and then as a citizen he achieved great distinction.

Finally and most importantly I think we all remember him as a man. He and the Lady Maie represented one of the finest families with which I have personally been associated. They were very close to each other and whatever their activities, whether it was flying aeroplanes or driving fast cars or in the more personal and deeper things in their association in public life, they retained a companionship that I think is something upon which all of us might reflect and which might well serve as a continuing example to so many future generations of Australians. He was a man admired by all who knew him. They, as a couple- the Lady Maie and the late Lord Casey- set a fine example. It is with a deep feeling of humility that I, personally and on behalf of the National Country Party, should like to extend to the Lady Maie and her family our tribute to a great Australian and one whose loss will be sadly felt.

Mr SCHOLES:
Corio

-Briefly, I should like to associate myself and the electorate I represent with the resolution moved by the Prime Minister (Mr Malcolm Fraser). Lord Casey entered this

Parliament first as the member for Corio in 1 93 1 , having defeated Arthur Lewis whose death preceded that of Lord Casey by about 12 months. He served the electorate of Corio well and I know that he is well thought of by those who remember his period as member for that electorate. He resigned in 1940 to take a diplomatic post and was succeeded by John Dedman who also died about 12 months ago. He was the first representative of the electorate of Corio to hold ministerial rank in this Parliament. The 2 members who succeeded him also rose to similar rank. His career was one at which most people would look in wonderment. In different circumstances he almost certainly would have served as Prime Minister. That he left the Parliament when he did most likely changed the course of Australia’s political history. I think it is fair to say that had he stayed he almost certainly would have been Prime Minister and in all probability the change of government in 1941 would not have taken place.

I associate myself with this motion. I think that in any era there are men who serve their nation in a manner which is unique and Lord Casey was one of those men.

Mr YATES:
Holt

-Mr Speaker, Lord Casey, Baron of Berwick, lived in the electorate of Holt, which I represent, and he too served 2 governments and 2 parliaments. He also served in the War Cabinet. I realise that the electors of Holt would like me to say on their behalf today that the loss of Lord Casey to the Australian Parliament, to this nation and to world affairs has been a tragedy. He was perhaps one of the greatest statesmen, ahead of his time, that the world has ever seen, and we were very fortunate, both here and in Westminster, to have a man with such foresight so shortly after the war. As he lived in the electorate of Holt, on behalf of the people of that electorate I would like to express to Lady Casey and her family our sense of loss and our respect for one of Australia’s finest and most famous men and certainly a world diplomat.

Mr SPEAKER:

– I am going to transgress the normal forms of the House to pay a personal tribute to Lord Casey. I became a member of Parliament in 19SS, after a redistribution, to represent part of an electorate which Dick Casey had formerly represented. When I went into the electorate I found that there was an immense feeling of personal warmth for the man. I remember that soon after I was elected I said to him: ‘Sir, what shall I call you?’ He said to me: ‘Billy, when you feel comfortable to do so you will call me Dick ‘. It was not long before I did so because of the warmth of the man. He was a great Australian, but he was also a tremendous man.

Question resolved in the affirmative, honourable members standing in their places.

Mr SPEAKER:

– I thank the House.

page 6

DEATHS OF FORMER SENATORS AND MEMBER

Mr MALCOLM FRASER:
Prime Minister · Wannon · LP

- Mr Speaker, honourable members will be saddened to know of the recent deaths of Thomas Louis Bull, O.B.E., a former Senator for the State of New South Wales, William Edward Aylett, a former Senator for the State of Tasmania, George Irvine Whiteside, a former Senator for the State of Queensland, and Laurence John Failes, a former member of this House for the electorate of Lawson.

Senator Bull had a deep personal understanding of the problems of the people who live in rural Australia. Through this understanding he was able to make a contribution of great value, not only to his work in this place, but also to the organisations and bodies on which he served. In the Senate Senator Bull was an active member of committees, joining the Senate Select Committee on the Container Method of Handling Cargoes in 1967 and serving on the Foreign Affairs Committee from 1965 to 1971. He became Chairman of the Senate Standing Committee on Primary and Secondary Industry and Trade. Senator Bull had a considerable knowledge of the workings of the Parliament and after serving as a Temporary Chairman of Committees for some time in 1969 he was elected Chairman of Committees and Deputy President of the Senate. Senator Bull left the Senate in 1971, but this in no way ended his involvement in public life. In 1973 he became Chairman of the Riverina Advisory Council and in 1974 Chairman of the New South Wales Pastures Protection Board Committee of Inquiry. Senator Bull is survived by his wife Jessie and 2 sons and 2 daughters. I am sure that all members will join me in extending sympathy to his family.

Senator William Edward Aylett was born in Tasmania in 1900. He died on 10 August this year. He left school in 1916 to work at Mount Bischoff tin mine on the west coast of Tasmania to help to support his family. Later he worked in the coal mining and timber industries in Victoria. He returned to Tasmania in 1925 where he became a farmer and became actively involved in the Labor movement. He was elected to the Senate in 1937. Senator Aylett served for many years as a Temporary Chairman of Committees. He was a member of the Joint House Committee, the Standing Committee on Regulations and Ordinances and the Parliamentary Standing Committee on Public Works. After leaving the Senate in 1965 he continued in public life, becoming President of the United Council of Progress Associations of the Gold Coast City from 1969 to 1970.

Former Senator Whiteside, who died on 27 July, was chosen by the Parliament of Queensland to represent that State in the Senate on 9 October 1962. He remained in the Senate until 29 November 1963. Before entering the Senate, former Senator Whiteside had a long record of service to the union movement and to the Australian Labor Party. His Party posts included the presidency of the Queensland Central Australian Labor Party Executive. He was a Queensland delegate to the Federal Australian Labor Party Executive and Chairman of the Labor Broadcasting Station Pty Ltd. In addition he was secretary of the Federated Engine Drivers and Firemen’s Association.

Laurence John Failes was elected to this chamber in 1949 as member for Lawson. I know that honourable members will be greatly saddened to hear of his death on 7 July. Like Senator Bull, he had a deep knowledge of rural affairs which he used to good effect during his long term in this House, retiring in 1 969. During his time as a member of this House he served on the Joint Parliamentary Committee on Foreign Affairs, was a member of the House Committee and was a Temporary Chairman of Committees from 18 February 1959. I am sure that all honourable members will join with me in extending sympathy to his family. I move:

That this House expresses its deep regret at the deaths of Thomas Louis Bull, O.B.E., a former senator for the State of New South Wales; William Edward Aylett, a former senator for the State of Tasmania; George Irvine Whiteside, a former senator for the State of Queensland; and Mr Laurence John Failes, a former member of this House for the electorate of Lawson; places on record its appreciation of their long and meritorious public service; and tenders its profound sympathy to their families in their bereavement.

Mr E G Whitlam:
Leader of the Opposition · WERRIWA, NEW SOUTH WALES · ALP

– I support the motion. The Prime Minister (Mr Malcolm Fraser) has already given the details of the parliamentary service of our four former colleagues and also an indication of the range of interests which they had before they came into the Parliament, during their service and afterwards. He has thereby indicated the qualifications which made each of them in his way a valuable member of this Parliament. Very many people here would not have known some of the men concerned, because at the time Senators Aylett and Whiteside left the

Parliament only one in seven of the present members of the Senate and only one in five of the present members of the House of Representatives were in the Parliament. Senator Aylett served for 2 7 years, which is a very long period in parliamentary terms. Only the honourable member for Fremantle (Mr Beazley) and Senator O ‘Byrne of the present members of this Parliament have served longer.

Of the people mentioned in the motion, some were known well to honourable members; some were known only for a short time. I first met Laurie Failes, for instance, during the war at Gove- Nhulunbuy as it now is- when we were both serving in the Air Force. On subsequent occasions, of course, I was able to meet him in his electorate of Lawson, for which he was the first and only member. The electorate was created for him; it expired when he retired.

Senator Aylett was first elected to the Parliament in 1938. It was a remarkable year. Labor won five of the 6 Australian States in the Senate and Senator Aylett, it will be recalled, entered the Parliament together with Senators Amour, Armstrong, Arthur and Ashley and others whose names began with letters lower in the alphabet. Senator Whiteside was here for the shortest period- barely a year. He was appointed by the Parliament of Queensland to succeed a deceased Labor senator at a time when it was customary to fill casual Senate vacancies with persons of the same political party as that of the former senator. All our former colleagues served not only in the Parliament but also outside. My own colleagues have told me of the way they appreciated Senator Bull’s term, his actions and his conduct as Chairman of Committees and Deputy President of the Senate and as chairman of 2 committees and a colleague on other Senate committees. The sentiments which the Prime Minister has expressed on behalf of the House to the relatives of our former colleagues I am certain are supported by all members. Many of us were associated with them outside the Parliament. Some few of us, a minority, were associated with all of them. We mourn them and we sympathise with their relatives in their loss.

Mr SINCLAIR:
Minister for Primary Industry · New England · NCP/NP

– I should like to associate the members of the National Country Party of Australia with the motion of condolence moved by the Prime Minister (Mr Malcolm Fraser). In particular I should like to express to the families of the late Senator Bull and the former member for Lawson, the late Mr Laurie Failes, my own personal sympathy. Both of these men, in then- association with my Party, had a long and continuing connection with the rural industries. Tom Bull championed a cause which I think in this Parliament is best known and expressed by the honourable member for Wakefield (Mr Kelly). Indeed, while a senator within the Parliament on many occasions he found himself in some opposition to the former Leader of my Party, the then Deputy Prime Minister and Minister for Trade and Industry, whose policies on tariff matters tended to be somewhat contrary to those which the late Senator Bull preferred. Senator Bull in fact, in his association with the grazing industry, first expressed concern about the extent to which there was a change in the structure of the Australian economy which export industries and those associated with them might find it hard to survive. Of course, on many occasions in the Parliament he gave voice to those concerns and in his attitudes and in his practice always upheld strongly support for the cause which he represented and in which he believed so strongly. To both his widow and his family I should like to extend my own personal sympathy.

Laurie Failes, the former member for Lawson and the only member for Lawson, as the Leader of the Opposition (Mr E. G. Whitlam) has stated- was another whose connection with the rural industries began his interest in politics. Through the war years he served with the Royal Australian Air Force. On coming out of the Air Force he felt concern at the direction of the economic policies of the government of the day. I am interested to hear that the electorate of Lawson was created for him. Of course, it was created by a Labor government and won by a member of the Country Party, Laurie Failes, and held by him throughout the time that that seat remained. Laurie Failes was a sheep farmer and wheat farmer. He was associated with the development of a part of our rural sector which again has come under some pressure in recent years. He was a forceful and vocal exponent of the cause of those he represented. On behalf of the members of my Party I extend deep sympathy to his widow and family.

Similarly, on behalf of the members of my Party I extend sympathy to the families of the former Senator Aylett and former Senator Whiteside. They were 2 men who, in their association with the Australian Labor Party and with the Parliament, represented effectively the causes in which they believed. During the term when they were members of this Parliament they spoke, of course, about those issues with which they were associated. To their families I extend my deepest sympathy and also express an understanding of the traumas that parliamentary life imposes on the families of all members of this place, irrespective of the parties to which they belong.

I think that motions of this sort give us an opportunity to say to those who, outside the Parliament, so often in our absence assist in meeting our electorate commitments how much we appreciate the way in which they carry that burden. In offering our condolences to the families of these former members of this Parliament, I think it is worth remembering those responsibilities, the way they are borne and, of course, the loneliness of frequent separation. In extending our condolences to the families of those who were former members, I think it is also worth expressing thanks to those of our own families who also bear those burdens.

Mr SULLIVAN:
Riverina

-I should very much like to associate my electorate of Riverina with this motion and to be associated with it personally. I join with the Prime Minister (Mr Malcolm Fraser), the Leader of the Opposition (Mr E. G. Whitlam) and the Deputy Leader of the National Country Party (Mr Sinclair) in the fine tributes that have been made about the former senator, the late Tom Bull. I find difficulty in expressing adequately my thoughts as I have lost a special friend. In the circumstances, words will not properly convey my real feelings.

Tom Bull was a man of unquestioned integrity. He was a country man and knew the country extremely well. He loved the country and he loved his country. He was a man of God. He was a man who accepted responsibility and he was a man of principle. He was a man who contributed in countless ways to the community. He was, indeed, a leader in every sense of the word. I remember him and I thank him for his friendship, for his wise counsel and for his personal help. He nominated me for preselection by the National Country Party for the seat of Riverina. He was my campaign manager during the recent December 1975 election. I am the richer for having known him and I am indebted to him but, sadly, it is a debt that must now remain unpaid.

Tom Bull and I joked many times about the fact that we had both begun our formal education in a little country, one-teacher, 14-pupil school at a place called Gobbagaula. The school has long since been closed and demolished but I often think that if such schools could produce men like Tom Bull they must have been grand institutions.

Tom Bull was always a devoted husband and father. In a world of changing values his family was and is a shining example of all those good things we speak about whenever we refer to the family as the basic unit of society. He was happiest when home with his wife, his sons, his daughters and his beautiful grandchildren. It is because of this wonderful family unity and spirit that I know how much he will be missed by his loved ones. Narrandera, the Riverina and Australia have lost a great man. We are all poorer for his passing. I join with other honourable members in expressing sincere sympathy to his wife and family.

Question resolved in the affirmative, honourable members standing in their places.

Mr MALCOLM FRASER (Wannon-Prime Minister)- As a mark of respect I suggest that the sitting be suspended until 8 p.m.

Mr SPEAKER:

– I am sure that course will meet with the approval of the House. The Chair will be resumed at 8 p.m.

Sitting suspended from 3 to 8 p.m.

page 8

APPROPRIATION BILL (No. 1) 1976-77

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

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

Second Reading (Budget Speech)

Mr LYNCH:
Treasurer · Flinders · LP

-I move:

In doing so, I present the Budget for 1 976-77.

When this Government was elected on 13 December last, Australia was in bad shape.

Inflation was out of hand, economic activity was falling again and unemployment had risen to record levels.

The Government immediately set about the enormous task of repairing the damage and restoring confidence.

Recovery is now getting under way.

The private sector is growing again and confidence is gradually returning.

This Budget will aid that recovery and rebuild confidence further.

It will do so in part by putting an end to permissiveness in government spending and turning back the recent trend towards bigger and bigger government.

At the same time it will build further on the social reforms of 20 May so as to assist the most needy in our community.

It is a Budget for confidence; it is also a Budget for reform.

page 9

FROM RECESSION TO RECOVERY

When this Government came to office, Australia was still locked in its most serious postwar recession.

That quite unnecessary calamity was the product of three years of Labor Government.

The major distortions which that Government imparted to the economy in 1974 and 1975 had become deep-rooted obstacles to a return to full employment.

The economy had been shaken to its foundations.

The unfolding of economic conditions over the past eighteen months or so is detailed in Statement No. 2 attached to this Speech.

Here I mention only a few facts.

They are facts which clearly bring out the huge gulf which had opened up, by the time we came to office, between conditions in the economy that all Australians are entitled to expect and conditions as we actually found them.

At the end of 1975, the private sector was employing no more people than it had been three years earlier, although over that period the labour force had expanded by about 370 000.

Unemployment had risen to a level unheard of in this country since the Depression of the 1 930s.

Gross non-farm product in the December quarter, seasonally adjusted and at constant prices, was still almost 5 per cent below its peak level recorded two years earlier.

The farm sector was in a state of collapse.

The share of company profits in national income- one of the flywheels of our whole economic system- remained depressed at around three-quarters of its long-run norm.

Real business fixed investment fell in the December quarter to its lowest level for almost three years.

The Consumer Price Index in the December quarter was 14.0 per cent above a year earlier.

Above all, inflation showed no real prospect of a sustained move down.

This was the economic legacy which we inherited.

The human reflection of these dry economic facts was to be seen in the devastation of the lives of ordinary people which those events had wrought.

I mention as one instance the catastrophic impact which the careering inflation of those three years has had upon the lives of hundreds of thousands of people who had thought that savings accumulated by the thrift and industry of their working lives would help to protect their later years; and who now find the real value of those savings cut to ribbons by the great inflation which the Government of that day induced and over which it so wantonly presided.

I mention also the personal tragedies of school-leavers and other young people, and of disadvantaged groups in the community such as Aborigines, who have been denied jobs by the policies of those three years.

Given this economic legacy there could be no rapid return to normality.

On the contrary, restoring the economy was certain to be a protracted task.

Before the election we said it would take a full three-year term.

The Government quickly put in hand a coherent strategy involving all the main arms of economic policy.

Initial measures to control government expenditures were taken as early as December and followed up by further measures in February.

Meanwhile, in January, major monetary measures were undertaken to drain off some part of the excessive liquidity build-up of 1 975.

Since that time, especially during the seasonally tight June quarter, monetary policy has been operated flexibly- but always with a view to bearing down against current inflationary pressures while maintaining the cap.cacity of the financial system to underwrite recovery in the private sector.

We had earlier made clear that, contrary to views in some quarters, we had no intention of depreciating the exchange rate for the Australian dollar.

In February the Commonwealth sought to bring home to the Conciliation and Arbitration Commission that full wage indexation, by locking the economy into double digit inflation and a disaster level of business profitability, ran completely counter to hopes of a sustained economic recovery and a return to full employment.

This fundamental truth was initially not widely understood.

Since then, however, it has increasingly gained understanding and acceptance in the community.

The full scale review of expenditures which, at the outset, we had put in hand culminated in my statement on Fiscal Policy Decisions of 20 May.

In that statement I announced a sharp reduction in the rate of growth of expenditures previously in prospect for 1 976-77.

At the same time I announced the introduction of full personal tax indexation and significant improvements in the manner of assisting families and to Medibank.

As we have stressed from the outset, we have made our first priority the absolute necessity to combat inflation.

We have done so not merely because of the direct hardships that inflation obviously brings, but because unless we can brake inflation we shall not succeed in restoring full employment.

Against that background, I come to the present situation.

The economy is now showing signs of progress.

Typical of the early recovery stage in the economic cycle, the areas of strength are still scattered.

Much of the early impetus to recovery has come from a cessation of the stock rundown which had continued heavily throughout 1975, and from continued strengthening in exports.

More recently however, private consumption expenditure has begun to grow.

In the business sector also there are early signs of confidence regenerating.

Some healthy gains in capital spending on plant and equipment have already occurred.

The key question hanging over the future course of the recovery is whether the main components of private demand- consumption and business investment- will firmly join stocks and exports in building a continuing recovery.

If they do not, that recovery will falter and expire.

Another key question concerns the extent to which the growth in demand will be met from imports and so not be translated into local production and local jobs.

The recovery will be threatened if rising demand is associated with a too strongly rising tendency to import.

The need to qualify answers to these questions indicates that the economy still lacks a fully assured foundation for recovery.

When one asks, why should that be, there is a very simple answer.

It is so because both the key questions I have mentioned depend for their outcome on the future of inflation in this country.

Consumers will step up their spending and cut back on their savings only if they judge inflation to be declining.

Businessmen will emerge further from their shell-holes and start buying plant, equipment and new buildings, re-stocking and taking on new workers only if the uncertainty wrought by runaway inflation can be removed from their calculations and profits again begin to represent a reasonable rate of return.

The prospective threat to the recovery from import competition will only be banished if Australia’s international competitiveness does not continue to be eroded for too much longer by cost escalation in excess of that of our trading partners.

Each of these provisos points unequivocally to the fundamental needs to reduce inflation and, as an integral part of that process, to rectify the wage-profit distortion which the wages explosion of 1974 produced.

These objectives are fundamental to recovery.

There have been some favourable developments on the inflation front in recent months.

The 5.6 per cent rise in the Consumer Price Index in the first half of 1976 represented some advance on the 6.4 per cent and the 7.2 per cent in the second and first halves, respectively, of 1975.

The Arbitration Commission’s decision of May and August in respect of wage adjustments for the Consumer Price Index movements in the first two quarters of 1976 hold out hopes for some further moderation of inflation in the remainder of the year.

Meanwhile, the previously very depressed level- though not yet the share- of aggregate profits has begun to pick up.

In these two respects we are moving in the right direction.

But we need to go much further- and we need to do so faster.

Time is of the essence for two reasons.

First, the sooner wages and profits return to a more normal relativity, the sooner job prospects will improve.

On the more pessimistic assumption, the downward adjustment in the wage share that is now required would occur slowly via an unacceptably high level of unemployment persisting for a long period.

The same adjustment can take place much more quickly, and with much less cost in terms of idle resources and production foregone, if the determinations of wage fixing authorities continue to eschew the full indexation of wages for past price increases and wage moderation prevails.

This is the course the Government has been urging before the Conciliation and Arbitration Commission.

The second reason why we need to get inflation down more quickly is in order to stop exporting jobs.

In short, when we come to examine each of our current economic problems we find that all of them have their genesis in the inflationary experience of recent years.

There is no way in which those problems can be solved other than by dealing with inflation itself.

That is the key to it all.

page 11

ECONOMIC STRATEGY AND THE BUDGET

Consistent with that view, this Budget is therefore an essential element in our anti-inflationary strategy.

First, the Budget takes its place in the on-going process of imposing more effective control on Commonwealth outlays generally.

Restraint on Budget outlays and on the size of the public sector is necessary to allow and to foster that expansion of the private sector to which we are committed.

Secondly, through the full indexation of personal income taxation which I announced on 20 May, we are putting in place some of our proposed reforms.

What these will mean is that the revenue side of fiscal policy will also be working to reinforce wage restraint, to strengthen company profitability and to boost business confidence.

Thirdly, the substantial reduction in the magnitude of the deficit since we came to office, and of which this Budget constitutes a further step, will help to moderate the flow of liquidity into the economy.

That is basic to achieving the monetary environment that is necessary if inflation is to be reduced.

I shall indicate later the monetary conditions which might be expected in 1976-77, given the Budget outcome and other relevant influences.

Of course, the very need for public sector restraint and tight control of the Budget deficitthe basic thrust of the Government’s fiscal and monetary policies- has been disputed by some.

Yet all the evidence- in Australia and overseasis that, under the kind of inflationary conditions which we have been and are still experiencing, fiscal and monetary policies of what used to be known as the ‘pump-priming’ kind no longer prime the pump but serve only to turn off the flow of jobs even further.

The reason is to be found in what I have already said.

It is inflation that is at the heart of the problem.

This Government yields to none in its concern for the genuinely unemployed.

Mr LYNCH:
LP

– The honourable gentleman’s government put more people out of work in this country than any other government in Australia’s history. Honourable members opposite should not talk about unemployment in this debate.

Mr Armitage:

– You are creating unemployment.

Mr LYNCH:

– The honourable gentleman might be unemployed even sooner than he thinks.

But, whether they know it or not, those who, in the name of reducing unemployment, call for higher government spending, or bigger deficits, or full wage indexation, or devaluation of the Australian dollar, are calling for higher- not lower- unemployment in this country.

The overwhelming weight of evidence is against such courses.

They have been tried both here and abroad; and they have failed.

Let me just mention here- for the case has been fully detailed elsewhere- that experience abroad strongly reinforces our conviction in these respects.

At this year’s Ministerial Council Meeting of the OECD, which I attended for Australia, the main industrialised nations of the nonCommunist world agreed on an economic strategy which had as its basic premise the view that: ‘. . . the steady economic growth needed to restore full employment and satisfy rising economic and social aspirations will not prove sustainable unless all Member countries make further progress towards eradicating

And I repeat, eradicating inflation.’

Consistent with that premise, OECD Ministers underlined the need for caution in the pursuit of expansionary policies and for firm use of fiscal and monetary policies to achieve the general economic climate required for non-inflationary growth.

As the Communiqué says: ‘. . . because of the virulence of recent inflationary experience, there is a danger that inflationary expectations could revive quite strongly if the pace of the recovery is too fast.’

Within that general context it was further agreed that: ‘. . . because of inadequate investment in past years in some countries and in certain basic industries, there is a risk of supply bottlenecks at a comparatively early stage of the recovery … In most countries, policies should be directed more towards promoting investment rather than consumption. In many cases, this will require an appropriate recovery of profits from the depressed levels of recent years. ‘

On that basis, action was seen as being required both to stimulate investment and to restrain the rise in public expenditure.

There could be no clearer demonstration of the appropriateness of the Government’s economic strategy.

I repeat- the speed with which we can restore full employment in Australia and ‘get Australia moving again’ on a sustainable basis will be directly related to the speed with which, in the words of the OECD Communique, we as a nation can ‘progress towards eradicating inflation’.

It follows that Australia would stand aloneand against the background of its internationally unfavourable inflation rate would be all the more noticeable for doing so- if we were once again to begin applying a clearly inappropriate ‘ pump-priming ‘ policy.

Whatever the virtues of such a policy may have been under conditions of stable prices, low unemployment and a smaller public sector, they have entirely evaporated under conditions of high inflation, high unemployment and a public sector already bloated beyond belief.

Having consistently rejected the ‘pumppriming’ expedient, however, the Government has not moved to the other extreme of trying to balance the Budget overnight.

Rather, this Budget applies the maximum degree of restraint judged to be consistent with promoting confidence and maintaing a steady path towards economic recovery.

By careful choice of the taxation measures to be announced tonight and those of 20 May, we have matched restraint in our own spending with confidence-strengthening measures to boost the private sector.

The way in which the various elements of the Budget slot into the anti-inflationary strategy highlights the importance of looking at all our policies- fiscal policy, monetary policy, wages policy and external policy- as a unified and coherent whole.

No single component of the strategy can fail without putting the basic objective under threat.

For example, a less firm fiscal stance would undermine the necessary degree of monetary control; or, alternatively, require a return to the kind of overly restrictive monetary policy which would inhibit recovery and the rebuilding of confidence.

A lax monetary environment would endanger wage and price deceleration.

A too stubborn adherence to the existing excessive level of real wages- for example, through full wage indexation- would continue to hold inflation high, depress consumer and business spending, hold back the creation of new jobs and prevent unemployment from falling.

Examples could be multiplied; but I simply say that our strategy is a coherent one.

All of its separate elements involve difficult decisions.

But the Government and all sections of the community must persist with the fundamental task.

In doing so, we can take comfort from two things.

First, we know that the alternatives have been tried and found wanting.

Secondly, although they are still limited, we are already beginning to see some positive results.

page 13

OUTLAYS

Budget outlays in 1976-77 are estimated to total $24,32 lm, an increase of 1 1.3 per cent over actual outlays in 1975-76.

In 1975-76 the increase was almost 23 per cent and in the year before that it was almost 46 per cent.

This marked slowing in the prospective rate of growth of Budget outlays in 1976-77 accords with the key role of expenditure restraint in the Government’s overall economic strategy to which I have referred.

Many of the provisions included in the Budget estimates flow from decisions announced in my comprehensive statement to the House on 20 May.

The references to individual provisions which follow are confined mainly to major items.

Full details are set out in Statement No. 3 attached to the Budget Speech.

Where appropriate, additional information will be announced by the Ministers concerned.

The decisions reflected in these expenditure pro visions are in line with the Government’s road priorities.

They reflect, for example, this Government’s philosophy that so far as possible responsibility for spending decisions should remain with private individuals and businesses, and not be assumed by governments.

More and more Australians are coming to understand that, one way or another, they must pay for the things they want.

This Government believes that Australians should have more scope to decide what they want

At the same time, these expenditure decisions reflect the Government’s main objectives to: promote confidence in the business sector; institute just social reforms in areas of need; and increase real levels of expenditure in those areas to which it gives priority.

page 13

EDUCATION

For example, although the proposed increases in spending on education are less than some would like, this is an area where, notwithstanding our overall budgetary constraints, we have provided for increases in real levels of expenditure and restored triennial programs on a rolling basis.

In short, education for this Government is a high priority area.

In all, Commonwealth expenditure on education in 1976-77 is estimated at $2,204m, an increase of 15.3 per cent compared with 1 975-76.

Grants to universities, colleges of advanced education, technical colleges and government and non-government schools by the respective education Commissions account for $ 1,751m, or nearly 80 per cent of the total allocation for 1976-77.

In each case the budgetary provision represents a significant increase in real terms.

The Government has given to the education Commissions, for planning guidance only, minimum expenditure levels for 1978 and 1979 which will involve further increases in real terms.

As announced in my statement of 20 May, this planning guidance is: for universities, colleges and schools, 2 per cent growth in real terms per annum; and for technical and further education institutions, 5 per cent growth in real terms per annum.

The Budget also provides $2m for the Curriculum Development Centre and $ 1 . 1 m for research by the Education Research and Development Committee.

In addition the Commonwealth extends substantial assistance directly to students.

This Budget includes a total of $155m in 1976-77 for a range of student assistance schemes, including the Tertiary Education Assistance Scheme and programs of assistance for isolated children and Aboriginal children.

The Government is aware that many of these allowances have not been increased for some time; meanwhile, inflation has been proceeding.

Large numbers of students are involved.

It is not clear to us, however, that existing schemes are the most cost-effective, in terms of directing the substantial sums involved to the most needy and deserving students.

We have therefore initiated an urgent investigation into the adequacy of existing rates of benefit and the possible rationalisation of the schemes.

It will be recalled that full-time allowances under the National Employment and Training System were reviewed in February; payments in respect of in-plant and part-time training under that System are also now being similarly reviewed.

With respect to student assistance schemes, the Government’s decisions will be announced in October and implemented from the beginning of the 1977 academic year.

The investigation will also cover the question of the reintroduction of tertiary education fees for those classes of students mentioned in my statement of 20 May.

This does not of course involve reintroducing fees for Australian students undertaking their first degrees.

page 14

SOCIAL SECURITY AND WELFARE

Another area in which this Budget provides for a large real increase in expenditures is Social Security and Welfare.

This is indeed the largest single component of Budget outlays.

In 1975-76 it amounted to over $5,000m or 23 per cent of total outlays.

The 1976-77 Budget provides for expenditure of $6, 1 87m, or about 25 per cent of total outlays.

The Government has already initiated major reforms in this area; some further reforms will be announced tonight.

Family Allowances

The new scheme of family allowances- one of this country’s most significant social reforms- is now in operation.

Under the new arrangements, rates of family allowances have been substantially increased and the tax rebates for dependent children abolished.

The new arrangements will benefit, in particular, large families with low incomes: those in most need will derive most benefit.

Some 300 000 low income families- with 800 000 children- with incomes such that they previously derived no benefit- or less than full benefit- from the dependent children’s rebates, will benefit most.

This accords with the Government’s sense of priorities.

Pensions

We are committed to protect pensions against inflation.

We will continue to honour that commitment.

In line with it we propose to introduce legislation to tie future pension and benefit adjustments automatically to movements in the Consumer Price Index.

The next two six-monthly increases, in line with movements in the Consumer Price Index, will come into effect in November 1 976 and May 1977.

Effective from the first payday in November the standard or single rate of social service pensions and benefits will be increased by $2.25 to $43.50 a week.

This reflects the movement in the Consumer Price Index between the December 1975 quarter and the June 1976 quarter.

The increase will apply in respect of age, invalid and repatriation service pensions, widows’ pensions and supporting mothers’ benefits.

The combined married rate will rise by $4.00 to $72.50 a week.

Similar increases will apply to unemployment, sickness and special benefits, sheltered employment allowances and tuberculosis allowances.

In line with the practice initiated by our predecessors, there will be no increase in single unemployment and sickness benefits payable to persons under the age of 1 8 years.

The increases are estimated to cost $190 million in 1976-77 and $508 million in a full year.

I come now to another significant reform.

Following a recommendation by the Income Security Review Committee, the Government has decided, with effect on pension payments after 1 1 November 1976, to abolish the separate property component in the means test for pensions.

Those pensions that are now subject to a means test based on a combination of income and property will in future be subject to a test on income only, including income from property.

It will be both simpler and more equitable to take into account for pension purposes the actual income received by a pensioner.

Many people will gain from this overdue reform.

It has been clearly inequitable that pensioners should have been means-tested on the basis of a notional return on property, even though in many cases their actual income from such property fell well short of that notional return.

We believe therefore that this measure will be welcomed by all.

Transitional arrangements will ensure that no existing pensioner will suffer a reduction in pension as a result of the change; these arrangements are estimated to cost about $7m in 1976-77.

Repatriation Benefits

The main Repatriation pensions also will be increased in November 1976 and May 1977 in line with increases in the Consumer Price Index.

The increases are estimated to cost $ 15.8m in 1976-77 and $38.8m in a full year.

Along with the proposed changes to the Social Security legislation, we will be introducing legislation to increase automatically the main Repatriation pensions.

The Minister for Repatriation will be announcing further details.

Assistance to Handicapped People

The Government attaches high priority to the provision of adequate facilities and care for handicapped people.

Under the Handicapped Persons Assistance program funds are provided to help voluntary organisations establish and operate sheltered workshops, activity therapy centres and training centres, and to provide accommodation for handicapped children and adults.

We propose to increase expenditure on this program substantially over the next three years.

This Budget provides a total of $30m for these purposes.

Mr LYNCH:
LP

– The honourable gentleman should wait until I have read another paragraph or two. He might be better edified. The $30m comprises $27m for continuing commitments and $3m for new projects.

In 1977-78 the total amount will be increased so as to provide not only for continuing commitments but also $ 10m for new projects.

In 1978-79 the planned provision for new projects will be doubled to $20m in addition to providing for continuing commitments.

DrKlugman-What about 1984?

Mr LYNCH:

– I will talk to the honourable gentleman about that later. I will be able to talk about 1984, which is more than he will be able to do in this Parliament.

In all, over these three years we shall be providing a total of $ 12 lm under this program.

Arrangements will also be made so that selected organisations will be able to commence the planning and construction of approved projects now, in the firm knowledge that government funds will be forthcoming at nominated dates over the next three years.

These arrangements parallel those already announced for aged persons homes and hostels under which up to $225m is to be made available over the next three years to provide urgently needed accommodation for about 15 000 aged people.

Handicapped Children

We have decided to increase substantially both the handicapped child’s allowance and the handicapped children’s benefit.

In recognition of the special financial problems that are involved in the care of handicapped children, the relative increase in benefits in this area outstrips that of any other area of the Budget.

We have demonstrated our concern for this real area of underprivilege by raising benefits sharply.

The handicapped child’s allowance will be increased from $ 10 to $ 1 5 a week and the handicapped children’s benefit, payable in respect of handicapped children in institutions, will be increased from $3.50 to $5.00 a day.

These increases, which will benefit about 2 1 000 children in these categories, will take effect from November and are estimated to cost an additional $3.8m in 1976-77.

Senior Citizens ‘ Centres

We shall provide an amount of $4m for grants to approved senior citizens’ centres in 1976-77, and the same amount in each of the two succeeding financial years.

page 15

OVERSEAS AID

Notwithstanding the need to contain government spending, we are proposing to increase outlays from the Budget on overseas aid, excluding defence co-operation, to $400m in 1976-77; that is, by 14.6 per cent on 1975-76.

Of this total, $228. lm is allocated to Papua New Guinea, which continues to be the major recipient of Australian aid.

An estimated $26m will flow to Indonesia in 1976-77, being the first year of the new threeyear aid program of $86m to that country.

Full details of Australia’s overseas aid programs are set out in the accompanying Budget Paper, ‘Australia’s Official Development Assistance to Developing Countries 1976-77’.

page 16

DEFENCE

In these uncertain times, the highest priority of any responsible Government must be national security.

Total outlays on defence activities in 1976-77 are estimated at $2, 178m, an increase of over 17 per cent compared with last year.

The present Government is determined to restore and maintain an adequate Australian defence capability.

This will require increases in defence expenditure over the years ahead, particularly for the more adequate equipment of the Defence Force.

A White Paper on Defence is to be issued during this Session and at that time the Minister for Defence will make a comprehensive statement on the Government’s defence policies.

page 16

HEALTH

The cost to the taxpayer of health care in Australia has rocketed in recent years.

Last year Commonwealth expenditure on health services amounted to about $2, 953m, including $ 1,637m on Medibank.

At $1,6 12m the Budget provision for Medibank in 1976-77 is slightly less than last year.

When allowance is made for the prepayment of $2 16m to the States at the end of June for hospital operating costs in the September quarter, the cost of Medibank this year is about $407m greater.

But for the modifications we have made, the increase in cost this year would have been much greater still.

Levy proceeds to be collected under the modified arrangements to come into effect on 1 October are estimated to offset the costs of Medibank by $25Om in 1976-77.

As part of the reform of Medibank, the Government will provide $37.5m in 1976-77 towards the deficits incurred by registered hospital insurance organisations- including Medibank Private Insurance- from the payment of benefits to high risk and chronically ill members.

In addition, $12m has been provided for a subsidy to registered hospital insurance organisations to reduce the cost for those Medibank levy payers who choose to take out basic hospitalonly insurance cover.

The subsidy is intended to ensure that the cost of such insurance generally will not be more than $2.60 a week for family cover.

The Government has also decided to make an advance of $ 10m in 1976-77 to Medibank Private Insurance for establishment purposes.

In line with the undertaking given by the previous Government we have provided $108m for payments to the States in 1976-77 for the development of public hospitals and related health care facilities.

A further $70m-compared with $54.3m last year- has been provided for payment of grants to States, local government authorities and other eligible organisations under the Community Health Program.

We have also made a number of increases in other items of health expenditures.

Commonwealth expenditure on medical research, including the special grants to the Hall and Florey Institutes, is estimated at $ 10.1m in 1976-77; expenditure in 1975-76 was $6.2m.

New arrangements for financial assistance to the Red Cross Society’s Blood Transfusion Service will result in an increase of $330,000 in the Commonwealth’s subsidy to the Service in 1976-77.

The provision for the Royal Flying Doctor Service in 1976-77 is increased by a special grant of $800,000 to $2m.

page 16

ABORIGINAL AFFAIRS

The Government is mindful of its election undertakings and is committed to promoting the welfare and well-being of Aboriginals.

Unlike our predecessors, however, we do not see the achievement of that objective as being simply a matter of injecting ever-increasing amounts of money into an ever-increasing complexity of insufficiently considered programs.

An increasing body of evidence has demonstrated the need to re-assess the efficacy of some of the approaches of the past.

In this re-assessment the Government will have the benefit of the recent Hay Report on the programs involved.

Meanwhile, and pending its consideration of that Report, the Government is providing in this Budget no less than $153m for programs of direct assistance to Aboriginals.

Although this is $33m less than expenditure in 1975-76, spending on many programs is being maintained at about the same levels as last year.

Mr Armitage- Shame!

Mr LYNCH:
LP

-And you ought to be ashamed of the waste and maladministration in that area.

Mr Bryant:

– You are a bunch of racists.

Mr SPEAKER:

– Order! The honourable member for Wills will withdraw that remark. We are in the middle of an important Budget Speech. I ask the honourable gentleman, who has served in the Parliament for 20 years, to understand that he should withdraw the imputation that was made.

Mr Scholes:

– I rise to order.

Mr SPEAKER:

– The honourable member for Corio will resume his seat. I ask the honourable member for Wills to withdraw what was said.

Mr Bryant:

– I will withdraw the remark.

Mr SPEAKER:

– I appreciate that.

Mr LYNCH:

– In the case of some programssuch as grants to Aboriginal Housing Associationsthe provisions in the Budget are to cover outstanding firm commitments, pending further reviews of the objectives, priorities and past administration of those programs.

In the light of those reviews additional funds will be provided.

page 17

HOUSING AND COMMUNITY DEVELOPMENT

Welfare Housing

As announced previously, advances totalling $375m- $ 10.4m more than was provided in 1975-76- will be available to the States for welfare housing in 1976-77.

The Government has decided in principle to undertake a housing allowance voucher experiment; $75,000 is provided in the Budget for the first phase of this initiative.

Should the experiment prove successful, implementation of such a program would give low income families the financial means to select their own rental accommodation on the open market.

It would provide a new mechanism to make welfare housing sensitive to the needs of the users rather than those of the planners.

It takes into account the view of the Commission of Inquiry into Poverty that the first principle in the provision of assistance to low income people is that assistance must be linked to the person and not to the house.

Growth Centres

The Government has under way a comprehensive review of all major urban and regional development programs, including growth centres and decentralisation, land commissions, sewerage and urban rehabilitation.

Pending review of the appropriate role for the Commonwealth in relation to growth centres, the Budget provides sufficient funds to preserve the Commonwealth’s options in regard to AlburyWodonga (for which $15m is provided), Bathurst-Orange ($2m) and Macarthur ($2m).

Other Programs

Other community development programs provided for in the Budget include: $50m for the National Sewerage Program; $ 1 5. 1 m for land commissions; $ 10.3m for the acquisition of property, planning and site development in the Woolloomooloo Basin in Sydney; and $9.4m to assist with the construction of water treatment plants in the Adelaide area.

page 17

CULTURE AND RECREATION

A total of $133m has been provided for the Australian Broadcasting Commission; this compares with $ 1 37m last year.

In his statement of 3 June the Prime Minister emphasised that the Government would seek to eliminate unnecessary expenditure on the arts in 1976-77, but maintain important and worthwhile programs.

The Australia Council has been allocated $23m this year, about the same amount as was provided in 1975-76.

Expenditure on construction and running costs of the National Gallery, and on acquisitions, is estimated at $9.3m in 1976-77 compared with $4.6m in 1975-76.

To meet existing commitments, about $llm has been provided by way of capital assistance for leisure facilities in the States, $5m more than was spent in 1 975-76.

The Commonwealth’s role in youth, sport and recreation programs is one of the matters to be examined by the Task Force that has been set up to examine welfare services and communitybased programs in the healthwelfarecommunity development area.

Pending the Government’s consideration of the Task Force report, the 1976-77 Budget provisions for youth, sport and recreation are being maintained at the amount- almost $ 1.2m- that is required to meet existing commitments.

page 17

ECONOMIC SERVICES

Postal and Telecommunications Services

The Australian Telecommunications Commission will undertake a capital program in 1976-77 which will require funds of $415m additional to those available from its own internal resources.

As already announced, $2 15m of this will be provided from the Budget; the Commission will seek the balance of $200m by borrowing on the local capital market.

Last year an amount of $392m was advanced to the Commission from the Budget.

The Australian Postal Commission’s operations in 1 975-76 yielded a surplus estimated at about $30m.

The Commission therefore expects to be able not only to finance its 1976-77 capital program entirely from internal sources but also to repay $3m advanced to it by the Commonwealth in 1975-76.

With effect from 1 September 1976, the fees payable by the licensees of commercial television stations are to be brought into line with the scale which, since 1973, has applied to commercial broadcasting stations.

The new fees are estimated to yield additional revenue of $624,000 in 1976-77 and make total revenue from fees sufficient to cover the annual operational and capital costs of the Australian Broadcasting Control Board.

Radiocommunication licences are also to be increased for some classes of users from thenpresent level of $ 12 a year to $20 a year.

The Minister will announce the details; I mention, however, that there will be no increases in fees payable by voluntary bodies such as life saving organisations and rural fire brigades.

These new fees will operate from 1 October and are estimated to increase revenue by $1.2m in 1 976-77 and $ 1 .6m in a full year.

Air Transport

The Government is concerned at the continuing high cost to the general public of providing airport and airways facilities.

The gap between revenue and expenditure in this area was about $77m in 1975-76.

To help reduce this gap, and as already announced, air navigation charges are to be increased by 15 per cent with effect from 1 December 1976.

The increase is expected to yield an additional $4m in revenue in 1976-77 and $8m in a full year.

We are also implementing economies which, without adverse effects on safety standards, will result in expenditure on civil aviation faculties and services in 1976-77 being lower, in real terms, than in 1975-76.

Rail Transport

An amount of $60. 8m is being provided to subsidise expected operating losses of the Australian National Railways Commission.

These losses, which greatly concern Government, are being generated primarily by the Tasmanian and non-metropolitan South Australian railway systems transferred to the Commonwealth under the previous Government.

A further $36. lm is included to finance the capital program of the Australian National Railways Commission.

This amount includes provision to continue the construction of the standard gauge railway between Tarcoola and Alice Springs.

It also includes funds for essential capital works on the tasmanian railway system pending completion of the inquiry into that system that was announced in my statement of 20 May.

The separate provision of $2m for the Adelaide to Crystal Brook standard gauge railway project will meet current commitments, pending the findings of the independent committee of inquiry that will be reporting on that project.

Sea Transport

The Australian Shipping Commission’s capital expenditure program for 1976-77 requires provision of $63.4m from the Budget.

This program relates essentially to the provision of terminals and the acquisition of vessels and seaborne equipment by the Australian National Line for use in coastal and overseas trades.

The subsidy for the operation of ‘Empress of Australia’ by the Australian National Line in its Bass Strait passenger service will be increased by $lm,to$2m,in 1976-77.

An amount of $ 16m is provided to meet the estimated cost in 1976-77 of the Tasmanian Freight Equalisation Scheme that has been introduced following the report of the Royal Commission into Transport to and from Tasmania.

The Government is increasing its financial assistance to the Australian Shippers’ Council from $90,000 to $120,000 for 1976-77.

Light dues levied on shipping to recover the cost of providing coastal navigation aids are to be increased from 3 1 cents per net registered ton per quarter to 35 cents from 1 October 1976.

This increase is expected to yield an additional $ 1.7m in 1976-77.

A separate levy on shipping of 1 cent per net registered ton per quarter has been collected to cover the cost of the national plan to combat pollution of the sea by oil.

An adequate working reserve has been built up and the Government has therefore decided to reduce this levy to 0.8 cents from 1 October 1976.

Urban Public Transport

The Budget estimates include almost $65m in assistance to the States for urban public transport projects.

This amount includes $20m for payments which may be required in 1976-77 to meet the Commonwealth’s share of approved cost increases in respect of previously approved projects.

Roads

An amount of $433. 5m will be made available to the States for roads in 1 976-77.

This includes $35. 8m which will be made available in addition to the amounts appropriated under existing legislation.

An amount of $8m is to be provided to the States in 1976-77 for expenditure on approved planning and research projects in relation to roads and urban public transport.

Beef

The Government has accepted the Industries Assistance Commission’s recommendation to continue for a further year the joint Commonwealth/State Government scheme for the provision of concessional carry-on finance to beef producers.

The Commonwealth will match State approvals in 1976-77 on a dollar-for-dollar basis, subject to a limit of $ 1 5m on the Commonwealth Government contribution.

Fertilisers

The Government has considered the report of the Industries Assistance Commission which recommended that the subsidy of $78.74 per tonne on the nitrogen content of nitrogenous fertilisers be phased out over three years.

The Government agrees in principle that this subsidy should be phased out and has decided that the rate should be reduced to $60 per tonne on 1 January 1977.

The subsidy is estimated to cost $12m in 1976-77.

Rural Reconstruction

The Rural Reconstruction Scheme, which expired on 30 June 1976, will be extended to 31 December 1976 pending finalisation of the Government’s consideration of the Industries Assistance Commission report.

Of the total of $2 7m provided for the Scheme in 1976-77, $10m relates to the proposed extension to 3 1 December 1 976; the remainder relates to commitments under applications approved prior to 30 June 1976.

Dairy Industry

An amount of $ 13.5m has been included to meet the Commonwealth’s estimated liability in respect of the Dairy Adjustment Program in 1976-77.

This is additional to other assistance the Government has offered to the dairy industry by way of underwriting of producers’ returns from skim milk powder, casein, butter and cheese, details of which have already been announced by the Minister for Primary Industry.

Wool

The Commonwealth has authorised the Australian Wool Corporation to increase the level of support provided under its minimum reserve price scheme to 234 cents per kilo clean on a whole clip average basis.

This is equivalent to 275 cents per kilo clean on the previous 2 1 micron basis.

Notwithstanding this increased level of support, it is expected that the Corporation will be able to repay in 1976-77 $245m of advances made by the Commonwealth to the Corporation in previous years.

Water Resources Assessment Program

The Government has decided to continue its support for the Commonwealth/State Water Resources Assessment Program for another three years; the provision for 1976-77 is $6.7m.

Productivity Improvement Programs

The Government is increasing, from $66,000 to $ 1 77,000, its support for programs designed to improve productivity at plant level.

page 19

LEGAL AID

An amount of $20m (including $3.7m for legal aid for the Aboriginal community) is included in the Budget for legal aid, compared with expenditure of $ 16.3m in 1975-76.

The Attorney-General is negotiating with the States with the object, of bringing all forms of legal aid under the control of statutory Legal Aid Commissions and thereby effecting savings in the administration of legal aid.

Pending completion of the negotiations, the Government is maintaining legal aid activities at their present level.

To help offset the sharp rise in costs of legal aid to the Commonwealth over recent years, new and increased fees will be levied in Federal Courts; these fees are estimated to yield $2. 5m this year and $3. 5m in a full year.

page 20

PAYMENTS TO THE STATES AND LOCAL GOVERNMENT AUTHORITIES

One of the topics to which, since taking office, the Government has accorded a very high priority is that of the financial relations between the Commonwealth, State and local governments.

The tax sharing scheme- the central element in our program of reform- is to a large extent now settled with the States.

Under Stage 1 of the scheme, the States will be entitled to 33.6 per cent of the Commonwealth’s personal income tax collections, excluding any special surcharges or rebates.

On present estimates, which are necessarily subject to a considerable margin of uncertainty, this puts the States’ entitlement for 1976-77 at $3,716m.

This would represent an increase of $643m, or about 2 1 per cent, over the comparable grants in 1975- 76, and is presently estimated to be $89m more than the States would have received under the old formula.

The State Governments’ Loan Council programs for 1976-77 will total $l,356m, an increase of 5 per cent compared with 1975-76.

Local government also will have an annual entitlement to a share of personal income tax.

An amount of $140m is to be provided in 1976- 77- an increase of 75 per cent over last year.

In recent years specific purpose payments to States and local government authorities have grown very fast; in 1974-75 the increase was no less than 92 per cent and in 1975-76 it was a further 34 per cent.

After adjustment for the hospital prepayments to the States in late June, specific purpose payments are presently estimated to increase by about 9 per cent in 1976-77.

Lumped together, net payments to States and local government authorities in 1976-77 are estimated to total $9,077m- an increase of 13 per cent after adjustment for the hospital prepayments.

If allowance is made also for the non-recurring payments made for unemployment relief in 1975-76, the increase in 1976-77 becomes 15 per cent.

This represents a significant increase in real terms and is a slightly faster increase than is in prospect for all other Budget outlays.

The greater part of the funds we are providing to the States is untied and can be used by the States in ways of their own choosing:

The States have always said they want greater freedom to make their own decisions and determine their own priorities.

That is why we have increased our provision to them of untied funds relatively more than funds for specific purposes.

The States now have the capacity to spend these untied funds in ways of their own choosing- be it welfare housing, or sewerage programs, or whatever it is to which they choose to give priority.

The State Governments, along with the Commonwealth, must play their part in the battle against inflation.

At a time when there are complaints about the level of funding of State Government programs the Commonwealth finds it particularly strange to find some State Governments actually supporting the even higher increases in their cost levels which full indexation of wages would bring.

There is a need for restraint in the expenditures of State Governments as well as m the expenditures of this Government.

The figures I have just given clearly show that the States are not being asked to bear any undue share of the task.

page 20

NATURAL DISASTER RELIEF

The Budget includes an amount of $26m for relief payments in 1976-77 following natural disasters.

This amount comprises continuing payments following floods and cyclones during 1975-76 and recently announced drought relief assistance to Western Australia.

The Government has also undertaken to support, in accordance with the natural disaster assistance arrangements with the States, expenditures by the Victorian Government on certain drought relief measures.

page 21

GENERAL GOVERNMENT

Civil Works

We have approved a total program of $293m for new works to be committed to construction in 1976-77.

A total cash allocation of $4 10m has been set for expenditure during the year on new and already committed projects; this compares with actual expenditure of $425m in 1975-76.

For the Darwin Reconstruction Commission a new works program of $50m and an expenditure figure of $140m have been determined; actual expenditure in 1 975-76 was $ 1 10m.

The approved new works program for the National Capital Development Commission is $153m, with a cash allocation of $195m compared with $ 188m in 1975-76.

For the remainder of the works program the limit on new works is $90m, including $50m for the Northern Territory, and the cash allocation is $75m; actual expenditure last year amounted to $127m.

Canberra

The Minister for the Capital Territory has already announced details of increases in general municipal rates and in water and sewerage rates in the Australian Capital Territory.

Action is in hand to limit the subsidy to the Canberra bus service to $5.4m in 1 976-77.

There will be increased revenue from bus fares and paid parking spaces in Canberra.

The Minister will be issuing details.

Staff Ceilings

Soon after taking office the present Government introduced new staff ceilings which were mainly responsible for reducing Commonwealth employment in the area covered by staff ceilings by 2.8 per cent in 1 975-76.

This compares with a growth in Commonwealth employment in the area concerned of about 4 per cent per annum in the three years to 1974-75.

On 14 June the Prime Minister announced a further overall reduction of 1.2 per cent in these staff ceilings to be achieved by 30 June 1 977.

This comprised a 1.6 per cent reduction in the ceilings for Public Service Act employees and a 0.9 per cent reduction in the ceilings for certain Commonwealth Government authorities.

These lower ceilings have been reflected in the detailed Budget estimates.

The Prime Minister indicated at the time that the 1976-77 ceilings set in June were provisional, being subject to further review and possible adjustment in the light particularly of the Government’s Budget decisions.

Following further consideration in the Budget context, the Government has decided upon an objective of achieving a further reduction of 2 per cent in staff ceilings for Public Service Act employees during 1976-77, making the objective in this area a 3.7 per cent reduction in all.

This further reduction is estimated to produce a saving to the Budget of about $22m in 1 976-77.

Accompanying- though lesser- reductions in the staff ceilings for certain Commonwealth Government authorities will mean that, after allowance for the reduction previously announced, the total reduction in ceilings now being aimed at during the course of 1976-77 amounts to 2.5 per cent.

The Government reaffirms its intention to achieve these reductions without sacking anyone and without creating personal hardship.

Continuing Expenditure Control

Following the change of Government we were able to keep total Budget outlays for 1975-76 within the original Budget estimates for the first time since 1968-69.

We aim to repeat that performance again in 1976-77.

We will not let up in our efforts to achieve savings and eliminate waste and inefficiencies wherever they occur.

Because so much expenditure tends to be committed before the year starts, effective expenditure control must begin at the stage of commitment.

To this end, new administrative arrangements have been developed for the regulation of forward expenditure commitments by departments and authorities which depend on the Budget for the whole or part of their finance.

Limits within which departments and relevant authorities may make commitments during the current financial year- but which are to be financed from appropriations in future years- were determined as part of the Budget process.

These limits can be increased only by specific Government decisions.

We see the development of these new administrative arrangements as making a major contribution to the improvement of overall financial management in the area of Commonwealth administration.

page 22

RECEIPTS

I turn now to the receipts side of the Budget.

Government spending cannot be massively increased as in recent years without also significantly increasing the overall tax burden.

This remains true notwithstanding the enormous deficits which have been allowed to open up between the outlays and the receipts side of the Budget- and which in due course have to be closed.

With that latter important qualification, it is also obvious that, by prudently reining in the rate of growth of government spending, it becomes possible not only to avoid further increases in the tax burden but also to contemplate reducing it.

In 1976-77, for the first time since the last Liberal-National Country Party Budget of August 1972, there will be no increases in the major indirect taxes.

I contrast this with the 1975-76 Budget proposals for indirect tax increases which- even excluding the coal export duty- represented additional levies totalling $602m in 1975-76 and $688m in a full year

Over the three years 1973-74 to 1975-76 the total of all the increases in taxation in this area lifted the annual level of taxation by over $ 1,000m.

In this Budget, I repeat, there are no proposals to increase excise on cigarettes, or on beer, or on spirits, or on petrol.

Moreover, because of our success to date in restraining expenditures, 1976-77 will see our first steps towards positively relieving the burden of taxation.

The decisions involved- those already announced and those I am about to announceaccord with our basic philosophy that individuals and businesses should have more say in spending decisions which concern them, and governments less.

At the same time they are intended to strengthen confidence among consumers and investors, and thereby advance the recovery of the economy.

page 22

PERSONAL INCOME TAX

The most important step in relieving the burden of taxation- the indexing of personal income tax- has already been taken and has been in operation for pay-as-you-earn purposes since 1 July.

It represents perhaps the most significant reform of the personal income tax system in our time, and certainly the most costly in terms of revenue forgone.

We have taken this step both in fulfilment of our objective of getting the Government’s hands out of taxpayers’ pockets, and for wage policy reasons.

Individuals, rightly in our view, attach considerable importance to their own command over their incomes and their ability so far as possible to spend those incomes as they see fit.

The indexation arrangements which are now part of the income tax law will prevent the automatic increase in effective tax rates which used to come about as rising money incomes resulting purely from inflation took taxpayers further up the progressive rate scale.

The law now provides for annual adjustments to prevent that.

A change to the law will now be needed if a government seeks to increase effective real rates.

This brake upon financial profligacy is a major step towards ‘keeping governments honest’ with their taxpayers.

The new arrangements are described in Statement No. 4 attached to this Speech.

The cost of indexation and the changes associated with it is estimated to be $ 1,050m in 1 976-77 and $ 1 ,2 10m in a full year.

We gave a commitment for 3 years; we fulfilled it in just under 6 months.

page 22

VALUATION OF TRADING STOCK

The Government made it quite clear in its election policy statements that it was not prepared to see inflation continue to add to the tax burdens of individuals and businesses.

We allowed ourselves a period of three years to give full effect to the necessary remedial legislation.

So far as personal income tax is concerned, we have already fulfilled our undertaking by indexing the system as from 1 July 1976.

We have now considered relieving businesses also from the impact of inflation on their tax burdens.

In the kind of highly inflationary situation which Australia has recently been experiencing, firms have serious problems in financing the rapidly growing costs of an adequate and appropriate level of trading stocks.

They have problems, too, with financing the soaring costs of replacing plant and equipment when depreciation allowances for taxation purposes are based on historical costs.

Since coming to office the Government has given careful thought to the most effective ways of providing relief to firms beset with problems of these kinds arising from our recent high rates of inflation.

In doing so it has had the benefit of the views originally stated by the Mathews Committee and, more recently, by Professor Mathews personally.

It has also sought and received the views of leading representatives of the accountancy profession and of a wide sweep of industry interests.

The Government has now decided to take a substantial step in relation to a system of trading stock valuation adjustments applying to taxable incomes earned in the 1976-77 income year.

Meanwhile, we are continuing to examine the impact of inflation on depreciation allowances and other aspects of business financing and profitability, with a view to bringing in appropriate legislation within the Government’s current term of office and having regard to the availability, in the meantime, of the investment allowance.

The key features of the proposed system of trading stock valuation adjustments will be:

The adjustments will reduce taxable incomes in respect of income year 1 976-77.

On practical grounds, the accent of the scheme will be, so far as possible, on simplicity.

With that in mind, we propose the use of a general index for calculating the trading stock valuation adjustment.

Specifically, the cost of a firm’s trading stock as at 1 July 1 976 will be revalued for income tax purposes by reference to the percentage increase in the ‘goods’ component of the Consumer Price Index between the June quarter of 1976 and the June quarter of 1977.

It is not proposed to bring the adjustments back into assessable income in later years in the circumstances proposed by the Mathews Committee- the adjustments will reduce tax, not defer it; in terms of the jargon, there will be no ‘clawback”.

It will be necessary to lay down some safeguards against misuse of the system to avoid tax that ought to be paid; the precise nature of these is at present under consideration.

By way of illustration I mention that, had such a scheme been operating fully in the current year on the basis of 1975-76 incomes, it is estimated that the cost to revenue this year would have been of the order of $700m.

What the full cost of the final scheme would be in 1977-78 cannot of course be foreseen at this stage.

That would depend among other things upon the rate of increase in the index during the current year.

We have said that the scheme would be phased in.

At this point it is clearly not possible for us to say how far, by this time next year, we shall feel able to go.

We shall go as far as we can.

What we do now undertake is that 50 per cent of the full adjustment will be allowed next year as deductions from 1 976-77 incomes.

There are other aspects of the system of adjustments which require further study and which we are therefore not in a position to announce at present; these include, for example, the safeguards I have referred to and the categories of trading stocks to be included in the scheme.

Legislation to be introduced in the next Autumn Sittings will provide full details.

In settling those details, the Government will have discussions with professional and industry groups where appropriate.

page 23

PRIVATE COMPANIES

The Government has undertaken to ease the distribution requirements for private companies under Division 7 of the Income Tax Assessment Act.

In this regard we have had the needs of small businesses particularly in mind. We believe in small businesses: They are essentially Australian.

We attach importance to the spirit of free enterprise which small business symbolises.

For distributions in respect of taxable incomes of the year 1975-76 and subsequent years the retention allowance for trading or business income will be increased from 50 per cent to 60 per cent.

This will increase by one-fifth the amount of after-tax income which a private company can retain without incurring Division 7 tax.

No change is being made to the 10 per cent retention allowance for property income or to the rule that there be no retention allowance for dividends that one private company receives from another.

At the same time, the law will be amended to terminate the ‘excess distribution’ provisions of Division 7, which permit a company which makes more than the minimum distribution in one year to make less than a minimum distribution in a later year without incurring Division 7 tax.

With the proposed increase in the retention allowances there will no longer be any practical need to retain these highly complex provisions, which have also been of some concern in connection with schemes of tax avoidance; they are accordingly to be withdrawn subject to appropriate transitional arrangements.

The increase in the retention allowance is estimated to cost about $lm in 1976-77 and $30m in a full year.

page 24

INCOME FROM MINING

The Government has had under consideration the report of the Industries Assistance Commission on the income tax arrangements applying to the mining and petroleum industries.

In the light of that report it has decided on certain amendments to the law, bearing in mind both the Goverment’s desire to see a healthy and efficient mining sector and the IAC’s observations on the desirable relationships between the levels of tax on income from mining and on income from other business sources.

The changes proposed are:

Petroleum exploration expenditure and allowable capital expenditure on the mining of petroleum will be deductible against income from any source.

Allowable capital expenditure of any mining company on the development of a mine or field will be deductible on a diminishing value basis, as at present, by reference to a maximum life of mine or field of 5 years, instead of 25 years as at present.

Allowable capital expenditure on facilities used for the transportation of minerals, including petroleum, will now be deductible on a straight line basis over either 20 years, as at present, or 10 years, at the taxpayer’s option to be exercised with the first claim for the deduction.

The categories of expenditure covered by the present provisions giving deductions for allowable capital expenditure on mineral transport facilities will be extended to cover expenditure, presently not deductible, on port development such as harbour surveys, initial dredging, navigational aids and breakwaters.

The amendments will apply first to capital expenditures incurred after today.

They have no cost in 1976-77 but the revenue to be forgone in the first full year is estimated at $60m.

page 24

CRUDE OIL LEVY

In the last Budget an excise of $2 per barrel was introduced on the production of crude oil, condensate and naturally occurring liquefied petroleum gas.

Under existing policy any company discovering oil would receive import parity less the production excise.

Many oil exploration companies have put to us that costs are so high today as to make commercial production from new oil discoveries of the size likely to be found in Australia unattractive at this level of return.

The Government accepts that the levy represents a substantial deterrent to companies considering exploration for new fields.

It has therefore decided that oil from discoveries after today will be free from the production excise.

The result will be that all production of crude oil from future discoveries will receive full import parity at the nearest refinery port.

The Government believes that this will significantly affect the level of activity within the oil exploraton industry.

page 24

COAL EXPORT DUTY

The coal export duty introduced in the last Budget applies at two rates- $6 per tonne for high quality coal and $2 per tonne for other coal, apart from certain lower grade coal which is exempt.

The Government has always regarded this as an entirely inappropriate form of tax.

The quality of deposits varies markedly, but within and between the two categories which are subject to duty the effects of the duty fall in a quite haphazard manner.

Marginal fields pay the same rate of duty as economically more profitable fields, or in some cases more.

The imposition of this levy has had undesirable effects both on existing producers and on potential developments.

It is the intention of the Government to remove this particular levy, but for budgetary reasons which will, I think, be obvious it is not possible to remove it at one stroke.

It will however be reduced immediately, in what the Government regards as a first step towards completely phasing out this particular tax within three years.

The Government is taking these steps towards phasing out this levy to encourage the healthy development of the industry.

If the States take advantage of this situation to increase their own royalties the Government will have to review its position.

So far as immediate steps are concerned, the Government will remove the duty from noncoking coal and will reduce the rates on coking coals by 25 per cent- from $6 to $4.50 per tonne in the case of the higher rate of duty and from $2 to $ 1 .50 per tonne in the case of the lower rate.

These changes, to apply immediately, will cost an estimated $33m in 1976-77 and $37m in a full year.

page 25

INVESTMENT ALLOWANCE

Legislation to introduce an investment allowance was passed in the Autumn Sittings of the Parliament.

