House of Representatives
9 May 1978

31st Parliament · 1st Session

  1. House of Representatives
  2. 31st Parliament
  3. 1978

Mr SPEAKER (Rt Hon. Sir Billy Snedden) took the chair at 2. 1 5 p.m., and read prayers.

page 2019

PETITIONS

The Clerk:

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

Pensioners: Home Maintenance Loans

To the Honourable Speaker and Members of the House of Representatives in Parliament assembled the petition of the undersigned citizens of Australia respectfully showeth:

That it is necessary for the Commonwealth Government to renew for a further term of at least 3 years the States Grants (Dwellings for Pensioners) Act 1974-77, renewed for one year expiring on the 30 June 1 978.

The demand for dwellings has not slackened as the waiting list (all States) of 12,000 single and 4,120 couples as at the 30 June 1 977, showeth.

Your petitioners respectfully draw the attention of the Commonwealth Government to the Report of the Committee of Inquiry into Aged Persons’ Housing 197S under the Chairmanship of the Rev. K. Seaman (now Governor of South Australia) which recommended additional funds to State housing authorities to meet the demand for low-rental accommodation in the proportion of $4 for $ 1 with the proviso that the States do not reduce their existing expenditure and

That the Act include married pensioners eligible for supplementary assistance and migrants as specified by the Seaman Report and that particular consideration be paid to the special needs and requirements of the prospective tenants in the location and design of such dwellings.

Furthermore, your petitioners desire to draw the Government’s attention to the hardship of many pensioner home owners caused by the high cost of maintenance.

The Social Security Annual Report 1976-77 shows that 24.6 per cent, or 283,000 home owning pensioners, have a weekly income in excess of the pension of less than $6 per week.

Your petitioners urge the Commonwealth Government to establish a fund whereby loans can be made to means tested pensioners for the purpose of effecting necessary maintenance to their homes. Such a loan to be at minimal interest rates sufficient to cover administrative costs and to be repaid by the estate upon the death of a single pensioner before probate or upon the death of the surviving spouse in the case of married pensioners or where two pensioners jointly own the dwelling. Administration to be carried out by local government bodies.

And your petitioners as in duty bound will ever pray. by Mr Sinclair, Mr Cadman, Dr Edwards, Mr Morris, Mr O’Keefe, Mr Ian Robinson and Mr Uren.

Petitions received.

Brandy

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

That we, citizens of the Commonwealth, earnestly request our Government to protect the interest of Australian grape growers by:

  1. Lowering the excise duty on brandy produced in Australia.
  2. Reducing the quantity of imported brandy on the Australian market which is adversely affecting Australian producers.
  3. Abolishing sales tax on brandy.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Giles. Petition received.

Citizen Forces: Long Service and Good Conduct Medals

The Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned members and ex-members of the Citizens Forces of Australia respectfully sheweth:

  1. On 14 February 1975, the then Australian Government deprived the Officers and men of the Australian Citizen Naval Military and Air Forces of the distinctive and historic Decorations and Medals for long service and good conduct, namely the Reserve Decoration, the Efficiency Decoration, the Air Efficiency Award, the Efficiency Medal and Long Service and Good Conduct Medals, awarded for long and meritorious voluntary service in the Citizen forces:
  2. The proposed substitution of the National Medal for these Decorations and Medals varies the principle of selective recognition of efficient voluntary service in the Citizen forces in that it recognises the period of service only and embraces also full time service as well in the defence forces as in the police, fire brigade and ambulance services:
  3. This deprivation caused and is continuing to cause serious discontent amongst personnel of the Citizens Forces who willingly and cheerfully give of their spare time outside their normal full time civilian careers, to serve Her Majesty and Australia:
  4. The Reserve Forces of Australia have been recognised by the present Government as a valuable- and costeffective component of the Defence Forces. Anomalously, whilst the Government is actually supporting recruiting for these Forces it has imposed and continued this deprivation which as foresaid has depressed the morale of the Citizen Forces:
  5. Her Majesty has not cancelled the said Decorations and Medals.

Your petitioners therefore humbly pray

Your honourable House take appropriate action to resume the award of the several distinctive and historic Reserve Forces Decorations and Medals to members of the Royal Australian Naval Reserve, Citizens Military Force (Army Reserve) and Citizens Air Force. by Mr Katter.

Petition received.

Air Training Corps

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

That steps be taken immediately to allow enlistment of females as Cadets in the Air Training Corps.

We, the undersigned, point out that as the Air Training Corps is now regarded as a Youth Movement as well as being incorporated in the Department of Defence, that females should and could be given the opportunity to serve their Country as is the right of females in Great Britain and New Zealand, where membership of the Air Training Corps is open to female applicants.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Morris. Petition received.

Social Security Payments

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

That distress is being caused to social security recipients by the delay in adjusting pensions to the Consumer Price Index months after goods and services have risen, and that many medications, formerly a pharmaceutical benefit, must now be paid for.

In addition, State Housing Authority waiting lists for low rental dwellings for pensioners become never less, and funeral costs increase even greater.

Your petitioners call on the Australian Government as a matter of urgency to:

Adjust social security payments instantly and automatically on announcement of increases in the quarterly Consumer Price Index.

Restore pharmaceutical benefits deleted from the free list.

The States Grants (Dwellings for Pensioners) Act 1974, eroded by inflation, be updated and increased to overcome the back-log.

The funeral benefit be updated to 60 per cent of a reasonable funeral cost. This benefit, when introduced in 1 943 at 200 shillings ($20.00), was seven times the pension at that time of 27 shillings ($2.70) per week, or more than twice the basic wage of 97 shillings ($9.70).

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Morris. Petition received.

Television Antenna System in Warburton Area, Victoria

To the Right Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the township of Warburton in the Electorate of McMillan respectfully showeth:

Whereas:

  1. Since the introduction of television into Australia twenty-two years ago, one half of the residents in the township of Warburton in Victoria have not been able to receive a viewable picture.
  2. The Community Television Antenna System (CTAS) could be introduced into the Warburton area to remove this inability and provide television to all those wishing to view that means of community education and entertainment.

Your petitioners therefore humbly pray that the Government of the Commonwealth of Australia per medium of the Minister for Post and Telecommunications give all directions to ensure the installation of all equipment necessary to install CTAS or such other means to produce television viewing for the citizens of Warburton.

And your petitioners as in duty bound will ever pray,

Petition received. by Mr Simon. Petition received.

National Family Policy

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

That ‘The family is the natural and fundamental group unit of society and is entitled to protection by society and the state.’

Your petitioners therefore humbly pray that the government initiate a national family policy and use the concept of family impact statements as a means highlighting family needs.

And your petitioners as in duty bound will ever pray,

Petiton received. by Mr Wilson. Petiton received.

page 2020

QUESTION

QUESTIONS WITHOUT NOTICE

page 2020

QUESTION

UNEMPLOYMENT BENEFIT FOR YOUNG PEOPLE

Mr Les McMahon:
SYDNEY, NEW SOUTH WALES · ALP

-Is the Minister for Employment and Industrial Relations aware that unemployed young people have not received a rise in the recent increase in unemployment benefit? Is he also aware that there has been no increase in this benefit for the last three years and that the present level is $36 a week? Will the Minister state why the Government is keeping the rate of unemployment benefit for young unemployed people at so low a level?

Mr STREET:
Minister for Employment and Industrial Relations · CORANGAMITE, VICTORIA · LP

-To the best of my knowledge the only increases which have not occurred are those for young people under the age of 1 8 years. The unemployment benefit has been increased for all those people over the age of 18 years. The Government considers that the present level is appropriate.

page 2020

QUESTION

COAL CONVERSION

Mr SIMON:
MCMILLAN, VICTORIA

– I direct a question to the Minister for National Development. Has the Government concluded negotiations with the Federal Republic of Germany and Australian State governments to further this Government’s commitment to conduct research into converting coal to oil? What is the significance of this research in the context of the development of a national energy policy? If a pilot plant is to be developed will it be sited in the Latrobe Valley of Victoria where the world’s largest brown coal reserves are located or, alternatively, will the coal from that Vally be utilised in the conversion process wherever the plant is located?

Mr NEWMAN:
Minister for National Development · BASS, TASMANIA · LP

– I thank the honourable member for McMillan for his question. Yesterday when I answered a question from the honourable member for Denison I talked about the need for Australia to develop self-sufficiency in relation to liquid fuels. I mentioned then that it was important that we also develop alternative energy fuels. Liquefaction is one of those important alternative energy routes that we should follow. I can tell the honourable member for McMillan that the negotiations with the Federal Republic of Germany are now in an advanced stage. Basically, the States of Queensland, New South Wales and Victoria have joined with the Commonwealth Government in sharing equally with West Germany a feasibility study into liquefaction. The basic aim of the study will be to test the economic application of coal liquefaction with respect to brown coals from Victoria and black coals from New South Wales and Queensland. After we do those tests we will be able to decide where pilot plants and demonstration plants may be set up. I am hopeful that negotiations will be completed by 30 June and that the feasibility studies will begin immediately after that date.

page 2021

QUESTION

VIP FLEET: PURCHASE OF AIRCRAFT

Dr BLEWETT:
BONYTHON, SOUTH AUSTRALIA

– I address my question to the Prime Minister. Is it a fact that the fixed costs of operating a Boeing 727-100 series are $30,000 a day? What is the estimated annual cost of operating the two 727 Boeings the Government proposes buying for the Prime Minister’s overseas travels? By how much will the appropriation for the VIP fleet increase in the next Budget to cover the two Boeings ‘ operations?

Mr MALCOLM FRASER:
Prime Minister · WANNON, VICTORIA · LP

– I think the honourable gentleman would well be aware that to be able to provide continuity of service, whether it is in Australia or outside Australia, it is more desirable to have two aircraft rather than one. It has been indicated also that once the Boeings are in service the rest of the VIP fleet will be examined against its requirement for use and, if there is a need for rationalisation in that context that would be undertaken. But to be able to guarantee service the Royal Australian Air Force says that it needs to have two aircraft of a type within that fleet. I think that, on a number of occasions, the points have been made that the Boeing is really the only aircraft that could be available that would meet a useful and necessary domestic requirement but which at the same time would have an international capability. It is possible to look for other aircraft that have a domestic requirement, but that is not what is necessary at the moment. It is easy to get aircraft which would have an international capability but virtually no use within Australia because of the limitations in airports. Against the background in which Qantas Airways Ltd will not have available to it 707s and domestic airline company 727s do not have the range that is necessary, the only choice available to the Government was the purchase of aircraft. If purchase was to be the choice, the only real and sensible option available to the Government was the purchase of two aircraft rather than one. I have no doubt that the detailed costings, which could be estimates only at the moment, might well be available and I shall consult with my colleague the Minister for Defence to see whether any firm figures can be given in relation to the actual costs of running the aircraft. But obviously the figures can be fairly broad estimates only at present. In any case, there is no knowledge when the Air Force will find aircraft that will be suitable for Australian requirements.

page 2021

QUESTION

VIP FLEET: PURCHASE OF AIRCRAFT

Mr ARMITAGE:
CHIFLEY, NEW SOUTH WALES

– My question is directed to the Prime Minister. I refer to the Government ‘s decision to purchase two Boeing 727 aircraft for the Prime Minister’s personal use in travelling about the world. Is it a fact that the two aircraft are to be fitted out with private eating and sleeping quarters for the right honourable member and his wife? Will the aircraft also have fully equipped offices with telephone and teleprinters, plus seating accommodation for some 40 other passengers? What is the estimated additional cost of this extensive refitting program for the two aircraft?

Mr MALCOLM FRASER:
LP

-The honourable gentleman persists, as do other members of the Opposition, in using the term ‘personal use’. Personal use, of course, is not under question in relation to these matters. The aircraft is for use by the Australian Prime Minister in the service of Australia, and that is not personal use. I think some other comment and opinion around Australia in relation to this matter would be worth noting. In the Advertiser of 8 May there were these words:

A sensible nation does not place its leaders’ lives at risk lightly, and to ignore a warning that an existing situation embodies risks which are ‘unacceptably high’ would be irresponsible. There is the additional argument that a Prime Minister using an ordinary commercial flight may endanger the lives of innocent fellow citizens if he becomes in the process a target for terrorism. Nothing that has just been said, however, absolves the Prime Minister or the Government from the obligation to avoid all travel which is unnecessary-

Which I thoroughly agree with-

To buy the planes in the first place is one thing. To use them extravagantly would be quite another . .

The honourable gentleman seems to miss completely the point that our criticism of a former Prime Minister was as to the time spent out of this country, the manner of travelling out of this country and the number of accompanying people on some occasions, which got up to over 50 on one particular trip, and which was quite unnecessary. The time spent out of the country in particular was, we believe, quite unnecessary and not related to the specific requirements of Australia and specific objectives necessary in Australia’s national interest. That editorial opinion has been echoed around Australia in a number of journals in recent days and I really believe that in this particular matter Opposition members are just trying to keep themselves where they are.

page 2022

QUESTION

URANIUM EXPORTS: SAFEGUARDS

Mr BAILLIEU:
LA TROBE, VICTORIA

– Is the Minister for Foreign Affairs aware that many of the people worried about the mining of Australian uranium are concerned that adequate controls do not exist regarding its use? In view of the fact that the Government has given details of the international and bilateral agreements that must be met before uranium can be sold overseas, will the Minister explain how these conditions and safeguards will be enforced and the nature of supervision that will apply? Could fuels or wastes be diverted without the supervisors knowing it? What would happen if supervisors discovered fuels or wastes being used for purposes other than within the agreement that this Government has made a pre-condition to any sales?

Mr PEACOCK:
Minister for Foreign Affairs · KOOYONG, VICTORIA · LP

-I must say at the outset of what will have to be a succinct answer to a series of questions dealing with an intricate matter that we do not start from the assumption that countries will seek to breach their important treaty obligations to us or to the International Atomic Energy Agency, or under the Nuclear NonProliferation Treaty. Of course, our safeguards agreements will provide for IAEA safeguards to verify that the uranium supplied is for peaceful purposes and will not be diverted to nonpeaceful or explosive purposes. There will, of course, be regular consultations with uranium importing countries to satisfy ourselves on the implementation of the agreement. Furthermore, the IAEA safeguards themselves involve periodic reports of a state’s holdings of nuclear material; inspections of material and checks of documents and records; and techniques of containment, for example, locks, safes and surveillance, including automatic cameras. On top of that there is a requirement to explain any discrepancies which are discovered.

Our particular bilateral consultations will not duplicate that process but will provide machinery for confirming to us that the agreement is being properly implemented, and for raising and resolving any questions as to its implementation. The IAEA, of course, can perform only as well as the best available measurement and other techniques permit. Nevertheless, IAEA safeguards provide such a high measure of confidence that any significant diversion referred to by the honourable member in his question would be detected in time. They are a serious deterrent to diversion because of the high probability of detection.

If a diversion is detected or if a country cannot give a satisfactory explanation for a discrepancy which is picked up in an IAEA inspection the matter would be reported to the Board of Governors and all the members of the IAEA, the Security Council and the General Assembly. The Board would call on the country concerned to take prompt corrective action and may invoke sanctions. These include cutting off IAEA assistance, requiring the return of supplied material and equipment and suspending the country concerned from the Agency. If a country breached its treaty obligations towards Australia we could draw on all the diplomatic, political and legal procedures available to governments in any case where the treaty is broken. We also would have the option of cutting off supplies. A breach which led Australia to cut off supplies would be likely to prompt similar action by other suppliers. Australia advocates such a collective approach to sanctions.

Finally, countries which have invested heavily in nuclear power reactors and which are coming to rely on that power generating capacity will obviously attach the greatest importance to the security of supplies of fuel. For example, after 1 985 France is expected to be dependent on nuclear power for 60 per cent of its electrical power generating capacity. In this way our willingness to make Australian uranium available to meet world energy needs, but subject to stringent safeguards, makes an important contribution to international nuclear non-proliferation. Ultimately the most important objective to which Australia is contributing by this policy and by its parallel high level of activity on nuclear arms control issues is an international environment in which no country could seriously contemplate the nuclear weapon option.

page 2023

QUESTION

INTAKE OF VIETNAMESE REFUGEES

Mr BRAITHWAITE:
DAWSON, QUEENSLAND

– I direct a question to the Minister for Immigration and Ethnic Affairs. In view of the reports from Vietnam of further boat loads of refugees being anticipated, can the Minister guarantee that Australian immigration procedures and policies will be sufficient to cope with these boat people as the trickle becomes a flood? Secondly, was the matter of these types of refugees taken up with Mr Mondale, the VicePresident of the United States of America, at yesterday ‘s discussions? If so, is the United States of America likely to involve itself in the problem of boat refugees from Vietnam?

Mr MacKELLAR:
Minister for Immigration and Ethnic Affairs · WARRINGAH, NEW SOUTH WALES · LP

– There have been reports from the Indo-China area concerning the potential number of people leaving Vietnam per medium of small boats. Figures available to us show that arrivals in Malaysia and Thailand over the last month number over 3,000. That is a rapid escalation above the numbers arriving in previous months. As far as I am aware there is no indication of any diminution in that rate of efflux from Vietnam. Added to this, of course, there are still continuing movements of refugees from Laos and Cambodia.

It should not be thought that those people making unauthorised arrivals in Australia, largely arriving at Darwin, have not been subject to Australian immigration laws; they have. They have not travelled in an authorised fashion but certainly they are subject to all the immigration laws and procedures as soon as they arrive. The Government is particularly conscious of the quite understandable disquiet of people in the area itself- in fact, all over Australia- about the possibility of the introduction of exotic plant or animal diseases. Therefore the most stringent quarantine health checks are carried out. The refugees are interviewed in great depth to make absolutely certain that they are what they claim to be, that is, refugees. In fact, as people know, already one person who claimed to be a refugee and who turned out to be an Indonesian who hitched a ride on a boat going through the Indonesian area has been sent back to Indonesia. Also, in Fanny Bay gaol in Darwin there are some crew members of a vessel against whom serious allegations have been made regarding the nature of their acquisition and control of the vessel.

I would not want it thought for a moment that Australia’s immigration laws are being circumvented in any way by these arrivals. As the honourable member says, there is a danger that the number attempting to come to Australia in this way may escalate. Australia has set out on a two-pronged approach to this problem. Firstly, we seek to internationalise it by seeking agreement from more countries throughout the world to resettle the refugees in Thailand and Malaysia. It is unfair to expect any one country to accept the full burden of refugee resettlement. This massive problem will not be overcome until a greater international effort is mounted to resolve this present situation. Secondly, we would hope that governments in the area would cooperate with Australian authorities to delay the vessels for a short period to enable the Australian authorities to interview people on board the ships and put them through the process of selection in those countries. Finally, the United States of America and Australia are co-operating very closely in these matters. The United States has announced that it is preparing to accept another 25,000 refugees and a number of those will be people who have come to be known as boat people.

page 2023

QUESTION

DISALLOWED QUESTION

Mr Humphreys having addressed a question to the Prime Minister -

Mr SPEAKER:

-Order! The question is out of order. The honourable gentleman is not entitled to suggest the answer to his own question.

Mr Young:

– I take a point of order. The question seemed very similar to earlier questions. In what way was the honourable member providing the answer to his own question?

Mr SPEAKER:

-He was suggesting the answer. I have ruled on the question.

page 2023

QUESTION

DEVELOPMENT OF RANGER URANIUM PROJECT

Mr CALDER:
NORTHERN TERRITORY

-Can the Minister for Trade and Resources confirm that negotiations have opened in Darwin with the Northern Land Council and others on terms and conditions, from all points of view, for the development of the Ranger uranium project? Will the Minister say what progress, if any, has been made so far, bearing in mind that section 12 (2) of the Aboriginal Land Rights Act establishes Commonwealth ownership of minerals on, in and under the ground?

Mr ANTHONY:
Deputy Prime Minister · RICHMOND, NEW SOUTH WALES · NCP/NP

– Negotiations commenced yesterday between the Commonwealth negotiator and the Northern Land Council. The negotiations are continuing this afternoon. In the course of discussions yesterday the Northern Land Council expressed concern about possible amendments to legislation that is before the Senate. A cable was sent to the Prime Minister this morning expressing concern. The Prime Minister replied that he would be sending the Minister for Aboriginal Affairs and me to the Northern Territory this afternoon to have consultations with the Council and members of the Northern Territory Legislative Assembly to see whether we can reach some accommodation as to the misunderstanding or the concern that people might have about the legislation that is coming before another place at the moment. Accompanying the Minister for Aboriginal Affairs and me will be the honourable member for the Northern Territory and Senator Kilgariff who has been responsible for certain amendments in another place. I hope that we can obtain complete understanding between the various parties.

page 2024

QUESTION

LAND PURCHASE: AUSTRALIAN POSTAL COMMISSION

Mr HOWE:
BATMAN, VICTORIA

– My question is directed to the Minister for Post and Telecommunications. Has the Minister noted a report in last Saturday’s Melbourne Age of comments made by the former Minister for Post and Telecommunications about a land purchase by the Postal Commission at Bundall in Queensland in February 1977? Can the Minister advise the House of the date on which Mr Ron McMaster approached the then Minister about land he wanted to sell to the Commission? What subsequent communication did the Minister have with the Australian Postal Commission in relation to Mr McMaster ‘s approach to him?

Mr STALEY:
Minister for Post and Telecommunications · CHISHOLM, VICTORIA · LP

– I thank the honourable member for his question. I have made extensive inquiries about this matter after questions were raised on it last week and I have almost finished a written answer to those questions. I will take on notice what the honourable member said and will provide him with an answer before the week is out.

page 2024

QUESTION

NAVAL EXERCISES IN THE INDIAN OCEAN

Mr CADMAN:
MITCHELL, NEW SOUTH WALES

– I ask the Minister for Defence whether he is aware of reports of proposed Australian and United States naval exercises in the Indian Ocean. Is there a particular reason for considerable newspaper comment on the exercises and is there anything exceptional about them?

Mr KILLEN:
Minister for Defence · MORETON, QUEENSLAND · LP

– Without wishing to give offence to the greater fourth estate I would excuse myself from seeking to understand the interstices of their corporate or individual minds. There is absolutely nothing exceptional about the proposed naval exercise in the Indian Ocean. It is very much a routine exercise and is an exercise that has been in planning now for some weeks. The character of the unexceptionability of it may be gathered from the fact that last year there was a combined exercise in the Indian Ocean, known as Operation Compass 1977, which involved units of the Royal Navy, the Royal Australian Navy and the United States Navy.

page 2024

QUESTION

YOUNG PEOPLE IN THE WORK FORCE

Mr Barry Jones:
LALOR, VICTORIA · ALP

-Further to my question to the Prime Minister last Friday concerning the recent report of the Organisation for Economic Co-operation and Development about the involvement of young people in the work force, I ask: Is it a fact that there are 140,000 unemployed people in Australia under the age of 25 years? Is it a fact, as is stated in the OECD report, that if Australia had the same proportion of young people involved in full-time education as Japan, 150,000 more people would be involved? Is it a fact that if Australia had the same proportion of young people involved in full-time education as the United Sates that half a million more young people would be involved?

Mr HOWARD:
Treasurer · BENNELONG, NEW SOUTH WALES · LP

-I do not have the facility to make rapid calculations of the type required to answer that question now. I will analyse the honourable member’s question and provide him with an answer as soon as possible.

page 2024

QUESTION

MEDIBANK

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

-I ask the Minister for Health: Is it a fact that the administrative expenses of Medibank Standard were 4.2 per cent of benefits paid? Is it also a fact that the administrative expenses of Medibank Private were 15.7 per cent of benefits paid which is a figure comparable with that of private funds? If this is the case will the Minister agree that the collection of all health contributions by means of a tax levy would appear to be a most efficient method of lowering health costs?

Mr HUNT:
Minister for Health · GWYDIR, NEW SOUTH WALES · NCP/NP

– The answer to the first question is yes. The answer to the second question is yes. The answer to the third question is that it would need a very long study to come to that conclusion. However, the Government is currently looking at all possibilities in regard to health insurance.

page 2024

QUESTION

IMMIGRATION

Mr McLEAN:
PERTH, WESTERN AUSTRALIA

– I ask the Minister for Immigration and Ethnic Affairs whether he is aware of reports in the ethnic Press that the Government is to radically change its immigration policy to admit only those people who speak English. Will the Minister inform the House about the validity of those reports?

Mr MacKELLAR:
LP

– I have seen translations of reports from a number of ethnic newspapers along these lines and I make it absolutely clear to the editors of those newspapers and to the community as a whole that I have not put forward any such proposals, nor do I intend to do so. There is no suggestion that I would seek to prevent the migration to Australia of people who meet Australia’s immigration requirements but who cannot speak English. I am very conscious, as other people have been, of the importance of English language ability in successful settlement. In fact, on 21 April this year, at a meeting between me and State Ministers concerned with immigration, a joint statement was issued which drew attention to the fact that English language ability was an important factor in successful settlement. These reports that I have seen circulating in ethnic newspapers are totally unfounded. I am very glad of the opportunity to put that furphy at rest.

page 2025

MOTOR VEHICLES

Mr HAYDEN:
OXLEY, QUEENSLAND

– I refer the Minister representing the Minister for Business and Consumer Affairs to the recently announced variations in the allocation of quotas for passenger motor vehicles. Can the Minister confirm whether it is a fact that -

Mr SPEAKER:

-Order! The question is directed to which Minister?

Mr HAYDEN:

– It is directed to the Minister representing the Minister for Business and Consumer Affairs.

Mr Howard:

– The Minister for Business and Consumer Affairs is in this House and so is the Minister for Industry and Commerce.

Mr HAYDEN:

– I am sorry. It just shows what an impact they have made on us. I refer the Minister for Business and Consumer Affairs to the recently announced variations in the allocation of quotas for passenger motor vehicles. Can the Minister confirm whether it is a fact that his Department has allocated a subsequent quota of one or two vehicles to persons who imported expensive motor vehicles privately from Europe during the base year for allocation of quotas? Is it a fact that these persons are subsequently selling their quotas to commercial motor vehicle importers for several hundred dollars profit per unit? Will the Minister indicate whether his

Government intends to allow the wealthy in this country to continue to obtain windfall profits from the sale of these import quotas?

Mr FIFE:
Minister for Business and Consumer Affairs · FARRER, NEW SOUTH WALES · LP

– The Leader of the Opposition and other honourable members will be aware that the Government is determined to reserve 80 per cent of the market for Australian car manufacturers. This is a conscious decision that has been taken by this Government to assist the Australian motor industry. Unlike the unhelpful assistance that comes from the other side of the House, the Government’s action in this regard is being appreciated by the Australian motor vehicle industry and is of enormous assistance.

In relation to the specific aspect of the honourable member’s question, I draw his attention and that of other honourable members to the fact that there was an Industries Assistance Commission inquiry into this particular matter and recommendations were made as to how the 20 per cent of the market that would be imported would be broken up between the companies concerned. Obviously a base period had to be determined. The history of imports during that base period was taken into consideraton when making the allocation. With regard to the current year, all allocations have not been made. We are not able to determine in advance precisely what the total market will be and we are resolved to ensure that no more than 20 per cent of the total market is imported from overseas. I have no knowledge of the specific transfer to which the honourable member referred in his question. If he cares to give me the details, I will undertake to have them investigated as a matter of urgency.

page 2025

QUESTION

MOTOR VEHICLE INDUSTRY

Mr WILSON:
STURT, SOUTH AUSTRALIA

-I ask the Treasurer: Is sales tax reduction a remedy for the ills of the motor vehicle industry or is it an irresponsible prescription? Is the Treasurer concerned that deferment of planned vehicle purchases caused by the speculation sparked off by the cynical statements of the Leader of the Opposition may worsen the position of the industry?

Mr SPEAKER:

-Order! The honourable gentleman is arguing the issue.