During those Sittings and since, representations were received on a number of aspects of the allowance on which changes in the law were sought.

In the course of its deliberations on the Budget the Government has carefully considered all of these representations and having done so has decided that the present scope of the allowance should remain unchanged.

page 25

PAYROLL TAX

The present level of the exemption from payroll tax in the Australian Capital Territory and the Northern Territory is to be increased to the level recently adopted by the States.

The present exemption of $20,800 will become $41,600 per annum; above $41,600 the exemption will phase out by $2 for every $3 by which the annual payroll exceeds that amount.

The new exemption will apply from 1 January 1977.

The change does not have any significant effect on Budget revenue.

page 25

INCOME EQUALISATION DEPOSITS

The Government has now considered the IAC report on ‘Rural Income Fluctuations- Certain

Taxation Measures’, which dealt with two broad questions: the averaging arrangements for primary producers, and a proposal for a scheme of income equalisation deposits for primary producers.

The Government has decided to continue the averaging system in its present form, but will take up the proposal for a scheme of income equalisation deposits.

Commencing with income year 1975-76, deposits lodged with the Government under the latter scheme will be deducted from the assessable income of the year of income in respect of which they are lodged, and included in assessable income of the year in which they are withdrawn.

The scheme will enable primary producers to act themselves to even out the effects of fluctuating income on their tax liabilities over a period of years.

Details of the scheme will be available when the legislation is introduced; the scheme will, however, include the following features:

A minimum limit of $100 and a maximum limit of $ 100,000 is to be applied to the total value of a taxpayer’s holdings.

It will not be possible to withdraw deposits within the first 12 months after lodgment (other than in exceptional circumstances such as natural disasters, death, or financial stringency); however, there will be no maximum limit on the period for which an amount may be left on deposit.

The scheme will apply to primary producers, but in determining taxable income’ from which deposits may be purchased, no distinction will be drawn between income obtained by primary producers from farm or non-farm sources.

Interest is to be paid on the deposits at a rate, initially 5 per cent per annum, to be prescribed by regulation.

The present Drought Bonds Scheme is to be discontinued under appropriate transitional arrangments.

Present holders of Drought Bonds will be offered the option of transferring to the new scheme.

It is estimated that the revenue forgone in 1976-77 will be about $2m; the full-year cost of the scheme cannot be estimated at this stage.

page 25

ESTATE DUTY

We undertook to increase the exemption from estate duty where the whole or part of the estate of a deceased person passes to a surviving spouse.

This is an area of the law where personal tragedies abound.

Even in current tight budgetary circumstances we have seen the need to pay special regard to rectifying the present situation.

We shall therefore fulfil our undertaking in this Budget.

We shall introduce a special deduction to apply where an interest in an estate passes to a surviving spouse.

The deduction will be $50,000, or the entire net value of the spouse’s interest in the estate if that is less than $50,000.

The existing statutory exemptions, and the rebate of part of the duty in respect of a primary producer estate, will then apply as at present to the remainder of the estate.

With the introduction of this special deduction, the deduction introduced in 1974 for an interest in the matrimonial home passing to a surviving spouse will be terminated.

This was in any case an unsatisfactory provision, as it discriminated between different types of assets and was available in full only if the gross value of the interest in the home did not exceed $35,000.

The new deduction will apply regardless of the nature of the assets and will not be reduced where the value of the relevant interest exceeds $50,000.

In the case of an estate passing wholly to a surviving spouse, no duty will now be payable on an estate up to $90,000 (or $98,000 for primary producer estates).

About 20 per cent of presently dutiable estates will cease to be dutiable, and the impact of duty on larger estates will be considerably reduced.

The new provisions will apply to estates of persons who die after today.

The cost of this measure is estimated to be $2m in 1 976-77 and $ 1 4m in a full year.

page 26

BUDGET OVERVIEW

In the aggregate, outlays in 1976-77 are estimated to increase by 11.3 per cent to $24,32 lm.

Receipts are estimated to increase by 18.8 per cent to $2 1,7 13m.

The overall deficit is therefore $2,608m.

This is $977m less than the actual deficit of $3,585m in 1975-76.

This latter figure would of course have been much greater had it not been for the actions taken by this Government immediately it came to office.

When allowance is made for overseas transactions, the domestic deficit in 1976-77 is estimated at $l,879m; this is over $l,000m less than the domestic deficit of $2,905m last year.

For all the reasons I have stated earlier this hauling in of the deficit this year is appropriate.

But, over and beyond that, it can fairly be claimed that the deficit in prospect for 1976-77 differs in important respects from those of 1975-76 and 1974-75.

The ‘mix’ of the prospective deficit this year is vitally different from those of the last two years.

It is particularly striking, for example, that the lower deficit in prospect for 1 976-77 is estimated to come about after forgoing revenue of no less than $ 1 ,250m on account of personal tax indexation and the investment allowance.

Had we not chosen to make those desirable reductions in the burden of personal and corporate taxation the deficit would have been about $ 1,360m and the domestic deficit would have been down to around $630m.

Not only is the reduction in the deficit appropriate to the evolving economic recovery but it is also being achieved after a major reduction in taxes which will play its own part in enhancing that recovery.

More generally, this Budget reflects the Government’s determination to press on with the major social, economic and administrative reforms that were outlined by the Prime Minister last November.

It continues the drive to restore to individuals the economic independence that was so markedly eroded by the policies of our predecessors.

It puts people first.

It points towards the re-enhancement of the role of the private sector and away from the threat of big government.

It emphasises the importance of free enterprise.

For the first time in recent years, it gives real incentive for individuals and companies to venture and to succeed.

page 26

THE ECONOMIC OUTLOOK

Against that background, I believe there will be general agreement that this Budget is above all a fiscally responsible one.

Among other things it represents another step towards a better ‘mix’ of fiscal and monetary policies than has existed in recent years.

The joint thrust of this Government’s fiscal and monetary policies to date has slowed the growth in the monetary aggregates in recent months from the grossly excessive rates of 1 975.

This Budget stays firmly on that track.

The reduction we are effecting in the Budget deficit will reduce the Government’s call on financing from the community.

It thereby provides more scope for maintaining financial conditions appropriate to continuing recovery in the private sector while holding growth in the overall monetary aggregates at appropriate rates.

Thus, the technical estimates at the moment suggest that with the monetary regulators at settings appropriate to continuing recovery in the private sector, a Budget outcome of the kind foreshadowed here, along with other factors affecting the financial system, could be consistent with growth in the broadly defined volume of money (M3) in the 10-12 per cent range during 1976-77.

That range, which is subject to the usual hazards of forecasting, will no doubt change as circumstances unfold.

Depending upon those circumstances it could also be necessary and appropriate for policy to be adjusted in the light of events as they develop.

As of now, however, it gives a broad indication that growth in the monetary aggregates will be a notch or so lower than last year.

The Government believes that, notwithstanding all the qualifications which necessarily attach to it, this broad indication of the monetary outlook will provide the private sector with a greater degree of certainty regarding that aspect of policy in the year ahead than it has previously enjoyed- particularly in recent years.

It should help, for example, to allay fears of either excessive financial tightness or financial ease.

Consistent with the aims of government policy, an outcome along these lines would contribute to reducing inflation while ensuring adequate funds to underwrite economic recovery.

Within that broad monetary framework, the decisions of the wage-fixing authorities will be crucial to the speed of the wind-down in inflation that, one way or another, must be achieved.

Provided there is significantly less than full flow-on of price increases to wages, an improvement of several percentage points in price performance, and a somewhat greater deceleration in money wages, can be had in 1976-77 as a whole.

By the end of the period, we should be down to single digit rates.

With some productivity gains accruing in the upturn, a noticeable rise in the profit share would then be in prospect.

With such a gradual winding-down of inflation and inflationary expectations, recovery in demand and activity would be unlikely to proceed at more than a modest pace.

Under those circumstances, both private consumption expenditure and business investment should, during 1976-77, become established as sources of continuing growth in demand for domestic production.

Over the year as a whole they should, on that basis, record moderate increases in real terms.

Unhappily, seasonal conditions appear likely to permit little if any increase in farm production overall; however, developments along the lines I have mentioned could reasonably be expected to result in gross non-farm product growing by about 4 per cent for the year as a whole.

Given a more widespread recognition, on the part of all those principally concerned, of the central role which current rates of inflation are playing in holding back the recovery and keeping unemployment high, it is possible to envisage a more optimistic scenario.

But until the evidence of that more widespread recognition comes up on the board- for example, in the determinations of the wage-fixing tribunals and in the co-operation with those decisions of the trade union leadership as a whole- we cannot plan on that.

Even the more gradual recovery prospects, however, would be consistent, after allowance for labour force and productivity growth, with some gradual reduction in unemployment during the course of 1976-77.

It would be rash to predict any earlier reduction in unemployment; movements in the remainder of calendar year 1976 are unlikely to be great.

But 1977, all going well, should see the start of a more concerted fall.

page 27

CONCLUSION

This Budget embodies and advances the Government’s overall economic and social strategy.

The economy is now set on the right path and the combination of expenditure and tax measures in this Budget will help it along that path.

For the first time in several years there are now good prospects of staying on a growth path we can sustain.

Inflation- and therefore unemployment- will not be wiped out overnight, but even on a not over-optimistic view of things they will be steadily reduced by the budgetary and other policies to which this Government is adhering.

After only eight months since, on coming to office, we confronted the full enormity of our inheritance, these policies are now beginning to produce results.

At the same time the Budget also reflects the Government’s priorities both as between private and public spending, and within the public sector itself.

It is, as I said at the outset, both a Budget for confidence and a Budget for reform.

As such, I commend the Budget to Honourable Members.

Debate (on motion by Mr E. G. Whitlam) adjourned.

page 29

STATEMENTS ATTACHED TO THE BUDGET SPEECH

page 30

STATEMENT No. 1- SUMMARY OF THE 1976-77 BUDGET

Budget Aggregates

The key Budget aggregates for 1976-77 are shown in the following table, together with comparable data for 1975-76: {:#subdebate-35-1} #### Outlays The budgeted increase of 11.3 per cent in outlays in 1976-77 is about half the increase in 1975-76, which in turn was about half the increase in 1974-75. The Budget therefore provides for a continuing marked deceleration in the rate of growth in outlays in 1976-77. After remaining fairly steady around 24-25 per cent for many years, total outlays as a proportion of GDP jumped to 30.0 per cent in 1974-75 and increased further to 31.4 per cent in 1975-76. On the basis of present estimates the proportion in 1976-77 is expected to be around (perhaps slightly less than) 30 per cent. The Government's decision to implement a new scheme of family allowances from 1 July 1976 is estimated to add close to $800 million to Budget outlays in 1976-77. The effects of this decision on the increase in outlays are expected to be largely - though not entirely - offset by other special factors, including the proposed borrowings by the Australian Telecommunications Commission from outside the Budget, the proposed large repayments by the Australian Wool Corporation and the large prepayments made to the States late in 1975-76 in respect of hospital operating costs in the September quarter of 1976-77. Budget outlays classified according to broad economic type are shown in the table below. The Commonwealth's own direct expenditure on goods and services is estimated to increase slightly faster than total outlays. Payments to or for the States are estimated to increase by 7.2 per cent compared with 1975-76 but if allowance were made for the prepayments in respect of hospital operating costs in late June the increase would be 12.6 per cent. Cash benefits to persons are estimated to increase by 21.4 per cent. An account of the economic context of the 1976-77 Budget and of the postBudget outlook for the economy is presented in Statement No. 2. A detailed account of estimated outlays in 1976-77, classified by function, is presented in Statement No. 3. The summary table below shows Budget outlays in 1975-76 and estimated outlays in 1976-77 classified according to the main functional headings. The major changes are: o total outlays are estimated to increase at half the rate which occurred in 1975-76 but outlays for defence and education are estimated to increase more rapidly than in 1975-76, reflecting the high priority which the Government attaches to these activities; o the further rapid increase in estimated outlays for social security and welfare reflects, *inter alia,* the introduction of the new scheme of family allowances and the Government's decisions to maintain the real value of pensions and other benefits; o the large increase in respect of the 'Not allocated to function' category is attributable mainly to a rapid increase in estimated payments of debt charges which, in turn, reflects the sharp rise in the level of outstanding debt following the large deficits of the past two years; o mainly as a consequence of the Government's changes to Medibank and the advance payments made to the States in June 1976 for hospital operating costs, outlays for health purposes are estimated to decline marginally in 1976-77, after more than doubling in 1975-76; o the decline in outlays on urban and regional development nec and the environment is concentrated in urban development programs which have grown very rapidly in recent years and which are currently under review; and *a* the estimated decline in outlays for economic services reflects changes in financing arrangements for the Telecommunications Commission and some other statutory authorities and the expected large repayments of earlier advances in 1976-77 from the Australian Wool Corporation. {:#subdebate-35-2} #### Budget Receipts Total Budget receipts are estimated to increase by 18.8 per cent in 1976-77 to $21 713 million. This is after allowance for the net loss to revenue of the taxation measures announced on 20 May and in the Budget Speech. Details of the estimates for 1976-77, including the impact of the new measures on receipts, are presented in Statement No. 4. The increase of 18.8 per cent in receipts in 1976-77 is less than the increases recorded in recent years. The 1976-77 figure includes the effects of the introduction of personal tax indexation, the abolition of rebates for dependent children (which has been offset by increased outlays on family allowances) and the proceeds of the Medibank levy which, for administrative reasons, is being collected through the taxation system. {:#subdebate-35-3} #### The Deficit The estimated *overall* deficit of $2608 million is $977 million less than the 1975-76 deficit of $3585 million. After allowance for the deficit incurred on overseas transactions - mainly in respect of defence and foreign aid expenditure - the Budget implies an estimated *domestic* deficit of $1879 million in 1976-77. This is $1026 million less than the *domestic* deficit in 1 975-76. {:#subdebate-35-4} #### Historical Data Historical data on Budget transactions are presented in Statement Nos 5 and 6. Statement No. 5 provides a detailed account of the Budget outcome in 1975-76, while Statement No. 6 presents Budget data in both functional and national accounts form for the period 1566-67 to 1976-77. An Appendix to the Budget Statements describes the basis of the functional classification of Budget outlays and notes some changes in classification. {: .page-start } page 33 {:#debate-36} ### STATEMENT No. 2 - THE BUDGET AND THE ECONOMY {: .page-start } page 34 {:#debate-37} ### STATEMENT No. 2 - THE BUDGET AND THE ECONOMY Macro-economic policy is currently aimed at controlling inflation and, largely as a consequence of that, achieving moderate and sustainable economic recovery. Key elements in this strategy have been restraints upon government spending, the control of liquidity and advocacy of moderation in wage fixation. Expenditure restraint, which had commenced in the 1975-76 Budget, was taken further in the announcements of December 1975 and February 1976 and, much more significantly, in the Treasurer's statement of 20 May. Important changes in personal income tax and a new system of family allowances were also announced on the latter occasion. Review of Economic Developments in 1975-76 {:#subdebate-37-0} #### Activity and Employment The course of economic activity in 1975-76 falls into two phases corresponding to the two half years: a decline in the first half followed by the beginnings of a recovery in the second half. To that extent experience in 1975-76 could be said to resemble that of 1974-75. However, the resemblance stops there. The decline in activity in the first half of 1975-76 was less marked, even though movements in final expenditures were similar. Whereas the increase in the second half of 1974-75 in total final expenditures owed much to rapidly increasing public sector demand, the 1975-76 upturn, though more gradual, occurred notwithstanding a contraction in public sector spending. In contrast to the second half of 1974-75, movements in the non-production sources of supply (stocks and imports) made a positive contribution to product in 1975-76. The following commentary, including the accompanying charts to which the text refers, employs semi-annual movements. All figures mentioned are seasonally adjusted and in constant price terms unless otherwise noted. Since the economy is an interrelated whole, starting the discussion with developments in real activity, though conventional, is to some extent arbitrary. Examining 1975 first in more detail, it can be seen from Chart 1 that *total final expenditure* (panel g) behaved very differently in the two halves of the calendar year, increasing by 2.8 per cent in the first half, but by only 0.8 per cent in the second half. *Private consumption expenditure* (panel a) increased fairly strongly in the first half and although higher on average in the second half of 1975, actually declined over the course of that period: The introduction of Medibank resulted in a smaller proportion of hospital services being recorded in private final consumption, and a larger proportion in government final consumption; this has had the effect of reducing the *level* of recorded consumption since the September quarter 1975. Recorded consumption declined 0.1 per cent in the September quarter and 0.2 per cent in the December quarter; after allowance for the Medibank reclassification, consumption increased marginally in both quarters. *Total private fixed investment* (panels b, c and d) which had fallen through 1974, declined again in the first half of 1975. Business fixed investment showed little change in that half year but in the second half of the year there were falls in both investment in *other, buildings* (panel c) and in *plant and equipment* (panel d). Lending for housing by. the major institutions increased rapidly from the December quarter of 1974 through 1975, facilitating a revival in *private dwelling investment* (panel b) in the second half of 1975. The growth in private consumption expenditure in the first half of 1975 was supplemented by some expansion in *exports* (panel f) but more significantly by strong growth in total *government expenditure* (panel e) which accounted for half the net increase *m 'domestic final expenditure* in that half year. Growth in government expenditure moderated in the second half of 1975 but still accounted for more than a third of the net increase in final expenditure in that period. The effect on *gross domestic product* (panel j) of the rise in final expenditures in the first half of 1975 was partly blunted by the sudden switch from slight accumulation to marked decumulation of *stocks* (panel h), this decumulation continuing right through 1975. However, a sharp fall in *imports* (panel i) accompanied and thus offset in large part the turnaround in stocks. This ensured that much of the growth in expenditures in the first half of the year was in fact translated into increased product. Imports increased slightly in the second half of 1975 and, together with contined stock decumulation, more than offset the relatively small growth in final expenditures in the period; as a result total domestic product declined again. It should be noted, however, that there was quite a strong rise in *industrial production* taking place in the second half of 1975. In 1975, as in earlier periods shown in Chart 1, the movements in the expenditure based estimate of gross domestic product (excluding the statistical discrepancy) were less marked than those in the income based estimate. None the less the direction of change shown by the two estimates is similar. For 1975 as a whole *domestic product* (income based) increased 0.5 per cent and *farm product* increased 15.6 per cent; *non-farm product* declined by 0.8 per cent. During 1975 the course of total employment was much influenced by direct government employment and, in particular, employment-creating schemes. After falling sharply in the latter part of 1974 *private* employment fell further in the first half of 1975 before levelling out toward the end of the year; on average it was 3.1 per cent less than for the year as a whole than in 1974. *Government* employment expanded strongly in the first half of 1975: the number employed under Commonwealth (REDS) and State administered employment schemes increased from 2500 (REDS only) at the beginning of 1975 to 37 500 at end-June. Subsequent phasing down of those schemes saw government employment first level out and then decline slightly in the final quarter of the year. Continued growth in the labour force in 1975 saw *unemployment* rise steadily to 5.1 per cent in September- 1975. *Factors in Continued Recession* The 1975-76 Budget assumed that 1975-76 would be a year of moderate product growth. In fact, total product declined slightly in the first half of the financial year. It has been suggested that this decline in activity in the first half of 1975-76 was due to premature contraction of fiscal stimulus in the 1975-76 Budget. However, the following analysis clearly refutes that hypothesis. There is no single budget parameter which accurately reflects the extent of fiscal push implied in any particular budget. To obtain a complete picture it is usually necessary to view a number of parameters collectively and in relation both to their own past magnitudes and to what has been and is occurring elsewhere in the economy. As a first approximation, however, the rate of increase in Budget outlays and the change in the domestic deficit (surplus) provide a useful indication. The table below shows rates of increase over recent half year periods in total Commonwealth Budget outlays (current prices), compared with the immediately preceding period and the same period a year earlier, together with movements in the implicit price deflator for total public sector (final) expenditures, and the domestic deficit during the same periods. As is clearly evidenced in the table, the rate of increase in total Commonwealth outlays accelerated markedly during 1974; it was not until the latter part of 197S that significant tapering occurred. Similarly, the domestic deficit was increasing throughout, very substantially so in 1974-75. It was not until the most recent half-year that the domestic deficit began to decrease. By these indicators, the impact of fiscal policy remained very strong into 1975-76 and could have been expected, given the normal lags and cumulative economic processes, to have imparted considerable impetus to total activity in 1975-76 and beyond, if the conventional responses had in fact been applying. In the event, the economy was sluggish during the first half of 1975-76 despite that impetus. This further suggests that, as in 1974-75, insufficient account was being taken of the influence of inflation on relationships between fiscal stimulus, income, aggregate demand, activity and employment. The two largest variations between actual events during 1975-76 and what was said in this document a year ago, were somewhat more sluggish growth in private consumption in the first half of the year, and a larger contribution to supplies from non-production sources - stock decumulation and imports. Of the other major expenditure aggregates, private dwelling investment - which had earlier undergone a severe shake-out - grew rather more than expected but the absolute magnitudes were not all that large; new investment in other building and in plant and equipment remained, as foreseen, fairly sluggish overall. Government final demand and exports behaved, by and large, as anticipated. Why did the major elements of private final demand not continue to grow? What factors contributed to the behaviour of stocks and imports and the consequent reduced level of activity? Answers to these questions are clearly central to analysing the subdued performance of the economy in 1975-76. The influences bearing on the individual decisions comprising the major aggregates are, of course, many and varied and those important for one decision will be less so for others. One major common influence on all decisions in 1975-76 (and the immediately preceding years) has been rapid inflation and, in the earlier stages, rapidly accelerating inflation. There is substantial evidence to suggest that the inflation of recent years both deepened and prolonged the recession; the effects of inflation on major final demand components are further discussed below. In the period under review, the inflationary environment also influenced the behaviour of stocks and imports, in each case contributing to the severity of the downturn in product; while obviously not the sole influence in either case, inflation played a major part in both. The expected cyclical shift from run-down to build-up of stocks finally began to occur in the early months of 1976. However, up till that time the run-down in the latter part of 1975 had continued rapidly. Clearly, the sluggish behaviour of consumer demand provided one cause for continued intentional heavy decumulation: this is evident from Table 2, which shows the ratio of non-farm stocks to sales. Low corporate profitability - part of the 'stagflation' environment - and the attendant strains on corporate cash flows in combination with the higher cost of financing stocks, undoubtedly reinforced the normal cyclical stock-shedding process. Thus, at a time of sluggishness of final demand, the stock/ sales ratio had fallen below its longer-run average by late 1975, and by mid- 1976, well below. While it has been normal for this ratio to drop considerably below its average during past 'cycles', this has generally occurred in the past when expanding sales were met in part by buffering stock rundown - i.e. the rate has hitherto declined to low levels commensurate with early-1976 only after several quarters of expanding sales. What sets 1975-76 experience apart from earlier cycles in this respect is that the stock/ sales ratio had been reduced to a very low level by dint of more severe stock-shedding alone, and before any strong pick-up in sales had occurred. In past cycles in Australia total product has been cushioned to some extent from variations in final demand by compensating movements in imports. Although not altogether absent, this cushioning effect on product has operated unusually, both with respect to magnitude and timing, during this cyclical downturn. Buoyed up by the lagged effects of the July 1973 across-the-board cut in tariffs and the September 1973 revaluation, imports reacted sluggishly to the slump in final demand in 1974; substantial increases contributed significantly to the slow-down and the decline in product in that year (Chart 1, panels i and j). The subsequent steep decline in imports in the first half of 1975 accompanying the sharp run-down in stocks, permitted the sizeable increase in final demand in that period to give rise to product growth. Steepened by the September 1974 devaluation and, to a lesser extent, the imposition of import quotas on certain items, the decline in imports in the first half of 1975 quickly reduced the ratio of imports to domestic sales from its unprecedentedly high 1974 level, to about the recent medium term average by mid-1975. As such, however, it remained still well above previous cyclical low points (Table 2). Although for 1975-76 as a whole imports were 4 per cent less than in the preceding year, imports of goods held steady in the first half of the year and then grew strongly through the second half. Several possible reasons for this continuing high demand for imports suggest themselves. The most convincing of these has to do with the effects on import demand of the changes in relative competitiveness of domestic producers brought about by the combination of earlier exchange rate and tariff changes and the continued movements in relative prices due to higher wage increases in Australia than in its major trading partners. The 'market share' effects of the unprecedented penetration by foreign suppliers during the 1973-74 import boom may also have been relevant. As important as these inflation-related influences on stocks and imports have been in prolonging the period of decline in product, more fundamental, particularly from the standpoint of economic recovery, have been the effects of inflation on consumer and business confidence, and hence on final demand. It is really for these reasons that the earlier fiscal and monetary stimuli proved ineffective and the upturn in activity in the first half of 1975 that they had sought to foster proved to be unsustainable. By adding to inflation and inflationary expectations through large budget deficits, and the associated excessive additions to liquidity, the massive stimuli of 1974-75 carried within themselves the seeds of their own undoing. In this document a year ago the effects of these factors were, up to a point, incorporated in the description of the recession to that time, and their continuing effect in conditioning recovery was noted. However, because of their persistent influence on overall economic conditions, the major linkages in what has come to be termed the inflation-unemployment nexus warrant brief canvass here. *Consumer Spending:* Contrary to the view that purchases of goods should be the best hedge against their effects, inflation and inflationary expectations, by creating uncertainty in respect of future prices and incomes and by eroding the real value of accumulated savings, caused consumers to save more, and spend less, of current incomes. The household saving ratio which had been climbing steadily during 1972 and 1973 from its longer run average of less than 10 per cent, jumped a further 4 percentage points to 18i per cent during 1974. Interaction of inflation with recession contributed to the severity of this phenomenon, fear and uncertainty about unemployment adding to precautionary saving. The resultant divergence of income and consumption growth in 1974-75 can be seen in the following table. It was not until well into 1975, as the rate of inflation *appeared to* stabilize and unemployment stopped rising so sharply, that consumers began to adjust their spending to the large real income increases that had occurred previously. With little further real income growth the saving ratio started to drop back a little. None the less, for 1975 as a whole, it still averaged more than 16 per cent and was still at that figure at year end. *Business Investment:* With the ability of companies to transfer rising costs to prices hampered by administrative constraints in the form of the Prices Justification Tribunal, heightened import competition, and increasing monetary tightness, the income share of profits fell earlier and more sharply than in previous cyclical downturns. The profit share turned down between the third and fourth quarters of 1973, two quarters or so *before* the overall downturn, whereas in previous recessions the profit share declined along with, or following, the downturn in overall activity. In the year to the September quarter of 1974 company gross operating surplus fell from 18 per cent of gross non-farm product at factor cost to 12 per cent (Chart 6 and Table 2); its average for the 1960's was 17i per cent. Conversely the share of wages, salaries and supplements rose from 64 to 71 per cent (Table 2). The comparative stability of real wages over 1975 as a whole and the first half of 1976 has allowed some marginal recovery in the profit share: in the six months to June it averaged 13 per cent. In 1974 the experience of drastically reduced profitability led to a sharp reassessment of expected future profitability, both as to level and degree of uncertainty. Large cost increases could be foreseen but their size and, more importantly, the extent of their recoverability in prices, were very uncertain. Meanwhile internal cash flows, historically the most important source of corporate investment funds, contracted sharply. Inflation also caused problems on the supply side of capital markets; in particular, the uncertainty it induced caused lenders to opt for short-term assets or to require an appropriately higher return to lend long. These depressive effects on both consumption and investment, together with the behaviour of stocks and imports described earlier, had obvious repercussions for total employment. Those derived demand effects were reinforced by the severe pruning of labour which had been induced by the rapid increase in real wages relative to productivity. In bringing down the 1975-76 Budget the then Treasurer said: 'We are no longer operating in that simple Keynesian world in which some reduction in unemployment could, apparently, always be purchased at the cost of some more inflation. Today it is inflation itself which is the central policy problem. More inflation simply leads to more unemployment.' {:#subdebate-37-1} #### Beginnings of Recovery The second half of 1975-76 saw the beginnings of what, assuming continued progress in dealing with inflation, should on this occasion be a sustainable upturn. Although its component parts behaved disparately, *total final expenditure* (panel g) increased 1.8 per cent in the second half of 1975-76. *Government expenditure* (panel e) fell noticeably and for the year as a whole rose only marginally as a proportion of GDP in current dollars (Table 2). Private final expenditure increased 2.7 per cent; *exports* (panel f) were the strongest growing component. The saving ratio declined somewhat and *private consumption* (panel a) is estimated to have grown by 1.4 per cent. After reaching very high levels toward the end of 1975, lending for housing by the major financial institutions tapered off somewhat in the second half of 1975-76 but the build-up of work in. the pipeline in 1975 enabled private *dwelling* activity (panel b) to expand rapidly throughout the period. Private investment in *non-residential building* (panel c) continued to fall away. On the other hand investment in *plant and equipment* (panel d) increased strongly in the second half, owing much no doubt to the investment and double depreciation allowances; the latter expired on 30 June. The growth in total final expenditure was accompanied by a sizeable increase in *imports* (panel i). The substantial stock decumulation during 1975 ceased in the second half of 1975-76 (panel h), with this turnaround more than offsetting increased import volume. With the net contribution to supplies from these non-production sources now negative, aggregate output increased in the second half. *Industrial production* statistics suggested less growth in that sector than had taken place in the first half of the financial year with a levelling out in the final months. In line with 1974-75 experience, cyclical variation in productivity again attenuated the effects on employment of the swings in output during 1975-76; Chart 2 tells the story. The decline in *product* (panel c) in the first half of 1975-76 was accompanied by a decline in *productivity* (panel b); although *employment* (panel a) declined during the first half year it remained higher on average than in the previous half year. The increase in product in the second half of the financial year was largely reflected in productivity growth (including a noticeable rise in overtime) : although employment increased slightly during the period it was probably lower on average than in the first "half of the financial year. The final phasing out of employment-creating schemes and restrictions on growth of the Commonwealth public service meant government employment was more or less level during that period; private employment may have increased slightly although still averaging less than in the preceding half year. One corollary of these cyclical swings in productivity is that significant recovery in employment, and a *fortiori,* significant reduction in *unemployment, is* lagging recovery in output. Increased product is being met to a large extent in the early stages by more intensive use of existing labour, including overtime (ie measured shortterm productivity gains). The rapid increase in the relative cost of labour which gave rise to severe retrenchments in 1 974-75 has been largely maintained in an excessive level of real wages which, until rectified, will continue to maintain unemployment at high levels and thereby reinforce the normal cyclical mechanisms causing recovery in employment to lag that in product. After reaching a relative peak in September 1975, seasonally adjusted registered *unemployment* fell moderately over the next five months but then tended to increase in the closing months of 1975-76. Excluding the direct effects of public employmentcreating schemes, seasonally adjusted registered unemployment at the end of 1975-76 was much the same as at the beginning. {:#subdebate-37-2} #### Balance of Payments For the financial year 1975-76 there was an overall *balance of payments deficit* of SI 020 million. A strong rise in the *trade surplus* was sufficient, notwithstanding sizeable growth in net invisible payments abroad, to reduce the deficit on *current account* to $840 million. By contrast, the capital account was weak and there was a small net apparent capital outflow of $180 million for the year as a whole. At the close of the year *international reserves* stood at $2.6 billion. Developments during the year in the trade and current account showed a stability . lacking in the previous year. However the capital account and the overall monetary movement were influenced by significant apparent private capital flows in the December quarter, largely as precautionary responses to exchange rate expectations. In the second half of the year there appeared to be some unwinding of such positions, and the overall payments position returned to approximate balance.* During the year world trading conditions for several export commodities improved and the growth in total *export* receipts picked up strongly in the second half. There were increases both in export volumes and in average prices. The pattern of *imports* in recent periods has been described earlier. Net invisible payments abroad, which were virtually unchanged in 1974-75, rose strongly in 1975-76. In part, this marked difference reflected a special factor in 1974-75 - large insurance receipts from overseas in connection with the Darwin cyclone. In the second half of the year the Government resumed a policy of making moderate net borrowings abroad. For the year as a whole net raisings on Government account approached $150 million. Private capital movements showed an overall small outflow in 1975-76 but, as noted, were variable during the year. Longer term capital movements seem to have been negligible in 1975-76; for the most part net private capital movements appear to have reflected short-term transactions (notably trade credit). {:#subdebate-37-3} #### Monetary Conditions As with economic activity, the monetary environment in the last financial year can be clearly divided into two parts. In response to both fiscal and monetary policy stimulus, liquidity eased rapidly in 1975 following the tightness of mid-1974. Although the rate of growth of outlays was reduced in the 1975-76 Budget, the continuing increase in the domestic deficit in 1975 (Table 1) had led to a build-up in the domestic monetary base which, by year-end, posed a clear threat to the development of anti-inflation policies. There was therefore a need for monetary policy action to reduce the excessive stock of money. Table 5 and Chart 3.2 set out the main formation factors of private sector liquidity and the volume of money over 1975-76 and the two preceding financial years. Overriding all other influences during the period was strong, sustained stimulus from domestic budgetary transactions. Table 1 shows that, in seasonally adjusted terms, the budget domestic deficit rose from an annual rate of $500 million in the first half of 1974-75 to $3900 million by the first half of 1975-76. In the first half of calendar 1975 this stimulus to domestic liquidity was reinforced by a surplus on private sector foreign exchange transactions. In the second half, substantial private capital outflows, concentrated particularly in the month of December 1975, worked in the opposite direction. Similarly, monetary measures, which had been tending to add to liquidity since the second half of 1974, became more restraining from mid- 1975 onwards. None the less the build-up from budgetary sources was such that private sector liquidity increased by $2703 million in 1975, four times the average rise of the preceding ten years. Moreover, sales of government securities to the non-bank private sector throughout 1975 were not such as to restrain the consequent growth in the volume of money substantially. For the year as a whole, of a total budget deficit of $4167 million, only $518 million, or less than one-eighth, was offset by sales of government paper to the non-bank public. From early 1975 the annual rate of growth of the volume of money, broadly defined, was around the historically high annual rate of 20 per cent (after adjustment for changed patterns of company tax collections). With a slightly improved profit performance, low investment and heavy stock decumulation, the corporate sector's net borrowing requirement was much less acute in 1975 than in 1974. Financial conditions were relatively easy and there was little difficulty in raising funds. There was some return to equity financing by companies as share prices recovered and new fixed interest raisings fell considerably. The demand for funds from financial institutions for corporate investment requirements was generally weak. The main demand for funds came from the household sector. In particular banks reported growth in personal lending through 1975 and mortgage institutions experienced keen demand for housing loans. At the end of 1975 financial institutions were flush with liquid funds. For example, the margin of free liquidity of the major trading banks was no less than ten percentage points. Savings bank deposits and funds held with permanent building societies had grown by more than S3.4 billion, or 22 per cent in 1975. At year's end private sector short term interest rates were substantially lower than in mid- 1974 and were tending downward. Against this background, the Government acted in January 1976 to reduce the large stock of liquid funds in the private sector. In particular, a new form of government security, the Australian Savings Bond (which replaced Special Bonds as the Commonwealth security designed especially for 'household' savers and small investors) was introduced with a view to attracting substantial subscriptions to Government securities from the non-bank public sector. The first Series, carrying a fixed interest rate of 10.5 per cent, quickly attracted net subscriptions of S757 million; the second Series, with an interest rate of 9.5 per cent, attracted net subscriptions of S275 million. Together with subscriptions of SI 94 million to the January/ February cash loan, the non-bank public added a total of $1187 million to its holdings of Commonwealth securities in the March quarter compared with $395 million in the first half of 1975-76 and $599 million in the whole of 1974-75 (Table 5 and Chart 3.2, panel (d)). As part of the monetary measures introduced in January, the Reserve Bank and the trading banks agreed that the minimum LGS ratio for the purposes of the LGS convention would be increased from 18 per cent to 23 per cent until the end of March 1977. This new agreement had the effect of temporarily reducing the trading banks' margins of free liquidity from 1 0 to 5 percentage points. In the March quarter there was a turnaround to a small surplus in the outcome of private sector foreign exchange transactions following the heavy net outflow of private capital in the December quarter. But a decline in the Budget deficit, in part seasonal but also reflecting a sharp reduction in the underlying rate, combined with the substantial take-up of government paper by non-bank investors, already described, to slow the rate of monetary growth (Table 5 and Chart 3.1). *As* a result of *these developments* the margins of free liquidity of some financial institutions declined considerably during the quarter. However, with the exception of the permanent building societies (where the situation was compounded because of the uncertainty surrounding the situation at that time of some societies in Queensland), financial markets and institutions generally accommodated the adjustment without undue strain. At the end of March the Treasurer reaffirmed that the Government would administer its monetary policies so that sufficient funds would be available to underwrite private sector recovery without being fully accommodating to inflation and that its policies would continue to be administered flexibly. It was evident that, with the deferral of the February company tax instalment to the June quarter, there would be a very large seasonal drain of funds from markets in that quarter. Accordingly, measures were taken to enable financial institutions to meet the demands upon them in the seasonally tight period without undue strains and disruptions arising. A third Series of Australian Savings Bonds introduced early in April carried a lower rate of interest. Also early in April it was announced that the SRD ratio was to be reduced by two percentage points later that month and that the Reserve Bank would, as usual, be conducting its operations in financial markets to smooth out any marked seasonality and other temporary irregularities. In the event, action taken by the Reserve Bank included substantial net purchases of commercial bills. The seasonally tight liquidity period was traversed without undue strain; sensitive short term interest rates rose temporarily; longer term interest rates remained generally unchanged; banks maintained their rates of new lending, although the trading banks' margin of free liquidity was reduced to a very low level. Overall the seasonally adjusted annual rate of growth of M3 was reduced to around 9 per cent in the six months to June 1976. Over 1975-76 as a whole M3 grew by about 14 per cent. {:#subdebate-37-4} #### Prices and Incomes Increases in earnings and prices, by half-yearly periods, are shown in Chart 4. Chart 5 displays movements in wages and gross surplus per unit of real non-farm product. Chart 6 illustrates related movements in the share of wages and company profits (gross operating surplus) in non-farm product at factor cost. Following very rapid increases in 1974-75 the rate of increase in earnings moderated somewhat in 1975-76 (Chart 4, panels a and b). With wage increases in 1975-76 more or less in line with the rate of price increase, the severe compression of profits experienced in 1974-75 was arrested: however, full indexation of wages during most of the year and little growth in productivity over the year as a whole precluded more than a marginal recovery in the profit share (Chart 6). *Unit wage costs* (Chart 5, panel a) rose more rapidly than average weekly earnings in the first half of 1975-76, though at rates well below those experienced at the peak in 1974-75. The rate of increase was less rapid in the second half. The behaviour of unit costs in both halves largely reflected variation in measured productivity since there was little difference in earnings growth (Chart 4, panel a), *Unit gross surplus* (Chart 5, panel b) increased noticeably in the first half year, falling back a little in the second half. For the year as a whole, the increase in unit gross surplus, together with increased product in the second half, led to a 16 per cent increase in the *gross operating surplus of companies* but, as noted, only marginal recovery in the profit share (Chart 6). Income of non-farm *unincorporated* enterprises increased 20 per cent. Given these movements in unit costs and gross surplus, *aggregate non-farm prices* accelerated in the first half of 1975-76 (Chart 5, panel c), moderating slightly in the second half. Falling farm and import prices offset the first half lift in non-farm aggregate price change, accounting for the more even picture for the implicit *deflator for major GNE components* (Chart 4, panel d). *Gross farm product* is estimated to have increased by about 7 per cent in 1975-76 in constant prices, but declined by 3 per cent in current prices because of lower prices received for some products. There were sizeable increases in farm costs and *farm income* declined by about 20 per cent, compared with a 59 per cent decline in 1974-75 and increases in the 60 per cent range in the two preceding years. The gross value of production of *wheat* is estimated to have declined marginally in 1975-76, most *other grains* showing substantial increases. The value of *wool* production increased slightly, but was still well below the levels recorded from 1972 to 1974. The value of *livestock* slaughtered recovered somewhat from the very low level of 1974-75, but was still well below the 1973-74 level. Although the system of conditional wage indexation introduced by the Arbitration Commission in its April 1975 National Wage decision was clearly the dominant influence in the process of wage determination in 1975-76, it is not possible to ascribe precise relative influences on earnings growth to this and other developments. While in 1975 the indexation system was generally accepted as having contributed to an industrial relations climate more conducive to moderation of wage demands, it is equally clear that willingness to comply with the Commission's guidelines covering non-indexation increases was reinforced by labour market conditions. Clearly too, lags in the application of indexation adjustments had some, at least temporary, moderating effects. It is open to argument whether earnings growth for the year as a whole was greater or less than it would have been in the absence of indexation. What can be said is that although deceleration in average ordinary time earnings was substantial early in the year, the scope of that deceleration was limited, under conditions of full indexation, largely to elimination of increases in excess of the prevailing inflation rate. As 1975-76 progressed and the scope for extra-indexation moderation was exhausted, the system of full indexation thus had the effect of 'locking-in' inflation at the prevailing rate (in the absence of some downward pressures entering the system from outside). The Commission's decision of 28 May 1976 involved a degree of partial indexation which represented a first step towards some further deceleration of inflation through the wages mechanism. The *consumer price index* (Chart 4, panel c) increased by 13.0 per cent in 1975-76 as a whole, compared with 16.7 per cent in the previous year and 12.9 per .cent in 1973-74. The tendency *through* 1975-76 was to slight moderation, the index rising by 12.3 per cent between the June quarters of 1975 and 1976. Identification of a clear underlying trend is rendered difficult by divergent contributions from the food and nonfood items, changes due to Medibank, and government taxes and charges. Table 6, showing movements in the various groups in recent half yearly periods, including a derived series excluding the effects of food, Medibank and taxes and charges, illustrates the various influences. {:#subdebate-37-5} #### The Economic Outlook 1976-77 {:#subdebate-37-6} #### Background The preceding analysis has depicted an economy which is showing signs of recovery. So far, as described earlier, much of this growth appears to have come from a turnaround in inventory investment and growth in exports. By its very nature, inventory investment cannot be expected to be a continuing source of growth. The longevity of recovery therefore depends on the achievement of steady, sustainable growth in both private consumption and private fixed capital expenditure. If consumption fails to grow, there can be no recovery, simply because consumption is such a large part of total demand. If consumption does grow but investment fails to grow, there is a very real risk of the re-emergence of *sectoral* capacity constraints, and hence of upward pressure on at least some prices and/or spill-over into imports, at an early stage. The strength of these components depends, in turn, on a number of factors. Crucial is the further diminution of inflation and inflationary expectations. An integral part of Australia's high inflation-high unemployment economic environment was the increase in the real wage that had earlier taken place, during 1974 in particular. Running as it did far ahead of productivity, and shifting factor shares, this dislocation of the normal relationships previously obtaining in the Australian economy has been preserved throughout the recession and, as discussed above, has contributed significantly both to its onset and its prolongation. It is important to state the implications of this fact for policy. Government policy starts from the standpoint that in current circumstances control of inflation is fundamental to the achievement of other economic policy objectives. The control of inflation is directed in part at those undesirable features which have commonly been associated with inflation: the inability of some groups to protect their incomes and savings, the distorting effects in the allocation of financial and real resources, and so on. But even more fundamental in recent experience has been the nexus whereby inflation has fostered recession and, most particularly, the very large increases in the real wage and associated factor share which made such a marked contribution to those developments in Australia. Unless and until the real wage is brought down relative to productivity in the process of winding inflation rates back, it will not be possible to restore fully the level of economic activity and to provide sufficient new job opportunities to reduce unemployment significantly. In the circumstances that prevail, those who argue for the increase or maintenance of real wages (or those who take decisions intended to increase or maintain them) are in effect, unwittingly or not, contributing to the maintenance of unemployment at present high levels. As the Commonwealth has argued before the Arbitration Commission, the rate of recovery and return to high employment economic stability will be longer delayed the longer the present real wage imbalance is maintained. The necessary adjustment can take place *much more quickly* and with much less cost in terms of idle resources and production forgone, if money wages increase for a period at rates noticeably below the inherited rate of price change. As they appeared earlier this year on the basis of the expenditure proposals and tax rates which existed then, prospects for the 1976-77 Budget were for a much larger deficit than in 1975-76. Such an outcome would, of course, have been completely incompatible with the objectives of policy. Inflationary expectations and inflation would have been exacerbated, not only because such an outcome would have been seen as failure by the Government to control its own activities, but also because of the massive infusion of liquidity into the economy implied by such a deficit. Such a set back to the quelling of inflationary expectations, and to confidence more generally, would have further depressed private consumption and private investment spending. In addition, if other implications of recent experience have been correctly drawn, other components which could well have assisted in choking off recovery in such a situation are inventories and imports. With inflationary expectations reinforced and renewed uncertainty engendered, business would not have willingly built up its stock levels. Again, with no further inroads to be expected in the rate of inflation, Australia's competitive position vis-a-vis our major trading partners would have deteriorated further; the inevitable strengthening of import flows which would have resulted would also have dampened domestic production. In sum, under these conditions an early end to the incipient recovery was to be expected. It was in the light of this outlook that the fiscal measures of 20 May were framed. They incorporated expenditure restraint and personal tax indexation. As a result of the 20 May package, and of other subsequent measures, a Budget deficit of $2608 million is now in prospect; the corresponding domestic deficit is $1879 million. Given these fiscal decisions and the background of other relevant developments, what is the economic outlook for the period ahead? It first needs to be said that no-one can accurately foretell the path which the economy will follow. This is particularly so given that the present position of the economy is considerably removed from past experience. The foregoing analysis has attempted, of course, to pinpoint some of the causal elements of this departure. A high level of unemployment continues to coincide with rates of price and wage increase which, while they showed some improvement over the course of 1975-76, are still clearly destabilising. The following description of the *possible* path of the economy over 1976-77 may then, indeed *will,* prove to be incorrect in detail if not, hopefully, in the broad. This will be particularly so if any of the specific working *assumptions,* which must be made in arriving at an overall forecast, are invalidated. {:#subdebate-37-7} #### Assumptions These assumptions include the following: o The general stance of monetary policy will be such that the banking system is able to meet the needs of the economy for finance while being less than fully accommodating to inflationary demands; o Apart from the Budget proposals themselves, there will be no new fiscal measures during 1976-77; o During 1976-77, no requirement for significant change in Australia's external economic policies will emerge, and the recovery in overseas economies will continue at a moderate rate; o Seasonal conditions will permit little if any increase in aggregate farm production; o Some form of partial indexation of award wages will continue, as will restraint in increases in other wages and conditions of employment. Of all these assumptions the most crucial is clearly the last. In effect, the course and extent of economic recovery in 1976-77 and beyond will be a function of the speed with which the present real wage imbalance can be rectified. To the extent that the assumption of continuing partial indexation proves invalid - or to the extent that restraint in other wage increases and conditions of employment is not maintained - the speed of recovery will be diminished, new jobs will not be created or will be created more slowly, and the present high levels of unemployment will be prolonged. {:#subdebate-37-8} #### Expenditure and Product On the basis of the foregoing, *private consumption expenditure,* which has already shown some growth, is expected to continue to expand at a moderate rate. Such growth should be increasingly spread across all components. It seems likely that the rate of growth of consumption will exceed that of income when both are expressed in real terms, implying a further decline in the saving ratio. This latter development is however only reasonably to be expected in the context of improvement on the inflationary front and, at the worst, no renewed deterioration in the labour market. It may be noted specifically that these assumptions imply a rise in real consumption notwithstanding some decline in real average wages (see *Prices and Incomes* below). *Investment in dwellings* grew very rapidly over the course of 1975-76. Financial flows and prospective monetary conditions suggest further moderate growth in 1976-77 as a whole, although the early months of the year may show the lagged effects of the downturn in building society finance approvals during the later months of 1975-76. Anticipations and survey data to hand suggest that *business fixed investment* could well begin to grow early in 1976-77. The picture of *timing* of recovery could differ somewhat between the two components: *other building and construction* and *plant and equipment.* Since the slump in non-dwelling construction investment has been relatively great, the outlook may still imply a fall for 1976-77 as a whole even though, *within* the year, the turnaround is occurring. In the case of *plant and equipment,* on the other hand, which has recently recorded growth, the further recovery in 1976-77 should result in a modest rise for the year as a whole. It must be stressed that the outlook for business investment is particularly contingent upon perceived improvement in the rate of inflation, improved profit performance and the general state of business confidence. The policy decisions entailed in this Budget should imply that *government expenditure on final goods and services,* summed over all levels of government, will show only small increases in 1976-77. What growth there will be is likely to take place at the State and Local levels only. *Stocks* have apparently turned around. Accumulation is expected to continue throughout 1976-77 and, if so, will contribute substantially to year-on-year growth in total product. This outlook for domestic demand, taken together with the picture for exports and imports given below, is consistent with growth in *gross non-farm product* in real terms of about 4 per cent in 1976-77. This is not strong growth by the standards of previous recoveries but, failing a major improvement in the real wage imbalance and a consequential speed-up in winding down inflation, it is probably about all the economy will be able to sustain during the period. {:#subdebate-37-9} #### Balance of Payments Developments in the balance of payments will be influenced by the strength of the recovery in world economic activity, and by that in the domestic economy. As the world economic recovery proceeds, *export* growth should consolidate and become more general, providing a significant source of stimulus to the domestic economy. *Imports* seem likely to continue to grow, probably at a somewhat faster rate than domestic demand. At this stage it seems plausible to think in terms of a trade surplus of about the same size as, and a *current account deficit* moderately larger than, in 1975-76. The capital account will benefit from a progressive resumption of long-term private capital inflow and a continuation of government borrowing at moderate levels. In the latter connection the recent purchase from the IMF under the compensatory financing facility is relevant. {:#subdebate-37-10} #### Monetary Conditions The foregoing would imply approximate balance in the external account so that the major influence on domestic liquidity conditions would come from domestic budgetary transactions. The smaller deficit in prospect should contribute to a lesser monetary expansion than during 1975-76, when the volume of money (M3) rose by almost 14 per cent. In their nature monetary forecasts tend to be even more fallible than activity forecasts but, on the assumptions enunciated above and with appropriate settings of monetary policy, the *volume of money* broadly defined could increase by between 10 and 12 per cent over the course of 1976-77. It should be stressed that this expected growth in the volume of money is a forecast conditional upon the stated assumptions. If the associated product and price expectations were to be realised, this would represent monetary growth consistent with objectives of policy, namely, to provide sufficient funds to foster sustainable recovery in private sector activity and employment, while exerting some downward pressure on inflation; depending on precise outcomes it could imply some increase in the velocity of circulation. {:#subdebate-37-11} #### Labour Market Product growth of the order projected above would probably be accompanied by growth in *productivity* of more than half of that amount. *Employment* growth then appears likely to be of the order of 1-2 per cent for the year as a whole although a faster rate of growth, more than 2 per cent, *over* the year is implied. Employment in the private sector will probably grow somewhat faster than that while, by contrast with recent years, public sector employment will show little, if any, growth. The labour force is projected to grow by 2 per cent at most over the course of 1976-77. Present expectations are thus for only a gradual reduction in the rate of *unemployment,* with little if any of this appearing during calendar 1976. Prospects for continuing gains in the unemployment area do, of course, strengthen into the following financial year, 1977-78. {:#subdebate-37-12} #### Prices and Incomes The continued application of some form of partial indexation as applied in May and August, is consistent with a gradual winding down in the rate of inflation provided extra-indexation wage increases (and improvement in conditions) remain small. If these (rather pessimistic) assumptions about indexation and extra-indexation wage settlements were to prove accurate, *average weekly earnings* might grow by about 12 per cent compared with the 14 per cent increase recorded in 1975-76. On that basis, the increase in the *consumer price index* and more broadly based price indices would seem likely to be of a similar order of magnitude for the year as a whole. Real average earnings per employed person would remain approximately unchanged but, due to employment growth, aggregate real earnings would increase moderately. Given projected changes in personal taxes, cash benefits, and other income components, both average and aggregate real disposable household income would increase at a faster rate than the real earnings component. Price changes of these magnitudes for the year as a whole imply a markedly better performance *over the course of* 1976-77 than occurred over the *course* of 1975-76. Looked at on a June quarter to June quarter basis, price increases some 4 to 5 percentage points lower than the increases recorded between the June quarters of 1975 and 1976 are expected for broadly based deflators. This picture would be consistent with annual rates of change in the single-digit area by the end of 1976-77. Given the prospective productivity increases mentioned earlier the wage-price developments would be accompanied by noticeable, but incomplete, recovery in the share of national income going to profits. In absolute terms the increase in non-wage (non-farm) incomes can be expected to be quite strong - possibly considerably in excess of the increases recorded in 1975-76. Only slow growth is to be expected in aggregate farm income. Needless to say, the picture in all respects would be better, the more rapidly the present inflation rate were wound down. The chief determinant of this during 1976-77 will be the extent to which the increase in money wages can be held below the inherited increase in prices. A more favourable outcome in this respect than that which has been taken for the purposes of the assumptions set out earlier would result, in time, in a sharper recovery in activity, a greater growth in employment and a more substantial inroad into present levels of unemployment. {: .page-start } page 56 {:#debate-38} ### STATEMENT No. 3- ESTIMATES OF OUTLAYS, 1976-77 This Statement presents detailed estimates of Budget outlays in 1976-77, classified according to their primary purpose or function. For comparative purposes the tables also show actual outlays in 1974-75 and 1975-76. Outlays for defence in 1976-77 are estimated at $2178.2 million, an increase of 17.6 per cent over 1975-76 and equivalent to 9.0 per cent of total Budget outlays. In 1975-76 defence outlays represented 8.5 per cent of total outlays. {:#subdebate-38-0} #### Manpower Costs Provision has been made for an increase of $88.5 million in manpower costs in 1976-77. The main reasons for the increase are the full-year effects of awards and determinations made in 1975-76 and a rise in the average number of service personnel. An increase in the number of pensioners, as well as a requirement to provide for an additional pension payday in 1976-77 are primarily responsible for the increase in the defence forces retirement and death benefits provision. Manpower costs are estimated to account for 52.7 per cent of total defence outlays in 1976-77, compared with 57.2 per cent of actual defence outlays in 1975-76. {:#subdebate-38-1} #### Defence Equipment and Stores Outlays on defence equipment and stores are intended to ensure that operational equipment (ships, aircraft, etc.) is adequate to meet likely contingencies. Outlays on 'capital' equipment in 1976-77 are estimated at $305.9 million, an increase of $158.2 million, and relate mainly to projects already committed, including patrol frigates, an oceanographic ship and Oberon submarines for the Navy, Nomad aircraft, tanks and Surface to Air Guided Weapons for the Army and replacement Hercules CI 30 aircraft and Orion long range maritime patrol aircraft for the RAAF. Provision has been made also for initial payments on new major equipment projects and for other equipment, details of which will be announced by the Minister for Defence. Expenditure on supporting equipment in 1976-77 is estimated at $178.1 million, an increase of $14.9 million over 1975-76. Outlays on repairs and maintenance are expected to increase by $5.0 million. {:#subdebate-38-2} #### Defence Facilities Expenditure under this heading is to provide and maintain capital facilities, including adequate living and working accommodation for personnel. Advances to the States for the provision of housing for servicemen and their families are estimated at $36.2 million, $2.0 million more than the amount spent in 1975-76. Other significant buildings and works include the continuation of construction of the Naval support facility at Cockburn Sound (W.A.), an office building at Victoria Barracks, Melbourne, a transmitting station at Humpty Doo (N.T.) and a supply centre at Zetland (N.S.W.). Provision also is made for upgrading of facilities at HMAS Nirimba (N.S.W.), RAAF Regents Park (N.S.W.) and Williamstown Dockyard (Vic). Expenditure on these and other projects is expected to total $142.6 million in 1976-77, an increase of $16.3 million over 1975-76. {:#subdebate-38-3} #### Industrial Capacity The main variation between expenditure in 1975-76 and 1976-77 relates to an increase of $15.4 million in the cost of maintaining reserve production capacity at Government factories and in industry. Part of this increase arises from changes in the methods of charging for Defence orders. Assistance provided in the estimates for the production of Nomad aircraft is $3.4 million lower than actual expenditure in 1975-76. {:#subdebate-38-4} #### Defence Science and Technology Establishments Expenditure on defence science and technology is aimed at assisting the Services to keep abreast of advances in military technology and at developing weapons systems suited to Australia's defence needs. Reductions in expenditure on the Woomera Joint Project resulting from the rundown of the Woomera Range towards a care and maintenance level are estimated to be more than offset by the full-year effects of recent wage and other cost increases. Defence Co-operation Through defence co-operation the Government aims to help friendly countries in the region of immediate interest to Australia to strengthen their own and the region's capacity for defence. Estimated expenditure of $23.9 million in 1976-77 includes $6.9 million as part of our commitment to Indonesia under a second three year commitment program of $25 million which began last year, and $4.6 million for continuing assistance to Malaysia and Singapore at levels similar to those in past years. An amount of $12.2 million is included for defence co-operation with Papua New Guinea in 1976-77, compared with $27.8 million last year. The decrease reflects new budgetary arrangements for providing financial assistance to Papua New Guinea for defence which were introduced from 6 March 1975, and the completion of the transfer of defence assets during 1975-76. The continuing localisation of the Papua New Guinea Defence Force has also reduced the numbers and support costs of Australian servicemen in Papua New Guinea. There has been a modest increase in military training and advisory assistance to other countries, including the Philippines, Thailand and Fiji. {:#subdebate-38-5} #### Storage and Transport Services Included here are removal and storage costs associated with the transfer of government employees in the defence sector and servicemen. {:#subdebate-38-6} #### General Administrative Expenditure This broad category of expenditure covers a wide range of items including travel, office requisites, postage and telephone services, light, power and water supplies, freight and cartage, compensation payments, and medical and dental services provided by civilian authorities. The budgeted increase of $32.5 million is attributable mainly to increased costs of providing these services, and an increase in activity. {:#subdebate-38-7} #### Natural Disasters, Civil Defence and Other Included under this heading are outlays on natural disasters, civil defence, war graves and various miscellaneous items. {:#subdebate-38-8} #### Recoveries and Repayments Recoveries and repayments in 1976-77 are estimated to total $76.6 million, slightly more than in 1975-76. The major items are payments by servicemen for rent and rations, contributions by other countries to the costs of joint defence activities and revenue from disposal of surplus defence equipment. {:#subdebate-38-9} #### Loan Act The Budget Estimates for 1976-77 show a prospective deficit in the Consolidated Revenue Fund of $1435 million in the absence of further action to meet that deficit. The intention is that this potential deficiency be met by transferring sufficient Defence expenditures from the Consolidated Revenue Fund to the Loan Fund where they can be financed from borrowings for defence purposes. It is proposed a Loan Bill to authorise these transactions be introduced into Parliament during the Budget session. In 1975-76 an amount of $547 million of defence expenditure was transferred from Consolidated Revenue Fund to Loan Fund and financed from borrowings. (In addition to meet the potential Consolidated Revenue Fund deficit in 1975-76 it was necessary to borrow $956.4 million for payment into the Consolidated Revenue Fund.) {: type="1" start="2"} 0. EDUCATION The Government has undertaken to provide substantial assistance for each level of education in 1977. Under a system of three-year rolling programs planning guidelines also have been given to the major education Commissions which provide for further real growth in 1978 and 1979. The 1976-77 Budget estimates relate to the second half of 1976 (in respect of which programs of assistance were determined in the context of the 197S-76 Budget) and the first half of 1977. The Government has initiated an urgent review of all student assistance schemes. The review is to cover, infer *alia,* the objectives and nature of the various schemes, the current levels of benefit, the possibilities for rationalisation, and any alternative approaches that could be adopted. The Government's decisions on these matters will be announced in October and implemented from the beginning of the 1977 academic year. Total outlays on education are presently estimated to increase by 15.3 per cent in 1976-77 to $2204 million, equivalent to 9.1 per cent of estimated total Budget outlays. {:#subdebate-38-10} #### Tertiary and Technical Education {:#subdebate-38-11} #### Universities, Colleges of Advanced Education and Teachers Colleges As announced in May, the Government has decided that the previous fixed triennial funding system for major education programs, the operation of which was suspended in 1975, should be replaced by a system of three-year rolling programs, with effect from the beginning of 1977. The change will provide the Government with greater flexibility in budgetary formulation while at the same time affording a reasonable planning framework for the education Commissions and institutions. Under a three-year rolling program a firm allocation is determined in the Budget context for the first year of the period and planning guidelines are indicated for the two subsequent years. With the introduction of this new approach the Government also has decided to replace the existing cost supplementation arrangements for universities, colleges, technical and further education institutions and schools with less automatic provisions for cost increases to take effect from the beginning of 1977. An allowance for retrospective cost increases is incorporated in the grants to these institutions provided for in the 1976-77 estimates. Total expenditure on university education is estimated at $673 million in 1976-77, an increase of $69.2 million, while expenditure on colleges of advanced education and teachers colleges is estimated to increase by $71.6 million to $506.5 million. The Government has settled upon a firm allocation for the universities of $598.3 million - at estimated June 1976 price levels - in calendar year 1977. This represents an increase of 2 per cent in real terms compared with the program approved for 1976, plus an additional $2 million for capital expenditure. For colleges of advanced education, the Government has decided on a 1977 program of $422.6 million at estimated June 1976 prices, an increase of 5 per cent in real terms compared with the program approved for 1976. The planning guidance provided for universities and colleges for 1978 and 1979 under the new rolling program arrangements is for 2 per cent growth in real terms in each year. In determining the level of expenditure on tertiary education for 1977, the Government has asked the Commission on Advanced Education to undertake a building program sufficient to accommodate increased enrolments at existing standards, together with a modest program of essential replacement and refurbishing. The intake by colleges is expected to increase by about 10 per cent in 1977. The Government has also asked the Universities Commission to defer all but essential construction and upgrading work. It is intended that universities will maintain their intake of students over the next three years at a level comparable to that in 1976. Pending further examination, the present level of enrolments in teacher education is to be regarded as a maximum. Any proposals for new capital expenditure on facilities for teacher education would require both tertiary Commissions to be satisfied that the expenditures were justified. A provision of $500 000 in 1976-77 has been made for a start on the Australian Maritime College in Tasmania. Of this amount $453 000 is intended for the acquisition of land for the College and $47 000 for expenses associated with the operations of the planning committee. All full-time non-bonded Australian undergraduate students admitted to approved courses at tertiary and approved post-secondary institutions are eligible, subject to a means test, for living and other allowances under the Tertiary Education Assistance Scheme. This Scheme was introduced in January 1974 to supplement the Commonwealth Government's decision to undertake full financial responsibility for tertiary education and to abolish fees as from that date. This Scheme is covered by the review of the Government's student assistance programs referred to above. The cost of the Scheme, with present benefits and conditions, is estimated to be $90.8 million in 1976-77 compared with $89.5 million in 1975-76. Assistance is available for postgraduate students under the Postgraduate Awards Scheme, a competitive non-means-tested scheme estimated to cost $7.6 million in 1976-77 (with present benefits and conditions), compared with $7.8 million in 1975-76. This Scheme is also under review. {:#subdebate-38-12} #### Technical and Further Education The Commonwealth Government's total expenditure on technical and further education in 1976-77 is estimated at $122.3 million compared with actual expenditure in 1975-76 of $101.9 million. Financial assistance to the States for technical and further education is directed towards enhancing the quality and extending the availability of technical and further education, on the understanding that the States do not reduce the level of their own activities in this area. The Commonwealth, of course, meets the full cost of technical and further education in the Territories. Under the newly-instituted rolling program arrangements the Government has decided on an allocation of $79.6 million (at estimated June 1976 price levels) for 1977 for technical and further education. This represents a 7.5 per cent increase in real terms compared with 1976. Planning guidance provided for technical and further education for 1978 and 1979 under the new rolling program arrangements is for a 5 per cent per annum growth in real terms. In line with the Government's emphasis on the rationalisation of available resources the Technical and Further Education Commission has been asked to co-operate with the tertiary Commissions in reviewing present facilities and opportunities for post-school education. Students attending technical colleges are eligible for assistance under the Tertiary Education Assistance Scheme, one of the student assistance programs currently under review. The Budget provides $20.2 million in 1976-77 for these benefits (at present rates and conditions. {:#subdebate-38-13} #### Schools Total expenditure by the Commonwealth Government on schools in 1976-77 is estimated at $763.1 million, an increase of $88.1 million or 13 per cent over 1975-76. The different arrangements for providing assistance for schools are summarised below. (A detailed account of financial assistance for schools in the States is included in Chapter IV of *Payments to or for the States and Local Government Authorities 1976-77).* *Schools in the States* Commonwealth outlays on schools in the States provide assistance to both government and non-government schools under programs administered by the Schools Commission. Grants for these purposes are estimated to total $549.2 million in 1976-77, an increase of $73.7 million or 15.5 per cent over 1975-76. The Schools program includes grants for general recurrent purposes at government and non-government schools, for new and upgraded buildings, for libraries, disadvantaged schools, innovatory projects and teacher development, and for migrant and handicapped children. The estimate of $549.2 million for 1976-77 includes the balance of grants payable to the States under the *States Grants (Schools) Act* 1976 which gives legislative authority to the approved program for the calendar year 1976. The rolling program arrangements apply also to schools in the States. Under those arrangements the Government has decided to provide a total of $545.6 million (at estimated June 1976 prices) in 1977 for programs of assistance to the States for schools. This program represents a 2 per cent growth in real terms over the approved program for 1976. The decision to replace existing cost supplementation provisions with less automatic provisions for unavoidable increases in costs at other levels of education applies also to schools. Planning guidance provided for schools in the States for 1978 and 1979 under the new rolling program arrangements is for a 2 per cent growth in real terms in each. year. Earlier legislation, the *States Grants (Schools) Act* 1972, provides for capital assistance for both government and non-government primary and secondary schools in the States by way of unmatched grants over a five-year period commencing 1 July 1973. The capital grants available in 1976-77 for government and non-government schools under this Act are included in the total program referred to above. *Schools and Pre-schools in the Territories* Outlays by the Commonwealth Government for schools and pre-schools in the Territories are estimated at $123.7 million in 1976-77, an increase of $5.1 million or 4.3 per cent compared with actual outlays in 1975-76. 'Pending the establishment of the Australian Capital Territory Schools Authority, an Interim Schools Authority has been created to administer and develop the Government's pre-school, primary and secondary education systems in the Australian Capital Territory. Provision is made in the estimates for 1976-77 for initial supplies and equipment fori one new government secondary college, one new high school and two new primary schools. Expenditure on government community schools in the Northern Territory is estimated to increase from $38.9 million in 1975-76 to $46.4 million in 1976-77 (See also references to the education of Aboriginals in the Northern Territory under 'Special Groups'). Provision has been made in 1976-77 for increased benefits under the Northern Territory Travelling Allowance Scheme. Students attending boarding schools interstate will now receive two return fares per year, while handicapped children attending special schools interstate will receive three return fares,, plus fares for escorts if necessary. *Pre-schools and Child Care in the States* The Commonwealth provides capital and recurrent assistance for pre-school and" child care projects including home care, vacation and after-school care projects, in the States. The Government has set up an Office of Child Care in the Department of Social Security to advise on and administer the program. This scheme is estimated to cost $74.4 million in 1976-77, $9.4 million more than in 1975-76. {:#subdebate-38-14} #### Student Assistance The Budget estimates for 1976-77 include $4.2 million (compared with $3.2 million in 1975-76) for the Adult. Secondary Education Assistance Scheme, under which meanstested allowances are made available to adults who, subject to certain conditions, are undertaking full-time studies in the final year of secondary schooling. The estimates also provide $5.5 million (compared with $5.6 million in 1975-76) for the Secondary Allowances Scheme, under which means-tested allowances assist low income families to maintain their children at school for the final two years of secondary education. These two schemes of assistance are included in the current review of all schemes of assistance to students. {:#subdebate-38-15} #### Special Groups Total assistance by the Commonwealth for the education of special groups is estimated at $59.1 million in 1976-77 compared with $77.0 million in 1975-76. {:#subdebate-38-16} #### Aboriginal Education Assistance is provided under the Aboriginal Secondary Grants Scheme to all full-time students of Aboriginal descent attending approved secondary schools or classes. Expenditure under the scheme is estimated at $8.4 million in 1976-77, compared with $8.6 million in 1975-76. The Aboriginal Study Grants Scheme provides, in the main, for assistance to Aboriginal students undertaking courses at universities, teachers colleges and technical, business and agricultural colleges. Since 1975 it has also provided for some overseas study, observation and short-term courses. Total expenditure under the scheme is estimated at $1.6 million in 1976-77, compared with $1.8 million in 1975-76. These schemes too are included in the review of the student assistance schemes referred to earlier. The Commonwealth Government has direct responsibility for the education of Aboriginal children in the Northern Territory and has provided for estimated expenditure of SI 6.3 million in 1976-77 compared with 522.1 million in 1975-76. The estimate for 1976-77 includes expenditure on a program under which Aboriginal children living in Aboriginal communities receive primary education in their own language and instruction in traditional Aboriginal arts, crafts and -skills. The decrease in proposed expenditure reflects a reduction of $6.1 million in expenditure on Aboriginal school buildings. A provision of $9.0 million is made in the Budget for grants to the States and to non-government organisations for Aboriginal education purposes in 1976-77. These grants will finance the construction and equipping of pre-schools and primary and secondary schools. Additional expenditure will be incurred on several programs of special assistance for schools with high Aboriginal enrolments, and on special courses in Aboriginal studies at tertiary institutions. The Government has also decided to provide $40 000 in. 1976-77 to establish a National Committee on Aboriginal Education. The committee, to consist entirely of Aboriginals and Torres Strait Islanders, will provide advice and information on the educational needs Of Aboriginals. Total assistance for Aboriginal education under these programs is estimated at $35.3 million in" 1976-77 compared with $41.4 million in 1975-76. {:#subdebate-38-17} #### Migrant Education The Commonwealth provides funds for special instruction to assist migrant children with English language difficulties to facilitate their participation in normal classes. Funds are provided to government and non-government school authorities for special language teaching equipment, for salaries of special teachers and for the initial special instruction of refugee children. In 1975-76 $10 million was spent on child migrant education under the *Immigration (Education) Act* 1971 in the six months period to 31 December 1975; from January 1976, however, the child migrant education program has been financed from general recurrent grants administered by the Schools Commission. Adult migrant education in the English language is conducted in special courses. Expenditure, including salary and administrative costs and living allowances for some students, is estimated at $9.1 million in 1976-77 compared with $8.2 million in 1975-76. An amount of $0.7 million is included in the 1976-77 estimates for the final year of a program of providing demountable classroom accommodation for child migrant classes in government and non-government schools, compared with $2.6 million in 1975-76. {:#subdebate-38-18} #### Soldiers' Children Education Scheme This scheme provides for payment of fees, fares and allowances, and for provision of books and equipment for the tertiary education and training of children of ex-servicemen who died as a result of their war service or who are either totally and permanently incapacitated or blind. Allowances are also paid in respect of children attending secondary schools. The cost of this scheme is estimated at $3.7 million in 1976-77 compared with $3.6 million in 1975-76. {:#subdebate-38-19} #### Isolated Children Children who, because of their geographical isolation, do not have reasonable daily access to a government school providing courses at the appropriate level, are eligible for benefits available under the Assistance for Isolated Children Scheme which was introduced in 1973. A basic boarding allowance and an additional allowance subject to a means test are paid in respect of such children living away from home to attend school. Additional assistance is available in cases of particular hardship. For isolated children who study at home by correspondence there is an allowance free of means test. The estimated cost of this scheme in 1976-77 is $9.3 million, compared with actual expenditure of $10.4 million in 1975-76. This scheme is included in the general review of student assistance programs. {:#subdebate-38-20} #### General Administrative and Other Expenditure General administrative and other expenditure of the Department of Education is estimated at $22.3 million in 1976-77, compared with $20.5 million in 1975-76. The estimate for 1976-77 includes $15.7 million for salaries, $2 million for the Curriculum Development Centre for school curriculum projects, and $1.1 million for the support of research in education. {: type="1" start="3"} 0. HEALTH The announced changes to Medibank, to come into effect from 1 October 1976, are the main factors affecting outlays for health in 1976-77. Total outlays from the Budget on health are estimated at $2909 million in 1976-77, a decrease of 1.5 per cent on 1975-76. Adjusted for the prepayment of $216 million to the States in June for hospital operating costs, there is an increase of 14 per cent. Details of actual outlays in 1974-75 and 1975-76 and estimated outlays in 1976-77 are shown in the following table: {:#subdebate-38-21} #### Medical Services and Benefits {:#subdebate-38-22} #### Medibank Benefits Under the new health insurance arrangements to commence on 1 October 1976 everyone, except low income earners, most pensioners, certain Defence Force personnel and Repatriation beneficiaries will contribute directly towards the cost of their health care. Under the present arrangements, the entire cost of Medibank is being met from general revenue. Coverage for medical and optometrical consultation benefits will continue to be universal for all Australian residents, and will be achieved in one of three ways: {: type="a" start="i"} 0. *Standard Medibank.* This will continue to provide coverage of 85 per cent of schedule fees (with a maximum patient contribution of $5 for any one service where the doctor charges the schedule fee), plus free standard ward accommodation in public hospitals, with treatment by doctors engaged by the hospital, to those persons who elect to pay a levy of *2i* per cent on their taxable incomes. In any instance, the levy will not exceed $300 a year for family cover or SI 50 a year for individual cover. Standard Medibank benefits also apply to persons who are exempted from the levy, other than those fully covered by private insurance, such as low income earners, most pensioners, certain Defence Force personnel and Repatriation beneficiaries. {: type="i" start="ii"} 0. *Standard Medibank, plus extra hospital insurance.* This will provide Standard Medibank benefits plus treatment by a doctor of the patient's choice, in shared room (intermediate) accommodation in public hospitals, to persons who elect to pay the levy and, in addition, purchase basic hospital-only cover from a registered health insurance organisation (including Medibank Private Insurance). The hospital fund benefits may also be applied towards meeting charges for private hospital treatment. 1. *Full private medical and hospital cover.* This will provide both hospital and medical benefits through private insurance. Persons opting to be exempted from the levy can do so by insuring privately with a registered health insurance organisation (including Medibank Private Insurance). This will provide the same coverage for medical benefits as provided to levy payers and coverage for intermediate or private hospital care. The basic medical and optometrical consultation benefits, for which all persons will be eligible, will continue to be related to 85 per cent of schedule fees, with a maximum difference between schedule fees and benefits of $5. Doctors are being asked to accept medical benefits as full payment for services to eligible pensioners and their dependants, while participating optometrists have entered into an undertaking to accept benefits as full payment for consultations to eligible pensioners and their dependants. After some allowance for cost increases, expenditure on benefits for medical services and optometrical consultations to be met by Medibank (Public) is estimated to amount to $710 million in 1976-77. Because of the new arrangements, this estimate is not comparable with Medibank expenditure on medical and optometrical consultation benefits in 1975-76. The estimated expenditure of $710 million comprises: {: type="a" start="a"} 0. $366 million for current Medibank benefits for services rendered prior to the changes on 1 October 1976 (but for which benefits may be claimed and paid before or after that date); and 1. $344 million for Medibank benefits for services rendered under the new arrangements from 1 October 1976. The benefit payments from the Health Insurance Fund cover basic medical benefits for persons covered by the levy. {:#subdebate-38-23} #### Other Medical Benefits Included here are residual expenditures on medical benefits for services that were rendered under the National Health Act prior to the commencement of Medibank on 1 July 1975. It is estimated that expenditure on these benefits will amount to $1 million in 1976-77. {:#subdebate-38-24} #### Diagnostic Services This item covers the running costs of the Commonwealth Pathology Laboratories, which provide a free pathology service to hospitals and medical practitioners, and the cost of supplying radio-active isotopes by the Australian Radiation Laboratory to hospitals and medical practitioners. Reduced expenditure in 1976-77 on capital works for the Pathology Laboratories is expected to slightly more than offset increases in operating costs. {:#subdebate-38-25} #### Treatment and Allowances for Ex-Servicemen and Women The Government meets the costs for eligible persons of specialist, local medical officer, paramedical and dental services, of providing and maintaining surgical aids (including spectacles) and of travelling expenses incurred in procuring medical treatment. Expenditure on these activities in 1976-77 is expected to increase by $3.7 million, of which $2.5 million is attributable to increased fees for local medical officers and specialists. {:#subdebate-38-26} #### Hospital Services and Benefits {:#subdebate-38-27} #### Medibank Hospital Payments The Commonwealth will continue to meet 50 per cent of the net operating costs of public hospitals in the States. In return the States provide free standard ward public hospital treatment without means test. As from 1 October 1976 the charge for a private patient in a public hospital will be $60 a day for a bed in a single room or $40 a day for any other bed. A charge of $20 a day will be payable by privately insured patients who are treated by hospital doctors. Private hospitals will continue to receive daily bed payments of $16 a day. As previously announced, an amount of $294.5 million was paid to the States on 29 June 1976 as a special measure of help to the States in the light of the total situation in regard to the Medibank arrangements. This payment was authorised by the *States Grants (Hospital Operating Costs) Act* and represented an estimate of the amount that would have been payable to the States for hospital operating costs between 25 May 1976, when payments ceased under the former Hospital Agreements, and 30 September 1976. Of the total payment, an amount of $215.6 million related to 1976-77 and, in ordinary circumstances, would have been paid in 1976-77. Excluding the advance payments, expenditure on Medibank hospital payments is estimated to amount to $830.0 million in 1976-77, a reduction of $117.6 million compared with 1975-76. {:#subdebate-38-28} #### Subsidy for Hospital Insurance The Government has decided that a subsidy will be paid to registered health insurance organisations in respect of persons who retain their rights to the benefits of Standard Medibank but also take out basic hospital-only insurance cover with such an organisation. The estimated cost of the Commonwealth subsidy in 1976-77 is $12 million. {:#subdebate-38-29} #### Hospital Benefits Reinsurance Trust Fund As provided by the National Health Act, the Commonwealth is to share the burden of meeting any deficits in reinsurance accounts required to be maintained by registered hospital insurance organisations. The deficits will occur from paying benefits to high risk and chronically ill members. The estimated cost of the Commonwealth subsidy in 1976-77 is $37.5 million. {:#subdebate-38-30} #### Other Hospital Benefits This item mainly reflects expenditure authorised by the National Health Act on special account subsidies, which will cease on 30 September 1976 with the establishment of the Hospital Benefits Reinsurance Trust Fund. *Treatment of Ex-servicemen and Women* Hospitals and clinics are maintained in each State for the treatment of eligible ex-servicemen and women and dependants. Use is also made of private and State public hospitals where this is appropriate. The costs involved with this treatment (including capital outlays) will reflect the full-year effects of recent increases in wages and in the cost of medical supplies. These increases, however, will be slightly more than offset by a significant decline in capital expenditure and the consequences of the Government's decision in May that, except in special circumstances, eligible veterans and their dependants will be classified as hospital service patients when admitted to non-repatriation hospitals, so that the costs will be met under the Medibank cost-sharing arrangements with the States. {:#subdebate-38-31} #### Mental Health Facilities Expenditure on mental health facilities are estimated at $7.1 million in 1976-77. This expenditure includes annual payments to the New South Wales and South Australian Governments for the cost of maintaining residents of the Australian Capital Territory and the Northern Territory receiving psychiatric treatment in those States, and the cost of medical care and treatment for eligible ex-servicemen and women at State mental hospitals. Assistance for non-residential mental health facilities is provided under the Community Health Program while funds for residential mental health facilities are provided under the Hospitals Development Program. {:#subdebate-38-32} #### Hospitals Development Program Under this program, grants of capital assistance are provided to the States, subject to their meeting part of the costs from their own resources, for the provision and modernisation of approved public hospital and other residential health facilities such as mental institutions, hostels for the mentally ill and nursing homes and hostels for the physically infirm. The Government will provide $108 million in 1976-77, approximately the same amount as in 1975-76. {:#subdebate-38-33} #### Health Program Grants Health Program Grants, which are authorised by the *Health Insurance Act* 1973, are payable to eligible organisations to meet the costs, or such proportion as the Minister may determine, of approved health services, including contract medical services provided on other than a fee-for-service basis, ancillary and allied health services, including diagnostic screening. Expenditure on Health Program Grants in 1976-77 is estimated to amount to $12 million compared with $7.1 million in 1975-76. {:#subdebate-38-34} #### Pharmaceutical Services and Benefits {:#subdebate-38-35} #### Pharmaceutical Benefits - General and Pensioners Except for a flat charge of $2 per prescription, which is payable by patients, the Government meets the cost of a range of drugs and medicinal preparations supplied on a doctor's prescription to any person in the community. Persons enrolled in the Pensioner Medical Service and their dependants are eligible for benefits without charge. Estimated expenditure on general pharmaceutical benefits in 1976-77 is $153.2 million, a net reduction of $23.3 million compared with 1975-76. Although some allowance has been made for cost increases and for an increase in chemists' remuneration, this has been more than offset by the full-year effects of the 50 cent per prescription increase in patient contribution introduced on 1 March 1976 and of deletions from the list of drugs and preparations covered. Expenditure on pharmaceutical benefits for eligible pensioners is estimated to increase by SI 9.7 million in 1976-77 to SI 27.0 million, mainly reflecting increases in prescription costs and utilisation of benefits. *Pharmaceutical Benefits - Ex-servicemen and Women* The Government meets the full cost of drug and medicinal preparations supplied on a doctor's prescription for eligible ex-servicemen and women and dependants. Expenditure for this purpose is estimated to decrease by $3.3 million in 1976-77 to $26.7 million. An allowance for an increase in chemists' dispensing fees will be more than offset by a decision taken by the Government in May 1976 to limit, generally, the prescription of drugs and medicinal preparations to eligible veterans and their dependants to items authorised under the National Health Act. {:#subdebate-38-36} #### Nursing Home and Domiciliary Nursing Care Services and Benefits {:#subdebate-38-37} #### Nursing Home Benefits and Payments For all patients in nursing homes approved under the National Health Act a benefit of S3. 