Mr HOWARD:
LP

-I thank the honourable gentleman for his question. He has drawn the attention of the House to a certain amount of speculation on and a certain number of contributions to a consideration of the motor vehicle industry at the present time which have proved very unhelpful. I would have to say to the honourable member quite categorically, in case there should be any doubt about it in his mind or in the minds of anyone else, that the Government does not propose any reduction in sales tax on motor vehicles. I draw the attention of the honourable member and of all honourable members of parts of the editorial in this morning’s issue of the Australian Financial Review which categorised the argument about sales tax reduction as a gimmick. The problems of the Australian motor vehicle industry will not be solved by gimmicks, nor will the problems of the industry be solved by unhelpful statements from the other side of the House.

page 2026

QUESTION

REVOLUTIONARY ORGANISATIONS

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-I direct my question to the Minister who represents the AttorneyGeneral in this House. The Minister will be aware of recent reports of the formation of groups within Australia, particularly New South Wales, dedicated to the overthrow of foreign governments and the infiltration of political organisations to subvert those organisations to their cause. Have any investigations pursuant to sections 7 to 9 inclusive of the Crimes (Foreign Incursions and Recruitment) Act been instigated to ascertain the facts? If so, what are the results? If not, will the Minister seek a firm undertaking that the Attorney-General will investigate these matters and advise the Parliament of his findings at any early date?

Mr VINER:
Minister Assisting the Prime Minister · STIRLING, WESTERN AUSTRALIA · LP

– I am not aware of the groups to which the honourable member refers, nor am I aware that any investigations have been authorised by the Attorney-General. However, I will direct the question to the Attorney-General and obtain an answer for the honourable member.

page 2026

QUESTION

INTERNATIONAL WHEAT AGREEMENT

Mr CORBETT:
MARANOA, QUEENSLAND

– I ask the Minister for Trade and Resources: Are there any signs of progress in the discussions on a new international wheat agreement? If progress towards reaching that agreement has been unsatisfactory, can the Minister advise what has caused the talks to bog down?

Mr ANTHONY:
NCP/NP

– Discussions have been going on for quite a considerable time in trying to arrive at a new international wheat agreement and one has been rather disappointed with the progress of the discussions. The hold-up has been mainly on the minimum and maximum price scales, stock holdings and also the inclusion of coarse grains in the agreement. There has been quite a difference of opinion between the European Economic Community and the United States on maximum and minimum price scales, but I am pleased to say that last week in Geneva in the course of discussions they did seem to get closer accord on their differences. I am hoping that later this year we can get down to some positive discussions to bring about a new international wheat agreement but there have been very great difficulties in reaching agreement between those two countries.

page 2026

QUESTION

TAXATION: FAMILY TRUSTS

Mr DAWKINS:
FREMANTLE, WESTERN AUSTRALIA

-Does the Treasurer recall that on 23 November last year the Prime Minister agreed in answer to a question that he made use of family trusts to lower the rate of tax he paid? Has the Treasurer included amongst his recently announced proposals amendments to prohibit this practice? If not, is it the Treasurer’s intention selectively to outlaw tax dodging and to turn a blind eye to those schemes engaged in by the Prime Minister?

Mr HOWARD:
LP

-The answer to the first part of the question would be self-evident to the honourable member from an examination of the Bill which passed all stages in this House last night, so I do not need to occupy, I hope, the time of the House at Question Time in repeating the provisions of a Bill which have been debated at length in this House. I will move along to the second part of the honourable member’s question.

Mr Dawkins:

– I raise a point of order. The Treasurer does not seem to have heard the question. I was referring to–

Mr SPEAKER:

-Order! The honourable member has asked his question. He will now listen to the answer. He must accept the answer given provided it is relevant to the question. He cannot require a Minister to answer in the way that the honourable member wants him to answer.

Mr HOWARD:

– In reply to the second part of the honourable member’s question, that is, the ‘if not, why not’ part, I would answer in this fashion: The question of what further reforms in the area of tax avoidance are to be undertaken by the Government is a matter which will be considered by the Government from time to time. I would not think that the honourable gentleman or anybody else in this House who is genuinely interested in the cause of eliminating blatant forms of tax avoidance would want a Treasurer or any member of the Government to speculate a’ large and in advance of any firm decisions having been made about what areas might be the subject of legislative proscription by the Government in the future. If the honourable gentleman is asking whether, at the present time, the Government has under consideration tax avoidance measures dealing with family trusts as a broad category, the answer is no.

I make no further comment about what may be the approach of the Government in the general tax avoidance area except to say that anybody who understands the first thing about tax avoidance will know one very simple fact, that is, that there is the world of difference- a very significant difference- between tax avoidance practices which are devoid of any commercial or other motive other than the total avoidance of tax and other tax minimisation practices- I am speaking generally of tax minimisation processeswhereby a person engaging in a normal commercial transaction opts to arrange his affairs in a method which attracts the minimum incidence of taxation. I think there is a very significant difference.

page 2027

QUESTION

VISIT BY VICE-PRESIDENT MONDALE

Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP

-I ask the Prime Minister whether, during the visit of the American VicePresident, Mr Mondale, he was able to pursue with Mr Mondale the issues relating to the international economic order which have been the subject of debate? If he was able to pursue those matters, can he tell us whether any substantial agreement was reached on those and related issues and, if so, what was it?

Mr MALCOLM FRASER:
LP

-Substantial discussions were held between the Vice-President of the United States of America and a number of Ministers during the course of yesterday morning and lunch time yesterday. I believe that the discussions were particularly useful, coming at this time from a number of different points of view. The general approach that Australia and the United States have to the Multilateral Trade Negotiations is, I think, along similar lines. We both believe that the trade negotiations need to be made successful if the world is to avoid the dangers of a reversion to protectionism which could have damaging trading results towards the end of this year and in future years. I think we both agree that the discussions that will take place and the decisions that will be made in the next few weeks and months could well set the pattern for many years ahead. Therefore, it is very important for nations to assess their own positions to see that they each make a maximum contribution to the success of the general trade negotiations.

The Vice-President repeated the view that had been put to us by the United States on a number of occasions that the United States is very determined that agriculture remains a pan of the negotiations in a constructive and realistic sense because, as I have indicated before, if the negotiations were to operate only in the industrial area they would be operating on less than 20 per cent of the world trade and in a manner that would be likely to reduce tariffs after 1980 by about half a per cent a year for eight years. That is hardly a very exciting prospect in the stimulation of trade or the expansion or markets. So, in these particular areas, I think there is a similarity of interest, a similarity of concern and a determination to work together to achieve objectives that we believe would be to the advantage of the world trading system.

It is also of importance that the Vice-President is visiting a number of countries in South East Asia at the present time, not just Australia and New Zealand, because in recent times there has been, to some extent, a preoccupation with Europe and with East- West issues. I believe that a number of countries, including Australia, will welcome the reassurance of continued United States interest, support and commitment to this part of the world. We all know that while there are obligations on every national government, no matter what the size of the country, there are many things in terms of world leadership which only the United States can do. The United States is the largest, most powerful and most influential leader of all the democratic nations. Therefore, the United States’ interests, obligations and responsibilities are global and not restricted to one region or another.

As reported to us, discussions in the Philippines, Indonesia and Thailand were certainly very useful in advancing the bilateral relationships between those countries and the United States. At the same time, they were useful in reaffirming the United States’ interest and concern in the wellbeing of South East Asia and the western Pacific region. If there had been doubts in the past about the interests of the United States I believe that the Vice-President’s visit should well dispel them.

We also agreed that there would be further cooperation between the United States and Australia in relation to energy. It is known that both countries are pursuing the real possibility of joint research into coal and solar energy. After the Commonwealth Heads of Government Regional Meeting in Sydney, one of the decisions of which was to set up a consultative group on energy chaired by India, the President of the United States wrote and offered United States assistance and help in relation to that work and other working parties being established as a result of that regional meeting if that were the wish of the regional countries. The United States is involved in other energy arenas designed to examine the best ways of making energy available as cheaply as possible at the village level in developing countries. The United States and Australia have agreed to consult together to make sure that the totality of efforts in this field is directed as far as possible to common purposes and objectives so that the maximum result can be achieved from whatever resources can be put into this research. These are important matters for many countries such as India. In addition, they are important for countries of the Pacific.

We have also reaffirmed our joint determination to maintain the most stringent safeguards against nuclear proliferation. The United States again welcomed the stand that Australia has taken in relation to this matter. The affirmation by the United States of its intentions has certainly further strengthened relations with the countries of Asia and the Pacific. As I have indicated, the United States has great responsibilities. I believe that we can have every justification for believing that the United States fully intends to answer and respond to those responsibilities in the years ahead. That is certainly welcome.

The Vice-President made specific reference to the ANZUS Treaty. While I fully agree with the Minister for Defence that the exercise to be undertaken in the Indian Ocean is normal in terms of United States-Australian defence cooperation, I believe that it has particularly welcome aspects at this time. We know the ambit of the ANZUS Treaty. We also know of negotiations and discussions between the Soviet Union and the United States and of the joint determination of the United States and Australia that those negotiations will not reduce the ambit of the ANZUS Treaty in any sense, shape or form. That joint exercise, amongst other things, will help to demonstrate that.

page 2028

QUESTION

FITTING OF HEARING AIDS

Mr MARTIN:
BANKS, NEW SOUTH WALES

– Is the Minister for Health aware of the great hardship being experienced by elderly pensioners, particularly those in convalescent homes, due to the decision of the National Acoustic Laboratory in Sydney to discontinue home visits for the purpose of testing and subsequent fitting of hearing aids? Will the Minister investigate this matter and issue instructions to re-introduce this necessary service to this disadvantaged section of the community?

Mr HUNT:
NCP/NP

– Owing to the great backlog of applications for hearing aids, the National Acoustic Laboratories in the various States have had to concentrate most of their resources in coping with applications for hearing aids for pensioners and for young people in particular. However, 1 have had some complaints about the cessation of home visits for additional fittings. I shall investigate the matter. In fact I have been concerned about it. If, within our resources, we are able to reinstate those home visits we will but our present preoccuption is trying to catch up with the applications that have been made for new hearing aids and to reduce the waiting list. In that regard the National Acoustic Laboratories have been extremely successful. But I can give the honourable member an assurance that I shall keep in touch with him about his concern.

page 2028

AUSTRALIAN DAIRY CORPORATION

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

– Pursuant to section 29 of the Dairy Produce Export Control Act 1924, I present the annual report of the Australian Dairy Corporation for the year ended 30 June 1 977.

page 2028

DEPARTMENT OF FOREIGN AFFAIRS

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

– For the information of honourable members, I present the annual report of the Department of Foreign Affairs for the year ended 31 December 1977.

page 2028

AUSTRALIA-JAPAN FOUNDATION

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

– Pursuant to section 25 of the Australia-Japan Foundation Act 1976, 1 present the annual report of the Australia- Japan Foundation 1976.

page 2028

PERSONAL EXPLANATIONS

Mr CARLTON:
Mackellar

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

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr CARLTON:

– I do.

Mr SPEAKER:

-He may proceed.

Mr CARLTON:

-Thank you, Mr Speaker, last night in the committee debate on clause 3 (2) of the Income Tax Assessment Amendment Bill, the honourable member for Grayndler (Mr Stewart) interjected during the course of my speech. The interjection appears in Hansard at page 1997 as follows:

Mr Stewart:

– It is no wonder that they sacked you as secretary of the New South Wales Branch of the Liberal Party.

I did not hear precisely what the honourable member for Grayndler said at the time, otherwise I would have dealt with the matter then. However, having read the interjection in Hansard, I believe it requires correction. For the record, I was not sacked from the post of General

Secretary of the New South Wales Division of the Liberal Party. I am happy to have been translated from that position through the orderly processes of preselection in the same way as my predecessor, Senator Carrick, was elected to another chamber. I am also happy to be in a position to assist my successor, Mr Gregory Battels, in the same way as I was assisted by Senator Carrick. The interjection of the honourable member for Grayndler might throw more light on past activities within his own Party than on mine.

Mr DAWKINS:
Fremantle

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

Mr SPEAKER:

– Does the honourable member claim to have been misrepresented?

Mr DAWKINS:

– Yes, Mr Speaker.

Mr SPEAKER:

-He may proceed.

Mr DAWKINS:

-In my question to the Treasurer (Mr Howard) this afternoon the middle sentence was:

Has the Treasurer included amongst his recently announced proposals amendments to prohibit this practice?

That is the practice of the Prime Minister avoiding tax via family trusts. In his answer the Treasurer tried to say that I had not been following the legislation that went through the House last night. I want to make perfectly clear that the recently announced proposals to which I was referring were the announcements which the Treasurer made last week concerning prepaid interest and prepaid rent which were not part of the amendments which went through the House last night.

Mr INNES:
Melbourne

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

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr INNES:

– I do.

Mr SPEAKER:

-He may proceed.

Mr INNES:

– My attention has been drawn to a newspaper article contained in the Daily Telegraph of Friday, 5 May, under the name of Leigh Bottrell. The major heading is ‘Today’ and the sub-heading is ‘Blow to prestige’. The article reads:

An exchange of rude notes between the National Country Party’s Mr Steve Lusher and Labor’s Mr Ted Innes in Federal Parliament does little to enhance the standing of our national legislative body.

The pair are among the more fiery of the people’s representatives and are not known to see eye-to-eye on anything.

But note-passing which ends in one inquiring of the other if he’d like a punch in the face surely takes their animosity too far.

I join with my parliamentary colleague the honourable member for Hume (Mr Lusher) in stating categorically that the article is a complete fabrication. I have never at any time corresponded with the honourable gentleman on any matter or received any note from him, rude or otherwise, across the chamber. I have not sent one. It is a malicious and totally untrue article, typical of some of the reporting by the Press, in particular by the Murdoch group. I should inform the House also that I have initiated legal proceedings in respect of this article in order to protect my reputation and in an endeavour to have people in this Parliament protected against such slanderous reporting.

page 2029

QUESTION

FOREIGN POLICY: A YEAR OF CHANGE AND CHALLENGE

Ministerial Statement

Mr PEACOCK:
Minister for Foreign Affairs · Kooyong · LP

– by leave-

Introduction

Mr Speaker, the world is in the midst of a period of change that could prove to be as significant as any in modern history. The character of international relations as we have known it is changing. New concepts of national interest are emerging and there is an increasing recognition of the interdependence of all members of the world community. There are no simple remedies or ready-made solutions for the problems we face today. Skill and application are required even to define the nature of the problems, particularly for those of us who must deal with their day-to-day manifestations. In dealing with the demands of the day it is possible that the main trends, the broad sweep of developments, can be neglected or overlooked. If we are to develop policies to protect our long term interests, we must understand the nature of the challenge and the problems we face.

Governments do not have the advantage of developing policies on the basis of hindsight or at leisure. We must face the issues that emerge today; but we must do so on the basis of a keen appreciation of the momentum and direction of change which is the characteristic of the present world situation. It is no longer possible to identify issues separately, as having only a political, strategic, economic or social nature. The changing pattern of world development involves all these elements. The present balance between the super-powers is as much political and economic as it is strategic. The demands of the developing countries of the Third World are as much political as they are economic. A characteristic of the changing pattern which confronts us is the challenge to the values and traditional thinking of the past. Australia can look back on a past which brought it many advantages. We must, however, clearly distinguish between those values which have been central to the Australian experience and those which reflected particular circumstances and are now perhaps outmoded. We must preserve those fundamental principles of justice, liberty and democracy which form the main strands of our national fabric. At the same time we must recognise the need for the bold measures which changing circumstances require.

A major element in this process of change has been a shift in the pattern of relationship among the major powers. This pattern is now more complex and fluid. Although the two superpowers retain their overwhelming predominance in terms of strategic military power, new centres of political, economic and military power have emerged. Nevertheless, the grim reality remains that the United States and the Soviet Union each possess sufficient military power to destroy civilised life. The avoidance of general nuclear war and the establishment of a lasting peace remain the major tasks confronting the international community. All countries have a very great interest in seeing a balanced agreement reached in the Strategic Arms Limitation Talks- SALT- now being conducted between the United States and the Union of Soviet Socialist Republics. We do not discount the complexity of the issues at stake nor that the talks involve the vital interests of both sides but we remind the superpowers of their awesome responsibility towards the world community. The erosion of former supremacies has coincided with a period of serious strain in the established international economic system. This strain derives principally from the continuation of unacceptably high rates of inflation and unemployment and slow recovery in the major economies, together with the effects of the sharp oil price increases in the mid-1970s.

Despite great differences in their individual economic conditions, Third World countries have become better organised and more united in pressing for a new international economic order and for a substantial improvement in their economic condition. Developing countries will continue to participate in overall global economic expansion but it is unrealistic today to believe that they can still be satisfied in this way. In their view the present system offers little prospect of meeting their demands or of taking account of their needs and their desire for a greater role in international decision making. The slow-down in world growth has further reduced their confidence that their interests can be accommodated through the expansion of the present system.

The united approach of Third World countries has been influential in shaping the discussion of international economic issues. It has helped to create what I have repeatedly called a new international agenda. The need for reform is widely recognised. It is accepted that international relations have moved in directions which require a new and imaginative approach.

Third World demands are too frequently seen only in economic terms. But the issues go deeper than this. Developing countries are seeking not only a more direct role in the management of the world economy but also an extension of their political influence. They seek redress in all those areas in which they consider there is inequality between the developed and the developing countries. Similarly, they want to build a world security system which would reduce the military predominance of the nuclear weapons states and the major alliances. They seek a role in the international system suited not to their former weaknesses but to what they see as their present strengths.

International Economic Issues

The proposals for a new International Economic Order cover a wide range of specific economic questions- in particular, those relating to commodities, access to markets of developed countries, industralisation, transfer of technology, food and agriculture, problems of the poorest nations, problems of debt, aid and other financial transfers and institutional arrangements. There are, of course, various views on what the so-called new order should include and on what its shape should be. I want to make it clear that the Government is taking a determined and vigorous part in the negotiation of these broad issues and in the detailed discussion of the particular questions which such negotiation requires. We want to obtain practical and durable decisions which take account of the legitimate interests of all groups of countries and which hold a prospect of reasonable benefit for the world community in general.

The Government has naturally taken full account of Australia’s position and economic circumstances. Australia is a middle power with certain features of particular relevance to the present international situation. As a large continent with a comparatively small population in a region of developing countries, we are numbered among the industrially developed. We are rich in natural resources and in general productive capacity; we are a significant maritime trading nation to which communications with major allies and trading partners are of particular importance. We therefore have a strong, indeed a compelling interest in ensuring that international economic relations are so adapted as to function more vigorously and equitably.

Progress in the negotiation of international economic issues has been disappointing. For some time the Government has been concerned about the lack of positive results. The present impasse has arisen because the two key problemsslow growth rates in the developed economies and the need to accommodate the interests of developing countries- have been treated as distinct and separate processes. Recovery in the economies of developed countries has been regarded as a necessary pre-condition for the settlement of Third World demands. In my address to the Ministerial Council meeting of the Organisation for Economic Co-operation and Development in Paris last June I indicated that the North-South distinction had served to dramatise the issues but had now become too rigid. There were many different interests represented by the countries falling into both groups and meaningful international solutions would have to take account of these differences.

The Government believes that a fundamental re-appraisal of present thinking is required on the grounds of justice to the Third World and in the interests of the developed countries. Unless the developed countries reassess their policies we cannot expect to arrest the present drift in international negotiations. This does not mean all the demands of the developing countries can be met, nor that we support all their claims. However, there are areas where action would result in mutual advantage: Action which will help to restructure trade relationships could stimulate world economic growth. A fresh look at NorthSouth relations is needed. We should seek out areas of mutual interest and work for positive and concrete international action.

From our experience over the past 12 months, therefore, the Government has concluded that measures which may have worked in the past have not succeeded in the present situation. We believe that it is not enough to concentrate our effort only on the revival of economic activity in the industrialised countries. We must also find ways to utilise demand in the developing countries to encourage world economic growth. This should include the significant number of middle income countries, many of which have growing industrial sectors. We have always understood the concerns of these groups of countries to expand their overseas markets. An overall expansion of world trade would go a long way towards meeting the needs of these countries, of the more stagnant economies of the least developed nations and of the developed countries.

In recent years there has been much discussion of ‘linkage’ in international relations, mainly of course in relation to detente. What the Government is saying is that, whatever its merits in terms of detente, the concept of linkage is necessary and appropriate in approaching the two problems of world economic recovery and North-South relations. There will be greater prospect of progress if they are considered in conjunction instead of as entirely separate questions. With this in mind the Prime Minister (Mr Malcolm Fraser) and I recently visited Tokyo for talks with the Japanese Prime Minister and his colleagues on the need for a new approach to world economic issues. We canvassed the Government’s views on expanding world trade, particularly the need to involve developing countries. In talks with Mr Fukuda and in extensive discussions between officials we found a large measure of agreement on objectives. Japan welcomed the opportunity to consider possible areas for co-operation in our approach to world economic problems. The two Prime Ministers reached a considerable degree of agreement in their analysis of the world’s economic and trading problems and on the need for closer and continuing consultations. We found that the Japanese shared our view that growth in the economies of the developing countries could play an important part in the long term in the growth of developed economies.

So far I have spoken in general terms. I turn now to consider in detail some of the major items in these international economic negotiations. In the period since my last comprehensive statement on foreign policy in the House in March 1977 the Government has taken significant and practical measures to give direction and purpose to Australia’s role in these developments.

The Committee on International Economic Co-operation- CIEC- was a most important event and Australia welcomed the framework it provided for the examination of a remarkably wide range of issues. The Conference fostered greater understanding of the issues involved and created an atmosphere conducive to further dialogue. Achievement may have fallen short of expectations but there were positive results.

The Common Fund

The proposal to set up a common fund to finance buffer stock operations, designed to stabilise world commodity prices, is perhaps the most notable achievement of the CIEC. I am pleased to have played a part in its adoption at the CIEC Ministerial Meeting in Paris last May, particularly in seeking the agreement of our major Western trading partners. The Government had hoped that this decision would have led to more rapid progress in the establishment of the Fund. We were disappointed when the principal negotiating conference in the United Nations Conference on Trade and Development failed to resolve outstanding differences on the role and structure of the Common Fund. The Government attached considerable importance to the successful negotiation of the Common Fund and in the last 12 months we have been closely associated with moves to overcome differences and to facilitate progress. On the suggestion of the Prime Minister, the Commonwealth Heads of Government Meeting in London last June set up a technical working group of experts to work out what progress could be achieved within a reasonable time frame. Ministers from 32 Commonwealth countries met in London on 13 and 14 April to consider the report of the experts group and to promote efforts to find an acceptable basis for the resumption of the negotiations. The Government believes that this initiative has made a significant contribution to progress in the understanding of the attitude of all groups towards the establishment of a Common Fund.

In the interest of resolving outstanding differences the Government has re-examined the Australian position. At the Commonwealth Heads of Government Regional Meeting in Sydney in February the Prime Minister indicated that we were prepared to go a long way to meet the views of developing countries by modifying our position on points which had proved a stumbling block in earlier negotiations. In so doing we have moved ahead of the great majority of developed countries. There should be no misunderstanding on this score. Developing countries regard a successful conclusion of the Common Fund negotiations as a major test of the commitment of developed countries to further progress in the North-South dialogue.

The Government now accepts that the fund should have direct Government subscriptions as well as deposits from participating commodity organisations, and borrowings. We accept also that the fund could have a role in measures other than the financing of buffer stocks in stabilising the export earnings of developing countries. With our own experience in testing the merits of stabilisation we have always recognised the importance of stability in commodity markets and that the international market must be improved for the benefit of all countries, both consumers and producers. In our recent talks in Tokyo we found that the Japanese Government appreciates our concern in this matter. Both countries have agreed that our senior officials should consult to find ways of bringing together the various world views on this key question. The form and extent of direct Government subscriptions and the role of the fund in financing any ‘other measures’ remain to be negotiated. Nevertheless, we believe that Australia’s initiative is an advance towards the eventual establishment of a common fund.

The Government believes that the common fund negotiations can be advanced only if both developing and developed countries move beyond the rigid positions which caused the breakdown of the UNCTAD conference. We have urged other countries to modify their positions in the interest of reaching early agreements. Only by such a re-examination can the negotiations hope to progress.

Integrated Program on Commodities

In the same general context, Australia is an active party to negotiations under the Integrated Program on Commodities (IPC). Eighteen major trading commodities are being examined. The Government hopes that agreements reached under the IPC will stabilise trade in these commodities and will ensure a more equitable distribution of the benefits of trade.

Multilateral Trade Negotiations

The Government is concerned at the slow progress of the multilateral trade negotiationsMTN. We believe that the objectives of the MTN are to expand and liberalise world trade by substantially reducing or eliminating trade barriers. Australia is participating fully in the negotiations and stands ready to negotiate concessions in all areas of the MTN where it receives real and tangible advantages in return. For this to occur there would have to be substantial and improved proposals for the liberalisation of world agricultural trade in products of interest to Australia and from which we derive approximately 50 per cent of our export income. The Government has recently tabled an offer on tariff and non-tariff barriers and these will be the subject of negotiations over the coming months in the light of responses made by other countries to Australian requests.

The Government’s recognition of the developing countries’ economic potential has been demonstrated in the practical steps we have been taking. We have established official representation in important oil-producing countries with fast-expanding economies in the Middle East and North Africa. We have emphasised the economic- especially commercial- side of relations with many other developing countries. Earlier this year the Government signed a trade agreement with Brazil and special arrangements are being developed for improving Australia’s trading relations with the ASEAN group of countries. Honourable members will already have noted the significant commercial growth reported at the recent Australia-Korea ministerial talks on trade; and I have no doubt that a similar trend will be brought to notice when the Australian-Iran Joint Ministerial Commission meets in a few weeks’ time for the first time in Australia.

Third World Inquiry

The Government recognises also the need for a thorough examination of the interests and aspirations of developing countries. In accordance with our election undertaking we have set up a high level committee with its secretariat in my Department to conduct an inquiry into Australia’s relations with the Third World and to examine the implications of their demands for Australia’s national interests. I look to the committee to give particular attention to the policy options open to Australia. I view the inquiry as a matter of urgency and I have asked the committee to report to the Government within 12 months. The setting up of this committee is a unique development. It demonstrates the Government’s resolve to place Australia’s relations with developing countries on a firm and constructive basis and to increase the effectiveness of our participation in the negotiations on world economic issues. It is vital that we formulate guidelines for national policies which enable us to identify major trends and anticipate developments. The Third World inquiry will assist the Government to do this more precisely.

Development Assistance

The Australian Development Assistance Program will continue to be a major vehicle for our efforts to contribute to regional and international development. Resources provided through international and bilateral programs have an important role to play in realising the great potential for growth in developing countries. The Government has significantly improved Australia’s performance in terms of the transfer of real resources to developing countries. We have re-affirmed our pledge to work towards the aid target of 0.7 per cent of our gross national product. The initiatives we have taken have built solid foundations for the expansion of our program which will occur as circumstances permit.

Consistent with the Government’s recognition of the needs of developing countries, we have broadened the scope of our aid program. This year we have increased our support for multilateral agencies by nearly 50 per cent. One tangible result of the CIEC meeting in Paris was the decision by developed countries to support a special action fund of $US 1 billion for immediate assistance to the most needy countries. Australia has been in the forefront in finalising the form of our contribution of $US 1 8m. One half will be given as untied cash grants to the International Development Association of the World Bank Group. The other half is being made available in bilateral grants to needy regional and Commonwealth countries, for the purchase of developmental commodities, materials, equipment and services from Australia over the next two years. We hope that other governments will be no less generous in meeting this commitment. Our support for multilateral agencies also includes joint financing of projects with the Asian Development and World Banks. We are increasingly funding community development projects in association with specialised agencies of the United Nations including UNICEF, WHO and ILO. The Government has made real progress in ensuring that our development assistance is relevant to the needs of developing countries. Some 83 per cent of our aid is now untied, notably in regard to local suppliers in recipient countries and within the ASEAN group. Further, the Government is prepared to cover significant local costs for projects in countries in the South Pacific and Asian regions and in least developed countries.

An important objective is to assist developing countries to achieve self-reliance in areas such as food production and technology. As food shortages are expected to persist in the short term, the Government has undertaken to double present levels of food aid over the next two years. To consider ways of making Australian technology and skills more available to Third World countries, we have set up a Consultative Committee on Research for Development, chaired by Sir John Crawford. The Committee will assist the

Government to identify research projects suitable for implementation under the aid program. The Government has also drawn more on expertise available in the private sector. This has improved our capacity to provide developing countries with the know-how appropriate to the large-scale and diversified projects which we are supporting increasingly.

Energy

Central to the issues of economic growth and development and to the interests of both developing and developed countries are the world’s energy resources. As an exporter of energy, with an even greater role to play in the future with our reserves of uranium, coal and natural gas, the Government is taking a constructive part in international discussions on energy. We are supporting efforts to conserve energy, to explore new energy reserves, to develop alternative energy resources and to establish an effective international dialogue on energy questions.

Australia is participating in the working group on energy, which was established at the recent Commonwealth Heads of Government Regional Meeting in Sydney as the result of a joint initiative by India and Australia. The work of this group, concentrating as it will on alternative forms of energy, will be forward looking and could have considerable potential. Australia has, of course, also been active in international bodies involved in energy questions in pressing for the framing of effective international energy policies. We are at present reviewing Australia’s position in relation to the International Energy AgencyIEA. In the United Nations we took the lead in encouraging member nations to develop a forum within the organisation for the discussion of energy issues. Australia will continue to urge on member states the necessity for co-operation in tackling what is regarded by many as the most serious problem of the age- the need to adapt a world economy based on the high consumption of oil to one based on renewable forms of energy.

Nuclear Energy, Non-proliferation and Disarmament

With large uranium reserves Australia has a vital interest in the development and use of nuclear energy. The Government’s decision to permit the mining and export of uranium is consistent with our international responsibilities in regard to nuclear non-proliferation.

The comprehensive and stringent safeguards policy for uranium exports announced in May last year is designed to promote universal adherence to the Nuclear Non-Proliferation TreatyNPT. The Treaty represents a formal commitment to non-proliferation. Our policy offers a tangible reward- access to Australian uraniumfor those countries which have renounced nuclear weapons by becoming parties to the Treaty. Equally, our policy offers a tangible incentive to non-parties to adhere to the Treaty.

Last November the Government established an expert multi-disciplinary task force on nonproliferation and safeguards. The functions of this group, which is chaired and serviced by my Department, are to keep the Government fully informed of all developments, to support the work of our Ambassador-at-Large, Mr Justice Fox, and to co-ordinate Australian participation in international forums concerned with nonproliferation. The Government has also joined in renewed international efforts to strengthen the non-proliferation regime, including the important International Nuclear Fuel Cycle Evaluation INFCE. Through our co-chairmanship of one of the eight working groups and our membership of a further six, we are contributing fully to this study. Our object is to ensure that any measures eventually agreed upon in INFCE, while meeting energy requirements, are consistent with and contribute to non-proliferation objectives. Australia was among the leaders at the last session of the United Nations General Assembly in securing the adoption of a resolution which called on all states to co-operate in preventing the proliferation of nuclear weapons and to ratify the NPT or, as a minimum, to accept arrangements involving non-proliferation safeguards covering their entire fuel cycle. The resolution also expressed strong support for making International Atomic Energy AgencyIAEA safeguards more effective. We were also instrumental in the negotiation of a nuclear test ban resolution which attracted practically unanimous support, including the United States and the Soviet Union.

The Government believes that the forthcoming Special Session of the General Assembly on Disarmament has the potential to promote a new consensus on the principles and priorities for future arms control negotiations. We believe, however, that the Special Session should also play a major role in promoting nuclear arms control objectives.

Law of the Sea

Increased interest in the distribution of the world ‘s resources has focussed greater attention on the law of the sea, an area of special concern to Australia. The Law of the Sea Conference is an ambitious attempt to resolve a range of complex issues through multilateral negotiation. Given the nature of the issues and the disparate interests of the countries involved considerable progress has been achieved since the first session of the Conference was held in Caracas in 1974. Geographical factors have in many instances cut across developed /developing country lines. That distinction, however, remains at the root of some of the unresolved issues.

The resources of the ocean and deep seabed beyond the limits of national jurisdiction is one such issue. The United Nations General Assembly in 1 970 declared such resources to be ‘ the common heritage of mankind’. Developing states want to establish an international authority to exploit mineral resources on a commercial basis and to distribute the proceeds, principally to the benefit of developing states. Developed states, on the other hand, want to ensure that such an authority would not unduly restrict access to these resources by companies or instrumentalities of states with technology capable of exploiting them. A similar, though less clearly defined difference of interest has emerged over the rights of access of other states to the living resources of the economic zones of coastal states. A group of over 50 land-locked and geographically disadvantaged states, mainly developing states, has been pressing claim to such rights by making rights of access to the EEZ, the Exclusive Economic Zone, a quid pro quo for its acceptance of other provisions of the proposed convention.

It is clear that if a convention is to be widely acceptable the interests of all groups will have to be accommodated. The Australian delegation will continue to play an important part in the negotiations recently resumed in Geneva. The Government hopes that substantial progress will be made towards an acceptable, comprehensive convention. However, I recognise that final agreement may still be some way off. A major effort will be required at the present meeting to achieve a breakthrough on outstanding issues.

Antarctica

Another important issue concerns the future of Antarctica. The drive to develop new fishing grounds in the more remote areas of the world has been accelerated by recent developments in the law of the sea, especially the proclamation of 200 nautical mile fishing zones. Several countries have already begun to assess Antarctica’s potential in fish and marine living as well as non-living resources. Large-scale commercial harvesting of fish and krill in Antarctic waters is an increasing probability. The Government is convinced that the future of the marine living resources of the region is the most urgent issue requiring the attention of those countries involved in Antarctica. The Special Antarctic Treaty Consultative Meeting which the Government hosted recently in Canberra set out to elaborate a draft regime for the conservation of marine living resources. The meeting is preparatory to a further meeting to be held later this year, which, hopefully, will establish the regime. Most of Australia ‘s basic interests and policy objectives are accommodated in the text that emerged from the meeting. I refer, in particular, to our interest in ensuring that any fishing that does take place should be carried out under conditions which will protect the integrity of the unique ecosystem of the seas surrounding Antarctica. I would like to repeat what I said in the House on 10 April. The contribution of honourable members and senators who participated in the meeting was favourably commented upon by everyone to whom I spoke.

As a party to the Antarctic Treaty we are committed to the demilitarisation and denuclearisation of that continent and to ensuring that it is used only for peaceful purposes. As the power which administers a large sector of the continent we have a number of important national interests to protect. We must conserve the living resources of the region and the unique Antarctic environment. We must also ensure that Australia ‘s position in the continent is respected.

Commonwealth of Nations

Mr Speaker, in this survey I have, on several occasions, referred to the work of the Commonwealth of Nations. Trade, development and related matters naturally have a special priority for the Commonwealth, the majority of whose members are developing countries. The Commonwealth also provides a vital link between developing and developed countries. There is no area of international concern which does not touch one or another Commonwealth country directly and intimately. The Government attaches considerable importance to Australia’s membership because the Commonwealth is making a distinctive and valuable contribution to the search for agreement on many global issues. We believe that the Commonwealth association gives member countries a singular opportunity for sustaining and strengthening this process of negotiation. In some cases, such as the Common Fund, the Commonwealth has given a practical lead. That is why Australia proposed that a regional dimension should be added to the Commonwealth’s activities. The Government felt that the Commonwealth’s accumulated experience and its unique tradition of consultation and practical co-operation through informal discussion would enhance co-operation in the Asian-South Pacific region. As a result of the Government’s initiative the Commonwealth Heads of Government Regional MeetingCHOGRM was held in Sydney in February.

The meeting which was attended by all 12 leaders from the Commonwealth states of Asia and the South Pacific identified a number of regional problems. In addition to the consultative committee on energy to which I have already referred, a similar committee on trade matters, to be chaired by Australia, was set up. The establishment of these committees and also of working groups on the illicit drug traffic and on terrorism, demonstrates a commitment by the Heads of Government to assist one another in practical ways. The success of the meeting was demonstrated by the unanimous agreement by the participating Heads of Government to accept the offer of the Indian Prime Minister to host a second meeting in 1980. The CHOGRM is one of the most important international initiatives sponsored by the Government since we came to office. Australia will continue to be a source of support for the Commonwealth because it provides us with an effective channel for promoting the Government’s foreign policy objectives both globally and within our region.

Defence and Security

I have described the Government’s substantial contribution to the search for solutions to world economic problems. Our foreign policy also gives a high priority to the defence of Australia. While the Government does not foresee any immediate threat to our security we have introduced greater realism into defence matters. Internationally, Australia is firmly aligned with the broad objectives of the West and the Government has strengthened our alliance with the United States. This alliance is based on many shared ideas and assumptions. It is reinforced by very extensive co-operation between the two Governments and at the private level.

The ANZUS Treaty, which links us to the United States and New Zealand and, through this association to wider Western interests, will remain the cornerstone of our security. We consult regularly and extensively with the United States in areas of direct and substantial strategic interest to Australia. The Indian Ocean is one such area. The aim of the current talks between the super-powers concerning the Indian Ocean is to prevent the further build-up of their military presence, to stabilise the status quo and, possibly at a later stage, to reduce their present level. The Australian Government has been kept closely informed of developments in the bilateral talks between the two superpowers. At the invitation of the United States we have commented to them on relevant aspects of the talks. As an ally of the United States and as an Indian Ocean littoral state, we have a direct interest in this matter. As a result of our consultations with the United States we have every confidence that any Indian Ocean arms limitation agreement will not qualify or derogate from the United States commitment to Australia under the ANZUS Treaty or constrain its freedom to act in implementing that commitment.

Western Democracies and Japan

In my review of foreign policy in the House on 15 March 1977, I stressed the importance the Government attaches to strengthening Australia’s relations with the developed democracies- our neighbour New Zealand, the United States and Canada, Japan and Western Europe. Inevitably in a period of sluggish growth in the world economy and international trade, competition is heightened and the pressure for greater protectionism increases. The consequence has been that Australia has suffered from certain measures adopted by some of these countries with which our interests are so closely identified. The Government is making vigorous efforts to redress the imbalance in our trading opportunities with the European Community and to preserve and expand Australian markets in Japan and the United States and elsewhere.

Though this means frank speaking and hard bargaining, we have not lost sight of the basic community of interests which we share. If the present emphasis in our relationships is upon adjustments in our economic ties it is also our objective to strengthen our political links. The close association between liberal democratic states can withstand such disagreements. The reconciliation of differences on the basis of mutual understanding and compromise is central to our shared democratic experience.

Following the visit of the Prime Minister and myself to Washington last year, the Government has established extremely good relations with President Carter and his Administration. This was clearly evident during the just completed visit of Vice-President Mondale. The visit reemphasised the strength and cordiality of the relationship between the United States and Australia; a relationship which is solidly founded in the shared values and aspirations of the American and Australian people. The talks between Vice-President Mondale and the Prime Minister and other leading members of the Government ranged widely over most issues of international and regional interest. His visit brought home the importance of regular bilateral exchanges on issues of mutual concern. If ANZUS remains the centrepiece, our relationship has acquired new dimensions, more appropriate to the circumstances and demands of the present situation.

World security depends to a great extent on the willingness and ability of the United States to maintain its central role in international affairs. The United States also remains a focal point for much of the commercial activity and financial arrangements of the developed countries and of much of the developing world. Fluctuations in United States fortunes have important international repercussions. Confidence in United States strength and in its determination is a vital factor not only for the United States itself but for those countries like Australia with shared values and common interests.

Japan’s importance to Australia as an economic partner and as a regional power hardly needs restating. With complementary economies we are now partners in one of the largest trade flows in the world. Japan buys a greater share of our exports than the United States and the European Community combined.

During 1977 two serious problems developed in our commercial relations with Japan. These were differences over the long-term sugar contract and continuing difficulties in securing access for Australian beef to the Japanese market. The sugar problem was resolved on a basis acceptable to both sides. Negotiations on beef are continuing and successive increases in quotas for global beef imports into Japan have been encouraging. In the present difficult world economic climate such problems are likely to arise. In the circumstances it is essential that the level of understanding and co-operation between our two countries should be strengthened. There is no doubt that our recent visit to Tokyo has enhanced relations with Japan. The discussions represented a new level of maturity and mutual confidence in the Australia- Japan relationship.

The ratification in July last year and entry into force of the Australia-Japan Basic Treaty of

Friendship and Co-operation was another milestone in our relationship. The Treaty re-affirms our friendship and commonality of interest. It also establishes a framework for continuing cooperation. In June Australia plans to host a meeting of the Australia-Japan Ministerial Committee, an important annual gathering which brings together the Ministers of both countries responsible for foreign relations, trade and economic matters.

The Government has also given serious attention to our relationships with the European Community. During our visit to Europe in May last year the Prime Minister and I clearly registered Australia’s needs and interests in Western Europe. Subsequently the Government appointed a Minister for Special Trade Negotiations, whose duties relate largely to Europe. The Minister has recently concluded a second major series of discussions in Western Europe, the results of which are being carefully studied. The Government’s objectives are to mitigate the harmful effects of the Community’s policies on our agricultural exports and to develop Australia’s role as a supplier of raw materials, minerals and energy resources to the Community.

In the past 12 months Australia and New Zealand have developed a sharper awareness of the need for a united approach to the trading problems we are both experiencing. Perhaps, in the past, in the very ease of our relationship we have taken each other for granted. The recent visit of Mr Brian Talboys, the New Zealand Deputy Prime Minister, has brought to the relationship a better appreciation of our common interests. In talks at ‘Nareen’ on 19 March we agreed to undertake a joint examination of international economic relations and to work together to press for progress in this area. The Governments also agreed to more regular exchanges of parliamentarians and officials and to the establishment of foundations to increase the range of contacts between our countries.

Soviet Union

The Government has sought to place Australia’s relations with the major Communist countries on a less ideological basis. Consistent with this objective our relations with the Soviet Union are conducted in a pragmatic and harmonious manner. Trade continues to be one of the most significant elements in our relationship. The Soviet Union is a substantial buyer of Australian products and Soviet officials, with our encouragement, have promoted Soviet products more actively in Australia. We have a shared aim in encouraging scientific and cultural exchanges under existing agreements. We both have an interest in finding effective solutions to international issues such as the Law of the Sea and Antarctica.

At the same time it must be acknowledged that we differ with the Soviet Union on many international issues. We find some aspects of Soviet policy disturbing and we have registered our concern about these. As I will indicate later, Soviet activity in Africa has assumed proportions and forms which are bound to attract our attention.

Reliable estimates of Soviet defence expenditure over the past decade indicate a rapid growth. In 1977 Soviet defence spending exceeded that of the United States by about 25 per cent. While we do not discount the real defence needs of the Soviet Union, we cannot fail to be concerned at the apparent Soviet military build-up. I reiterate the Government’s hope that the two superpowers will be able to arrive at an agreement on arms control which will prevent any dangerous instability and halt the upward spiral in military expenditure.

Regional Relationships and Policies

I turn now to our regional relationships and policies, which together with our relationships with the Western democracies and Japan lie at the heart of our foreign policy. Our commitment to co-operation, to the fullest extent possible, with the countries of the Asian and Pacific area, has been a major theme in Australian policy for many years. Australia has a permanent national interest in the security and development of the area which will continue to have a high priority in the Government’s foreign policy. Effective relations with the five countries of the Association of South East Asian Nations- ASEAN- are essential to the Government’s continuing efforts to promote regional stability and economic development. The logic of our geographical position, and the economic and political vigour of these close neighbours, gives ASEAN a particular importance for Australia. We support the Association as an example of the best sort of practical regional self-help and co-operation. I have now visited each of the member countries and established close working relations with their leaders.

Since the Prime Minister’s visit to Kuala Lumpur in August last year for discussions with ASEAN heads of Government we have been working actively to implement the agreements about Australian-ASEAN relations made at that time. We have increased our forward aid commitments to ASEAN countries by $90m to $250m. Similarly, we have extended the ASEAN-Australian co-operation program by a further $10m to $15m for projects to be implemented jointly by the five countries. In addition to providing this assistance, the Government has taken steps to strengthen our structural relationship with ASEAN by creating machinery to promote greater ease and regularity of consultation. Pending final arrangements we propose to establish an ASEAN -Australia consultative committee, to be based in Canberra, to act as an ‘early warning system’ on trade and any other problems which emerge in our relationship. In the coming months we propose to host two major forums for the expansion of ASEAN ‘s trade with Australia- an ASEAN-Australia Industrial Cooperation Conference in Melbourne in June, and an ASEAN Trade Fair in October. We have continued to implement our program of economic co-operation with ASEAN in a number of development assistance projects. I should add that the Japanese and New Zealand Prime Ministers attended the post-ASEAN summit meeting in Kuala Lumpur in August 1977, together with our Prime Minister. The three governments recognise the important role that the developed countries can play in assisting in the development of their neighbours in the region.

Australia’s relations with Indonesia are one of the most important threads in the complex web of Australia’s foreign policy. We welcome the opportunity of working with President Suharto and his new Government to strengthen the already extensive range of contacts and exchanges normal between close and friendly neighbours. These have continued and in some cases grown despite disagreement over aspects of the Timor issue. On 20 January I announced the Government’s decision to accept East Timor as part of Indonesia. We hope that the Government’s action will facilitate settlement of some outstanding humanitarian issues, such as family reunion and the rehabilitation of Timor. We look forward to moves towards fulfilment of these objectives and to expand further the mutually beneficial ties that already bind our two countries. As I have stated before in the House, the Government will not turn away from this vital relationship.

There has also been a number of important developments in the South Pacific which, with South East Asia, is a region of direct and special interest to Australia. As a member of the South Pacific Forum the Government naturally gives a high priority to fostering co-operation in the region. The meeting of the Forum in Port Moresby in August last year, made two decisions of farreaching consequence. Member countries agreed to co-operate closely with each other in declaring 200 nautical mile fisheries or exclusive economic zones. The Forum also decided to establish a Regional Fisheries Agency to secure the maximum benefit from the living resources of these zones. Australia warmly welcomed these developments. Honourable members will recall that on 13 April my colleague, the Minister for Primary Industry (Mr Sinclair), introduced a Bill to amend the Fisheries Act 1952 extending the Australian fishing zone to 200 nautical miles around Australia and its territories. It will be necessary for Australia to delimit the fishing zone with the 200 nautical mile maritime zones with several of our immediate neighbours.

The Government has expanded Australian representation in the South Pacific. New posts have been opened in Apia in Western Samoa and in Vila in the New Hebrides. The number of independent countries in the region continues to grow. This year we will welcome two newly independent countries- the Solomon Islands on 7 July and Tuvalu on 1 October. We hope that the remaining territories will continue to progress towards independence in accordance with the expressed wishes of their people. In the past twelve months there has been a noticeable increase in the number of high level contacts between Australia and the countries of the South Pacific. Ministers have attended several regional meetings, including the South Pacific Commission in August last year. In July a parliamentary delegation led by Senator Durack travelled extensively throughout the region. The President of Nauru and the Head of State of Western Samoa and the Chief Ministers of the Solomon Islands and the New Hebrides, all visited Australia during the period. Officials of my Department held regular exchanges with their counterparts in the Fiji Ministry of Foreign Affairs. The Government welcomes the report of the Senate Standing Committee on Foreign Affairs and Defence on ‘Australia and the South Pacific’. The report, tabled on 13 April, reflects the growing awareness in Australia of the countries and peoples of the South Pacific.

Australia’s close relationship with Papua New Guinea has resulted over the past few years in a series of bilateral agreements and arrangements in the aid, trade, defence, civil aviation and other fields. The only major outstanding bilateral issue is the maritime boundary between the two countries and all other issues relating to the Torres

Strait. The Papua New Guinea Foreign Minister, Mr Olewale and I resumed negotiations in April and, as is known, we met again this month. The results of these talks have been most satisfactory and productive and I will soon be making a separate statement on these matters.

I have already mentioned that amending legislation, to proclaim a 200 nautical mile fishing zone, has been introduced into the Australian Parliament. Consistent with the South Pacific Forum declaration of 31 August 1977, Papua New Guinea on 30 March made a similar proclamation. In the area between Australia and Papua New Guinea these proclamations will be of restricted and interim nature, pending final decisions to be taken when the Torres Strait negotiations are concluded. The first national elections since independence were held in Papua New Guinea last year and saw the return of the Somare coalition government. The Australian Government looks forward to continuing and expanding the practical and warm relationship which we have developed with Mr Somare and his colleagues.

The Economic and Social Commission for Asia and the Pacific- ESCAP- is highly regarded by developing countries in the region. Honourable members will be aware that I led the Australian delegation to the 34th session of ESCAP, which concluded in Bangkok on 17 March. The session was devoted largely to a discussion of a new development strategy for the 1980s. I am pleased to say that Australia was able to play an important part in the meeting. A resolution which identified certain regional needs and guidelines for future action was approved. This, I believe, is a significant achievement for the Commission. It reflects the cooperation and understanding that have developed in recent years among members of ESCAP. As the Regional Commissions of the United Nations system will be given increased powers as a result of decisions on restructuring the economic and social sectors of the United Nations, taken at the United Nations General Assembly 32nd session, I would expect this process to be developed further in the future. There have been some particularly noteworthy regional activities undertaken by or through ESCAP. These include the Mekong Committee, comprising Laos, Thailand and Vietnam, which was finally reconvened in January 1978. The fourth member, Kampuchea, has so far displayed little interest in the Committee. This Committee co-ordinates the development of the resources of the Mekong River. It is widely recognised as a vital project for this part of South East Asia.

Earlier today I tabled my Department’s annual report, which covers the full range of Australia’s bilateral relations and activities overseas during 1977. However, before completing my remarks on our regional relationships and policies I propose to refer to our relations with two countries of importance to the Asian-Pacific region- China and India.

Relations with China show the steady consolidation that both sides of this House would wish to see. The visit last September by a delegation from the National Peoples’ Congress, led by Vice-Chairman Ulanfu was a significant indication of the progress that has been achieved since relations were established. We now deal with China in a large number of areas. The growth in our trade has been very gratifying. Record levels will be reached this financial year. China’s foreign trade is expanding and there are good prospects for continued growth as China pursues its goals of economic modernisation and growth. The Government welcomes the increasing number of Australians visiting China. The establishment of the Australia-China Council, about which I hope to make an announcement shortly, will further enhance our contacts and non-official exchanges. I would also like to note the valuable contribution made to relations with China by the recent visit of the Minister for Industry and Commerce.

Whilst there are clear differences between our two societies there are some important elements we have in common. The improving state of China’s relations with the countries of South East Asia and its declaration of support for the activities and objectives of ASEAN are encouraging evidence of China’s more positive attitude. This should favour the development of confidence and relieve some tension in the region.

The Government has sought to inject greater substance into Australia’s traditionally warm relationship with India. The Prime Minister took the opportunity at the Commonwealth Heads of Government Meeting in London in June 1977 and at the Regional Meeting in Sydney in February to have wide-ranging discussions on bilateral and global issues with Prime Minister Desai. Both leaders agreed on the desirability of strengthening bilateral co-operation in trade, scientific and agricultural research and regional energy requirements. Existing trade and science and technology agreements will provide the framework for expanding contacts in these areas. Invitations to the Prime Minister and me to visit India were most welcome and we look forward to making the visit at an appropriate time.

I regret that time does not permit me to discuss our expanding relations with the other countries of the West Asian region. We value the relations we have established with Iran, Pakistan, Nepal, Sri Lanka, Bangladesh and Burma and we will continue our efforts in these countries.

Areas of International Tension

I would not wish to submit a comprehensive statement on Australia’s foreign policy to the House without touching on some areas of international tension. In some cases there have been significant developments since my last report. In the past year we have seen the prospects for a settlement of the Middle East question fluctuate between the hopes inspired by President Sadat’s dramatic decision to visit Jerusalem in November, and the atmosphere created by the terrorist attack in Israel on 11 March and the subsequent Israeli incursion into southern Lebanon. It is to be hoped that recent developments will not jeopardise peace talks between the parties to the Arab-Israeli dispute. A United Nations force, UNIFIL has now taken up a position in southern Lebanon. The Government hopes that the force will help to restore the authority of the Lebanese Government in southern Lebanon and bring the security and normality for which the people of southern Lebanon have waited so long.

The Government’s view, which I outlined to the United Nations General Assembly last September, is that a settlement of the Middle East dispute, to be both just and lasting, should be based on the principles encompassed in Security Council resolutions 242 and 338. Any settlement will have to take account of the legitimate rights of the Palestinian people. The Government would support any settlement which was freely agreed to by the parties themselves in their negotiations.

There has been some progress in reconciliation between the communist and non-communist states of South East Asia. This development is to be welcomed and encouraged. Fighting has, however, again broken out in the area, this time between two neighbouring communist states, Vietnam and Kampuchea. The Government naturally regrets this outbreak of conflict and supports the concept of a peaceful, negotiated settlement. We do not take sides in a dispute which is primarily the result of long-standing mutual suspicions.

Australia’s bilateral relations with the countries of Indo-China also deserve comment. I have initiated high level contacts with the Vietnamese Government, last year with the Foreign Minister at the United Nations General Assembly in New York and more recently with a Vice Foreign Minister at the ESCAP session in Bangkok in March. These exchanges will, I hope, help to resolve some outstanding matters in our bilateral relations, notably the reunion of families separated by events in Indo-China. The Government has made representations to the Vietnamese Government expressing concern about the health and welfare of a respected Vietnamese clergyman whose continued detention is a matter of concern to many Australians. The Government continues modest aid programs in Vietnam and Laos. This year we have provided some food aid in response to international appeals following grain shortages in both countries.

The situation on the Korean peninsula at present gives no cause for immediate concern, although the potential for a rapid deterioration will remain until there is real progress towards a lasting settlement. The Government has welcomed assurances from the United States that reduction of its forces will be managed in such a way as to preserve the present military balance.

Events in southern Africa have reached a stage where the momentum for change is irreversible. The Government’s position has been consistently and clearly stated. We support all attempts to find peaceful solutions based on the principle of majority rule and human rights for all. At the Commonwealth Heads of Government Meeting in London last year the Prime Minister unequivocally reaffirmed this commitment. The Government, however, does not subscribe to the use of force in Zimbabwe or, for that matter, in any other country. Nevertheless, we realise that attempts to thwart black African aspirations can only play into the hands of extremists and those from outside the region who would exploit them for their own purposes. In our recent talks with Vice-President Mondale we expressed our support for the Anglo-United States proposals for a settlement in Zimbabwe.

The Government’s total opposition to apartheid has been placed firmly on record. More recently our position has been restated at a number of major international conferences, most notably at the Commonwealth Heads of Government Meeting in London in June 1977 and at the World Conference for Action against Apartheid which I attended in Lagos last August.

The Government has been concerned by developments in the Horn of Africa in relation to the hostilities between Ethiopia and Somalia. There has been a large build-up of Soviet and Cuban military equipment and personnel which has clear implications for the balance of forces in the region. It is regrettable, to say the least, that this build-up is taking place while the Soviet Union is engaged with the United States in substantive negotiations on arms control in the Indian Ocean. Now that Somali Government forces have withdrawn from Ethiopia the continuing presence of Soviet and Cuban military personnel can only hamper the search for peace, and we look to their withdrawal.

Human Rights

It is apparent from my references to southern Africa that the Government takes its human rights obligations seriously. This is a theme I developed in my speech to the United Nations General Assembly in September of last year and it should be placed firmly on record in this Parliament. Australia’s membership this year of the United Nations Commission on Human Rights, after a long absence of 22 years, indicates the importance the Government attaches to humanitarian issues.

In developing our position in the international debate on human rights, the Government has sought to ensure that Australia’s traditions and values are given full expression. I appreciate that the issues involved are complex and embrace a variety of social, cultural and political contexts. Given our geographical position we in Australia have a keen awareness of this. The Government believes that the rights of the individual should be given due recognition. We, therefore, support initiatives which will produce action where gross violation of rights has occurred. In recent years international attention has been drawn to serious human rights violations in Asia, Africa and South America. The Government is concerned about infringements of human rights wherever they occur. In summary, we are working to improve international machinery for protecting human rights and to promote support for the human rights standards set out in international instruments.

A practical illustration of the difficult choice we face is the tendency for some developed countries to introduce human rights criteria into decisions on the eligibility of governments for loans from international financial institutions. The Government considers that decisions on these matters should continue to be based principally upon economic and financial criteria. Wherever possible, loans should be related to the needs of the people in recipient countries.

This year member states of the United Nations will commemorate the 30th anniversary of the Universal Declaration of Human Rights which remains one of the international community’s enduring achievements. The Government is conscious that we have not yet ratified the Covenant on Civil and Political Rights. This is a matter we hope to rectify. Like most things, human rights begin at home. New legislation will shortly be introduced to give effect to the Government’s election commitment to establish a Human Rights Commission relating to Commonwealth laws.