50 a day is payable, with a supplementary benefit of S3.00 a day for patients requiring intensive care. An additional benefit, which varies from State to State, is payable by the Commonwealth for eligible pensioners and, from 1 October 1976, for patients covered by Medibank. An equivalent benefit is payable by registered hospital insurance funds to insured patients. Under the *Nursing Homes Assistance Act* 1974, the Government meets approved operating deficits, after receipt of patient contributions, of eligible nursing homes that agree to participate in arrangements authorised by the Act. Estimated expenditure on nursing home benefits in 1976-77 is $172.1 million, an increase of $28.3 million compared with 1975-76. After some allowance for cost increases, financing the deficits of eligible nursing homes is estimated to cost S67.5 million, an increase of $15.6 million. {:#subdebate-38-38} #### Domiciliary Nursing Care Benefit The Government pays a benefit of S2.00 a day to persons who arrange for the provision of adequate nursing care for elderly relatives at home as an alternative to institutional care. The elderly relative must have attained the age of sixty five years and require professional nursing care to an extent that would otherwise justify admission to an approved nursing home. Expenditure on the benefit is estimated to increase by S0.7 million in 1976-77 to S8.4 million, reflecting an expected increase in utilisation. *Nursing Home and Domiciliary Nursing Care for Ex-servicemen and Women* The Government meets the full cost of nursing home accommodation required by ex-servicemen and women because of service-related disabilities. Certain other categories of ex-servicemen and women, including chronically ill war widows, may be assisted with the cost of nursing home accommodation for disabilities not due to war service, on the same basis as nursing home patients enrolled in the Pensioner Medical Service. Free domiciliary care services are provided to these groups as required. Expenditure on nursing home and domiciliary care for eligible persons is expected to increase by $1.6 million in 1976-77 to $25.6 million. Of this increase $1.4 million is attributable to higher nursing home charges and increased usage. {:#subdebate-38-39} #### Other This item includes provision for the final instalment of $652 000 in 1976-77 of a special grant of $1.7 million to Queensland towards the cost of construction of Stage 2 of a public nursing home at Wynnum. It also includes subsidies, estimated to cost SI 0.2 million in 1976-77, to approved non-profit organisations that provide home nursing services. The rate of subsidy was increased with effect from 1 July 1976. For organisations established before September 1956, the annual Commonwealth Government payment for each nurse who attracts a subsidy was increased from $7100 to $8600. For organisations established after that date, the annual subsidy for each nurse employed was increased from $3550 to $4300. The Commonwealth subsidy to any organisation will not exceed that paid to the organisation by a State. The increase in the subsidy is expected to cost $1.4 million in 1976-77. {:#subdebate-38-40} #### Community Health Facilities and Services The Government is providing assistance to the States, local government authorities and other eligible organisations for the provision of community-based health services. Except for projects having an Australia-wide application, the Government meets 75 per cent of capital costs and 90 per cent of operating costs for all projects. An amount of $70.8 million has been allocated to the Program for 1976-77; this is $16.2 million more than expenditure on the Program in 1975-76. In addition, grants to the States and institutions for planning and research purposes are estimated at $1.0 million in 1976-77. {:#subdebate-38-41} #### Treatment and Prevention of Tuberculosis The Government has notified the States that reimbursment of their capital and maintenance expenditures on the diagnosis and treatment of tuberculosis will cease as from 31 December 1976. Provision is made to reimburse State expenditures incurred up to 31 December 1976 and for the continuation of allowances to persons suffering from tuberculosis and their dependants. Expenditure under this item is estimated to decline by $5.3 million in 1976-77 to $7.5 million. {:#subdebate-38-42} #### Dental Services for School Children The Commonwealth is establishing, in co-operation with the States, an Australia-wide school dental scheme to provide a free dental service to all primary school children. After 1 July 1976 the Commonwealth will meet 90 per cent of the capital cost of new training facilities and clinics. Capital facilities commenced before that date will continue to be funded fully by the Commonwealth. Also from 1 July 1976, the Commonwealth will meet 90 per cent of the operating costs of training facilities (previously funded fully by the Commonwealth) and 65 per cent of the operating costs of clinics (previously 75 per cent). Expenditure on the scheme is estimated to increase by $1.0 million in 1976-77 to $25.4 million. Health Services in the Territories In the Capital Territory and the Northern Territory the Commonwealth provides health services of the type provided elsewhere by State -and local government authorities. These services include hospitals, public health activities, ambulance services and community health centres. The Capital Territory Health Commission operates two hospitals in the Australian Capital Territory and the Department of Health operates five hospitals and a leprosarium in the Northern Territory. Construction and equipping of Calvary Hospital and a central hospital services complex continue to account for the major part of capital outlays in the Capital Territory. The major projects in the Northern Territory in 1976-77 are the construction of a new hospital in Darwin and the redevelopment of hospitals at Tennant Creek and Alice Springs. Allowing for 50 per cent of net operating costs of the hospitals being met by Medibank, net expenditure on health services in the Territories is estimated to increase by $16.6 million in 1976-77 to $101.3 million. {:#subdebate-38-43} #### Health Services for Aboriginals Expenditure under this heading includes direct expenditure by the Commonwealth ($7.3 million in 1976-77) and grants to the States ($13.2 million). The program provides hospital facilities, clinics, health centres and doctors and nurses in areas of high Aboriginal population. Provision also is made for health education and preventive medicine projects. {:#subdebate-38-44} #### Other Health Services {:#subdebate-38-45} #### Medical Research Grants Through the medical research program of the National Health and Medical Research Council, the Commonwealth Government assists the medical research activities of Commonwealth and State Government departments, universities and institutions and individual research workers, and with the training of medical research workers. An amount of S5.2 million was provided for this purpose in 1975-76 and the Government has decided to provide S9.1 million in 1976-77. In addition payments of S500 000 each will be made to the Howard Florey Institute of Experimental Physiology and Medicine and the Walter and Eliza Hall Institute of Medical Research. Similar payments were made to these Institutions in 1974-75 and 1975-76. {:#subdebate-38-46} #### Commonwealth Serum Laboratories Commission The main functions of the Commonwealth Serum Laboratories Commission are to produce and sell biological products, undertake research into the production of therapeutic biological products and maintain stocks of biological products. The provision of $9.2 million for 1976-77 is $0.8 million less than actual expenditure in 1975- 76. {:#subdebate-38-47} #### Purchase of Pharmaceutical Manufacturing Company Expenditure of $0.2 million under this heading in 1976-77 reflects the balance of the purchase price of a group of private pharmaceutical companies acquired in 1975-76. {:#subdebate-38-48} #### Medibank Private Insurance - Advance for Establishment Purposes As announced in the Budget Speech, an amount of $10 million will be advanced to Medibank Private Insurance for establishment purposes. {:#subdebate-38-49} #### Aids and Appliances The Commonwealth meets the cost of supplying hearing aids (and batteries) to children, eligible pensioners and their dependants; artificial limbs to civilians; stoma appliances and, up to 30 September 1976, home dialysis equipment (and supplies) to all persons in the community who need them. From 1 October 1976, the cost of supplying free home dialysis equipment will be shared equally between the States and the Commonwealth under Medibank hospital arrangements. Expenditure is expected to increase by $2.3 million in 1975-76 to $5.9 million. {:#subdebate-38-50} #### Educational Campaigns The Government is continuing to sponsor the National Drug Education Program. Funds have been provided to support State and national projects of drug education since 1970-71; $750 000 has been allocated to the program in 1976-77. {:#subdebate-38-51} #### Blood Transfusion Service and Products In recent years the annual operating costs of the Red Cross Society's Blood Transfusion Service in the States has been shared by the Society (5 per cent), the Commonwealth (35 per cent) and the States (60 per cent) and in the Territories by the Society (5 per cent) and the Commonwealth (95 per cent). Beginning in 1976-77 the Society will contribute the lower of 5 per cent of operating costs, or 10 per cent of its previous year's income from donations. Any reduction in the Society's previous share will be taken up by the Commonwealth. Approved capital costs in the States will continue to be shared equally by the Commonwealth and the States. Blood collected by the Society's Transfusion Service is processed into blood fractions, plasma and serum by the Commonwealth Serum Laboratories Commission. The blood products are supplied, free of charge, to hospitals and approved pathologists for use in medical diagnosis and treatment. The Commonwealth Government reimburses the Commission for the cost of processing the blood. The Government's contributions are estimated to increase by $0.9 million in 1976- 77 to $7.6 million. {:#subdebate-38-52} #### Quarantine Services Human, animal and plant quarantine measures are enforced mainly to prevent the introduction of exotic diseases into Australia. By arrangement, the States administer animal and plant quarantine and have their costs reimbursed by the Commonwealth Government. Human quarantine is administered by the Commonwealth Government. Quarantine services in 1976-77 are expected to cost $8.8 million, $1.1 million more than in 1975-76. {:#subdebate-38-53} #### Other Included here are the Commonwealth Government's subsidy of $2.0 million to the Royal Flying Doctor Service (an increase of $1.1 million), subsidies towards the cost of certain international health conferences, grants to the States for the Arboencephalitis Eradication Campaign, and administrative expenditures related to public health and the administration of the Therapeutic Goods Act. {:#subdebate-38-54} #### General Administration This item comprises the general administrative and capital expenses of the Department of Health, the Hospitals and Health Services Commission, and the Health Insurance Commission. Expenditure is estimated to increase from $81.4 million in 1975-76 to $96.8 million in 1976-77, reflecting the full-year effect of salary and other cost increases in 1975-76. {:#subdebate-38-55} #### Recoveries Recoveries are accounted for mainly by charges met by certain countries for treatment given to their ex-servicemen through repatriation facilities. {: type="1" start="4"} 0. SOCIAL SECURITY AND WELFARE The Australian social security system is intended to protect people from economic hardship caused by events such as loss of earnings through age, invalidity, sickness, unemployment or the loss or absence of a supporting male as a result of death, desertion or long-term separation. It is designed also to compensate ex-servicemen for war-caused disabilities and the dependants of those whose deaths are war-related and to assist parents with the expenses associated with bearing and raising children. Much of this assistance is provided by way of cash benefits. There are selective, or means-tested, benefits such as invalid and widows' pensions and unemployment benefits, as well as universal benefits such as maternity allowances and family allowances. Additionally, assistance is provided, either directly or through State and local government authorities and voluntary agencies, for a wide range of welfare services for people with special needs. The aged, for example, are assisted with their accommodation needs and invalids may be trained so that they can re-enter paid employment. Assistance is provided in a variety of forms lor the advancement of Aboriginals. Total direct outlays on social security and welfare are estimated to increase from $5012 million in 1975-76 to $6187 million in 1976-77, an increase of 23.5 per cent. Direct outlays on social security and welfare in 1976-77 are equivalent to 25.4 per cent of estimated total Budget outlays. The Government is continuing to review the income security system in Australia. This review will include consideration of the final reports from the Commission of Inquiry into Poverty, the National Superannuation Committee of Inquiry and the Independent Inquiry into the Repatriation System. The remaining reports of the Commission of Inquiry into Poverty and the National Superannuation Committee of Inquiry are expected during 1976-77. Details of actual outlays on social security and welfare in 1974-75 and 1975-76 and estimated outlays in 1976-77 are shown in the following table: Assistance for the Aged {:#subdebate-38-56} #### Pensions and Allowances Age pensions are payable, free of means test, to residentially qualified men and women aged 70 years or more or who are permanently blind. Age pensions are payable, subject to a means test, to residentially qualified women aged 60 to 69 years and to residentially qualified men aged 65 to 69 years. To be residentially qualified for age pension, a period of ten year's continuous residence in Australia is usually necessary. Wife's pension is payable to an age pensioner's wife who does not qualify for an age, invalid or repatriation service pension in her own right. The pension is subject to a means test. Additional payments of $7.50 a week for each child are available to pensioners with dependent children. These payments are subject to a means test. Supplementary assistance of up to $5 a week is payable, subject to a special means test, to pensioners who pay rent or lodging charges. Generally the amount of supplementary assistance payable is not to exceed the actual amount paid for rent or lodgings. Upon the death of one of a married pensioner couple, the surviving member becomes entitled to receive, for up to six fortnightly instalments, the equivalent of the two pensions that would have been paid had the spouse not died. Pensions are at present payable subject to means test on a combination of income and property. As announced in the Budget Speech, it is proposed to abolish the property component from 1 1 November 1976 and to replace the existing means test by a test on income only, including income from property. A transitional savings clause will ensure that no existing pensioner will suffer a reduction in pension as a result of the change. It is proposed to increase the standard and married rates of pension in November 1976 and May 1977 by the percentage increase in the Consumer Price Index between the December quarter 1975 and the June quarter 1976 and between the June and December quarters 1976 respectively. The first increase is to take effect from the first pay period in November. The existing maximum rates of pensions and additional payments are set out below, together with those proposed as from 11 November 1976: The estimated cost of the two proposed increases in the rates of age pension is $114.7 million in 1976-77 and $308.8 million in a full year. At 30 June 1976 there were 1 183 000 age pensioners (including wives of age pensioners in receipt of a wife's pension) and during 1976-77 the number is estimated to increase by 27 000 to 1 210 000. The average amount of age pension (including additions for children and supplementary assistance) is estimated to rise from $35 a week in 1975-76 to $39.50 a week in 1976-77, an increase of 12.9 per cent. The main reasons for this are the proposed increases in pension rates in line with the CPI, and the full-year effects of increased rates of pension introduced during 1975-76. As announced in the Budget Speech, the Government proposes to introduce legislation to adjust relevant pensions and benefits automatically for movements in the Consumer Price Index. {:#subdebate-38-57} #### Aged Persons Accommodation Under the *Aged or Disabled Persons Homes Act* 1954 organisations are encouraged and assisted to provide suitable homes in which aged people may live in conditions approaching ordinary domestic life. The Government makes grants on a $2 for $1 basis to religious and charitable organisations and local governing bodies to meet the cost of erection, extension or purchase of homes for the aged. The maximum subsidy limits under the Act are $10 200 for a single unit and $11 850 for a double unit, plus a maximum of $1 920 a unit for land. Handicapped adults may also be accommodated in subsidised homes. The Government pays a personal care subsidy of $15 a week to eligible organisations for persons aged 80 years or over and other residents who require, and are receiving, approved personal care while living in hostel-type accommodation provided by those organisations. Expenditure for the provision of homes is estimated at $20 million in 1976-77 and the personal care subsidy is estimated to cost $11 million. The *Aged Persons Hostels Act* 1972 is designed to encourage the provision of hostel accommodation for the aged. Subject to certain conditions, the Commonwealth Government meets the cost of providing additional hostel accommodation by eligible organisations up to a maximum of $15 300 a person. The Government also pays an additional grant of up to $2 400 a person for the purchase of land; a further $250 a person is available for furnishings. Accommodation provided under the Act must be allocated strictly on the basis of need and without any contribution from the prospective resident. Expenditure under the Act is estimated at $25 million in 1976-77. A total amount of $45 million will therefore be provided for aged persons homes and hostels in 1 976-77. This will be the first year of a three-year program approved by the Government to subsidise the provision of aged persons accommodation. It will be the Government's objective, budgetary considerations permitting, to provide a further $180 million over the two following years. The *States Grants (Dwellings for Pensioners) Act* 1974 is designed to assist the States with the provision of self-contained dwelling units at reasonable rentals for single age, invalid, Class B widow and certain single repatriation pensioners, who have little or no means apart from their pension. The Act provides for grants totalling $30 million for the three year period commencing July 1974. The grants are allocated among the States in proportion to the total number of age, invalid and Class B widow pensioners in receipt of supplementary assistance in each State. Rents of units provided under the scheme are not less than the maximum rate of supplementary assistance paid to pensioners. Of the total, $19.2 million had been spent to June 1976, including $13.1 million in 1975-76; the States are to receive the remaining $10.8 million in 1976-77. {:#subdebate-38-58} #### Home Care Services Under the *States Grants (Home Care) Act* 1969, and the *States Grants (Paramedical Services) Act* 1969, the Commonwealth Government provides funds, in association with the States, for the provision of a range of home care services, mainly for. aged persons and for the provision of senior citizens centres. Under the *States Grants (Home Care) Act* 1969, the Commonwealth Government shares on a $2 for $1 basis with the States the cost of approved housekeeping or other domestic assistance provided wholly or mainly for aged persons in their homes. The Commonwealth Government also shares, on a $2 for $1 basis with the States, up to a maximum of two-thirds of the capital cost of approved senior citizens centres, as well as meeting on a $2 for $1 basis the cost of the salary of a welfare officer employed in conjunction with such a centre. Grants are estimated to amount to $11.7 million in 1976-77, $1.8 million more than in 1975-76. Of this $11.7 million in 1976-77, an amount of $4 million will be provided for grants to senior citizens centres. This will be the first year of a three-year program with the same amount to be provided in each of the two succeeding financial years. The Commonwealth Government shares, on a $1 for $1 basis with the States, the cost of approved paramedical services provided wholly or mainly for aged persons in their homes under the *States Grants (Paramedical Services) Act* 1969. Grants in 1976-77 are estimated at $573 000, or $163 000 more than in 1975-75. The *Delivered Meals Subsidy Act* 1970 is designed to assist the establishment, expansion, improvement or maintenance of approved meals-on-wheels services. The basic rate of subsidy is 25 cents a meal. An additional subsidy of 5 cents a meal is payable if the organisation undertakes to include with each meal approved kinds and quantities of fresh fruit or fruit juices. Expenditure under the Act in 1976-77 is estimated at S2 million, compared with $1.8 million in 1975-76. Assistance to Veterans and *th~ar* Dependants {:#subdebate-38-59} #### War Pensions and Allowances War pensions and allowances (and certain other benefits including medical treatment) are available to certain veterans and their dependants. The term 'veteran' includes any man or woman eligible for consideration under the *Repatriation Act* 1920 or associated Acts by virtue of service in the Australian armed forces. The term 'service' includes service in the 1914-18 War, the 1939-45 War, the Korea-Malaya Operations, the Far East Strategic Reserve, special service in South-East Asia (including Vietnam) and service with the Defence Force on or after 7 December 1972. Basic eligibility varies according to the nature of service. Broadly, for those with 'active service', incapacity or death resulting from 'any occurrence' during service may be accepted. For those with 'home service', however, the criterion is narrower, in that incapacity or death must have arisen out of, or be attributable to, that service; incapacity or death arising from a condition existing prior to enlistment may be accepted if aggravated or contributed to by the conditions of service. {:#subdebate-38-60} #### Classes of War Pensions Pensions are paid to eligible veterans in three main categories: ° The Special Rate (known as the T & PI) Pension, payable to a veteran who, as a result of service, is blinded, or is totally and permanently incapacitated so that he is unable to earn more than a negligible percentage of a living wage; o The Intermediate Rate, payable to a veteran who, because of the severity of his incapacity accepted as related to service, can work only part-time or intermittently, and in consequence is unable to earn a living wage; and o The General Rate, payable to a veteran who has an incapacity accepted as related to service, but who is still able to work full-time, although under difficulty. The amounts payable range from 10 per cent to 100 per cent of the maximum general rate, according to the assessed degree of incapacity. Pensions are also paid to the wives of incapacitated veterans and to their children. Such pensions are paid at rates varying with the assessed degree of the particular veteran's incapacity. When the death of a veteran has been accepted as related to his service, his widow qualifies for the war widow's rate of pension and for associated benefits, while his children each receive pensions at 'orphan' rates and other benefits. If a veteran's death has not been accepted as related to service, but at the time of death he was receiving, or is later adjudged to have been eligible to receive, a pension at the special rate or as a double amputee, his dependants qualify for pensions as if his death had been accepted as related to service. Other dependants of deceased veterans may qualify for pensions in certain cases. {:#subdebate-38-61} #### Allowances Various allowances are provided to supplement war pensions. These allowances vary according to the type or severity of disablement and the special needs of the pensioners. {:#subdebate-38-62} #### Rates of Pensions and Allowances The existing and proposed rates of the main war pensions and allowances are set out below: As announced in the Budget Speech, it is proposed to amend the Repatriation legislation to automatically amend the special, intermediate and general rate war pension and the war and defence widow pension each Spring and Autumn in line with movements in the Consumer Price Index. During 1975-76 the average number of veterans and their dependants in receipt of war pensions was 507 000 and for 1976-77 the number is estimated to be 474 000. The effect on expenditure of this estimated decline in numbers is more than offset by the full-year effects of increased rates of benefits introduced in 1975-76 and the increases in benefit rates announced in the Budget Speech. The proposed increases in war pensions in November 1976 and May 1977 are estimated to cost $15.8 million in 1976-77 and $38.8 million in a full year. {:#subdebate-38-63} #### Service Pensions Service pensions may be payable to: e a male veteran who served in a theatre of war and who has attained the age of 60 years or is permanently unemployable; a female veteran who served in a theatre of war or embarked for service abroad and has attained the age of 55 years or is permanently unemployable; e a veteran suffering from pulmonary tuberculosis irrespective of age or the area of service; and ex-members of the Defence Forces of British Commonwealth countries who served in a theatre of war and have had at least ten year's residence in Australia. Service in a 'theatre of war' means, in respect of the 1914-18 War or 1939-45 War, service 'at sea, in the field or in the air, in naval, military or aerial operations against the enemy in an area, or on an aircraft or ship of war, at a time when danger from hostile forces of the enemy was incurred in that area or on that aircraft or ship of war . . . '. In respect of certain later service, 'service in an operational area', and 'special service' as denned, are the qualifications equivalent to service in a 'theatre of war'. A service pension is the broad equivalent of an age or invalid pension. The advantages to the veteran are availability of the service pension five years earlier and, in certain circumstances, eligibility for a wide range of medical treatment services in the repatriation system. Service pensioners are eligible for the same range of pensions and allowances as age pensioners and the rates of benefits are the same. Like age pensions, service pensions will be increased in November 1976 and May 1977 in line with movements in the Consumer Price Index. Service pensions are paid, free of means test, to eligible veterans aged 70 years and over. For eligible veterans under 70 years of age 50 per cent of any war pension received is disregarded as income for service pension means test purposes. The proposed new means test arrangements for social security pensions, to operate. from November 1976, will also apply to service pensions. During 1975-76 the average number of service pensioners (including wives) was 131 000; this number is estimated to rise to 142 600 in 1976-77. Increased expenditure in 1976-77 reflects this increase in numbers, the full-year effect of pension increases granted in 1975-76, and the increased rates to apply in 1976-77. The proposed two increases in service pensions are estimated to cost $14.4 million in 1976-77 and $35.0 million in a full year. Assistance to the Handicapped {:#subdebate-38-64} #### Invalid Pensions and Allowances Invalid pensions are payable to persons not less than 16 years of age who are permanently incapacitated for work to the extent of at least 85 per cent, or permanently blind, and have become so while residing in Australia. Pensions are subject to a means test except in the case of people who are permanently blind. If the incapacity or blindness occurred outside Australia, the residence qualification is the same as for an age pension. As for age pensions, it is proposed to replace the present means test with a test on income only. Invalid pensioners are eligible for the same additional payments as age pensioners and the rates of payment are the same. Similarly, wife's pension is payable to the wife of an invalid pensioner if she is not eligible for an age, invalid or service pension in her own right. At 30 June 1976 there were 220 000 invalid pensioners (including wives of invalid pensioners in receipt of wife's pension) and during 1976-77 the number is estimated to increase by 15 000 to 235 000. The average amount of invalid pension (including additions for children and supplementary assistance) is estimated to rise from $37 a week in 1975-76 to $41 a week in 1976-77, an increase of 10.8 per cent. The main reasons for this are the proposed increases in pension rates in line with the CPI and the full-year effects of increased rates of pension introduced during 1975-76. The estimated cost of the increases in rates of invalid pension in November 1976 and May 1977 is $20.4 million in 1976-77 and $54.8 million in a full year. {:#subdebate-38-65} #### Handicapped Child's Allowance Handicapped child's allowance, of $10 a week, is payable to parents or guardians in respect of a child under the age of 16 years who is cared for at home and who, because of the severity of the handicap, is in need of constant care and attention. As announced in the Budget Speech, it is proposed to increase the rate of allowance by $5 a week to $15 a week at an estimated cost of $3.4 million in 1976-77 and $5.2 million in a full year. The number of recipients at 30 June 1976 was 19 000 and this number is estimated to increase to 21 000 by 30 June 1977. {:#subdebate-38-66} #### Sheltered Employment Allowances Sheltered employment allowances are payable to disabled people employed in approved sheltered workshops who are qualified to receive an invalid pension or who would become so qualified if they ceased to be provided with sheltered employment. The allowance is subject to the same means test as applies to the invalid pension and the rates of payment are generally the same. An incentive allowance of $5 a week is paid (free of means test) to the recipients of sheltered employment allowance. Recipients of the sheltered employment allowance are not eligible for supplementary assistance. Under the *Handicapped Persons Assistance Act* 1974 the Commonwealth Government provides subsidies on a $4 for $1 basis to non-profit organisations and local governing bodies for the purchase, construction, extension, alteration, rental and maintenance of premises that cater for physically and mentally handicapped people. Buildings qualifying for subsidy comprise day training centres for handicapped children, activity therapy centres and sheltered workshops for handicapped adults and residential projects for people who attend these establishments. Residential projects for people who, because of a disability, need special accommodation to allow them to engage in normal outside employment also qualify for subsidy. Subsidies on a $4 for $1 basis are available also for the cost of furnishing and equipping the various types of centres, while assistance with operating costs may be provided by means of staff salary subsidies. The latter are usually on a $1 for $1 basis although a higher proportion, up to 100 per cent, may be paid for the first two years of operation of some new projects. A training fee of $500 is paid to eligible sheltered workshops for each former employee who, after completing more than six months sheltered employment, graduates to and retains employment for 12 months or more. The Government has decided to introduce a three-year program of subsidy assistance under the Act. Expenditure during the three years will increase from $30 million in 1976-77, to $39 million in 1977-78 and to $52 million in 1978-79. {:#subdebate-38-67} #### Handicapped Children's Benefits The handicapped children's benefit of $3.50 a day for each child is payable to charitable and religious organisations conducting approved homes accommodating and caring for both physically and mentally handicapped children under 16 years of age. The benefit continues to be paid to an eligible organisation when a child is absent from the institution for a short period only, e.g. a weekend home visit. As announced in the Budget Speech, it is proposed to increase the rate of benefit from $3.50 a day to $5.00 a day, at an estimated cost of $0.4 million in 1976-77 and $0.7 million in a full year. Total expenditure on the benefit is estimated at $1.7 million in 1976-77, $0.5 million more than in 1975-76. {:#subdebate-38-68} #### Rehabilitation Services The Commonwealth Rehabilitation Service attempts to restore disabled people to their fullest physical, mental, social and vocational usefulness. Treatment and training are provided free to persons in the following categories if there is a reasonable prospect of their engaging in gainful employment: invalid pensioners; widow pensioners and supporting mother beneficiaries (other than those eligible under the National Employment and Training System); recipients of unemployment, sickness or special benefits; former national and regular servicemen who are disabled at time of discharge but are ineligible for rehabilitation assistance from the Department of Repatriation; persons receiving a tuberculosis allowance; persons who become disabled while working for the Commonwealth Government and who are covered by the Compensation (Australian Government Employees) Act; and boys and girls of 14 and 15 years who would otherwise be likely to qualify for an invalid pension at 1 6. Expenditure is estimated at $14.1 million in 1976-77 compared with $11.8 million in 1975-76. {:#subdebate-38-69} #### Assistance to Widows and Supporting Mothers {:#subdebate-38-70} #### Widows' Pensions and Allowances Pensions are payable to widows subject to a means test. As for age pensions, it is proposed to replace the existing means test with a test on income only. No period of residence is necessary if a woman and her husband were residing permanently in Australia when she became a widow. In other cases, there is a residence qualification of either 5 years prior to claiming a pension or ten years' continuous residence in Australia at any time. There are three classes of widows' pension: Class A - A widow with one or more qualifying children in her care. Class B - A widow without qualifying children and at least 50 years of age or at least 45 years of age if her Class A pension ceased after she reached that age because she no longer had a qualifying child in her care. Class C - A widow without qualifying children and in necessitous circumstances within 26 weeks of her husband's death. For all classes, the term 'widow' includes a woman who was the common-law wife of a man for at least three years immediately before his death. For Class A and B, it includes a wife who hasbeen deserted for six months, a divorcee, a woman whose husband has been imprisoned for six months and a woman whose husband is in a mental hospital. Widow pensioners are eligible for supplementary assistance, additional pension for dependent children and mother's allowance (in lieu of guardian's allowance) at the same rates as age and invalid pensioners. These payments are subject to a means test. At 30 June 1976 there were 129 000 widow pensioners and during 1976-77 the number is estimated to increase by 9000 to 138 000. The average rate of pension (including additions for children and supplementary assistance) is estimated to rise from $47 a week in 1975-76 to $52 a week in 1976-77, an increase of 10.6 per cent. The estimated cost of the increases in the rates of widows' pensions announced in the Budget Speech is $13.5 million in 1976-77 and $36.6 million in a full year. {:#subdebate-38-71} #### Supporting Mothers' Benefits and Allowances A supporting mother's benefit is paid to unmarried mothers and mothers who are deserted de facto wives, de facto wives of prisoners and separated wives. The benefit becomes payable six months after the date of the event which gives rise to eligibility (e.g., the birth of a child or separation), and it is payable at the same rate and subject to similar conditions as the Class A widow's pension. Supporting mothers are also eligible for supplementary assistance, additional benefit for dependent children and mother's allowance. At 30 June 1976, there were 46 000 supporting mother beneficiaries and during 1976-77 the number is estimated to increase by 9000 to 55 000. The average rate of benefit (including additions for children and supplementary assistance) is estimated to rise from $55.50 a week in 1975-76 to $61 a week in 1976-77, an increase of 9.9 per cent. The estimated cost of the increases in the rates of supporting mother's benefit announced in the Budget Speech is $5.1 million in 1976-77 and $13.9 million in a full year. {:#subdebate-38-72} #### Other Under the *States Grants (Deserted Wives) Act* 1968 the Commonwealth Government shares, within limits, on a $1 for $1 basis with the States the cost of helping certain mothers of families without a breadwinner where the mothers are ineligible for a Class A widow's pension or the supporting mother's benefit. Assistance is provided during the first six months after the date of the event which gives rise to eligibility (e.g., the birth of a child or separation). The main groups of mothers assisted are deserted wives, deserting wives, wives of prisoners and unmarried mothers. After the first six months, these groups of mothers may qualify for either a Class A widow's pension or a supporting mother's benefit. {:#subdebate-38-73} #### Assistance to Families {:#subdebate-38-74} #### Family Allowances Family allowances are payable to people with children under 16 years of age, or over 16 but under 25 years of age and receiving full-time education at a school, college or university and not in employment. There is no means test. Allowances are usually paid to the mother and to be eligible she must reside, or intend to reside, permanently in Australia and have the care of one or more children. Special conditions apply if the person does not intend to reside permanently in Australia. A major reform, announced in May 1976, will direct more support to the families in most need. In essence it involves abolishing the taxation rebates for dependent children and substantially increasing family allowances (formerly child endowment). Approximately 300 000 families were unable to take advantage, or take full advantage, of the taxation rebates for children and the new system provides greatly increased assistance to these families. The new rates are compared with the old rates in the following table: At 30 June 1976, there were 4 357 000 children (including student children) covered by the allowances and during 1976-77 the number is estimated to increase by 25 000 to 4 382 000. The increases in rates are estimated to cost about $800 million in 1976-77. The effect of this on the overall Budget result is offset by the gain to revenue from the abolition of rebates for dependent children *(see* statement No. 4). The increase in outlays is also affected by the occurrence of 1 less twelve-weekly bank credit of allowances in 1976-77 than occurred in 1975-76. {:#subdebate-38-75} #### Maternity Allowance Maternity allowance is payable, as a lump sum, to mothers on the birth of children. There is no means test. A woman is entitled to the allowance if she resides, or intends to reside, in Australia permanently and gives birth to a child here or on board a ship travelling to Australia. Special conditions apply to a woman who is not a British subject and does not intend to reside in Australia permanently. The rates of allowance are as follows: During 1976-77 the number of grants is estimated at 225 000. {:#subdebate-38-76} #### Other Grants are made to eligible marriage guidance organisations (estimated at $1.9 million in 1976-77), to organisations involved in premarital education (estimated at $50 000 in 1976-77) and to the Institute of Family Studies (estimated at $800000 in 1976-77). Expenditure on the provision of family planning facilities and on the training of medical personnel is estimated at $0.8 million in 1976-77. Expenditure by the Committee of Inquiry into Human Relationships is estimated at $115 000 in 1976-77. An orphan's pension of $1 1 a week is payable free of means test to the guardian of a child under 16 years of age or a full-time student over 16 but under 25 years of age. It is paid in respect of a child both of whose parents are dead or one of whose parents is dead and the whereabouts of the other is unknown, or in respect of a child whose sole surviving parent or adoptive parent is in prison or in a mental hospital. Expenditure is estimated at $2.3 million in 1976-77, $0.5 million more than in 1975-76. Assistance to the Unemployed and Sick {:#subdebate-38-77} #### Unemployment and Sickness Benefits Unemployment and sickness benefits are available, subject to an income test, to people who are unemployed or to people who are temporarily incapacitated for work and have thereby lost income. A special benefit may be paid to a person ineligible for a pension or for an unemployment or sickness benefit if he is unable to earn a sufficient livelihood for himself and his dependants. To be eligible for unemployment or sickness benefit, a person must be at least 16 years of age and under 60 (females) or under 65 years (males). The person must also have lived in Australia for at least a year immediately prior to claiming benefit or intend to remain here permanently. The basic rates of benefit are generally the same as for age and invalid pensions. But pension increases in 1975-76 were not applied to single unemployment, sickness and special beneficiaries under 18 years of age. This group received $36.00 a week at 30 June 1976 and it is proposed to continue the benefit at this rate during 1976-77. Beneficiaries are also eligible for additional benefit for each dependent child. After receiving benefits for six consecutive weeks sickness beneficiaries become eligible, subject to a special income test, to receive supplementary allowance of up to $5.00 a week if they pay rent or for lodgings. This allowance is not payable to beneficiaries in hospital who have no dependants. The cost of the increases in rates of unemployment, sickness and special benefits (and additional payments) announced in the Budget Speech is estimated to be $21.8 million in 1976-77 and $58.3 million in a full year. {:#subdebate-38-78} #### Regional Employment Development Scheme Under this Scheme, which was introduced in September 1974, financial assistance has been provided for projects of economic and/ or social benefit which provide employment for persons who would otherwise remain out of work. Local government bodies, State Government departments and authorities, community, sporting and recreational organisations and charitable bodies have received assistance under the Scheme. In September 1975 the then Government announced that no new requests for assistance under the Scheme would be accepted. An amount of $123.4 million was spent in 1975-76. Provision is made for expenditure of a further $350 000 in 1976-77 to complete projects approved prior to September 1975. {:#subdebate-38-79} #### Structural Adjustment Assistance This item includes the provision of income maintenance to employees displaced as a direct result of prescribed structural changes and of redundancy in Commonwealth employment. Provision is made for expenditure of $0.2 million in 1976-77 for final payments to persons who are still eligible for assistance under the schemes. No Government decisions have been prescribed under the Structural Adjustment Assistance Scheme since March 1975. {:#subdebate-38-80} #### Other Welfare Programs {:#subdebate-38-81} #### Funeral Benefits A funeral benefit of up to $20 is payable to any person liable for the funeral costs of an age or invalid pensioner. A higher benefit of up to $40 is payable to an age, invalid or widow pensioner (including a woman in receipt of supporting mother's benefit) liable for the funeral cost of a spouse, a child or another such pensioner. For these benefits 'pensioner' means a person who satisfies, or had satisfied, the Commonwealth Government pensioner 'fringe' benefits means test. {:#subdebate-38-82} #### Telephone Rental Concessions A reduction of one-third in the basic annual rental for a telephone is available to pensioners and recipients of some other benefits who meet certain requirements including, in most cases, a special means test. {:#subdebate-38-83} #### Australian Assistance Plan The Government has decided that the Australian Assistance Plan would more appropriately be administered and funded at the State or local Government level. The Commonwealth will take responsibility for the transition stage of the Plan by paying the salaries of those people presently engaged in the Plan for up to 12 months and by providing finance to complete projects approved before 30 June 1976. Expenditure is estimated at $5.4 million in 1976-77. {:#subdebate-38-84} #### Assistance to Homeless Men and Women The *Homeless Persons Assistance Act* 1974 provides, over a three-year period, for the payment of capital grants to voluntary agencies and to local authorities for approved projects (such as night shelters, reception centres and hostels) in order to upgrade and replace inadequate existing accommodation and to build new facilities for homeless persons. It also provides for the payment of a salary subsidy of 50 per cent of the salary of approved staff, an accommodation subsidy of 75 cents a person a day and a meal subsidy of 25 cents a meal in respect of non-resident homeless persons. The program is to be reviewed on completion of the three-year period. The first payments under the Act were made in June 1975. It is estimated that expenditure in 1976-77 will be S2.8 million, SI. 3 million more than in 1975-76. {:#subdebate-38-85} #### Assistance for Migrants The Commonwealth Government makes grants to the Good Neighbour Council and other community agencies engaged in migrant integration activities. Expenditure in 1976-77 is estimated to be S2.2 million, $0.3 million more than actual expenditure in 1975-76. Aboriginal Advancement Programs nec Overall expenditure under this item is estimated to fall in 1976-77 by $8.8 million to $34.7 million, mainly because funds provided in support of Aboriginal enterprises are estimated at $2.9 million in 1976-77, compared with $11.5 million in 1975-76. General Administrative and other Expenditure This expenditure comprises the general running and capital expenses of the Departments of Social Security, Repatriation (except those relating to repatriation institutions) and Aboriginal Affairs. {: type="1" start="5"} 0. HOUSING Outlays for housing are estimated to total $567.9 million in 1976-77. This total includes amounts for improvements in housing accommodation for Aboriginals, for housing in the Territories, for migrant accommodation, for Defence Service Homes and for assistance to the States for welfare housing. {:#subdebate-38-86} #### Advances to States for Housing The Budget provides an amount of $375 million to be advanced to the States in 1976-77 for welfare housing purposes under the terms of the 1973-74 Housing Agreement. The amount advanced in 1975-76 was $364.6 million. These advances, which are repayable at low rates of interest over a 53 year period, are mainly to assist the State housing authorities to provide dwellings for rental or sale on a concessional basis to low income families. A proportion of the advances is allocated to Home Builders' accounts to provide low-interest housing loans to prospective home owners who meet specified eligibility conditions. Eligibility for allocation of a State housing authority dwelling, or for a loan from the Home Builders' account, is determined by means tests. For allocation of a family dwelling from a State housing authority, average weekly income of the main family breadwinner during the previous six months (excluding overtime and child endowment) must not exceed 85 per cent of the Statistician's latest seasonally adjusted quarterly estimate of average weekly earnings. For a loan from Home Builders' account funds, income of the main breadwinner must not exceed 95 per cent of average weekly earnings. In cases where the family includes more than two children an additional $2 per week is added to the income limit for each additional child. Sales of State housing authority dwellings are limited to a maximum of 30 per cent of family dwellings completed during the five years commencing 1 January 1974. Sales may be made only to purchasers meeting the means test at the time of sale, and there are restrictions on resale. The maximum interest rate is set at 5.75 per cent. Details of the Housing Agreement and the State by State allocation of the $375 million are presented in the document *Payments to or for the States and Local Government Authorities 1976-77* published concurrently with the Budget Speech. {:#subdebate-38-87} #### Grants to States for Housing The *States Grants (Housing Act)* 1971 authorises the provision of housing assistance to the States by way of basic grants of $2.75 million a year, payable for a period of 30 years in respect of the States' housing operations in each of the years 1971-72 and 1972-73; $5.5 million will again be paid in 1976-77. The payments are in lieu of an interest concession on funds used by the States for welfare housing in those years. The provision for payment of an additional grant of $1.25 million a year for rental assistance under this Act expired on 30 June 1976; no rental assistance grant is, therefore, payable in 1976-77. Under the *Commonwealth and State Housing Agreement Act* 1945, the Commonwealth pays a contribution under specified conditions towards the rental losses of houses built by a State under that Agreement. In 1975-76, an amount of $226 084 was paid to Queensland under the Act. Further details of these arrangements are presented in the document *Payments to or for the States and Local Government Authorities 1976-77.* {:#subdebate-38-88} #### Home Savings Grants Under the *Home Savings Grant Act* 1964 a grant is payable to eligible persons who have accumulated savings over a period of at least three years towards the purchase or construction of their first home. This scheme formally ends on 31 December 1976. It is to be replaced, however, by a new scheme to operate from 1 January 1977, details of which were announced in March 1976. Grants will continue to be paid under the 1964 Act, on homes contracted to be built or purchased on or before 31 December 1976, to persons who had commenced to save by 21 August 1973. Estimated expenditure in 1976-77 under the 1964 Act is $6.5 million. The new scheme, when fully operative, will provide for payment of a grant of up to $2000 on the basis of $1 for each- $3 saved. Savings held in acceptable forms from 1 January 1976 will be eligible. The first $2000 grants will be payable in respect of homes acquired on or after 1 January 1979. Grants of up to $1333 will also be payable from 1 January 1978 for savings over two years and of up to $667 from 1 January 1977 for savings over one year, on the basis of $1 for each $3 saved after 1 January 1976. The new scheme will provide for grants to all persons whether married or single, who are Australian citizens, or who have the right to permanent residence in Australia, who are acquiring their first home. There is no limitation on the age of applicants nor on the value of the dwelling involved. Estimated expenditure in 1976-77 under the new scheme is $15 million. {:#subdebate-38-89} #### Housing Loans to Savings Banks The *Banks (Housing Loans) Act* 1974 provided for a special appropriation of $150 million to be advanced to savings banks and certain other banks for the purpose of making additional housing finance available to give a short-term stimulus to activity and employment in the home building industry. Advances of $119.7 million were made to banks in 1974-75 to meet drawings against loan approvals; a further $30.1 million was advanced in 1975-76. An amount of $0.2 million was not drawn. Repayments totalling $53.1 million were received in 1975-76, including a prepayment of $38.2 million. Repayments in 1976-77 are estimated at $10.7 million. {:#subdebate-38-90} #### Defence Service Homes (Australian Housing Corporation) Administration of the Defence Service Homes Scheme has been the responsibility of the Australian Housing Corporation since 24 June 1975. The Government decided in February 1976 to abolish the Corporation; alternative administrative arrangements are now being developed for the Defence Service Homes Scheme. Meanwhile, an amount of $10.2 million is being provided to meet administrative expenses in 1976-77. An amount of $39.3 million is being advanced for the Defence Service Homes Scheme's lending program. An estimated $66.4 million representing principal repayments by borrowers will be retained by the Corporation for relending. Thus $105.7 million will be available for the Defence Service Homes program in 1976-77. As a result of the decision to abolish the Corporation, $9 million of the funds advanced to the Corporation in 1974-75 were repaid to Consolidated Revenue in 1975-76. A further amount of $34.6 million was repaid to Consolidated Revenue by the Corporation in 1975-76, representing total principal repayments by borrowers for the five months to 1 December 1975. From that date, principal repayments have been retained by the Corporation for relending. An interest subsidy of S24.5 million was paid to the Corporation in 1975-76; the estimated subsidy required for 1976-77 is $27 million. The interest subsidy reflects the extent to which interest charged to borrowers under the Defence Service Homes Scheme falls short of the interest rate payable to the Commonwealth on the Corporation's capital. Housing in the Territories Expenditure under this heading covers the construction of new houses and flats and advances to individuals for the construction of dwellings in the Australian Capital Territory and the Northern Territory. Of the S78.8 million allocated for dwellings to be built for sale or rental in 1976-77, $22.8 million will be allocated to the Australian Capital Territory and $56 million to the Northern Territory. Of the latter amount S53.6 million is for dwelling construction by the Darwin Reconstruction Commission. Included in the $50.7 million for 1976-77 under Other Gross Advances for Housing is an advance to the Northern Territory Housing Commission of $21.2 million for the purpose of building dwellings for sale or rental. Of the balance, SI 5.6 million will be available for first mortgage lending by the ACT Commissioner for Housing in 1976-77. This represents a reduction from the S29.1 million available in 1975- 76 and is consistent with the Government's decision to apply a more stringent means test for eligibility - more closely matching that in the States - for ACT Commissioner for Housing loans. For eligible Northern Territory residents, SI 3.8 million, including SI 1.5 million under a concessional scheme to allow rebuilding following Cyclone Tracy, will be available for first mortgage lending by the NT Home Finance Trustee, compared with $11 million in 1975-76. {:#subdebate-38-91} #### Housing for Aboriginals The Commonwealth Government provides special assistance to help meet the housing needs of Aboriginals. The Budget provides $28.3 million for this purpose in 1976- 77, $15 million less than actual outlays in 1975-76. The Government is reviewing the objectives, priorities and delivery of its programs in this area and the Budget provision is to cover outstanding firm commitments. Estimated outays include $6.5 million in grants to the States ($13.2 million in 1975-76) and $7.2 million in grants to Aboriginal Housing Associations ($19.3 million in 1975-76) for the construction and purchase of homes for Aboriginal families. The provision for the Aboriginal Housing and Personal Loans Fund of the Aboriginal Loans Commission will be increased from $7 million in 1975-76 to $10 million in 1976-77. Payments to Aboriginal Hostels Limited for the provision of hostel accommodation for Aboriginals are estimated at $3.7 million in 1976-77 compared with $3.5 million in 1975-76. {:#subdebate-38-92} #### Other Recoveries and Repayments Included here are rents received in respect of Government-owned dwellings in the Territories. Receipts from rentals in the Northern Territory are estimated to increase from $2 million in 1975-76 to $4 million in 1976-77. The level of rent receipts for the Northern Territory in 1975-76 reflected the concessional level of rentals applied from 1 July 1 975, following a six month rent-free period, for cyclone damaged dwellings. The increase in 1976-77 reflects an increase in the number of Government-owned dwellings being rented in the Northern Territory and the Government's decision to increase rentals from August 1976. Receipts from housing rentals in the A.C.T. are estimated to increase from $10.8 million in 1975-76 to $16.4 million in 1976-77. The increase reflects the full-year effect of increases in rents of Government dwellings in 1975-76 and a further increase, announced in June, to occur during 1976. {: type="1" start="6"} 0. URBAN AND REGIONAL DEVELOPMENT NEC AND THE ENVIRONMENT After increasing very rapidly to $408 million in 1975-76 outlays on activities encompassed under this heading are estimated to decline to $256 million in 1976-77. The Government has initiated a comprehensive review of all major urban and regional development programs and the nature and extent of its future involvement in them. Urban and Regional Development nec This heading brings together outlays of the Commonwealth Government on urban and regional development which are not classified to other functions. These include financial assistance for selected growth centres, land commissions, the area improvement program and urban rehabilitation. Initiatives in urban public transport are discussed under 'Transport and Communication' in the function 'Economic Services'. Expenditure on national parks and the national estate is classified to the function 'Culture and Recreation'. {:#subdebate-38-93} #### Growth Centres Pending the outcome of the current review of the Commonwealth's role in the development of growth centres, the Budget provides sufficient funds for existing growth centres to keep the Commonwealth's options open. The total allocation of $33 million includes $15 million for Albury-Wodonga and $2 million each for Bathurst-Orange and Macarthur. Most of the remaining $14 million is for capitalised interest on previous advances for these growth centres. {:#subdebate-38-94} #### Urban Rehabilitation In 1974-75 the Commonwealth Government acquired 700 dwellings on 19 hectares of land at Glebe from the Anglican Church at a cost of $17.5 million, with a view towards rehabilitating the Estate and preserving accommodation for low-income families. Expenditure on rehabilitation in 1975-76 amounted to S2 million. An amount of $1.1 million has been provided in the Budget for rehabilitation works in 1976-77. An amount of $10.3 million is provided in the Budget to meet the estimated cost in 1976-77 of the acquisition, planning and site development of land in the Woolloomooloo basin of Sydney. This continues the provision of financial assistance to New South Wales which commenced in 1975-76 under an agreement concluded with the State in 1974-75. The site is to be developed mainly for residential purposes. In addition to the provision of this financial assistance, the Commonwealth Government agreed to transfer to the State, at no cost, land valued in excess of $11 million. {:#subdebate-38-95} #### Urban Flood Mitigation The Commonwealth Government has undertaken in an agreement with the Queensland Government to provide 40 per cent of the cost of flood mitigation works on Breakfast Creek and Enoggera Creek in Brisbane. An amount of $1.8 million is provided in the Budget for this purpose in 1976-77, compared with $2.1 million in 1975-76. The 1976-77 estimates also include $0.1 million for assistance to Victoria for flood mitigation works at Seymour. {:#subdebate-38-96} #### Area Improvement Program The Area Improvement Program was established in 1973-74 with a view to helping to remedy deficiencies of public facilities in certain locations. Projects eligible for funding under the Program include planning activities, municipal drainage schemes, environmental protection, and acquisition and development of parklands and open space. The Government is at present reviewing its future involvement in these activities. Outlays on the Program amounted to $15 million in 1975-76. Assistance in 1976-77 is being limited to existing commitments which are estimated to amount to $0.6 million. {:#subdebate-38-97} #### Land Commissions/ Urban Land Councils The Commonwealth's involvement in urban land development programs is also under review. An amount of $15.1 million has been included in the Budget to meet existing commitments to the States for land commissions/ urban land councils; a further $10.4 million is to be provided in the form of capitalisation of interest payments. The assistance is for land acquisition and servicing of the land acquired (where these costs are not met from normal government subventions) . {:#subdebate-38-98} #### Other Urban Development and Amenities Expenditures on land acquisitions and development in the Australian Capital Territory and the N'orthern Territory are the major items included here; $38 million is included in the estimates for the Australian Capital Territory in 1976-77 and $3.8 million for the Northern Territory. {:#subdebate-38-99} #### Development of Aboriginal Community Amenities Expenditure in 1976-77 on the provision and improvement of facilities in Aboriginal Communities, including land purchase, water supply, sewerage and other services is estimated at $11.6 million, $1.7 million less than actual expenditure in 1975-76. This includes grants to the States ($1.5 million) and direct expenditure by the Commonwealth Government ($10.1 million). Protection of the Environment The main expenditure items under this heading in 1976-77 include financial assistance to New South Wales for pollution abatement work on the Captains Flat mine dumps ($1.2 million) and expenditure on air monitoring activity ($226 000), public hearings on environmental impact statements ($250 000) and grants to conservation bodies ($400 000). {:#subdebate-38-100} #### Sewerage and Garbage The Commonwealth is reviewing its future role with respect to the provision of assistance to the States for sewerage works. An amount of $50 million is provided in the Budget for further advances to the States in 1976-77, compared with $113.2 million in 1975-76. Repayments of previous advances under this program are estimated at $0.4 million in 1976-77, compared with $0.1 million in 1975-76. An amount of $8.7 million is provided for expenditure by the Darwin Reconstruction Commission on sewerage and garbage works. This is an increase of $4.7 million over funds made available in 1975-76 and reflects the high priority given to the replacement and repair of facilities damaged or destroyed by Cyclone Tracy. A further $24 million is included for the construction of sewerage, garbage and stormwater facilities in the Australian Capital Territory and the Northern Territory. The major project is the Lower Molonglo Water Quality Control Centre in the Australian Capital Territory; expenditure on this project in 1976-77 is estimated at $17 million. {:#subdebate-38-101} #### General Administrative Expenditure This item includes the administrative expenditure of the Department of Environment, Housing and Community Development ($13.1 million), the Darwin Reconstruction Commission ($3 million) and the National Capital Development Commission ($20.4 million). (The Cities Commission, previously included under this item was abolished by the *Cities Commission (Repeal) Act* 1975, on 19 January 1976.) The 1976-77 estimate also includes $0.3 million in respect of the Commonwealth's one-third contribution to the estimated administration expenses of the Albury-Wodonga Development Corporation. Under the present arrangements the administrative expenses of the Corporation are shared equally by the Commonwealth, New South Wales and Victoria. These arrangements are expected to be reviewed by the three parties during 1976-77. {: type="1" start="7"} 0. CULTURE AND RECREATION The Commonwealth Government provides funds for a wide range of cultural and recreational activities. Outlays in 1976-77 are estimated to total $253.9 million, about the same as in 1975-76. {:#subdebate-38-102} #### National Broadcasting and Television Service The programs of the National Broadcasting and Television Service are presented by the Australian Broadcasting Commission and broadcast through transmitters operated for the Postal and Telecommunications Department by the Australian Telecommunications Commission. The Budget provision of $156.2 million for 1976-77 (compared with actual expenditure of $164.3 million in 1975-76) reflects the Government's decision to reduce Budget outlays on the Australian Broadcasting Commission and to reduce the further development and expansion of the National Broadcasting and Television network. {:#subdebate-38-103} #### Planning and Regulation of Broadcasting and Television The Broadcasting Control Board is responsible for the regulation and control of broadcasting by commercial radio and television stations and for planning the development of radio and television services generally. The estimates include $5 million for the Board in 1976-77, compared with $4.9 million in 1975-76. {:#subdebate-38-104} #### Ethnic Broadcasting Experiment An amount of $105 000 has been provided for the continuation of the ethnic broadcasting experiment in Sydney and Melbourne until the end of September 1976. By that time it is intended that plans will be announced for longer-term ethnic broadcasting. The figures shown in the table do not include about $0.2 million for salaries and other administrative expenditure incurred over the period of the experiment (May 1975 to September 1976) by the former Department of the Media and the Postal and Telecommunications Department in supporting the experiment. {:#subdebate-38-105} #### Libraries Included under this heading is expenditure on the National Library of Australia, the Canberra Public Library Service and library services provided in the Northern Territory. Total outlays are expected to increase by $1.4 million in 1976-77, mainly because of the higher running costs of the National Library. {:#subdebate-38-106} #### Australian National Gallery and Collection The Australian National Gallery will operate as a separate statutory authority from 1976-77. Its total allocation in 1976-77 includes $0.8 million for administration, $3.5 million for the acquisition of further items for the National Collection, including works of Australian art, and $5 million for construction expenditure on the National Gallery building. *Assistance to the Arts* The Australia Council's programs of support for the arts are included under this heading. The Council operates with the assistance of Boards responsible for theatre, music, literature, aboriginal arts, crafts, and visual arts. Changes in the role of the Council, its structure and methods of operation were announced in the Prime Minister's Statement on the Arts in June 1976. One change is that the film, radio and television responsibilities of the Council have been transferred to the Australian Film Commission. The amount provided for the Council's programs in 1976-77 (excluding its administrative costs) is S19.4 million, compared with expenditure of $19.8 million in 1975-76. The Council's administrative expenditure in 1976-77 is estimated at $3 million. Also included under this heading is an amount of $0.7 million for 1976-77 operations of the Public Lending Right Scheme, under which payments are made to Australian authors and publishers. The Australia Council is to assume responsibility for this scheme. {:#subdebate-38-107} #### Film Industry Development An amount of $3.7 million is included in the Budget for the Australian Film Commission which encourages the making, promotion, distribution and exhibition of Australian films (including television programs). This provision represents an increase of S0.8 million on payments in 1975-76. {:#subdebate-38-108} #### Archives The Government will continue to develop, preserve and maintain archival resources that are of national significance or of general public interest. The 1976-77 Budget provides $5.4 million for these purposes. This includes $1.3 million for the Archives building program, relating in the main to the construction of a new repository at Victoria Park (W.A.). {:#subdebate-38-109} #### Youth, Sport and Recreation Expenditure on youth, sport and recreation activities in 1976-77 is estimated at $13.7 million, an increase of $2.3 million over 1975-76 expenditure. An amount of $11.1 million has been provided to meet existing commitments under the Capital Assistance for Leisure Facilities Program. Grants under this Program are generally made through the States, with the States, local government bodies and voluntary organisations normally contributing towards the cost of projects. Grants under this scheme in 1975-76 amounted to $6.3 million. Pending the outcome of an overall review of programs in this area an amount of $1.1 million 'has been provided for youth, sport, national fitness and recreation programs in 1976-77. This compares with actual expenditure of $2.7 million in 1975- 76. {:#subdebate-38-110} #### Other Cultural Organisations Expenditure in 1975-76 relating to the continuation of special activities in connection with the objectives of the United Nations International Women's Year amounted to $987 000. In 1976-77 $40 000 has been allocated to cover outstanding commitments. {:#subdebate-38-111} #### Wildlife and National Parks The major item of expenditure under this heading relates to grants to the States to acquire land for nature conservation purposes. The provision for this purpose in 1976- 77 is $3.3 million. Expenditure in 1975-76 was $1.3 million. An amount of $0.5 million is being provided in 1976-77 for the natural environmental investigations and surveys program, $150 000 for support for the Great Barrier Reef Marine Park Authority and $240 000 for the National Parks and Wildlife Service. The Service will have a total of $1.1 million available to it in 1976-77 when account is taken of the carryover of funds from 1975-76. {:#subdebate-38-112} #### National Estate The program of assistance to State and local government bodies, National Trusts and other bodies for the protection of the National Estate was reviewed in 1975-76. An amount of $1.9 million is provided for this program in 1976-77 to finance approved projects outstanding from the 1975-76 program. The Australian Heritage Commission is now in operation. Its responsibilities include the development of procedures for the protection of the National Estate. The Commission is compiling a national register of the National Estate which will identify and categorise all historical sites, buildings and areas of national historical importance that are worthy of restoration and preservation. The running costs of the Commission in 1976-77 are estimated at $0.3 million. *Cultural and Recreational Activities in the Territories nec* Included here is a range of mainly 'State' and municipal-type expenditures relating to such activities as the construction and/ or maintenance of parks and gardens, halls, swimming pools and theatres, together with assistance to cultural organisations in the Territories. Expenditure on these activities is estimated at $16.5 million in 1976-77, $1.4 million more than in 1975-76. {: type="1" start="8"} 0. ECONOMIC SERVICES This function brings together the various services and categories of assistance provided by the Commonwealth Government to industry and the community generally. It embraces the provision of economic infrastructure, the regulation of private sector economic activity and more direct forms of Government participation in economic activity. {: type="A" start="A"} 0. TRANSPORT AND COMMUNICATION The Budget provides $1043 million for transport and communications activities in 1976-77, $285 million less than in 1975-76. {:#subdebate-38-113} #### Communication Since 1 July 1975 postal and telecommunications services have been provided by the Australian Postal Commission and the Australian Telecommunications Commission, respectively. Each Commission is required to operate on a commercial basis with the financial objective of generating, by way of charges for services, such amounts as are necessary to meet all operating costs plus at least half of its capital expenditure. The remainder is financed through borrowings which in 1975-76 were wholly interestbearing advances from the Budget. In 1976-77 it is estimated that the Australian Telecommunications Commission will need to borrow $415 million. The Government proposes that $215 million of this will be provided as advances from the Budget and that the Commission should seek to borrow the remaining $200 million on the domestic capital market. The Australian Postal Commission is not expected to require any advances from the Budget in 1976-77; rather, it is expected to repay $3 million. Radio frequency management, as provided for in the *Wireless Telegraphy Act,* includes regulation of the operations of over 240 000 radio communications stations in Australia. {:#subdebate-38-114} #### Air Transport Advances by the Commonwealth to Qantas Airways Ltd and the Australian National Airlines Commission mainly represent the passing on of proceeds of loans raised by the Government on behalf of the airlines to assist in the financing of aircraft. Amounts repaid by the airlines to the Government in respect of past loans are in turn repaid to the lenders. The proposed advances to Qantas in 1976-77 are to enable the airline to make the final payment on its twelfth Boeing B747 aircraft, while the proposed advances to TAA are to assist in purchasing its seventh Boeing B727-200 aircraft. The Department of Transport provides many services to the air transport industry, including the provision and operation of about 90 airports and of air navigational facilities. Those activities account for the major portion of administrative and operational expenditure and outlays on buildings, works and equipment. Efforts are being made to achieve economies in the provision of civil aviation services which are expected to lead to expenditure in this area being lower, in real terms, in 1976-77 than in 1975-76. Expenditure on buildings, works and equipment includes $2 million for continuation of the Brisbane Airport land acquisition program, $0.75 million for land acquisitions at Melbourne Airport and $3.5 million for further payments on three F28 aircraft to be delivered in 1976-77 for use by the Department of Transport in testing navigational aids. The Government has decided to provide special assistance in 1976-77 to Connair Pty Ltd and Bush Pilots Airways Ltd, which provide air services in northern Australia. At the same time a study is to be undertaken of the optimum arrangements for providing in the longer term for the essential air transport needs of the area served by Connair. Other developmental air service subsidies will continue to be phased out. The Government has agreed that annual grants be extended for three years from 1 July 1976 to the three main organisations representing the general aviation industry, the Royal Federation of Aero Clubs of Australia, the General Aviation Association (Australia) and the Gliding Federation of Australia. The total cost of the grants in 1976-77 is $61 000. As a further step towards achieving increased recovery of costs of providing airports and airways facilities, air navigation charges are to be increased from 1 December 1976 by 15 per cent, the maximum allowed under the 1973 Airlines Agreement with the two major domestic airlines. This increase is estimated to yield additional revenue of about $4 million in 1976-77 and $8 million in a full year. The balance of the increase in receipts from air navigation charges is due to the full-year effect of the 1975-76 increase in charges, and to traffic growth. The level of cost recovery is expected to be about 61 per cent in 1976-77 compared with about 60 per cent in 1975-76. The Government has also taken the opportunity to review the scale of charges levied on the international airlines. Whereas all scheduled international routes are now subject to the same rate of charge, legislation will be introduced to vary the charges payable on individual routes so that they more directly reflect the cost of the facilities and services provided. No change in revenue is expected as a result of these changes. Revenue from business concessions at airports and rentals paid by airlines for airport terminals are the major elements of revenue included in other recoveries. Estimated revenue in 1976-77 also includes an amount of $1.5 million from charges to be introduced in 1976-77 for a wide range of regulatory services formerly provided by the Department of Transport at little or no cost to the user. {:#subdebate-38-115} #### Road Transport Under the *Commonwealth Aid Roads Act* 1969 grants totalling $1 252 million were provided to the States over the five years 1969-70 to 1973-74. Continuing arrangements for the three years 1974-75 to 1976-77 are embodied in three Acts - the *National Roads Act* 1974, the *Roads Grants Act* 1974, and the *Transport (Planning and Research) Act* 1974. Following the Premiers' Conference on 14 February 1975, the then Prime Minister announced that an additional $30 million in road grants would be made available to the States in 1974-75 to assist employment in the roads sector; in the event total grants in 1974-75 amounted to $368 million. In 1975-76 a further additional grant of $64 million was made available as an offset against increases in road construction costs, which had occurred at rates higher than allowed for in the scheduled appropriations of the *Roads Grants Act* 1974 and *National Roads Act* 1974. Those additional funds were appropriated by the *Roads Acts Amendment Act* 1976. The Government has decided to increase the road grants payable to the States in 1976-77 by $35.8 million over and above that available under existing appropriations. This will bring the total amount available in 1976-77 to $433.5 million. As was the case in 1975-76, these additional grants are being made to help offset increases in road construction costs over and above those provided for in the earlier appropriations. An amount of $8 million is to be provided to the States in 1976-77 for expenditure on approved planning and research projects in relation to roads and urban public transport. Of the $31.5 million included in the estimates for road construction and maintenance in the Territories, $2.8 million has been provided for the maintenance of beef cattle roads in the Northern Territory, $15.6 million for the construction and maintenance of other roads in the Northern Territory and $13.1 million for roads in the Australian Capital Territory. Outlays on other road construction and maintenance include $15.2 million in assistance subsequent to the Tasman Bridge disaster, including restructuring of the Bridge to provide an additional traffic lane. Of this total an amount of $650 000 is provided for the continuation of design and related investigations for the proposed second Derwent bridge at Dowsings Point, Hobart. Repayments by Queensland of advances provided for the construction of beef cattle roads are estimated at $0.6 million. An amount of $4.4 million has been provided for the purchase of new and replacement equipment for the Canberra bus service and the Commonwealth car fleet in the Australian Capital Territory. Outlays for these purposes in 1975-76 amounted to $7.7 million. {:#subdebate-38-116} #### Rail Transport The provision for the Australian National Railways comprises $60.8 million to meet estimated operating losses and $36.1 million for its capital program. These figures include provisions in respect of the Tasmanian and non-metropolitan South Australian railway systems, for which the Australian National Railways has had financial responsibility since 1 July 1975. A major element in the capital program is the construction of a railway between Tarcoola and Alice Springs. The capital program also provides $4.3 million for essential works on the Tasmanian railway system pending the outcome of the current review of the system. The major outlay under the heading 'Other Rail Transport (net)' is an advance of $2 million for expenditure on the construction of a standard gauge railway between Adelaide and Crystal Brook. This project is to be reviewed by an independent committee of inquiry and the amount included in the Budget has been restricted to firm commitments pending the findings of the inquiry. Expenditure on the line in 1975-76 was $5 million. This and other smaller outlays, however, are more than offset by repayments of previous advances for rail projects in the States. {:#subdebate-38-117} #### Urban Public Transport The Commonwealth Government is providing financial assistance to the States, under the terms of the Urban Public Transport Agreement, to meet two-thirds of the cost of approved urban public transport projects. Payments to the States under the terms of the Agreement to the end of 1975-76 totalled $78.9 million and further expenditure of $64.6 million, including an estimated $20 million to meet the Commonwealth's share of cost escalation on projects approved under the Agreement, is proposed in 1976-77. {:#subdebate-38-118} #### Shipping and Harbours An amount of $63.4 million is provided for advances to the Australian Shipping Commission in 1976-77, primarily to meet commitments entered into by the Commission by mid- 1976. These commitments include contracts for the construction of four bulk carriers (two 120 000 d.w.t. and two 25 000 d.w.t.), one vehicle deck cargo vessel, one vehicle deck container vessel, associated seaborne and onshore equipment and a container terminal at Botany Bay. The Commission is expected to repay $40.7 million of earlier loans from the Budget. Of that amount, $35.7 million represents an early repayment of loans to finance two 139 000 d.w.t. bulk carriers which is expected to be made after the Commission obtains alternative finance overseas for those vessels. An amount of $16 million is provided for the Tasmanian freight equalisation scheme. Under this scheme Tasmanian consignors will receive a subsidy from the Commonwealth in respect of eligible cargoes shipped by sea from Tasmania to the mainland. The scheme is aimed at making the door-to-door freight cost of eligible cargoes shipped from Tasmania to the mainland approximate the door-to-door costs of moving similar goods by road or rail over similar distances on the mainland. The Government has agreed to' extend the scheme to producers' goods and materials shipped from the mainland to Tasmania. Details of the assistance to apply to eligible southbound cargo have still to be announced. The Budget also includes subsidies payable to the Australian Shipping Commission of $2 million for the 'Empress of Australia' passenger service between Tasmania and the mainland and $2.8 million for retrospective payment of losses incurred by the Commission in 1975-76 on northbound general cargo carried from Tasmania to the mainland. 