There is continuing criticism that the Eastern European approach to human rights has been no more than formalistic This reflects disappointed western expectations about detente and the Helsinki accords. The Soviet Union and its allies have, nevertheless, been obliged to take human rights questions more seriously. Further action is required but the limited progress achieved should not be altogether discounted.

Refugees

Long-standing refugee problems persist; new situations have arisen. We have seen this in Europe, Africa, South America and the Middle East and more recently in South East Asia. IndoChinese refugees continue to arrive in Thailand, Malaysia and neighbouring countries to add to the number already there awaiting resettlement. Australia’s response to refugee situations bears directly on our foreign relations and on our standing in the international community. Statements by Ministers during the past year, particularly by the Minister for Immigration and Ethnic Affairs (Mr MacKellar) testify to the Government’s determination in association with other countries to develop an appropriate, consistent and humanitarian response to refugee situations.

Terrorism

This Government, along with many other governments, has for some time been concerned by the increasing resort to terror by groups in support of extreme political, social or economic objectives. Terrorism is a violent assault upon the freedom of individuals and the stability of the international system. In many cases it seeks to undermine free societies. All individuals and societies should be protected from the threat of such terror. One of the important results of the Sydney CHOGRM was the decision to set up a regional working group on terrorism. The work of this group should greatly assist countries in this region to take positive steps to guard against acts of terrorism. In taking these steps, the Government is conscious of its responsibility to achieve a proper balance between the requirements of security and the rights and liberties of individual citizens.

Drug Problems

Another problem of grave concern is the traffic in illicit drugs. The Government has increased its efforts to halt this traffic. The recent CHOGRM underlined the gravity of the situation and established a working group to examine further regional co-operation to tackle the problem. My colleague the Minister for Business and Consumer Affairs (Mr Fife) announced on 24 January the details of the comprehensive initiatives taken by the Government to contain drug trafficking into Australia. I have repeatedly expressed the Government’s concern at the number of Australians, particularly young Australians, being arrested overseas on charges relating to the possession of or trafficking in drugs. I repeat my warning that in many countries the penalties for these offences are drastic and much more severe than those in Australia. I again emphasise that Australian citizenship does not confer immunity from the laws of other countries.

Foreign Policy and the Public

I have appreciated the co-operation I have received from the media generally in promoting public awareness of the dangers of becoming involved with drugs overseas. The media, of course, perform a vital function in disseminating information, not only on specific issues such as drugs but also on foreign policy matters more generally.

It is important that the Australian public understand the changing nature of international relations and their consequences for Australia. As the Government looks for answers to the complex problems we now face, public understanding of and support for our policies will be vital. An effective foreign policy depends ultimately upon an interchange of ideas with an informed public opinion. In my speeches to a wide variety of Australian organisations and by other means I have emphasised these new and significant developments in world affairs and the Government’s view of their implications for Australia. It is equally important that the decision makers in countries of particular importance to Australia should have up to date information and a realistic appreciation of Australian policies and national interests. Our missions abroad have an important role in this function.

Conclusion

Mr Speaker, I have described in some detail the general issues facing Australia, the practical measures the Government has taken in the past year and those areas requiring particular attention in the future. I have sought to convey something of the magnitude and complexity of the international scene which confronts Australia. We can no longer rely on instinctive reactions to the increasingly complex and sensitive issues. We must maintain a high degree of professionalism and sophistication in our approach. Change is not always comfortable and adjustments can be made more easily if we anticipate the problems and develop policies to cope with them.

I have said that the prospect of change can be unsettling. The Government does not neglect those elements which give our national life coherence and continuity. We take fully into account the more permanent and enduring features of Australian foreign policy interests. Within the framework of change, the Government maintains an appropriate sense of perspective. In the course of this statement I have emphasised the importance the Government attaches to our links with the Western democracies whose basic values, traditions, way of life and social structure are similar to our own and to our regional policies and relationships. Together, these form the core of our foreign policy.

The Government is taking every opportunity to promote Australia’s views in the international discussions on the critical questions of world economic recovery and development If these negotiations are difficult, it is partly because their objectives are anything but simple. If agreements are to last, if they are to be effective, they must be worked out thoroughly and meticulously. If the process seems slow we can take comfort in the knowledge that change of this magnitude cannot and should not be wrought overnight. We often speak of historical changes with a peremptory kind of precision, as if they had covered no more than the space of a few years. If we do so, we lose the reality of history and we miss that most invaluable practical lesson, the lesson of patience. Hasty improvisation will retard our common end. We require understanding and a willingness on all sides to review attitudes and to compromise. After all good government is founded on compromise. We balance inconveniences. We give and take. We remit one advantage that we may enjoy another. In pointing to the need for patience and a spirit of compromise, I am not suggesting that we relax our effort. I suggest that the advisers to the Opposition cease treating this matter with the derision they do. I should have thought that a party that puts itself forward as a party of socialism and one which is allegedly interested in humanitarian ideals would have conducted itself through its advisers- they cannot answer me here- in a more restrained manner and not with the jollity they seek to project in the chamber today. I am disappointed at their conduct. If it causes them so much amusement, I repeat that good government is founded on compromise. We balance inconveniences. We give and take. We remit one advantage that we may enjoy another.

In pointing to the need for patience and a spirit of compromise I am not suggesting that we relax our effort. On the contrary, the Government’s will and its endeavour is directed towards the creation of a new momentum, a new commitment to restoring sound economic growth and to building solid foundations for a more equitable international economic system. This was the motive and theme of our recent talks with Mr Fukuda in Japan. It will continue to be a most important feature of our diplomacy.

Sustained and lasting international economic recovery is as essential for Australia as it is for the rest of the world. Greater opportunities to sell more of our produce in world markets will have a real effect in stimulating our own economic recovery. This is not a narrow or selfish national goal but one which recognises the greater interdependence of the world community. We, therefore, look also to the developing countries of the Third World. They have a significant contribution to make to any sustained and lasting world recovery. The alternative can only be increasing confrontation, bitterness and disillusionment as countries fight for a bigger share of the present world market.

Mr Speaker, I am confident that the Government, in the vigorous and determined pursuit of the goals I have put before you today, will have the support of this House and the overwhelming majority of the Australian people. I present the following paper:

Foreign Policy; A Year of Change and Challenge- Ministerial Statement, 9 May 1978.

Motion (by Mr Fife) proposed:

That the House take note of the statement.

Suspension of Standing Orders

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

That so much of Standing Orders be suspended as would prevent the Deputy Leader of the Opposition speaking for a period not exceeding 75 minutes.

Mr LIONEL BOWEN:
Smith · Kingsford

– I assure the House that I shall not need to speak in excess of 75 minutes; in fact I hope I shall speak for substantially less than that. The tenor of the concluding remarks of the Minister for Foreign Affairs (Mr Peacock) is that we should have patience. Indeed we should if we listen to the usual annual litany that has taken some 75 minutes to read. There was no jollity from the Opposition in listening to it. I am a bit confused as to what the Minister was referring to in relation to us accepting his statement in any sense of levity. We are very concerned as to what is happening in the international area and we welcome the fact that the Minister has made the statement. But we suggest to the honourable gentleman that it might have been improved if it had been a little shorter and had come to the point a little more quickly.

No one in the Parliament is unaware of the basic changes taking place, but rather than having a repetitive phrasing about hard times we would like to see a little more action. Without its trappings, the statement is a lot thinner. It contains some things that are worth while and positive, which we can support. On the other hand, some of the big sentences cover big gaps and some of the statements gloss over basic dilemmas the Government faces in establishing its policies.

Economic Issues

I will have more to say later in the day about the Government’s handling of international trade. For the present, I will say this: The Minister says the Government is making ‘determined and vigorous’ efforts, but a lot of what he says is already dated. He quoted what he said at the Organisation for Economic Co-operation and Development meeting in June 1977. He claims he played a big role at the Conference of International Economic Co-operation in May 1977, but the Government’s input was totally invisible at the time. He tells us demand in developing countries will help world trade, but does not show how those countries’ debt problems will be handled. He lists the concerns of the developing countries- and his list comes straight from the United Nations General Assembly Special Session declaration of 1975- when Labor was in office. He names modifications to Australia ‘s policy on the Common Fund and says the Government has tabled an offer in the Multinational Trade Negotiations, but nowhere is the impact on the Australian economy discussed and we have not been given the list offered in the MTN. Once again, it is a question of ‘trust me, I’ve just discovered the 1970s’.

Some of the general propositions in this speech could have been written about a decade ago. We recall hearing a former Prime Minister, when he was Foreign Minister, talk about a ‘shift in the pattern of relationships among the major powers’, such pattern becoming ‘more complex and fluid ‘. The opening few words of the Minister’s speech struck the same notes as the Australian Labor Party policy speech in 1972 - commendable but some 6 years late.

Points of Agreement

I make clear that we support a number of things the Minister has said. We certainly support the increased attention to the Third World- a central element of the foreign policy of the Labor Government, castigated at the time by the present Prime Minister, Mr Malcolm Fraser. I see that the search party appointed by the Prime Minister to look for the Third World is headed by the same person as has drafted the Minister’s speeches, including the one we have just heard.

Mr LIONEL BOWEN:

-I am thankful for that. We were going to give it a B-minus mark. We will upgrade that mark. This does not augur well for the Committee on Relations with the Third World. The Prime Minister has never released the terms of reference of the ‘Inquiry’. I have heard that the terms of reference reflect self interest and the objective of defence against threats from the Third World. The Minister asserts otherwise. Perhaps I should direct a question to the Minister for Defence (Mr Killen). We support the expansion of development assistance programs and hope that the Government will restore their growth to the pace Labor achieved. We support the maintenance of regular and extensive strategic consultations with the United States of America. Labor broadened the base of those consultations as part of the renegotiation of base agreements in 1973, and the present arrangements are based on the Barnard/ Schlesinger communique of January 1974. We are glad to see the continued growth of the relationship with the People’s Republic of China, for which the basis was laid with a communique signed on 21 December 1972, less than three weeks after Labor took office. We recognise the personal role of the Foreign Minister over the years, particularly in relation to Papua-New Guinea, the proximity of his views to our own, and the support he gave to our moving PapuaNew Guinea to independence. Let us make it clear at this stage that it was a Labor Government which activated that move to independence. If that had not happened we very much doubt whether independence would have been achieved by this time.

Nevertheless, I do not think we have quite the basis for a bi-partisan foreign policy. Not all of the principles on which such Labor policies were based have been fully comprehended. Not all of what the Government puts forward is acceptable to us. The kinds of problems we find in the economic area are equally visible in other areas. For example, we have been given a list of conferences which the Foreign Minister and others have attended or will attend. We admire their stamina. But attendance at events does not mean that the Government can claim credit for all that happened at them. I remind the Foreign Minister of his words:

Governments do not have the advantage of developing policies on the basis of hindsight.

Nor should the Government claim for itself the credit of achieving things at conferences when it had nothing of value to say. Let us look at what the Minister had to say on nuclear energy, nonproliferation and disarmament- nothing new.

Disarmament and Arms Control

During the period of the Labor Government, 1972-75, the major strides taken in Australian foreign policy included major initiatives which demonstrated clearly Labor’s commitment to international security, to war avoidance, to arms control and disarmament. Labor is committed now, as it was then, to Australia’s defence and security. We see that advanced greatly by measures taken to develop a more co-operative and secure international environment. The Fraser Government is a divided house on this issue, as it is on so many others. The rhetoric of the Foreign Minister suggests support for or even expansion of some of Labor’s foreign policies and disarmament policies. But the Cold War preoccupations of the Prime Minister are those of a man whose natural tendency is to confront and antagonise, to seek out conflict and to secure agreement, with other countries and among his Party colleagues, by bluster and bludgeon. The Minister for Defence has an unenviable record of announcing threats to Australia at breakfast and having to eat them for lunch. But despite what he and the Prime Minister have said about threats to Australia, they have done precious little to sustain defence forces on the basis even of past concepts, let alone demonstrate a capacity to review those concepts to meet future needs.

All over the world it has become evident that the escalating costs of arms and their effectiveness bring into question conventional approaches to defence. This has been a major factor impelling countries towards negotiation of their differences; towards negotiation to achieve mutual and balanced force reductions, and towards establishment of a better world order.

What has been the Government’s response? It has been confused, limited and negative. No substantial statement on matters related to arms control has been made in the Parliament since the Prime Minister’s statement on 1 June 1976. That statement did not advocate arms control: it was a diatribe against the weak-kneed which called up the ‘dogs of war’. The Foreign Minister came into the Parliament a year ago and gave a statement on foreign policy which said virtually nothing about arms control. I acknowledge to the Foreign Minister that he has made staff from his Department available to me for a factual briefing on these issues. But the Government is obliged to inform the Australian people, to make clear its views and to justify them.

We have heard a few words from the Government since April 1977 about nuclear arms control. That is, from the date on which the Government first heard and simplistically adopted President Carter’s argument that increased supply of uranium would contribute to non-proliferation objectives. That, however, is a record of distortion and I suspect there could be some prospect of deception. I leave the nuclear issue aside for a moment. The failure by the Government to adopt positive approaches and inform the Australian people of developments in this field must be brought to account.

Recent Developments

The fact is that the United Nations will hold a special session of the General Assembly beginning on 23 May to discuss disarmament. This is being hailed as the largest and possibly the most important meeting on disarmament since 1932. When will Australia be told about this by the Government? The fact is that Australia since last year has been participating with 53 other countries as a member of the preparatory committee for this Special Session on disarmament. What has Australia been contributing to this committee, and when will we be told about it? The fact is that a number of world leaders are going to attend this special session. Will the Foreign Minister attend and if so, what will he say? Or is he going to leave it to the Prime Minister once again?

These are matters of public importance. The Foreign Minister may have spoken on occasion in New York about the importance of disarmament; but his first responsibility is to this Parliament. Perhaps it is easier for him to win acceptance of statements in favour of disarmament from audiences in New York than it is for him to get them accepted in his own Cabinet or party room. Perhaps his general rhetoric in New York has no substance.

The Prime Minister, if he speaks to the Special Session, may tell it that during the years 1972-75, when Australia ratified the Nuclear NonProliferation Treaty and the Seabed Arms Control Treaty, when we also sought membership of the Conference of the Committee on Disarmament, and when we participated in the first Review Conference on the NPT: ‘Lack of realism inhibited Australia from the constructive role open to us.’ That was what he said on 1 June 1976 about what the Labor Government did in this area. He went on to say:

A Government does a great disservice if it encourages acceptance by the people of an unrealistic view of the world in which they live.

Nothing has been said since to suggest that he has changed his attitude towards active pursuit of disarmament and arms control. He regards positive steps to arms control and disarmament as a disservice to the nation. It will be interesting to see what reaction he may get from the United Nations General Assembly. He has not, of course, been inhibited from preaching economics by the unique outdatedness of his views, nor has he avoided saying the wrong thing at the wrong time or in the wrong place.

Progress with arms control negotiations

The United States and the Soviet Union continue to pursue agreement on strategic arms limitations talks; for a comprehensive nuclear test ban treaty; for mutual restraint of forces in the Indian Ocean; for control of chemical weapons; for control of weapons designed for use against satellites, and so forth.

Despite the view of the Prime Minister that the United States should strengthen its military resolve and not be trapped by arms control negotiations with the Soviet Union, these negotiations have gone ahead and let us hope and trust that they bear fruit. The commitment of the Soviet Union to the negotiations is clear. The commitment of the United States is clear. The President’s capacity to convince all the members of the United States Senate may be less clear. In matters such as these, however, we hear the Government claim that it is, once again, the party which preserves and possesses a special relationship with the United States and which is closely in accord with United States policies. This is not really the position. A progressive Administration is in office in the United States. The Fraser Government claimed close identity with the previous United States Administration’s policies. But so many of the Ford Administration’s policies towards international security and disarmament have been reversed by the Carter Administration that claims by the Prime Minister to continued policy identity with the United States are, without positive confirmation, empty. The fact is that now there is negotiation and prospect of agreement on these major issues, the Prime Minister has turned his attention to trade and economics, where there is currently more room for his confrontational style, although Australia’s interests in trade and economics are equally damaged thereby.

Indian Ocean

One area of immediate concern to Australia is the Indian Ocean. In the Indian Ocean there have been for six or seven years, proposals for a Zone of Peace. The Ford-Kissinger Administration in the United States resisted the Labor Government’s urgings for negotiation with the Soviet Union on mutual restraint in the Indian Ocean area. The Carter Administration has entered into negotiations with the Soviet Union for mutual restraint of forces in the Indian Ocean. Honourable members will recall that the President’s announcement of the opening of talks on demilitarising the Indian Ocean took our Government completely by surprise. It is not the first time that there has been this unusual misunderstanding despite the alleged intimacy between Presidents of the United States and Prime Ministers of Australia. We have even had some miscalculation as to surnames, and I understand that recently on the occasion of an introduction, the name Malcolm was supplanted by the name John.

Information on those negotiations has been made public in the United States, but not in Australia. The Australian Government claims to be in close consultation with the United States Government on the details of negotiations, but we are told nothing of what the Government has had to say about bases, about ship types, about ship numbers, about military aircraft and so on in the Indian Ocean. We have a right to know whether the Government ‘s role in this is encouraging or discouraging restraint and arms control. We suspect it could be the latter.

Nuclear Non-Proliferation

On the question of nuclear non-proliferation, the Government frequently argues that export of uranium is essential to non-proliferation. There is some weight to the argument that an abundant supply of uranium might slow down or render economically uncompetitive, the dangerous new steps in the nuclear fuel cycle of reprocessing and the breeder reactor. However, that case for uranium export requires qualification and measurement against alternative risks. The Government brushes aside or fails to address both the qualifications and the risks in pursuit of export earnings. Export earnings are important but must be measured alongside the risks of destruction of the human race and civilised society as we know them. In the nuclear area, the Government is using simplistic claims of disarmament benefit to justify pursuit of exports and to override the wider issues of safety, security and environmental damage which issues are daily appearing less and less solvable. However, to argue with the Government on its own ground, exporting of uranium could only benefit non-proliferation if certain other criteria were satisfied: Supply would have to be assured. How does the Prime Minister assure supply if he is using yellowcake as a weapon of trade war with the rest of the world? Safeguards would have to be adequate. What, for example, has the Government had to say about the Special Safeguards Implementation Report to the International Atomic Energy Agency. Board of Governors in September 1977? Has it sought to suppress or secure release of this document? It said that agreement by a country to subject its nuclear activities to I.A.E.A. safeguards did not necessarily assure that adequate material control and accounting measures were applied. The Government has not made clear what, if anything, it is doing to meet this problem, or to secure publication of the report. A lot more than safeguards would have to be established. Indeed, the safeguards systems in force internationally allow any country lawfully to bring itself within weeks or days of assembly of a weapon, by allowing the stockpiling of weapons-usable material in national hands. We do not know the terms of the Australian Model Safeguards Agreement, despite repeated requests in this Parliament.

The Foreign Minister protests that we need know no more than what the Government said last August. But it is what was not said then that is of greatest interest. What are the circumstances in which the Government would permit enrichment or reprocessing? On the answer to that rests the whole policy. Does the Government allow Australian uranium to be made into any weapons-usable material and kept in national hands? Apparently it does. Has it advocated or proposed keeping such material out of national stockpiles? Clearly it has not. These are basic questions to which the Government must respond if its policy is not to be thought ill-founded in this area, as well as in the areas of safety and the environment. These are basic concerns of the United States in its non-proliferation policy with which the Government claims identity, but without justification. It is also now clear that, whereas the Government claims identity with the American line of development on nonproliferation policy, other countries, notably Britain, with Germany and France, all of which have powerful nuclear industries, are pulling in other directions. They seem to be committed to nuclear power at any cost and by right, rather than to nuclear non-proliferation by restraint upon the material produced in their nuclear fuel cycles. And yet it is to these countries that the Government is most urgently pressing to export uranium. First it says it does so to prevent nuclear proliferation; then it threatens not to do so for reasons of trade. By consistently refusing to make available to this House the Model Safeguards Agreement- the minimum statement of the conditions of export- it has failed to provide any substantiation for its claim that exports of uranium can assist non-proliferation.

It is not good enough for the Government to claim that it stated its policy in May or August 1977. The world does not stand still. A number of developments since August cast serious doubts on, or require further development of the Government’s policy. The International Nuclear Fuel Cycle Evaluation began in October 1977, but we have had no report from the Government since that date on what it has had to say in that regard. The Government uses the label as an assurance that at some future date the problems of non-proliferation will be solved. INFCE is in the hands of the nuclear industry establishment. How can that be? The decision by the United Kingdom to proceed with reprocessing at Windscale shows the disregard of one major country to which the Government would export uranium for non-proliferation concerns about such operations. The deterioration of relations between the United States and western European countries, including the suspension of the United States supply of enriched uranium to EURATOM countries, reflects a division on nonproliferation policy which can be resolved neither by bilateral safeguards agreements nor by uranium supply. When will the Government address these problems and provide the Parliament with its views on them? I suggest the problems are too hard for the Government to address and the answers to them would reveal the shortcomings of its ‘rush to export’ policy, which is its policy at present.

The neutron bomb

Recent publicity given to the so-called enhanced radiation warhead’ or ‘neutron bomb’ has highlighted the moral dilemma of the United States Government in considering whether to deploy it. The prospect of France acquiring this weapon highlights the danger of its acquisition by more governments. There is no sign of moral dilemma in the Australian Government, although this Government has impressed so firmly upon us all the need for Australia to focus its attention on the North Atlantic and Europe in strategic matters. That is another matter which shows up the Fraser Government’s preoccupation with armament and confrontation rather than security, arms control and disarmament.

The fact is that this weapon, for which military establishments are pressing while nearly everybody else is urging that it should not be developed or deployed, poses several major risks to humanity. Firstly it is, with its emphasis on wholesale, sudden and indiscriminate destruction of human life while avoiding damage to property, utterly contrary not only to moral principles but also to the tenuous but important body of law developed over the last 100 years for the protection of humanitarian rights in armed conflict. Secondly, because it is so tempting a weapon to the battlefield commander, it is a real threat to the nuclear threshold. To this extent, it is a weapon of different character and strategic consequence from the thousands of other nuclear weapons in the European theatre. Let us keep clearly in mind that, whilst many nuclear ‘tests’ have occurred, no nuclear weapon has been used in war since August 1945. In August 1945, only one country possessed nuclear weapon material and much of the stockpile was used in the bombing of Hiroshima and Nagasaki. Now five countries, perhaps more, have nuclear weapons and there are perhaps over 20,000 weapons in existence and far more material at hand, The use of any one nuclear weapon would break down the inhibitions on the use of more of them. No sane defence planner believes that the use of nuclear weapons, once begun, can be held to a limit. Thirdly, how can we convince other countries that they should have no nuclear weapons while nuclear powers develop more and more dangerous nuclear weapons? The neutron bomb is especially a risk to proliferation because its whole purpose is to improve operations against conventional forces- that is, non-nuclear forces.

It is thus a direct potential threat to non-nuclear states and an incitement to them to develop nuclear weapons. Why has the Fraser Government nothing to say on this issue? Because, once again, it does not accept basic principles in regard to arms control and disarmament. To express concern about the neutron bomb is not in any sense to condone the presence of, or fail to criticise, the massive weapons against which it might be used. But if there is any essential moral basis to the defence of the West it is that ends do not justify means.

Comprehensive Test Ban

The testing of the ‘neutron bomb’ illustrates the danger of all testing, leading as it does to new nuclear weapon powers or new and more dangerous weapons in the hands of old nuclear weapon powers. That is why the Labor Party has consistently stood against further testing in all environments, why it toughened the Australian position against France in 1973 and why it took the lead in the United Nations in arguing for a comprehensive test ban. I am glad that the Government retained that approach in the United Nations. I am also very glad that real progress is being made in discussions between the United States, the United Kingdom and the Union of Soviet Socialist Republics on a treaty to achieve a comprehensive test ban. There is room, however, for greater Australian initiative in pressing these nuclear powers and others to agree on such a treaty.

The Need for National Initiative

I urge the Government to look for such initiative. Too much of its foreign policy consists of asking questions of other governments. Too often it only gets beyond asking questions when the Prime Minister intervenes in some erratic way to push Australian policy or other countries’ policies in unpredictable directions. The Government has failed to inform the Parliament and the Australian people about the Special Session on Disarmament. It has failed to define the issues arising at the Special Session. It has failed to take initiatives when it must do so- not for the sake of the Prime Minister’s repertory experience, but for national security. When the Government does that and makes its policies clear and clearly argued, it may secure national support and certainly support from the Opposition.

Energy

On the broader questions of energy, the Foreign Minister makes a variety of claims to support a variety of international efforts. Perhaps some efforts might be directed by the Government to a domestic energy policy. As to the International Atomic Energy Agency, the Government might give us a chance to hear its argument before it announces any decision to seek membership.

Law of the Sea

On the law of the sea negotiations, the Minister’s statement shows no recognition of the very real possibility that the conference is failing. What preparations is the Government making for that contingency?

The Commonwealth/Terrorism

We are also deeply concerned about the way in which the Prime Minister reacts to acts of violence, which are not necessarily acts of terrorism. The Mark report was severely critical of the callout of the troops following the Hilton Hotel bomb outrage. The Prime Minister would do well to take heed of that criticism. Australians want security from terrorism; they do not want a Prime Minister who rides roughshod over civil liberties and who has a dangerous tendency towards militarism.

The Opposition has always had a high regard for the Commonwealth, but we express strong reservations about the Prime Minister’s use of the Commonwealth as a stage for the projection of his own minor image. This relates to what the Minister had to say about terrorism. A terrorist requires a target. Any person who engages in such excessive pomp and who resents such a confrontational image must have regard for the extent to which he encourages those on the fringe of society into acts of lunacy, violence and folly. Folly breeds folly: Confrontation calls out confrontation. Perhaps the Prime Minister cannot change his character, but he ought to moderate his style if he is seriously concerned about extremism and violence.

Western Democracies and Japan

The greatest difficulty in responding to a statement on foreign policy arises from the fact that so little foreign policy is now left to the Foreign Minister. In looking at his statement, we have to note that there are some policies which have been forced upon the Foreign Minister.

But we also must beware the quantities of rhetoric which may mean little or have little to do with prospective actions by the Government. We need to look at the record to see what the Minister’s statements amount to. In March 1977, he told us that the superpowers were losing control of the international agenda, that ideology was losing its potency and that there was a prevalence in the world of pragmatism, scepticism and dissent against which we had to map the future.

The first tasks listed were to consolidate relations with Japan, remove uncertainty from the Government’s dealings with the United States of America and strengthen ties with western Europe. If that was the map the Government had a year ago, obviously nobody showed it to the driver. After the failure of the Deputy Prime Minister (Mr Anthony) in March, the Prime Minister and the Foreign Minister had to go to Japan in April to re-apply some cosmetics to the relationship, carefully avoiding discussion on subjects of direct and immediate concern to Australia. The Foreign Minister said:

With complementary economies we -

That is, Australia and Japanare now partners.

I draw his attention to the following statement in the Sydney Morning Herald yesterday:

The present strains in the relationship should end once and Tor all the myth that complementary economies have a better than average change of interacting without friction.

We need a more refined analysis of this relationship than the Minister offers. The Japanese Government is clearly moved by concern for the Japanese worker. The issues between us are often those of whose workers are advantaged by what action. Let us not look goggle-eyed at the size of the relationship; let us subject it to proper scrutiny. As for the ‘new level of maturity and mutual confidence’ in the relationship with Japan, I suggest that we have heard that so often that it sounds like a geriatric encounter group.

The efforts by this Government to reassert its claim to relationship with the United States of America is also damaging over the long term to what ought to be an open and equal relationship between forward-looking democracies. I was pleased to hear that the Minister’s discussions with Vice-President Mondale were cordial. I assure him that our discussions were warm and relaxed. But we have not heard much about what progress might have taken place. I think, in fact I believe, the Vice-President was anxious to know what action the Government might be taking to assist him in his Congress deliberations later this year.

The relationship with Europe, which the Foreign Minister said he would nurture, has, of course, been subjected to an exercise in bullying which can only be damaging to our long term interests. I will speak later about this aspect. In fact, of course, the priorities and strategies of this

Government are dependent on what comes into the Prime Minister’s head daily.

Union of Soviet Socialist Republics

I cannot accept the Minister’s assertion that ‘relations with the Soviet Union are conducted in a pragmatic and harmonious manner’. The Prime Minister, the Minister for Primary Industry (Mr Sinclair) and many other members of this Government have a pathological incapacity to come to terms with the Russians. The principle behind the Minister’s statement is correct. We ought to deal fairly with the Soviet Union. The fact is that this Government will not and apparently cannot. It has a 100 to 1 trade advantage and cannot appreciate that by seeking to demonstrate a willingness to correct that imbalance somewhat it will open up great opportunities for Australia.

The Minister for Primary Industry amply demonstrated this Government’s insensitivity to Soviet relations on 8 April when he chose the transit lounge at Sydney Airport as the venue for talks with the Soviet Fisheries Minister: It was a display of churlishness that the Soviets treated as a clear snub.

So far as Soviet activities in Africa are concerned, may I express a vote of confidence for some of the leaders of African governments. They are not dominoes. In 1975 I met Nyerere and Kaunda at the Commonwealth Heads of Government Conference in Kingston. They made it very clear there that because they had not been able to get any support in the past from governments such as that in Australia they could see no alternative but to resort to arms and perhaps seek Communist support to solve the problems of the black man in Africa. I have no doubt that that will be why they act to protect their national interest.

USA and USSR

I note that in a reference by the Minister to the United States of America he said that ‘world security depends to a great extent on the willingness and ability of the United States to maintain its central role in international affairs’. That may be so, if one takes the quotation out of context. But I look at this in the context of the Prime Minister’s wild and warmongering statement of June 1976. At that time, he was lamenting the restraints imposed on Dr Kissinger by the United States Congress and was worried about the United States’ ‘will to lead’. I remind the House that if Dr Kissinger had had his way and not been opposed by Senator Dick Clark, a Democrat, and others in the Senate Foreign Relations

African Affairs Sub-Committee, Dr Kissinger would have led the United States deep into a secret war in Angola in 1 975.

There is some confirmation of that fact in the Sydney Morning Herald this morning where one sees reference to CIA blundering stupidity in being involved in what has been called the secret war in Angola.

I look at the history of that part of Africa since then. It is conceivable that such an involvement could have led to pressures on Australia to join in a widening racist war in southern Africa. Again we could have had Australian conscripts abroad, this time in an even more futile war that would be far more damaging to our global interests. Remember Vietnam. That is a war in which we should never have been involved. If there had been a Labor government in this country in the 1960s we could have kept the United States of America out of that war. Liberal Prime Ministers of this country have always sought to commit the United States as far abroad as possible. I urge the Government to recognise the folly of such an approach and realise the inconsistency with some of its more enlightened policies, as towards racism in southern Africa. The test of policies on race, however, is not one of posture, but of recognition of the independent capacity and judgment of peoples of another race.

Human Rights

The Minister’s statement on human rights is essentially one of rhetoric. He said that black men have human rights if they live on another continent at a range of 10,000 miles. Let us see those rights in Queensland and let us see that policy at work in relations with South East Asia. We must bear in mind that this Government’s interest in human rights resulted directly from the election of a United States President with a concern for human rights. We must be concerned about human rights issues in foreign policy because as we become immune to abuse of human rights in other countries, we will grow more insensitive to abuse of human rights in Australia. We have on the one hand a government internationally posturing on the question of human rights; on the other hand, it is not prepared to take the necessary action here in Australia for the protection and preservation of human rights. Australia not only has the power under the external affairs power to provide judicially enforceable human rights–

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– Not privileges but rights. Also it has a responsibility under the International Covenant on Civil and Political Rights to provide such remedies. Our membership of the United Nations Human Rights Commission only heightens this responsibility. The Minister asks who wrote this. Does he want to look at the minutes of the Premiers’ Conference last year when -

Mr Peacock:

– If you don’t do anything you are negligent; if you do something unilaterally you are posturing.

Mr LIONEL BOWEN:

-Just a moment. You are posturing in the United Nations. When it was put by one of your own Ministers at the Premiers’ Conference that we should legislate in this field to protect human rights, Bjelke-Petersen said ‘I won’t have a bar of it.’ So we have no legislation. People are gaoled throughout the length and breadth of Queensland for seeking to exercise the rights you loudly proclaim in the United Nations. Yet you say it is not posturing. When we speak of the need for the protection of human rights in Australia, we are speaking about enshrining minimum rights- minimum democratic rights, minimum legal process rights, minimum prohibition of anti-discrimination, minimum rights of freedom of speech, thought and religion and freedom of assembly and association, and you have not got it in Queensland. Parliaments may add to and expand these rights, but they should not subtract from them. The Minister said in his statement that ‘the Government is concerned about infringements of human rights wherever they occur’. What he should have added was ‘provided they occur on the other side of the world ‘. That is not simply an assertion on my part. The Prime Minister himself told the Parliament as much on 10 April in answer to a question I asked him. He said, in relation to human rights under State laws:

If the honourable gentleman wishes to establish the circumstance in which he would have this Government responsible for matters that are properly the responsibility of other Australian State governments, then he is advocating a course that this Government would not want to pursue.

I notice the Minister is silent. That is the point; he is not running the Government. In other words, the Prime Minister was saying that States rights are more important than human rights. It makes the high-sounding words of the Foreign Minister seem rather hollow. It is of great regret that human rights have increasingly been suppressed around the world and particularly in our own neighbourhood. But failure by the Government to express its regret is fairly typical of its general approach to our neighbours. Australia is too widely known as a country without an opinion, the last to cast a vote on almost any issue and the last to come up with new, positive ideas on international questions. This Government spends a lot of time at international meetings, but it is rarely clear to the Parliament, the people, or even other countries, whether Australia has anything new or of substance to offer. We are known too much as the government that always fits in. We do not, of course, need to be rude to our neighbours or others, but I believe we must show more spine, more spirit and more respect for our own national self-interest, and greater commitment to clearly stated principles. It is not to press for militancy to suggest that a more principled approach would produce in other governments a greater respect than we enjoy at present.

In responding to criticism of its performance on the Timor issue, the Government has sought to say that the die was cast before it took office in 1975. Let us get the facts straight: It was after this Government came to office that Indonesia invaded East Timor. Since that original invasion took place, wide-spread atrocities have taken place in Timor. In spite of the Minister’s undertaking on 13 April to tell me that other Governments have recognised the incorporation of East Timor into Indonesia, he has come up with no answer. It is contrary to fundamental international legal obligations of the Government that it should in such a way accede to an act of blatant aggression. The plain established fact is that Indonesia has engaged in a gross and consistent violations of human rights in Timor which ought not to have been condoned as they have been.

The Minister knows this subject is of great concern to the Australian people. The Minister is aware also that prior to the elections last month in Indonesia, several hundred students were arrested and that over two hundred such students remain in gaol, apparently without charge and without trial. I advise the House that the Minister was approached by a national student organisationthe Tertiary Catholic Federation of Australiaon 5 March, 6 April and 25 April about this matter. That organisation asked the Government to use its good offices and influence with the Indonesian Government to request that those detainees who have sought merely to express their conscience by peaceful means be released from detention immediately and that any other detainees be tried immediately. The Minister has not replied to that request. I am not surprised, because, as honourable members well know, he has failed also to meet his commitment to bring in legislation to close the Rhodesian Information Office and the Croatian Embassy.

The refugee question is related to human rights. Leaving aside the Minister’s generalisations, however, I ask the Minister why he has not indicated what the Government will do about the people in gaol in Darwin, against whom there is apparently evidence of piracy and of disposing of the crew of the boat known as the 1028? We are not without compassion in the case of genuine refugees. But it is up to the Government to provide more, and more substantial, information about the individuals concerned. We cannot trust the Government’s judgment otherwise. We see these strange and disturbing developments in the right-wing in the Liberal Party.

Drug problem

None of us can be unaware in our electorates of the growth of serious problems in relation to drug trafficking and drug abuse. I suggest, however, that once again the Ministers are likely to be guilty of grand-standing. I urge the Government to see the human side of the problem. Youth unemployment sees young people out of the house with a choice between beer in the pub or grass in the park. The need for money leads to trafficking in drugs. Job creation might be a lot cheaper and a lot more effective than a squadron of surveillance aircraft ai $15m each. If the Government had the courage to change the laws so that taxation returns could be subject to stringent safeguards, of course, be examined we could readily ascertain where the accumulation of wealth is occurring and then pinpoint an involvement in crime, and might find a few of the drug runners and others who have made fortunes out of their criminal activities which have inflicted misery on others. Clear evidence of this has been brought to light before the New South Wales Royal Commission. People have accumulated substantial assets because of their involvement in drug activities. It is not always possible to penalise the unfortunate person who has heroin in his possession because frequently that person is an addict. It is no solution to the problem to send him to gaol. We should look for the masterminds who have the money and deal with them.

In respect of foreign policy there have been many years of bitterness and division between ourselves and the non-Labor parties. There could be great advantages in consensus on foreign policy, but this has not proven possible for most of our history. The Fraser Government has chosen to adopt many of the policies we introduced between 1972 and 1975 but I do not believe this provides a basis for consensus because, while the present Government has taken on some of the trappings of our policies, we are still far removed in principle in regard to the basic driving forces and the perspectives of our policies. Labor foreign policies have been and remain committed to a positive view of the future and the advancement of Australian national interests. I do not question that we live in a difficult world, in military as well as economic terms. We all know that. The question is: How do we approach problems and solve them? Do we preach pessimism; do we seek to encourage conflict; do we call for greater armament, as does the Prime Minister? In this regard, there is a broad similarity between the Prime Minister’s approach to international and national issuesneither is constructive.

I do not propose today to take up issues to which we will give priority in Government three years from now. I want to emphasise some particulars that distinguish our policies from the Government’s policies. I do this to show that we have a lot to offer. Firstly, between 1972 and 1975, we removed from Australian foreign policy the dark shadows of the cold war. We established relations with the real government of China; we took matching steps to improve communications with Moscow; we recognised the existing governments in North Vietnam and North Korea. The Fraser Government has not backed away from diplomatic relations with these countries, but it has upset the balance of our relations with the U.S.S.R. and China because of the Prime Minister’s anti-Soviet inclination. We see no purpose in taking sides with either of these two major powers. We need good political and economic relations with both.

Secondly, we put Australia’s relations with the United States on a proper and equal basis. The Fraser Government has, as is the inclination of non-Labor governments, claimed monopoly ‘ownership’ of relationships with the United States. That damages our national, political and economic interests and is also I believe resented by many intelligent Americans, as well as Australians. The Labor Party is no more an antiAmerican party than it is a pro-Soviet party. We stand for fair and equitable co-operation.

As well, however the claim of the Fraser Government to identify with American foreign policies is a false claim, if not a self-delusion. For example, the Fraser Government is out of step with the United States on human rights, Indian Ocean arms control, and nuclear nonproliferation policy, to name only three areas where it claims close identity with American policy.

In South East Asia we see the emptiness of the Fraser Government’s line. The Government has boasted in rhetoric of its superior relations with the Association of South East Asian Nations but it has found no real answers to the basic problems in economic relations with our neighbours. This problem shows up very sharply in the Timor issue. The Government’s handling of the Timor issue reflects a style of acquiescence in Australia’s dealings with South East Asian countries and others. Lacking a clear base of principle, other than to ‘be friends’ with neighbours, we wait upon their opinions. Those countries know what to expect from this Governmentbasically, nothing but weakness. This does not mean that we want Australia to cast a vulgar and offensive or disagreeable image or to pressure or bully our neighbours. What we want is a consistent image so that we are known to stand for certain principles.

We cannot be seen to be prepared to weaken in the face of aggression, as was the case with the aggression by Indonesia against East Timor. We have to acknowledge cultural differences with our neighbours, but if we do not maintain a consistent concern for human rights in our policies we risk more blatant disregard for human rights in neighbouring countries and, we risk, also, a progressive deterioration of and disregard for human rights and freedoms in our own country. If we are known for our principles and for our consistent policies, we will enhance our status internationally. If we look to the future, we will be regarded as a country of the future. The Fraser Government, I suggest always offers a piecemeal foreign policy, resting on shifting principles and with its focus on the past.

Debate (on motion by Mr McLean) adjourned.

page 2053

TRADE

Discussion of Matter of Public Importance

Mr Deputy SPEAKER:
Mr Martin

-Mr Speaker has received a letter from the honourable the Deputy Leader of the Opposition proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The damage caused to Australia’s short term and long term trade interests by the Government’s activities.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the Standing Orders having risen in their places-

Mr LIONEL BOWEN:
Smith · KINGSFORD-SMITH, NEW SOUTH WALES · ALP

– One of the most important matters in

Australia today is trade and this matter of public importance is directly aimed at the disruption and damage caused to our interests by this Government’s activity. We depend on our external trade for our national wellbeing. It has always been that way and it always will be. Our domestic economy, our resources and our capacity dictate that. What concerns the Opposition is that we are engaged in negotiations throughout the world, with a great many Ministers from the Prime Minister (Mr Malcolm Fraser) down putting propositions on behalf of the Australian Government when this Parliament does not know what those propositions are. We were reminded by the visit of Vice-President Mondale that he has made certain offers to the Australian Government and is awaiting a reply. He is anxious to get that reply because he has to deal with Congress and, as he said, how is he expected to get success in Congress unless Australia clearly indicates its attitude to what he is offering? We do not know what the United States is offering. We do not know what we are offering. We have heard, for example, that we are offering a 40 per cent tariff reduction over the next eight years but have then said that we will not accept that sort of proposition in international negotiations unless we get access to the United States market for our agricultural products. However, assuming that we get that access for our agricultural products, and I am not decrying that we need less protection in the world, what will it do to our manufacturing base if we reduce our level of protection by some 40 per cent?

Let us debate the issue now and not have, as we have had in the past in this Parliament, the former Labor Government castigated again for having reduced tariffs by 25 per cent. There have been foolish policies implemented- they exist still- brought about by the weakness and the lack of capacity of the Prime Minister and the many Ministers handling these issues. It is because so many Ministers are involved and the consequent inconsistencies that this weakness has developed. Trade is important. World trade and other international economic relations are undergoing rapid change and there is a problem in sustaining confidence in growth. The response by the Government to this problem is both tardy and misdirected, not unlike its domestic economic policies. Its domestic economic policies are of a wrestler type- a half-Nelson hold suitable for wrestling the economy to the floor but hardly a basis for confidence, restructuring and growth, the ingredients which the economy so badly needs.

The Vice-President of the United States was able to remind us that the United States has created 5.5 million additional employment opportunities, has reduced its energy costs and has expanded its money supply. We do not seem to be moving in any of these areas. The problem with applying this wrestler-type approach to external trade is that other governments cannot be expected to respond as quickly as members of this Government to direction from above, nor will they knuckle under as our domestic economy can be expected to do. There is a crude and belated assault on external trade and this seems to be the latest phase in the Fraser strategy for economic recovery. In 1975 we were promised an investment-led recovery. When that did not work we were promised a consumer-led recovery and, more recently, the Deputy Prime Minister (Mr Anthony) has spoken of a trade-led recovery. The Minister for Defence (Mr Killen) has said that we ought to achieve this recovery by way of defence expenditure, perhaps suggesting that we call in the troops.

Despite this Government’s claim to the contrary, a number of countries are concerned about the world economy and discussions about its problems have been under way for many years. In fact, the Government has been rather slow in discovering the issues and the forums where they are under discussion. It has acted in a confused and damaging way and our interests have been damaged. In bilateral dealings with trading partners we are advancing a concept of bargaining by bullying but this will not produce results. In advocating multilateral negotiations senior members of the Government endanger national interests by confusing their own selfaggrandisement with national interest.

The Government’s approaches- multilateral and bilateral- too frequently cut across and confuse existing international machinery, damaging negotiations and creating ill-will. Daily the Government is allowing many opportunities to pass by. In pursuit of its advantage in bilateral arrangements with our major trading partners, the Government has intervened with an aggressive approach- and it is not producing results. The core of this approach is that we cannot secure objectives sentimentally: We must put to one side due form, due process and the feelings of the heart and declare to these countries that we serve them on the basis that, if we are to get some benefit, there has to be an opportunity to our advantage. In more precise terms, we should say to them: ‘We want you to take something from us, and if that commodity is uranium, you have to take something else as well’. So it is a case of fish for beef or that sort of thing on a bullying basis.

We are very glad if barter arrangements, contra-deals and the like can be struck, but they must be struck in a different way. At first blush, the Government’s approach looks very attractive: Australia on its own feet. Moreover, at every time in every diplomatic exchange, there are, or there ought to be, such realities of national interest in mind. That is what we are saying. In this case, however, on more reflective examination and in the manner in which the Fraser Government has pursued this strategy, it is a very damaging effort. This matter is referred to by a London correspondent in last Friday’s Age who says:

Australian officials (in Europe) now accept that the political, economic and technical problems facing Europe’s nuclear industry are such that there are no short-term advantages to be gained and plenty of penalties to be incurred by crude attempts at resources diplomacy . . .

In some circumstances of inflexible demand and monopoly of supply, it is possible for a supplier quite successfully to set his own demands. Even the oil producing states are aware of their limitations. Trade demands that the Government has made of Europe, Japan and the United States, have been made with a bullying and a bluster. But they were made from a position of weakness, where we had no capacity to control supply and where we have major competitors. In the advanced countries, we are more likely to be seen as unreliable and untrustworthy.

Between 1972 and 1975, Labor took many steps to guarantee the advantageous competitive export of our materials. What this Government is doing in linking the breadth of commodities in trade is not the same. It is building uncertainty, unpredictability and unreliability into Australia’s trading image. It is appropriate for a state trading organisation or a private trading organisation to work out mutually advantageous package deals with other countries and governments can support such efforts. However, what the Government is doing is not to approach it at that level. Trade and investment decisions are not made according to laws of physics and favourable movement cannot result from brute pressure.

In June 1977, the Prime Minister visited Brussels. He was there for three days. It was on the basis of that visit that we created a special Minister for Trade. Since then we have had two Ministers with responsibility for special trade representations undertake four negotiating visits, without any clearer vision at the outset than that more beef would be sold, without any prior regard for the existence of multilateral trade negotiations and in the face of an ensuing hostile reaction from the Europeans. We looked to be acting in a very foolish fashion indeed.

In August 1 977, the Prime Minister met with heads of government of the Association of South East Asean Nations in Kuala Lumpur. I understand that the meeting was less satisfactory than other meetings the ASEAN leaders had held with Mr Muldoon and Mr Fukuda. The empty rhetoric of the Government’s foreign policy priority relations with South East Asia was exposed. The Prime Minister chose to be very blunt in conversation with Mr Fukuda in demanding access for our products. What has been the result? I suggest that, over and above the consequences of economic recession, the diplomatic ineptitude of the Government has cut back our trade with Japan by some 30 per cent in some areas.

Last month the Prime Minister handed his greatest insult to the Europeans, condemning them for postponing a meeting he wanted to have in May. An article in the Australian Financial Review reported that for the first time, the European Community lodged a formal complaint with the Australian Ambassador in Brussels. The article stated that European Common Market officials were treating the Prime Minister’s remarks as a ‘gratuitous insult’. It quoted a spokesman for the EEC as saying, in reference to the proposed June meeting:

It has clearly become so much more of a confrontation than a discussion.

There was another quote, this time from the Australian trade officials who had been left to do the real negotiating:

The timing of his -

That is, the Prime Minister’scomments could not have been worse.

Having behaved like the proverbial bull in the china shop, the Prime Minister claimed the next day that his tough line had produced an immediate response, and therefore there would be a meeting in June. Subsequently we learned that this was a phoney statement and that the date for the June meeting had been set before the Prime Minister’s outburst. I had hoped that some good might come from these consultations. If they are damned, they are damned by the Government’s mismanagement of them. The insult done to the European leaders is an insult to our intelligence.

I remind the House of the words of the Foreign Minister (Mr Peacock) in March 1977:

The Government believes that . . . our relationship with the European Communities must be brought closer to the level of the relationships we have with the other two great industrial democracies- the United States and Japan . . . It is the centre with which we could be expected to have the closest relationship.

But that policy has run backwards. The Minister for Special Trade Representations (Mr Garland), whom we never seem to see in this chamber, is not helping in any fashion at all. One of his more recent efforts was a letter to the London Times on 18 April, in which he chose to talk about Australia ‘s tariff structure. He spoke with pride of the 25 per cent across-the-board tariff cut in 1973. Of course that measure was instituted by the Labor Government. Yet that Minister comes into this chamber and castigates us for that sort of action.

In the month before that, the venerable Minister had this to say:

The European nut has to be cracked from the top. We have to crack the total structure.

While the Minister for Special Trade Representations was being so especially representative in that crude fashion, the Japanese were being much more subtle. Again, according to a report in the Australian Financial Review of 22 March, while our Minister spoke of cracking nuts, the Japanese moved quietly to the negotiating table to conclude an export deal with the European steel community.

Let me turn now to multilateral issues. Of the Commonwealth Heads of Government Regional Meeting, let me say three things: First, if it produced any results of substance, they were in the economic area. Secondly, who thought of that discussion? It was our ASEAN neighbours, not us. Thirdly, the pompous character of the event, which quite likely attracted the mad bomber was central to the Government’s purpose. The bedecked bath-houses of Bowral may have been an appropriate prelude to the opening of the second Fraser Parliament, but it was a rather obscene imposition on leaders from countries, including Australia, with major economic problems. I name this meeting first because it represents most clearly the emptiness of the Government’s approach to international matters: The stage is the thing, and the script is of minor importance.

Multilateral trade and economic discussions have been proceeding on wide fronts. It will be recalled that a former Foreign Minister of the Labor Government, Senator Willesee, attended a Foreign Ministers’ meeting of the non-aligned movement in 1975. At that time, the present Prime Minister condemned our actions in seeking to improve relations with the developing world. In the last few months he has discovered the developing world and he now has hopes or had hopes, to get to a conference with some of the developing world in Jamaica. But he is unable to tell us with any clarity what that conference will discuss. It is not enough to say that the subject is general. If it is that general, like his predecessor, he could hold the conference on the telephone. If the conference has substance and if it is important to us, let us hear that other than by way of assertion; otherwise the Prime Minister’s motives are suspect.

We have to look at this question of trade. Multilateral trade negotiations have been going on in Geneva for some years. They are now at a point where they could reach a satisfactory conclusion. But what is the Government’s proposition. Has it agreed to tariff reductions? Is it urging, in futile fashion, that it will agree to those reductions only if it gets access to beef or agricultural products markets. Let us be factual and look at the situation of the politics of other countries. If the European Common market is overladen with beef, it is not going to allow any Australian access to that market. In the middle of last year, the Prime Minister sent three pleading letters to President Carter which, amongst other things, asked the President to send America’s Special Trade Representative, Robert Strauss, to Australia for talks. Mr Strauss might well have come to Australia if he had been able to understand what he was coming to talk about. Instead, his deputy, Mr Alan Wolff, came in his place. His message was very clear. Mr Wolff told reporters that Australia was wasting its time whingeing and blustering to America about its wider trade problems. He said quite bluntly that, if Australia wanted to advance its wider trade interests, the multilateral trade negotiations in Geneva were the place to do so.

New opportunities do exist for trade. That is what this matter of public importance is all about. In the interests of countries elsewhere in the world there are opportunities of new kinds of trade arrangements. This Government cuts itself off from important areas of trade by opposing the establishment of a trading corporation which could be a valuable instrument in dealing with countries with which we do not have traditional ties. It cuts itself off from Eastern Europe. It shows less imagination and skill than the New Zealand Government in developing trade with the Middle East. Its export incentives scheme is full of holes. We could support the Government in grander designs if its diplomacy were sound, if it demonstrated an understanding of the realities of trade and if it had a visible strategy. Until then, we can only condemn its strategy as being against the national interest.

Mr ALDRED:
Henry

– It is with some interest that one hears the Opposition put forward the arguments that it has used this afternoon because basically it is the same old refrain that we heard a few weeks ago. There was a similar discussion on a matter of public importance only a short time ago. One can only conclude that when the Opposition again brings up almost the same topic within such a short period it must be running out of subject material for discussion. I might say, rather than waste time on all this nonsense we have heard this afternoon, that the Minister for Trade and Resources (Mr Anthony) is actually doing something practical this afternoon. He is concluding trading negotiations with the Koreans and there will be announcements about that later today and tomorrow. The Opposition has gone over the same old record this afternoon.

Before I comment in detail on what the Deputy Leader of the Opposition (Mr Lionel Bowen) said this afternoon there are two opening comments I want to make. Firstly many of the difficulties that we are currently encountering in our trading relations with various countries and difficulties which we have encountered over the past few years have resulted from one simple fact, and that is the wages explosion that the Opposition set off when it was in office back in 1 974. That has played a major part in damaging our trading prospects throughout the world in all markets- established and new markets- because of the high cost that was pushed into our various exports, particularly our manufactured exports. Secondly, I make the comment that many of the difficulties that we are experiencing have also resulted from the actions of militant and irresponsible elements of the trade union movement which have done a good deal of damage to the export of our mineral products from Western Australia. They have also damaged our exports of live sheep. I also add in response to the comment made by the Deputy Leader of the Opposition about the Minister for Special Trade Representations (Mr Garland) being absent from the House this afternoon that I find that comment rather amusing. In fact, it is the sort of comment that only someone who is an economic fruit cake would make. What is the job of a Trade Minister? The job of a Trade Minister is to be overseas securing contracts and trying to improve our trading situation, not to be sitting here listening to the same old material being dredged up again and again by the Opposition.

In respect of trading relations with Japan, again I find the Opposition’s claims rather paradoxical and amusing because it has said this afternoon that it is not the function of the Government to try to bully our various trading partners, whether it is Japan, the Soviet Union, the European Economic Community or whatever. When this very same topic was discussed a few weeks ago as another matter of public importance that is exactly what the Opposition was suggesting. It was criticising this Government for not being strong enough, firm enough, and for not taking a sufficiently aggressive attitude in relation to dealing with the Japanese, because the Japanese had cut back on their intake of iron ore for their steel mills. But within a matter of only two or three weeks there is a complete turnabout by the Opposition. One week it is saying that we are not being strong enough and a few weeks later it is saying exactly the reverse. It is complete hypocrisy on its part. As a matter of fact, as to the discussion a few weeks ago, just after the Minister for Trade and Resources, Mr Anthony, came back from Japan he made it quite clear that a number of very specific gains had been made in trading with the Japanese. In his statement of 22 April in respect of beef he said:

On quantities I was assured that the quota for the first half of the fiscal year- April to September 1978- would be a minimum of 40,000 tonnes- an increase of 5,000 tonnes on the quota for the same period this fiscal year.

He went on to say:

I believe there will be a further additional 5,000 tonnes in the quota for the second half of next fiscal year.

He went on in that statement to detail a number of other gains he had made on that visit to Japan, notwithstanding the difficulties that the Japanese steel mills are experiencing at the present time.

The Opposition has commented this afternoon on the stand the Government has taken in its relationships with the European Economic Community. Again we have heard some rather outrageous statements on this occasion- and this is a reversal of what we heard a few weeks ago- suggesting that the Government has been taking too strong a stand. That strikes me as absolutely incredible. What is this country supposed to do? The EEC is dumping on the rest of the world heavily subsidised agricultural products, and for that matter subsidised manufactured products, produced by very inefficient industries in Western Europe.

French agriculture is notoriously inefficient. British manufacturing industry is notoriously inefficient. These are now protected by the Universal Customs Union in Western Europe and these goods are being dumped on the rest of the world. We are in a situation in which we are now taking far more goods from EEC countries than they are taking from us. This situation simply cannot be tolerated. If the Opposition had taken a stronger line in terms of our relations with the EEC when it was in office we might not be in the situation in which we are now. In that regard I will quote from the statement made by the Prime Minister (Mr Malcolm Fraser) on 16 April 1978. He said:

It is no credit to the Labor Party that while Australia’s products were being shut out of Europe it raised no protest and no authoritative voice to arrest the trend. In their time, our markets for most of our major agricultural products virtually disappeared.

I find it incomprehensible that the Labor Party speaks on this issue only to chide the Government for seeking to redress what the Labor Party lost. They suggest the Community should be treated with kid gloves and that we should use a feather duster. If they themselves went even as far as that when they were in office, nobody was aware of it. Their great achievement was to lose markets.