'Other' outlays of $3.6 million in 1976-77 include $2.5 million for capital expenditure, mainly by the Department of Transport on navigational aids and facilities. {:#subdebate-38-119} #### Pipeline Authority Project The advance of $43.5 million provided for the Pipeline Authority in 1976-77 includes $21.4 million to meet interest payable by the Authority in respect of its borrowings and $19 million for the completion of the Moomba-Sydney pipeline which is expected to be in operation by late 1976. {:#subdebate-38-120} #### General Administrative and Other Expenditure An amount of $26.1 million is provided in 1976-77 for the running expenses of the Department of Transport (excluding expenses related to the provision of air transport services), of which $18.4 million represents wages and salaries. {:#subdebate-38-121} #### Other Recoveries Light dues, which are charged on commercial shipping for the use of marine navigational aids provided by the Commonwealth, are the major source of recoveries under the heading. As announced in the Budget Speech, it is proposed to increase the charge from 1 October 1976 from 31 cents to 35 cents per net registered ton per quarter. The increase in the charge is expected to raise an additional $1.7 million in 1976-77. {: type="A" start="B"} 0. WATER SUPPLY AND ELECTRICITY Budget outlays on water supply and electricity projects are estimated to total $74.1 million in 1976-77, an increase of $3.4 million compared with 1975-76. {:#subdebate-38-122} #### Urban Water Supply The Commonwealth Government is continuing to provide financial assistance to the Queensland Government to help finance the construction of the Ross River Dam, Stage 2, near Townsville. Of the total grant of $2.6 million, $1.2 million is expected to be made available in 1976-77. The Budget includes an amount of $9.4 million for assistance to South Australia for water treatment works in Adelaide compared with $8.9 million in 1975-76. The Scheme is designed to upgrade the quality standards of the Adelaide water supply. Also included is an amount of $20.1 million for water supply works in the Australian Capital Territory and $1.6 million for the Northern Territory. The estimate for the Australian Capital Territory includes $15 million for the Googong Dam, which is expected to be completed during the summer of 1978 and which will bring water storage capacity to a level capable of sustaining a population of around 400 000 in the Canberra-Queanbeyan area. {:#subdebate-38-123} #### Snowy Mountains Scheme The diminishing level of outlays on the Snowy Mountains Scheme over recent years reflects the virtual completion of the Scheme. The proposed payment of $1.5 million to the Snowy Mountains Hydro-Electric Authority will enable the Authority to undertake a program of completing permanent works essential to the Scheme. The Government is investigating ways in which the New South Wales and Victorian Governments might share in financing assets required for the operation and maintenance of the Snowy Scheme. In the meantime the Authority will not undertake commitments except in respect of assets which clearly form part of the permanent works of the Scheme. {:#subdebate-38-124} #### Gladstone Power Station The Commonwealth Government is providing assistance to the Queensland Government, by way of loans, to help finance the construction of a thermal power station at Gladstone in central Queensland. Assistance provided by the Australian Government for the project is proportionate to the total cost of the power station in the ratio of 80 to 155. Payments of $32.4 million and $39 million were made in 1974-75 and 1975-76 and it is estimated that a further $26.5 million will be required in 1976-77. *Electricity Supply in the Territories* The increase of $5.2 million in estimated expenditure in 1976-77 largely reflects the work being undertaken in Darwin by the Darwin Reconstruction Commission, for which funds amounting to $18.8 million are provided in the Budget. That estimate includes provision for the continuing rehabilitation of electricity reticulation, servicing of sites for new housing and for Stage 6 of the Stokes Hill Power Station. {:#subdebate-38-125} #### Repayments Repayments under this heading in 1976-77 are estimated at $8 million, consisting of repayments of $5 million by the Snowy Mountains Hydro-Electric Authority, and S3 million by the Tasmanian Government in respect of assistance provided for hydro-electric power development. {: type="A" start="C"} 0. INDUSTRY ASSISTANCE AND DEVELOPMENT The Commonwealth Government assists industry through a variety of measures, including direct financial assistance, taxation concessions, guaranteed home price arrangements, financial guarantees and the customs tariff. Net direct assistance from the Budget (i.e. after deducting amounts collected by way of industry levies and charges such as the wool tax and the livestock slaughter levy) is estimated at $131 million in 1976-77, compared with $351 million in 1975-76. Direct industry assistance takes the form of bounties and subsidies, reconstruction schemes, contributions to research and promotion programs, and other payments to or for the benefit of industry. It includes also some outlays by Government departments and instrumentalities (e.g. Department of Overseas Trade, Department of Industry and Commerce, Department of Primary Industry and the Australian Tourist Commission); such organisations provide many services either free or for charges which do not recover fully the costs incurred. Apart from these direct outlays from the Budget, substantial additional assistance has been provided through the Budget by way of special taxation concessions which, as they result in a reduction of Government revenues, are as much a call on the Budget as direct outlays. The amount of revenue forgone in 1975-76 through the main taxation concessions for which data are available is estimated to have been $146 million. Further information relating to these taxation concessions is provided at the end of the commentary on this sub-function. Outlays under some other functional headings in this Statement also assist industry. Examples include the provision of airports and airways facilities for the aviation industry, assistance for the development of the film and television industry, some specific purpose payments to the States, expenditure to improve the defence capacity of industry, and part of the expenditure on the CSIRO. Outlays for net direct industry assistance in recent years, together with estimates for 1976-77, are shown in the following table and described in the brief commentary which follows. {:#subdebate-38-126} #### Forestry and Fishing Industries {:#subdebate-38-127} #### Softwood Forestry Development Under the *Softwood Forestry Agreements Act* 1972 the Australian Government has provided financial assistance for a five-year planting program ending on 30 June 1976. As in the previous Agreement, the assistance provided was by way of interestbearing loans repayable over twenty-five years, with repayments and the payment of interest to commence approximately ten years after the date of each advance. Payments amounting to $29.3 million have been made to the States under this Agreement up to 30 June 1976 including payments of $7.9 million in 1975-76. The Commonwealth Government has decided to extend the agreements authorised by the *Softwood Forestry Agreements Act* 1972 by one year, with amounts payable to each State calculated in accordance with the principles embodied in the present Act but limited in the aggregate to $6 million. The future of the agreements beyond 1976-77 is to be the subject of a review. Estimated outlays in 1976-77 also include $1.5 million of final payments with respect to plantings in 1975-76. {:#subdebate-38-128} #### Agricultural and Pastoral Industries {:#subdebate-38-129} #### Wool Industry The Government has authorised the Australian Wool Corporation to operate a minimum reserve price of 234 cents per kilo clean on a whole clip average basis for the 1976-77 and 1977-78 wool selling seasons. (This reserve price is equivalent to 275 cents per kilo clean for 21 micron wool.) The Corporation will continue to regulate the flow of wool onto the auction market to improve the balance between quantities of wool supplied and demanded and will exercise a 'pot-holing' function to reduce losses due to random movements in prices when the market is above the floor. It is expected that there will be a significant reduction during 1976-77 in stocks held by the Australian Wool Corporation, and the Corporation is expected to repay $245 million of funds borrowed earlier from the Government. The wool tax (8 per cent on the gross return from wool sold) is estimated to yield $81.2 million in 1976-77. This includes a special levy of 5 per cent on the gross return of wool sold to offset any losses which may arise from the operation of the reserve price scheme. It is estimated that an amount of $50.8 million will be collected and paid to the Corporation's Market Support Fund. Of the estimated expenditure of $51.4 million in 1976-77 for wool research and promotion, $30.4 million is expected to be contributed by the industry from the proceeds of the Wool Tax. {:#subdebate-38-130} #### Wheat Industry The sixth Wheat Industry Stabilisation Scheme commenced with the marketing of the 1974-75 crop and covers the seasons 1974-75 to 1978-79. On 1 July 1976 the Stabilisation Fund had a credit balance of $55.1 million derived from grower contributions plus interest received under the previous scheme. During the year it is expected that growers will contribute $60.1 million to the Fund. There is an upper limit of $80 million for balances remaining in the Fund so the excess of $42.2 million (including interest received during the year) will be repaid to growers. "No stabilisation payments by the Commonwealth are due in 1976-77. {:#subdebate-38-131} #### Dairy Industry Under the Dairy Adjustment Program, which replaced and broadened the Marginal Dairy Farms Reconstruction Scheme, assistance is provided to develop and diversify dairy farms. The Program was due to expire on 30 June 1976, but has been extended to 31 December 1976 and has been widened to include carry-on finance and to expand the range of diversification activities eligible for assistance. In May 1976 the Commonwealth announced the underwriting for the 1975-76 season of the equalisation value for skim milk powder at $300 per tonne. The Commonwealth has proposed that the cost be shared by the Commonwealth and the States on a two-to-one basis. First payments under the scheme are not expected to be made before the end of 1976-77. The Industries Assistance Commission is to report by 31 August 1976 on marketing arrangements for the dairy industry. {:#subdebate-38-132} #### Fruit Industry The Commonwealth has decided to extend the various reconstruction and stabilisation schemes in operation in recent years for a further 12 months, subject to some amendments in the rates and limits of assistance, following initial consideration of related reports by the Industries Assistance Commission. For the 1976 season, the maximum rate of assistance for apple exports under the Apple and Pear Stabilisation Scheme will be increased from 80 cents per bushel to $2 per bushel and the limit on total assistance for apple and pear exports will be increased from $3.5 million to $5.1 million; it is expected that the maximum Commonwealth stabilisation contribution of $5.1 million will be required in 1976-77. In addition, the Commonwealth has joined with the State Governments in a supplementary scheme to assist apple exports to the U.K. and Europe in 1976 on a matching $ for $ basis, subject to a maximum Commonwealth contribution of $0.5 million. The Commonwealth provided $0.9 million under similar supplementary arrangements for apple exports in 1975. Under the Fruitgrowing Reconstruction Scheme, which was introduced in 1972 with an upper limit of $4.6 million, assistance has been provided to growers for the removal of fruit trees deemed surplus to long-term market requirements. The scheme has recently been extended to allow applications for assistance to be received until 31 December 1976 and the eligibility criteria for assistance have been liberalised. The upper limit on the assistance available will be increased to $5.6 million to cope with a high rate of applications from canning fruit growers. Estimated expenditure under the scheme in 1976-77 is $1.5 million. The Dried Vine Fruit Stabilisation Scheme has been extended on an unchanged basis for 1976, and it is estimated that a Commonwealth contribution of $0.6 million will be required in 1976-77 because of declining export returns. The last occasion on which the Commonwealth had to contribute towards the scheme was 1973-74. {:#subdebate-38-133} #### Poultry Industry Expenditure on stabilisation and research in the poultry industry is mostly financed from industry levies which flow back to the industry through State egg marketing authorities in accordance with the terms of the egg industry stabilisation scheme. {:#subdebate-38-134} #### Cattle, Sheep and Pig Meat Industry In 1975-76 the Commonwealth undertook to provide up to $19.6 million under the *States Grants (Beef Industry) Act* to match State contributions for a joint scheme to provide carry-on finance at concessional rates of interest to specialist beef producers who, while judged to be viable under normal market conditions, lacked finance and were unable to obtain carry-on funds from normal sources. The actual amount provided in 1975-76 was $11.3 million. The scheme has been extended and the Commonwealth has agreed to provide up to $15 million for the scheme in 1976-77. Outlays for meat export inspection and animal health services undertaken by the Bureau of Animal Health are estimated at $26.7 million, compared with $22.4 million in 1975-76. Charges for meat export inspections outside prescribed hours are estimated to yield $2 million in 1976-77. Since January 1970 the Commonwealth has assisted the States in financing an intensified campaign for the eradication of bovine brucellosis and tuberculosis. By June 1976, $27.6 million had been paid to the States, including $8.2 million in 1975-76. A further $12 million, of which about $11.2 million would be paid to the States, is provided for 1976-77. The charge of 0.6 cents per lb on all beef exports introduced in 1973-74 to recoup the Commonwealth's expenditure incurred in this campaign was suspended from 1 March 1976. From 1 July 1976 recoupment is to be by way of a livestock slaughter levy of $1 per head on all cattle slaughtered. This will raise an estimated $7.8 million in 1976-77. The Commonwealth Government joined the States in July 1973 in a scheme to compensate owners of livestock slaughtered following a positive reaction to bovine tuberculosis tests. Payments to 31 December 1975 amounted to $0.8 million. The Government has accepted the recommendation of the Industries Assistance Commission that this scheme be continued from 1 January 1976 and has decided to liberalise the basis for compensation payments after 1 July 1976. The Government has also accepted the Commission's recommendation that a 'brucellosis slaughter' compensation scheme be introduced from 1 July 1976. A total of $6.5 million is provided in 1976-77 for such compensation, including about $6 million for payment to the States. Expenditure on research and promotion is estimated at $8.7 million in 1976-77 compared with $8.4 million in 1975-76. About $6 million of this expenditure will be financed by industry livestock slaughter levies. Outlays not Allocated to Specific Agricultural and Pastoral Industries *Rural Lending* The Commonwealth Government advanced $8 million to the Commonwealth Development Bank in 1975-76 to augment the Bank's capacity to lend to beef producers whose capital structures had been seriously affected by adverse trends in beef prices but who, in the opinion of the Bank, remained viable. This followed an advance of $20 million for the same purpose in 1974-75. {:#subdebate-38-135} #### Rural Reconstruction Scheme Under the *States Grants (Rural Reconstruction) Act* assistance is made available to the States on a 75 per cent loan/ 25 per cent grant basis for a scheme which embraces debt reconstruction, farm build-up and rehabilitation. The scheme, which was to be terminated on 30 June 1976, will be extended to 31 December 1976 pending consideration of proposals for a new scheme. By 30 June 1976, $189.3 million had been paid to the States and a further $27 million has been provided for 1976-77. {:#subdebate-38-136} #### Fertilizer Bounties The *Nitrogenous Fertilizer Subsidy Act* 1966 authorises subsidy payments on the basis of the nitrogen content in natural sodium nitrate, and in manufactured nitrogenous substances produced and sold in Australia as fertilizer. Late in 1975 the Act was extended to 31 December 1976, continuing the $78.74 per tonne subsidy rate, pending consideration of the Industries Assistance Commission report on the subsidy. The Government has accepted in principle the Commission's recommendation that the subsidy be phased out and, as announced in the Budget Speech, proposes that the subsidy rate from 1 January 1977 be $60 per tonne. On that basis, subsidy payments in 1976-77 are estimated at $12 million. The *Phosphate Fertilizer Bounty Act,* which provided for the payment of a bounty in respect of superphosphate and ammonium phosphate produced and sold for use in Australia, expired on 31 December 1974. Following an interim report of the Industries Assistance Commission, the bounty was reintroduced with effect from 11 February 1976 at the previous rate of $11.81 per tonne. The future of the bounty, which is presently scheduled to expire on 30 June 1977, will be considered by the Government in the light of the Industries Assistance Commission's final report which is due by 31 October 1976. Payments in respect of the bounty are estimated to amount to $50 million in 1976-77. {:#subdebate-38-137} #### Agricultural Extension and Research Since 1948-49 annual grants have been made to the States to promote improved farm practices in the dairy industry. Further grants have been provided since 1952-53, for expansion in the States of agricultural advisory services generally. In addition to the funds provided to the States, a small amount is spent directly by the Commonwealth Government on projects nominated by the States which are of national interest. Up to 30 June 1976 about $70 million had been provided for these purposes. The estimates provide for a further $10.1 million in 1976-77. The Government has decided that the scheme should be reviewed. {:#subdebate-38-138} #### Irrigation and Other Pastoral Water Projects Expenditure under this heading comprises Commonwealth Government financial assistance to the States for rural water conservation and irrigation purposes and flood mitigation. The main items provided for in 1976-77 represent continuing assistance for the Clare Weir in Queensland ($2.6 million) and the Dartmouth Dam on the Mitta Mitta River in Victoria ($14.5 million). The estimates also include provision of $1 million to New South Wales towards the cost of construction of three weirs on the Namoi River. Under a program of water resources assessment $6.7 million will be provided to the States in 1976-77 for surface water measurement and for investigation of underground water resources. Additional information on these projects is contained in Budget Paper No. 7: *Payments to or for the States and Local Government Authorities 1976-77.* {:#subdebate-38-139} #### Land Development Projects {:#subdebate-38-140} #### Soil Conservation The provision of $0.5 million for 1976-77 represents payments to the States under the *States Grants (Soil Conservation) Act* 1974, which provided for an interim program of financial assistance for State soil conservation programs. Concurrent studies by the Commonwealth Government are also nearing completion. {:#subdebate-38-141} #### Brigalow Lands Development Scheme The *Brigalow Lands Agreement Act* 1962 approves an agreement with Queensland for the provision of financial assistance to that State for land development in the Fitzroy River Basin. The Act provides for assistance, subject to an overall limit of $23 million, to finance expenditure incurred by the State on specified works during the thirteen years ending 30 June 1975. The assistance has been in the form of interest-bearing loans repayable over twenty years. Payments amounting to $16 million have been made to Queensland under this Agreement up to 30 June 1975, including $2.2 million in 1975-76. An estimated $0.8 million will be provided in 1976-77 in respect of expenditure by the State before 30 June 1975. {:#subdebate-38-142} #### Repayments Estimated repayments of $5.2 million in 1976-77 include $3.8 million in repayments by War Service Land Settlers. {:#subdebate-38-143} #### Administrative and Other Expenditure Included under this heading are the administrative expenses of the Department of Primary Industry and the Bureau of Agricultural Economics. Also included is $250 000 in respect of locust control activities. The Government finances the Plague Locust Control Commission on a dollar for dollar basis with the States of New South Wales, Victoria, South Australia and Queensland up to a maximum Commonwealth/ State expenditure of $500 000 per annum. {:#subdebate-38-144} #### Mining Industry {:#subdebate-38-145} #### Uranium Exploration and Development In October 1974, the then Government decided that all new exploration for uranium in the Northern Territory was to be carried out by the Australian Atomic Energy Commission as the agent of the Commonwealth. The 1975-76 Budget included $5.6 million for uranium exploration and development activities of the Commission. Mainly because of investments by the Commission in uranium mining ventures, actual expenditure totalled $10.7 million. In early 1976 the present Government decided to discontinue uranium exploration by the Commission at the end of the current field season; the $1.7 million provided for this purpose in 1976-77 accords with this decision. {:#subdebate-38-146} #### Petroleum and Minerals Authority In June 1975 the High Court handed down a decision declaring the Petroleum and Minerals Authority Act invalid. In 1974-75, $50 million was advanced to the Petroleum and Minerals Authority to enable it to carry out its responsibilities. Following the High Court decision, an amount of $46.3 million, the balance of funds held by the Authority, was repaid to the Commonwealth in 1975-76. {:#subdebate-38-147} #### Petroleum Search Subsidy The Petroleum Search Subsidy Scheme expired on 30 June 1974. An amount of $5.9 million was paid in 1974-75 and $0.2 million in 1975-76 for approved exploration programs completed before 30 June 1974. There are no further outstanding commitments. {:#subdebate-38-148} #### Bureau of Mineral Resources The ongoing activities of the Bureau, for which the Budget provides $12.5 million in 1976-77, are a significant form of assistance to the mining industry through its work in gathering, storing and publishing geological and geophysical information relevant to the exploration and development by industry of the nation's mineral resources. {:#subdebate-38-149} #### Other Mining Outlays under this heading include a $4.2 million contribution to the financing of the International Tin Council's 'buffer-stock', an $0.8 million contribution towards administrative costs of the Joint Coal Board, $0.7 million for the operation of the Northern Territory Mines Branch and $0.4 million for the Commonwealth's contribution towards coal utilisation research. Offset against those outlays is an estimate of net revenue in 1976-77 from the divestment by the Commonwealth of assets acquired by the former Petroleum and Minerals Authority. {:#subdebate-38-150} #### Manufacturing Industry {:#subdebate-38-151} #### Shipbuilding Assistance Assistance is payable in respect of the construction of vessels in Australia following a case-by-case examination by the Australian Shipbuilding Board. Assistance for new shipbuilding contracts is provided under the *Ship Construction Bounty Act* 1975 as a direct bounty to shipbuilders. Currently the maximum level of assistance is 35 per cent but the Government's shipbuilding policy provides for a phased reduction in the level of assistance, to an eventual long-term rate of 25 per cent by December 1980. Prior to the enactment of the bounty legislation in June 197S, a shipbuilding subsidy was provided by the Commonwealth buying ships and then selling them to shipowners at a lower price (under the authority of the Australian Shipping Commission Act). The bulk of assistance is still being paid under those arrangements because tenders for the vessels concerned were called before June 1975. Budget outlays under both schemes are estimated at $25.7 million in 1976-77 and represent subsidies for the construction of about 39 vessels. An amount of $1.2 million has been provided for the administrative expenses of the Board. {:#subdebate-38-152} #### Industrial Research and Development Grants The provision of $15.4 million allows for payments under the *Industrial Research and Development Grants Act* 1967, including all outstanding general grants relating to grant years up to 1974-75 together with a significant proportion of payments arising from general grant applications for the 1975-76 grant year. No further funds are to be provided for selective grants under the Act. A description of this scheme was provided in Statement No. 3 attached to the 1975-76 Budget Speech. The *Industrial Research and Development Incentives Act* 1976 replaces the previous scheme with a new industrial research and development incentive program effective from 1 July 1976. The new scheme provides for selective project grants, together with commencement encouragement grants. Firms will be encouraged to commence and develop a basic capability in industrial research and development and, in addition, worthwhile projects will receive support. The new scheme is designed to overcome two basic criticisms of the former scheme, namely the lack of any real selectivity in the administration of major grant allocations, and the complexity of the scheme itself. No funds have been allocated for payment of grants under this Act in 1976-77 but the administering body will enter commitments in 1976-77 involving expenditure in subsequent years. {:#subdebate-38-153} #### Refrigerator Compressor Bounty Following a recommendation of the Tariff Board, the previous Government introduced for a period of 2 years a bounty of up to $5 for each compressor of 1.5 kw or less for use as a refrigeration component in the manufacture of goods that are subsequently used in Australia. An amount of $3.9 million was provided in 1974-75 and $1.4 million in 1975-76. The scheme has now expired and there will be no payments in 1976-77. {:#subdebate-38-154} #### Book Bounty An amount of $6.5 million has been provided for estimated book bounty payments in 1976-77. The fall in payments reflects an estimated decline in the number of books receiving bounty. Bounty is payable on eligible books manufactured in Australia at a rate of 334 per cent of the cost of production. {:#subdebate-38-155} #### Agricultural Tractors Bounty The *Agricultural Tractors Bounty Act* 1966 provides for the payment of bounty on eligible tractors produced and sold to 31 December 1976. Bountiable tractors currently attract a bounty ranging from $1040 to $1560 per tractor depending on the power of the tractor and subject to certain local content requirements. Payments of bounty on the existing basis are expected to total $2.5 million for the half-year to December 1976. The bounty is currently under review following a report from the Industries Assistance Commission. {:#subdebate-38-156} #### Export Development Grants Grants administered by the Export Development Grants Board are provided to encourage firms to seek and develop overseas markets. Grants are payable on the basis of eligible export market development expenditure in respect of goods and services substantially of Australian origin. The Budget provision covers eligible claims for grants outstanding at the end of 1975-76 (estimated at $13 million) and up to $15 million in respect of new commitments falling due in 1976-77. It became apparent during 1975-76 that the rate of expenditure under the scheme, while initially limited by difficulties in processing of claims, would substantially exceed the amount intended when the scheme was introduced. In order to reduce future expenditure under the scheme, legislation to amend the Act with effect from 1 July 1976 is to be introduced in the Budget Session of Parliament. The main changes proposed are the elimination of the premium rate of grant, a reduction in the grant ceiling for individual claims, and removal of special provisions relating to promotions sponsored by the Government. {:#subdebate-38-157} #### Structural Adjustment Assistance The structural adjustment assistance scheme was introduced in 1973 to help eligible firms adjust to the effects of structural changes resulting from specified decisions of the Government. Outlays on the scheme declined from $5.3 million in 1974-75 to $1.1 million in 1975-76 following implementation of temporary protection measures for certain industries. The specified application periods in respect of all prescribed Government decisions have now expired. The Budget provision of $750 000 is for eligible claims received before the due date but not finalised by June 1976. {:#subdebate-38-158} #### Tourist Industry An amount of $3 million is to be provided to the Australian Tourist Commission for the purpose of encouraging overseas visitors to travel to and within Australia. The Commission has ceased the promotion of domestic tourism. Discussions are to be held with State Governments and industry groups with a view to their matching, dollar for dollar, the Commonwealth's contribution to the costs of the Commission up to $1.5 million. Provision of $1.5 million has been made for other assistance to the tourist industry. The low cost accommodation grants scheme and the scheme of grants for the development of tourist attractions have been terminated but it is estimated that $0.8 million will be required in 1976-77 for outstanding commitments under the latter scheme. The amount provided also includes grants to the Canberra Tourist Bureau ($0.1 million) and the Northern Australia Tourist Board ($0.5 million). {:#subdebate-38-159} #### Other Assistance to Industry {:#subdebate-38-160} #### Australian Industry Development Corporation The broad functions of the Australian Industry Development Corporation (AIDC) are to help finance the development and growth of Australian private enterprise in areas of activity concerned with, or incidental to, the manufacture, processing, treatment, transportation or distribution of goods, or the development or use of natural resources (including the recovery of minerals) or of technology; and to secure Australian participation in the ownership and control of companies engaged in such activities. Early in 1976 the Corporation advised the Government that, after reviewing its commitments and business forecasts and having regard to the Government's efforts to restrain expenditures from the Budget, the 1975-76 Budget provision of $75 million would not be drawn. To facilitate its operations, the Corporation has requested, in accordance with the Australian Industry Development Corporation Act, the payment of a further capital instalment of $12.5 million this year; this instalment will increase the Corporation's paid up capital to $62.5 million. The Corporation has no plans to request the Government to borrow funds on its behalf this financial year. {:#subdebate-38-161} #### Export and Trade Promotion Expenditure on export and trade promotion is estimated at $15.7 million in 1976-77. The total includes expenditure on the Trade Commissioner Service ($11.3 million), matching grants to primary product marketing boards ($1 million), trade publicity, fairs, displays and trade promotion visits ($3.3 million); and contributions to international organisations ($0.1 million). {:#subdebate-38-162} #### Export Finance and Insurance Corporation The Export Finance and Insurance Corporation (EFIC) provides export credit insurance and guarantee facilities, insurance cover for direct investment overseas against non-commercial risks, and, where necessary, export finance for medium and long term credit sales of capital goods. During 1974-75 and 1975-76, EFIC's export finance facility was provided with long-term loans from the Budget amounting to $4 million. These funds, advanced at 7i per cent, were blended with moneys provided by the trading banks at commercial rates of interest to produce concessional interest rates equivalent to those offered by foreign competitors. The subsidy involved in providing the Corporation with concessional finance amounted to $70 000 in 1975-76. A new arrangement for financing EFIC's export finance activities began in July this year. The trading banks have agreed to fund the. export finance facility by way of loans at commercial rates of interest. The Corporation will on-lend the funds to foreign buyers at concessional rates of interest. The 'gap' between the commercial rates at which EFIC will borrow and the corporation's on-lending rates will be financed from the Budget by an interest rate subsidy payable to EFIC each year. A provision of $500 000 has been made in the Budget for. this purpose. The Government has developed a special instrument, the 'subsidy commitment authority', to control commitments on the Budget in the years ahead arising from the Corporation entering into loan transactions with overseas buyers involving subsidised interest rates. The subsidy commitment authority has been set at $15 million for 1976-77 and will be reviewed annually. It will enable EFIC, as appropriate, to finance capital goods exports aggregating approximately $75 million at existing rates of interest in present market conditions and to support Australian tenders for overseas contracts considerably in excess of this amount, given that all the tenders will not be successful. Put another way, the provision of concessional loans aggregating about $75 million would involve an interest subsidy of $15 million spread over the life of the loans. The revised arrangements will enable EFIC to continue to provide concessional finance in support of Australian capital goods exports, will achieve substantial savings in 1976-77 and future Budgets, and will return the financing of capital goods exports to the private sector. {:#subdebate-38-163} #### Other Assistance The item 'Other Assistance' includes an amount of $0.7 million for the cost in 1976-77 of Australian participation, in conjunction with the Governments of Papua New Guinea and Japan, in a technical feasibility study of the VVabo hydro-electric project in Papua New Guinea; $1.3 million was spent on the study in 1975-76. Industry Assistance Through the Taxation System A considerable amount of assistance to industry has been provided in the past through special taxation concessions. Some of these concessions were withdrawn during 1972-73 while others were withdrawn or modified in 1973-74, 1974-75 and 1975-76. On the other hand, a new concession was introduced in 1974-75- double depreciation - applicable to new plant and equipment first used or installed ready for use by taxpayers in the manufacturing and primary industry sectors on or after 1 July 1974 and before 1 July 1975. The double depreciation scheme was extended in both time and coverage in 1975 but when the income tax law was amended to provide a new investment allowance provision was also made for the discontinuance of the double depreciation scheme for plant used or installed after 30 June 1976. The new investment allowance is applicable to new plant and equipment purchased, leased or constructed under a contract made on or after 1 January 1976. A 40 per cent rate will apply for the period 1 January 1976 to 30 June 1978, and a 20 per cent rate for the period 1 July 1978 to 30 June 1983. Such concessions result in a reduction of, or a delay in the receipt of, Australian Government revenues (and a corresponding increase in the funds available to the recipients) . They are, in fact, as much a call on the Budget as equivalent direct outlays would be, and for this reason have sometimes been described as disguised expenditures. Assistance of this type through the taxation system has been provided mainly by way of income tax concessions which permit firms and individuals to make deductions from their assessable income additional to those authorised under the general provisions of the income tax law. The amount of revenue forgone in 1975-76 through the main taxation concessions is estimated to have been about $146 million. Details are shown below. (Pay-roll tax rebates under the export incentive scheme in respect of exports in 1970-71 and prior years are included under the heading 'Manufacturing Industry'.) Most of the relevant concessions in the income tax field may be grouped in three broad categories, namely: A those allowing the deduction of larger amounts than are authorised under the general provisions of the law (included in this category is the rebate for export market development expenditure, which, until it was withdrawn, in respect of expenditure incurred on or after 1 July 1974, gave a tax saving additional to the saving resulting from the deductions from income for this expenditure); B those allowing certain taxpayers to deduct the cost of items of plant over shorter periods than is the case for the general run of taxpayers; and C those exempting certain classes of income. The main provisions in each of these classes, and the estimated amounts of revenue forgone in 1975-76 are shown in the following table. A miscellany of other provisions is not included, in some cases because of lack of data on revenue forgone or questions about the extent to which they may properly be regarded as wholly 'Industry Assistance'. These provisions include the concession whereby primary producers are allowed to adopt artificially low values for natural increase in their livestock accounts for taxation purposes; drought bonds; and the accelerated depreciation of expenditure on employees' amenities. The averaging provisions applied to primary producers are also not included. Taxpayers to whom these provisions apply are assessed on their taxable incomes for the current year at rates of tax corresponding to the average of their incomes for the current year and the preceding four years. One effect of the provisions, which is an intended effect, is to ensure that *fluctuations* in income in conjunction with progression in rates of tax do not lead to those taxpayers bearing higher tax rates than other taxpayers having incomes which, over a period of years, are comparable but nonfluctuating. The effects go beyond that when there is an upward trend in incomes over a number of years and, even if there are fluctuations in income superimposed on that trend, the averaging provisions can result in the taxpayers covered by them bearing lower tax rates than other taxpayers whose incomes over a period of years are comparable. {: type="A" start="D"} 0. LABOUR AND EMPLOYMENT Expenditure on labour and employment programs is expected to total $223.6 million in 1976-77, an increase of $5.6 million on 1975-76. The estimated increase reflects higher expenditure on departmental administration ($5.6 million), an increase in the program, of assisted migration ($4.1 million), increased assistance for apprenticeship training ($3.9 million), and an increase in funds for the Australian Trade Union Training Authority ($3.7 million). These and other increases are largely offset by a $12.3 million reduction in the provision for the Stevedoring Industry Authority in 1976-77. Details are shown in the following table: {:#subdebate-38-164} #### Conciliation and Arbitration The increase in expenditure of $0.7 million in 1976-77 reflects provision for additional national hearings and increasing costs. {:#subdebate-38-165} #### Payment to Stevedoring Industry Authority The Government has decided to withdraw from direct involvement in the stevedoring industry by 31 December 1976. The enabling legislation, the *Stevedoring Industry Charge Act* 1947, has been extended to that date. The 1976-77 estimate [Footnote continued from page 88] (/) This estimate is based on the deductions allowable in the 1974-75 income year in respect of purchases and appropriations in that year (net of amounts included in the 1974-75 assessable income in respect of appropriations made in the previous year) *less* the depreciation that would have been allowable in that year on the relevant plant purchases or the plant in respect of which the appropriations were made. While the provisions in question do not allow any greater total deduction over the life of the plant and equipment than do the normal depreciation provisions of the income tax law, they result in a deferment of tax which involves a cost to the Budget and a benefit, namely the provision of interest-free finance, to the taxpayers concerned. Normal depreciation allowances are designed to allow taxpayers to write off the cost of plant and equipment against income as the plant and equipment is used up in producing that income. The value of accelerated depreciation allowances to taxpayers depends on how much sooner they receive savings than would be the case if the allowances had been based on the usage of plant and equipment, and on the .value to them of having the use of these savings. Where there is a constant or increasing rate of investment 'n plant and equipment subject to accelerated depreciation, the concession virtually provides the taxpayers concerned with a revolving or increasing credit in their account with the taxation revenue. provides lor six months' activity and represents collections of levies imposed on stevedoring employers which are collected by the Government on behalf of the Authority. The funds are utilised by the Authority to pay attendance money and leave benefits to water-side workers, and to reimburse employers for pension and redundancy payments. {:#subdebate-38-166} #### Coal Mining Industry Long Service Leave Long service leave benefit for coal miners are financed from a Trust Fund established under the *State Grants (Coal Mining Industry Long Service Leave) Act* 1949. In States where miners have been awarded long service leave, the States reimburse employers the cost of granting this leave. The Commonwealth Government in turn reimburses the States from an excise imposed on the production of coal. The excise is estimated to yield $3.5 million in 1976-77 and this amount has been provided for payments to the Trust Fund. Expenditure from the Trust Fund in 1976-77 is estimated to be $4 million. {:#subdebate-38-167} #### Trade Union Training This item provides for expenditure under the *Trade Union Training Authority Act* 1975 for the establishment and operation of trade union training courses conducted by the Australian Trade Union Training Authority at the national and State level. Of the estimated expenditure of $6.8 million in 1976-77, $2.5 million is for training courses and $4.3 million for the capital cost of establishing State training centres and for expenditure in 1976-77 on the construction of the Clyde Cameron College at Albury-Wodonga. {:#subdebate-38-168} #### Apprenticeship Training Government assistance for apprenticeship training is intended to promote apprenticeship opportunities and to improve the standard of training of apprentices in industry. Existing apprenticeship training support programs are being reviewed in discussions with the States, the National Training Council and the major employer and trade union organisations with the aim of introducing in early 1977 a new scheme based on cost sharing between employers, the States and the Commonwealth Government. The existing apprenticeship training schemes will continue until the new arrangements can be introduced. The major components of the present arrangements include the National Apprenticeship Assistance Scheme (NAAS), provision for wage costs of apprentices surplus to normal requirements who are employed in Commonwealth or State Government establishments, and subsidisation of apprenticeship training supervisors in State Government employment. Expenditure is estimated to increase by $3.9 million to $41.6 million in 1976-77. NAAS, which provides incentives to employers through subsidies for first-year apprentice wages and for off-the-job training, and living-away-from-home allowances for first and second year apprentices, accounts for the major part of expenditure on apprenticeship training. The average wage subsidy paid to employers of first-year apprentices is about $1275 a year. The off-the-job training subsidy for each apprentice is $4 per day. The cost of the scheme is estimated to increase from $32.1 million in 1975-76 to $32.8 million in 1976-77. The intake of eligible apprentices is estimated to increase to 35 000 in 1976-77. An amount of $8.6 million is provided for the wage costs of apprentices, surplus to normal requirements, who are undergoing training in Commonwealth and State Government establishments; this represents an increase of $3.4 million on 1975-76. Apprenticeship training supervisors subsidised in State Government employment are estimated to cost the Commonwealth Government $0.2 million in 1976-77. {:#subdebate-38-169} #### Employment Training Schemes NEAT and other employment training arrangements are estimated to cost $41.1 million in 1976-77, an increase of S0.2 million on 1975-76. Under NEAT trainees receive full or part-time training allowances, living-away-from-home and book and equipment allowances, and assistance with the payment of fees and fares. Subsidies are available to employers who provide in-industry training or release trainees for training during working hours. Changes to the full-time training allowance, including the introduction of a means test on the income of the trainee and the trainee's spouse, were made by the Government in March-April 1976. These changes will restrict assistance to those in need and spread the available funds over a larger number of trainees. $40 million has been provided for NEAT in 1976-77, the same amount as was spent in 1975-76. The Government has decided to increase its assistance to encourage and improve training programs within industry from $619 000 in 1975-76 to $900 000 in 1976-77. {:#subdebate-38-170} #### General Administration Expenditure for administration and other minor expenditures related to employment and industrial relations are estimated to increase by $4 million to $61.3 million in 1976-77, mainly because of wage, salary and other cost increases during 1975-76. As announced in the Budget Speech, the Government has decided to increase expenditure on productivity promotion programs to $177 000 in 1976-77. This compares with actual expenditure of $66 000 in 1975-76. {:#subdebate-38-171} #### Assisted Migration Expenditure on assisted migration is estimated at $18.8 million in 1976-77, an increase of $4.1 million on 1975-76. The increase in expenditure reflects an increase of 10 000 to a total of 30 000 in the number of assisted migrants to be sought. The main components of the assisted migration program in 1976-77 are embarkation and passage costs ($11.1 million) and transitory accommodation ($6.4 million). Expenditure in 1976-77 for administrative costs related to immigration and ethnic affairs is estimated at $21.9 million, an increase of $1.9 million on 1975-76. This reflects increased salary costs and higher levels of activity. Contributions by assisted migrants towards passage costs are to be increased from $150 to $300 for a family unit and from $150 to $200 for a single person and are estimated to total $2 million in 1976-77. {: type="A" start="E"} 0. OTHER ECONOMIC SERVICES This residual group covers economic services which are not readily categorised elsewhere. Outlays on the various services in each of the past two years, and the estimates for 1976-77, are summarised in the following table. {:#subdebate-38-172} #### Economic and Trade Regulation Most of the outlays under this heading relate to the costs of operations of the various authorities listed. The Industries Assistance Commission, established in 1973, inquires into and reports to the Government on questions of assistance for all industries. The former Tariff Board, which it replaced, advised on protection for manufacturing industry. {:#subdebate-38-173} #### Specialised Activities Increases in wages and salaries and other costs are again responsible for most of the increased allocations for the specialised activities listed in the above table. The functions of the Bureau of Meteorology are currently under review; the Budget provision will enable the Bureau to carry out its ongoing activities in 1976-77. Recoveries in respect of specialised activities are estimated at $13 million in 1976-77 and consist of receipts of the Bureau of Meteorology from the provision of specialist services. {:#subdebate-38-174} #### General Administrative and Other Expenditures Expenditure under this item in 1976-77 includes operating costs of the Departments of Overseas Trade, Business and Consumer Affairs and National Resources. {: type="1" start="9"} 0. GENERAL PUBLIC SERVICES This broad functional heading covers a range of general public services and activities concerned with the organisation and operation of the Commonwealth Government, including legislative services, administrative services, the maintenance of law and order and foreign affairs and overseas aid. {: type="A" start="A"} 0. LEGISLATIVE SERVICES Estimates of outlays on legislative services in 1976-77, together with details of actual outlays in the preceding two years, are shown in the following table: {:#subdebate-38-175} #### Parliamentary Expenditure - Salaries and Allowances Provision has been made for the effects of the recent determination of the Remuneration Tribunal which adds an estimated $0.9 million to outlays for the salaries and allowances of Members of the Parliament in 1976-77. The determination *inter alia* adds $1250 per annum to the basic salary of Senators and Members, $500 per annum to the stamp allowance and a minimum of $1300 per annum to the electorate allowance. {:#subdebate-38-176} #### Parliamentary Expenditure - Other This item covers salaries, administrative costs and capital works associated with the functioning of Parliament and includes costs relating to State and Electorate Offices of Senators and Members of Parliament, Ministerial staff and the staff of other officeholders. The $3.3 million increase relates mainly to increased costs of salaries and allowances and includes $0.2 million for the costs to the Commonwealth Government for an Inter-Parliamentary Union Conference to be held in Canberra in April 1977. {:#subdebate-38-177} #### Australian Electoral Office This item reflects the administrative costs of maintaining electoral rolls and the conduct of Commonwealth elections and referenda. Outlays in 1975-76 reflected the elections for the Senate and the House of Representatives held in December 1975. {: type="A" start="B"} 0. LAW, ORDER AND PUBLIC SAFETY Commonwealth outlays on law, order and public safety are estimated to total $133.9 million in 1976-77, an increase of $25.6 million over 1975-76. Details of actual outlays in the two years to 1975-76, together with estimates for 1976-77, are provided in the following table and associated commentary: {:#subdebate-38-178} #### Courts and Legal Services The Government has decided that there should be a rationalisation of the existing structure of federal courts. There will be a single Federal Court with appeal functions in place of the Federal Court of Bankruptcy and the Australian Industrial Court. The new arrangement recognises and enhances the position of the State Courts by giving those Courts powers in important fields of law not now open to them. Legislation to effect the decision will be introduced in due course. {:#subdebate-38-179} #### High Court A new High Court building is being constructed in the Australian Capital Territory at a total estimated cost of $28 million; $6 million has been provided to meet construction payments in 1976-77. The other $1.4 million under this heading represents the estimated running costs of the High Court in 1976-77. {:#subdebate-38-180} #### Commonwealth-State Law Courts The Commonwealth is meeting approximately 45 per cent of the construction costs of a joint court complex in Sydney with the State of New South Wales. Commonwealth expenditure in 1975-76 was $2.6 million and a further $3.9 million is included in the estimates for the Commonwealth share in 1976-77. The complex is scheduled for completion in 1976-77. {:#subdebate-38-181} #### Australian Law Reform Commission The Government has established the Australian Law Reform Commission to deal, on a national basis, with the systematic development and reform of the law, including in particular the modernisation and simplification of the law, the elimination of defects in the law and the adoption of new or more effective methods of administration of the law and the dispensation of justice. An amount of $0.6 million is to be provided in 1976-77 for these purposes. {:#subdebate-38-182} #### Legal Aid Legal aid arrangements are currently under review between the Commonwealth Attorney-General and the States. Meanwhile, the current level of activity of the Australian Legal Aid Office will be continued. The estimated total cost of $20 million includes payments to private legal practitioners estimated at $9.6 million, grants of $1 million to the States to supplement existing legal aid schemes and $3.7 million for legal aid to Aboriginals. {:#subdebate-38-183} #### Family Law The *Family Law Act* 1975 established the Family Court of Australia, the Family Law Council and the Institute of Family Studies. The Family Court of Australia is the largest Federal Court and now comprises 23 judges; the Western Australian Family Court comprises a further 4 judges. An amount of $10.9 million has been provided for Family Law activities in 1976-77 of which $5.4 million is for salaries and administration expenses of the Commonwealth's Family Court. The remaining $5.5 million will be paid to the States for the operation of the Family Court by the State Government in Western Australia ($1 million), reimbursement of other State Governments for the administration of maintenance provisions of the legislation ($4.4 million) and payment for family reports commissioned by the Courts ($0.1 million). {:#subdebate-38-184} #### Protection of Human Rights The *Racial Discrimination Act* 1975 established a Commissioner for Community Relations and a Community Relations Council. The running costs of the Office of the Commissioner and the Council are estimated at $0.3 million in 1976-77. {:#subdebate-38-185} #### Police Security and Detention The cost of providing police and prison services in the Australian Capital Territory and the Northern Territory is estimated to be $21.4 million in 1976-77. The estimate for the Commonwealth Police Force is $25.7 million. The increase in expenditure mainly reflects the full-year effects of increases in salary rates during 1975-76. {:#subdebate-38-186} #### Attorney-General's Department Administrative expenditure by the Attorney-General's Department is estimated at $14.9 million in 1976-77, an increase of $2 million. Of the increase, $1.3 million relates to salaries; the remainder ($0.8 million) is for increased administration costs including final payments for the consolidation of Commonwealth Acts and the takeover from other Departments of the responsibility for printing Australian Capital Territory and Northern Territory Ordinances. {:#subdebate-38-187} #### Public Safety and Protection The Government is providing $0.9 million in 1976-77 for road safety promotion and research and an annual grant to the States of $0.2 million for promotion of road safety practices. Other outlays on public safety are largely for various fire prevention services. {: type="A" start="C"} 0. FOREIGN AFFAIRS AND OVERSEAS AID This heading embraces most of the expenditures undertaken by the Australian Government in relation to policies designed to foster relations with foreign countries and external territories. The bulk of the expenditures (about 75 per cent in 1976-77) relates to various external economic aid programs to assist developing countries, including Papua New Guinea. A detailed account of these aid programs is given in Budget Paper No. 8 entitled *Australia's Official Development Assistance to Developing Countries 1976-77.* Total outlays on foreign affairs and overseas aid are estimated to increase by $62.4 million, or 13.3 per cent, to $531.7 million in 1976-77. As the following table shows, the net increase in aid payments accounts for most of this increase. {:#subdebate-38-188} #### Aid Payments An amount of $400 million is to be provided for expenditure on overseas aid in 1976-77, an increase of $51 million or 14.6 per cent over 1975-76. This allocation is reflected mainly in the amount of $399.4 million identified under 'Aid Payments' in the table above but the $400 million figure also includes certain expenditures not incurred by the Australian Development Assistance Agency but nevertheless regarded as forms of development assistance. When outlays under 'Assistance Additional to Aid Payments' are added to the figure of $400 million, the total resources devoted to the provision of official assistance to developing countries in 1976-77 are estimated to amount to $432.4 million. This figure does not, however, allow for significant sums spent by Australian and State Governments on the education of several thousand students from developing countries or for the portion of Australia's contributions to the regular budgets of a number of international organisations which help to finance aid projects in developing countries. Nor does it take into account the relevant activities of the Export Finance and Insurance Corporation. The Government, in the national interest, has assumed large contingent liabilities in relation to developing countries through its support of EFIC activities in export and investment insurance. Since February 1975 EFIC has also operated a facility to finance exports of capital goods, on concessional terms if necessary, especially to developing countries. {:#subdebate-38-189} #### Bilateral Aid Expenditures on bilateral aid programs are estimated to increase by $31.9 million, or 10.4 per cent, to a total of $339.4 million in 1976-77. {:#subdebate-38-190} #### Papua New Guinea An amount of $228.1 million has been provided for expenditure on aid to or on behalf of the Papua New Guinea Government in 1976-77, $14.5 million more than 1975-76. A new 5-year Australian aid commitment to Papua New Guinea, commencing in 1976-77, was announced in March 1976 and provides for payment of $930 million in budgetary assistance over the commitment period. Under the terms of this commitment, provision has been made in the Papua New Guinea aid program for 1976-77 for payment of a general budgetary support grant of $190 million. Other expenditures on aid to Papua New Guinea include termination and retirement benefits payable to expatriate officers of former P.N.G. Administrations and the Australian Staffing Assistance Groups ($31.8 million), the cost of assistance provided under the Australia-Papua New Guinea Education and Training Scheme ($1.2 million) and the cost, estimated at $5 million in 1976-77, of upgrading civil aviation facilities at Port Moresby and Nadzab (near Lae). {:#subdebate-38-191} #### Bilateral Projects Anticipated expenditure from the Development Assistance Fund on bilateral aid projects in 1976-77 is $60 million, an increase of $14.1 million, or 30.7 per cent, over 1975-76. The expected increase is due mainly to implementation of projects currently in the pipeline. {:#subdebate-38-192} #### Training Expenditure on Colombo Plan and other Bilateral Training programs (excluding training provided under the Australia-Papua New Guinea Education and Training Scheme) in 1976-77 is estimated at $16.5 million compared with $12.4 million in 1975-76. Included in this figure is an amount of $0.7 million for educational projects which previously were funded from the Development Assistance Fund. {:#subdebate-38-193} #### Food Aid This item embraces the bilateral aid component (217 000 tonnes) of Australia's commitment to provide 225 000 tonnes of wheat or flour equivalent as food aid under the Food Aid Convention of the International Wheat Agreement. The balance of Australia's commitment of 8 000 tonnes will be provided through the World Food Program which is included below under the heading 'United Nations Programs'. In addition, provision has been made for the supply of non-grain and processed foods amounting to an estimated $2 million. The cost of bilateral food aid in 1976-77 is estimated at $29.7 million. {:#subdebate-38-194} #### Other Bilateral Support for voluntary aid organisations in Australia will increase from $590 000 in 1975-76 to an estimated $650 000 in 1976-77 reflecting mainly an increased provision for aid projects undertaken by voluntary organisations in developing countries. Provision has also been made for an amount of $1.6 million in 1976-77 in respect of payment of the balance of a loan to the Fiji Government for construction of the Suva-Nadi Highway. A further expansion of certain programs of assistance to developing countries is currently under consideration and an amount of $2.7 million has been included in the Budget for this purpose. {:#subdebate-38-195} #### Multilateral Aid Expenditure on multilateral aid programs is estimated to increase by $18.7 million or 45 per cent to a total of $60 million in 1976-77. {:#subdebate-38-196} #### United Nations Programs Payments by Australia to aid agencies and organisations established under the aegis of the United Nations are expected to increase by 14.5 per cent to $10.9 million in 1976-77. This total includes $1 million for the International Fund for Agricultural Development which is expected to become established during the year. Other major programs receiving support are the World Food Program, the United Nations Development Program, the United Nations Children's Fund, and the United Nations High Commissioner for Refugees. {:#subdebate-38-197} #### Regional and Other International Programs Total assistance to regional and other international programs is expected to increase from $5 million in 1975-76 to $8.6 million in 1976-77. **Major regional** programs receiving support include the Association of South East Asian Nations, the Economic and Social Commission for Asia and the Pacific, the University of the South Pacific, the Asian Institute of Technology, the South Pacific Commission and the South Pacific Bureau for Economic Co-operation. The Commonwealth Fund for Technical Cooperation and the Consultative Group for International Agricultural Research are also major recipients of multilateral aid. The increase in 1976-77 is accentuated by the inclusion of regional training projects which in previous years were funded mainly from the Development Assistance Fund. {:#subdebate-38-198} #### International Development Finance Institutions Total payments by Australia to the Asian Development Bank and the World Bank Group are expected to increase from $26.8 million in 1975-76 to $40.5 million in 1976-77. These estimated payments include calls on Australia in accordance with previously announced commitments to those institutions. As in previous years there will be an offsetting receipt of $0.7 million from the International Bank for Reconstruction and Development in respect of the maintenance of value repayments which that institution is required to make to Australia in accordance with its Articles of Agreement. There is also provision in the Budget for expected payments of $4 million to the World Bank's new lending facility, the Intermediate Financing Facility (or 'Third Window') and $1 million to the International Monetary Fund's new Oil Facility Interest Subsidy Account, which has been established to reduce the cost to developing countries of borrowings from the Fund's Oil Facility. {:#subdebate-38-199} #### Assistance Additional to Aid Payments The provision of Defence Co-operation (S23.9 million in 1976-77) represents an extension of Australia's own defence effort but it also supplements the Government's external economic aid programs in furthering the broad foreign policy objectives of helping developing countries in the Asia/ Pacific area to raise their standards of living. It serves this objective by releasing for development purposes resources that the recipient Governments themselves might otherwise have devoted to defence purposes. Details of Australia's assistance in this respect are included in the section on Defence Co-operation under the 'Defence' function. The administrative expenses of the Australian Development Assistance Agency, which the Government has decided will be replaced by a Bureau within the Department of Foreign Affairs, are estimated at $8.5 million for 1976-77. These costs form part of Australia's aid effort but are classified as 'General Administrative Expenditures'. {:#subdebate-38-200} #### Cocos (Keeling), Christmas and Norfolk Islands Included under this heading are the costs involved in administering these three small external territories. An increased amount has been provided for Christmas Island in 1976-77, reflecting in part an expanding capital works program on the Island. An allocation of $292 000 has been made in the Budget for a continuing program for restoration of historic buildings on Norfolk Island. *Membership of International Organisations and Other Non-aid Expenditure* This item encompasses expenditure incurred by virtue of Australia's membership of a wide range of international organisations. Active participation in many global and regional organisations is an integral part of Australia's present foreign policy. This involves financial contributions towards the administrative expenses and, in some cases, the functional activities of the organisations in question. Total expenditure under this heading is expected to increase from $15.5 million in 1975-76 to $16.4 million in 1976-77. The major items include $3.7 million for the United Nations Organisation, $1.7 million for the World Health Organisation, $1.3 million to the Organisation for Economic Co-operation and Development, $1.1 million towards the cost of the UN Peace Keeping Force in the Middle East, $1.2 million for the United Nations Food and Agriculture Organisation, $0.9 million for the United Nations Education, Scientific and Cultural Organisation, $0.8 million for expenditures associated with Australia's cultural relations with various other countries, $0.7 million for participation in the US Bicentennial celebrations, $0.6 million towards implementation of Australia's independence gift to Papua New Guinea of a National Library and $350 000 for the activities of the recently established Australia-Japan Foundation. {:#subdebate-38-201} #### General Administrative Expenses Included in this item are the administrative costs of the Department of Foreign Affairs, the Australian Development Assistance Agency and the Overseas Property Bureau. The increase in 1976-77 is explained in part by the continuation of a large overseas construction program and the purchase of computing equipment for the Department of Foreign Affairs' communications network in Canberra, London and Washington. {: type="A" start="D"} 0. GENERAL AND SCIENTIFIC RESEARCH NEC The largest expenditure under this heading is that by the CSIRO. Also included are expenditures on specific programs of research undertaken by several Government departments and instrumentalities, such as the research activities of the Department of Science in Antarctica and the nuclear research activities of the Australian Atomic Energy Commission. Assistance for general research activities through the Australian Research Grants Committee, fellowship schemes and support for the learned academies is included also. {:#subdebate-38-202} #### Australian Atomic Energy Commission The Commission's functions include research and investigation into matters associated with uranium and atomic energy, and sale of radio-isotopes. In early 1976 the Government decided that uranium exploration by the Commission should end in the current field season. Outlays relating to uranium exploration and development are included under 'Industry Assistance and Development'. {:#subdebate-38-203} #### Commonwealth Scientific and Industrial Research Organisation Expenditure by CSIRO relates to the Organisation's activities in the fields of agricultural, biological, industrial and physical research, together with the provision of research services and facilities and support for research associations. It was announced in May 1976 that an independent external inquiry would be conducted into the operation of CSIRO. The inquiry will cover the general philosophy, organisation and management structure of the Organisation, the efficiency of its research programs and its revenue raising potential. In the interim its activities will be held to the same real levels as in 1975-76. The increase of $8 million in the provision for CSIRO in 1976-77 therefore reflects cost increases including increased salary and wage costs of $6.6 million. {:#subdebate-38-204} #### Antarctic Division The Antarctic Division administers and organises and provides logistic support for the Australian National Antarctic Research Expeditions (ANARE). These expeditions operate from four stations in the Antarctic region and conduct scientific research programs in upper atmosphere physics, cosmic ray physics, glaciology, biology and medical science. {:#subdebate-38-205} #### Research Grants Assistance is provided through the Australian Research Grants Committee, the Queen Elizabeth II Fellowship Scheme and the Queen's Fellowship Scheme for research projects by individuals in the humanities and social sciences, physical, chemical, biological and earth sciences, engineering and applied sciences and marine science. The increase in the provision for 1976-77 includes an amount of $2.1 million which is to be paid to universities to reimburse them for costs incurred in providing interim support for ARGC programs in 1975-76/ and a small increase in the level of support in real terms for the ARGC program in 1976-77. {:#subdebate-38-206} #### Australian Institute of Marine Science The Australian Institute of Marine Science was established in 1972 to conduct studies in marine science and to co-ordinate and develop marine science in Australia. Initially, the work of the Institute is being directed to studies of the Great Barrier Reef, the Coral Sea and the coast and adjacent waters of North Queensland. The Institute is occupying temporary premises in Townsville pending the construction of a laboratory at Cape Ferguson. The provision in 1976-77 of $7.6 million reflects expansion of the Institute's research program and progress with the construction of the permanent laboratory. {:#subdebate-38-207} #### Anglo-Australian Telescope Board This item covers the Australian Government's share of the cost of constructing and operating a 3.9 metre optical telescope near Coonabarabran in New South Wales. The construction of the telescope was completed in 1974-75 at a cost of $15.9 million, which was shared equally between Australia and the United Kingdom. The cost of operating the facility in 1976-77 is estimated at $1.7 million, one-half of which will be met by Australia. {:#subdebate-38-208} #### Australian Institute of Aboriginal Studies The Australian Institute of Aboriginal Studies was established in 1964 to promote, encourage and assist studies and research in relation to the Aboriginal people. The work of the Institute includes the identification, recording and preservation of sites that are of special significance to Aboriginals, the collection of Aboriginal music, folklore and language and research into the interaction between Aboriginals and Europeans. An amount of $1.9 million will be provided to the Institute in 1976-77. {:#subdebate-38-209} #### Other Research and Science Items under this heading include support for the Academies of Science, the Social Sciences and the Humanities, the Australian and New Zealand Association for the Advancement of Science and other minor support for scientific and research activities. In addition, funds are provided for activities under several agreements for scientific and technological co-operation with other countries and for the interim Australian Science and Technology Council. Amounts for the support and development of major scientific facilities such as the Balloon Launching Station at Mildura, the Nuclear Magnetic Resonance Spectrometer and the facilities operated under arrangement with US agencies are also included under this heading. {: type="A" start="E"} 0. ADMINISTRATIVE SERVICES Included under this heading are general administrative services not allocated to specific functions, together with some common services. Details of outlays on general administrative services in 1974-75 and 1975-76, together with estimates for 1976-77, are shown in the following table: {:#subdebate-38-210} #### Financial Affairs and Fiscal Administration {:#subdebate-38-211} #### Taxation Administration Of the increase in 1976-77, $14.8 million reflects increases in rates of pay and an increase in average employment of the Taxation Office. The Taxation Office has undertaken a program of computer equipment additions at a cost of $2.1 million in order to complete the nation-wide implementation of the Central Taxpayer System by July 1977. {:#subdebate-38-212} #### Statistical Services The *Australian Bureau of Statistics Act* 1975 established the Bureau as a statutory authority. The same Act established the Australian Statistics Advisory Council as a body representative of users of official statistics to advise on statistical priorities and the efficiency of statistical systems. The estimated increase in outlays of $12.4 million in 1976-77 mainly reflects the increased running costs of the Australian Bureau of Statistics and costs related directly to the 1976 Census of Population and Housing. General Administration of the Territories This item includes outlays in the Australian Capital Territory (S23. 2 million in 1976-77) and the Northern Territory ($46.5 million) on services which are of a general nature and cannot be readily classified to other relevant functions. Other Administrative Services nec Among the outlays included in this category for 1976-77 is $31.8 million for the administrative expenses of the Department of Prime Minister and Cabinet (including the Public Service Board). This estimate includes $6 million for computing equipment associated with the MANDATA project being undertaken by the Public Service Board. The project will provide a centralised facility for the maintenance of personnel and establishment records and non-discretionary entitlements for all Commonwealth Government Departments. On I July 1976 the Administrative Appeals Tribunal Act came into operation. The Tribunal is empowered to hear appeals against certain administrative decisions and $0.3 million has been included in the Budget for 1976-77. An amount of $100 000 has been included for the running costs of the Office of the Ombudsman. {:#subdebate-38-213} #### Common Services Included under this heading are outlays of departments and agencies providing general services to the Government as a whole, such as construction activities, printing, publicity, storage and transport services and the purchase and lease of buildings. {:#subdebate-38-214} #### Construction Services (Net) The major factors contributing to the increase in this item are the estimated S3. 5 million increase in salaries and administrative expenses for the Department of Construction and a reduction of $1.1 million in estimated recoveries from disposal of plant and equipment. These factors are largely offset by a reduction of $2.1 million in expenditure for buildings, works, furniture and fittings, plant and equipment, and repairs and maintenance for the Department of Construction. The Department of Construction is arranging to execute more of its maintenance and minor works by private contract and, in so doing, is reducing its labour force directly involved. As a result of non-replacement of wastage this labour force has been reduced from 8367 at 30 November 1975 to 7829 at 30 June 1976. {:#subdebate-38-215} #### Commonwealth Offices This item reflects the costs of constructing and maintaining Commonwealth Offices, including the purchase of sites for new offices. The proposed outlay of $30 million includes $25.3 million for offices under construction in the Australian Capital Territory and the States and $4.5 million for repairs and maintenance of existing premises. {:#subdebate-38-216} #### Property Management and Services Provision is made here for the services necessary to manage Government office accommodation and for the Government's survey program. The major components of the estimate are salaries ($21.4 million), contract cleaning ($7.1 million), and office services ($7.8 million). {:#subdebate-38-217} #### Government Purchasing The main component of this estimate is salaries ($8.7 million) for the staff of the Department of Administrative Services engaged in purchasing activities. {:#subdebate-38-218} #### Stores and Transport Included in this item are removal and storage costs associated with the transfer of Government civilian employees and the costs of operating Commonwealth transport pools in the States. {:#subdebate-38-219} #### Rent This item reflects the rental costs for office space leased for civil departments. Increased rentals on existing leases are mainly responsible for the $3 million increase. {:#subdebate-38-220} #### Publicity Services Expenditure under this heading includes the programs of publicity undertaken through the Australian Office of Information and through films made by Film Australia. {: type="1" start="1"} 0. NOT ALLOCATED TO FUNCTION Outlays not allocated to specific functions comprise payments to the States and local government authorities not elsewhere classified in this Statement, natural disaster relief, interest payments on the public debt, an allowance of $90 million for increases in wages and salaries for Commonwealth Government employees and the defence forces and the unallocated administrative savings of $22 million arising out of the Government's decision to further reduce staff ceilings. {: type="A" start="A"} 0. PAYMENTS TO OR FOR THE STATES AND LOCAL GOVERNMENT AUTHORITIES NEC AND NATURAL DISASTER RELIEF Outlays under this heading comprise general revenue funds for the States, State Government Loan Council programs, assistance related to State debt, certain forms of financial assistance for local government and natural disaster relief. Details of the payments are presented below; additional information on these and other payments to the States and local government authorities classified under various functional headings is contained in the Budget Paper, *Payments to or for the States and Local Government Authorities, 1976-77.* {:#subdebate-38-221} #### General Revenue Funds General revenue funds are utilised for purposes determined by the States. The financial assistance grants, which made up most of these funds up to and including 1975-76, were determined under a formula by which the grant to each State each year was equal to the grant paid in the previous year escalated by the percentage increase in the State's population and in average wages in the economy as a whole and by a further 'betterment' factor. In recent years, including 1975-76, the betterment factor was 1.8 per cent. It was to have increased to 3.0 per cent in 1976-77. The financial assistance grants are to be replaced by personal income tax sharing arrangements between the Commonwealth and State Governments. Under 'Stage 1' of these arrangements which will apply in 1976-77 and subsequent years, the States will be entitled to 33.6 per cent of Commonwealth personal income tax collections excluding the revenue effects of any special surcharges or rebates applied by the Commonwealth. Under 'Stage 2' the States will also be able, if they wish, to legislate to impose a surcharge on personal income tax in the State additional to that imposed by the Commonwealth or to give, at cost to the State, a rebate on personal income tax payable under Commonwealth law. These arrangements for State surcharges or rebates are expected to apply from the beginning of 1977-78. (These tax sharing arrangements were settled following discussions at Premiers' Conferences in February, April and June 1976.) The 'Stage 1' arrangements include a guarantee that the States' entitlements in any year will not be less than in the previous year and, in the four years 1976-77 to 1979-80, will not be less in a year than the amount which would have been yielded in that year by the financial assistance grants formula referred to above. On the basis of present estimates the States will receive $37 16.2 million under the tax sharing arrangement in 1976-77, $89 million more than their estimated entitlement under the former formula arrangements. Special grants are paid on the recommendation of the Grants Commission; each of the four less populous States is free to apply for them, but Queensland is at present the only applicant State and payments of special grants in 1976-77 relate solely to that State. Repayments under the general revenue assistance heading relate to special repayable and interest bearing advances made to Victoria in 1969-70 and New South Wales in 1971-72 and 1972-73. In total, general revenue funds to bs provided to the States (net) in 1976-77 are estimated at $3722.7 million, an increase of $611.1 million, or 19.6 per cent, compared with 1975-76. {:#subdebate-38-222} #### State Government Loan Council Programs At its June 1976 meeting the Loan Council approved a total State Government program of $1356 million for 1976-77. This represents an increase of 5 per cent over the 1975-76 program. Of the total program $904 million will be represented by borrowings and $452 million by capital grants provided by the Commonwealth. {:#subdebate-38-223} #### Assistance Related to State Debt Under the Financial Agreement the Australian Government pays $15.2 million each year to the States as a contribution towards interest payable on their debt and also contributes sinking fund payments. The sinking fund payments in 1976-77 are estimated to total $31.6 million. (In 1975-76 there was in addition a $2 million reimbursement to South Australia and Tasmania in connection with sinking fund payments on debt taken over by the Commonwealth in connection with the transfer to the Commonwealth of railway systems in those States.) Assistance totalling S57.5 million paid to the States in 1974-75 represented debt charges on $1000 million of State debt. Under amendments to the Financial Agreement this amount of State debt was formally transferred from the States to the Commonwealth Government as from 30 June 1975. The costs associated with this debt are now met directly by the Commonwealth rather than through grants to the States. {:#subdebate-38-224} #### Assistance for Local Government Under the new tax sharing arrangements to commence in 1976-77 the Commonwealth is to provide funds to the States for general purpose assistance to local government authorities. The amount to be provided in 1976-77 is $140 million, which represents an increase of 75 per cent over the amount of $79.9 million paid to the States for local government in 1975-76 on the recommendation of the Grants Commission. {:#subdebate-38-225} #### Natural Disaster Relief S26.1 million is included for expenditure on natural disaster relief in 1976-77. Of this amount S25.2 million is estimated to be required for payments to the States including Commonwealth support to Victoria and Western Australia for drought relief assistance. The balance of $0.9 million is estimated to be required for finalisation payments for Darwin cyclone relief. Continuing expenditures on the permanent reconstruction of Darwin are shown under other functional headings. Expenditures included under this heading in 1975-76 totalled $64.2 million, of which $33.2 million was for relief and immediate restoration measures following the devastation of Darwin by Cyclone Tracy in December 1974 and $31.1 million took the form of payments to the States. No allowance has been made in the estimates for further natural disasters which may occur in 1976-77. {: type="A" start="B"} 0. PUBLIC DEBT INTEREST This heading brings together interest payments made from the Budget sector to other sectors, including interest payments on Commonwealth securities, and under defence credit arrangements with other countries. Interest received by Government Trust Funds on Commonwealth securities held as investments and cash balances is offset against gross interest payments. *Gross Interest Paid on Commonwealth Securities* The estimate for gross interest paid on Commonwealth securities comprises interest on all Commonwealth securities on issue, except for interest on defence borrowings. It includes interest on securities issued on behalf of the States and Government instrumentalities. Any payments by the States or instrumentalities to reimburse the Commonwealth for interest paid are recorded as receipts under the heading 'Interest, Rent and Dividends'. {:#subdebate-38-226} #### Loan Defence Act Interest The estimated decline in interest payments on loans raised in the United States for defence equipment purchases reflects the declining level of outstanding debt. {:#subdebate-38-227} #### Loan Consolidation and Investment Reserve Interest is received by the Loan Consolidation and Investment Reserve on investments in Commonwealth securities which were mainly issued in Special Loans to assist State works programs. Because these receipts represent interest paid by the Commonwealth to the Commonwealth (through one of its Trust Accounts) the interest received by the Trust Account is offset against total interest paid. {:#subdebate-38-228} #### Other Interest is also received by other Commonwealth Trust Funds, including the National Debt Sinking Fund, on investments in Commonwealth securities and on cash balances. These transactions are also offset. The estimated decline in this item arises because the large balance formerly held by one Trust Account, the National Welfare Fund, has been transferred to the Consolidated Revenue Fund so that no interest will be received by that Fund in 1976-77. {: type="A" start="C"} 0. ALLOWANCE FOR WAGE AND SALARY INCREASES An allowance of $90 million has been included in the Budget estimates to take account of increases in rates of wages and salaries in the public service which it is estimated may occur over the course of the year. The calculation of this allowance is necessarily approximate. {: type="A" start="D"} 0. UNALLOCATED ADMINISTRATIVE SAVINGS The Government is continuing a policy of restraint in its employment of staff in 1976-77 and has again set individual staff ceilings for departments and for authorities wholly or partly financed from the Budget. Mainly as a result of the staff ceilings announced by the present Government in February 1976, Commonwealth employment had been reduced by about 9300 or 2.8 per cent by the end of 1975-76. On 14 June 1976 the Prime Minister announced a further overall reduction of 1.2 per cent in staff ceilings to be achieved by 30 June 1977. This comprised a 1.6 per cent reduction in the ceilings for Public Service Act employees and a 0.9 per cent reduction in the ceilings for certain Commonwealth Government authorities. These lower ceilings have been reflected in the detailed Budget estimates. It was indicated at the time that the 1976-77 ceilings set in June were provisional and subject to further review and possible adjustment. Following further consideration in the Budget context, the Government has decided upon an objective of achieving a further reduction of 2 per cent in staff ceilings for Public Service Act employees during 1976-77, making the objective in this area a 3.7 per cent reduction in all. This further reduction is estimated to produce a saving to the Budget of about $22 million in 1976-77; this saving had not been allocated, in detail, across departments at the time the Budget estimates were finalised. {: .page-start } page 137 {:#debate-39} ### STATEMENT No. 4 - ESTIMATES OF RECEIPTS, 1976-77 Total receipts in 1976-77 are estimated at $21 713 million, an increase of 18.8 per cent compared with 1975-76. This is *after* allowance for the net loss to revenue - estimated at $298 million- of the taxation measures announced on 20 May and in the Budget Speech. {: .page-start } page 137 {:#debate-40} ### THE MEASURES The following schedule lists these measures and shows their estimated effects on receipts in 1976-77 and in a full year: The following comments are in elaboration of these measures. *Indexation of the Personal Income Tax System* Automatic indexation of the personal income tax system, to apply with effect from 1 July 1976, was announced on 20 May 1976. Legislation to that effect has now been passed. The net tax payable by a taxpayer is determined: by calculating tax payable on his taxable income, according to the personal income tax rate schedule; and deducting from that amount any rebates to which he is entitled. Unless provision to the contrary is made, as taxable income increases the marginal and average tax rates corresponding to the taxable income also increase, because the income is then further up the progressive rate scale. Tax payable therefore becomes a larger percentage of taxable income than before. Any rebates fixed in money terms (e.g. dependants' rebates, and the general rebate) also become a smaller percentage of taxable income. For both reasons, net tax payable becomes a larger percentage of taxable income. If taxable income increased at *the same rate* as the price level, the *before-tax real* income would remain unchanged. But in those circumstances, for the reasons noted above, net tax payable would become a larger percentage of taxable income, and the disposable *after-tax* income would decrease in *real* terms. As the law stood previously, there was no provision for automatic adjustments to the personal income tax system to prevent such effects of inflation. Adjustments could be made on a discretionary basis by amending the income tax law. The law now provides for indexation of the basic parts of the system; adjustments will now occur automatically each year *unless* the law is changed. The effects of indexation were reflected in pay-as-you-earn deductions from salaries and wages as from 1 July 1976. The indexation provisions of the law embrace the income brackets of the rate scale, the general rebate, the rebates for dependants (other than rebates for dependent children and students which have been abolished as part of the new family allowance arrangements), the housekeeper rebate and the sole parent rebate. These are to be automatically adjusted each year for increases which have occurred in the Consumer Price Index. The average level of the index in the year ending with the March quarter immediately preceding the year of income is compared with its average level in the twelve months ending with the previous March quarter. Any part of the increase that is attributable to higher indirect taxes imposed by the Commonwealth Government is netted out for the purpose of indexing the personal income tax system. The adjustment factor for 1976-77 indexation purposes is 13 per cent, 1 percentage point less than the movement in the published CPI - the difference reflects the effects of increases in indirect taxes during the period over which the movement was measured. Where these taxes are altered, to transfer command over resources between the private and the public sector, it is necessary to ensure that this objective is not nullified by other systematic changes. The indexation arrangements have the following effects: The steps in the marginal tax rate schedule are widened in proportion to the price index (e.g. in 1975-76 the 20 cent rate applied to the first $2000 of income and the 27 cent rate to income between $2000 and $5000; in 1976-77 those rates will apply respectively to the first $2260 of income and to income between $2260 and $5650). *o* These adjustments ensure that if a taxpayer's taxable income increases by the same percentage as the price index, the tax payable on it under the rate schedule will also increase by that same percentage (without indexation the tax payable would increase by more). That implies that tax payable remains the same in *real* terms. e The rebates which are a specified amount and are indexed also increase in amount by the same percentage as taxable income, and remain the same in *real* terms. o Both of these elements of the system also have the effect that a taxpayer on a fixed money income (which falls in real terms if prices rise) will have his tax reduced under indexation. As already noted, the index applied relates to a *past* year. This is necessary for practical reasons. In any year there is therefore likely to be a difference between the price change experienced and that used for indexation (e.g. if prices were to rise by less than 13 per cent in 1976-77, tax indexation this year at that rate would tend to *increase* real after-tax incomes, not merely sustain them). Over a number of years the differences and their effects can be expected to average out to a substantial extent, with overcompensation for effects of price increases on the tax system occurring in some years, and under-compensation in other years. In the 1976-77 income year, the rebate allowed for the maintenance of a spouse, daughter-housekeeper or housekeeper, and the sole parent rebate, have been increased from $400 to $500 and $200 to $350, respectively. These increases were decided as a separate matter and are larger than the increases required by the strict application of the 13 per cent indexation factor. The comparative rate scales applying in 1975-76 and 1976-77 are set out below: *General Rates of Tax - Individuals* In 1976-77 the *general rebate* is $610 (compared to $540 in 1975-76). The *dependants' rebates* in these two years are: {:#subdebate-40-0} #### Taxation of Certain Social Security Payments The exemption from tax of certain pensions for persons below age pension age and also of unemployment and sickness benefits has been withdrawn with effect from 1 July 1976. Previously, pensions paid to persons below age pension age were exempt from tax while those paid to persons of pensionable age (men who are aged 65 or over and women who are aged 60 or over) were, with some exceptions (e.g. war pensions), subject to tax. The pensions and benefits which will become subject to tax irrespective of the age of the person to whom they are paid are: widows' pensions; supporting mothers' benefits; service pensions, other than those equivalent to invalid pensions; unemployment benefits, sickness benefits and special benefits. {:#subdebate-40-1} #### Medibank Levy A levy of 2½ per cent per annum on taxable income is payable from 1 October 1976, up to a ceiling of $300 for people with dependants or $150 for people without dependants. Taxpayers insuring privately are not required to pay the levy. The levy is to offset part of the outlay on Medibank but, for administrative reasons, is being collected by the Commissioner of Taxation in conjunction with income tax. {:#subdebate-40-2} #### Coal Export Duty Non-coking coal is to be exempt from the duty and the rates of duty on coking coal will be reduced by 25 per cent, from $6.00 to $4.50 per tonne for coal subject to the higher rate, and from $2.00 to $1.50 per tonne in other cases. {:#subdebate-40-3} #### Income Equalisation Deposits The Income Equalisation Deposits Scheme for primary producers, which will replace and extend the existing Drought Bonds Scheme, will allow deposits to be deducted from assessable income of the year in respect of which the deposit is lodged. When a withdrawal is made, the amount withdrawn will be added to assessable income of the year in which the withdrawal is made. Interest will be payable in respect of the whole amount of the deposit at a rate prescribed by regulation. Initially the interest rate will be 5 per cent. {:#subdebate-40-4} #### Mining Taxation The Income Tax Assessment Act will be amended to provide that expenditure on petroleum *exploration* be immediately deductible from income derived from any source provided the Commissioner of Taxation is satisfied that a genuine business activity of exploration is being carried on. Under the present law, expenditure on petroleum exploration is immediately deductible only from income from petroleum or petroleum products. Allowable capital expenditure by petroleum *mining* enterprises is to -be deductible from income derived from any source. At present it is deductible only from income from petroleum or petroleum products. A similar provision already applies to allowable capital expenditure by general mining enterprises. Allowable capital expenditure on assets used for general mining or petroleum mining operations is to be deductible on a diminishing value basis by reference to a maximum life of mine or field of 5 years, instead of 25 years as at present. Allowable capital expenditure on facilities used for the transportation of minerals and petroleum is to be deductible on a straight-line basis over either 10 years or 20 years at the option of the taxpayer, instead of over 20 years only as at present. Expenditure, not presently deductible, on port development such as harbour surveys, initial dredging, navigational aids and breakwaters, is to be allowable in the same way as other expenditure on transport facilities. *Payroll Tax in the Australian Capital Territory and the Northern Territory* Since payroll tax was passed to the States in 1971, the States have raised the levels of their exemptions. It is proposed that the Commonwealth exemption now be increased to align it with that applying in New South Wales and some other States. The exemption limit in both the Australian Capital Territory and the Northern Territory will be increased from $20 800 per annum to $41 600, and will phase out for employers with payrolls in excess of $41 600 at the rate of $2 for every $3 of the excess. The changes do not have any significant effect on Budget receipts. {:#subdebate-40-5} #### Retention Allowances of Private Companies Under Division 7 of the Income Tax Assessment Act, a private company becomes liable to additional tax if it does not distribute a prescribed proportion of taxable income as reduced by company tax. The purpose of this provision is to maintain, as far as practicable, equity of treatment between shareholders in private companies and persons who operate unincorporated businesses as sole traders or partnerships. It is needed to prevent the kind of tax minimisation, by retention of profits in the private company's hands, that could be expected where there is a wide gap between the rate of company tax (42.5 per cent at present) and higher marginal rates of personal income tax (up to 65 per cent at present). The retention allowance in respect of trading profits is to be increased from 50 per cent to 60 per cent (the allowance in respect of property income remaining at 10 per cent), thus placing more funds at the direct disposal of private companies for purposes of expansion and development. {:#subdebate-40-6} #### Valuation of Trading Stock A trading stock valuation adjustment is to be allowed in respect of the income year 1976-77 and later years. This adjustment, which is described at greater length in the Budget Speech, will not affect revenue from company tax in 1976-77, which relates to 1975-76 incomes. {:#subdebate-40-7} #### Estate Duty An additional deduction of up to $50 000 is to be introduced and applied where an estate or part of an estate passes to the surviving spouse. At the same time the existing matrimonial home deduction will be terminated. The spouse deduction will be additional to the present statutory exemptions of $40 000 where an estate passes wholly to close relatives, $20 000 where it passes wholly to others ($48 000 and $24 000, respectively, for primary producer estates), and pro rata amounts where it passes partly to close relatives and partly to others. The spouse deduction will apply to estates of persons who die after 17 August 1976. It will remove an estimated 20 per cent of all estates now subject to duty from the dutiable field, or about 2500 estates per year. In the case of an estate passing *wholly* to a surviving spouse it will be wholly free from duty if valued at $90 000 or less ($98 000 for primary producer estates). Examples of the effect which the new spouse deduction will have on duty payable are given below for cases where the whole estate passes to the surviving spouse: {: .page-start } page 143 {:#debate-41} ### THE ESTIMATES The following table compares estimated receipts in 1976-77 with actual receipts in each of the two preceding years: {:#subdebate-41-0} #### Taxation Revenue After taking account of the measures described above, total taxation revenue in 1976-77 is estimated to increase by 18.5 per cent to $19 957 million. The main components of this change are described below. {:#subdebate-41-1} #### Customs Duty - Imports Customs duty collections on imports are estimated to total $1110 million in 1976-77, $178 million or 19 per cent more than in 1975-76. This increase reflects current forecasts of imports growing rather more strongly than domestic product in 1976-77. {:#subdebate-41-2} #### Customs Duty - Coal Exports On the basis of existing rates of duty, revenue from the levy on coal exports is estimated at about $145 million in 1976-77. As announced in the Budget Speech, however, this duty is to be phased out over the next three years. The first phase of its removal is estimated to reduce collections in 1976-77 by $33 million to $112 million. {:#subdebate-41-3} #### Excise Duty Collections of excise duty are estimated at $2510 million in 1976-77, an increase of $178 million or 7.6 per cent on collections in 1975-76. As indicated in Statement No. 2, a modest recovery is forecast in consumption expenditure during 1976-77. This recovery is expected to be reflected in increased consumption of goods subject to excise. The estimate also allows for the full-year gain to revenue of the higher duties announced in the 1975-76 Budget, including the duty on production of crude oil, condensate and naturally occurring LPG. The major components of the 1976-77 estimate, together with changes compared with 1975-76, are as follows: Current rates of duty for the main items subject to excise duties are shown in the following table: {:#subdebate-41-4} #### Sales Tax Sales tax revenue is estimated to increase by 21 per cent in 1976-77 to $1700 million. In 1975-76 sales tax receipts increased by 22 per cent. The effect on collections of faster growth in sales volumes in 1976-77 is forecast to be