That is the record of the Opposition in respect of Australia’s relations with the EEC and its trading policy when it was in office. I certainly concede that it is going to be very difficult to rectify many of the problems that we have as far as Western Europe is concerned and the EEC in particular, but we cannot take that sort of thing lying down; and we have not been sitting back doing nothing. In fact, that is one of the reasons the Minister for Industry and Commerce (Mr Lynch) went to China in the last week or so. He went there to try to overcome some of the problems in terms of the export of products that we have run into difficulties with and to try to find new markets for them. That is what the trip to China was all about. He has already been assured by the Chinese Government that China will be prepared to take substantially increased quantities of Australian iron ore which will to a large degree offset the loss of iron ore exports to Japan because of the cutback in intake by the Japanese steel mills.

This is tied in with the Chinese 10-year plan from 1 975 to 1 985 which involves, among other things, a 10 per cent annual industrial growth rate; an allocation of 60 per cent of government expenditure on economic construction; a steel production target of 60 million tonnes per annum or 2.4 times last year’s production rate; and the development of 120 large scale plants including ten iron and steel plants and nine nonferrous metal plants. If we can get in on that at this stage, obviously it will be quite a coup as far as this Government is concerned. I congratulate the Minister on what he has managed to achieve in China in the last week. It has been a very substantial achievement.

Mr Lionel Bowen:

– Who recognised China?

Mr ALDRED:

-I concede that Labor recognised China. I grant you that.

Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP

- Sir William McMahon started it.

Mr ALDRED:

-Sir William McMahon-a Liberal Government- started it, but certainly Labor carried it further. The Minister also has received assurances that the Chinese will be looking very seriously at the possibility of using Australian technology, particularly in the mineral processing field. Hopefully we will see that extended further too. Also in accordance with many of the Chinese long term ambitions, particularly for the mechanisation of agriculture, it looks as though there will be a strong possibility as a result of the Minister’s visit that our exports of agricultural machinery will be substantially expanded to the Chinese market. We have just about reached saturation point in sales of agricultural machinery in this country and the fact that the Chinese market for the export of our agricultural machinery may be expanded is, I think, a feather in the Minister’s cap and a substantial achievement. It is a substantial achievement, particularly as the Chinese hope to have a very substantial proportion of their agricultural industry mechanised by 1985. In fact, the Chinese hope to have some 85 per cent of their agricultural industry mechanised by 1985.

I think that it can be seen in respect of the new markets that we have been trying to establish to replace old markets that have been disappearing, that the Government does have a longer term strategy in respect of trade policy. That also has been evidenced by the export incentive package that was brought down the other day. This package involves a new export incentive grant- a taxable cash grant which will be payable to exporters- and a revised and reformed export development market grants scheme as well as a new three-year program of pushing not only our manufactured exports but also our rural exports overseas. That will be tied in with the considerable strengthening and expansion of the Trade Commissioner Service.

It is very important in that regard to note exactly the areas in which the Trade Commissioner Service has been and is being expanded. It will be expanded and strengthened shortly in the Middle East, the South Pacific and Latin America. Australia has been one of the countries leading the West into the new markets in those developing countries and taking advantage of them. I think it is important to note that in the long term by the taking of that initiative

Australia will not only help to raise the standard of living in those countries but also, because it is among the first to go into those developing countries, it will secure a foothold in the developing nations, particularly the Middle East, South America, the South Pacific and South East Asia. This will give us a great advantage as the years go by. As the standard of living in those countries rises, as their purchasing capacity rises and as the consumer tastes of the people in those countries become very similar to the consumer tastes of people in Western nations, obviously their capacity to take a number of our products will be expanded greatly. I am referring not only to manufactured goods but also to processed food products and a number of other goods. I think the Government should be greatly commended for thinking ahead in that way in respect of those markets. It is doing so far more than other Western nations.

In conclusion, I think it would be quite fair to say that we certainly recognise that there are problems with certain of the markets to which we have exported traditionally. I refer in particular to many of the countries of western Europe, particularly those which are members of the European Economic Community. But we are doing the best we can to overcome those problems. At the same time, instead of just sitting down and taking it in a sleepy sort of fashion without attempting to do something about it, we have attempted to go out and secure new markets. That is what the visit to China was all about. That is what the export incentives program is all about. The strengthening of the Trade Commissioner Service, particularly in those new developing markets that I have been talking about, is also concerned with that. I hope that before the Opposition brings forward a matter like this for discussion again it will do its homework a little better. If it is to bring forward this topic again, let us hope that it takes a slightly different slant and that we do not want to hear the same old 78 r.p.m. record playing over and over again, as we heard a few weeks ago.

Mr DEPUTY SPEAKER (Mr Martin)Order! The discussion has now concluded.

page 2058

PERSONAL EXPLANATION

Mr LIONEL BOWEN:
Smith · Kingsford

-I wish to make a personal explanation.

Mr DEPUTY SPEAKER (Mr Martin:
BANKS, NEW SOUTH WALES

Does the Deputy Leader of the Opposition claim to have been misrepresented?

Mr LIONEL BOWEN:

-Yes. The honourable member for Henty (Mr Aldred), when quoting from a speech of the Prime Minister (Mr Malcolm Fraser), made the allegation that the Labor Government had done nothing while it was in office in respect of representations to the European Common Market. It is on record, and he should know, that in December 1 974 1–

Mr Groom:

– I rise to a point of order. The honourable gentleman is not making a personal explanation.

Mr LIONEL BOWEN:

-I am, Mr Deputy Speaker. Answering the point of order, I was in Brussels in December 1974 having discussion with the European Common Market about giving access to our beef and agricultural products. It is on that basis that I am making a personal explanation.

Mr Groom:

– It is not a personal explanation.

Mr LIONEL BOWEN:

-It is a personal explanation on the basis that the Labor Government made such representations and the honourable member for Henty has said that it did not make any representations.

Mr DEPUTY SPEAKER:

-Order! Does the Deputy Leader of the Opposition claim to have been misrepresented by the honourable member for Henty?

Mr LIONEL BOWEN:
Mr DEPUTY SPEAKER:

– In what way was the Deputy Leader of the Opposition misrepresented?

Mr LIONEL BOWEN:

-I was misrepresented on the basis that the honourable member for Henty said that not one member of the Labor Government had made representations to the European Common Market.

Mr DEPUTY SPEAKER:

-Is the Deputy Leader of the Opposition claiming that that statement applies to him?

Mr LIONEL BOWEN:

-It applies to me, yes.

Mr DEPUTY SPEAKER:

-Is the Deputy Leader of the Opposition saying that that is where he has been misrepresented?

Mr LIONEL BOWEN:
Mr Aldred:

– I rise to a point of order. My point of order is that the honourable member is not making a personal explanation.

Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP

– It contradicts every ruling.

Mr Aldred:

– That is correct. It contradicts your own rulings, Mr Deputy Speaker, insofar as what the Deputy Leader of the Opposition is saying does not contradict what I said about that Labor Government while it was in office not achieving–

Mr DEPUTY SPEAKER:

-Order! The issue is now being debated. I think the matter has gone far enough.

page 2059

CONSTRUCTION OF PROPOSED HIGH SCHOOL AT NHULUNBUY, NORTHERN TERRITORY

Reference to Public Works Committee

Mr McLeay:
Minister for Construction · BOOTHBY, SOUTH AUSTRALIA · LP

– I move:

The proposal is for the construction of a high school to accommodate 400 students, utilising a modular system of construction developed for Northern Territory schools. It is planned that the facilities provided will include two general learning units, a science unit, a multi-purpose area, industrial arts, art-craft and home economics areas, a library-resource centre and administration areas. These will be housed in separate modular buildings located around a central courtyard. Provision of a janitor’s residence, an oval and tennis and basketball courts on the 12- hectare site is also planned. Nhulunbuy is located on the Gove Peninsula and is in an area subject to cyclones. The structures will be designed to cater for these conditions. Materials and finishes will be selected to simplify construction and minimise capital and maintenance costs. The estimated cost of the proposal at April 1978 prices is $3. 15m. I table plans of the proposed work.

Question resolved in the affirmative.

page 2059

APPROPRIATION BILL (No. 3) 1977-78

Second Reading

Debate resumed from 8 May, on motion by Mr Eric Robinson:

That the Bill be now read a second time.

Mr McLEAN:
Perth

– I am pleased to support the Appropriation Bills presently before the House, which cover the Additional Estimates for 1 977-78. As I understand the situation, these Bills are required to meet any shortfall in meeting approved commitments as provided for in Appropriation Act (No. 1) 1977-78 and Appropriation Act (No. 2) 1977-78. They help also to facilitate new expenditures approved by the Government subsequent to the Budget. We are talking about additional appropriations totalling more than $365m.

As was mentioned by the honourable member for Gellibrand (Mr Willis) last night, these Bills reaffirm the Government’s policy of restraint. The Opposition has criticised the Government consistently for its policy of expenditure restraint over the past couple of years, for containing the Budget deficit, for following a tight wage policy, and for generally taking the hard political decisions associated with combating inflation. Obviously, the Opposition does not believe that an investment in political courage now will lead to any dividends for the Australian economy in the future. It does not seem to have grasped the fact that there is no longer any trade-off between inflation and employment.

The Leader of the Opposition (Mr Hayden) congratulates the Government on bringing inflation down but he claims that it has been achieved at considerable cost in terms of employment. Surely by now he has learnt that reducing inflation is the only way to achieve a sustainable and natural return to acceptable levels of economic activity and employment. In the context of these Appropriation Bills it is interesting to note that the Opposition, whilst seeking to criticise the Government for overshooting the projected deficit for 1977-78, itself advocates a policy of fiscal expansion and accuses the Government of being unnecessarily preoccupied with the extent of the deficit. The honourable member for Gellibrand expressed those views in his contribution to this debate last night.

The Treasurer (Mr Howard) has already stated that the deficit will be greater than expected, due partly to the Government providing additional assistance to people in need and due also to the Government’s success in reducing the rate of inflation. I urge the Government to continue its policy of fiscal restraint. I ask the supporters opposite of fiscal stimulation whether they have noticed any alleviation of the employment situation by virtue of the fact that the deficit has grown in this fiscal year, whatever the reasons. Of course, they have not noticed such an improvement; there has been none. The economy does not respond to that kind of stimulus. On the question of stimulation, the Opposition seeks to quote from bulletins of the Organisation for Economic Co-operation and Development when it finds it convenient to do so. When OECD reports criticise the Government the Opposition claims that the OECD is an absolute independent authority on Australian economics. When the OECD seeks to praise the management of the Australian economy, as it has done in the April survey of the Australian economy, its reports are branded as being biased and basically written by our Treasury. The honourable member for Gellibrand again put this view last night when he said that the April survey of Australia was edited by Treasury.

I emphasise that the OECD has been consistent over a long period in supporting the basic thrust of Australia’s economic policy and recognising the basic constraints we face with regard to stimulation of the Australian economy. It said that we could do better in the field of manpower planning but it supports our demand management policies which can only be complemented by, but not substituted by, manpower planning. The honourable member for Gellibrand in his speech on the Address-in-Reply debate in this House on 9 March this year quoted from the December issue of the OECD publication Economic Outlook in support of his argument that Australia should indulge in expansionary demand policies both fiscal and monetary.

I point out to the honourable member for Gellibrand that last October the SecretaryGeneral of the OECD, Mr Van Lannep, urged caution in this matter. He stated that certain constraints inhibited several member countries from accepting this kind of policy. This was an independent speech to an independent audience. It was not edited in any way by any country. Addressing the Council of Europe on 10 October last year Mr Van Lennep stated:

Demand management policies should be directed towards achieving a moderate but sustained expansion of demand, strong enough to permit a progressive reduction in unemployment, but not so strong as to set off a resurgence of inflation.

That is a bit like supporting motherhood. We all agree with that. To achieve this would be a difficult enough task for a government of angels but for an earthbound Treasurer it is a very difficult task. It is certainly difficult for one who has to deal with the rapacious demands of his colleagues seeking a bigger share of the national Budget. I urge the Treasurer to continue his strong line in this area of restraint. I hope that the Minister for Environment, Housing and Community Development (Mr Groom) who is at the table is listening to the words of wisdom I have for him.

Mr Van Lennep added some very important qualifications to his statement which have relevance for the Australian experience. He said:

It was recognised that in many countries the necessary recovery in productive investment was unlikely to be forthcoming without a shift in underlying cost/price relationships in favour of profits. In particular, where there was also a need to improve the balance of payments there would be only limited scope for increases in public current expenditure and private consumption.

In other words, the OECD recognised that one of the most basic domestic distortions which had to be overcome was the distortion between the level of real wages and productivity. Where effective stabilisation policies have been pursued it has been possible to hold down production costs in relation to prices and thereby pave the way for the necessary improvement in the rate of return on capital. This means that at some point wages must rise slower than prices particularly in countries such as Australia which need to improve their competitive position.

The OECD is consistent in its advocacy of this course of action. Now, six months later, it again states in its April 1978 report on Australia that the causes of the non-cyclical employment and investment decline are due to: . . . the persistence of very high rates of inflation, and, in particular, the massive shift in factor shares which occurred in 1978.

This Government’s support for partial wage indexation is endorsed by the OECD. It acknowledges that this country has not yet recovered from being the country which, in its own words: . . . exhibited the largest gap between the growth of real wages and the growth of productivity of any OECD country.

The OECD referred to the period 1972 to 1975. As a percentage of gross domestic product at factor cost, the profit share is still below the accepted normal level for Australia. This vindicates the Government’s wages policy and its efforts to stimulate investment. By inference the OECD does not accept in any way the wages policy of the Opposition which would only lead to a greater distortion of this imbalance and further unemployment.

The consistency of the support of the OECD for Australia’s anti-inflationary policy is further established by the other qualification that Mr Van Lennep placed on his call for stimulation last October. He said:

It was recognised that the position of individual countries differed considerably, and that some would need to concentrate primarily on bringing inflation under control, while others- the so-called locomotive countries- would carry a particular responsibility for maintaining the momentum of the recovery.

This strategy has again been endorsed by the OECD in its April report. It again says that this Government’s approach is correct. The other qualification to stimulating demand management is also relevant to the Australian experience. The Secretary-General said that some countries with a fragile balance of payments position might have difficulty in reflating. He said:

If any one of these countries rook action to bolster demand by itself, its current deficit would increase and downward pressure on its exchange rate could worsen the inflationary situation and undermine confidence.

Again this is a consistency in the comments of the OECD supporting the present demand management strategy of the Australian Government. In other words, inflation is the top priority and must remain so. When the basic imbalances between real wages and productivity and internal and external balance are corrected there will be no barrier to the automatic and natural increase in the level of economic activity and employment in Australia. The present strategy of the Government has been working successfully to correct these imbalances. The OECD and other organisations expect 1979 to be a year of strong growth in both investment and employment. But the Government must hold to its present strategy even though it is politically painful if Australia is to overcome inflation and unemployment in the long term.

An important part of this program in the context of these Appropriation Bills is the containing of the Budget deficit. The Treasurer may have difficulty in doing this. I hope not. We now have to realise that there was a time when governments could have an appreciable effect on aggregate demand by changing the deficit level by, say, $50m. Now, decisions to change employment levels marginally, ignoring price effects, might involve billions of dollars. We have already seen that this has long-term effects on inflation rates which eventually counter any beneficial short-term employment effects. We should also remember that record deficits in this country in recent times have been accompanied by record unemployment. That is one budgetary problem facing the Government.

The honourable member for Gellibrand does not recognise that the policy of budgetary restraint has led to lower inflation in Australia. It has led to falling interest rates. It has accommodated an increase in private investment demand. All these factors will assist a return to higher levels of economic activity and employment over a longer period. Another budgetary problem relates to the inbuilt tendency for deficits to increase automatically. With tax reductions and tax indexation revenue tends to move automatically in one direction. With indexation of benefits the expenditure side of the Budget moves automatically in the other direction. I therefore urge the Treasurer to continue his policy of budgetary restraint. I suggest that to achieve control of the deficit the Government will have to adhere more stringently to its policy of assisting those people in need rather than supporting the movement towards universal payments. This resolve is required if inflation is to continue to fall and if pressures on interest rates are to continue easing.

I also suggest that some fiscal expansionary influence could be non-inflationary if carried out responsibly and not in the way suggested by the Opposition. It need not increase- it must not increase- the size of the deficit. I refer to the possibility of the Government transferring some public resources from consumption to investment expenditure. An emphasis on works programs could be contemplated within the context of a controlled deficit and within the Government’s affirmed and quite proper strategy of budgetary restraint. The pre-conditions for falls in interest rates are, firstly, control of the deficit and, secondly, continued reduction in inflation. A decline in interest rates will greatly influence the capital account and the balance of payments but only if the bona fides of the Government have been established with regard to inflation control or internal balance, thereby improving our long-term international position competitively and providing some degree of currency stability. The control of the deficit is part of this precondition.

I urge the Government, in particular the Treasurer (Mr Howard), to hold firm in the direction of the present economic strategy. The inflation rate is now responding favourably. Investment and consumer demand remain strong. The balance of payments is strengthening and the major imbalances in the domestic economy are being redressed. It is a long, hard fight to bring this country back to economic health. There are not any easy options. The present course is the only course. Any resort to short term expediency at this stage would constitute a grave threat to long term employment revival, a revival which is now confidently expected by the Organisation for Economic Co-operation and Development and the Australian business community. The political temptation to respond to short term pressure is very strong but it ignores the long term economic realities faced by Australia. The OECD has concluded that the strategy of this Government in the longer term is essentially correct. I should like to quote from the ‘Conclusion’ section of Chapter IV ‘Prospects and Conclusions’ of the OECD Economic Surveys- Aus.tralia which was published in April of this year. The OECD acknowledged, as we do, that unemployment remains a significant problem but it has to be solved by measures that will have a long term effect. The report states:

Unemployment has increased to a level which is not only a post-war peak but higher in relation to past averages than in most other countries. It might be argued that the concentration of policy on the anti-inflationary and factor-share issues, rather than on speeding up the pace of recovery, has resulted in costs in terms of output and employment foregone in the short term. With a considerable part, but by no means all, of unemployment cyclical in nature there would, on the face of it, seem to be strong reasons to turn to more expansionary policies, to try to alleviate the problem. It seems probable that such policies would indeed lead to some shortterm expansion of output and reduction in unemployment, but that the net gains so achieved would be less over the longer run than what is likely to be achieved under policies broadly similar to those now being followed. This assessment is based, not on the proposition that fiscal and monetary policies do not work- in fact the Australian experience suggests that they do- but on the view that with inflation only recently into single figures and the present real wage imbalance the circumstances are not propitious for a relaxation of demand management.

That is strong advocacy for this Government to continue its present long term demand management policies. In other words, problems do remain but the strategy of this Government, despite short term difficulties, is the only correct long term strategy for the Australian economy. I urge this Government to have the courage to stay on its present course, which is the only proper course for solving problems which are essentially of a long term nature. Within that context, I support the Appropriation Bills before the House.

Sitting suspended from 5.59 to 8 p.m.

Dr KLUGMAN:
Prospect

-Tonight we are still debating Appropriation Bills No. 3 and No. 4 and, as honourable members know, they present an opportunity to speak on most issues. I want to devote my remarks mainly to the question of health costs, but before doing so I would like to make some more general remarks. We need confidence in this country in the economy and I would ask the Minister for Environment, Housing and Community Development (Mr Groom), who is at the table, to draw the attention of the Treasurer (Mr Howard) to a report which appeared last week in the Australian Financial Review that persons associated with both VAM Ltd and the so-called militant wing of the New South Wales Liberal Party are trying to take over the New South Wales Permanent Building Society, which has assets of $700m. At present, the so-called moderates in the New South Wales branch of the Liberal Party, led by Sir John Pagan, control this particular building society.

Is the Treasurer aware that VAM Ltd is in receivership, that its shares were suspended in 1971 by the Sydney Stock Exchange and have not since been relisted? Can he assure the House that such a takeover of the building societywhich I think is the largest- would not endanger the deposits of thousands of persons? I feel particularly strongly about this because I am one of those depositors and I certainly would not like to see the brawl between different wings of the New South Wales branch of the Liberal Party endanger my hard-earned savings. Speaking quite seriously, I do not know what kind of legislation is available to the Government to intervene in that sort of situation, or whether it would all be under Commonwealth or State control but, with assets of $700m, the building society is obviously a very large organisation. It seems to me to be ridiculous that people who are associated with a failed company will apparently be able to get control of that particular building society.

All of the changes made to the health insurance scheme by the Fraser Government have really been moves to shift the cost of health care from the Government to individuals. Let us remember that health care can basically be paid for in three possible ways. First, it can be paid for by the individual or his family incurring the expense; in other words, the sick user pays. Secondly, it can be paid for by people insuring themselves and thus spreading the risk; the insurance companies pay. Thirdly, it can be paid for out of taxation revenue. In most countries, including Australia, payment is by a mixture of the three methods. Payment by the sick individual, or via private insurance, really amount to the same thing- the payment is by private sources. I ask leave to incorporate Table I in Hansard.

Leave granted.

The table read as follows-

Dr KLUGMAN:

– This table shows that before Medibank was introduced by the Whitlam Government the Commonwealth paid 28.5 per cent of health care costs; State and local government paid 27 per cent; and private sources, including private insurance, paid 44.5 per cent. During 1975-76 the Commonwealth proportion of Medibank was increased to 51.9 per cent; State and local government contribution dropped slightly, to 24.8 per cent; and that from private sources was almost halved, to 23.3 per cent. Payment via taxation is, of course, generally considered to be more likely to be progressive; that is, based on the ability to pay.

Since the Fraser Government took office it has tried to reverse the proportion paid by the Commonwealth and by private individuals. The Commonwealth’s share has been reduced to 44 per cent; that of State and local government is still about 24 per cent; and that of private sources has increased from 23.3 per cent to 32 per cent. All of the attempts of the Fraser Government have been directed to increasing the proportion of health care costs paid by private sources. In fact, payments for health care from private sources are shown in table 2, which I ask leave to incorporate in Hansard.

Leave granted.

The table read as follows-

Payments for Health Care from private sources-

Dr KLUGMAN:

– Table 2 shows that the payments from private sources for health care increased from $1,2 18m in 1975-76- the only year when Medibank was in operation- to an estimated $2,200m in this financial year. Therefore, during the last two years more than $ 1,000m of the cost has been transferred to private sources. This has really been an increase in taxation, because taxation is an agreement between the Government and individuals to provide certain services in exchange for an amount of money. A real increase in taxation is either a reduction in services or an increase in money collected. Usually people think about increases in taxation occurring only when more money is collected, but if services are reduced it has exactly the same effect. In this particular case, as the services provided by the Government have been reduced they have to be paid for outside of the taxation system, and that really represents an increase in taxation.

Many examples of this are provided in the field of health care, but the most obvious occurs when there is a withdrawal of drugs from the pharmaceutical benefits list. The patient then has to pay for those drugs more than he previously had to pay, but his taxation is not reduced. This really amounts to an increase in taxation. The Government is now trying to soften people up in anticipation of certain possible changes to the health care insurance system by leaking those changes to the Press so that they will become more acceptable to individuals. We all know that there is at present- or there was until this morning- an argument taking place in Cabinet between the Minister for Health (Mr Hunt) and the Prime Minister (Mr Malcolm Fraser), with different Ministers taking up different positions.

Possibilities canvassed during the last week in the newspapers include that the gap between what the doctor charges and what patients receive from either Medibank or private funds will rise from 1 5 to either 20 or 25 per cent; the hospital charges will increase by up to 50 per cent and that, to cover this, hospital insurance for private ward treatment will rise by about $2.80 a week per family; that many long-term elderly patients in public hospitals will be covered only for nursing home benefits, rather than for hospital benefits, which means that they will be contributing a substantial sum from their own pockets; that the subsidy of $ 16 a day per bed for private hospital patients will be abolished; that bulk billing will be abolished; and that health insurance funds will be able to offer cheaper medical benefits insurance for people prepared to pay up to the first $150 a year of doctors’ charges from their own pockets.

We also know that pressure will be placed on some hospitals to withdraw beds which are not being fully utilised, and we have heard of the proposition of a $4 per day ‘reminder’ charge -to remind people that hospitalisation is expensive. It has been leaked that the Medibank levy will be increased to 2.7 or even 3 per cent of taxable income, and that the present ceiling will be abolished, forcing many people to take out private health insurance. Now we have heard of the final proposition, which seems to have been supported at question time today by the Minister for Health, that the Government is proposing a 1 per cent across the board health tax for everybody, whether belonging to Medibank or to private funds.

Obviously I do not know what the Government will announce during the next few years, but since before the elections Government supporters have talked about the simplicity of running a national economy. The Prime Minister has stated clearly that it is just like running a house or a farm. If you do not have the money you do not spend it; you balance the Budget. The Prime Minister has poured heaps of rhetoric on to the sin of deficits. He promised to get the deficit down to around $2,000m in the coming year and now it looks like being more than $3,000m. The projected deficit for the 1978-79 Budget, now in preparation, is something like $6,000m. Health costs are a pretty big slice of Budget spending. The Treasurer, urged by Mr Fraser, has already promised that Government spending will be cut to the bone in this Budget, as it certainly has to be if the Government’s promises are to look a little more substantive than hollow nonsense. The Government looks at health care as a drain on the public purse and it looks at it in the short term context of the 1978-79 Budget. It is one of the Budget areas where costs can be cut to the bone, or at least where a little extra revenue can be generated and where outgoing can be kept to a minimum- or that is the way the Government sees it. It is in that light that the Government will look at health costs. There will be no philosophical commitment to preventive medicine, no change to make the health system a more equitable, balanced and a sensible government program. What will happen is that the Government will utilise the ideology of free enterprise and massive public confusion over the whole system to attack, not the problem of rising health costs, but the problem of the burden on the Budget they represent. What we are then dealing with is a successful attempt by the Government to increase taxation whilst claiming to be reducing taxation.

I would like to take this opportunity to remind honourable members of the fraud associated with replacing our system of tax rebates and child endowment with the family allowance scheme. Honourable members may recall that this scheme was applauded by many people two years ago. It was hailed as a revolutionary new program. For the first year in fact a significant number of people were better off. But now every taxpaying family with children is much worse off than it was under Labor. I seek leave to incorporate in Hansard a table which compares the rates paid to tax paying families under the family allowance scheme with those paid under the tax rebate and child endowment arrangements.

Leave granted.

The table read as follows-

Dr KLUGMAN:

– In this table the $200 child rebate introduced in the 1975-76 Hayden Budget has been indexed in line with other tax rebates. Under indexation the child rebate in 1977-78 would have been at least $250 per child- that is $4.82 per child per week for a taxpaying family calculated on the basis of indexing $200 by 13 per cent in 1976-77 and by 10.9 per cent in 1977-78. These are official Government figures which apply to the Government’s tax indexation measures. We see from the table that every tax paying family is worse off. The tax rebate which has now been lost in respect of a family with just one child is $4.80 a week. The child endowment for the first child would have been 50c a week. Therefore a family with one child would have received $5.30 a week under our system even if the level of child endowment had not at any stage been increased. The family allowance this year for the first child is $3.50. Therefore every family with only one child loses $1.80 a week. A family with two children would have received a tax rebate, which is no longer available, of over $9.60 a week. The child endowment would have been 50c for the first child and $ 1 for the second child making a total of $1 1.10 a week. The family allowances introduced by this Government are $3.50 for the first child and $5 for the second child, making a total of $8.50 a week. Therefore there is an income loss to that family of $2.60 a week. Similarly, for a family with three children the loss is $3.40 a week, for a family of four children it is $4.45, for a family of five children it is $4.75 and for a family of six children $5.30 a week.

I was pleased to see the other day that the honourable member for Lilley (Mr Kevin Cairns) raised this issue. He claimed he had the support of at least one other Government supporter to index family allowances. Obviously this is necessary otherwise the loss will increase from year to year. If the family allowance is not increased and the tax rebates are allowed to apply to areas other than those available to children every tax paying family with children in Australia will suffer a net loss.

The Government is not prepared to take on the medical profession. This is one of the most difficult problems facing a government. The median income of the medical profession in Australia now exceeds $70,000 a year. Doctors are getting richer faster than any other occupation or group and that probably includes lawyers. Doctors’ incomes must be held down if the nation is to afford a national insurance system, but this is very difficult to achieve. The reason it is difficult is that those who minister to the body, allegedly unlike those who minister to the soul, spring from a tradition that puts them at peace with personal affluence. They have no trouble harmonising with the time honoured interest of getting rich, as is evidenced by the investment advice carried by medical journals.

Mr Moore:

– You should go back to it, Dick.

Dr KLUGMAN:

– I often think I should. Furthermore, with our method of the doctor prescribing, the patient receiving and a patchwork of insurance systems paying, there is lots of money in the system and no incentive to be frugal in using it. 1 would like to make one further point. The Government, the newspapers and the media generally have been trying to blame Medibank for the great increase in health care costs. The Minister for Health no longer does so. Let me explain why the Government has got away with it in many instances. The total cost of health care in Australia increased by 36.4 per cent in 1974-75 and by 26.8 per cent in 1975-76. No wonder most of the instant experts writing feature articles for the Press or pontificating on television and radio blamed Medibank, especially as their ‘in depth’ investigations were often based on handouts from the Voluntary Health Insurance Council. There is only one catch to that proposition, and that is that Medibank medical started on 1 July 1975 and hospital Medibank later still in most States. Therefore the huge increase in health care costs preceded Medibank. The year before Medibank came into operation in Australia health care costs increased by 36.4 per cent. The year after Medibank came into operation the figure had dropped to 26.8 per cent. I am not suggesting that 26.8 per cent is a figure to be aimed for. What I am saying is that the increase in health care costs had nothing to do with the introduction of Medibank. It was depressing, but it was there. The amount of money paid out by the private funds by way of medical benefits during the year before Medibank was introduced increased by 5 1 per cent.

Last week the Minister for Health tabled the report of the Health Insurance Commission. There were a number of notable features about that report and I would like to draw the attention of the House to some of them. The report shows that Medibank Standard underspent its original appropriation in 1976-77 by $27 lm. It also shows that the administrative expenses of Medibank Standard were only 4.2 per cent of benefits paid but those of Medibank Private, which are similar to those of the other private funds, were 15.7 per cent. This disparity clearly shows the Medibank Standard as originally conceived is much simpler and less expensive to administer. Yet Medibank Private, despite its much higher administrative expenses, was still able to show a profit of $ 1.7m in the first nine months of operations.

On the question of bulk billing, there have been many claims and allegations that this procedure was expensive. Apart from the administrative savings in bulk billing- I know that the honourable member for Petrie (Mr Hodges), who is the Deputy Government Whip, is one of those who often attacks bulk billing- the Health Insurance Commission report showed that even though 55.6 per cent of all medical claims were bulk billed, they still amounted to only 34.9 per cent of the value of all claims and that the number of medical services for each bulk billed claim averaged 1.28 compared with 2.2 services for all other claims. The report also showed that the average cost of each medical claim under the bulk billing system was $8.80 compared with $ 1 1 .50 for each claim on individual accounts. All this suggested that not only does bulk billing not cause excessive costs but also that the system of bulk billing markedly depresses health costs.

I would like to move the following amendment to the second reading of Appropriation Bill No. 3 (1977-78). I move:

Mr DEPUTY SPEAKER (Mr Millar:
WIDE BAY, QUEENSLAND

-Is the amendment seconded?

Dr Jenkins:

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

Mr MOORE:
Ryan

– It is with pleasure that I support the Appropriation Bills. I am surprised that when the economy has been performing relatively well of recent times the Opposition should move such an amendment. April has been a significantly better time for the economy than most of us would have forecast. The consumer price index for March at 1.3 per cent was a remarkable achievement. One looks at the consequences of that and at the rate of growth of money supply, which is now down to 6 per cent moving up to 8 per cent with the improvement in the foreign exchange. For the first time for many years both the inflation rate and the money supply rate have moved under 10 per cent, which in itself is a great achievement. If the Government maintains its stance it points to a vastly improved economy in the latter part of 1978 and into 1979. 1 can say only that I am delighted to see some of the total aggregates in the Australian economy coming together as with this we can have some hope that the future is going to be much better.

I do not suggest for a minute that we have done particularly well in the economic terms over a two-year period. Things have gone very slowly. However, for the first time the American dollar has stopped falling. Our currency is coming into a better shape and there is support for it. Further, there is now money coming into the capital account. But this should not detract us from some of the problems that still confront us. Those have to be seen in terms of our balance of payments position and the continued speculation against the Australian dollar. I would hope, when one looks at the possibilities of falling inflation and a reasonable development of money supply, that in the latter part of 1 978 one will see an improvement in the economy; that the use of capacity in the economy will move up and as a consequence productivity and profitability will be infinitely better. Unfortunately, I do not see a great improvement in that period in the levels of employment, because in the first 10- points improvement it is more or less bound to be an improvement in productivity and therefore expressed in profitability.

I move now to the composition of the 1 978-79 Budget. I believe this to be critical to the performance of the Australian economy in the coming 12 months. Most newspaper writers have referred to the possible deficit this year approaching the $3 billion mark. This is a reasonably high figure and I hope that when we move to construct the coming Budget the deficit will not exceed that figure. Indeed, one would hope that there would be some restraint on that. To achieve this there will need to be quite a dramatic term of discipline upon government spending. We must look at the priorities of spending, at the areas in which the greatest return can be had in the Australian economy for the dollar spent in terms of the greatest dollar movement or multiplier that can be achieved. I hope that when we set out our priorities in the coming few months for the 1978-79 Budget we look at some restraint in government spending.

It is clearly time that the area of health, was looked at. I do not support the idea that we should go along with a ballooning expenditure in this area. No nation can support some of the welfare schemes that have been put forward. A drift into those areas is totally destroying to any growth economy. We must have a growth economy if we are to see higher levels of employment and personal satisfaction in this nation. We must look also at the question of education in the framing of the Budget. I hope that in this area we shall see some real determination to get value for money. I hope that we will look at the reintroduction of tertiary education fees. For far too long the idea of having second degrees for free is, in my view, the greatest bludge of all time. In times of uneasy employment who would go outside the ivory tower and try his hand when one can stay there and have it paid for by the Government? I hope that some degree of responsibility would come into that area.

The Government should look also at the question of social welfare payments. I have the greatest sympathy for people who, through no fault of their own, are thrown into unemployment. The Government, indeed the nation, has a responsibility. We should approach this matter with a very genuine, humane approach. However, I see no reason for some of the extravagances in this area. I am amazed that indexation has been applied so liberally to a number of benefits. Again we should look at this question when the framing of the Budget takes place.

While I said that I would see an absolute maximum of $3 billion deficit, I hope that some priority shifts would allow some avenue of capital works development in the coming year. This in itself would do a lot towards giving a certain degree of encouragement in the coming financial year. One can see from the Government accounts that are available today some of the strains that are undoubtedly inherent in the management of the economy. When one looks at the size of the deficit, which amounts to $4,522m at the end of April, one can see the strains that must be placed around the money market and on the financial community in having to meet that sort of deficit in Australia. No community can go on funding those sorts of deficits without reflecting some strain.

Tonight I want to spend a few moments discussing the question of how the Australian Government deficit can best be funded and what innovations can be introduced into this field. It is vitally important in Australia, not only in terms of Government management but also in terms of commercial usage, that we have a better understanding of what goes on and how things can be improved. Firstly, I shall deal briefly with the Government side, both overseas and domestic. In respect of overseas raisings, of which we have been making extensive use in recent times, I press the Treasurer and the Government to ensure in our approaches to overseas raisings that an Australian firm is included in the management syndicates of all loans raised. That might mean nothing to a lot of people. May 1 just tell one story of what happened in Canada in respect of extensive overseas borrowings for the national development. That nation insisted that in the management syndicates of overseas borrowings a Canadian firm was included. The firm was not specified other than that it was to be a Canadian firm. By that means Canada developed in that nation the seeds of a reasonably strong capital market. To date Australia has not insisted on this and I would hope that in the future we do something about it. We will never learn the techniques used in capital markets until we insist on this. One may say: Who will buy that? I can assure the House that the Government underwriters in New York, Morgan Stanley, will go along with it. They will not like it but they will go along with it as they recognise the merit of it; they are pragmatists. It is high time that the Australian Treasury and the Reserve Bank insisted on it.

I turn now to the domestic market. In the coming year if we are to fund a deficit that 1 would hope would be a maximum of $3 billion- I would hope something lower- it is still quite a sizeable task to sell bonds of the order of $ 1,500m plus. What can we do to improve on it? Frankly, the Reserve Bank has done a remarkable job not only recently but over a number of years in keeping the monetary policy straight when the fiscal policy has gone remarkably wrong, and I refer here to the time of the Whitlam Government. I hope that the expertise of the Reserve Bank will be expanded and used. There is no point in going out and saying that we do not know yet what is the deficit. This is what we must be pondering in regard to the May issue because there has been no sign of the level at which we might pitch the rates in May, and this is critical to the interest structure.

We must encourage the Bank to use its expertise not only in terms of market operating but also to get into the market to see what can be done in other areas, for example, in regard to Treasury notes. What institution in the world can one go to, bang a cheque on the counter and come home with a commodity at a set price? These should be put out to tender for specific amounts and the price set according to market supply and demand. If we attempt to set both quantity and price we surely will misread the economy. There is no way for people who sometimes insulate themselves from the real market place, as can be done in Canberra, to understand what is going on. This applies to areas other than the Treasury note area wherein significant amounts are held. The Government accounts statement shows that at the end of April Treasury note holdings were of the order of $2,400m which is remarkably high. I did not think they would have been as high as that.

I turn now to the question of Commonwealth bonds. I have never understood why Commonwealth bonds are put out at specific interest rates for any quantity going. It is time that we used the market forces to predetermine what interest rates would be borne by the market place. Today there is undoubtedly an excess of money over supply. I have no doubt that if the Commonwealth put out its paper at tender, interest rates could be allowed to come down gradually and in a more orderly fashion than they are at present. I commend to the Reserve Bank the idea of a forward market on capital account. Until such time as we get a forward market on capital account we have no chance of using short-term overseas money to get the interest rate in Australia into a reasonably competitive position. If we continue the current situation where we can get a forward market only on a trading account we will never get the movers, the owners and the operators in the short-term market with considerable amounts of money applying themselves to the question of investing in Australian Government securities because the risk would be too great. Losses on exchange are non-tax deductible; interest on investment is taxable income. Therefore, there is a non-deductible risk set against a profitable income so clearly the investor would never be enticed into that market.

I refer now to the capital market itself. A general inquiry into the Australian capital market is long overdue, whether that inquiry is by way of royal commission or whatever we call it. Through such an inquiry we would see something of the operation of the entire banking system and investment structure in Australia. I deal firstly with the banking system. For years it has been a very protected area. Competitiveness has been relative and certainly restricted. The banks through their stodginess have allowed to develop fringe institutions which really have not had the expertise in the first place but which had the nous to go out and buy the expertise from some of the existing institutions. I would hope that such an inquiry would look at the role of the commercial banks and at the role of their currency reserve which has been kept in a tax free, secretive area. It should look also at how this system is going. It is a great balancer. For a long time the commercial banks have hidden a number of things in this area.

Let us look now at the role of the statutory deposits, one of the management devices used by the Reserve Bank in the money market. I do not think it is a very good device. Then there is the role of the LGS, the liquid reserves. If these could be used more appropriately the whole of the capital market would do a lot better. It strikes me that they should be used as part of the general capital market rather than be locked up in the Reserve Bank. If we encourage the banks to go into the market using the LGS as one of the statutory reserves that in itself would make it a far more viable proposition. Surely this is what we must look at; the setting up of a capital market which is viable and strong enough to move in, because then we would not have institutions, governments, banks and insurance companies saying: ‘We get locked into your securities and they are a poor investment ‘. We would be able to turn around and say: ‘It is not the poor investment, it is the darned poor management that goes into the investment of these funds’. I suggest not only in terms of the use of government money but also in terms of the use of private money that this would be a marked improvement on the current situation.

We need to look also at the interbank and intra bank transactions. I would like to know more about the movement of funds, and particularly of securities, between the savings banks and the commercial banks and the relationship of their deposit with the Reserve Bank. This is a technical area but they will never admit it. I will bet that they are moving securities- long dated securities- from the savings banks to the commercial banks to overcome some of their problems. The thirty-twenty rule applying to insurance companies needs to be looked at too. It has some advantages in the restrained and restricted market we have in Australia and if it is shown to be of benefit probably it should be kept but, on the other hand, if we can move as a result to expand the market in which people are prepared to trade it might well be that the market forces which apply to Commonwealth securities should be allowed to flow on into the thirtytwenty rule and to the semi-government institutions and those funds.

Insurance companies should be encouraged to form a mortgage market which would be of benefit to the housing industry. It is high time that these companies, which have significant funds available- this morning’s Financial Review contained a brief sketch of the financial position of the Australian Mutual Provident Society- moved into this area. Their investment in housing is remarkably small. They might claim that they do not have the expertise to deal in housing but I expect that they would have the expertise to deal in mortgages because if a suitable mortgage market were established many hundreds of millions of dollars could be mobilised in this area. I assume that a far greater effort could be made to get this market moving.

I move on to areas outside banks and insurance companies in which there is a multiplicity of operators. There is the official money market. There are restricted dealers- nine of them- whose holding varies from $800m to $ 1,400m which it reached during the halcyon days when the Government was forecasting interest rate falls. I totally deplore the Government going around forecasting interest rate movements. It is an incredible position. The operators in this field who in the following 12 months came up with remarkable profits had only the Government to thank. The Government cannot go around telling people that interest rates will fall by 2 per cent and not expect significant and spectacular investment and windfall profits to result. It is a totally ludicrous approach. A significant contributor in the area of official securities is the unofficial market; the merchant banks, the overseas representative offices of the overseas banks, the brokers and the small time bill dealers. Many millions of dollars are tied up in these areas and that money is not totally utilised within the community. The people who operate in this field take up their position within a market not because they have a direct commercial use for that money but because they have an inherent desire to guarantee their position. That applies particularly to the commercial banks in Australia.

Another side operation is the building societies which have very significant deposits in Australia. They have been somewhat under a cloud. As the Government moves to insure deposits, surely they will become a very significant instrument in the banking area. When it comes to that stage they are far more than building societies; they are quasi banks. How can they pay one rate of interest on a guaranteed deposit vis a vis that paid by a savings bank at a markedly lower rate of interest and at a discriminating rate which cannot last? So there must be some form of adjustment in that particular area. This brings us to the question of what savings banks can do with their moneys and what cash reserves or LGS ratios can be imposed onto building societies. Also in this general area must be included the role of the Australian Industry Development Corporation which made a very sad and sorry collection of investments and which had very sad and sorry borrowing policies.

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

Dr JENKINS:
Scullin

-In dealing with Appropriation Bills such as this, honourable members have the opportunity either to debate the general theme of a government’s budgetary policy or to refer to that policy in terms of their specific expertise, or even in terms of the specific areas which they represent. I think it would be fair to say that the two preceding speakers, the honourable member for Ryan (Mr Moore) and the honourable member for Prospect (Dr Klugman), in dealing with their specific areas of expertise, have shown a very knowledgeable attitude to the appropriations. I am not necessarily indicating that I support everything that has been said, but I think their remarks are indicative of the type of discussion which can take place on matters such as this.

I rather regret that the excellent general critique of government budgetary policy that was made last night by the honourable member for

Gellibrand (Mr Willis) on behalf of the Opposition tends to be separated in time from this general debate. I think his comments on the general theme are worthy of greater debate and notice. I advert to some of the things that he said. Honourable members will recall that, in discussing criticism of what the Government’s budgetary policy was doing to the economy generally, the honourable member for Gellibrand referred to the question of government spending. He indicated that it was not only the level of expenditure that we were concerned about but the priorities as regards that expenditure. We were reminded of that point by the amendment moved today by the honourable member for Prospect. The amendment states that: ‘whilst not opposing the Bill, the House is of the opinion that the appropriations contained therein reflect a policy in respect of government spending (a) which is depressing the lack of demand, increasing unemployment and inhibiting economic recovery and (b) which exemplifies the wasteful and inequitable priorities aimed at supporting the well off and economically secure rather than the under-privileged.

The terms of the amendment deserve further examination. The honourable member for Gellibrand told the House that the Government could take some consolation from two of the occurrences. He accepted that the rate of inflation had been substantially reduced by the budgetary policy being followed by the Government. He also accepted that the amount of private investment had increased substantially. But, in looking at that increase in private investment, he sounded a warning that whilst private investment would be stimulated by factors such as the 40 per cent investment allowance and other favourable taxation provisions, all these stimuli for private investment were, by their very nature, capital intensive. So, at a time when the economy is stagnant, there is encouragement to the capital intensive sphere. But this does not create jobs and so does not give the real stimulus that is needed. This is what we are about in our criticism of the Government’s budgetary strategy.

The Government, by its attitudes to public spending and other matters, must accept full responsibility for the stagnant nature of the Australian economy. It acts as though all cuts in public expenditure are good. The honourable member for Gellibrand gave many examples of such cutbacks, but one I wish to follow up is the cutback in the amount of money available for apprenticeship training- over $4m. One must ask: Is this good? What will flow from it? It means that young people seeking apprenticeships in this stagnant economy are unable to find them. There is no real stimulus for increased opportunities for apprenticeships. Following on that, not only is there unemployment of young people, but also is there the prospect in a very short time of a lack of skilled tradesmen in many areas. So, the whole effect flows on. There is no doubt that, overall, the drastic cuts in public expenditure have brought about a drastic cut in the rate of growth in this country.

The Minister for Finance (Mr Eric Robinson), in introducing Appropriation Bill (No. 3) 1977-78, made reference to some increased allocations in the employment field. For example, he said:

The Department of Employment and Industrial Relations requires an additional $30. 7m to meet an increase in payments to employers and trainees under the National Employment and Training scheme.

The Minister also said that an extra $2.1m was needed for the Community Youth Support Program. These two schemes indicate the concern on this side of the House because they involve employment and young people. However, I do not propose to criticise the various schemes that are covered by these Bills. I have had words to say about them on other occasions.

Let us look at what the stagnant economy that this Government has caused is doing to the people in this sphere. I refer to a local newspaper group whose circulation is in the Scullin electorate and in surrounding electorates. Back in February-March, that newspaper started a series of articles which were headed ‘A Losing Battle’. It was a description used in connection with some of the young people whom some Government supporters label ‘dole bludgers’. It was the story of their experience when seeking employment. That newspaper made an appeal to local employers on behalf of these young people. Goodness knows, enough of those local employers are always saying in their clubs over a drink that they have many vacant positions but that they cannot get people to fill them. How genuine is that? I shall quote from that article headed ‘A Losing Battle’ in the Preston Post of 29 March. That newspaper explains, in its article, that it introduced this series four weeks ago to help outofwork teenagers to gain employment, but that it has had a poor response from employers. It explains further that some of these young people have been trying for jobs continually for more than 12 months. What sort of young people are they? This is how Zelco Sambolec of Thomastown, a young boy of 17 years of age, views unemployment:

You have no dreams or aspirations left when you are unemployed. They all go down the drain.

He wants to become a hairdressing apprentice. He said:

I feel my life is at a standstill and society is passing me by . I don’t really care what I do as long as I have a job. . . . I feel as if I am wasting my life.

He has been unemployed for five months and he has applied for many jobs. The newspaper article then refers to a girl aged 1 7. It reads:

She has applied for more than 70 jobs and only strong emotional support from her family and the hope that sooner or later she must get a job has kept her going.

She is going to job interviews only to be told she does not have enough experience or is too young. ‘How are you supposed to get experience when you are straight out of school ‘, she said.

She completed a receptionists ‘ course after leaving school and would like a job in that field.

The article refers to a lad aged 1 6, and it reads:

He has been unemployed for 12 months but says an optimistic attitude has kept him going.

He has applied for more than 100 jobs without success but keeps trying because he hopes the next one may prove fruitful . . . ‘I don’t like getting money for nothing. I prefer to stay independent and have not applied for unemployment benefits’.

What was the response of local employers to this article? In the same newspaper of 4 April 1978 there appeared under the heading ‘ “Battle” is lost’ this small paragraph:

Lack of support by employers has forced us to drop the series, A Losing Battle.

I think that is the answer to allegations of dole bludging and it gives a fair example of what we are doing to the young people in the community by depressing the economy. Let me cite another example. A 16-year-old female was apprenticed to a ladies’ hairdresser for a few weeks at the beginning of this year. Shortly after she commenced the hairdressing salon was sold and she was unable to continue there as an apprentice. Her apprenticeship required her to attend a technical college for a day a week. So in the hope that she would find another position as a hairdressing apprentice she continued to attend the technical college for a day a week. In the meantime she applied for a social security benefit and such is the encouragement given to her that this Government told her that because she spent a day at technical college during the week she was not eligible for a social security benefit. What does that do to young people who are seeking to learn skills?

What do the recent articles that have been run in both the Melbourne and Sydney Press in regard to job opportunities for the young do to these people? Yesterday in the Age there was a report not so much on the unemployed but those whom unemployment and homelessness have made unemployable. The article emphasises the point that it is referring not to the better known homeless, alcoholic skid row individuals but to a new group in society of young people up to the age of 20 years who survive in a sub-world of crime, prostitution, alcoholism, drug addiction and so on. It is obvious to many organisations that the numbers in this area of unemployment are increasing. The article reads:

Their numbers have been increasing rapidly over the past two or three years and welfare workers believe that situation will continue to deteriorate as unemployment worsens.

How effective are programs to reduce the inflation rate and to increase private investment when the cost in human lives is leading to this sort of situation? One of the social workers involved in the problem of unemployment said: ‘Young people have no idea of how to live in modern Australian society if they have no job’. This is a criticism of the lack of availability of employment, and there is another factor to be considered. That social worker said:

There is nothing in our education system about how to survive in an unemployment society; or how to live and relate to adults in such a society, . . .

I believe that we must start to think of the social cost of the programs that we are running and the results they will bring for the future. The examples I have given indicate that the present programs, despite the increased expenditure, are ineffective. One of the most effective methods is to put some stimulus into the economy so that there is not this dreadful round of stagnation in the economy. It may well be that because of advanced technology some stagnation will occur, and I accept that, but it does not excuse governments for not planning for that sector or for not trying to construct an economy that has some vibrancy in it instead of an economy which is artificially depressed.

Let me turn to another field- a field I know fairly well, in the area of health- and that is the matter of the accommodation of geriatric patients. It was only in January of last year that we had a report from a committee on the care of the aged and infirm which suggested some innovations. I refer to a project in my electorate to illustrate how government policies have depressed it. It is the Bundoora geriatric complex. As early as 1 967-68 the Victorian Hospitals and Charities Commission highlighted the acute shortage of geriatric beds and said that there had to be at least two major geriatric hospitals in the Melbourne Metropolitan area, one of which should be in the northern metropolitan area. Following that statement a 40-odd acre site was acquired locally for a hospital. A provisional committee was set up in August 1973 with encouragement from the then Labor Government. There was a grant of $30,000 for a philosophic brief on this institution. I think that a proper philosophic brief was produced. The fundamental aim of the complex would be to care for each patient in accordance with individual needs while maintaining personal dignity and sense of identity, independence, involvement with and contribution to society and security, freedom from fear and loneliness.

When the committee was established a good deal of expertise was gathered together. The site was available. A number of essential services were put in but in March this year the axe fell. There were no funds. The project ground to a halt. I might add that since then it has been suggested that there will be $ 1 m available but it is in the sweet by and by and no one will say when. At a stage when documentation on the project should be well under way, there is no way without finance for the work which has already been commenced to be continued. That work will have to wind down. So it means that the need for such an institution in that area has been acknowledged for 10 years. A project has been started but, because of the restrictive types of priorities which this Government has set and which pass down to the State governments, that project will not progress further for some time although substantial work already has been carried out. This in itself is wasteful. What happens to those people who 10 years ago needed that institution? What happens to those people for whom money already has been spent on starting a project for which more money will be required to start it again? I should like to go into this subject in more detail but the time I have available to speak in this debate is drawing to a close. I say to the Government: It is no use cutting down public expenditure unless it gets its sense of priorities right in regard to what it is trying to do. We criticise not only the level of expenditure but also the sort of crazy level of priorities that the Government has fixed for the Australian people.

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

Mr McVEIGH:
Darling Downs

– I appreciate the opportunity of following the honourable member for Scullin (Dr Jenkins) in this debate. I pay a warm tribute to him for a most worthwhile contribution to the debate on these Appropriation Bills- a contribution which obviously is the product of an understanding mind. I believe that his contribution is worth studying because he has itemised and put his finger on some of the very great personal problems that are facing the Australian society at the present time. Unless heed is taken of the points raised by the honourable member for Scullin it could well be that we will destroy the future lives of many young Australians because unless they do have the opportunity of employment and the opportunity to fulfil a most meaningful life, it could well be that they will lose all respect for the work ethos.

I want to continue the main thread of his speech, which was to do with the appropriations of the Department of Employment and Industrial Relations. I want to place specific emphasis upon division 290.4.02, for which the appropriation of an additional $30,700,000 is sought. I want to take a different tack. To me, it is bad politics when one has to devote a significant sum of money for the purpose of retraining our work force to give it more opportunities. It appears to me that it would be better if we could be positive by creating an environment for economic development which by itself automatically would create more job opportunities. Specific policies are only as good as the policies in the general economic field. The Government’s fiscal policy has at one and the same time acted as a brake and an accelerator. The leadership of the Prime Minister (Mr Malcolm Fraser) in a tough and desperate economic environment has seen responsibility in government spending- the brake- and an increase in private investment, be it in business, in the home or on the farm, which is the accelerator. The sheaf of ideas and impossible dreams of economic manipulation have been replaced by the fist of relentless pursuit of success in restoring confidence and stability. The greatest contribution that we, as a Government, have made has been in the battle against inflation. Our stocksbased on facts, not fiction- in the Organisation for Economic Co-operation and Development, which is the world monitoring agent, are very high. The latest consumer price index figures stand as unassailable evidence to support the OECD. We can award full marks for inflation being reduced to almost 8 per cent. That is the atmosphere that has created confidence.

It is the scripture of my party that men and women do their best and achieve their full potential when the reward of their efforts is their own. One realises that a government has the impossible task of reconciling minimum taxation with maximum spending. The poles never meet in the eyes of the public. But one can never be sure and can never say with absolute certainty that we obtain more revenue by having a higher rate of taxation in the dollar than could be obtained by having a lower rate of tax in the dollar, which encourages the ordinary person- the worker or the entrepreneur- to make more dollars. On a personal scene, I am attracted to the view that the aim of government should be to obtain its revenue by lowering taxes on more dollars earned rather than to obtain its revenue through higher taxation on fewer dollars earned as people will not exert themselves because of the famous words: ‘Why should we work hard as the Government takes it from us in taxation?’

In this debate, therefore, I should like to develop the theme of obtaining revenue through lower taxation on more dollars earned. This is developed with the background knowledge and deep appreciation that no government in the history of this nation has done so much to alleviate the burden of taxation. The Government’s achievement in this area is a monument to its policy objectives. I believe that those objectives are worth listing because of their sheer quality. They are: The restructuring of personal income tax from 1 February; the 40 per cent investment allowance; the trade in stock valuation adjustments; and the change in Division 7 taxation permitting an increase from 50 per cent to 60 per cent in the amount of profits which private companies can retain without attracting undistributed profits tax. They are great incentives. It would appear to me to be appropriate in this debate, coming as it does in the time of discussion and debate about the formation of the 1978 Budget, to advance a few suggestions which may be of assistance in furthering the economic activity of our country, an activity which will have a flow-on effect in beating the battle against unemployment.

From representations made to me and from inquiries I have made it has become quite clear that private companies need special representations made on their behalf prior to the next Budget. In his speech on 13 October of last year dealing with small business the Hon. P. Lynch instanced that 75 per cent of all small businesses are sole proprietorships and partnerships and that the proportion of unincorporated retailers is as high as 88 per cent of all retail business. It is honest, therefore, to say that most of the partnerships and business arrangements obtain full benefit from the proposals which I referred to earlier and which we have implemented. But we cannot and must not forget about the private companies- be they family or otherwise- which comprise the remainder referred to in the speech of the Hon. P. Lynch on 1 3 October of last year.