slightly more than offset by the effect of slower price rises than occurred in 1975-76. Estimated collections by rate class are shown in the following table: {:#subdebate-41-5} #### Income Tax - Individuals It is estimated that *net* collections of income tax from individuals in 1976-77 will increase by 22.6 per cent to $11 3307 million. {: type="a" start="a"} 0. *Pay-as-you-earn Instalment Deductions* Gross PAYE instalment deductions in 1976-77 are estimated at $9875 million, an increase of $1513 million or 18.1 per cent. The estimate for 1976-77 is based on increases of 12 per cent in average earnings and of 1.5 per cent in the average level of employment (both expressed in terms of male units). In 1975-76 earnings are estimated to have increased by about 14 per cent and there was little change in employment. The 1976-77 figure includes the proceeds - estimated at $208 million - of the *2i* per cent Medibank levy on taxable income which is being collected by the Commissioner of Taxation. Notwithstanding the system of tax rebates introduced in the 1975-76 Budget - which replace most concessional deductions - refunds of PAYE tax in 1976-77 are estimated at $1100 million, compared with $1343 million in 1975-76. The main reasons for the still relatively high level of refunds in 1976-77 are the over-deduction of tax instalments paid prior to the introduction of the revised schedule on 1 January 1976; the tendency for many taxpayers to refrain from claiming dependants in declaration forms; and the high incidence of unemployment and part-time employment in 1975-76, with resultant over-deduction of tax on a full-year basis. (6) *Other Individuals* After allowance for the estimated cost to revenue in 1976-77 of the introduction of a scheme of income equalisation deposits ($2 million), collections on assessments of individuals are estimated to increase by 15.1 per cent to $2532 million. These tax payments are based on incomes received in 1975-76. Primary producers' incomes are estimated to have increased only slightly in 1975-76; other business and property incomes are estimated to have shown moderate to strong increases. The 1976-77 figure includes the proceeds - estimated at $42 million - of the Medibank levy which is being collected by the Commissioner of Taxation. {:#subdebate-41-6} #### Income Tax - Companies Company incomes in 1975-76, from which the great bulk of the present year's collections are drawn, are estimated to have increased by 17 per cent overall compared with 1974-75 levels; on the basis of this movement, collections of income tax from companies in 1976-77 are estimated at $2900 million. The various changes in company tax arrangements announced in the Budget Speech will have their main impact on tax collections in years after 1976-77. {:#subdebate-41-7} #### Other Taxes, Fees and Fines The major items in other taxes, fees and fines are indicated in the following table: Little change is expected in this category of receipts in 1976-77. The largest increase is $6.1 million in respect of unfunded employee contributions to retirement benefit schemes; this increase is attributable mainly to changes arising from the commencement of the new Commonwealth Superannuation Scheme with effect from 1 July 1976. This and other smaller increases are expected to be largely offset by an estimated decline of $14.7 million in stevedoring industry charges. The Government has announced that it is to withdraw as a regulatory agency from the industry and will cease to collect the charge from 31 December 1976 when the existing legislation expires. As announced in the Budget Speech, fees payable by licensees of commercial television stations are to be increased from 1 September 1976. The new fees are estimated to yield additional revenue of $624 000 in 1976-77. Radiocommunication licence fees are to be increased for some classes of users from their present level of $12 a year to $20 a year. The new fees will increase revenue by $1.2 million in 1976-77 and by $1.6 million in a full year. {:#subdebate-41-8} #### Interest, Rent and Dividends Details of estimated receipts of interest, rent and dividends in 1976-77 are set out below: All interest received by the Commonwealth Government from sources outside the Budget sector is included under this heading, together with land rents collected in the Territories and dividends received from Government-owned companies and corporations, other than financial enterprises. Total receipts of interest, rent and dividends are estimated at $1632 million in 1976-77, an increase of $226 million or 16.1 per cent compared with 1975-76. The increasing amounts of interest received reflect the large advances made to the States and to bodies operating outside the Budget in recent years. The largest increases in 1976-77 are in respect of interest due on advances to the States ($166.4 million) and to the Telecommunications Commission ($41.0 million). Interest received from the Australian Wool Corporation in 1976-77 is estimated to be $13.5 million less than in 1975-76 as the Corporation is expected to repay the major part of its outstanding borrowings during 1976-77. Net Receipts from Government Enterprise Transactions Details are shown in the following table: This table covers withdrawals (other than taxation receipts) from public financial enterprises, such as the Reserve Bank and Commonwealth Banking Corporation. In addition, the operating revenues, net of operating expenses, of activities carried on as business-type enterprises are included to the extent that the transactions are recorded in Budget sector cash accounts. The payment of $80 million to the Commonwealth from Reserve Bank profits in 1976-77 will be the first such payment since 1972-73. During the intervening period net earnings of the Reserve Bank have been used principally to reduce the Bank's unfunded exchange valuation losses. An amount of $12.3 million is to be paid to the Commonwealth by the Commonwealth Banking Corporation in 1976-77, equivalent to one half of the Corporation's published profit for 1975-76. {:#subdebate-41-9} #### Sale of Land and Buildings Receipts from the sale of land and buildings are estimated to increase by $5.6 million in 1976-77, mainly on account of increased proceeds from the sale of leases in the Capital Territory and sales of land and buildings owned by the Commonwealth. {: .page-start } page 149 {:#debate-42} ### STATEMENT No. 5- BUDGET RESULT, 1975-76 In the aggregate, outlays in 1975-76 turned out to be very close to the original Budget estimate but receipts were significantly lower - and the deficit significantly higher - than had been estimated. The outcome is summarised in the table below: It became apparent soon after the Budget was brought down that the deficit for the year would be considerably greater than that budgeted for. The most important contributing factor here was the likelihood that the increase in average weekly earnings would fall well short of the 22 per cent assumed for purposes of estimating payasyouearn income tax receipts, thereby substantially reducing receipts from this source. On the outlays side too, though to a lesser extent, there were indications that expenditures on some activities would exceed the Budget estimates and increase the likely deficit. In particular, expenditure on unemployment benefits was running at much higher levels than had been allowed for in the estimates. Against this background the outlook by mid-year was for an overall deficit of $4500 million or higher. The incoming Government took immediate steps to restrain the growth in outlays and in the prospective deficit. A general freeze on new expenditure proposals was announced in December, together with stringent new staff ceilings on employment and reductions in the budgetary allocations for overtime and travel expenses. These measures were estimated to save $60 million directly over the remainder of 1975-76. Following an urgent review of government spending programs further decisions were announced on 3 February which were estimated to involve direct savings on outlays amounting to about $300 million in 1975-76. Through these and other measures, total outlays in 1975-76 were held to a level lower than that budgeted for, the first time since 1968-69 that outlays have been contained within the original Budget estimate. This result was achieved despite prepayments in June of $216 million to the States for hospital operating costs which would not otherwise have been paid until 1976-77. In the event, receipts of company and other individuals (non-PAYE) income tax turned out to be higher than had been estimated and partly offset the large shortfall in PAYE receipts. The increased collections of company and non-PAYE income taxes reflected both improved collection procedures and higher 1974-75 incomes (which were subject to tax in 1975-76) than had been assumed at the time of the Budget. The actual deficit of $3585 million was $786 million more than the Budget estimate. {: .page-start } page 150 {:#debate-43} ### OUTLAYS Although outlays in 1975-76 were only slightly different from the Budget estimate in the aggregate, there were substantial differences in respect of many categories of expenditure. The outcomes for major categories are compared with the Budget estimates in the following table: Comments on the main variations from the Budget estimates follow. *Defence* Defence outlays in 1975-76 were $53 million more than the Budget estimate. Manpower costs exceeded the Budget estimate by $63 million, reflecting both increases in rates of pay and higher than expected payments under the Defence Forces Retirement and Death Benefits scheme. The latter outcome stemmed primarily from greater commutation requirements than had been estimated and from a post-Budget increase in rates of pensions. Largely because of cost increases during 1975-76, expenditure on administrative expenses exceeded the Budget estimate by $12 million. Partly offsetting these increases, expenditure on defence facilities was $10 million less than the Budget estimate and there was an increase of $14 million in Trust Account balances during the year. {:#subdebate-43-0} #### Education Actual outlays on education were S3 million higher than the 1975-76 Budget estimate. Payments under the Tertiary Education Assistance Scheme were $14 million more than the Budget provision, reflecting a greater number of students qualifying for benefit, and higher average benefit payments, than allowed for in the Budget estimate. On the other hand, the allowance for cost escalation of education grants included in the 1975-76 Budget estimates exceeded actual cost increases. {:#subdebate-43-1} #### Health Outlays for health in 1975-76 were $176 million greater than the Budget estimate. There was an increase of $126 million in payments for hospital running costs. This increase, however, reflected accelerated payments of $216 million to the States in 1975-76 for hospital operating costs which would normally have been paid in 1976-77. Excluding those accelerated payments, hospital payments were $90 million less than the Budget estimate, largely because some States entered the hospital side of Medibank later than expected. Claims in respect of medical services rendered before the introduction of Medibank on 1 July 1975 exceeded the Budget estimate by $21 million. Payments of hospital benefits were $12 million more than estimated, mainly because rates of subsidised health benefit payments for low income groups were higher than expected. Wage and salary increases in repatriation institutions were largely responsible for the cost of hospital services to ex-servicemen and women exceeding the Budget estimate by $8 million. Deficit financing of nursing homes operated by eligible organisations exceeded the Budget provision by $21 million, reflecting in the main an increased number of approved beds and a larger than expected carryover of operating deficits from 1974-75. Other nursing home benefits were $15 million lower than estimated, reflecting the Government's restraint on new commitments and increased recourse by nursing homes to the deficit financing arrangements. The Government's decision to refrain from entering into new expenditure commitments in certain areas was largely responsible also for expenditure on community health facilities falling short of the Budget estimate by $11 million. {:#subdebate-43-2} #### Social Security and Welfare Outlays for social security and welfare exceeded the Budget estimate by $240 million. Unemployment and sickness benefits accounted for $177 million of this increase reflecting in the main a higher than estimated average number of benefit recipients during the year. Again largely because of higher numbers of beneficiaries, payments of other pensions and benefits were $56 million more than the Budget estimate. Payments under the Regional Employment Development Scheme were $12 million below the Budget estimate. {:#subdebate-43-3} #### Housing Outlays for housing were $70 million less than the Budget estimate. Repayments by banks of advances made to them in 1974-75 for housing lending exceeded the Budget estimate of $38 million as banks repaid some advances earlier than was required. The Government's decision in February to confine the Housing Corporation's activities to the provision of Defence Service Homes loans produced a saving of $45 million on the Budget estimate. Expenditure on housing in the Territories exceeded the Budget estimate by $22 million, mainly because the Darwin Reconstruction Commission made better progress than had been envisaged. *Urban and Regional Development nec and the Environment* Total outlays for activities under this heading fell short of the estimate by $40 million. In line with the Government's decision to effect expenditure savings in these areas there were shortfalls in respect of growth centres ($12 million), Land Commissions ($10 million) and the Area Improvement Program ($3 million). For similar reasons, expenditure on the development of Aboriginal amenities was $5 million lower than estimated. A shortfall of $9 million in outlays on the Woolloomooloo development project resulted largely from delays in the acquisition of land for the project. On the other hand, expenditure on sewerage programs in the Australian Capital Territory was $8 million higher than the Budget estimate. {:#subdebate-43-4} #### Culture and Recreation Expenditure on cultural and recreational activities was $9 million less than the Budget estimate. The largest shortfall occurred in respect of the National Gallery ($4 million), following the Government's decisions in February to defer acquisition of some overseas art works and to slow construction of the new National Gallery building. {:#subdebate-43-5} #### Transport and Communication Outlays for transport and communication exceeded the Budget estimate by $48 million. There were increases compared with the Budget estimates in net advances to Qantas ($22 million) and to the Australian Shipping Commission ($25 million) for the purchase of aircraft and ships respectively. The contribution of air navigation charges .towards the cost of civil aviation facilities fell short of the Budget estimate by $23 million because charges were increased later and by lesser amounts than had been envisaged at Budget time. Reflecting the Government's decisions in February to achieve expenditure savings, advances from the Budget to the Australian Postal Commission and Australian Telecommunications Commission were each $1 1 million less than originally estimated. Payments to the States for Urban Public Transport Improvement programs were $9 million less than the Budget estimate. {:#subdebate-43-6} #### Industry Assistance and Development Total outlays for industry assistance and development were $121 million less than estimated. This shortfall stemmed from two main sources. First, because of a sustained improvement in wool prices, the Australian Wool Corporation made net repayments of $31 million, rather than borrowing $80 million as had been envisaged at Budget time. Secondly, the Budget included $75 million for additional capital and advances to the Australian Industry Development Corporation; in the event no payment was made. Loans to beef producers also fell short of the Budget provision by $8 million and outlays on the new export development grants scheme were $10 million less than estimated. There were, however, some significant upward variations. The 1975-76 growers' contribution of $30 million to the Wheat Industry Stabilisation Scheme, expected in June, was not received until July. The re-introduction of the superphosphate bounty by the incoming Government involved expenditure of $20 million which had not been provided for in the Budget and the continuation of the Nitrogenous Fertilizer Subsidy beyond 31 December 1975 added a further $7 million. Assistance to the shipbuilding industry exceeded the Budget provison by $12 million while residual payments under the now terminated export incentive grants scheme were $29 million higher. {:#subdebate-43-7} #### Labour and Employment Outlays for labour and employment activities exceeded the Budget estimate by $6 million. Payments to the Stevedoring Industry Authority were $14 million greater than the Budget provision following a post-Budget decision of the previous Government to increase the rate of the Stevedoring Industry Charge, the proceeds of which are passed back to the industry. This increase was partly offset by a shortfall of $12 million in payments under the NEAT System as a consequence of the Government's action to tighten eligibility conditions for assistance under the. System. {:#subdebate-43-8} #### Foreign Affairs and Overseas Aid Total payments under this heading fell short of the Budget estimate by S38 million. Within this total there was a shortfall of $29 million in overseas aid payments reflecting both the Government's decision in February to effect reductions and deferments in aid expenditure of $21 million and expenditure slippages on projects and training along with a slower than expected draw-down of a loan to Fiji. Calls for payments to the Asian Development Bank were also less than expected. Partly offsetting these shortfalls, assistance to Papua New Guinea exceeded the Budget allocation by $3 million due to higher than expected termination and retirement benefit payments to expatriate officers of former Papua New Guinea Administrations and the Australian Staffing Assistance Group. Administrative expenses under this heading were $8 million less than estimated, reflecting mainly a shortfall of $6 million in expenditure on the overseas construction program which resulted from restraints imposed on certain new projects and unexpected expenditure slippages. {:#subdebate-43-9} #### Administrative Services Outlays on administrative services were affected by the imposition of the new staff ceilings, cut-hacks in overtime and travel, and by measures to rationalise the use of commissions, boards of inquiry, other advisory bodies and consultants. These and other economy measures more than offset the costs of wage and salary increases during the year and total outlays turned out to be $20 million lower than the Budget estimate. *Payments to or for the States and Local Government Authorities nec and Natural Disaster Relief* Total outlays in this category fell short of the Budget estimate by $97 million, There was a shortfall of $112 million in financial assistance grants to the States. The Budget estimate was based on, inter alia, an assumed increase of 21 per cent in average wages in the year to March 1976; in the event the increase was 17 per cent. The New South Wales Government exercised its option to delay repayment of special advances of $6.5 million. Compensation payments to victims of the Darwin Cyclone disaster fell short of the Budget provision by $15 million as the number and value of claims turned out to be less than expected. On the other hand, payments to the States for natural disaster relief exceeded the Budget estimate by $22 million following severe damage caused by floods and cyclones affecting all mainland States except South Australia. {: .page-start } page 154 {:#debate-44} ### RECEIPTS The differences between the Budget estimates and actual receipts in 1975-76 are set out in the table below; the accompanying notes comment briefly on the main variations. {:#subdebate-44-0} #### Customs Duty - Imports Collections of customs duty on imports were $74 million higher than estimated, mainly because the value of imports turned out to be higher than had been assumed at Budget time. {:#subdebate-44-1} #### Customs Duty - Coal Exports Revenue from coal export levies was $8 million less than estimated. After the Budget was introduced the previous Government decided to exempt exports of steaming coal from the duty (at a cost of $4 million to revenue); in addition, the overall volume of exports was slightly lower than was estimated at Budget time. {:#subdebate-44-2} #### Excise Duty Excise collections were $76 million less than the Budget estimate. Clearances of most major dutiable goods, particularly beer and cigarettes, were lower than had been estimated at Budget time. The levy on crude oil, condensate and naturally occurring LPG introduced in the 1975-76 Budget raised S257 million, compared with the Budget estimate of S280 million. {:#subdebate-44-3} #### Sales Tax Revenue from., sales tax was S17 million lower than estimated; this was mainly because prices of some taxable goods rose less rapidly than was assumed at Budget time. *Income Tax on Individuals - Pay-as-you-earn* Gross collections of PAYE instalment deductions were $1346 million less than the Budget estimate. It was this very large shortfall which was primarily responsible for the actual deficit exceeding the Budget estimate by a wide margin. The Budget estimate of gross PAYE collections was based on assumed increases of 22 per cent in average weekly earnings in 1975-76 and 2 per cent in average employment (both on a male unit basis). In the event, earnings increased by about 14 per cent and there was little change in employment. Refunds of PAYE income tax collections were $318 million higher than estimated. The effect on refunds in 1975-76 of periods of unemployment and part-time employment for many taxpayers in 1974-75 - which effectively results in over-deduction of tax - was greater than estimated. In addition, the estimate did not allow sufficiently for the net over-deduction of instalments that resulted from the operation during 1974-75 of three different schedules of instalments, one of which compressed a full-year adjustment into a 6 month period. *Income Tax on Other Individuals* Collections on assessment of income tax on individuals were $543 million greater than the Budget estimate. This reflected improved collection procedures instituted by the Taxation Office and higher than assumed incomes earned in 1974-75 (subject to tax in 1975-76) by non-farm unincorporated enterprises. {:#subdebate-44-4} #### Income Tax - Companies Company income tax collections also were $363 million more than the Budget estimate, reflecting a larger than estimated increase in company incomes in 1974-75 (assessed to tax in 1975-76). {:#subdebate-44-5} #### Other Taxes, Fees and Fines Other taxes, fees and fines exceeded the Budget estimate by $24 million. Receipts from the Stevedoring Industry Charge were $17 million greater than the estimate following an increase in the rate after the Budget was brought down; the proceeds from this charge are paid to the Stevedoring Industry Authority. {:#subdebate-44-6} #### Interest, Rent and Dividends Receipts from interest, rent and dividends were $76 million less than the Budget estimate. The main change was in respect of interest received from the States, reflecting the formal take-over by the Commonwealth of $1 000 million of State debt on which the interest liability amounted to $55 million. {: .page-start } page 156 {:#debate-45} ### FINANCING TRANSACTIONS The manner in which the deficit in 1975-76 was financed is summarised in the following table: Brief comments on the main 1975-76 financing transactions are provided below. {:#subdebate-45-0} #### Net Proceeds of Loan Raisings Overseas Three loans totalling $93 million were raised in Germany, the Netherlands and Switzerland' in 1975-76. A further public loan of $162 million (SUS200 million) was raised in New York, of which $26 million was advanced to Qantas and $23 million to the Australian Shipping Commission. Other loan raisings on behalf of Qantas amounted to $23 million. Repayments of previous drawings for Qantas and the Australian National Airlines Commission amounted to $25 million. Other securities to the value of $89 million were repurchased or redeemed in New York, London, Germany and Canada. Repayments of $3 million were made on borrowings from the International Bank for Reconstruction and Development. Repayments of previous drawings arranged for defence equipment purchases in the United States on extended payment terms amounted to $35 million in 1975-76. *Net Proceeds of Loan Raisings in Australia* The Australian Savings Bond introduced in January was designed especially for household savers and non-professional investors. This new bond proved to be highly attractive and made a significant contribution to financing the deficit. In the first five months after its issue, the Australian Savings Bond raised $1202 million, and there have been $22 million in redemptions. Net redemptions of the now superseded Special Bonds amounted to $57 million in 1975-76. Four Government public cash and conversion loans in August, October, January/ February and April resulted in loan raisings of $1699 million. Total redemptions and repurchases amounted to $194 million. States Domestic Loan Raisings were $6 million, bringing net proceeds of loans raised in Australia in 1975-76 to $1511 million. *Net Change in Treasury Notes on Issue* Treasury Notes are the shortest term Government security issued to the public in Australia. As at 30 June 1976, Treasury Notes on issue amounted to $457 million, a decline of $1620 million over the financial year. {:#subdebate-45-1} #### Other Financing Transactions The unusually large figure recorded under this heading included $720 million from security transactions between the Commonwealth Trust Fund and the Reserve Bank which supplemented the Bank's trading portfolio during the year. The trans- actions were designed to enable the Bank to carry out effectively its open market operations. These security transactions with the Bank were partly offset by cancellations of Treasury Bonds amounting to $95 million by the Loan Consolidation and Investment Reserve. Other major transactions in this category included net payments of $119 million by the Postal and Telecommunications Commissions, representing the employer contributions to their superannuation schemes, and $19 million in proceeds from coinage and bullion transactions. {:#subdebate-45-2} #### Residual Financing To complete the financing of the deficit in 1975-76, $1350 million was borrowed from the Reserve Bank and Government cash balances were run down by $296 million. Of the amount borrowed from the Reserve Bank $850 million was covered by the issue of Treasury Bills and $500 million by the issue of new marketable securities. This is the first occasion since 1969-70 that borrowings in the form of Treasury Bills have remained outstanding at the end of a financial year. The issuing of new marketable securities to the Reserve Bank was supplementary to the transactions with the Bank recorded under Other Financing Transactions and will provide support to the market operations of the Bank during the seasonal upswing in liquidity. As a result of the run down in cash balances during the year, at 30 June 1976 these balances stood at $469 million. {: .page-start } page 158 {:#debate-46} ### STATEMENT No. 6- BUDGET TRANSACTIONS SINCE 1966-67 This Statement presents Budget transactions since 1966-67 classified according to the two complementary methods of classification adopted throughout the Budget Speech and Statements. The *functional classification,* which was introduced in the 1973-74 Budget, categorises Budget outlays according to their primary objectives or purposes. This classification facilitates decision making on the nature, extent and relative priorities of Government activities. The *national accounting classification* details Budget outlays by economic type and facilitates comparisons of Budget aggregates with other national accounts data. This classification is essential when it comes to assessing the overall economic impact of the Budget. As the functional classification generally adopts national accounting conventions for the definition of Budget outlays and receipts, the data on outlays by function are in line with those used in the analysis of the economic impact of the Budget. This avoids the problems encountered prior to 1973-74 when two conceptually different classifications were used. {:#subdebate-46-0} #### Functional Classification Functionally classified Budget data for the period 1966-67 to 1975-76, together with 1976-77 estimates, are presented in the tables at the end of this Statement. In bringing together categories of outlays with similar objectives or purposes, the functional classification focuses attention on the nature of Government activities and the share of resources devoted to particular objectives. It also provides a logical framework within which programs can be developed to facilitate an assessment of the effectiveness of outlays in meeting stated objectives. Further information on the basis underlying the functional classification is given in the Appendix to the Budget Statements. The functional classification is essentially a re-classification of appropriation data, supplemented with sub-costings of appropriation items of substantial magnitude that cover several functions. However, Table 2 provides less detail than do the tables in Statement No. 3, partly for ease of presentation and partly because some of the sub-costings necessary to eliminate the effects of all changes in accounting procedures and administrative arrangements are not available. To the extent possible, the definitions and concepts adopted for the historical series are the same as those used in Statement No. 3. **Major discontinuities** are indicated where appropriate. Comparisons of trends over the period covered in the tables are affected by certain major developments such as the transfer of pay-roll tax to the States, 'offsets' to grants to the States, changes in the operation of certain retirement benefit schemes and the transfer of the South Australian and Tasmanian railways. These factors are mentioned in the Notes on Tables. {:#subdebate-46-1} #### Budget Sector Outlays Over the nine year period from 1966-67 to 1975-76, total outlays of the Commonwealth Government Budget Sector increased at an average annual rate of 15.5 per cent; details for each functional category are shown in the following table: The data in the tables are in current prices and reflect price increases as well as real increases in resources devoted to particular functional activities. Comparisons within and among different categories of outlays are also affected by differential rates, of price increase. Average annual rates of increase can mask movements *within* the period covered. The chart below shows the proportion of total outlays within the major functions in each of the past ten years. In 1974-75 and 1975-76 Budget outlays increased much faster than total output and represented a substantially increased share of GDP: {:#subdebate-46-2} #### Budget Sector Receipts Details of Commonwealth Government Budget Sector receipts for the period 1966-67 to 1975-76, together with 1976-77 estimates, are presented in Table 4. Data on the composition and rate of growth of Budget receipts over the period 1966-67 to 1975-76 are shown in the following table: The chart below gives an indication of the relative importance of the various categories of receipts in total Budget sector receipts over the ten years from 1966-67. By far the most important single category of receipts is income tax on individuals, which increased from 37.8 per cent of total receipts in 1966-67 to 50.4 per cent in 1975-76. This increase stems largely from the effects of the progressive rate scale in a period of strong growth in personal incomes particularly wage and salary incomes. This growth occurred despite adjustments to the rate scale and other elements of the personal income tax system that were made in 1970-71, . 1972-73, 1974-75 and 1975-76 with a view to reducing rates of tax for most taxpayers. The major reason for the contracting share of 'Other General Taxation' in the total is that pay-roll tax revenue after 1971-72 relates to collections in the Australian Capital Territory and Northern Territory only, following the transfer of this tax to the States in September 1971. The decision, announced in the 1974-75 Budget Speech, to abolish broadcast listeners and television viewers licences from 18 September 1974 has also contributed to this contraction in recent years. Total Budget receipts have represented a steadily increasing proportion of GDP in recent years. {:#subdebate-46-3} #### The Budget Deficit The overall Budget deficit in each of the years 1966-67 to 1975-76 is shown in Table 1. There is a brief discussion of the Budget deficit in the next section. {:#subdebate-46-4} #### National. Accounts Classification The national accounts for the economy as a whole provide a systematic summary of the transactions that take place within the economy, especially those relating to the production and use of goods and services, and to transfers of income or capital between sectors of the economy. The national accounts classify transactions into various categories and, by outlining the relationships between the categories, enable analysis of the processes by which production and expenditure are linked. Traditional methods of presenting estimates of public sector receipts and expenditure grew out of the requirement for maintaining parliamentary control over government spending. Estimates presented in a form suitable for this purpose do not necessarily lend themselves to an assessment of the economic impact of government financial activity. By presenting Budget data on a basis which is conceptually consistent with, and more easily related to, the national accounts for the economy as a whole, the national accounting presentation of Budget transactions by economic type clarifies the nature of transactions between the public sector and the rest of the economy. The classification also provides a consistent framework within which the aggregation of Commonwealth and State and local authority outlays and receipts is facilitated, to produce consolidated figures for the public sector as a whole. There is no single measure of the economic importance of government transactions. In terms of national accounting categories, the most direct influence that Budget outlays have on demand is by means of expenditure on final goods and services, i.e., the resources used in the provision of public goods such as defence, education, health and community amenities. Transfers and advances from the Budget to other sectors are also important, but the impact on economic activity of these outlays depends on the spending propensities of the recipients of the transfers and advances. For Budget receipts, it is also true that any assessment of their effect on the economy has to take into account the varying impact of different taxes and other receipts. A further important distinction is between domestic and overseas Budget transactions; payments made overseas do not add to domestic incomes and the demand for locally-produced goods and services, while receipts from overseas resources increase total receipts without withdrawing purchasing power from the domestic private sector. The total economic impact of the Budget is an amalgam of all these influences. In a shorthand way the Budget deficit or surplus (and the domestic deficit or surplus) is usually taken as a summary measure of the Budget impact; like all summary measures, however, it is subject to a number of important qualifications. {:#subdebate-46-5} #### Commonwealth Government Outlays The contribution of the Commonwealth Government and its authorities to recent growth in the size of the public sector has been dominated by the transactions of the Budget sector. In 197S-76, for example, the Budget's direct call on resources, in the form of final expenditure on goods and services, represented over 80 per cent of final expenditure by the Commonwealth Government sector as a whole. Advances from the Budget to Commonwealth authorities also finance a significant part of final expenditures on goods and services recorded in the non-Budget sector. Direct expenditure on goods and services, however, represents only a moderate and, in recent years declining, proportion of total Budget outlays. The bulk of the Commonwealth's budgetary transactions comprise transfer payments and advances to other sectors of the economy, including other government sectors. In 1975-76 transfer payments and net advances accounted for 79 per cent of total Budget outlays, of which almost half represented grants and net advances to State Governments. Table 3 attached to this Statement shows Budget outlays since 1966-67 on a national accounts basis. On this basis, transfers between different parts of the accounts of the Commonwealth Budget sector are eliminated and additional detail included so that the figures shown relate to the transactions which occur between the Commonwealth Government Budget sector and the rest of the economy, including other levels of government, and overseas. The national accounts figures therefore show government transactions classified into economically orientated categories comparable with those presented in the Budget Paper *National Income and Expenditure* 1975-76. Over the past decade there has been a tendency for Commonwealth Budget outlays to grow somewhat faster than expenditures in the economy as a whole. As indicated in the table on page 133 this outcome for the decade as a whole is heavily influenced by the experience of the last two years, 1974-75 and 1975-76. The following table compares the average annual rates of growth of the main components of Budget outlays with the average annual rate of growth in gross national expenditure for the period since 1966-67. Taking the period as a whole, the Budget's *direct* call on resources, as measured by final expenditure on goods and services, reached a peak of 7.2 per cent of gross national expenditure in 1967-68; it declined thereafter to 5.9 per cent in 1973-74 but in the last two years has again risen to be 6.7 per cent of GNE .in 1975-76. In assessing the total economic impact of the Budget on final demand for goods and services it is not sufficient, however, to look only at its direct call on goods and services. This is because, as noted previously, much the larger proportion of Budget outlays is in the form of transfer payments, such as payments of pensions, subsidies, interest and grants, and the call on resources from such payments depends on the uses to which the recipients put the funds. Other Budget outlays take the form of advances (e.g.,, to the States) and the economic impact of these is different again. Consequently, it is necessary to take account of variations in the composition of total outlays in analysing the Budget's impact. Expenditure on goods and services declined as a proportion of total Budget outlays from a peak of 29.1 per cent in 1968-69 (associated with the strong growth in defence spending in the preceding years) to 21.1 per cent in 1975-76. On the other hand, cash benefits to persons have increased from 20.6 per cent in 1967-68 to 27.9 per cent in 1975-76. The high proportion in 1975-76 reflected, inter alia, the introduction of Medibank and high average levels of unemployment during the year. Although it is not possible to specify precisely the final use of funds transferred from the Budget in this way, many of the recipients of these benefits would have high marginal propensities to spend so that this category of outlays is likely to have a fairly immediate impact on final demand for consumption goods. A major proportion of Commonwealth Government outlays comprises payments to the States and local government authorities. Because of changes from time to time in the methods of making such payments, it is more useful to look at 'Grants to or for the States and local government authorities' and 'Net Advances to the States' as one category. Considered as a whole, payments to the States have normally accounted for about one-third of Commonwealth Budget outlays. Over the last ten years, the proportion has ranged between 31.4 per cent in 1968-69 and 38.7 per cent in 1975-76. (The high 1975-76 figure reflects in part the prepayments totalling almost $216 million which were made to the States in June in respect of hospital operating costs which in the normal course of events would not have been made until 1976-77.) These outlays finance, inter alia, the States' health and education services and their works and housing programs. As with cash benefits, it is not practicable to trace through precisely the final use of all these funds from the Budget. Moreover, the timing of outlays by the States can differ from the timing of payments to them of funds to finance those outlays. Advances other than to the States are distributed chiefly within the Commonwealth Government sector itself in the form of advances to government instrumentalities operating outside the Budget. These include the Postal and Telecommunications Commissions, the Australian National Airlines Commission, Qantas Airways Limited, the Australian Shipping Commission, the Australian Wool Corporation and the Snowy Mountains Hydro-electric Authority. Advances to such authorities in 1975-76 amounted to $653 million or 3.0 per cent of Budget outlays; this represents a considerable fall from the 1974-75 level of 6.1 per cent when there were large advances to the Australian Wool Corporation. Again, it is generally not practicable to trace through the precise utilisation of the funds advanced to these instrumentalities from the Budget. It is possible though to offset transfers between the Budget and non-Budget sectors of the Commonwealth Government and to consolidate outlays, other than inter-sector transfers, to form a statement of the outlays and receipts of the Commonwealth Government sector as a whole. The method of consolidation used is outlined in a Supplement to the Treasury Information Bulletin dated September 1974. Table 5 attached to this Statement sets out national accounts estimates of the main categories of receipts and outlays of the Commonwealth sector as a whole for the period since 1966-67. Total outlays by the non-Budget sector amounted to $1 380 million in 1975-76. There are some significant differences between the relative composition of outlays of the Commonwealth sector as a whole and that of the Budget sector alone. The following table details the respective compositions of outlays for 1975-76: *Total Public Sector Direct Expenditure on Goods and Services* Taking into account State Governments and local authorities, the relative size of total public sector direct expenditure on goods and services remained fairly steady around 22 per cent until 1974-75 when there was a sharp increase to almost 25 per cent of GNE. The following table shows the trend in the public sector's share of expenditure on goods and services over the period since 1966-67: The sharp rise in the share of resources going to the public sector in 1974-75 and 1975-76 reflected a combination of increased demands by governments on the resources of the economy, and the downturn in private sector activity. {:#subdebate-46-6} #### Budget Receipts Total budget receipts in national accounts terms have increased at an annual average rate of 14.8 per cent over the period from 1966-67, rising from 22.5 per cent of gross domestic product in 1966-67 to 26.2 per cent in 1975-76. These receipts comprise taxes of various types together with a number of other charges, and interest, rent and dividends. As with outlays, different types of receipts have different effects on the economy. Taxes on incomes, for example, influence private demand for goods and services through their effect on the level of disposable incomes; sales taxes, on the other hand, affect private demand through the prices of goods. Consequently, the 'mix' of Budget revenues, as well as their total size, is a relevant consideration in any assessment of the overall impact of the Budget on the economy. {:#subdebate-46-7} #### The Overall Budget Result The Commonwealth Government has incurred overall deficits on its budgetary transactions in each of the years 1966-67 to 1975-76 *(see* Table 1). Estimates of the *domestic* budget result are available only for the years since 1968-69. These estimates are shown in the following table, along with the overall Budget result for the same years and the latter expressed as a proportion of GDP. The main financing transactions undertaken to meet the deficits in the Budget over the period have been domestic and overseas loan raisings, the issue of Treasury Notes, and temporary borrowings from the Reserve Bank. Details of these financing transactions are given in Table 6 attached to this Statement. Notes on Tables To the extent practical, historical data have been adjusted to eliminate major breaks in series. However, some important changes which affect year to year comparability cannot be readily removed. At the Premiers' Conference in June 1971 it was agreed that the Commonwealth Government would cease to levy pay-roll tax in the States as from 1 September 1971 and that the States would levy their own pay-roll taxes as from the same date. This decision resulted in a reduction in Commonwealth pay-roll tax revenues estimated at $253 million in 1971-72. To offset most of this loss in revenue, financial assistance grants paid to the States in 1971-72 were reduced. The full-year effect of these transfer arrangements is reflected in the 1972-73 figures for outlays and receipts. The transfer arrangements had the effect of reducing the growth of outlays and receipts below the rate that would otherwise have been recorded by approximately 3 percentage points in 1971-72 and about 1 percentage point in 1972-73. The figures shown in the Tables reflect these lower growth rates. Comparisons between 1972-73 and subsequent years are not affected by the transfer since no significant effects of the changeover continued beyond 1972-73. Increases in special purpose payments to the States are recorded under the appropriate functional headings, while 'offsetting adjustments' to General Revenue Assistance Grants to the States are taken into account under the functional heading Payments to or for the States and Local Government Authorities nec and Natural Disaster Relief. The assumption in 1973-74 of full financial responsibility for universities and colleges of advanced education by the Commonwealth Government contributed to an increase in outlays classified to Education but also involved a compensating decrease in general purpose funds provided to the States. This means that the rate of increase in Commonwealth Government resources devoted to education, as shown in the function Education, is somewhat overstated. A similar effect occurs in 1974-75, which was the first full year of the new tertiary education arrangements; these arrangements applied only to the second half of 1973-74. Changes in the operation of the Defence Forces Retirement and Death Benefits, Ministerial Retiring Allowances and Parliamentary Retiring Allowance Schemes affect the outlays for 1973-74 and subsequent years under the relevant functions and under the receipts headings Other Taxes, Fees and Fines - Unfunded Retirement Benefits Contributions. These changes involved a move from funded schemes to unfunded benefit schemes. The implementation of the new Commonwealth Superannuation Scheme with effect from 1 July 1976 gives rise to similar effects. Notes on Tables 1 and 2: Budget Sector Outlays Classified by Function The 1956-66 Housing Agreement was not renewed on its expiry at the end of 1970-71. Instead, the Commonwealth and State Governments agreed on arrangements under which housing allocations would be met, in the same way as other expenditures, by the States out of their approved Loan Council borrowing programs. Amounts totalling $160 million in 1971-72 and $166.9 million in 1972-73 were subsequently allocated by the States for housing projects similar in nature to those covered by the 1973 Housing Agreement. Tables 1 and 2 show these amounts classified to 'Payments to the States, etc.' instead of 'Housing'. However, for the purposes of the calculation of the trend rates of growth and the chart of proportions of total outlays, these amounts have been included in the function 'Housing'. Because of revisions in the classification of items to the various functional headings (see Appendix to the Budget Statements) the figures in these two tables are not entirely comparable with those given in the Budget documents in previous years. Notes on Table 3: Figures in National Accounts Terms - Budget Sector {:#subdebate-46-8} #### Outlays *Net Expenditure on Goods and Services* This heading covers direct purchases of domestic output and imports, and includes wages and salaries of government employees and pay and allowances of defence forces. Any recoupments of such expenditures from other sectors of the economy or overseas are netted off. Current and capital expenditure are shown separately. In accordance with national accounting conventions, the cost of purchasing equipment for defence purposes is classified as current expenditure. {:#subdebate-46-9} #### Transfer Payments Current payments to other parts of the economy or overseas, other than payments for goods or services supplied (but including the purchase of existing assets) are listed in their various forms under this heading. {:#subdebate-46-10} #### Net Advances Loans, advances and additional capital made available by the Commonwealth Government are shown in the respective items under this heading. Repayments of loans and advances are deducted to arrive at the net figures. Notes on Table 5: Commonwealth Government Sector The method of presentation of national accounting estimates and expenditures for the Commonwealth Government sector as a whole is discussed in the Appendix to the Supplement to the Treasury Information Bulletin entitled *National Accounting Estimates of Receipts and Outlays of Australian Government Authorities,* September 1974. {: .page-start } page 183 {:#debate-47} ### APPENDIX TO THE BUDGET STATEMENTS - THE FUNCTIONAL CLASSIFICATION OF BUDGET OUTLAYS The purpose of the functional classification is to bring together outlays with like objectives or purposes. In this way the classification aims to present information on the nature of government activities, on the share of resources devoted to particular objectives and to facilitate assessment of the effectiveness of outlays in meeting objectives. Compared with the classification used in Budget Statements prior to 1973-74, the functional classification has the added advantage of being based on national accounting conventions. There is thus a consistent conceptual basis underlying both the economic classification and the functional classification. This removes a considerable source of confusion which existed in Budget documents prior to 1973-74 when two conceptually different classifications were used - the so-called 'conventional' classification and the national accounting classification. Basis of the Functional Classification The conventions and principles used in the functional classification are essentially those set out in the publication *A System of National Accounts,* United Nations, New York 1968. That classification is a widely accepted international standard for the classification of public expenditure by function. It is also used by the Organisation for Economic Co-operation and Development as a basis for the development of internationally comparable statistics on the public sector. The Australian Bureau of Statistics has concurrently adopted these conventions and principles in the documents it publishes on public authority finance. While the major functional headings adopted for Budget purposes are conceptually consistent with those used by the Statistician in his publications, it should be noted that the figures published by the Bureau for Commonwealth Government outlays cover both Budget outlays and outlays by Commonwealth Government authorities which operate outside the Budget sector. They therefore differ somewhat from the figures shown for the Budget sector in the Budget Statements. Information on the transactions of authorities operating outside the Budget sector is shown in the *National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities* which is published with the Budget documents. Two further differences should be noted. First, outlays on primary industry assistance are shown in the Budget Statements 'net' of the relevant primary industry levies and charges; these outlays are shown on a gross basis by the Statistician. Secondly, for the years prior to 1 974-75, part of the expenditure incurred by some Commonwealth Government departments and instrumentalities operating in Papua New Guinea is classified by the Statistician as foreign aid. These outlays, however, are shown under the same functional heading in the Budget Statements as similar outlays made within Australia. Supplementary information on the functional allocation of these outlays is available in the Bureau's publication *Public Authority Finance - Federal Authorities.* The Structure of the Functional Classification The major functional headings are shown in the summary table in Statement No. 3. Brief descriptions of the contents of each function are given below. These descriptions are intended to convey the scope of the outlays included under each heading rather than to be a detailed listing of the contents of each category. Further detail on each function is provided in the body of Statement No. 3. Historical data for the period 1966-67 to 1975-76 are given in Statement No. 6. From an examination of the classification structure set out in the Budget Statements it will be evident that the functional classification is relatively aggregative in nature. On the whole it has not been possible, for example, to dissect the administrative outlays of departments and to allocate them over the particular sub-categories shown under each functional heading. Outlays under each functional heading in the classification have been grouped together into readily identifiable expenditure blocks. These expenditure blocks do not, as a rule, purport to represent detailed purpose-oriented sub-functions or programs; rather, they are meant as recognisable and meaningful groupings which lend themselves to discussion and analysis. Nevertheless, the main outlay blocks are decidedly more purpose-oriented than was the case with the categories of expenditure identified under the conventional classification used prior to 1973-74. Given the need to produce a continuing and up-to-date record of actual monthly outlays and receipts which is consistent with the overall estimates embodied in the Budget Speech and documents, it has been necessary to work largely within existing central accounting records. These records are, at present, built around the Appropriation Acts, which are the legal authority for expenditure rather than detailed costing documents. The figures presented, therefore, have been derived essentially by reclassifying appropriation data, supplemented where necessary by a limited number of sub-costings of substantial appropriation items which cover several functions. It should be noted also that the functional categories do not necessarily correspond with appropriation or departmental structures. Furthermore, some outlay and receipt figures are netted in arriving at aggregates. Expenditure votes and revenue heads under the control of a particular department may, therefore, be classified under more than one functional heading and it will not always be possible to identify individual appropriation items in the Statements. The introduction of the functional classification, however, does not alter the structure of the appropriations or the summaries presented with the Appropriation Bills, such as the document *Estimates of Receipts and Summary of Estimated Expenditure.* Although the basic aim of a functional classification scheme is to reveal the broad purposes for which government outlays are undertaken, it is important to note that such a classification cannot always be applied unambiguously. Particular outlays will often serve two or more distinct functions. Military colleges, for example, may be said to serve both a defence and an education purpose. The application of a functional classification scheme, however, requires that an outlay be classified to the function which it is considered primarily to serve. In the example above, the primary function is considered to be defence; this is in line with United Nations recommendations. It is not possible, in any single classification system, to focus at one and the same time on every outlay characteristic that may be of interest to the Government or the public. Supplementary information on particular aspects of expenditure is therefore provided in other documents; for example, details of wage and salary estimates are shown in the document *Estimates of Receipts and Summary of Estimated Expenditure* and a separate Budget Paper is provided on *Payments to or for the States and Local Government Authorities.* Other supplementary Budget Papers issued with the Budget Speech this year deal with the Civil Works Program and Australia's Overseas Development Assistance. {:#subdebate-47-0} #### The Implications of Adopting National Accounting Conventions As indicated earlier in this Appendix, the use of definitions of Budget outlays and receipts based on national accounting conventions places Budget data on a basis which, in the main, is conceptually consistent with national accounting information published by the Australian Bureau of Statistics and can be related to that information. The principles underlying the national accounting presentation of Budget data are set out in the Appendix to the Supplement to the Treasury Information Bulletin entitled *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities,* September 1974. Concurrent with the introduction of the functional classification in 1973-74, some changes were made to the previous national accounting definitions of outlays, receipts, the deficit, and their components used in the Budget Statements. The more significant of these changes were: {: type="a" start="a"} 0. net advances to the Australian Wheat Board are now treated as outlay items, rather than financing transactions as in the past. This brings the classification of these short-term advances into line with that accorded to other advances from the budget: {: type="1" start="6"} 0. purchases of land and existing buildings (including inter-departmental transfers for which a financial adjustment is made) are now treated as outlays rather than offsets to the proceeds from the sale of these assets under a receipts heading. This change permits gross outlays on these assets to be shown under the appropriate functional headings. Other conceptual changes in line with the principles set out in the publication *A System of National Accounts* were also introduced. These changes relate mainly to the treatment of rents and business enterprise transactions and are indicated in the September 1974 Supplement to the Treasury Information Bulletin. Overall, they do not have a very significant effect on the figures shown for total receipts and total outlays. The adoption of national accounting conventions implies that the receipts and outlay figures shown in the Statements attached to the Budget Speech relate, for the most part, to the net transactions of the budget sector with the rest of the economy. Some important characteristics of the national accounting treatment shown in the Statements are: {: type="a" start="a"} 0. the transactions of various Funds forming the Public Account (the Consolidated Revenue Fund, Trust Fund and Loan Fund) are consolidated and inter-fund transfers are eliminated. For example, payments to Trust Accounts are not shown as part of outlays; rather, the expenditure from Trust Accounts is included. The aim is essentially to record the transactions between the Budget sector and the rest of the economy. Allowance is made, however, for adjustments between functions arising from the transfer of existing assets where financial adjustments for these transfers are recorded; {: type="1" start="6"} 0. receipts derived from activities which are essentially of a governmental nature, involving regulation and compulsory payment, are normally treated as revenue items. As mentioned earlier, however, the various primary industry levies and charges which are collected by the Government and applied more or less directly for the purposes of commodity stabilisation, research and promotional activities are offset against the relevant outlays. Other recoveries and. repayments are normally offset against the relevant outlays to arrive at net outlay figures. For example, repayments of principal on advances to other authorities are offset against the corresponding advances under the same outlay heading. Bringing together the relevant outlays and recoveries or repayments makes it possible to see more readily the extent of financial resources which are directed through the Budget to a particular activity. Other taxes, compulsory charges, licence fees and the like which are more of a general revenue nature continue to be treated as receipts items under the heading 'Other Taxes, Fees and Fines'; 1. the operating revenues of activities which are carried out as business-type enterprises are shown net of operating expenses as receipts items and do not appear in the outlay tables. The current operations of enterprises are therefore reflected in the Budget Statements to the extent that they contribute to general budget revenues; and 2. certain transactions which are netted in published totals of the receipts and payments of the Public Account are shown in gross form. The more important of these are interest on loans raised by the Commonwealth Government for State works programs and for the Australian National Airlines Commission and Qantas Airways Ltd. Interest paid on these loans is included under the outlay heading 'Public Debt Interest', while interest received on advances made to the relevant authorities is included as a receipts item. This has the effect of making the coverage of interest in the Statements the same as the coverage of the debt to which it relates. Changes in the Functional Classification Because the organisation for and coverage of government activity is not static, changes need to be made to the functional classification headings and their contents from time to time. The principal changes made to the contents of the functional headings this year are indicated below: {: type="a" start="a"} 0. Railways. In 1975-76 the Australian National Railways (ANR) replaced the Commonwealth Railways. Prior to that, Commonwealth Railways had been treated as a departmental enterprise within the Budget sector; its capital payments were shown as outlays under the heading 'Transport' while operating receipts were offset against operating expenditure under the receipts heading 'Net Receipts from Government Enterprise Transactions'. Under the new arrangements, ANR is treated as an enterprise outside the Budget sector with advances for capital purposes and an operating subsidy being shown as outlays. In the 1975-76 Budget Statements there was a break in the series at 1975-76 but it was noted that, if possible, data for earlier years would be adjusted to a comparable basis. This has now been done. 1. Superannuation. The implementation from 1 July 1976 of the new Commonwealth Superannuation scheme is reflected directly in two items in the functional classification. First, outlays under the heading 'Net Superannuation Payments' (NSP) have risen because under the new legislation the Government has assumed responsibility for the payment of the full pension, whereas under the previous arrangement the cost of the pension was shared proportionately between the Government and the Superannuation Fund. Secondly, there has been an increase in the receipts item 'Unfunded Employee Retirement Benefits Contributions'. Under the new legislation, at the time of retirement, an officer's accumulated contributions (plus interest) are paid from the Superannuation Fund into CRF. The officer may then take an additional contributor financed pension (which is included under the outlays item NSP) or may elect to take a lump sum. To avoid distorting the outlays and receipts figures, payments of lump sums are netted off from the receipt item. In addition, payments will be made from the Superannuation Fund to CRF in respect of the Fund's liability for existing pensioners at 30 June 1976. The precise size and timing of these payments has still to be determined. Pending finalization of this matter and in view of the capital nature of this transaction (in the national accounting sense), the estimated payment in 1976-77 has been classified to 'Other Financing Transactions'. As a consequence of changed administrative arrangements and problems of data availability, it has again been necessary to make some changes in the composition or presentation of the various expenditure blocks. Where appropriate these have been footnoted in the tables. Because the functional classification is derived largely from existing appropriation accounting data, adjustments to the functional classification are constrained by availability of suitable data in that system. In particular, the major "changes to departmental administrative arrangements announced in December 1972. June 1974, June 1975, and December J 975. have made it difficult to produce a strictly consistent set of outlay aggregates for the periods covered in the Budget statements. Where possible, the more important discontinuities have been eliminated by the sub-costing and re-grouping of appropriation data, but it has not been practicable to eliminate all inconsistencies and produce an entirely comparable series. This should be borne in mind when examining the tables in Statement No. 3 and, more particularly, Statement No. 6. For all these reasons, considerable care must be exercised when comparing functionally classified data in the 1976-77 Budget Statements with those in Budget Statements for earlier years. {:#subdebate-47-1} #### Description of Functions The following notes describe briefly the scope of the net outlays encompassed under each functional heading. {: type="1" start="1"} 0. *Defence* Outlays on military defence, including outlays to keep the armed services in a state of readiness. Includes outlays on central administration and on research in connection with activities carried out for defence purposes; outlays on military construction and equipment, inspection, transport and storage; all outlays on recruiting, training, equipping and housing the armed forces, and on medical care and other services for them; outlays on military colleges; expenditure for the provision of quarters for families of military personnel; outlays on pensions and other payments for military personnel under the Defence Forces Retirement and Death Benefit Scheme; outlays on civil defence; outlays on foreign military aid and contributions to international military organisations and alliances. {: type="1" start="2"} 0. *Education* Outlays on the provision, management and support of educational services from pre-school level through to higher school certificate level, trade and technical courses, courses in music, fine arts, etc., and of university and other higher education. Includes outlays relating to the provision of scholarships and allowances to students at all levels; special educational programs designed specifically for the benefit of persons of Aboriginal descent, for migrants and for handicapped children; expenditure on nonvocational adult education courses, school bus services and general administration, regulation and research activities related to education. {: type="1" start="3"} 0. *Health* Outlays on facilities or services for the prevention and treatment of human illness. Includes outlays related to the prevention of diseases, such as chest X-ray campaigns, immunisation and vaccination programs, regulation of standards of sanitation, etc.; outlays concerned with the provision of hospital and clinical services, including treatment and care of those suffering from psychiatric disorders, infectious diseases, etc., and expenditure on nursing schools associated with hospitals. Also includes the payment of hospital, nursing home, medical and pharmaceutical benefits which are designed to cover all or part of the costs of hospitalisation and medical treatment and care of specific groups, such as persons of Aboriginal descent, the aged, former members of the armed forces and their dependants; community health centres, centres for the treatment of drug addicts, and domiciliary care services; general administration, regulation and research related to health matters. {: type="1" start="4"} 0. *Social Security and Welfare* Provision of pensions and allowances and other benefits to persons who, because of age, physical or mental disability, domestic circumstances or other reasons, are unable or not expected to earn a sufficient livelihood for themselves and their dependants. Includes the provision of benefits such as unemployment benefits, age and repatriation pensions, accident and sickness benefits, other benefits to compensate for loss of income and unemployment relief schemes. Provision of financial assistance towards the expenses associated with the bearing and raising of children, marriage guidance and child care facilities, other social security benefits, child welfare services and institutions, homes for and care of the aged and disabled and welfare programs to meet specific needs of disadvantaged groups. {: type="1" start="5"} 0. *Housing* Outlays on the provision of dwellings for sale or rental, and mortgage finance for purchase or construction of dwellings, other financial assistance aimed at facilitating the purchase or construction of dwellings or home ownership. General administration, regulation and promotion of standards, and research in the field of housing. {: type="1" start="6"} 0. *Urban and Regional Development nec and the Environment* Urban and Regional Development nec: Outlays on general promotion and assistance for urban and regional planning and development. Includes outlays on the development of new cities or towns where it is not possible to distinguish expenditure as specifically for housing, roads, sewerage or other purposes, or it is not appropriate to classify the expenditure to other categories (such as in the case of major urban sub-division or* renewal outlays, including the purchase of land for such purposes). Administrative costs of departments and agencies engaged in urban and regional planning and development and environmental activities together with miscellaneous outlays including those on the provision of community amenities. Environment: Outlays on water quality control, air pollution and monitoring and other outlays related to pollution prevention and protection of the environment including identifiable outlays on research, planning and investigation. Sewerage and Sanitation: Outlays on the treatment and disposal of sewage, refuse collection and disposal. {: type="1" start="7"} 0. *Culture and Recreation* Outlays related to the support of performing and creative arts; support of organisations concerned with sporting and other leisure-time activities, and provision of facilities serving purposes primarily related to these activities, such as swimming pools, community centres, athletic fields, etc.; contributions to youth and social organisations; outlays on the protection and preservation of historic sites and buildings, parks and wildlife reserves, and other elements of the national estate; outlays on the provision and operation of government radio and television broadcasting services. {: type="1" start="8"} 0. *Economic Services* This category covers regulation of and assistance provided to, the private sector; direct government participation in economic activity and provision of economic infrastructure. {: type="A" start="A"} 0. *Transport and Communication.* Outlays concerned with postal services, and domestic and overseas telecommunications; outlays on construction, maintenance, promotion, administration and research relating to the various modes of land, sea and air transport, including urban transportation systems and pipelines for petroleum and gas transport. (Road traffic control services are shown under the category 'Law, Order and Public Safety'.) 1. *Water Supply and Electricity.* Outlays on construction and other assistance, regulation and research in connection with the production, transmission and distribution of electricity; and on the conservation, collection, purification and distribution of water primarily for domestic and industrial consumption. 2. *Industry Assistance and Development.* Direct assistance to primary, secondary or service enterprises in forms such as bounties, subsidies, export incentives, advances from the Budget and other transfers including payments to ensure guaranteed prices for commodities or to maintain the prices of commodities below their normal market price; support of agricultural and other industrial research and development and of promotional activities including export promotion; outlays on the management of timber and fishery resources; provision of veterinary, extension and other services to agriculture; land clearing, reclamation and settlement activities; outlays on programs of rural debt reconstruction and farm rehabilitation; investigation, measurement, development and management of water resources for irrigation and pastoral purposes and rural flood mitigation; assistance and encouragement of mineral exploration; geological surveys; development of tourist facilities and tourist promotion; administration, promotion, regulation and research, directly associated with specific primary, secondary or service industries. 3. *Labour and Employment.* Outlays related to the regulation of working conditions, the prevention and settlement of industrial disputes and the enforcement of industrial awards and agreements; programs designed to facilitate changes of occupation by persons displaced by redundancy, occupational training schemes for adults including assistance to enter or re-enter the work-force, provision of labour exchange facilities; outlays directly related to the assisted passage migration scheme; general administration, regulation and research in the field of labour affairs. 4. *Other Economic Services.* Outlays related to regulation of monopolies and restrictive trade practices, price control and justification, regulation of the tariff, other forms of business regulation; outlays on patents and trade marks administration, outlays on meteorological services and other; technical services not allocable to specific kinds of industry; outlays on general administration in the area of economic and commercial affairs not allocable to other outlay categories within the 'Economic Services' function. {: type="1" start="9"} 0. *General Public Services* This category covers outlays on a number of general public services and activities concerned with the organisation and operation of government. {: type="A" start="A"} 0. *Legislative Activities.* Outlays of the legislative and executive bodies of government, including parliamentary committees and the operation of the Governor-General's establishments', outlays related to the conduct of elections and maintenance of registers of voters. 1. *Law, Order and Public Safety.* Outlays on law courts (other than those concerned with industrial relations) and bodies concerned with the administration of the legal system and preparation and execution of law court action; provision of legal aid; registration of legal titles to property; outlays in respect of prisons and other places of detention and correction, and probation services; police services, including traffic control; fire protection and other public safety promotion or services; general administration and research related to these activities. 2. *Foreign Affairs and Overseas Aid.* Outlays of departments and agencies charged primarily with the handling of foreign relations; administration and other expenditure relating to external territories; and outlays on foreign economic aid and contributions to international bodies other than military alliances and organisations. 3. *General and Scientific Research.* Contributions for the promotion of and outlays on, basic and general research in the biological, physical and social sciences, which cannot readily be classified to other outlay categories or linked with the provision or promotion of a particular service or activity. 4. *Administrative Services.* Outlays on the collection of taxes, raising public loans, managing public debt, and controlling the disbursement and audit of public funds. Outlays on general services for the government as a whole, such as statistical services, the purchase and operation of government buildings and equipment (including the construction, repair and maintenance of general purpose buildings), rent, office cleaning, personnel and other administration. General administrative expenses of departments covering a variety of government activities and which cannot be readily apportioned over relevant functions are also included under this heading. {: type="1" start="1"} 0. *Outlays Not Allocated to Function* 5. *Payments to or for the States and to Local Government Authorities nec and Natural Disaster Relief.* General purpose grants and advances to State and other local government authorities which may be spent at the recipient's discretion and grants not classifiable to specific functions. This category includes payments to assist the States to meet debt charges. Payments to States and direct assistance for .the relief of victims of drought, flood, fire and other natural disasters, and for the restoration of community services and facilities. Long run specific reconstruction is, to the extent possible, classified according to purpose. {: type="A" start="B"} 0. *Public Debt Interest.* Net interest payments made from the budget sector to. other sectors, including interest payments on government securities, or under credit arrangements with other countries. Interest received from Government investments in Commonwealth Government securities if offset against gross interest payments. {: .page-start } page 191 {:#debate-48} ### APPROPRIATION BILL (No. 2) 1976-77 Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by **Mr Lynch,** and read a first time. {:#subdebate-48-0} #### Second Reading {: #subdebate-48-0-s0 .speaker-KIM} ##### Mr LYNCH:
Treasurer · Flinders · LP -- I move: >That the Bill be now read a second time. This Bill contains details of proposed appropriations of the Consolidated Revenue Fund in 1976-77 totalling $1,725,446,000 for expenditure on: (a) the construction of public works and buildings; (b) the acquisition of sites and buildings; (c) advances and loans; (d) items of plant and equipment which are clearly definable as capital expenditure; (e) grants to the States under section 96 of the Constitution; and (f) new policies not authorised by special legislation. Included in the above total is an amount of $100m as an Advance to the Treasurer for the purposes set out in the Bill. The proposed expenditures in this Bill were dealt with as appropriate in my Budget Speech. I commend the Bill to honourable members. Debate (on motion by **Mr Uren)** adjourned. {: .page-start } page 191 {:#debate-49} ### BUDGET 1976-77 {: #debate-49-s0 .speaker-KIM} ##### Mr LYNCH:
Treasurer · Flinders · LP **-Mr Speaker,** I present the following papers for the information of honourable members in connection with the Budget for 1976-77: {:#subdebate-49-0} #### Estimates of Receipts and Summary of Estimated Expenditure 1976-77 {:#subdebate-49-1} #### Civil Works Program 1976-77 Government Securities on Issue at 30 June 1 976. Payments to or for the States and Local Government Authorities 1976-77. {:#subdebate-49-2} #### Australia's Official Development Assistance to Developing Countries 1976-77 {:#subdebate-49-3} #### National Income and Expenditure 1975-76 {:#subdebate-49-4} #### National Accounting Estimates of Receipts and Outlays of Commonwealth Government Authorities {:#subdebate-49-5} #### Income Tax Statistics Ordered that the papers be printed. {: .page-start } page 191 {:#debate-50} ### POSTAL AND TELECOMMUNICATIONS COMMISSIONS {: #debate-50-s0 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- I present the following papers for the information of honourable members: {:#subdebate-50-0} #### The Australian Postal Commission- Service and Business Outlook for 1976-77 {:#subdebate-50-1} #### The Australian Telecommunications Commission- Service and Business Outlook for 1976-77 Ordered that the papers be printed. {: .page-start } page 191 {:#debate-51} ### TARIFF PROPOSALS {: #debate-51-s0 .speaker-ZD4} ##### Mr HOWARD:
Minister for Business and Consumer Affairs · Bennelong · LP -- I move: {:#subdebate-51-0} #### Customs Tariff (Coal Export Duty) Proposals ( 1976) The proposals I have just tabled introduce the tariff charges on coal foreshadowed by my colleague the Treasurer **(Mr Lynch)** in his Budget Speech earlier this evening. The changes reduce the export duty on high quality coking coal from $6 per tonne to $4.50 per tonne, reduce the export duty on coking coal other than high quality coking coal from $2 per tonne to $1.50 per tonne, and exempt from duty all exports of non-coking coal. These changes will be effective in relation to all exports after 8 o'clock this evening. I commend the proposals to the House. {: #subdebate-51-0-s0 .speaker-NH4} ##### Mr KEATING:
Blaxland -These proposals amount to a loss in revenue estimated at $37m in a full year. While one can understand that some applications of the coal export duty tax in fact did not discriminate as to the profitability of companies- Motion ( by **Mr Sinclair)** put: >That the honourable member be not further heard. The House divided. (Mr Deputy Speaker- Mr P. E. Lucock) AYES: 82 NOES: 31 Majority....... 51 AYES NOES Question so resolved in the affirmative. {: #subdebate-51-0-s1 .speaker-5E4} ##### Mr SINCLAIR:
Leader of the House · New England · NCP/NP -- So that the Budget debate can be resumed at the proper time, I move: >That the debate be now adjourned. Question resolved in the affirmative. {: .page-start } page 192 {:#debate-52} ### BILLS RETURNED FROM THE SENATE The following Bills were returned from the Senate without amendment: States Grants (Hospital Operating Costs) Bill 1 976 Road Safety and Standards Authority (Repeal) Bill 1976 States Grants (Air Quality Monitoring) Bill 1976 Remuneration and Allowances Amendment Bill 1976 Family Law Amendment Bill 1 976. {: .page-start } page 192 {:#debate-53} ### ASSENT TO BILLS Assent to the following Bills reported: Health Insurance Amendment Bill 1976. National Health Amendment Bill 1976. Health Insurance Commission Amendment Bill 1 976. Social Services Amendment Bill (No. 2) 1976. Conciliation and Arbitration Amendment Bill 1976. Customs Tariff Validation Bill 1976. Northern Territory (Administration) Amendment Bill 1976. Supply Bill (No. 1) 1976-77. Supply Bill (No. 2) 1976-77. Papua New Guinea (Staffing Assistance) Termination Bill 1976. Public Accounts Committee Amendment Bill 1976. Wool Industry Amendment Bill 1976. Wool Tax Amendment Bills (Nos 1 to5) 1976. Dairy Adjustment Amendment Bill 1976. Dairying Industry Research and Promotion Levy Bill 1976. Dairying Industry Research and Promotion (Miscellaneous Amendments) Bill 1976. States Grants (Hospital Operating Costs) Bill 1976. Road Safety and Standards Authority ( Repeal ) Bill 1 976. States Grants (Air Quality Monitoring) Bill 1 976. Remuneration and Allowances Amendment Bill 1976. Maritime College Bill 1 976. Industrial Research and Development Incentives Bill 1976. Family Law Amendment Bill 976. {: .page-start } page 192 {:#debate-54} ### CONSTITUTIONAL CONVENTION {: #debate-54-s0 .speaker-KIH} ##### Mr DEPUTY SPEAKER (Mr Lucock:
LYNE, NEW SOUTH WALES -I have received a letter from the President of the Senate advising that the Senate, by resolution on 3 June 1976, appointed Senators Brown, Button, Cavanagh, Greenwood, Webster and Withers to be members of the Commonwealth Parliament's delegation to attend the Australian Constitutional Convention. {: .page-start } page 192 {:#debate-55} ### ADJOURNMENT Sale of Toy Syringe- Raid on Entebbe Airport- Transport Services to Tasmania- Gold Motion (by **Mr Sinclair)** proposed: >That the House do now adjourn. {: #debate-55-s0 .speaker-JVS} ##### Mr NEIL:
St George -- I rise to warn the House of a toy- allegedly a toy- that is on sale in Hurstville in Sydney and which may be on sale in the electorates of other honourable members. It is a toy syringe and is called Hypo-Phony. It is said to be capable of giving fake hypodermic shots. The brochure that comes with this socalled toy says that you can pretend to give a shot to yourself, blood to an anaemic friend, hot blood to a cold girl, pep to a tired person or get blood out of a turnip, steak, roast, etc. The brochure then talks about endless fun possibilities and says that this thing is good for a million laughs. Two years ago this object was investigated by the former Minister for Customs and Excise, the then **Senator Murphy,** who ordered that a regulation be prepared to have the item banned from importation into Australia. Since that time apparently some attempt has been made to draw a regulation but no action has been completed. The so-called toy- I call it that because I do not want to dignify the product with a name of something that children would legitimately use- is still on sale. I understand that some were imported into this country within the past year or so. Last week when I found out about this I spoke to the Minister for Business and Consumer Affairs **(Mr Howard)** who is the Minister responsible for customs matters. He advised me that there was considerable concern about this. There is a degree of medical opinion that this item could be used as a real implement. There may be some doubt on that but it might be possible to adapt the item. This, of course, could possibly cause infection or even death to some people. I think the House would agree that clearly something which is suggestive of the use of drugs, and in particular hard drugs, ought not to be available in the community especially if it is sold as a toy, directed to young people, said to be good for laughs or capable of drawing blood, giving shots or the like. The brochure that goes with the item is quite irresponsible. It claims that the product is sold throughout various parts of the world and that various patents are pending. The product does not appear to originate in Australia. I do not know what the final decision of the new Minister will be on this matter, but there would seem to be 2 courses of action open to get something done about it. The first relates to item 18 of the Customs (Prohibited Imports) Regulations which refers to goods dangerous or a menace to the community. Perhaps the item could be banned under that regulation. However that may be too wide. I understand there have been some difficulties in the use of item 18. It may be said that such a blanket provision would not necessarily be appropriate for use in this case. Secondly, a new regulation could be drawn. If a new regulation were drawn it would need to be drawn with considerable precision. It is also, I put to the House, necessary that warnings be given to the community generally and that the House and the Minister be advised of other places where this product might be on sale. Surely in the interests of the community an approach to retailers to refuse to sell these items would be warranted. No doubt the Minister, if he chooses to proceed by way of one of the regulations, as I certainly hope he will, will also communicate to State Ministers who have control of consumer affairs the fact that this product is being sold and perhaps request that they look into the matter. But the important question is whether or not this type of item should be on sale and whether there should be a general information gathering process so that the item could, I hope, be banned from import and prevented from being on sale. {: #debate-55-s1 .speaker-JPG} ##### Mr BIRNEY:
Phillip -- I draw the attention of the House to a recent rescue operation that has now become known as the mission to Entebbe. It is my opinion that this epic sortie will be enshrined in the annals of military history as one of the truly great actions of all time. I am sure that the heroism, daring and conspicious gallantry of all those brave souls who took part have the admiration of all men of peace and goodwill. I have not the slightest doubt that, but for them, innocent men and women would have been slaughtered in the cause of political fanaticism. Terrorism in the form of the hijacking of aircraft would be in its death throes if all the nations of the world spelt out in bold terms thenrefusal to give sanctuary to these gangsters and made it clear that terrorism or aggression in whatever form it may take will be condemned and that automatic sanctions will be placed on transgressors. One could be pardoned for believing that a simple motion placed before the United Nations, condemning terrorism, would have been passed with enthusiasm and applause. I was staggered to read recently that this very motion, sponsored by responsible nations, had failed to pass. In retrospect there can be no question that the terrorists were aided and abetted in their infamy by that madman and butcher of humanity, Idi Amin of Uganda. One of the hostages was a lady of some 75 years of age by the name of Dora Bloch. She was taken prisoner by the hijackers and, whilst at Entebbe airport, apparently complained of food poisoning and was taken to a Ugandan hospital. Apparently she was in hospital at the very time of the rescue operation. After the success of that venture the same woman was seen by independent witnesses to be dragged from the hospital, screaming, with Ugandan soldiers forcing sponges down her throat to stop her plaintive cries. Wire service reports clearly indicate that the body of this unfortunate woman, whose only crime was to be an innocent tourist, was found charred and burnt beyond recognition on the outskirts of Kampala. Despite the weight of diplomatic protests and inquiries from Israel and Great Britain, Amin of Uganda has washed his hands of the whole affair. So I believe that the time has now come for the Federal Government to sever diplomatic relations with Uganda, and I call upon the Government to do so. {: #debate-55-s2 .speaker-QK5} ##### Mr GROOM:
Braddon -- I congratulate the honourable member for St George **(Mr Neil)** and the honourable member for Phillip **(Mr Birney)** on raising such important subjects and speaking so sincerely about them. Shortly before the recent recess I spoke on the important Tasmanian freight equalisation scheme and I recall, **Mr Deputy Speaker,** that you were in the chair on that occasion. I made some mildly critical comments at that time about delays which had occurred in implementing this important scheme and I feel it is only proper that I should now compliment the Minister concerned and the Government on implementing the scheme so expeditiously. {: .speaker-KNA} ##### Mr Martyr: -- They are frightened of you. {: .speaker-QK5} ##### Mr GROOM: -That might be so. The scheme commenced on 1 July. It is a most important reform for Tasmania and I believe it will ensure the future stability and prosperity of the Tasmanian economy. I think in early 1973 the previous Labor Administration made certain hollow promises about assisting Tasmania with its freight problem and, of course, that Administration was in office for 3 years and nothing was done. No action was taken. Now we see that a Government which has been in power for only 6 months has implemented the scheme. I concede that there are problems with the scheme. It is a unique scheme; it is a new scheme. Naturally there will be difficulties with it. There are problems in determining the categories of goods which will be eligible for assistance. In my electorate of Braddon we have an important cheese industry but cheese is not included in the categories of goods. This is probably because of some misconception. However, representations have been made to the Government and the Minister and I trust that something will be done to include cheese in the scheme. There are other such commodities and one that comes to mind is potatoes. This is another important commodity produced on the north-west coast of Tasmania. At the moment the scheme does not operate as favourably for that industry as it might. I hope that the scheme will be implemented in such a way as to give the potato industry access to the important Sydney market. There are review provisions available in the scheme which will enable industries of all kinds to make application upon appropriate grounds for inclusion in the scheme. The point I want to make tonight is that the Government and the Minister should be congratulated on ensuring that the scheme operated within the time limit proposed. It was suggested originally that the scheme would commence operating on 1 July and that deadline was met. It is a complex scheme. The Minister and the Department had a difficult task but they did the job very well. When it is operating fully I believe the scheme will enhance the prosperity of Tasmania. {: #debate-55-s3 .speaker-K6U} ##### Mr COTTER:
Kalgoorlie -I rise to bring to the attention of the House the Government's decision to adopt the report of the Industries Assistance Commission on the production of gold. I believe this decision was made on wrong information supplied to the Commission and was made on the assumption that all the evidence contained in the IAC report which was presented on 6 June 1975 was correct. I submit that the report is so out of date as to be unrealistic and that the recommendation should no longer apply to the industry. I quote the report in part. It states: >The concessions . . . provided under this Act were designed for the situation where the price of gold was maintained at an artificially low level. I further quote from the report: >First, with the large increases in the price of gold which have occurred in recent years, the cost of these tax concessions in terms of the taxation revenue forgone has greatly increased. In 1973-74, the cost to the general community of these tax concessions totalled over $ 12m and, by 1980, they could cost in excess of $40m annually depending on movements in production costs and in the price of gold. With regard to this situation, the report further states: ... it must eventually result in a misallocation of resources between gold mining and other forms of mining . . . Under this proposal, gold producers would be subject to the same taxation provisions as other mineral producers by July 1980. I believe that these assumptions are completely false. Firstly, they were based on an era in which gold was attaining a price of approximately $ 140 an ounce. Today, not much more than 12 months later, the price is approximately $89 or $90 an ounce. So the claim that the tax forgone would reach $40m per annum is entirely false. Today, there are few, if any, gold mining companies or individuals in a position where they would show enough profit to pay tax. So the amount of revenue forgone to the Government would be negligible. The industry today is in a very parlous state. There is a very weak market for the commodity. The last thing it needs is a kick in the teeth like the removal of the tax exemption clause. I submit that the IAC should have another complete look at the gold mining industry and that the Government should reconsider its decision to phase in the imposition of taxation the gold mining industry and give this industry another chance. The IAC report of 6 June 1975 goes on to say: >Employment in the industry over the next two or three years is unlikely to be affected by the recommendations. ... the effect on the life of the mines is not expected to be significant. The employment situation in the gold mining industry in Kalgoorlie at the present time is indeed at risk and the effect on the life of the mines is indeed great. I further quote from the report: >However, it is believed that the recommended phasing out provisions could cost between $60m and $130m in revenue forgone . . . In my opinion, in the phasing out period no revenue would be forgone because the industry is not in a position today where it would be paying tax and it is not likely to reach that position in the short term. We all know that a significant factor in the depressed price of gold is the International Monetary Fund sales of gold over the next *3Vi* years. It was proposed to sell 25 million ounces of gold over 4 years, commencing about January 1976. This scheme has approximately 3vi years to run. There is not a significant prospect of the price of gold rising during that time so we would see the gold industry maintaining an uneconomical situation for perhaps 3 years or more. During this time I do not believe that we ought to be talking about implementing a tax on gold. A further aspect of the gold mining industry in Kalgoorlie is that is does generate a tremendous amount of employment and a tremendous amount of interest for the individual prospector who goes out at weekends or in any other spare time and uses his individual initiative and his free enterprise instinct to gain himself some further employment and some betterment of his way of life and his standard of living. If the gold is to be taxed this incentive will be removed from these few honest, hard working individuals who are out there, in the outback of Australia, eking out a living and not only prospecting for gold but finding tomorrow's mines. It is obvious that today's prospectors are the people who bring in tomorrow's mines and the massive development that goes with them. With tomorrow's mines and the big mining development, we see great employment opportunities, development and tremendous capital inflow into the area. All of this will dry up if at this point in time we decide to impose a tax on gold mining. We have some massive ventures like the Telfer gold project in the Pilbara and the Blue Spec mine at Nullagine. We have projects in Tasmania and in Tennant Creek which in my opinion will wither and die on the vine if we impose a tax on gold. There could well be a closure of the State battery system in Western Australia which performs the custom milling operations for the prospectors. Because of the lack of incentive and the lack of ore coming from individual prospectors there will be a drying-up of job opportunities when the State batteries close down. This is a tremendous service industry to outback Australia and to Western Australia in particular. It helps individuals raise their standard of living, as I said a moment ago, and also creates a tremendous amount of export income for Australia and a tremendous amount of productivity for the area it serves. I ask the Government and the Ministers concerned to reconsider seriously the decision to implement the recommendations in the Industries Assistance Commission report. I submit that the LAC report is so out of date that it is not realistic today. Question resolved in the affirmative. House adjourned at 10.36 p.m. {: .page-start } page 196 {:#debate-56} ### ANSWERS TO QUESTIONS UPON NOTICE The following answers to questions upon notice were circulated: {:#subdebate-56-0} #### Aboriginal Unemployment (Question No. 641) {: #subdebate-56-0-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. Which of the recommendations contained in the report of the House of Representatives Standing Committee on Aboriginal Affairs on *Aboriginal Unemployment Special Work Projects* have been implemented. 1. In respect of the recommendations not implemented which (a) have been firmly rejected and (b) are under active consideration. {: #subdebate-56-0-s1 .speaker-EE6} ##### Mr Viner:
Minister for Aboriginal Affairs · STIRLING, WESTERN AUSTRALIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2) The recommendations contained in the House of Representatives Standing Committee on Aboriginal Affairs on Unemployment: Special Work Projects are under active consideration by the Government and will be fully considered, together with other issues involved in the Aboriginal unemployment problem, on the basis of advice from a working party of officials of the Departments of Employment and Industrial Relations, Social Security and Aboriginal Affairs which has been established to review the problems and make recommendations on employment and training programs. None of the recommendations has been rejected. Recommendations 4 (a) and (b) concerning the employment of Aboriginals in the Commonwealth Public Service are under active consideration as part of a general review of the Public Service Board's policy on the employment of Aboriginals. {:#subdebate-56-1} #### Yirrkala People (Question No. 642) {: #subdebate-56-1-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. Which of the recommendations contained in the report of the House of Representatives Standing Committee on Aboriginal Affairs on *Present Conditions of Yirrkala People* have been implemented. 1. In respect of the recommendations not implemented which (a) have been firmly rejected and (b) are under active consideration. {: #subdebate-56-1-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: >The recommendations fall into four categories- those seeking action by Government, by the Aboriginal people, by Nabalco, and those seeking joint action. > >Those recommendations seeking action by the Government, and the action which has been taken are; 1, 8, 12: The Machinery for achieving the intention of these recommendations will be available under the Aboriginal Land Rights (Northern Territory) Bill when this Bill and complementary legislation to be enacted by the Northern Territory Legislative Assembly become law. 10: There has been a marked increase in the number of people seeking permits to go beyond the mining lease boundary, where previously they would have breached the permit requirements; it is expected that legislation to be enacted by the Northern Territory Legislative Assembly, complementary to the Aboriginal Land Rights (Northern > >Territory) Bill, will make appropriate provisions in this regard. 14 and 15: These recommendations are under active consideration; it will also be appropriate for the Standing Committee on Aboriginal Affairs to include questions such as this in its current examination of the question of alcohol and Aboriginals; I will await the outcome of the Standing Committee 's inquiry with interest 16: There has been an increase in the number of Aborigines undergoing training as nursing aides and health workers. Training is given at the new health centre at Yirrkala in preference to the base hospital at Nhulunbuy. There are Aboriginal health workers on all homeland centres and these are supported by visiting doctors and sisters who offer continuous on-the-job training. 17: The water supply from Yirrkala Creek is under constant surveillance by the local health officer; the water is of acceptable standard when regularly chlorinated. 1 8 and 1 9: A range of adult education and training courses is available to Aborigines at Yirrkala. In addition to Mission and Government staff involved in Social work (including working with Aboriginals assistants) there are two adult education teachers at Yirrkala. > >Those recommendations seeking action on the part of the Aboriginal community and the action which I am informed has been taken by the community are: 7: The Aboriginal community has established an incorporated body to represent the community's interests, including the receipt and disbursement of moneys generated by the mining project. 9: The Aboriginal incorporated body has invested approximately $20,000 in stocks and shares and is considering the purchase of the Government's shares (to the value of $70,000 ) in the Yirrkala brickworks. 1 1: The Aboriginal community is actively considering this recommendation which relates to a contentious matter within the community. > >Recommendations seeking action by Nabalco Pty Ltd and action which I am informed the company is taking in respect of those recommendations are: 3: The Company has adopted the practice of holding meetings with the Aboriginal community on an ad hoc basis when specific issues need to be discussed, rather than at tegular monthly intervals as was the earlier practice; these meetings are held at various locations appropriate to the subject under discussion. 4: The Company has provided a scale relief model which is temporarily located in its offices at Nhulunbuy but which will be housed at Yirrkala when suitable accommodation is available. > >S: The Company has been seeking to improve the effectiveness of its communication with the Aboriginal people and is prepared to meet with the Aboriginal people at any time or place nominated by them; the Aboriginal community is free to avail itself of whatever outside advice it considers necessary. 6: The Company *is* prepared to enter into direct negotiation as suggested by this recommendation; the arrangements for such negotiations at the appropriate time will be made in accordance with arrangements provided for in the Land Rights (Northern Territory) Bill now before Parliament Those recommendations requiring joint action by all parties at Gove, and the action taken are: 2: Such negotiations will be possible under arrangements to be provided in the Aboriginal Land Rights (Northern Territory) Bill now before Parliament. 13: The present red mud disposal areas were established as pilot projects but have continued in use pending negotiations of further leases for red mud disposal; the effects of red mud disposal on the environment are being taken into account in the consideration of the Company's further requirements; the appropriate Government Departments, the Aboriginal community and the Company are involved in these negotiations. 20: Since the report of the Committee the following action has taken place: {: type="a" start="a"} 0. Yirrkala is now connected by cable to the Nhulunbuy/Darwin troposcatter telephone system and there is a number of telephones available at Yirrkala, including a public telephone. 1. A broadcast repeater station has been opened at Nhulunbuy and it relays programs of the ABC. The location of the repeater was chosen to enable the repeater to serve both Yirrkala and Nhulunbuy. 2. With Government funding and Company cooperation the local television system was upgraded so that reception is possible both at Yirrkala and Dhupuma 21: All communities likely to be affected by the proposed Arnhem Highway have been and continue to be consulted about its location. {:#subdebate-56-2} #### Granting of Visa (Question No. 666) {: #subdebate-56-2-s0 .speaker-L6X} ##### Mr Garrick:
BATMAN, VICTORIA asked the Minister for Immigration and Ethnic Affairs, upon notice: {: type="1" start="1"} 0. 1 ) Did the Government refuse to grant a visa to **Mr Eddie** Zananiri, the Palestinian student leader while Israel's General Bar-lev was allowed to enter Australia to address a Zionist fund raising function in Sydney; if so, what was the reason for the refusal. 1. Did the refusal of the Government have anything to do with the fact that **Mr Zananiri** is regarded as a freedom fighter or terrorist. 2. In granting permission for General Bar-lev to enter Australia was the Government aware that he (a) commanded an armoured column in the 19S6 invasion of the Sinai, (b) was Deputy Chief of Staff of the Israeli army during the 1 967 war and (c) became Chief of Staff in 1 968. 3. If so, what is the difference between the position of General Bar-lev and that of **Mr Zananiri.** {: #subdebate-56-2-s1 .speaker-0I4} ##### Mr MacKellar:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP -- The answer to the honourable member's question is as follows: >The Minister for Foreign Affairs has advised that General Bar-lev, who is the Israeli Minister of Commerce and Industry, was granted a diplomatic visa on 20 April 1 976 for a stay of one month. > > **Mr Ada** (Eddie) Zananiri was nominated for entry to Australia as the fiance of an Australian citizen. > >This would have been on the basis that he would have been granted six months' temporary residence which normally would be followed by the granting of permanent residence status after marriage to the nominator. The Government, therefore, considered **Mr Zananiri** 's case in the light of approving potential permanent residence in Australia. > >General Bar-lev's army career was not relevant to the decision to issue a diplomatic visa to him for a short stay in Australia. He is a Minister of a country with which Australia has diplomatic relations. > >The controversy and incidents involving violence which occurred during **Mr Zananiri** 's visit to Australia in May 1 973 were taken into account when the Government reached its decision not to approve entry for potential permanent residence. {:#subdebate-56-3} #### Defence Service Home Loans (Question No. 668) {: #subdebate-56-3-s0 .speaker-L6X} ##### Mr Garrick: asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. How many loans for the construction of defence service homes in the electoral division of Batman have been approved since 1969. 1. How many defence service homes now exist in the electoral division. {: #subdebate-56-3-s1 .speaker-JVV} ##### Mr Newman:
Minister for Environment, Housing and Community Development · BASS, TASMANIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Particulars of Defence Service Homes loans are not recorded on a basis which would make it practicable to identify those granted for the construction of homes in a particular electoral division. 1. It is possible to identify by post-code area all homes for which assistance under the Defence Service Homes Act has been granted. On this basis it has been established that there are approximately 600 homes currently subject to a security under the Defence Service Homes Act in the Batman electoral division. {:#subdebate-56-4} #### National Animal Health Laboratory (Question No. 679) {: #subdebate-56-4-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Construction, upon notice: >What is the estimated increase in construction costs of the national animal health laboratory for each month's delay caused by deferment of commencement of the project. {: #subdebate-56-4-s1 .speaker-KSB} ##### Mr McLeay:
Minister Assisting the Minister for Defence · BOOTHBY, SOUTH AUSTRALIA · LP -- The answer to the honourable member's question is as follows: >It is not possible to estimate with any degree of accuracy increased construction costs for the National Animal Health Laboratory at Geelong; any variation in costs would depend to a large extent on labour and material" prices throughout the duration of the project, as well as on the competitiveness of the market when tenders are invited for each element of the job. Telephone Installations in the Electorate of Batman (Question No. 686) {: #subdebate-56-4-s2 .speaker-L6X} ##### Mr Garrick: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. 1 ) Is it a fact that in the Electoral Division of Batman the delay between an application for, and the installation of, telephones is up to 9 months for businesses and up to 12 months for individuals. 1. If so, what are the reasons for these inordinate delays. 2. How many applications for telephones did the Telecom sales office have to handle in the last 12 months in the Electoral Division of Batman. 3. Will he give consideration to expanding the operations of that office, as it seems the staff is not sufficient at its present level. {: #subdebate-56-4-s3 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The Batman Electorate is in the area served by the Telecom Business Office at Northcote. In that area the average delay between payment of fees and provision of telephone services completed during June 1976 was S weeks. Isolated cases where installations have taken up to 9 months for business subscribers and 12 months for individuals were confined to some services in new development areas. 1. The long delays in development areas result from the need to undertake major Engineering works to provide cable to the appropriate exchange. 2. IS 407 in the area served by the Northcote office including 5747 in the Batman Electorate. 3. 30 additional Field and Administrative staff have been provided since early May. {:#subdebate-56-5} #### Weapons Research Establishment: Staff Reduction (Question No. 692) {: #subdebate-56-5-s0 .speaker-KWZ} ##### Mr Wallis:
GREY, SOUTH AUSTRALIA asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. 1 ) How many positions have been declared redundant at Weapons Research Establishment, Woomera following the announcement of the Care and Maintenance Policy. 1. What reductions in Staff have taken place. 2. How many employees have been placed in alternate government employment. 3. How many employees have been dismissed. 4. What reductions in Staff have taken place in private firms engaged in Weapons Research Establishment operations at Woomera. {: #subdebate-56-5-s1 .speaker-4U4} ##### Mr Killen:
Minister for Defence · MORETON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: >The information provided below is in respect of the period since my statement of 18 February 1976 on future arrangements at Woomera; > >1 ) No positions have been declared redundant > >) Staff reductions have amounted to 62 people. > >3 ) 1 3 of the 62 people who have left Woomera have been placed in government employment elsewhere; the remaining 49 have resigned. > >No employees have been dismissed. > >There has been an overall reduction of 2 people in the staffs of contractors supporting Weapons Research Establishment operations at Woomera. {:#subdebate-56-6} #### Weapons Research Establishment: Army Service Canteen (Question No. 693) {: #subdebate-56-6-s0 .speaker-KWZ} ##### Mr Wallis: asked the Minister for Defence, upon notice: >In view of the phasing down of operations of the Weapons Research Establishment at Woomera, is it intended to maintain the operations of the Army Service Canteen Organisation at the establishment; if not, what plans are in hand concerning its operations. {: #subdebate-56-6-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: >The Australian Services Canteens Organisation will continue to operate the Community Store at Woomera for the foreseeable future. {:#subdebate-56-7} #### Growth Centres Program (Question No. 694) {: #subdebate-56-7-s0 .speaker-DJ4} ##### Mr Short:
BALLAARAT, VICTORIA asked the Minister for Environment, Housing and Community Development, upon notice: >Has the Government considered the selective development of centres outside the metropolitan areas; if so, when will its intention be made known. {: #subdebate-56-7-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: >As recently announced by the Treasurer, the Government has established an Interdepartmental Committee to examine and report on the future role of the Commonwealth in the Growth Centres Program. The Committee has been asked to report as a matter of urgency, but I am not able to indicate when the Government's deliberations will be completed. Aboriginal Equity in Mt Goldsworthy (Question No. 704) {: #subdebate-56-7-s2 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. 1 ) Has **Mr D.** W. McLeod proposed on behalf of the Aboriginal people in Western Australia that the Australian Government should purchase a 50 per cent equity in Mt Goldsworthy for the benefit of the Aboriginal people and that the purchase price be amortised over several years from profits. 1. If this proposal has received consideration can he (a) give details of the possible purchase price and feasibility of the amortisation proposal, (b) indicate whether the proposed level of equity is in fact available for purchase and, if so, on what terms, (c) advise if any inquiries or negotiations have been instituted and the progress made, (d) say if the proposal is constitutional and (e) predict the benefits which could accrue to the Aboriginal people. {: #subdebate-56-7-s3 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2)1 have no knowledge of such a proposal from **Mr McLeod.** {:#subdebate-56-8} #### Postage Rates (Question No. 728) {: #subdebate-56-8-s0 .speaker-K5A} ##### Mr O'Keefe:
PATERSON, NEW SOUTH WALES asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. Have investigations been made into the suggestion that a rate be established for local delivery to box numbers; if so, what stage has been reached. 1. Have Post Office officials stated that this system could be introduced with considerable savings to businesses and private persons. 2. Would this factor increase business to the Postal Commission and stop local personal delivery. {: #subdebate-56-8-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Yes. The Postal Commission has considered the matter of special postage rates for local mail and, as recently announced, has determined a special rate for local bulk mail, lodged at the post office counter for delivery from that office. Although it is not practicable to offer an exclusive rate for mail to box numbers, the new conditions will enable private residents and business people, subject to certain conditions, to post local delivery standard letters and non-standard articles at the reduced rate. 1. No. 2. It could have this effect, but net earnings would probably be less. {:#subdebate-56-9} #### Australian Telecommunications Development Association (Question No. 735) {: #subdebate-56-9-s0 .speaker-EV4} ##### Mr Young: asked the Minister for Overseas Trade, upon notice: {: type="1" start="1"} 0. 1 ) Has his attention been drawn to reports by the Chairman of the Australian Telecommunications Development Association that Australia has missed out on orders totalling $830m for telecommunications equipment in Indonesia because of the attitude of the Federal Government. 1. Does the Australian Government maintain an Australian Telecommunications Mission in Indonesia to assist in the planning of Indonesian telecommunications. 2. Is it a fact that a company cannot tender for telecommunications equipment in Indonesia unless finance is guaranteed. 3. Is it also a fact that finance through Australian Government channels will not be guaranteed until a firm and approved contract has been produced. 4. If these are facts will he investigate the situation and ensure that this valuable market for our exports is not lost {: #subdebate-56-9-s1 .speaker-BU4} ##### Mr Anthony:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. My attention has been drawn to press reports of the statement by the Chairman of the Australian Telecommunications Development Association to the effect that Australia has missed out on substantial orders for telecommunications equipment in Indonesia. 1. The Australian Government has maintained as part of its external aid program an Australian Telecommunications Mission in Indonesia since 1968 to supervise the contractual and constructional aspects of a World Bank financed microwave telecommunications system. The Mission is also responsible for the *supply,* installation, testing and commissioning of telephone exchanges and the provision of advisory services to the Indonesian State Telecommunications Authority on the planning of Indonesia's international telecommunications network. The Mission's work is expected to be completed by mid 1978 by which time the value of the Australian contribution is expected to ha ve reached $ 1 3. 7m. It has been the policy of successive Australian Governments that aid should be provided by way of grants rather than by semi-commercial soft credits and tied loans. Aid is provided on the basis of meeting the needs of the recipient country. In some cases important commercial benefits have resulted for Australian industry as a result of our aid program but these benefits are not the principal purpose of granting aid. {: type="1" start="3"} 0. The Indonesian procurement authorities normally specify that tenders for the supply of equipment should contain an indication of financial arrangements proposed by potential suppliers. However, where a supplier country has established credit facilities with the Indonesian Ministry of Finance, reference to this facility will suffice. 1. While it is strictly correct that financing through the Export Finance and Insurance Corporation (EFIC) cannot be guaranteed until a firm proposal has been examined, it is the usual practice for EFIC to provide an exporter with approval in principle to finance a particular proposal in advance of a tender being submitted thereby ensuring that the terms and conditions of finance can be included in the tender. 2. To assist exporters to participate in the large scale procurement that is being undertaken by Indonesian Government instrumentalities, EFIC established in April 1975 an SI 8.5m credit line with the Indonesian Ministry of Finance under which credit terms of up to 10 years at internationally competitive interest rates were available. Although the Indonesian authorities indicated that the terms of this credit line were acceptable to them, they did not take advantage of it for procurement of Australian goods. This credit offer expired on 30 June 1 976. Notwithstanding expiry of EFIC's credit line offer, Australian capital goods exporters to Indonesia may still apply for concessional interest rate finance from the Corporation and any such applications will be considered on their merits on a case by case basis. Rate Exemptions in the A.C.T. (Question No. 747) {: #subdebate-56-9-s2 .speaker-SH4} ##### Dr Klugman:
PROSPECT, NEW SOUTH WALES asked the Minister for the Capital Territory, upon notice: >Will he provide an estimate of the cost to revenue in the Australian Capital Territory during the year 1974-75 of the exemption from rates of property occupied by religious institutions, for religious or educational purposes. {: #subdebate-56-9-s3 .speaker-GY5} ##### Mr Staley:
Minister for the Capital Territory · CHISHOLM, VICTORIA · LP -- The answer to the honourable member's question is as follows: >In the Australian Capital Territory unimproved value of a site for rating purposes depends on the market value of the site for the purpose for which the lease is granted. > >Because the leases of sites used by religious institutions for religious or educational purposes are allocated for those purposes alone there is no market in the A.C.T. for such sites. > >While the sites in question continue to be used for their existing purpose it is not possible to arrive at a demonstrable market value. > >Any attempt to estimate the value of the sites as if they were available for other purposes could be quite misleading, as the other uses could range from ordinary residential use to the highest possible commercial use. > >In these circumstances I am unable to provide the information sought. {:#subdebate-56-10} #### Deportations (Question No. 756) {: #subdebate-56-10-s0 .speaker-KJA} ##### Mr Innes:
MELBOURNE, VICTORIA asked the Minister for Immigration and Ethnic Affairs, upon notice: {: type="1" start="1"} 0. 1 ) How many persons have been deported under Section 14 of the Migration Act, or previous Acts in force, during the last 2 5 years. 1. On how many occasions have Commissioners been appointed for the purpose of that Section and what were the occasions. {: #subdebate-56-10-s1 .speaker-0I4} ##### Mr MacKellar:
LP -- The following answer is provided to the honourable member's question: {: type="1" start="1"} 0. 1 ) Eight ( 8 ) persons have been deported pursuant to Section 14 of the Migration Act. Prior to the commencement of the Migration Act on 1 June 1959 the only deportation legislation which provided for a hearing before a Commissioner was the Aliens Deportation Act 1948. No deportations were effected pursuant to the latter Act which was repealed when the Migration Act came into force. {: type="1" start="2"} 0. Six (6) persons have been appointed as Commissioners for the purpose of Section 14 of the Migration Act. Appointments are made having regard to the location of the hearings and the availability or otherwise of Commissioners appointed previously to hear further cases. {:#subdebate-56-11} #### West Coast Highway: Perth (Question No. 759) {: #subdebate-56-11-s0 .speaker-JF7} ##### Mr Beazley:
FREMANTLE, WESTERN AUSTRALIA asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) Can he say whether the consultants' report and recommendations on the southern extensions of the West Coast Highway in the Perth Metropolitan area has been received by the Western Australian Government. 1. As Commonwealth financial assistance is likely to be sought for the development of the project, when will an environmental impact study be commenced by his Department. {: #subdebate-56-11-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Volume one of the consultants report, which contains the terms of reference of the study together with a discussion of the options available and the conclusions and recommendations, was submitted to the Western Australian Minister for Conservation and Environment on 6 May 1 976. It is understood that this report was made available for public comment until 9 June 1976 but the period has now been extended to 7 July 1976 to enable people to consider and comment on both volumes of the report as the second volume, containing the technical data, has only recently become available. It is further understood that, when the State Environment Protection Authority has considered the consultants report and the public comments, it will report to the Western Australian Minister for Conservation and Environment {: type="1" start="2"} 0. The Western Australian Government has not yet sought any Commonwealth financial assistance for the southern extension of the West Coast Highway in Perth. Therefore it has not, in terms of the Environment Protection (Impact of Proposals) Act 1974-75 formulated any proposal that is subject to the Act Thus at this stage there is no basis on which my Department needs to take any action to examine the environmental aspects of this matter. {:#subdebate-56-12} #### Great Barrier Reef Marine Park (Question No. 247) {: #subdebate-56-12-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) Have invitations been sent to the Queensland Government to nominate (a) a person to be appointed as a part-time member of the Great Barrier Reef Marine Park Authority established by the *Great Barrier Reef Marine Park Act* 1975 assented to on 20 June 1975 or (b) a person or persons for appointment to the Great Barrier Reef Consultative Committee established by the Act. 1. If so, when were the invitations sent. {: #subdebate-56-12-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) An invitation to the Queensland Government to nominate a person to be appointed as a part-time member of the Great Barrier Reef Marine Park Authority was sent on 9 October 1975 by the honourable member when Prime Minister. This Government, and the Queensland Government, accept this as the formal invitation required under Section10 of the *Great Barrier Reef Marine Park Act* 1975. On 12 March 1 976 the Minister for Environment, Housing and Community Development formally invited the Queensland Government to nominate members for the Great Barrier Reef Consultative Committee. {:#subdebate-56-13} #### National Employment and Training Scheme (Question No. 264) {: #subdebate-56-13-s0 .speaker-ZJ4} ##### Mr Willis:
GELLIBRAND, VICTORIA asked the Minister for Employment and Industrial Relations, upon notice: >How many persons receiving full-time training under the NEAT system are in the following categories: (a) single juniors, (b) single adults, (c) married persons with a dependent spouse, (d) married persons with a dependent spouse and 1 dependent child, (e) married persons with a dependent spouse and 2 dependent children, (f) married persons with a dependent spouse and 3 dependent children, (g) married persons with a dependent spouse and 4 or more dependent children, (h) widows, divorcees, deserted wives or single mothers with 1 dependent child, (i) widows, divorcees, deserted wives or single mothers with 2 dependent children (j) widows, divorcees, deserted wives or single mothers with 3 dependent children, (k) widows, divorcees, deserted wives or single mothers with 4 or more dependent children, ( 1 ) married persons with a spouse who earns between $70.50 and $238.20 a week, (m) married persons with a spouse who earns below $70.50 a week, and (n) married persons with a spouse who earns above $238.20 a week. {: #subdebate-56-13-s1 .speaker-KVM} ##### Mr Street:
Minister Assisting the Prime Minister in Public Service Matters · CORANGAMITE, VICTORIA · LP -- The answer to the honourable member's question is as follows: >Statistics in the detail required are not immediately available. However, I have set out below the results of a sample survey of full-time NEAT trainees in Victoria. The sample was 130 trainees selected on a random basis and represented 10 per cent of full-time NEAT trainees in Victoria. Caution should be exercised in applying the results of the survey to the situation under NEAT in States other than Victoria. > >The results of the sample survey for the groups as requested are as follows: > >6 per cent > >37 per cent > >6 per cent > >5 per cent > >4 per cent > >1 percent > >1 per cent > >6 per cent > >5 per cent > >5 per cent > >Nil > >21 per cent > >3 percent > >In respect of category (n) it is not possible to provide an indication of the percentage of married trainees with spouses earning in excess of $238.20 per week. Being eligible for reimbursement of fees and books and equipment costs only they are recorded along with other trainees m this category. {:#subdebate-56-14} #### Land Acquistion (Question No. 306) {: #subdebate-56-14-s0 .speaker-QF4} ##### Mr Connolly:
BRADFIELD, NEW SOUTH WALES asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) What sum was spent on land acquisition for urban housing purposes by the previous Government. 1. How much land was acquired. 2. Excluding the purchase of land from the Church of England in Glebe, how much of this land cannot be resold. 3. What is the resale value of this land. 4. Does the Government intend to sell any or all of this land; if so, what sum does the Government expect to receive from the sale. {: #subdebate-56-14-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: >The following answers are in respect of Defence Service Homes acquisitions: > >$12m > >7S6.S hectares > >All the land acquired for Defence Service Homes purposes can be resold. > >Approximately twenty hectares have been sold for $1.1 3m, the current market value of the balance of the land is estimated to be $ 1 4.6m. > >The land was acquired for the purpose of developing Defence Service Homes estates. The land will be sold by the Australian Housing Corporation to persons eligible under the provisions of the Defence Service Homes Act at its capital cost plus holding charges, development costs and such other expenses incurred in respect of the land by the Corporation prior to its sale. The sum the Corporation will receive from the sale of the land cannot be determined until the date of sale. > >The following answers have been provided by the Department of Administrative Services in respect of the land acquisition functions of that Department: > >$33,836,837. > >8356 hectares. > >None. > >Not known at this time. > >It is not possible at this stage to say how much of the land will be sold. {:#subdebate-56-15} #### Actors' Wages (Question No. 314) {: #subdebate-56-15-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. Has his attention been drawn to demands by the Queensland Government to have wages, earned by 200 Aborigines working as extras on a film being made in Queensland, paid to the Government of that State and not to those who have earned the money. 1. ) Can he say whether Actors ' Equity is insisting that the individuals are paid their own wages. 2. Will he examine what action can be taken to ensure that wages earned are paid to those who have earned them. {: #subdebate-56-15-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 have seen newspaper reports on the matter. 1. 1 understand that the agreement between the producer of the film and Actors' Equity contains a legally binding clause stating that wages for the Aboriginal extras shall be paid to the tribe and/or individuals who earned them. 2. No action is necessary. {:#subdebate-56-16} #### Department of Aboriginal Affairs: Air Travel (Question No. 362) {: #subdebate-56-16-s0 .speaker-JT9} ##### Mr Bungey:
CANNING, WESTERN AUSTRALIA asked the Minister for Aboriginal Affairs, upon notice: >What sum has been paid by his Department to each airline for air travel within Australia during the last 2 years. {: #subdebate-56-16-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: The figures relate to the period 1 April 1974 to 31 March 1976. Prior to 1974, payments made by the Northern Territory Division of the Department of Aboriginal Affairs were included in the records of the Department of the Northern Territory and cannot be separated. {:#subdebate-56-17} #### Wool Tariffs (Question No. 428) {: #subdebate-56-17-s0 .speaker-SH4} ##### Dr Klugman: asked the Treasurer, upon notice: {: type="1" start="1"} 0. 1 ) Has his attention been drawn to a statement in *Muster* of March 1976, prepared by the Australian Woolgrowers' and Graziers' Council, that (a) tariffs deprived wool and grain producers of an estimated $543m in revenue in 1973-74, (b) without tariffs wool prices would be at least 40c/kg clean higher and (c) between 1960 and 1972 Australia had the slowest rate of growth of Gross Domestic Product traded internationally of all major developed countries. 1. If so, are these statements correct. {: #subdebate-56-17-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. The answers below relate to the statements referred to in paragraph ( 1 ) of the honourable member's question. {: type="a" start="a"} 0. and (b) I am not in a position to vouch for the judgments and calculations of the Australian Woolgrowers' and Graziers' Council. I note however that in other documentation the revenue losses due to the tariff are based on the assumption of a complete removal of the tariff coupled with a devaluation sufficient to leave the overall value of imports unchanged. Since such a devaluation would be excessive (it would bring the balance of payments into disequilibrium by over-stimulating exports), any estimates of export revenue losses made on that basis would be considerably overstated. 1. It is possible to develop statistical comparisons which are not inconsistent with this assertion. However, single year comparisons of the proportions of gross domestic product (GDP) traded internationally by various countries can be significantly affected by a number of temporary factors. These could include the position of each country's economy in the business cycle, conditions in overseas markets, and, for countries importantly engaged in commodity trade, variations in seasonal conditions and commodity prices. More importantly, many longer-term factors need to be borne in mind when making such comparisons. For example, the creation of the Common Market led to a considerable growth in intra-EEC trade with an associated diversion of some trade away from non-member countries. In addition, basic geographical factors tend to constrain Australian participation in world trade. A further relevant point is that it is not possible to draw meaningful conclusions from such comparisons as to the 'efficiency' or 'welfare ' of particular sectors of the Australian economy. {:#subdebate-56-18} #### Tasmania: Urban Land Council (Question No. 461) {: #subdebate-56-18-s0 .speaker-EE4} ##### Mr Uren:
REID, NEW SOUTH WALES asked the Prime Minister, upon notice: {: type="1" start="1"} 0. 1 ) Will the total amount of financial assistance made available to Tasmania under clause 13 of the 'Agreement in relation to the provision of financial assistance to Tasmania for Urban Expansion and Redevelopment (Urban Land Council)- 1975-76', signed by the Prime Minister and the Tasmanian Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is that Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-18-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Tasmania will not incur expenditure under this clause during the current financial year. 1. The Labor Government proposed an umbrella-type agreement covering all programs under the Urban and Regional Development (Financial Assistance) Act 1974-75. The Tasmanian Government preferred that separate financial agreements be made in respect of the different categories specified in the Schedule to that Act. 2. and (5) See (1). {:#subdebate-56-19} #### Tasmania: Sewerage (Question No. 462) {: #subdebate-56-19-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Tasmania under clause 13 of the 'Agreement in relation to the provision of financial assistance to Tasmania for Sewerage- 1975-76', signed by the Prime Minister and the Tasmanian Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-19-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Provision was made in the Agreement for financial assistance to the State for expenditure in respect of approved programs up to a total amount of $ 1.9m. Savings will be made, where programs have not been approved, as part of the Government's effort to achieve restraint in public expenditure in the national economic interest. Approved programs are listed below. 1. See my answer to pan (3) of Question No. 461 *(Hansard,* 17 August 1976, page 202). 2. 4.9.75 and 25. 11.75. 3. 5 ) Works programs approved 4.9.75 and 25. 1 1 . 75: {:#subdebate-56-20} #### Tasmania: National Estate (Question No. 463) {: #subdebate-56-20-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Tasmania under clause 13 of the 'Agreement in relation to the provision of financial assistance to Tasmania for the National Estate- 1975-76', signed by the Prime Minister and the Tasmanian Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-20-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. Part of the allocation for 1975-76 was spent on programs carrying over from the previous financial year. 1. Not applicable. 2. See my answer to part (3) of Question No. 461 *(Hansard,* 17 August 1976, page 202). 3. 25.11.75. (5) There are some program variations under consideration at the moment that do not involve changes to money amounts. {:#subdebate-56-21} #### Queensland: Sewerage (Question No. 464) {: #subdebate-56-21-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Queensland under clause 13 of the 'Agreement in relation to the provision of financial assistance to Queensland for Sewerage- 1975-76', signed by the Prime Minister and the Queensland Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-21-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Provision was made in the Agreement for financial assistance to the State for expenditure in respect of approved programs up to a total amount of$1 3.65 million. Savings will be made, where programs have not been approved, as part of the Government's effort to achieve restraint in public expenditure in the national economic interest. Approved programs are listed below. 1. It is not different. 2. 4.9.75 and 25.1 1.75. 3. 1. Works programs approved 4.9.75 and 25.1 1.75: {:#subdebate-56-22} #### Queensland: National Estate (Question No. 465) {: #subdebate-56-22-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Queensland under clause 13 of the 'Agreement in relation to the provision of financial assistance to Queensland for the National Estate- 1 975-76 ', signed by the Prime Minister and the Queensland Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-22-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. Part of the allocation for 1975-76 was spent on programs carrying over from the previous financial year. 1. Not applicable. 2. It is not different. 3. 25.1 1.75 and 10.10.75. 4. Program approved 25.1 1.75: There are some program variations under consideration at the moment that do not involve changes to money amounts. {:#subdebate-56-23} #### Queensland: Flood Mitigation (Question No. 466) {: #subdebate-56-23-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Queensland under clause 13 of the 'Agreement in relation to the provision of financial assistance to Queensland for Flood Mitigation- 1975-76', signed by the Prime Minister and the Queensland Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since I July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-23-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. Not applicable. 2. It is not different. 3. 28.9.75 and 25.1 1.75. 4. The program approved on 28.9.75 was for the Supply Period only. The program approved on 25.1 1.75 relates to the whole financial year. The total financial assistance available is $2,200,000. {:#subdebate-56-24} #### Queensland: Area Improvement (Question No. 467) {: #subdebate-56-24-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Will the total amount of financial assistance made available to Queensland under clause 13 of the 'Agreement in relation to the provision of financial assistance to Queensland for Area Improvement- 1975-76', signed by the Prime Minister and the Queensland Premier, be made available to that State in accordance with the Agreement. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for any changes. 3. On what dates have programs received approval under this Agreement since 1 July 1975. 4. What were these programs, and what was the total financial assistance to the programs approved on each of those dates. {: #subdebate-56-24-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Provision was made in *the Agreement* for financial assistance to the State for expenditure in respect of approved programs up to a total amount of $3.2Sm. Savings will be made, where programs have not been approved, as part of the Government's effort to achieve restraint in public expenditure in the national economic interest. Approved programs are listed below. 1. It is not different. 2. 30.10.75 and29.II.75. 3. Program approved 30.10.75: {:#subdebate-56-25} #### Captains Fiat (Question No. 473) {: #subdebate-56-25-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. 1 ) Will the total amount of financial assistance set aside in the 1 975-76 Budget for allocation to New South Wales for mine waste pollution control *works* at Captains Flat be made available to that State in 1975-76. 1. If not, will he state what amount will be made available, and explain why the total amount will not be made available. {: #subdebate-56-25-s1 .speaker-QS4} ##### Mr Fraser:
Prime Minister · WANNON, VICTORIA · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Yes, subject to expenditure by the State. 1. The amount available will depend on expenditure by the State. {:#subdebate-56-26} #### Sewerage Backlog (Question No. 484) {: #subdebate-56-26-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) Did the Minister for Urban and Regional Development state on 1 7 September 1 974 *(Hansard,* page 1271) that his Government was determined to remove the sewerage backlog over the following 8 years. 1. What is now the estimated date for overcoming the sewerage backlog. {: #subdebate-56-26-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. In a statement issued on 20 May 1976 the Acting Minister for Environment, Housing and Community Development advised that an urgent review of the National Sewerage Program was being undertaken. In the meantime, a reduced level of funds have been allocated given the Government budgetary difficulties. Any estimate of when the sewerage backlog will be eliminated will depend on the outcome of this review, but more importantly it will depend on the will of the individual States to determine their own priorities with respect to sewerage. {:#subdebate-56-27} #### Department of Aboriginal Affairs: Expenditure (Question No. 541) {: #subdebate-56-27-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. What commitments for expenditure in 1976-77 and 1977-78 does his Department have. 1. On what date was each commitment made. 2. What sum is involved in each commitment. 3. For what purpose is each commitment. 4. To whom have the commitments been made. {: #subdebate-56-27-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: >I refer the honourable member to the reply provided by the Treasurer to question number 526, *Hansard* 26 May 1976, page 2525. Blackleg in Rape Crops (Question No. 560) {: #subdebate-56-27-s2 .speaker-JT9} ##### Mr Bungey: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. 1 ) Can he say what organisations are conducting research into the disease known as blackleg in rape crops. 1. What funds *from* Commonwealth Government sources have been made available to each organisation for this research. 2. What specific lines of research into the problems are being undertaken by each organisation. 3. What progress has been reported to date. {: #subdebate-56-27-s3 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) As far as my Department is aware the organisations in Australia conducting research into blackleg in rape crops are the Department of Primary Industries, New South Wales, the Departments of Agriculture in Western Australia and Victoria, and the University of Western Australia. 1. Commonwealth grants to the University of Western Australia amounted to $7,500 in the period 1972-73 to 1975-76. No Commonwealth funds have been made available to the Victorian Department of Agriculture for this purpose but research projects on blackleg in rape crops undertaken by the other State Departments have been supported, amongst others, from the Commonwealth grant to the States for regional research and agricultural extension services. Estimates of the amounts from the grant devoted to such research are: W.A. Department of Agriculture-S 12,400 in period 1973-74 to 1975-76. N.S.W. Department of Primary Industries-$3,750 in period 1972-73 to 1975-76 as part of projects on adaptive research on winter oilseed and grain legume crops. {: type="1" start="3"} 0. The research conducted by the Western Australian Department of Agriculture has involved the study of disease dissemination mechanisms, methods of infection of the rape plant, and the effects of disease development on various stages of plant growth as well as breeding and testing of crop varieties for resistance to blackleg and testing of fungicides as protectants. The New South Wales research is directed towards avoidance of the disease through the use of tolerant varieties and variation of sowing time. The work of the Victorian Department of Agriculture initially involved research into factors contributing to incidence of the disease under field conditions, seed as a source of infection and methods of control. The current phase involves breeding for resistance using imported varieties as source of resistance. At the University of Western Australia, research has centred around the study of the host-parasite relationship and has two main facets, namely, the biology of the causal organism of blackleg and development of resistance in the host plant. 1. The work by the Western Australian Department has led to the development of a technique for screening large numbers of rape varieties and crosses from these for blackleg resistance under glasshouse conditions. This has allowed the breeding and selection program to be speeded up. In addition, some seven research papers arising from this work have been prepared. Results of the fungicide work have so far been disappointing but it is proposed to continue in this area. Results in New South Wales have indicated that time of planting and variety (winter and spring types) may have a significant bearing on yield. However, atypical seasonal conditions have so far confused the picture. In Victoria, research to date has shown that incidence of the disease is strongly associated with the early (autumn) sowings followed by heavy winter rain. The best method of control of the disease in the field is to practise late sowings in isolation from other rape crops or fields sown to rape in the previous one or two seasons. An index of infection which enables the severity of crop infectionto be accurately predicted has been developed. Infected seed has been shown to be relatively unimportant in the spread of the disease except for new crop areas. The breeding work is continuing. Work at the University of Western Australia has led to the buildup of a large collection of different types of the fungus which causes blackleg. These are to be used for testing new rape varieties for resistance as they become available. Laboratory techniques for measuring resistance to the disease have also been developed. Current research is concerned with imparting the resistance found in some imported varieties to locally developed strains whilst maintaining their yield potential. {:#subdebate-56-28} #### Department of Aboriginal Affairs: Employment (Question No. 602) {: #subdebate-56-28-s0 .speaker-6I4} ##### Mr Macphee:
Minister for Productivity · BALACLAVA, VICTORIA · LP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. How many persons are employed by his Department or by agencies responsible to him or his Department in a staff recruiting capacity and what amounts are chargeable to his Department of such agencies in respect of their annual salaries. 1. To what extent does his Department or any such agency engage private employment agencies to assist in the recruitment of staff. 2. What sum was spent by his Department or any such agency in engaging private employment agencies in the financial year 1974-75. 3. To what extent does his Department or any such agency engage or otherwise obtain assistance from the Commonwealth Employment Service in the recruitment of staff and what sum has been paid to the Commonwealth Employment Service in respect of such assistance. {: #subdebate-56-28-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Recruitment within the Department of Aboriginal Affairs is handled in general by one person in Central Office and is supervised by one officer in each Regional Office. None of the staff of the agencies responsible to me is engaged full-time in recruiting activities. 1. The Department of Aboriginal Affairs does not use private agencies to recruit staff. The Australian Institute of Aboriginal Studies has in the past used private agencies to engage secretarial staff, but has latterly ceased to do so. Aboriginal Arts & Crafts Pty Ltd has used private employment agencies or consultants to recruit staff on only two occasions. Aboriginal Hostels Ltd has engaged private employment agencies to a limited extent. Applied Ecology Pty Ltd has used private employment agencies for recruitment of staff on four occasions since it commenced operation in 1 973. {: type="1" start="3"} 0. Payments by the above bodies to employment agencies in the financial year 1974-75 are as follows: {: type="1" start="4"} 0. The Department of Aboriginal Affairs does not obtain assistance from the Commonwealth Employment Service in the recruitment of staff. The Australian Institute of Aboriginal Studies uses the CES to recruit secretarial and clerical staff and janitors. Arnhem Transport Services Pty Ltd, Aboriginal Arts and Crafts Pty Ltd, Applied Ecology Pty Ltd, and Aboriginal Hostels Ltd regularly use the services of the CES. No charges are made by the CES for this service. {:#subdebate-56-29} #### Department of the Northern Territory: Employment (Question No. 603) {: #subdebate-56-29-s0 .speaker-6I4} ##### Mr Macphee:
LP asked the Minister for the. Northern Territory, upon notice: {: type="1" start="1"} 0. How many persons are employed by his Department or by agencies responsible to him or his Department in a staff recruiting capacity and what amounts are chargeable to his Department or such agencies in respect of their annual salaries. 1. To what extent does his Department or any such agency engage private employment agencies to assist in the recruitment of staff. 2. What sum was spent by his Department or any such agency in engaging private employment agencies in the financial year 1974-75. 3. To what extent does his Department or any such agency engage or otherwise obtain assistance from the Commonwealth Employment Service in the recruitment of staff and what sum has been paid to the Commonwealth Employment Service in respect of such assistance. {: #subdebate-56-29-s1 .speaker-ID4} ##### Mr Adermann:
Minister Assisting the Minister for National Resources · FISHER, QUEENSLAND · NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The number of staff currently engaged on full-time recruitment, publicity, selection and appointment of staff, including the routine processing functions for the Department of the Northern Territory Public Service, is eight and the annual cost in salaries is $75,538.00. Recruitment functions are carried out by the Northern Territory Port Authority, the Northern Territory Housing Commission and the Darwin Reconstruction Commission. The Port Authority utilises 23 per cent of one person's time at a cost of $2,790.00, the Housing Commission utilises 20 per cent of one person's time at an annual cost of $2,230.00, while the Darwin Reconstruction Commission utilises 30 per cent of one person 's time at an annual cost of $4,000.00. {: type="1" start="2"} 0. The department and the boards and authorities do not engage private employment agencies to assist in recruitment of staff. 1. Nil. 2. The department, as well as the boards and authorities mentioned above, utilises the services of the Commonwealth Employment Service, Darwin, on an ad hoc basis, usually for such positions as day labourer, storeman, etc. There is no charge made for services they render. {:#subdebate-56-30} #### Employment Agencies (Question No. 611) {: #subdebate-56-30-s0 .speaker-6I4} ##### Mr Macphee:
LP asked the Minister for Employment and Industrial Relations, upon notice: {: type="1" start="1"} 0. 1 ) How many persons are employed by the Commonwealth Employment Service and what is the total salary cost involved. 1. To what extent does his Department have liaison with other departments or Government agencies in respect of staff recruitment and, in particular, what role does the Commonwealth Employment Service play in assisting Government departments and agencies to recruit staff. 2. What sum did the Commonwealth Employment Service spend on advertising job vacancies in the financial year 1974-75. 3. To what extent does his Department or any agency responsible to him or his Department engage private employment agencies to assist in the recruitment of staff. {: #subdebate-56-30-s1 .speaker-KVM} ##### Mr Street:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The average staff employed by the Commonwealth Employment Service during the current financial year is expected to total 2790. The total annual salary cost involved, based on the average staffing level of 2790, is expected to total $26,300,000. 1. This Department, as is the case with all Commonwealth Departments, is required to submit recruitment demands to the Public Service Inspectors in the respective States, who recruit and allocate staff in accordance with departmental requests. The Commonwealth Employment Service does at times assist Government Departments to recruit staff. However, this is generally limited to those occasions where the Public Service Inspectors are unable to satisfy departmental requests for staff, and this tends to occur mainly in country rather than metropolitan areas. Departments are permitted to recruit base level 'exempt' staff and the Commonwealth Employment Service has assisted in recruiting such staff wherever requested. {: type="1" start="3"} 0. During the financial year 1974-75 the Commonwealth Employment Service spent $8,465 on advertising job vacancies. 1. I understand that the Trade Union Training Authority has on one occasion engaged a person for a short period of time through a private employment agency. I have also been advised that the Australian Stevedoring Industry Authority has on a few occasions in the past engaged a private employment agency to recruit such essential staff as accounting machinists, for periods up to 3 weeks. {:#subdebate-56-31} #### Sporting Spectators (Question No. 622) {: #subdebate-56-31-s0 .speaker-KUX} ##### Mr Stewart:
LANG, NEW SOUTH WALES asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. What is the estimated number of spectators who attend both senior and junior (a) amateur and (b) professional sporting events (excluding horse and greyhound racing) each week-end in (i) each of the States and (ii) Australia. 1. ) What revenue is collected per annum by Governments in (a) each of the States and (b) Australia in taxes paid by such spectators. {: #subdebate-56-31-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is: {: type="1" start="1"} 0. 1 ) and (2) The information requested is not held by the Department of Environment, Housing and Community Development. I have asked that approaches be made to the relevant Commonwealth and State instrumentalities to see if they are able to provide me with sufficient detail to allow me to answer more fully. If information is available, I will pass it on to the honourable member. {:#subdebate-56-32} #### Sporting Spectators (Question No. 623) {: #subdebate-56-32-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) What are the numbers of spectators who attend each week (a) galloping, (b) trotting and (c) greyhound fixtures in (i) each of the States and (ii) Australia. 1. What revenue is collected per annum by Governments in (a) each of the States and (b) Australia from (i) galloping, (ii) trotting and (iii) greyhound fixtures. {: #subdebate-56-32-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's questions is as follows: {: type="1" start="1"} 0. and (2) The Information requested is not held by the Department of Environment, Housing and Community Development. I have asked that approaches be made to the relevant Commonwealth and State instrumentalities to see if they are able to provide me with sufficient detail to allow me to answer more fully. If information is available I will pass it on to the honourable member. {:#subdebate-56-33} #### Sport Participants (Question No. 624) {: #subdebate-56-33-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for Environment, Housing and Community Development, upon notice: >How many seniors and juniors participate in organised competitive sport each week-end in (a) amateur and (b) professional sports in (i) each of the States and (ii ) Australia. {: #subdebate-56-33-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: >I am not aware of any records that are kept at State or Commonwealth levels that would provide a precise answer to this question. However, the information I have provided in response to the honourable member's question on notice > >No. 623 concerning registered numbers of participants in sporting bodies in Australia, should give him some idea of the scale of sports participation in Australia. {:#subdebate-56-34} #### Tertiary Education Assistance Scheme (Question No. 626) {: #subdebate-56-34-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister representing the Minister for Education, upon notice: {: type="1" start="1"} 0. 1 ) How many applicants for assistance under the Tertiary Education Assistance Scheme, whose eligibility has been approved from 1 January 1976, are still awaiting payment. 1. Is the delay in payment due to staff reductions in the Public Service. 2. If the delays are due to staff shortages, does this fact conflict with the statement attributed to the Prime Minister published in the *Financial Review* of 26 April 1976, that Public Service reductions had not caused any deterioration or lack of efficiency in Departments. {: #subdebate-56-34-s1 .speaker-EE6} ##### Mr Viner:
LP -- The Minister for Education has supplied the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) At the time the honourable member asked his question there were some 2700 students whose applications had been conditionally approved but to whom no payment of benefits had been made. Payment of benefits to these students was dependent upon their providing additional information relating to such matters as examination results, course enrolments and income details. The additional information was required so that either the level of a student's entitlement could be determined or his eligibility could be confirmed. 1. and (3) No significant delays have been caused by staff reductions. {:#subdebate-56-35} #### Commonwealth Hostels (Question No. 630) {: #subdebate-56-35-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Environment, Housing and Community Development, upon notice: >In respect of each Commonwealth hostel closed since 1 1 November 1973, what (a) was the reason for closure, (b) is the capital value, (c) is the maximum number of people who could be accommodated and (d) is the current and intended function. {: #subdebate-56-35-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: >Two Commonwealth Migrant Hostels, both in New South Wales, and one Hostel in Canberra, have been closed since 11 November 1973. The Cabramatta Migrant Hostel was closed from 24 April 1975 and the East Hills Migrant Hostel from 1 May 1976. Narellan House, a Government employee hostel in Canberra, was closed from 2 February 1 976. > >The information sought in respect of each hostel follows: East Hills {: type="a" start="a"} 0. Surplus to current requirements. 1. Current capital value not known. Construction cost of modern accommodation (erected over the period 1968 to 1971) was $3,044,000. Value of land for rating purposes in 1 975-76 was $283,710. 2. 1300. 3. Hostel retained on care and maintenance basis against future immigration need. Cabramatta {: type="a" start="a"} 0. Surplus to current requirements. 1. b ) Current capital value not known. Construction cost of modern accommodation (erected in 1970 and 1971) was $1,261,000. Value of land for raring purposes in 1975-76 was $400,000. 2. 500. 3. Hostel retained on care and maintenance basis against future immigration need. Narellan {: type="a" start="a"} 0. Surplus to requirements. 1. Capital value at 1 July 1975 was $283,000. 2. 140. 3. Disposed of to Department of Administrative Services on 2 February 1976. Now used for student accommodation. {:#subdebate-56-36} #### Regional Employment Development Scheme (Question No. 631) {: #subdebate-56-36-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Employment and Industrial Relations, upon notice: {: type="1" start="1"} 0. 1 ) What is the (a) name, (b) location, (c) description and (d) value of projects approved under the RED Scheme. 1. What is the total (a) number and (b) value of projects approved under the scheme. 2. How many people were directly employed under the scheme. 3. In respect of each uncompleted RED Scheme project what expenditure (a) has been incurred and (b) is required to facilitate completion. {: #subdebate-56-36-s1 .speaker-KVM} ##### Mr Street:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Some 9100 projects with an estimated total value of $247m were approved under the RED Scheme, of which $207m (approx) was to be funded by the Commonwealth Government. Approval was later withdrawn for just over 900 projects with a total value of about $ 18m because no unemployed persons had commenced work on them at July 1975 when the former Ministers responsible for the Scheme decided to review it against the proposed 1975-76 Budget allocation of $ 135m. The location of all approved projects was as follows: It is somewhat impracticable to list the name, location, description and value of each of these projects for inclusion in the reply to the honourable member's question. However, details are on microfiche in the New South Wales Regional Office of my Department and are available for perusal by him. {: type="1" start="3"} 0. The Scheme led to the creation of some 69 600 individual employment opportunities for unemployed persons recruited through the Commonwealth Employment Service. A total of 5700 additional jobs were created under the Scheme for specialist personnel required on projects bringing the total number of job opportunities directly created by the Scheme to over 75 000. 1. From the data currently available in my Department it is not possible to give the details sought by the honourable member in respect of each incomplete project. It should be appreciated that many sponsors, on being advised of the tight funds situation, either completed projects using their own resources, or cut back the extent of projects to meet resources that were available. My Department estimates that ' over 99 per cent of all projects were either completed or taken to a stage where benefit flowed to the local community. {:#subdebate-56-37} #### Yarralin Land Claim (Question No. 636) {: #subdebate-56-37-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. 1 ) What is the area and value of land at Yarralin on Victoria River Downs claimed by the Ngaringman People. 1. What progress has been made towards meeting the claim and when can finality in the form of a lease be expected. {: #subdebate-56-37-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) The area of land in the present claim of the Ngaringman group at Yarralin is approximately 90 square miles or 140 square kilometres. No valuation by the Valuer General has yet taken place in respect of the land. 1. The Interim Land Commissioner, **Mr Justice** Ward has advised that his recommendations on the claim will be presented to me shortly for consideration. {:#subdebate-56-38} #### Aboriginal Unemployment (Question No. 638) {: #subdebate-56-38-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: >What is the number and percentage of employable Aboriginal people who are unemployed. {: #subdebate-56-38-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: >The total number of Aborigines registered for employment with the Department of Employment and Industrial Relations at 2 April 1976 was 10 335. For a number of reasons, including the isolation of many Aboriginal communities, and the lack of awareness among Aborigines of their unemployment benefits entitlements, many Aborigines do not register for employment and the actual number unemployed may well be substantially greater. My Department estimates, on the basis of 1971 Census data, that the number of Aborigines now in the labour force is a little under 35 000. More satisfactory figures will be available in due course from the 1976 Census. {:#subdebate-56-39} #### Aboriginal Health (Question No. 640) {: #subdebate-56-39-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Aboriginal Affairs, upon notice: {: type="1" start="1"} 0. Which of the recommendations contained in the Report of the House of Representatives Standing Committee on Aboriginal Affairs on *Aboriginal Health in the South West of Western Australia* have been implemented. 1. In respect of the recommendations not implemented which (a) have been firmly rejected and (b) are under active consideration. {: #subdebate-56-39-s1 .speaker-EE6} ##### Mr Viner:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2 ). The Report has been considered by the Aboriginal Affairs Co-ordinating Committee of Western Australia and recommendation 7 (a) of the Report, for an expansion of the Co-ordinating Committee's membership, and recommendation 7 (b) for establishment of a Health Subcommittee, have been implemented. The functional departments have also examined the report with a view to determining the practicability of implementing the recommendations. A summary of action to date on each of the other recommendations follows: {: type="1" start="1"} 0. The formal procedure for co-ordination and consultation provided under the terms of the Western Australian Aboriginal Affairs Planning Authority Act is being implemented to the extent possible with the limited staff available. The Perth Aboriginal Affairs Co-ordinating Committee meets monthly as do the five subsidiary area coordinating committees outside the metropolitan area. Consultation at the local community level takes place at Consultative Committee meetings held twice yearly in each of the seven areas into which the State is divided for administrative purposes. The Aboriginal Medical Service field staff consult at a training level with major hospitals and liaise with Community Health Services field staff informally. Community Health Services has recently conducted seminars for field staff in Kalgoorlie and Port Hedland which should promote more effective consultation in the future. The Community Health Services Director is a member by standing invitation of the Medical Committee of the Aboriginal Medical Service. Community Health Services, with an increased Aboriginal field staff, has local contact with communities throughout the State. {: type="1" start="2"} 0. This recommendation is being implemented progressively. Community Health Services is making a baseline health study of Aboriginal people. 1. The recommendation has been implemented in part. Community Health Services conduct Health Education programs in schools and the Education Department is currently reviewing the effectiveness of the program. ( The Aboriginal Medical Service provides health education at the AMS Centre. Subsidised lunch schemes are operating at Gnowangerup and Wiluna and other self-supporting schemes are being organised in a number of other centres. {: type="1" start="4"} 0. The terms of this recommendation are now receiving priority attention from the Aboriginal Affairs Co-ordinating Committee Health sub-committee which includes representatives of the Alcohol and Drug Authority, Community Health Services and the Department for Community Welfare. 1. The New Era Aboriginal Fellowship has established a 'Half-way House' (St Norbett's Centre). An Aboriginal Medical Service alcoholic program works in conjunction with this Centre by referring patients through a social worker. 2. The Alcohol and Drug Authority has completed a *film* on some aspects of alcoholism in Kalgoorlie as a preliminary step. Future developments will depend on available funds ana staff resources. 3. The Alcohol and Drug Authority in conjunction with Community Health Services, Department of Corrections, Aboriginal Medical Service and Aboriginal organisations is developing proposals for management and treatment of habitual drinkers. 4. and 10. These issues are being considered by an Interdepartmental Committee comprising the Departments of Aboriginal Affairs, Social Security, and Employment and Industrial Relations. 5. 1. A program of closing down reserves is dependent upon funding for town housing. Agreement has been reached between the State Housing Commission and the Department for Community Welfare to give priority in towns where reserve closure is planned and applicants appear to have potential. Houses for use as training centres have been offered to the Department for Community Welfare by the State Housing Commission. 6. This recommendation has been implemented. The Department for Community Welfare has indicated its intention to appoint as many homemakers as are required subject only to the availability of suitable personnel. 13 (a) This recommendation has been implemented in part. Views of Aboriginal people in local communities, as well as the Aboriginal Affairs Co-ordinating Committee are being sought on housing solutions but progress must depend on the availability of funds. {: type="a" start="b"} 0. This recommendation has not been accepted by the State Housing Commission. The Commission does obtain views of other agencies, including the Department for Community Welfare but does not accept that any other agency can determine standards for tenants. 7. The Housing Commission is continuing to decentralise its operations as and when practicable. 8. The Department of Aboriginal Affairs is kept informed through the Aboriginal Affairs Co-ordinating Committee of any opposition by local government. The State Housing Commission has resolved difficulties with some local authorities, enabling an intended program for 1976-77 to be formulated. The State Housing Commission is continuing to negotiate with authorities still raising objections. 16. (a) Effective consultation takes place between Adult Education, Technical Education of W.A., Education Department and Aboriginal communities. Health and hygiene courses are available. {: type="a" start="b"} 0. The Department of Education is now reviewing the health education program for schools and communities in conjunction with the Community Health Services with a view to upgrading the service as required. The Department of Aboriginal Affairs funds approved programs. 1. Aboriginal Teacher Aides have been appointed where required throughout the State, as well as two Aboriginal Liaison Officers- one in Kalgoorlie and one in Port Hedland. The appointment of additional officers is subject to the availability of funds. 9. Effective implementation of this recommendation has not been possible as funds available to both authorities have been limited. 10. The Aboriginal Affairs Co-ordinating Committee has authorised its Health Sub-committee to invite the Community Recreation Council to participate in its activities. 11. The Department of Aboriginal Affairs has a policy of promoting such Centres but funds for this purpose are extremely limited. {:#subdebate-56-40} #### Broken Hill Tourist and Travellers' Centre (Question No. 762) {: #subdebate-56-40-s0 .speaker-KFB} ##### Mr FitzPatrick:
DARLING, NEW SOUTH WALES asked the Minister representing the Minister for Industry and Commerce, upon notice: {: type="1" start="1"} 0. Has a commitment by the previous Government to finance up to 25 per cent ($125,000) of the cost of a Tourist and Travellers ' Centre at Broken Hill been withdrawn. 1. If so, what is the reason for the withdrawal. 2. Did the New South Wales Government agree to provide 25 per cent if the Commonwealth Government agreed to match it. {: #subdebate-56-40-s1 .speaker-ZD4} ##### Mr Howard:
LP -- The Minister for Industry and Commerce has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) and (2) The previous Government did not enter into any commitment to provide funds for the Broken Hill Tourist and Travellers' Centre. This project was one of several submitted by the New South Wales Government for consideration under the scheme of Commonwealth Government grants for the development of tourist attractions in 1975-76. Following its review of expenditure in February of this year, the Government decided to immediately terminate this program of grants. All existing commitments will be honoured. No grants were approved during 1975-76. (3)1 understand that the New South Wales Government has announced a grant of $ 1 50,000 to the project, representing 25 per cent of the estimated total cost. The grant is conditional on the Broken Hill City Council being able to fund the balance of 75 per cent of total cost and commencing work on the project. {:#subdebate-56-41} #### Political Broadcasts (Question No. 763) {: #subdebate-56-41-s0 .speaker-KFB} ##### Mr FitzPatrick: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. Under what circumstances must radio broadcast stations announce authorisations of political broadcasts. 1. Do radio talk-back sessions conducted by a political party during air-time purchased by that party come within regulations governing authorisation announcements. 2. What safeguards exist to ensure that the listener to a talk-back program solely sponsored by a political organisation is made aware that it is such, and not a normal unsponsored talk-back session. {: #subdebate-56-41-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. Section 117 of the *Broadcasting and Television Act* 1942-1975 requires that broadcasting and television stations identify the true names of speakers and authors of political addresses and statements, in addition to identifying political parties in the case of political matter broadcast on behalf of such parties. 1. There are no provisions in the Act for exemption from the requirements of Section 1 1 7. 2. If such programs were broadcast, the provisions of Section 1 17 would apply, and it would be necessary to identify the speakers and the party involved. {:#subdebate-56-42} #### Canned Fruit Sales to New Zealand (Question No. 765) {: #subdebate-56-42-s0 .speaker-2E4} ##### Mr Lloyd:
MURRAY, VICTORIA asked the Minister for Overseas Trade, upon notice: {: type="1" start="1"} 0. 1 ) How much and what varieties of canned deciduous fruit have been sold to New Zealand in each of the last three financial years. 1. Have any applications for import licences for the supply of Australian canned deciduous fruit to that country been refused in those years. {: #subdebate-56-42-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Exports of Australian canned deciduous fruit to New Zealand for the last three financial years were recorded as follows: {: type="1" start="2"} 0. I am unaware of whether applications by New Zealand importers to import canned fruit have been refused during those years. {:#subdebate-56-43} #### Kippax Health Centre: A.C.T. (Question No. 768) {: #subdebate-56-43-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Health, upon notice: {: type="1" start="1"} 0. How many fee for service and salaried medical practitioners are using the Kippax Health Centre, A.C.T. 1. What staff is available to each of these persons or to the group generally. 2. Who pays for these persons and what rental or other charges are paid by the doctors. 3. When did the centre open and how many changes have there been to the fee for service and salaried staff since then. 4. What after-hours service is provided by each group, and who provides it. 5. What is the average number of consultations per day for each group for the first5 months of 1976. 6. What other services are provided at the centre and how are they financed. {: #subdebate-56-43-s1 .speaker-GH4} ##### Mr Hunt:
Minister for Health · GWYDIR, NEW SOUTH WALES · NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Three fee-for-service and 2 salaried medical practitioners are based at Kippax Health Centre. 1. The fee-for-service doctors employ their own support staff. Salaried doctors share a receptionist and 2 nurses employed by the Commission. The Commission also employs 4 further clerical staff to cover main foyer reception, telephone-switchboard and medical records on behalf of the centre overall. Other Commission staff (including specialists, nurses and allied health professionals) provide services to patients of all doctors in the centre. (See (7)). {: type="1" start="3"} 0. Apart from the support staff employed by feeforservice doctors, the staff referred to in (2) are paid by the Commission. Fee-for-service doctors pay rentals based on the size of their rooms in the range of $2,000-2,500 per annum plus cleaning charges. 1. The centre opened on 17 May 1975, with 2 feeforservice and 2 salaried practitioners. One further feeforservice doctor has joined the centre this year; one salaried practitioner has resigned and been replaced and a further part-time salaried practitioner worked in the centre for approximately 5 months to February 1976. 2. The medical practitioners provide a joint after-hours service, including emergency clinics on Saturday and Sunday mornings; a sister employed by the Commission supports both free-for-service and salaried doctors at the emergency clinics. 3. In the first five months of 1976, the salaried medical practitioners at the centre provided an average of 42 consultations per day. I am not in a position to supply the information sought by the honourable member in respect of the fee-for-service group. However, should he wish to directly approach the medical practitioners involved, I will gladly provide him with their names. {:#subdebate-56-44} #### Use of Taxis by Members (Question No. 769) {: #subdebate-56-44-s0 .speaker-JQB} ##### Mr Bonnett:
HERBERT, QUEENSLAND asked the Minister for the Capital Territory, upon notice: {: type="1" start="1"} 0. What are the costs involved in supplementing Commonwealth cars with taxis during the shuttle services for Members? 1. What are the reasons for employing taxis on the shuttle service when Commonwealth cars are standing idle? 2. How can the taking of taxis away from public taxi ranks for shuttle service work be explained in the light of his recent statement that the Government will seek to encourage the availability of more taxis in Canberra? {: #subdebate-56-44-s1 .speaker-GY5} ##### Mr Staley:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1) The cost of a taxi on shuttle service for members is at the normal taxi hire rates. This is at present 35 cents flag-fall plus 22 cents per km. The total charge varies according to the distance and the Department of the Capital Territory adds an administrative on-cost of 10 per cent for billing to the user. Departmental rates for Ministerial and Passenger Cars on the other hand are 11.10 cents per hour plus 6 cents per km which on average means a charge of 60 cents per km. 1. Taxis are used to supplement the Commonwealth Car Fleet Co-ordination is effected by the Transport Section of the Department of the Capital Territory and taxis are not used in situations where a Commonwealth car is available. Often on late night work it is neither economic nor possible to man all available Commonwealth cars. 2. The Canberra taxi fleet depends to some extent on work allocated to it by the Transport Section of the Department of the Capital Territory for its viability. The amount of work allocated is discussed periodically with the taxi industry with a view of ensuring adequate service to the public generally. {:#subdebate-56-45} #### Employees of Bankrupt Firms (Question No. 773) {: #subdebate-56-45-s0 .speaker-SH4} ##### Dr Klugman: asked the Treasurer, upon notice: {: type="1" start="1"} 0. Are employees sometimes unable to receive salaries and long service leave payments in cases of liquidation and bankruptcy because of the prior right of the Commissioner for Taxation under section 22 IP of the Income Tax Assessment Act. 1. If so, will he consider taking steps to alleviate this hardship on employees. {: #subdebate-56-45-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. By virtue of section 22 IP of the Income Tax Assessment Act, tax instalment deductions payable to the Commissioner of Taxation by a trustee in bankruptcy or by the liquidator of a company have priority over all other debts whether preferential, secured or unsecured, with the exception of specified costs, charges and expenses. They would thus rank in priority ahead of amounts payable for salaries and long service leave. (2) Section 22 IP comes into operation when an employer who has made deductions purporting to be for tax instalments fails to remit the amount deducted to the Commissioner or purchase tax stamps. If an employer carries out his statutory obligation and remits the instalments by the due date, the employees are allowed credit in their income tax assessments for the tax instalments deducted from their wages. If the employer goes bankrupt or, being a company, goes into liquidation without paying the instalments to the Commissioner, the Crown nevertheless keeps the employees indemnified against this loss and the Commissioner allows them credit for the amounts deducted although he may never receive any payment whatsoever. The Commissioner's priority thus merely attempts to ensure that he will be reimbursed, at least in part, for the credit allowed to employees. After considering the matter my view is the same as that of the previous Treasurer who dealt with a similar question last year and after considering the purpose and operation of section 22 1 P reached the conclusion that it would be best if the priority conferred by the section is retained. VIP Flights (Question No. 775) {: #subdebate-56-45-s2 .speaker-SH4} ##### Dr Klugman: asked the Minister for Defence, upon notice: >Will he provide a list of all VIP Flights undertaken by No. 34 Squadron RAAF since 1 December 197S giving (a) the origin and destination of each flight, (b) the names of all persons carried, (c) the purpose of the flight and (d) the scheduled time of the nearest commercial flight over the same route. {: #subdebate-56-45-s3 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="a" start="a"} 0. and (b)- See details of special Royal Australian Air Force flights tabled in Parliament on 18 May 1976 and 4 June 1976. 1. The purpose of the flight in each case was within the guidelines laid down in the Rules for the use of RAAF VIP Aircraft for VIP and VIP Party Travel tabled in Parliament on 1 March 1973. 2. The provision of details of scheduled commercial flights is not my responsibility. This information should be available from the commercial airlines. The rules governing the use of VIP aircraft make it quite clear that a request for VIP aircraft travel is not to be made to an approving authority if alternative forms of transport are available. I can assure the honourable member that, in considering whether approval for VIP travel should be given, I also take into consideration the scheduled times of commercial flights. {:#subdebate-56-46} #### Filing of Documents (Question No. 789) {: #subdebate-56-46-s0 .speaker-HI4} ##### Mr Morris:
SHORTLAND, NEW SOUTH WALES asked the Minister for Foreign Affairs, upon notice: >When will he acknowledge my personal telegram of 7 December 1973 to him as caretaker Minister for Foreign Affairs seeking an assurance that no telexes, files, papers or documents relevant to question No. 3381 which first appeared on the Notice Paper on 28 October 1975 had been burnt or otherwise destroyed since the caretaker Government was appointed and that all telexes, files, papers and documents relevant to the question would be held in a secure place pending resumption of the Parliament. {: #subdebate-56-46-s1 .speaker-MI4} ##### Mr Peacock:
Minister for Foreign Affairs · KOOYONG, VICTORIA · LP -- The answer to the honourable member's question is as follows: >The telegram to which the honourable member refers was received in my office on 1 1 December 1973. As the honourable member is already aware from the response to an identical telegram sent to the Secretary of my Department, no telexes, files, papers or documents relevant to question No. 338 1 were or are held in the Department of Foreign Affairs. {:#subdebate-56-47} #### Visits of State to Singapore (Question No. 790) {: #subdebate-56-47-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Foreign Affairs, upon notice: {: type="1" start="1"} 0. Does the Department of Foreign Affairs maintain records of official visits of Australian Ministers of State to Singapore. 1. Does the Department arrange official visits to the Head of State of Singapore for Australian Ministers of State visiting Singapore; if so, what records are kept of such arrangements and appointments. {: #subdebate-56-47-s1 .speaker-MI4} ##### Mr Peacock:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. If a Minister of State on an official visit to Singapore wishes to call on the Head of State of Singapore, my Department, through the High Commission in Singapore, would endeavour to arrange such a visit. The purpose of the file is to record the request to the Singapore Government for an appointment, and the actual timing of the appointment, if granted. Representation in Singapore: Prime Minister's Visits (Question No. 791) {: #subdebate-56-47-s2 .speaker-HI4} ##### Mr Morris: asked the Minister for Foreign Affairs, upon notice: {: type="1" start="1"} 0. 1 ) Did he tell me in answer to my question No. 36 *(Hansard, 25* March 1976, page 1087) relating to the occasions on which, and in what capacities the present Prime Minister had visited Singapore since his election to Parliament, that the Department of Foreign Affairs does not maintain a register of overseas visits undertaken by Members of Parliament 1. Has bis attention been drawn to the information supplied by the Prime Minister in answer to my questions Nos 292 and 293 *(Hansard,* 18 May 1976, page 2169) that the records showed that he had made visits to Singapore on certain dates. 2. What is the reason for the apparent discrepancy between the answer supplied by him and those supplied by the Prime Minister. {: #subdebate-56-47-s3 .speaker-MI4} ##### Mr Peacock:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. and (3) The information on which the reply to question No. 36 was based did not come from Foreign Affairs records. Water Hyacinth in Murray River (Question No. 793) {: #subdebate-56-47-s4 .speaker-2E4} ##### Mr Lloyd: asked the Minister for National Resources, upon notice: {: type="1" start="1"} 0. Has the River Murray Commission indicated that water hyacinth is a potential threat to the Murray system. 1. If so, what is the Commission doing by itself and in conjunction with the N.S.W. Irrigation Commission, and various scientific bodies, to control and eradicate the menace. {: #subdebate-56-47-s5 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes- the Commission recently recorded its concern and alarm about the threat which water hyacinth presented to the River Murray system. 1. The Commission has no charter for the control of weed infestation. Each Commissioner did however agree to make representation to his respective Government for action to implement control measures to prevent water hyacinth spreading further into the River Murray system. Such representations were made. It is understood that an Interdepartmental Committee has been set up by the New South Wales Department of Agriculture to report to the Minister of Agriculture on ways and means of dealing with the problem, following which discussions are likely to take place with the relevant Ministers from Victoria and South Australia and myself as Chairman of the Australian Water Resources Council to consider action to be taken to control the spread of this water weed. {:#subdebate-56-48} #### Pollution of Murray River (Question No. 794) {: #subdebate-56-48-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for National Resources, upon notice: {: type="1" start="1"} 0. 1 ) What is the present stage of development of proposals to correct the increasing salinity and general pollution problem of the Murray River. 1. When is it anticipated that the Governments who are parties to the River Murray Commission will be required to reach agreement on the necessary financial and physical proposals to protect the river. {: #subdebate-56-48-s1 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The development of proposals to correct the salinity and general pollution problem of the Murray River is primarily a matter for the States concerned. The River Murray Working Party and its steering Committee of Federal/State Ministers made certain recommendations in this regard and these matters are still being considered by the Governments concerned. 1. I refer the honourable member to the answer, Parts (3) and (4), to his earlier Question No. 7, which appeared in Hansard on 17 March 1976, page 766. De-snagging of Murray River (Question No. 795) {: #subdebate-56-48-s2 .speaker-2E4} ##### Mr Lloyd: asked the Minister for National Resources, upon notice: {: type="1" start="1"} 0. 1 ) When will work begin on de-snagging (a) the Murray River in certain areas between the Hume and Yarrawonga weirs and (b) the Barmah Choke below the Yarrawonga weir. 1. Will the river be able to carry the summer flows post Dartmouth if this work is not carried out. 2. When is it anticipated that Dartmouth water will become available, what will be the quantity and how will it be allocated. 3. What measures are proposed to protect the Barmah forest from the post Dartmouth river level. {: #subdebate-56-48-s3 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. (a) River remedial works including snagging in the fifteen mile section of the Murray upstream of Howlong are in progress. {: type="a" start="b"} 0. The River Murray Commission's Technical Committee in consultation with the appropriate State authorities is actively pursuing the matter of hydraulic capacity of the River Murray between Tocumwal and Echuca to carry increased regulated flows which may be required after the completion of the Dartmouth Dam Project. At present, an investigation is being carried out to provide detailed information for the preparation of designs for improvements which may be necessary to increase the carrying capacity of the river or to by-pass part of the flows via the Edward system. 1. Yes- but it is anticipated that a high river will extend over a longer period, but generally will be within the carrying capacity of the river. 2. The effect of the construction at Dartmouth Dam will be to increase the annual entitlement to South Australia by some 300 000 megalitres and that State's share of available water during periods of restriction to one-third. After meeting the South Australian entitlement, the additional water made available by Dartmouth will be shared equally between New South Wales and Victoria. The extent to which irrigation allocations are increased as a consequence of Dartmouth is a matter for the States of New South Wales and Victoria to decide having regard to their particular policies in regard to incidence and severity of restriction to supply during dry periods. In operation, Dartmouth Dam will provide a reservoir of storage which will only be called upon during dry periods. The storage at Hume will normally be drawn down before any releases are made from Dartmouth. In this way, greater efficiency in the use of water resources will be achieved. Once Dartmouth has filled, it could remain so for a number of years unless a serious drought occurs requiring releases of water. Dartmouth will have a storage capacity of 4m megalitres and under average conditions will take four years to fill from commencement of storage which it is hoped will take place in the second half of 1 977. {: type="1" start="4"} 0. Investigations are not at the stage where it can be determined what works, if any, will be necessary. Some of the alternatives under study involve reinstatement of the natural levee banks of the river to increase its carrying capacity, upgrading the existing regulators, improved drainage works and selected de-snagging. Slaughter of Cattle at Tongala (Question No. 796) {: #subdebate-56-48-s4 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Was the dramatic increase in the price of chopper dairy cows and other second grade beef which immediately followed the Tongala slaughter, coincidental or does it indicate that meat companies have been making a fortune out of the misfortune of farmers. 1. If it was not coincidence or due to some other reason, will he consider setting up an inquiry into the meat buying activities of the meat companies so that a genuine auction system is either revived or some other selling method is introduced which will guarantee price justice for the producer. {: #subdebate-56-48-s5 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1) It is not possible to isolate a single factor which may have caused a rise in prices for chopper dairy cows and other second grade beef shortly after the Tongala slaughter. Processors can in most cases substitute meat from one type of beast for another if there is a change in relative prices. The following factors may have influenced the market: {: type="a" start="a"} 0. In the last six months a record total of more than 1.1 million cattle have been slaughtered in Victoria, 17 per cent above the corresponding figure a year ago. With current weak demand this record supply has led to depressed prices for all types of cattle. 1. Last year many farmers because of the good season and the then low cattle prices held back cull cows which otherwise would have been marketed. Because of the current drought farmers have had to sell both the stock they held back last year and this years' culls. The abnormally high supply of chopper cows, created by such forced sales, has contributed to the relatively lower prices for this type of stock. 2. Immediately following the slaughter at Tongala, **Mr Smith,** the Victorian Minister for Agriculture, guaranteed producers a bounty of $5.00 per head for stock slaughtered and buried by Councils. Farmers may have then decided to withhold their culls from sales and accept the bounty rather than risk a bill from their stock agents. It is estimated by the Victorian Meat Works Association that the number of such stock offered for sale fell by 30 per cent the following week. 3. One processor, who had until recently been killing mainly vealers to fill a contract, changed over to a contract suitable for cull cows. At the same time as the reduction in supply referred to above occurred this firm entered the market looking for 1400 cull cows a day. This appears to have created a very much more competitive market and could explain at least part of the price rise. 1. ) A variety of factors may have led to the rise in prices. A further inquiry into the meat industry would not be justified; in recent years there have been a number of inquiries and reports related to the meat industry including: 'Stabilisation of Meat Prices'- a report from the Joint Committee on Prices, Parliament of Australia. 'Report from the Select Committee of the Legislative Assembly upon the Meat Industry'- (New South Wales Government 1972). 'Inquiry into the Economics of Marketing of Livestock and Meat in Victoria', by L. E. Cozens of the Department of Agriculture, Victoria, at the request of the Victorian Cabinet (May 1973). 'Meat Production, Processing, Marketing, Abattoir Facilities and Fees, Desirability of a Government Supervisory Authority', report of a Select Committee of the House and Assembly, Tasmania. 'Meat Industry Inquiry in West Australia ', a report by the Meat Industry Advisory Committee to the Government of Western Australia. Industries Assistance Commission Report 'Beef (September 1975). {:#subdebate-56-49} #### Food Aid (Question No. 797) {: #subdebate-56-49-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Foreign Affairs, upon notice: {: type="1" start="1"} 0. 1 ) How much grain was given to Bangladesh in each of the years 1974 and 1975 and what has been given, or has been requested to be given, during the period 1 January to 31 May 1976. 1. What checks have been made to ensure that any grain so given was not allowed to rot because of a shortage of adequate storage. 2. Have any requests been received for the provision of grain storage facilities. {: #subdebate-56-49-s1 .speaker-MI4} ##### Mr Peacock:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1) In 1974, 143 745 tonnes of wheat was shipped as aid to Bangladesh and for 1975 the figures are 69 764 tonnes of wheat and 500 tonnes of rice. During the period 1 January to 31 May 1976 there were no shipments of wheat or other grains to Bangladesh as bilateral aid. However, an Australian gift of 8000 tonnes of wheat to the World Food Programme was shipped to Bangladesh. There were no requests for wheat or other grains as aid to Bangladesh during the period 1 January to 3 1 May 1976. 1. The Australian High Commission in Dacca keeps in close touch with the Bangladesh authorities to ensure proper and efficient receipt, storage and utilization of food aid. Australian wheat is inspected after its arrival in Bangladesh and before it is distributed locally. Sometimes it is stored in a single facility with shipments from other countries. The Food Ministry of the Government of Bangladesh has informed the High Commission that there has been no significant deterioration of stored foodgrain over the past two years. The problem of wastage of foodgrain because of inadequate storage facilities is regarded as more potential than actual, and various measures have been taken by the Government of Bangladesh and by aid donors to meet this problem. 2. In response to a request from the Government of Bangladesh, Australia has undertaken to provide assistance to Bangladesh in the development of grain storage facilities. These are to be 500 tonne multi-purpose warehouses in rural areas, mainly in the north-eastern region where sites are being selected. They will be suitable as centres for the storage of ration food items, agricultural inputs and locally produced grains. {:#subdebate-56-50} #### Dung Beetle Program Question No. 802 {: #subdebate-56-50-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister representing the Minister for Science, upon notice: {: type="1" start="1"} 0. 1 ) What progress has been made with the dung beetle program. 1. How many beetles have been released and in what areas of Australia. 2. What areas (a) are considered to now have an adequate beetle population and (b) lack a suitable variety. 3. Are collections still being made in other countries for these deficient areas. 4. How much has the project cost. 5. When is it anticipated that the program will no longer require CSIRO support. {: #subdebate-56-50-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- the Minister for Science has provided the following answer to the honourable member's question: {: type="1" start="1"} 0. 1 ) Establishment and spread of beetles in northern areas of Australia has continued and there are now two species *(Onthophagus gazella* and *Euonitocellus intermedius)* which occupy between them virtually the whole of the continent north of a line joining Exmouth in the west to Dubbo in the east. Another two species *(Sisyphus spinipes* and *Liatongus militaris)* have multiplied dramatically in the Rockhampton area and are rapidly spreading although, even with human assistance, they will require some years to occupy all suitable areas. During the moist summer months all four of these species already occur in such numbers as to dispose rapidly or very large quantities of dung. Similarly in New South Wales at Narrabri and surrounding districts, dung pads are being rapidly destroyed by introduced beetles, mainly *E. intermedius, E. africanus, O. gazella* and *Onitis alexis.* Studies in that area provide strong circumstantial evidence that bush fly numbers have been substantially reduced by dung beetle activity. Apart from establishing a significant population of beetles in northern Australia, these first years of the project have enabled much basic and vital research to be done on the biology, distribution, and breeding of the beetles. That research is now paying handsome dividends in speeding up the rate of establishment of new beetles in Australia. {: type="1" start="2"} 0. So far, 24 species of beetles have been released, 13 of which are known to have become established. In all, approximately one million beetles have been distributed in all Australian States. 1. (a) Most of northern Australia already has a useful beetle population, although, in terms of the number of species present, it cannot yet be regarded as adequate. There are important gaps yet to be filled but some of the fifteen new species now being bred in Canberra are expected to make a significant contribution. {: type="a" start="b"} 0. A suitable variety has not yet become established in south-eastern Australia, but one species *(Onthophagus binodis)* has begun to build up its numbers in south-western Australia, in the vicinity of Perth. In addition, a beetle *(Hister nomas)* that is predaceous on dung-breeding fly larvae has colonised a large part of coastal New South Wales down to the Victorian border. 2. Yes. Beatles for southern Australia are now being collected in areas with closely matching climate regimes. These include regions of northern Iran, northern Turkey, Morocco, Spain and western France. 3. 5 ) Approximately S 1 ,200,000 over a ten-year period. 4. Collection of beetles overseas, initial egg production in South Africa, mass breeding in Australia, subsequent release and establishment are all time-consuming operations on which it is virtually impossible to put a precise time scale. This is especially true of beetles for southern Australia where low winter temperatures (in the east) and summer drought (in the west) restrict beetle activity to about half of each year. Probably another ten years is the rninimum required to ensure that beetles will be established all over Australia. By that time, careful selection of the most effective species should have ensured a greatly improved level of dung disposal in all the major climatic zones of Australia, but there will still be very many species left in the Old World to supplement their activities if necessary. {:#subdebate-56-51} #### Statutory Marketing Boards and Corporations (Question No. 779) {: #subdebate-56-51-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: >What are the (a) salaries, (b) daily allowances, (c) travel allowances and (d) travel rights, etc., for members of the various statutory marketing boards and corporations. {: #subdebate-56-51-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: >Details in respect of annual fees, daily allowances and travelling allowances for members of statutory marketing boards are: All members receive reimbursement of costs when travelling on official business within Australia. Fares for domestic air travel are recompensed to members at economy class rates. Other fares such as taxis or train fares are fully reimbursed. A car allowance set at Public Service Board rates is paid to members using their cars to and from meetings. {:#subdebate-56-52} #### Environment Preservation (Question No. 629) {: #subdebate-56-52-s0 .speaker-K9M} ##### Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP asked the Minister for Environment, Housing and Community Development, upon notice: >What Commonwealth/State expenditure has been incurred or committed to preserve or rehabilitate the environment of (a) Botany Bay, (b) Sydney Harbour, (c) Parramatta, (d) Port Hacking, and (e) Georges River. {: #subdebate-56-52-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Under the *National Estate Program* the following expenditure has been incurred: *Direct Land Acquisition:* 219 hectares of land on Towra Point in Kurnell Peninsula were acquired in 1975 for $3,869,300 as pan of a proposed total acquisition of 600 hectares to establish a national nature reserve. {: type="1" start="2"} 0. Under the *Area Improvement Program* the following expenditure has been incurred: {:#subdebate-56-53} #### Darwin Disaster Fund (Question No. 746) {: #subdebate-56-53-s0 .speaker-KSF} ##### Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP asked the Minister for the Northern Territory, upon notice: {: type="1" start="1"} 0. What proportion of the funds generously contributed by a large number of Australian citizens to the Darwin Disaster Fund has been spent. 1. ) On what items was this fund spent. 2. If any of the fund is unspent, what is likely to be done with this money. {: #subdebate-56-53-s1 .speaker-ID4} ##### Mr Adermann:
NCP/NP -- the answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) Donations totalling $8,142,275 had been received by the Trust Fund as at 30 June 1 976. 1. At the same date $7,574,497 has been expended under the following broad heads: {: type="1" start="3"} 0. The balance of $567,778 will be partly applied as follows: To complete Bereavement Grants payment . . 202,500 Payments of all late applications for Financial Assistance & Re-establishment Grants, approximately........... 20,870 On completion of these payments the Trust will consider how the remaining funds should be applied. {:#subdebate-56-54} #### Completion of Census Forms (Question No. 737) {: #subdebate-56-54-s0 .speaker-5J4} ##### Mr Scholes: asked the Treasurer, upon notice: {: type="1" start="1"} 0. 1 ) Has a statement been made to the effect that no action will be taken against individuals who do not complete census forms. 1. If so, will this affect the accuracy of the census statistics. 2. ) Will similar provisions apply to the case of surveys carried out by the Australian Statistician. {: #subdebate-56-54-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. 1. and (3) See answer to ( 1 ). {:#subdebate-56-55} #### Value of Imports . (Question No. 743) {: #subdebate-56-55-s0 .speaker-5J4} ##### Mr Scholes: asked the Treasurer, upon notice: >What was the estimated value of imports of (a) motor vehicles, (b) carpets and (c) textiles in each of the last 5 years. {: #subdebate-56-55-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >The Australian Statistician has supplied the following information on the value of imports into Australia of motor vehicles, carpets and textiles for the financial years 1970-71 to 1974-75. {:#subdebate-56-56} #### School Cadet Units (Question No. 777) {: #subdebate-56-56-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. 1 ) Which schools in each State had cadet units prior to the introduction of the 1975-76 Budget. 1. What was the number of cadets in each case. 2. Which schools would have met the criteria of the new policy announced by the Government {: #subdebate-56-56-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) The following tables present the statistical information required (tables are attached). 1. Naval Reserve and Air Training Corps Cadets Twenty-one of the 24 schools which had either Naval Reserve or Air Training Corps units, would have met the minimum size criterion of 30 per unit, which is laid down for the new scheme. These units are readily identifiable from the statistical tables provided. There has been no significant change involved in the other criteria of the new scheme, and it is considered that units would have met these criteria. It should be noted that none of the schools which had either Naval Reserve or Air Training Corps units as at July 1 975, have disbanded their units. Army Cadets Two hundred and nine of the 3 1 0 schools which had Army cadet units would have met the minimum size criterion of 70 per unit, which is laid down for the new scheme. These units are readily identifiable from the statistical tables provided. Another main criterion of the new scheme as regards Army cadets is that of the requirement to have an instructor to cadet ratio of 1:20. This is a new criterion, and units were not structured on this basis under the previous scheme. All schools which had cadet units in 197S have been invited to reform their units according to the new criteria. The initial response to this invitation has been very favourable, although at this stage it would be premature to provide details. {:#subdebate-56-57} #### No. 34 Squadron RAAF: Flight Training (Question No. 731) {: #subdebate-56-57-s0 .speaker-HI4} ##### Mr Morris: asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. 1 ) What training exercises were carried out by No. 34 Squadron as part of normal crew training and airfield proving flights during January, February and March 1 976. 1. On what dates were each of the training exercises during these months (a) planned and (b) authorised. {: #subdebate-56-57-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2 ) Details of flying training exercises by No. 34 Squadron, RAAF, are shown on the following table: Note 1. Airfield proving flights may be for either crew conversion or for continuation training. Note 2. As planning is a continuous process, it is not practicable to provide a specific planning date for each flight {:#subdebate-56-58} #### Sporting Organisations (Question No. 625) {: #subdebate-56-58-s0 .speaker-KUX} ##### Mr Stewart: asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. How many registered (a) amateur and (b) professional sporting organisations exist in (i) each of the States and (ii) Australia. 1. ) What are the titles and registered numbers (senior and juniors) of each of the sporting organisations in (a), (b), (i) and (ii) of part ( 1 ). {: #subdebate-56-58-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is: {: type="1" start="1"} 0. 1 ) and (2) The following list shows the sporting organisations known to the Department of Environment, Housing and Community Development and the latest available registration figures. Differing methods of registration used by the various associations may influence the reliability of these figures. In some cases, there are no figures available, in others the figures are estimates only. It is stressed that these figures, by necessity, must include overlapping membership of different sports. The figures do not include the 'casual participant, although in many sports (e.g. swimming), this component may be extremely large. In a large number of junior sports formal registration numbers are not accurately known. Some professional organisations are not included in this list and figures on such organisations are not available to the Department of Environment, Housing and Community The registrations by State of National Sporting Associ-Development. ations as at 1 9 April 1975 were as follows: {:#subdebate-56-59} #### Shipbuilding (Question No. 57) {: #subdebate-56-59-s0 .speaker-HI4} ##### Mr Morris: asked the Minister representing the Minister for Industry and Commerce, upon notice: {: type="1" start="1"} 0. 1 ) How many ships are currently under construction in Australian shipyards. 1. What are the names and/or designations of these ships. 2. Where are the vessels being built. 3. What tonnages are they. 4. What is the cost of each vessel, and what level of Australian Government subsidy has, or will be paid on each. 5. What will be the area of operations of each vessel. 6. 7 ) For whom are they being built. 7. How many ships have been constructed in Australian shipyards from 12 February 1972 to date. 8. What are the names and/or designations of these ships. 9. Where were they built. 10. What tonnages are they. 11. What was the cost of each vessel, and what amount of subsidy was paid in respect of each. 12. What is the area of operations of these vessels. 13. For whom were they built {: #subdebate-56-59-s1 .speaker-ZD4} ##### Mr Howard:
LP -- The Minister for Industry and Commerce has supplied the following answer to the honourable member's question. (1), (2), (3), (4), (6) and (7): Details of vessels on order or under construction in Australian yards as at 23 April 1 976 for which Australian Government subsidy assistance has been sought and other vessls for which construction has been arranged through the Shipbuilding Division of the Department of Industry and Commerce, are provided in Table A. Reliable data on other vessels on order or under construction in Australian shipyards is not available. (8), (9), (10), (11), (13) and (14): Details of vessels completed in Australian yards between 12 February 1972 and 23 April 1976 for which Australian Government subsidy assistance was granted, and other vessels for which construction was arranged through the Shipbuilding Division of the Department of Industry and Commerce are provided in Table B Details are also provided of completions of ship conversion projects for which subsidy assistance has been given. Reliable data on other vessels constructed in Australian shipyards is not available. {: type="1" start="5"} 0. and (12): The cost of individual vessels and the subsidy paid or to be paid on each is confidential to the shipbuilder, the owner and the Government, and therefore cannot be made available. {:#subdebate-56-60} #### Anti-Tuberculosis Program (Question No. 809) {: #subdebate-56-60-s0 .speaker-K5A} ##### Mr O'Keefe: asked the Minister for Health, upon notice: {: type="1" start="1"} 0. Is it a fact that the Anti-Tuberculosis Program in Australia will cease on 3 1 December 1976. 1. Has the program been of great service in locating, treating, and eradicating this dreaded disease. 2. Were 382 000 X-rays carried out in New South Wales during 1 975 and did these result in active tuberculosis sufferers being located and 1400 other abnormalities and 1 49 cases of lung cancer being detected. 3. Is tuberculosis a serious and contagious disease leaving little room for complacency from a health point of view. 4. Is a relatively small amount of finance required for the anti-tuberculosis program. {: type="1" start="6"} 0. Will he carry out further investigations with a view to the anti-tuberculosis services being maintained in Australia. {: #subdebate-56-60-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. The anti-tuberculosis program conducted under the tuberculosis arrangements with the States will cease on 3 1 December 1976. 1. Yes. 2. I am informed by the State Tuberculosis authorities that 411054 chest X-ray examinations for detection of tuberculosis were carried out in New South Wales in 1 975. These examinations detected 58 active or probably active cases of tuberculosis, 22 1 inactive cases of tuberculosis and 1937 other significant conditions requiring investigation including 1 57 cases of lung cancer. 3. Yes. 4. The anti-tuberculosis program cost $16,485,000 throughout Australia in 1974-75. In the 27 years of operation of the program the total cost to the Commonwealth has been $325m. 5. No further investigations are necessary because the States are adequately equipped to maintain control of tuberculosis as part of their normal public health responsibilities. {:#subdebate-56-61} #### Access to Taxation Records (Question No. 810) {: #subdebate-56-61-s0 .speaker-L1V} ##### Mr Yates: asked the Treasurer, upon notice: >Is the Department of Social Security given access to individuals' taxation records when investigating eligibility for social service payments. {: #subdebate-56-61-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >Section 16 of the Income Tax Assessment Act authorises the Commissioner of Taxation to communicate information to the Department of Social Security for the purpose of the administration of any law of the Commonwealth relating to pensions, allowances, endowments or benefits. The Commissioner has stated that information is provided only where a written request is made by a responsible officer of the Department of Social Security and then only where it is established that the information being sought is necessary for the administration of laws for which that Department is responsible. Officers of the Department of Social Security are not afforded access to income tax returns nor are they provided with information which is not relevant to those functions. {:#subdebate-56-62} #### Mr A. D. Aussie Stone (Question No. 818) {: #subdebate-56-62-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Treasurer, upon notice: >Would a taxpayer like **Mr A.** D. Aussie-Stone who at the last elections nominated as a candidate in 8 divisions be entided to claim his expenditure in contesting each division as an allowable deduction under section 74 of the Income Tax Assessment Act. {: #subdebate-56-62-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >The Commissioner of Taxation has advised that, where a candidate nominates for more than one division of the Parliament, the deduction to which the candidate is entitled under the income tax law is not limited to his expenditure in respect of any one division. {:#subdebate-56-63} #### Regional Offices- Australian Legal Aid Office (Question No. 821) {: #subdebate-56-63-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the AttorneyGeneral, upon notice: >On what dates and at what locations have regional offices, of the Australian Legal Aid Office been established. {: #subdebate-56-63-s1 .speaker-YF6} ##### Mr Ellicott:
Attorney-General · WENTWORTH, NEW SOUTH WALES · LP -- The answer to the honourable member's question is as follows: 1 am informed that regional offices were established at the following locations on the following dates: {:#subdebate-56-64} #### Registration of Newspapers (Question No. 822) {: #subdebate-56-64-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. Which newspapers have been registered for postage under Category C in each State since 1 January 1975. 1. ) On what date was each newspaper registered. {: #subdebate-56-64-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) The following newspapers have been registered since 1 January 1975 for postal transmission as Category C publications. {:#subdebate-56-65} #### Recreation Expenditure (Question No. 823) {: #subdebate-56-65-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister for Environment, Housing and Community Development, upon notice: {: type="1" start="1"} 0. 1 ) Did the Minister write to his State counterparts asking them to defer expenditures to 1977-78 on the recreation projects for which the Minister for Tourism and Recreation announced grants on 17 December 197S *(Hansard,* 28 May 1976, page 2692, and 2 June 1976, page 2794) and on which work is in progress and warning them to expect no Federal funds before 1977-78 on the recreation projects for which grants were announced on 17 December 1973 but in respect of which no work has yet been undertaken and no contract signed. 1. What were the names and portfolios of the Ministers to whom he wrote. 2. ) On what date did he write to each of them. 3. What were the date and substance of each reply. {: #subdebate-56-65-s1 .speaker-JVV} ##### Mr Newman:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. **Senator Greenwood** wrote to State Ministers of Recreation, saying that 'we should seek wherever possible' to defer expenditures to 1977-78, where work is currently in progress on approved recreation projects, and that 'I can give no guarantee' when funds would be made available, in the case of those projects which had not been commenced. The Minister, knowing the Government's determination to reduce spending, was seeking an accurate assessment of progress to date with regard to all projects and likely cash flow requirements, and he was frankly admitting that there was no absolute certainty that funds would be appropriated by Parliament in 1976-77 immediately to meet these requirements in full. Since that time the Treasurer's statement of 20 May has made it clear that sufficient funds will be appropriated in 1976-77 to meet all commitments. The Supply Bill (No. 2) 1976-77 already provides for an amount of $4.6m for the Capital Assistance for Leisure Facilities Program, and further funds are to be provided in the Budget. The Government will meet its obligations in full and without delay wherever the original terms and conditions of a grant are met. The import of these ministerial statements was fully explained to the relevant State Permanent Heads and other officers at a meeting of the Standing Committee on Recreation on 3 1 May and 1 June 1 976. {: type="1" start="2"} 0. The Honourable G. McKinnon, M.L.C., Minister for Education, Cultural Affairs and Recreation, Western Australia The Honourable J. D. Herbert, M.L.A., Minister for Community and Welfare Services and Minister for Sport, Queensland The Honourable B. R. Dixon, Minister for Youth, Sport and Recreation, Victoria The Honourable T. M. Casey, Minister for Tourism, Recreation and Sport, South Australia The Honourable D. Arblaster, Minister for Culture, Sport and Recreation, New South Wales The Honourable N.L.C. Ban, M.H.A., Minister for Education, Recreation and the Arts, Tasmania. {: type="1" start="3"} 0. Letters were sent on 22 April 1 976. 1. The Hon. G. McKinnon replied on 7 May 1976. The essence of his reply was: 'The CALF Programme has . . . been of great benefit to both local government authorities and community groups in contributing a real stimulus to the development of recreational facilities. '. . . I would see the severe curtailment or abandonment of the scheme as a retrograde step. '. . . . my officers will cooperate as you require, however, . . . deferring of expenditure on works currently in progress until the 1977-78 financial year would be seen as a breach of faith by the local governments and community groups and would place my department in a difficult position.' The Hon. J. D. Herbert replied on 27 April 1976. The essence of his reply was: '. deferment of expenditure to 1977-78 . . . could lead to a number of projects being left in an unfinished state and be incapable of being used for the purpose intended or cause extreme financial embarassment where the projects are nearing completion and the organisation has borrowed to the full extent to finance the work.' The Hon. B. R. Dixon sent a telegram on 23 April 1 976 requesting that the Minister defer sending letters to those Victorian grantees who have approved projects on which work has not yet commenced or projects for which contracts have not been signed. He then wrote on 30 April: 'I appreciate the Commonwealth's desire to reduce cash requirements in 1976-77 ... I also wish to avoid undue deferral of projects to which we are jointly committed. I believe that this can be achieved provided I can receive your assurance that the Commonwealth will, in due course, honour its present commitments to Victoria in full. 'I would be reluctant to advise municipal councils to slow down or scale down their approved projects which are so greatly needed. This can be avoided if you can eventually meet your committed portion of our joint contribution. ' The Hon. T. M. Casey replied on 29 April 1 976 the essence of his reply was: 'Your letter . . . represents a complete breach of faith to a number of hardworking voluntary organisations and local government . . . you have . . . entirely ignored expenses for working drawings and the like that organisations have already incurred in good faith. Your letter leaves me with no confidence in your Government's written commitments ... the voluntary organisations and local government . . . will feel the same.' '. . . your proposal to defer . . . is so unrealistic that it leaves me wondering whether you even considered what this meant.' 'Work will commence in two weeks on the Campbelltown project. A contract will be let in the next few weeks for the Enfield project and Angle Park is currently before our Parliamentary Standing Committee on Public Works. What is the position with these commitments? 'I trust that . . . you will now review your decision.' The Hon. D. Arblaster, the then Minister, replied on 7 May that his Department had previously warned grant recipients that the date when commitments could be met depended on the availability of funds in any year. 'I am most disturbed at the possibility that projects in N.S.W. for which grants have been approved will be disadvantaged as a result of the responsible attitude adopted by the N.S.W. Government compared with other States. In these circumstances I would seek your urgent assurance that if any cancellation of grants is necessary, that this will be undertaken on a pro rata basis in relation to the overall grants approved rather than by selective discrimination of individual projects which may not have commenced as a result of my Department 's actions. ' Since the recent change of Government in N.S.W. discussions have been continuing at an officer level. {:#subdebate-56-66} #### Reserve Bank of New Zealand: Interest Rates (Question No. 830) {: #subdebate-56-66-s0 .speaker-2E4} ##### Mr Lloyd: asked the Treasurer, upon notice: >Further to the answer to question 504 *(Hansard,* 1 June 1976, page 2782) will he request the Reserve Bank to inquire of the Reserve Bank of New Zealand what interest rate is charged by that institution on advances to primary industry marketing authorities in that country and provide the information sought in that question. {: #subdebate-56-66-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >Inquiry of the Reserve Bank of New Zealand has confirmed that the interest rates charged on advances to primary industry marketing authority customers are variable and are not made public by the Bank. {:#subdebate-56-67} #### Seed Storage Laboratory (Question No. 831) {: #subdebate-56-67-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Does Australia have anything equivalent to the National Seed Storage Laboratory of the United States of America. 1. If so, where is it and what is the extent of the collection and the safety procedures for storage. 2. If Australia has no such laboratory, why has one not yet been established. {: #subdebate-56-67-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2) Australia does not have a centre equivalent to the National Seed Storage Laboratory in the United States of America. 1. Plant breeders and associated research workers are catered for in Australia through various germ plasm collections built up and located within specific plant research centres. There is a continuing exchange of material and information in these particular spheres and this system of interchange helps scientists in Australia in their work of development of new cultivars For instance, the Australian Wheat Collection, housed at the Agricultural Research Institute, Tamworth, N.S.W., was established and is maintained with funds made available by the Wheat Industry Research Council. As was intended, it serves the needs of research workers throughout Australia. Other seed collections are maintained by CSIRO, the State departments responsible for agriculture or, in some cases, by universities or agricultural colleges. The work of Australian scientists in the development of a number of plant varieties suited to the diverse needs of this country '% range of environments is very highly rated. However, as far as I am aware, there has not been a deep interest shown in the past for the establishment of a central gene pool similar to that which operates in the United States of America. {:#subdebate-56-68} #### Meat Marketing (Question No. 833) {: #subdebate-56-68-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. 1 ) Has his attention been drawn to an assertion by **Mr J.** P. Dempster to the Western Australian Royal Commission of Inquiry into meat marketing that meat exporting companies had undercut each other on the Japanese market and cost Australian producers $lm; if so, is there any substance in the assertion. 1. Has the selling or trading of United States meat entitlements prevented the maximisation of returns in other markets. {: #subdebate-56-68-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. As the Western Australian Royal Commission of Inquiry into meat marketing is continuing, the transcript of evidence from all witnesses will not be available for some time. Therefore, I cannot determine if **Mr Dempster** made the alleged assertion. 1. Under the Australian Meat Board's diversification scheme, exporters are required to sell to markets other than the U.S.A. in order to earn an entitlement to ship meat to the U.S.A. These entitlements, known as credits, can be traded between exporters. The fact that credits can be traded enables the diversification scheme to work as an equalisation system, equalising returns from over the total industry. In theory this results in cattle prices being related to the average equalised return and not to the price obtained in any particular market. In fact there are variations for different classes of cattle which in pan reflects the different requirements of varying markets. {:#subdebate-56-69} #### Milk Quotas (Question No. 834) {: #subdebate-56-69-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Will he explain the criteria to be used in the administration or implementation of the Agricultural Council decision of 14 May 1976 that market milk quotas will no longer be required to be filled during the off-season. 1. Does this mean that for a prescribed period no milk will have to be delivered or will a percentage of the quota be required. 2. If a percentage of the quota will be required, what is the recommended percentage. {: #subdebate-56-69-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: (1), (2) and (3) The Australian Agricultural Council has agreed on the need for production restraint for the dairy industry. Among guidelines adopted to achieve restraint, is agreement in principle to amend, where necessary, the system operating in individual States so that farmers holding quotas for market milk will no longer be required to fill individual dairy quotas during the off-season. The Ministers for Agriculture from Tasmania and Western Australia while indicating general support for this proposal said they would need to consult with their Governments and industries. The implementation of the proposal is a matter for the States and there may be some variations between States as to the way in which the changed policy operates. It is the Commonwealth's understanding that in general quota holders will no longer be obliged to supply the minimum quantum of milk specified in contracts and no penalties will attach for failure to supply milk during the off-season. However, the volume of milk availability differs between States and in Western Australia, for instance, it may be necessary to require quota holders to meet a percentage of their quota during the off-season to ensure adequate fresh milk is available for consumers. Australian Broadcasting Commission: Talk Back Session *Morning Extra* {: #subdebate-56-69-s2 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -On 20 May 1976, the honourable member for Wide Bay **(Mr Millar)** asked me the following question, without notice: >Is the Minister aware that the Australian Broadcasting Commission talk back session *Morning Extra* invites listeners beyond the Sydney area to ring the station reverse charge? This morning I understand that there were calls from as distant as Renmark, Forbes and Cairns. Having in mind that the ABC recently withdrew several popular programs as an economy measure when previously required by the Government to exercise restraint in spending and that further substantial staff cuts are allegedly contemplated, will the Minister take steps to establish whether the ABC can justify its action in accepting these reverse charge calls for a program of dubious merits? The following is in answer to the honourable member's question: >It is true that the ABC's fifty minute radio program *Morning Extra* includes some reverse-charge telephone calls from listeners at the ABC 's expense. > > *Morning Extra* is broadcast live by the ABC's regional radio stations in New South Wales, Victoria, Queensland and South Australia. Extracts from the program are broadcast from Tasmanian regional stations. > >The ABC considers it appropriate for its country listeners to have the opportunity from time to time to express their opinions live on ABC Radio; it regards this kind of contact as of value and interest both to the listener and to the ABC. The average cost of such calls of which there are no more than ten in any one *Morning Extra* program is about $2.00 for each two minute call. New Zealand Timber {: #subdebate-56-69-s3 .speaker-BU4} ##### Mr Anthony:
NCP/NP -- On 18 May 1976 the honourable member for Wide Bay **(Mr Millar)** asked me the following question without notice: >Is the Minister for Overseas Trade aware of reports of alleged dumping of New Zealand timber on Australian domestic markets? Is he also aware of claims that this New Zealand timber is priced at approximately half the price of timber ex some Australian mills and that as a result many of these mills face closure? Will the Minister assure the House that the Government is giving urgent attention to the matter? The following additional information is provided in answer to the honourable member's question: >In 1974-75 and the first nine months of 1975-76, New Zealand supplied only 6 per cent of Australia 's total imports of sawn timber. Statistics for the first nine months of 1 975-76 compared with the same period in 1974-75 show that the value of imports of sawn timber from all sources decreased by over 5 per cent. During the first nine months of 1975-76, imports of sawn timber from New Zealand are running some 12 per cent higher in quantity terms and some 9 per cent higher in value terms compared with 1974-75. New Zealand thus appears to be improving its share of the Australian market at the expense of other supplying countries rather than by taking sales away from Australian mills. > >Should there be evidence that importation of New Zealand sawn timber is taking place under conditions which constitute dumping and which causes or may cause injury to Australian producers the appropriate action would be submission of a case to the Bureau of Customs, Department of Business and Consumer Affairs. {:#subdebate-56-70} #### Pharmaceutical Services Committee (Question No. 839) {: #subdebate-56-70-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Health, upon notice: {: type="1" start="1"} 0. 1 ) What was the composition of the Pharmaceutical Ser-- vices Committees of Inquiry in each State. 1. ) Has this composition been changed or is it his intention to do so. 2. If so, why is the change taking place, and who decided that it should. 3. If a change is to occur, is one of the reasons to weaken the influence of the Pharmacy Guild. 4. If so, is this sensible when the Guild's goodwill is essential for the future operation of the Pharmaceutical Benefits Scheme. {: #subdebate-56-70-s1 .speaker-GH4} ##### Mr Hunt:
NCP/NP -- The answer to the honourable member's question is as follows: (1), (2) and (3) The National Health Act provides that the Minister for Health may establish in each State a Pharmaceutical Services Committee of Inquiry consisting of the Director of Health in the State, an officer of the Commonwealth Department of Health who is a pharmacist and four pharmaceutical chemists appointed by the Minister. Until recently it had been the practice for the Minister to appoint three pharmacists from a panel nominated by the Pharmacy Guild of Australia and one pharmacist from a panel nominated by the Friendly Societies Dispensaries Association. Following representations from the Pharmaceutical Association of Australia and New Zealand, the then Minister for Health, **Dr Everingham,** in 1975 approved a change in the composition of the non-departmental membership of the Committees, which now comprises two pharmacists nominated by The Pharmacy Guild, one nominated by the Friendly Societies Dispensaries Association and one nominated by the Pharmaceutical Society in the respective State. The Pharmaceutical Societies represent the professional practice of pharmacy and all pharmacists (whether employer or employee pharmacists) are eligible to be members. This policy was followed when the non-departmental membership of these Committees was changed on 1 March 1 976. {: type="1" start="4"} 0. No. 1. See (4). {:#subdebate-56-71} #### Ship Inspection Work (Question No. 841) {: #subdebate-56-71-s0 .speaker-JT9} ##### Mr Bungey: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. For what reasons is the ship inspection work at Fremantle in connection with the Grain (Export) Regulations to be performed by the Western Australian, Department of Agriculture instead of the Commonwealth Department of Health as from 1 July 1976. 1. Will the changes lead to additional Commonwealth costs; if so, how much. 2. What consideration is being given to the transfer of similar functions at Victorian ports from the Commonwealth Department of Health. 3. If it is not being considered, what differences are there between Western Australia and Victoria in this regard. {: #subdebate-56-71-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) In Western Australia the inspection of ships in accordance with the requirements of the Exports (Grain) Regulations has been carried out on behalf of the Department of Primary Industry by the Commonwealth Department of Health at Fremantle and by the Western Australian Department of Agriculture at Albany, Bunbury, Esperance and Geraldton. A new grain loading facility is scheduled to be opened at Kwinana later this year. In view of the proximity of this port to Fremantle my Department initiated discussions with the Department of Health about inspection of ships to load grain at Kwinana. The Department of Health indicated that the increasing workload associated with its quarantine responsibilities had already caused difficulty in coping with grain ship inspections at Fremantle and would preclude it from taking on additional work at Kwinana without additional staff. In all the circumstances my Department requested the Western Australian Department of Agriculture to undertake the ship inspection work at Kwinana and Fremantle as well as the four outports. This was agreed with effect from 1 July 1976. {: type="1" start="2"} 0. At this stage it appears that the Western Australian Department of Agriculture will engage one additional inspector to cope with ship inspection work. As stated in ( 1 ) however, the Department of Health could not have coped with the additional work without engaging additional quarantine staff. The opening of the new facility rather than the transfer of responsibilities will lead to additional costs to the Commonwealth estimated at $ 1 1 ,000 for the year 1976-77. 1. None. 2. In Victoria all grain ship inspections are carried out on behalf of my Department by one authority, the Commonwealth Department of Health. In Western Australia the change means, as stated in (2 ), that all such work will be carried out by one authority, the Western Australian Department of Agriculture. *MV Agios* *Nikolaos* *III* (Question No. 842) {: #subdebate-56-71-s2 .speaker-JT9} ##### Mr Bungey: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. Was the *Agios Nikolaos III* delayed from loading grain in Geelong during May 1 976; if so, why. 1. Is the claim, that the age of the grain residue on the ship indicated that some of the grain residue had in fact been in the ship when it previously loaded grain in Australia correct. 2. At what Australian ports had the ship loaded grain on previous voyages, and on what dates. {: #subdebate-56-71-s3 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) *MV Agios Nikolaos III* was inspected at Geelong on 19 May 1976 in accordance with the requirements of the Exports (Grain) Regulations, as are all ships which are to load export grain in Australia. It was found that cleaning and removal of infestable residues was necessary. This is not an unusual requirement. When the required work had been done the vessel was reinspected on 21 May 1976 and was found to be in a suitable condition to load grain. A Grain Loading Permit was issued following this reinspection. {: type="1" start="2"} 0. I am unaware of such a claim, but if it has been made my Department is unable to confirm it. 1. According to Departmental records this vessel has previously loaded grain in Australia on the following dates. {:#subdebate-56-72} #### Hercules Aircraft Cargo (Question No. 851) {: #subdebate-56-72-s0 .speaker-KIK} ##### Mr Lusher:
HUME, NEW SOUTH WALES asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Did an RAAF Hercules aircraft transport a Murray Grey bull from Australia to China, departing Melbourne on 24 October 1973. 1. What are the full details of all other cargo transported on that aircraft. {: #subdebate-56-72-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. In addition to the bull and its crate, the aircraft transported the following cargo: Australia to Hong Kong- 1 Falcon station wagon, 1 safe hand bag, 2 bags of diplomatic mail. Australia to Peking- Animal fodder, sawdust and water, 8 jerry cans, 2 loading pallets, 92 cartons of wines and mineral waters, 13 cases of photo-copying equipment, 19 cartons of swimming pool equipment, 10 cases of prints, maps and tapestry. Hong Kong to Peking- 2 dining table extensions, 10 book cases, 2 newspaper racks, 27 cartons of liquor, 18 cartons of foodstuffs, 6 cartons of stationery. {:#subdebate-56-73} #### Cheese Imports (Question No. 836) {: #subdebate-56-73-s0 .speaker-2E4} ##### Mr Lloyd: asked the Treasurer, upon notice: >What tonnage of (a) cheddar, (b) gouda or gouda type and (c) other fancy cheeses have been imported into Australia from (i) New Zealand and (ii) all other countries in the last 5 financial or calendar years and for the period 1 January to 30 April 1976. {: #subdebate-56-73-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >The Australian Statistician advises that imports of cheese into Australia are not recorded for precisely the same categories quoted in the question. However, the Statistician has supplied the attached table showing tonnages of various kinds of cheese imported into Australia from (i) New Zealand and (ii) all other countries for the financial years 1 970-7 1 to 1 974-75 and for the ten months from July 1 975 to April 1976. Statistics for the period July 1975 to April 1976 are preliminary and therefore are subject to revision. {:#subdebate-56-74} #### Warships in the Indian Ocean (Question No. 829) {: #subdebate-56-74-s0 .speaker-CV4} ##### Mr Jacobi:
HAWKER, SOUTH AUSTRALIA asked the Minister for Defence, upon notice: {: type="1" start="1"} 0. Can he say how many visible surface warships or sighted submarines of (a) the United States of America, (b) the United Kingdom, (c) Iran and (d) France were in the Indian Ocean in each of the years 1971 to 1975 and to what categories of warships, e.g., cruiser, destroyer, submarine, minesweeper etc., do they belong. 1. Is there any estimate of the ship days spent in the Indian Ocean by these vessels in each year; if so, what are the details. 2. Is he able to say to what facilities in what countries in the Indian Ocean warships from these countries have access. 3. Are statistics available as to how many warships from these countries have passed through the Suez Canal since its re-opening. {: #subdebate-56-74-s1 .speaker-4U4} ##### Mr Killen:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Insofar as information is available, it is included below. {: type="a" start="a"} 0. United States of America The only permanent U.S. naval presence in the Indian Ocean is the Middle East Force (MIDEASTFOR), based at Bahrain since 1948 and consisting of a command ship and two destroyers. Since 1973 this Force has been supplemented for about SO per cent of the time by carrier or guided-missile cruiser task groups ranging from two to five ships, on temporary deployment from the Seventh Fleet in the Pacific Typical deployments have ranged from a cruiser accompanied by two frigates and an oiler, to an aircraft carrier accompanied by three frigates. The largest single deployment was from October to early December 1973, when a Seventh Fleet task group comprising an aircraft carrier, seven destroyers and frigates and a support ship, was on station in the Indian Ocean. Details of U.S. Naval deployments for 1973- 1975 and of a total ship days 1 97 1- 1 975 are shown in the Tables below. {: type="a" start="b"} 0. United Kingdom Since the cessation of the Beira patrol- in support of economic sanctions against Rhodesia-in June 1975 and the withdrawal of British forces from Singapore, the United Kingdom has not maintained a permanent naval presence in the Indian Ocean. The U.K. does, however, operate a survey ship in the Persian Gulf and retains its component of the communications facility at Diego Garcia. An RN task group including six combatants deployed east of Suez in 1 975 and operated in the Indian Ocean for several weeks. Naval ship visits are now mostly while in transit. Total ship days per year of U.K. naval deployments in the Indian Ocean from June 1974 to December 1975 were: {: type="a" start="c"} 0. Iran Iran is, of course, an Indian Ocean littoral state. The Imperial Iranian Navy consists at present of 57 ships, including three destroyers, eight frigates, 25 patrol boats and six minesweepers. {: type="a" start="d"} 0. France French naval deployments in the Indian Ocean from November 1973 to November 1975 were as follows: Note: Details of ship classes and types, and of ship days, are not available. While numerically the largest naval presence of the major powers, the French comprises mainly minor surface combatants and auxiliaries. {: type="1" start="3"} 0. British and French warships have access to facilities in their remaining territories. The United States has facilities in association with the United Kingdom on Diego Garcia (British Indian Ocean Territory) and also arrangements with Bahrain. All four countries have access to such facilities as are available in some other Indian Ocean ports, on a commercial basis. 1. No. {:#subdebate-56-75} #### Fruit and Vegetable Tariffs (Question No. 835) {: #subdebate-56-75-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Business and Consumer Affairs, upon notice: {: type="1" start="1"} 0. What is the (a) tariff percentage, (b) quota and (c) by-law arrangement for the import of (i) fresh, (ii) canned and (iii) dried (A) tomatoes, (B) mushrooms, (C) raspberries, (D) strawberried, (E) potatoes, (F) onions, (G) peas, (H) beans, (I) nuts (almond, walnut, cashew, pecan), (J) citrus juice, (K) pineapples, (L) deciduous fruit, (M) cherries and (N) prunes. 1. In providing this information will he indicate any special arrangements that exist with New Zealand. {: #subdebate-56-75-s1 .speaker-ZD4} ##### Mr Howard:
LP -- The answer to the honourable member's question is as follows: Such requests normally would be considered only when the goods are imported for further processing and normal Australian production cannot meet the demand. Ad hoc concessions are currently accorded: several varieties of beans, including navy beans, for use in canned products: dried apricots; and beans for cultivation. {: type="1" start="2"} 0. Apart from the accord of special preferential tariff rates of duty under the provisions of the New ZealandAustralia Free Trade Agreement, no special arrangements exist with New Zealand in respect of these goods. See ( 1 ) (a) above for details of rates of duty currently applying to the goods when the produce of New Zealand. {:#subdebate-56-76} #### Cigarette and Tobacco Advertising (Question No. 323) {: #subdebate-56-76-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Post and Telecommunications, upon notice: >As the Government has decided to proceed with the policy of banning any advertising of cigarettes or tobacco on radio or television, what action will be taken to ensure that the ABC does not breach this policy. (l)(b)-Quota > >Imports of these goods are not subject to quota. However, under the Customs (Prohibited Imports) Regulations, the importation of whole unprocessed potatoes is prohibited unless permission in writing is granted by the Minister for Business and Consumer Affairs. > >1 ) (c)- By-law Arrangement > >Standing by-laws currently allow duty free admission of the following: mushrooms, dried or powdered, for use in a factory for the manufacture of dehydrated soups or packeted meals; peas and beans, dehydrated, for use in a factory in the production of dried foodstuffs; and kernels, cashew. > >Ad hoc by-law concessions may, from time to time, be granted on fruits or vegetables if, following consultation with the Department of Primary Industry and/or relevant industry bodies or following recommendations from the Industries Assistance Commission, this action is considered appropriate. {: #subdebate-56-76-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: >Under the terms of section 63 of the Broadcasting and Television Act the ABC is prohibited from broadcasting or televising advertisements. {:#subdebate-56-77} #### Urban and Regional Development: Western Australia (Question No. 469) {: #subdebate-56-77-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. Has the 'Agreement in relation to the provision of financial assistance to Western Australia for Urban and Regional Development 1975-76', proposed by the Labor Government and agreed to in principle by the Western Australian Government, been signed. 1. If not, have separate agreements covering the various categories of urban and regional development been signed to replace the proposed ' Umbrella Agreement '. 2. If the proposed Agreement referred to in part (1) has been signed, has it been altered in any way. 3. If so, what was the nature of these alterations, what were the reasons for these changes, and when will it be tabled. {: #subdebate-56-77-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: >An Urban and Regional Development Agreement with Western Australia has been signed and was tabled in the Parliament on 19 May 1976. The Agreement that was signed will operate in respect of the period from 1 July 1975 to the end of the Supply period. {:#subdebate-56-78} #### Staff Recruiting (Question No. 604) {: #subdebate-56-78-s0 .speaker-6I4} ##### Mr Macphee:
LP asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. How many persons are employed by his Department or by agencies responsible to him or his Department in a staff recruiting capacity and what amounts are chargeable to his Department or such agencies in respect of their annual salaries. 1. To what extent does his Department or any such agency engage private employment agencies to assist in the recruitment of staff. 2. What sum was spent by bis Deparment or any such agency in engaging private employment agencies in the financial year 1974-75. 3. To what extent does his Department or any such agency engage or otherwise obtain assistance from the Commonwealth Employment Service in the recruitment of staff and what sum has been paid to the Commonwealth Employment Service in respect of such assistance. {: #subdebate-56-78-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) In the Postal and Telecommunications Department, Australian Broadcasting Control Board and Australian Broadcasting Commission there are no staff engaged primarily on recruitment functions. Telecom Australia employs a number of staff on recruitment activities, many of whom are not exclusively engaged in such activities and, therefore, it has been necessary to make an assessment of the time and annual salaries expended full-time on recruitment. The assessed figures are 53 man years at an annual cost of $620,000 for salaries. The position in Australia Post is similar and the assessed figures are 30 man years at an annual cost of approximately $300,000. The Overseas Telecommunications Commission currently employs 4 officers for staff recruitment, the salaries of whom amount to $45,177 per annum. 1. The Postal and Telecommunications Department does not utilize the services of private employment agencies for the recruitment of staff. Neither is it the practice for related statutory authorities to engage employment agencies although during the last two financial years a few instances have occurred when their use has been necessary. The A.B.C.B. has obtained temporary typing assistance, through agencies, on short terms of engagement to cope with special requirements. Australia Post engaged an agency only once, since 1 July 1975, in respect to the filling of several positions in its market services area. O.T.C. , on one occasion in 1974, recruited an Assistant Programmer through a private agency. {: type="1" start="3"} 0. A.B.C.B.-$2080. O.T.C.-$825. 1. The assistance of the Commonwealth Employment Service (CES) is not utilized by the Postal and Telecommunications Department or the A.B.C.B. Telecom Australia, Australia Post, A.B.C. and O.T.C. make fairly regular use of the CES for which no charge is made. Australia Post also makes occasional use of the Professional Employment Office of the CES in recruiting managerial and professional staff. {:#subdebate-56-79} #### Consequences of Government Expenditure (Question No. 664) {: #subdebate-56-79-s0 .speaker-L6X} ##### Mr Garrick: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. 1 ) Is it a fact that while reports are being issued in relation to cut-backs in social welfare and the public service an additional $660 million is to be spent on the Army during the next 5 years. 1. Are Liberal-National Country Party priorities weighted so that big business interests can prosper and feel safe behind solid defences. 2. Does he share the concern that such priorities may lead to the sacking and under-payment of workers, the education of children of migrants and poor people in slum-like schools, the near starvation of pensioners and the humiliation and economic hardship of the unemployed. {: #subdebate-56-79-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. No. 1. No. 2. It is the Labor Party's policies that established high unemployment levels in Australia. To repair the damage will not be quick or easy. Not enough attention was given by the Labor Government to Defence expenditure nor to assisting the under-privileged and disadvantaged. The present Government's policies are directed to both these problems. {:#subdebate-56-80} #### Employment Conditions (Question No. 677) {: #subdebate-56-80-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. On how many occasions has the Government coordination committee on employment and industrial relations intervened in negotiations on employment conditions between unions and Telecom Australia, the Overseas Telecommunications Commission and the Postal Commission. {: type="1" start="2"} 0. On how many occasions were the original agreements between the Commissions and the unions altered and in what manner. 1. Which of these agreements flowed on to other Government areas. 2. What industrial action resulted from the interventions. 3. What was the estimated financial cost to each Commission as a result of such industrial disputes. 4. Were the Commissions re-imbursed the losses caused by industrial disputes, created by Government interference in relations between the Commissions and their employees. {: #subdebate-56-80-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Since 13 December 1973 there have been no occasions on which the Government Co-ordination Committee on Employment and Industrial Relations has intervened in negotiations between unions and the Commissions mentioned. However, all three Authorities maintain a liaison with the Committee on matters of mutual interest and frequently the Committee's views have been sought before management decisions have been finalised. 1. -- (6) See answer to ( 1 ). {:#subdebate-56-81} #### Telephone Connections (Question No. 678) {: #subdebate-56-81-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. 1 ) Has he sought reasons for the fall in the number of applications for new telephone connections to which he referred in his letter to me relating to staff reductions in Telecom Australia. 1. When does he anticipate that the excessive delay in connections will be reduced substantially. 2. Is it good business practice to reduce staff before reducing the period of delay in making new telephone connections. {: #subdebate-56-81-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The anwer to the honourable member's question is as follows: {: type="1" start="1"} 0. The downturn in demand for telephone services referred to was previously set out in detail in the document 'Service and Business Outlook 1975-76' which was published in August 1973 by Telecom Australia. In this document it was forecast that new service demand in 1973-76 would be 325,000 compared with the actual level of 332,391 in 1974-75. New services connected in 1975-76 were greater than the demand for new services thus permitting the backlog at the commencement of the year to be reduced. 1. and (3) Generally applications for services are being met within one or two months. Telecom Australia advise that during 1975-76 the average connection time has been reduced by approximately 10 per cent. It is planned to reduce waiting times further in the current year. Staffing policies pursued by Telecom Australia are responsive to the need to maintain existing service standards and to improve the rate of connection of new services. Destruction of Film by Australian Broadcastion Commission (Question No. 744) {: #subdebate-56-81-s2 .speaker-5J4} ##### Mr Scholes: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. 1 ) Has the ABC recently destroyed news films from its Library. 1. If so, what was the subject of each film destroyed and were films of the Petrov Royal Commission among those disposed of. 2. Are duplicate copies of these films held in the ABC Library. 3. Who requested the destruction of these films. {: #subdebate-56-81-s3 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. Yes. 1. and (3) As a culling process from the many thousands of feet of film it shoots, the ABC daily destroys film which is judged to have no future use as program or archival material. A list of material destroyed is not kept, but items of any consequence of a political, social, scientific, economic or historical nature are retained. The ABC has not destroyed films of the Petrov Royal Commission. This Royal Commission occurred prior to the opening of the ABC Television Service and the ABC has never possessed film of it shot by its own staff, although some film of it was purchased by the ABC from Cinesound-Movietone for inclusion in a documentary on **Dr H.** V. Evatt. Copies of this documentary are held in the ABC's film Library. {: type="1" start="4"} 0. No request for the destruction of these films has been made. {:#subdebate-56-82} #### Australian Broadcasting Commission Current Affairs Programs (Question No. 748) {: #subdebate-56-82-s0 .speaker-JRD} ##### Mr Bourchier:
BENDIGO, VICTORIA asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. What are the names and political affiliations of all speakers on ABC current affairs programs during the last 3 months. 1. What was the total time occupied by speakers known to have affiliations with (a) the Australian Labor Party, (b) the Liberal Party, (c) the National Country Party (d) Communist Parties and (e) Other Parties. {: #subdebate-56-82-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. 1 ) and (2) The ABC does not inquire as to the political affiliations of speakers who appear on its many current affairs programs in radio and television. {:#subdebate-56-83} #### Consumer Price Index (Question No. 772) {: #subdebate-56-83-s0 .speaker-SH4} ##### Dr Klugman: asked the Treasurer, upon notice: {: type="1" start="1"} 0. 1 ) What changes have been made in the weighting of the Consumer Price Index since December 1 968. 1. What was the relative weighting of each of the components at (a) December 1 968 and (b) December 1 973. 2. What are the relative weightings at the present time. {: #subdebate-56-83-s1 .speaker-KIM} ##### Mr Lynch:
LP -- The answer to the honourable member's question is as follows: >See my answer to a similar question (No 3, asked by **Mr Lloyd)** appearing in the *Hansard* of 1 April 1976 (page 1330). Sanctions against Rhodesia: Aid to Mozambique (Question No. 784) {: #subdebate-56-83-s2 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Minister for Foreign Affairs, upon notice: {: type="1" start="1"} 0. 1 ) What was the date and form of the requests by the Commonwealth Secretary-General for assistance to Mozambique to which he referred in answer to my question without notice on 27 May 1976 *(Hansard,* page 2532)? 1. What was the date of Australia's response? 2. ) What assistance is being given by Australia' 3. Can he say what assistance is being given by other Commonwealth countries? {: #subdebate-56-83-s3 .speaker-MI4} ##### Mr Peacock:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. In a circular letter of 4 March 1976, the Commonwealth Secretary-General transmitted to Commonwealth Heads of Government the statement issued at the conclusion of the Sanctions Committee meeting the same day. In brief, the Sanctions Committee, through the Secretary-General, recommended to Governments to react to the needs of Mozambique in accord with the agreement reached at the Commonwealth Heads of Government meeting in Kingston in May 1975. Before leaving on his investigatory visit to Mozambique the Secretary-General sent a telegram on 14 March 1976 to all Commonwealth Heads of Government requesting them to consider how to translate their Kingston agreement into effective measures. A further appeal was made in a circular letter of 21 April 1976, when the Commonwealth Secretary-General notified Governments that the Board of Representatives of the Commonwealth Fund for Technical Co-operation (CFTC) approved in principle the establishment of a special technical assistance programme for Mozambique through CFTC. The Government decided to await the report of the Commonwealth Secretary-General and the report of the UN investigatory mission before deciding on Australia's contribution. {: type="1" start="2"} 0. Apart from interim replies to the above appeals, Australia's official and positive response was announced on 3 June 1976. 1. The assistance to Mozambique given by Australia will consist of! {: type="a" start="a"} 0. Food aid, including cost of freight, to the value of $A1m; 1. $US 100,000 to a special fund established under the Commonwealth Fund for Technical Co-operation for technical assistance to Mozambique. 2. Most Commonwealth countries have pledged support for Mozambique, but not all have identified what form this support will take. Canada will give $C3m of food aid, the United Kingdom is committed to a £1 5m bilateral program, New Zealand will provide $NZ 120,000 of skim milk powder, and other countries have indicated they will be mounting bilateral programmes of assistance. Pledges to the Commonwealth Technical Assistance Fund for Mozambique as at 25 June 1 976 were as follows: In addition a number of other Governments have promised assistance but have not yet confirmed the precise amount of their pledges. {:#subdebate-56-84} #### Australian Broadcasting Control Board: Program Monitoring (Question No. 792) {: #subdebate-56-84-s0 .speaker-3F4} ##### Mr Burr:
WILMOT, TASMANIA asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. 1 ) What are the annual costs to the Australian Broadcasting Control Board in respect of program monitoring of television and radio by its staff throughout Australia. 1. What are the annual costs of the Australian Broadcasting Control Board in respect of technical inspections of television and radio stations throughout Australia. 2. As a large number of staff are involved, can these costs be calculated to include the cost of supplying administration office space, and all other overheads associated with the work. {: #subdebate-56-84-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. $420,000. 1. $378,000. 2. The costs given in ( 1 ) and (2) are based on the annual salaries of the staff employed and overhead costs apportioned on a pro-rata basis. {:#subdebate-56-85} #### Wool Price (Question No. 811) {: #subdebate-56-85-s0 .speaker-L1V} ##### Mr Yates: asked the Minister for Primary Industry the following questions, upon notice: {: type="1" start="1"} 0. 1 ) Is a 20 per cent increase possible in the floor price for wool. 1. Would the Australian Wool Corporation be able to support the market if a 20 per cent increase in the floor price of wool was granted, without getting additional finance. 2. How much has the Government lent to the Australian Wool Corporation in the last 2 years. 3. Does the Government regard the 2 1 micron indicator for wool as a reliable one, or will it be changed this year. 4. Will he give the figures for last season's wool selling showing the rate at which all combing wool microns between 1 9 and 30 sold compared to the floor price. 5. Will the floor price for wool be increased for the 1976-77 season. {: #subdebate-56-85-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answers to the honourable member's questions are as follows: {: type="1" start="1"} 0. The short answer is no. At the close of the 1975-76 season the auction price for 21 micron wool was 287 cents per kg clean which was less than 15 per cent above the floor price for this wool category. An increase of 20 per cent in the floor price for 2 1 micron wool for the 1976-77 season would have been difficult to sustain. Wool of 21 micron represents only a relatively small percentage of the clip and its market behaviour is not necessarily representative of the whole clip. Accordingly, the Government decided that the floor price would be expressed as a 'whole clip average' for 1976-77. The whole clip average floor price for 1976-77 has been established at 234 cents kg clean and this represents an increase in the floor of 1 4 per cent over the clip average which applied in 1 975-76. The Government also decided that the floor price policy would be continued during 1977-78 at a price not below the level of the floor decided for this season. {: type="1" start="2"} 0. The Australian Wool Corporation has substantial credit facilities available and could sustain a much increased rate of buying without immediate need to seek additional sources of finance. The costs of interest and carrying charges are however substantial. Accordingly, on the new floor price basis, the Corporation expects to make substantial repayments of advances from the Budget during 1976-77. 1. Under the Wool Marketing (Loan) Acts a total of $281.5 million has been lent to the Australian Wool Corporation in the past two years together with a loan of $ 1 3m from a continuing Working Capital Trust Fund. 2. See answer to question 1. 3. The rate at which combing wools between 19 and 30 micron sold in 1 975-76 compared with the floor price are as follows: 4. Yes- see answer to question 1. {:#subdebate-56-86} #### Compensation for Wheatgrowers (Question No. 832) {: #subdebate-56-86-s0 .speaker-2E4} ##### Mr Lloyd: asked the Minister for Primary Industry, upon notice: {: type="1" start="1"} 0. 1 ) Has the Wheat Board or the Department of Primary Industry ever considered the introduction of a scheme similar to the New Zealand Wheatgrowers' Compensation Scheme as a more effective form of disaster insurance. 1. If so, why has not such a scheme been introduced here. 2. If introduction of a similar scheme has not been considered, why is this so. {: #subdebate-56-86-s1 .speaker-5E4} ##### Mr Sinclair:
NCP/NP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. (2) & (3) I understand that the New Zealand Wheatgrowers' Compensation Scheme provides for a form of crop insurance which affords protection to wheat growers against losses from hail, flood and frost. It is a grower financed scheme and for the cover growers pay a levy of 15 cents per tonne of wheat into a compensation fund. The grower carries the first one third of the risk and the fund the other two thirds. It should be noted that the Australian wheat industry is on a very much larger scale than New Zealand's and the fluctuations in yield from one natural cause or another are very much greater. For these reasons alone these difficulties in implementing a similar scheme in Australia are infinitely greater. An indication of the smallness of the scheme in New Zealand, from the Australian point of view, is seen in the fact that only six claims totalling $3,350 were paid on wheat from the 1974 harvest. All-risk crop insurance has received consideration in Australia, principally by the Australian Wheatgrowers' Federation. The matter is a very complex one and the major deterrent probably has been the cost of implementation in the Australian situation where yields are so variable. The publication 'The Principles of Rural Policy in Australia: A Discussion Paper' (the so called 'Green Paper') gives a brief section (paras 4.79 to 4.90) on the topic. A pilot all-risks insurance scheme covering wheat grown in Western Australia was introduced in April 1974. 1 understand however that it will not be continued in the future. The Government has already expressed its interest in natural disasters insurance schemes. The Insurance Industry Conference has been asked to report on the feasibility of introducing a crop and livestock insurance scheme and in addition a study is currently being undertaken into the possibility of introducing a more widely based natural disasters insurance scheme covering the major natural hazards such as earthquake, tropical cyclones, floods and bushfires. {:#subdebate-56-87} #### Local Government Employment and Expenditure (Question No. 840) {: #subdebate-56-87-s0 .speaker-6U4} ##### Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES · ALP am asked the Prime Minister, upon notice: >Can he give statistics for increases in local government employment and expenditure comparable to those he gave for Federal and State employment and expenditure on 3 June 1976. {: #subdebate-56-87-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: >Statistics for increases in local government employment and expenditure over the periods specified are given below. The figures are based upon Australian Bureau of Statistics publications. > >In the period from December 1 972 to December 1 975 the number of local government employees increased by 3,700 or 3.1 percent. > >Local government outlays increased in 1972/73 by 11.7 per cent; in 1973/74 by 12.4 per cent; and in 1974/75 by 22.1 percent. {:#subdebate-56-88} #### Urban and Regional Development: Victoria (Question No. 470) {: #subdebate-56-88-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. 1 ) Will the total amounts of financial assistance made available to Victoria under clause 6 of the 'Agreement in relation to the provision of financial assistance to Victoria for Urban and Regional Development', signed by the Prime Minister and the Premier of Victoria on 5 January 1976, be made available to that State in accordance with the Agreement. 1. If not, will he state what amounts will be made available by the categories referred to in clause 6, and explain why these total amounts will not be made available. 2. In what way is this Agreement different to that proposed by the Labor Government, and what were the reasons for the changes. 3. On what dates have Ministerial consultations taken place in accordance with clause 28 of the Agreement since the Agreement was signed, and who were the Ministers present. 4. 5 ) On what dates ha ve officer consultations taken place in accordance with clause 29 of the Agreement since the Agreement was signed, and which Australian and State Departments were represented. 5. On what dates have programs received approval under this Agreement since 1 July 197S. 6. 7 ) What were these programs, by category, and what was the total financial assistance to the programs approved, by category, on each of those dates. {: #subdebate-56-88-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. and (2) Provision was made in the Agreement for financial assistance to the State for expenditure in respect of approved programs up to the total amounts listed, by category, below: Savings will be made, where programs have not been approved, as part of the Government's effort to achieve restraint in public expenditure in the national economic interest. Approved programs are listed below. {: type="1" start="3"} 0. The operation of the agreement was limited to one financial year in view of the Government's intention to review programs. The amounts of financial assistance to be provided by the Commonwealth for each category of assistance is specified in the agreement. 1. 4 ) Consultations ha ve not yet taken place. 2. ) Formal officer consultations have not yet taken place. 3. Urban Land Council-1 December 1975, 4 June 1976 and 30 June 1976; Area Improvement- 30 October 1975, 8 December 1975; Sewerage-4 September 1975, 25 November 1975, 20 May 1976; National Estate-25 November 1975. 4. Urban Land Council- a program involving expenditure of $ 14m was approved on 1 December 1975. Program variations reducing expenditure to $13,151,000 have been agreed with the Victorian Government. The composition of this program is: Part of the allocation for 1975-76 under this heading was spent on programs carrying over from the previous financial year. {:#subdebate-56-89} #### Urban and Regional Development: South Australia (Question No. 471) {: #subdebate-56-89-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. What were the total amounts of financial assistance, by category, made available to South Australia by notice issued by the Labor Government under clause 5 (2) of the 'Agreement in relation to the provision of financial assistance to South Australia for Urban and Regional Development*. 1. Is the total amount of financial assistance made available to South Australia by that notice still available. 2. If not, will he state what amounts will be made available, by category, and explain why the total amounts specified in the notice will not be made available. 3. Have any subsequent notices been issued to South Australia varying the original notice. 4. 5 ) If so, did South Australia agree to this variation. 5. On what dates have Ministerial consultations occurred in accordance with clause 30 of the Agreement since the Agreement was signed, who were the Ministers present, and what was the purpose of each meeting. 6. On what dates have officer consultations occurred in accordance with clause 3 1 of the Agreement, since the agreement was signed, which Australian and State Departments were represented, and what was the purpose of each meeting. 7. At what dates have programs received approval under this Agreement since 1 July 1975. 8. What were these programs, by category, and what was the total value of the programs approved, by category, on each of those dates. {: #subdebate-56-89-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: >(')- {: type="1" start="2"} 0. Yes. 1. Not applicable. 2. Yes. The amounts available have been increased to the following: {: type="1" start="5"} 0. Yes. 1. Consultations have not yet occurred. 2. Formal consultations have not yet occurred. 3. South Australian Land Commission- 1 3 October 1 975 and 9 December 1975; Area Improvement- 30 October 1975; Sewerage-4 September 1975 and 25 November 1975; Water-25 November 1975; National Estate-25 November 1975, 6 March 1976 and 15 April 1976 4. -- National Estate- Program variations approved 6 March 1976 and IS April 1976-No additional funds. Transfer within projects only. {:#subdebate-56-90} #### Urban and Regional Development: New South Wales (Question No. 472) {: #subdebate-56-90-s0 .speaker-EE4} ##### Mr Uren: asked the Prime Minister, upon notice: {: type="1" start="1"} 0. 1 ) What were the total amounts of financial assistance, by category, made available to New South Wales by notice issued by the Government under clause 5(2) of the 'Agreement in relation to the provision of financial assistance to New South Wales for Urban and Regional Development '. 1. Is the total amount of financial assistance made available to New South Wales by that notice still available. 2. If not, will he state what amounts will be made available, by category, and explain why the total amounts specified in the notices will not be made available. 3. Have any subsequent notices been issued to New South Wales varying the original notice. 4. 5 ) If so, did New South Wales agree to this variation. 5. In what way are the amounts referred to in part ( 1 ) different to the amounts New South Wales was told it would receive, by the Prime Minister, in August 197S. 6. Will he explain why the amounts promised by the former Government in August I97S will not be made available. 7. In what way is the Agreement referred to in part ( 1 ) different to that proposed by the Labor Government, and what were the reasons for the changes. 8. On what dates have Ministerial consultations occurred in accordance with clause 29 of the Agreement since the Agreement was signed, who were the Ministers present, and what was the purpose of each meeting. 9. 10) On what dates have officer consultations occurred in accordance with clause 30 of the Agreement since the Agreement was signed, which Australian and State Departments were represented, and what was the purpose of each meeting. 10. At what dates have programs received approval under this Agreement since 1 July 1975. 11. What were these programs, by category, and what was the total value of the programs approved, by category, on each of those dates. {: #subdebate-56-90-s1 .speaker-QS4} ##### Mr Malcolm Fraser:
LP -- The answer to the honourable member's question is as follows: {: type="1" start="1"} 0. -- {: type="1" start="2"} 0. and (3) Yes, but the State has agreed to effect savings in Urban Land Council, Sewerage and Area Improvement Programs. 1. No. 2. Not applicable. 3. -- {: type="1" start="1"} 0. Assistance to the Sydney South West Sector was increased by $800,000. 1. Assistance for sewerage shows an increase of $521,500. This figure, however, includes an element for sewerage support activities. 4. Savings will be made, where programs have not been approved, as pan of the Government's effort to achieve restraint in public expenditure in the national economic interest. 5. The operation of the agreement was limited to the period ending 30 November 1976 in view of the Government's intention to review the programs. 6. Consultations have not yet occurred. 7. Formal consultations have not yet occurred. 8. -- {: type="1" start="1"} 0. . Urban Land Council- 6 November 1 975 and variation of program 4 April 1976; 1. Sydney South West Sector- 25 November 1 975; 2. Bathurst/Orange-2 December 1975; 3. Area Improvement- 30 October 1975, 4 December 1975 and 25 March 1976; 4. Sewerage-4 September 1975 and 25 November 1975; 5. National Estate-25 November 1975. 9. -- {: type="1" start="1"} 0. . Urban Land Council- program approved 6 November 1975 and varied 4 April 1976: {:#subdebate-56-91} #### Applications for Telephone Services (Question No. 639) {: #subdebate-56-91-s0 .speaker-5J4} ##### Mr Scholes: asked the Minister for Post and Telecommunications, upon notice: {: type="1" start="1"} 0. How many applications for new telephone services were received in each telephone district in each of the last 1 2 months. 1. How many connections were made in each district in each of the last 12 months. 2. What was the number of outstanding applications in each district in each of the last 1 2 months. 3. What is the average delay in the provision of services to new applicants in each district {: #subdebate-56-91-s1 .speaker-KZL} ##### Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP -- The answer to the honourable member's question is as follows: (1), (2), (3) and (4) Telecom Australia is not able to readily provide statistics individually for each of the 107 tele phone districts but has supplied in the following tables information in respect of (a) metropolitan and (b) country regions in each State. Should the honourable member have a particular district in mind, I will be pleased to obtain the desired information for that district The average delays in provision of telephone services involving new lines and equipment as at 30 April 1976 (expressed in calendar days) were as follows:

Cite as: Australia, House of Representatives, Debates, 17 August 1976, viewed 22 October 2017, <http://historichansard.net/hofreps/1976/19760817_reps_30_hor100/>.

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