Many thinking and concerned Australians are aghast at the revelation during recent weeks that many people deliberately evade taxation. The proposition has been advanced- I believe with some justification- that if the rate of taxation were reduced even further than we have reduced it there would not be anywhere near as many attempts by taxation planners to exploit the taxation laws by such means as using share trading loopholes. I condemn those people who deliberately launder substantial income. I hope that the strongly worded stern warnings given to such tax exploiters and evaders by the Hon. J. Howard, the Treasurer, will indicate to these people that they certainly do not have the sympathy of the Government or the population at large. By the very fact that they are evading taxation they are not being fair and are causing the average Australian person to pay far greater taxation than would be the case if everyone paid his just dues. I fully support the Treasurer, the Cabinet and the Government in their efforts to clamp down on tax evasion and exploitation. I can assure them that they have the full support of the majority of the Australian people in ensuring that the tax burden is placed fairly and equitably on each and every one of us.

I want to take up the cudgels on behalf of the private companies which, I believe, have not received the same concessions as the rest of the Australian taxpaying public. If we have more progressive private companies there will be more opportunities for employment and more people will have the opportunity of making a reasonable contribution to the Australian way of life. In the last Budget, the primary taxation rate of private companies was increased to the same level as that of public companies, namely, 46 per cent. The difference in the distribution of income insofar as private companies and public companies are concerned is in the fact that public companies are free to distribute or not to distribute it without fear of penalty whilst private companies are compelled by the taxation laws to distribute at least 40 per cent of their profit because of the additional taxation for undistributed profits. For each dollar in profit a private company makes it has to pay out 46 per cent in primary tax, which leaves 54c in the $ 1 profit. On the basis of being required to distribute 40 per cent of that and assuming that this amount of distribution- namely, 21.6c- is subject to 60 per cent personal income tax in the hands of the shareholders, the taxation authority can have, as it were, a tax grab of 58.96 per cent of private income tax in the short term and up to 78.4 per cent in the long term.

Under the previous arrangements of having to distribute at least 50 per cent of their income, private companies on the same personal tax margin of 60 per cent had to pay the Government 59.75c of the profit dollar, 42.5c by primary tax and 17.25c by personal tax. Following the introduction of the 40 per cent retention allowance, the Government took 56.30c, 42.5c by primary tax and 13.8c by personal taxation. This was a drop in total tax of 3.45c per dollar from the amount under the previous arrangement. Following the Budget when primary income tax was increased to 46c, total tax became 58.96c which is 2.66c more than the intermediate step and only .79c less than the first position.

Quite obviously, private companies and their shareholders under the total package deal are not in a much better position than they were under the old arrangement. It would appear to me, therefore, that as an exercise in impartiality and honesty the Government in its pre-Budget discussions must consider an increase in the amount of profit a private company can retain for the purposes of expansion of the business from the present 60 per cent and /or a return to the original concessions in the base rate granted to private companies. It is appropriate to bring to mind the recent statements of Mr John Valder, the former Chairman of the Sydney Stock Exchange. I believe that they are very apt and worth serious thought.

The second point I want to make on behalf of private companies is in relation to provisional taxation, either about to be paid or due in the near future for the year 1977-78. 1 submit that it is not too late to bring these provisional tax payments into line with the taxation concessions of a general nature granted as from 1 February 1978. Quite often we find that private companies have a big taxation liability on the one hand while on the other hand they have liquidity problems and have an inability to raise, within the normal bank rate, sufficient funds to meet their taxation liability. The situation can arise and has arisen wherein the level of income for the year ended 1978 would be roughly the same as that for the year ended June 1977. On this basis, with the income for the current year being estimated to be approximately the same as for the previous year, the amount of taxation payable would be greatly reduced on account of the reduced rates being applicable from 1 February 1978. What concerns me about the whole exercise is that the various commissioners of taxation all over Australia have not allowed in their provisional taxation assessments any amount for the reduced rates that would apply after 1 February 1978.

It is realised, of course, that a person can elect to vary his taxation by self-assessment within the permitted margin for error of 20 per cent. I do not believe that people and companies that were in a position of knowing that their income would be roughly the same, even allowing for inflation, should have been put to the expense of extra accounting procedures when the Taxation Office through a computerised arrangement could have varied the provisional tax in line with the reduced taxation rates to apply from 1 February. It seems to me to be manifestly unfair that people are forced into a liquidity problem because the Taxation Office and the Treasury believed that they were entitled to administrative convenience rather than a fulfilment of our Government’s clear promise of less taxation to all after 1 February 1978.

Governments are here to serve people, not to hinder them. Why should there be different and differing standards of taxation assessments according to the degree of ingenuity and aggression displayed by tax agents on behalf of their clients? In this highly technical age it surely would have been a simple procedure for the Taxation Office automatically to have issued provisional taxation notices, bearing in mind the concessions granted on 1 February, rather than calculating provisional tax at the previous year’s rates. I particularly ask the Treasurer to investigate even at this late hour whether this can be done in order to alleviate many cases of great personal hardship.

There is another area of disadvantage to selfemployed people about which I desire to pass one or two comments. It would appear that modern taxation procedures do not follow the New Testament dictum that the servant is not above his master. The employee of a company is certainly at a greater advantage as compared to a person who is his own master when we analyse taxation benefits for superannuation payments. An example best clarifies the situation. I take the case of a private company and a self-employed person, both of whose enterprises net $40,000 per annum. I assume that the director of the private company is entitled to $32,000 per annum and that his salary warrants a contribution of $8,000 for superannuation by the company. Company tax saved by directing $8,000 to superannuation is $3,680. Tax on a sufficient distribution of $1,728 at 60 percent is also saved. The total saving in taxation is therefore $4,716 or 58.95 per cent of the $8,000. The self-employed person in his own right is discriminated against under superannuation proposals. The professional person, self-employed, earning a similar income of $40,000 would have no taxation concession and would pay $4,800 income tax on the $8,000. Obviously, he should be entitled to the same concessions for superannuation as the person who is incorporated as a private company.

The limit for the combined concessional allowance of $1,200 for life insurance premiums and superannuation contributions has not been changed since 1967-68. Since then prices have increased more than three times. This represents a staggering loss of real value. The maximum allowance should be raised to restore its purchasing power. It should change as the circumstances suggest. Unless we encourage people to invest in insurance there will be long-term problems from the neglect of capital formation with the loss of a company’s support for life assurance- the only savings medium oriented towards long-term investment. It must be remembered- the honourable member for Ryan (Mr Moore) spoke about this- that the life assurance industry has to operate under the 30-20 rule which virtually forces it to invest 30 per cent of its funds in government securities and thus accept a lower return than that which would be applicable on the open market.

It is good to encourage people in effect to compulsorily save. Unless this eventuates economic growth will be dampened and the country will become more dependent on foreign capital for development. Fewer jobs will be created and inflationary problems will be built into the economy notwithstanding the efforts of a determined government to conquer them. Those of us who are pledged to ensuring that the interest rates on borrowings will be reduced will also have to admit that unless funds are available from people such as life assurance companies, the public sector will suffer by being forced to pay higher interest rates on borrowings. Small business has played and will continue to play a notable part in providing services in all areas of Australia. Tremendous impetus was given in the general area of small business by the Government’s investment allowance which is due to be changed from 1 July. This, of course, was part of the Government’s economic strategy. I believe that the Government should give very serious consideration to extending its benefits.

There are one or two other comments of a general nature which I make on two particular schemes. One is the Community Youth Support Scheme. To me it seems to be playing a very significant part in helping young people who, through no fault of their own, are unable to obtain positions. These people at least now have a feeling that other people in society are concerned for them and think about them. Two excellent schemes are operating in my electorate, one in Toowoomba and one in Warwick. I have been tremendously impressed by the enthusiasm which these young people are displaying. It is good to see them becoming involved. It is good to see that they respect their leaders. Above all it is good to see that the community responds to them and indicates an interest in their various undertakings. I also note from Appropriation Bill (No. 3) that there has been an increase in the appropriations for the Defence Department for the Navy and Army cadet schemes. There was a great debate on cadets a few years ago. Suffice it to say that when this Government restored the cadet system there was much questioning as to its future. It is heartening to realise that it has been a success story.

We find now, particularly in the case of air cadets and army cadets, that ceilings have been reached and that boys and girls are unable to find places in the various cadet units. I hope that the Government in its appropriations next year can indicate that the ceilings for the various cadet corps will be lifted. To my mind there is no better way of moulding and chiselling into shape the character and basic motivation of our youth than giving them the opportunity of observing discipline and being part of the cadet system. It is depressing and upsetting to realise that these young people who come along full of enthusiasm, backed by the cadet corp arrangements now which see a great community involvement, find that they cannot get a place. In one area in my electorate boys are so determined that they turn up each Friday night so that, whilst they cannot be part of the movement, they are with it. Although they do not get an issue of uniforms, they still participate in the various activities. We should encourage that sort of activity if we are concerned for the future of Australia.

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

Mr MORRIS:
Shortland

-In this debate on Appropriation Bill (No. 3) 1977-78 and Appropriation Bill (No. 4) 1977-78 we are discussing the appropriation of an additional $283.23m under Appropriation Bill (No. 3) and $82.22m under Appropriation Bill (No. 4) in addition to the amounts provided for services this financial year under Appropriation Bill (No. 1 ) 1977-78 and Appropriation Bill (No. 2) 1977-78, which constituted the Budget. In the time available to me I want to deal with some specific expenditure proposals by the Department of Health, the Department of Defence, the Department of Prime Minister and Cabinet and the Department of Transport.

Far too little opportunity is provided in the Parliament to examine in detail the individual items of expenditure for which funds are sought from time to time. The useful paper presented with these Bills by the Department of Finance is the statement of expected under spendings, or savings, to use a euphemism, on Appropriation Acts Nos. (1) and (2) for 1977-78-the Budget. Page 24 of that publication shows an expected under expenditure of $5m under division 327.4 for hospital insurance organisations subsidy. That $5m under expenditure is one-third of a total of $ 15m. I understand from my colleague the honourable member for Prospect (Dr Klugman), the shadow Minister for Health, that this money is used to assist the health insurance funds in cases of hospitalisation which fall under the heading of chronicity. There is much public confusion and worry at present in relation to the coverage of long term aged hospital patients who are members of the Hospitals Contribution Fund of New South Wales. I bring to the attention of the Parliament the experience of a constituent who claims that at the time Medibank was being introduced he was assured by the Newcastle manageress of the Hospitals Contribution Fund of New South Wales, to quote from his correspondence to me, that: as my mother was contributing to the Fund- at the highest scale- her level of accommodation would continue unchanged.

After a series of correspondences he was advised by the Hospitals Contribution Fund of New South Wales on 12 May 1976 that the chronicity rule would apply from 31 December 1975; that is, from almost five months earlier, in respect of claims for his aged mother who was being cared for throughout in a private hospital. The Fund’s decision was in effect retrospective and meant a considerable burden on the constituent concerned and his aged mother. I do not want to delay the House with all the detail of the subsequent representations- all to no avail- but I instance them as an example of the confusion and of how little store can be placed on undertakings given by representatives of, in this case, a health insurance organisation. The weight borne by that assurance of the officer of the organisation is something that will probably have to be tested in court. I should like the Minister for Health (Mr Hunt), when he has an opportunity, to look at this matter and to examine the action taken by the Hospitals Contribution Fund of New South Wales to see what can be done to require the Fund to fulfil the undertaking given by the Newcastle manageress to my constituent. Therefore, I seek leave to incorporate in Hansard a letter I have received from my constituent, Mr Hanes on the matter.

Leave granted.

The document read as follows- 14 Kalinda Parade. Whitebridge. N.S.W. 2290. 14th February, 1978.

Mr P. Morris, M.H.R. Commonwealth Parliament Office, 1 st Floor Cnr Ridley and Pearson Streets, Charlestown, N.S.W. 2290.

Dear Sir,

Following your perusal of the file of correspondence in relation to a problem which exists with the Hospital Contribution Fund of Australia- as requested- I submit a condensed version of the problem.

However I beg to stress the need for this condensed version to be read in conjunction with the file.

My mother was hospitalised in Lingard Private Hospital on 1 5th Oct 1 973 and her accommodation was private room. She was a member of H.C.F. paying at the highest scale. Accounts submitted by Lingard Hospital were paid by H.C.F. in full.

Prior to the introduction of Medibank in Oct 1975 I queried the local Fund Agent- on at least four occasions- re the continued hospitalisation of my mother- at the same level of accommodation and was assured ‘as my mother was contributing to the Fund- at the highest scale- her level of accommodation would continue unchanged’.

Because of confusion in the public mind re the introduction of Medibank I ascertained that H.C.F. had a local manager ( manageress ).

I interviewed the local manageress who assured me that there would be no change in accommodation level of my mother- when Medibank was introduced.

However late February-early March Lingard Hospital informed me that H.C.F. in their letter dated 26th Feb 1976 advised. ‘Because the admission is in respect to a chronic condition there is no entitlement to the fund ancillary Private Hospital Table benefit on this claim. ‘

On being informed thus I immediately presented myself at the Newcastle Office of H.C.F. and requested interview with the manageress- which was granted.

On showing her the letter from H.C.F. to Lingard Hospital I was advised that H.C.F. would not meet the account in full.

Reminding the Manageress of her previous assurances her reply was-‘ I cannot remember everything I tell people ‘.

On being informed thus I terminated the interview.

On returning the letter to Lingard Hospital a discussion ensued which resulted in the Hospital dispatching a letter to H.C.F. Sydney Office.

The Hospital had not received a reply by the 7th April. As the uncertainty of this situation was most unsatisfactory I presented myself at the H.C.F. in Sydney on this date and requested a interview with the Claims Manager.

The Claims Manager was most helpful in discussion- but at no stage did he dispute the advice given me. He retained correspondence and the Contributors book which I was holding advising me that the claim would be reassessed. He also requested that I instruct Lingard Hospital to despatchmarked for his attention- the current account, which would also be considered.

H.C.F. advised in their letter of 27th April 1976 they had re-assessed the claim 1st October-31st December 1975 and made a further payment of $546.00 to Lingard Hospital. No mention was made of the account which they had requested that I instruct Lingard Hospital to despatch. They also advised that future hospitalisation would have to be assessed under the Chronicity Rule.

My letter of 28th April 1976 thanked them for the action taken and requested clarification of the date of application of the Chronicity Rule.

H.C.Fs. letter dated 12th May 1976 advised that the Chronicity Rule would apply from 3 1st December 1975.

My letter to H.C.F. of 15th May 1976 stated in detail the facts surrounding this unsatisfactory situation and again stated the assurance given me that my mother’s hospitalisation would continue- unchanged.

Perhaps- at this point- reference to my letter to Mr R. Face, M.L.A. dated 3 1st May 1977 would clearly indicate.

  1. The evasive attitude, or reluctance of H.C.F. to discuss the crux of the problem- the advice given me by a responsible Officer of H.C.F.
  2. The failure of Ministers to recognise the problem.

Referring back to H.C.Fs. letter of the 12th May 1976 they advised that the application of the Chronicity Rule would apply from 3 1st December 1975.

However The Department of Health in their letter dated 10th Sept 1976 in part stated. ‘To apply the rule the Commonwealth insists that the first claim in respect to the Chronic illness be paid at the full rate’.

It is obvious that in the application of the rule they are remiss. However may I return to my original contention.

  1. 1 sought and was given advice by a responsible officer of the fund.
  2. This advice later proved incorrect.
  3. 1 contend that until the Fund corrected this incorrect advice the fund was responsible.

Please would you make representation on my behalf in this matter.

Yours faithfully, H. HANES

Mr MORRIS:

-I thank the House. I shall make the complete file available to the Minister for Health. I ask that he give consideration to the course of action followed by the health insurance fund to ensure that justice is accorded to Mr Hanes and to his aged mother.

I turn now to division 233.1.01 of Appropriation Bill (No. 3), Administration and Other Expenditure, Travelling and subsistence. An amount of $3.622m is provided. Appropriation Bill No. 1 provided $32.63 5 m for this purpose. This amount, together with the $3.622m I have just mentioned provided by Appropriation Bill (No. 3) makes a total provision of $36.357m for travelling and subsistence by personnel of the Department of Defence and Defence Service personnel. Total travel funds for 1977-78 of $36. 357m represent an increase of 12 per cent or $3. 864m for expenditure under this subdivision over 1976-77. Expenditure under division 233.1.01 includes movement of defence staff and personnel within Australia by commercial transport services. I want to relate this 12 per cent increase in travel funds to almost $36.5m for the Department of Defence to the $ 1.705m being made available under division 504.01 to the Department of Prime Minister and Cabinet for conveyance of the Governor-General, Ministers of State and others by the Royal Australian Air Force and Department of Transport aircraft.

I noted that Appropriation Bill (No. 3) provides an extra $0.262m for this item making a total of $ 1.705m for the operational costs of the VIP fleet in 1977-78, which is an increase of 12 per cent over the figure for 1976-77. In other words, in this time of enforced austerity by this conservative Government, when the Prime Minister (Mr Malcolm Fraser) and his ministry have succeeded in reducing the real wages of employees, there is to be a 12 per cent increase in funds made available for the personal pleasures of those who have access to the VIP fleet. Last week we saw the announcement by the Government that it is to purchase two Boeing 727 aircraft with a passenger capacity of 1 20 each as the first stage of a $40m program to re-equip the VIP aircraft fleet with the two Boeing 727s and three rather sleek, luxurious Grumman Gulfstream jets.

I draw to the attention of the Parliament that the present market charter rate of 727- 100s is in the range to $3,500 an hour. That is the style of aircraft to be purchased for the VIP fleet. If one works backward from that charter rate of $3,500 an hour- the current rate- one can establish that the fixed cost of those aircraft, without taking into account wages, operation or anything else, is something to the tune of $30,000 a day. The Minister for Defence (Mr Killen) said yesterday: ‘We are buying two because that is cheaper than buying one.’ But the announcement, as far as the Opposition is concerned, is indicative of the Government’s priorities. Here there can be no other reasonable explanation than that the purchase of these aircraft and the 12 per cent increase in funds provided in this year for operation of the VIP fleet are nothing but an indulgence for the Prime Minister. The main argument that has been advanced for their purchase has been that security and more overseas travel are involved. So, here we have a priority demonstrated by the plucking of funds from nowhere to be made available to purchase two Boeing 727s at the same time as we members of the national

Parliament this week will probably each be interviewed by representatives of the pensioners’ organisations seeking an improvement in conditions and entitlements for pensioners. It is rather a strange clash of events. On the one hand the Government can pluck $40m out of nowhere to buy large VIP luxurious aircraft for more overseas travel. On the other hand, we will be invaded by representatives of the pensioners’ movement. I submit that the reason advanced by the Government- security- for the purchase of the aircraft is spurious. I would like to refer to the Prime Minister’s own words in this chamber on 25 March 1976. At page 1000 of Hansard he is reported to have said:

On my own visits overseas, commercial aircraft will be used as far as possible. The argument that Qantas cannot provide adequate security for a Prime Minister is a specious argument and false.

In addition, I would like to refer to the report tabled last week by the Department of Prime Minister and Cabinet relating to overseas travel by the Prime Minister ‘Assessment of Aircraft Security Considerations’. On page 1 despite the Prime Minister’s remarks this morning, I must attach substance to the report. The following appears:

There are still some security risks, but in our judgment acceptable risks, involved in a Qantas charter aircraft specially chartered for the visit throughout and carrying no other cargo or passengers;

It goes on to refer to the view that if you want to have the best you buy new aircraft. On page 2, in the second last paragraph, the following appears:

This is an assessment based on security grounds. We have not taken into account considerations of cost . . .

It goes on to say: . . . on formal visits the convenience of the government being visited if formal arrivals are involved, inspection of guards, bands and the like.

We can all visualise the former member for Grayndler describing with great exhilaration the pomp and ceremony of the Prime Minister’s arrival overseas in our own freebie No. 1, the new Boeing 727; the troops being paraded of the foreign country which the Prime Minister is visiting. I cannot do justice to it, as the former member for Grayndler could. The final recommendation reads as follows:

In short, our recommendation is that on future overseas visits you travel only by RAAF aircraft or Qantas charter aircraft. In certain circumstances involving direct Qantas commercial flights, flying by commercially scheduled services may be acceptable as far as security of a Prime Minister is concerned.

I again put to honourable members that the reasons advanced by the Government for the purchase of these two 120-passenger, luxurious long-range Boeing 727-100s are spurious. There is no urgency whatever. What we are seeing here is an indulgence of the Prime Minister’s penchant for luxury aeroplanes at taxpayers’ cost. Let me go on to instance just a few of the abuses in the last two years or so to which VIP aircraft have been put. I mentioned the other day the wine carriage flight, the strawberry flight, the search and collect mission for cleaning cloths a few weeks ago, the $3,000 Press conference dash by the then Minister for Environment, Housing and Community Development. He quite frankly said that he had to have a VIP aircraft, otherwise he could not have made the Sydney metropolitan evening television program.

Then we had the title from the Sydney Sun, ‘Fraser’s delight Opera House Flight’. I thought that was a beautiful catch line. We have seen the indulgence of Government members and the indulgence of the Prime Minister in the uses to which this fleet of expensive aircraft are put. This morning we heard the Prime Minister referring to the small numbers of people who went overseas. Let me quote again from John Shaw of the Sydney Sun of 26 May 1977, in referring to that safari of the Prime Minister and the entourage of 43 that was aboard with the Prime Minister. That is the entourage honourable members will recall, that managed to drink the British Trident charter aircraft dry in a 40-minute flight from Paris to Bonn. That was the capacity and quality of the members of that entourage of 43. The Prime Minister this morning quoted selectively in support of this proposed expenditure from the Adelaide Advertiser. Let me quote for the benefit of the national Parliament from this morning’s Sydney Morning Herald, the editorial of which is entitled, ‘Unconvincing Case ‘. It reads:

Mr Fraser claims that there are ‘overwhelming’ security reasons for the Federal Government’s decision to buy two Boeing 727 aircraft for its VIP fleet. Really? There are reasons, certainly; but on the available evidence they are considerably less than overwhelming.

That editorial goes on to say that it was the present Government, when in Opposition, that ridiculed Mr Whitlam’s 1974 proposal made at a time, and I emphasise this, when aircraft hijackings and bomb scares were more prevalent than they are now, to buy two 707s for the VIP fleet for security reasons. The Mirror of 8 May says:

VIP JETS: IT’S PLANE HYPOCRISY

Of all the transparent hog-wash being given to us at the moment the excuse that we need two VIP Boeing 727s on grounds of security is the hardest to swallow.

The Sydney Sun of this evening titled its editorial, ‘Flying Too High ‘ and added:

In a dazzling display of financial acrobatics the Minister for Defence, Mr Killen, says that the Government can fly two VIP 727 jets as cheaply as one.

This is a trap for very young shoppers, and Mr Killen should know better.

I do not want to delay the House, but as far as the Department of Defence is concerned it is true to say that sometime ago it indicated that there was a need for tanker aircraft. It is true also to say that consideration was given to the use of flexible tanker fitments inside those aircraft whereby they could have a dual role, the transportation of passengers and conversion to a tanker aircraft. But no reference to that has been made in regard to this proposal to buy Boeing 727- 100s; no mention has been made of the considerable conversion costs; no mention has been made of the costs and delays incurred in training the several crews that would be needed for each aircraft so that the Prime Minister could jet off to Bermuda, Jamaica or wherever his next overseas stop may be. Moreover, no reference whatsoever is made in the Estimates, either in Appropriation Bills No. 1 and No. 2, or No. 3 and No. 4 now before us, to the operating costs of two 727s and the three Grumman Gulf Stream executive jets that are to follow. For all of this, the reason put forward by the Government is security.

I believe sincerely that we have a Prime Minister who has in him a confrontation streak; that he likes to create confrontation, and when one creates confrontation one generates a need for greater security forces. From that he derives some kind of satisfaction. That is not just my opinion. Let me refer honourable members to a report in the Melbourne Age of 6 April, page 1, concerning a visit by the Prime Minister to Monash University on the previous day. Chief Inspector Bryan Harding, the deputy head of the security operation at the University, offered quite stringent criticism of the behaviour of the Prime Minister on that occasion. Honourable members may read the article themselves, but I would like to quote these two short sentences: ‘The Prime Minister created an unnecessary confrontationsomething easily avoidable, ‘ Inspector Harding said.

We are left with the unhappy conclusion that he (Mr Fraser) sought confrontation.

I think that that streak, that behaviour at Monash University, is also tied up with this sudden and urgent expenditure of $40m on the purchase of two Boeing 727 luxurious 120passenger aircraft. This is at the same time, as I said earlier- tomorrow and the next day- as honourable members will be explaining to pensionersthe Opposition will not have as much trouble as will Government supporters- why it is that a blitz is being conducted upon pensioners to ensure that no pensioner shall receive other income that may affect his or her entitlement to the given rate of pension. It may well be that somebody is getting a few dollars somewhere. It may be that someone is being overpaid 50c or $ 1 a week. I heard yesterday of a case involving a 52c a week overpayment of pension which is being recovered by the Department. It would be very difficult for Government supporters to extol on the one hand the virtues of this urgent program to spend $40m of the taxpayers’ money on the purchase of a new, luxury international VIP fleet and, on the other hand, to justify to the more than one million pensioners of this country the proposal that the means test that governs the award of fringe benefits cannot be updated. We all know that the means test governing the entitlement of pensioners to fringe benefits has remained frozen for almost nine years. As recently as a few weeks ago the Minister for Social Security (Senator Guilfoyle) said that many successive conservative governments- the Labor Government could not get co-operation from the Australian Medical Association on this issuehave not seen fit to provide the additional funding that is required to enable not the easing of the means test on fringe benefits but simply the updating of the means test to take account of the decreases in the value of money since 1969. So there we have it. Day by day and week by week pensioners are being denied an entitlement to fringe benefits, which is a rather severe penalty for those pensioners who would receive local government rate rebates if they held a pensioner medical card. On the one hand we have to explain to the pensioners of Australia why the means test cannot be eased or updated and on the other we have to explain to them the value of updating the VIP fleet.

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

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2079

APPROPRIATION BILL (No. 4) 1977-78

Second Reading

Consideration resumed from 13 April, on motion by Mr Eric Robinson:

That the Bill be now read a second rime.

Question resolved in the affirmative. Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 2080

ESTATE DUTY ASSESSMENT AMENDMENT BILL 1978

Second Reading

Debate resumed from 13 April, on motion by Mr Howard:

That the Bill be now read a second time.

Mr MACPHEE:
Minister for Productivity · Balaclava · LP

- Mr Deputy Speaker, might I have the indulgence of the House to raise a point of procedure on this legislation. Before the debate is resumed on this BUI I would like to suggest that it may suit the convenience of the House to have a general debate covering the Bill, the Estate Duty Amendment Bill, the Gift Duty Assessment Amendment Bill and the Gift Duty Amendment Bill as they are associated measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate. I suggest therefore, Mr Deputy Speaker, that you permit the subject matter of the four Bills to be discussed in this one debate.

Mr DEPUTY SPEAKER (Mr Armitage:
CHIFLEY, NEW SOUTH WALES

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

Mr WILLIS:
Gellibrand

-The four Bills that are now before us in this cognate debate affect estate duty and gift duty. They have essentially two purposes. One is to abolish both estate and gift duties on property passing to a member of a family as from 21 November 1977. The second purpose is to abolish estate and gift duty entirely as from 1 July 1979. In respect of the abolition from 2 1 November, property passing to members of a family has been denned to include a widow or widower, a child, a grandchild, a parent or a grandparent of that person.

The Opposition does not support these Bills. I propose to move an amendment to the Estate Duty Assessment Amendment Bill. This amendment in fact expresses our attitude on each of the four Bills. I move:

Before going to the substance of that amendment, I shall briefly sketch the background of both taxes. The States have levied death duties since the colonial days in the last century. The Federal Government introduced estate duty in 1914, which was one year before income tax was introduced in this country. Gift duty has operated since 1941. Thus for many years a dual system of death duties has operated, being levied by both the States and the Federal Government. That has been a major difficulty with the system. I will elaborate on that difficulty at a later stage.

The rationale for such taxes is basically the need for equity in the tax system. It is incredibly ironic that this debate is taking place one day after we have had a debate on the closing of loopholes in the Income Tax Assessment Act. During that debate honourable member after honourable member on the Government side of the chamber got up and beat his breast about the problem he was having balancing the principle of equity with the principle of nonretrospectivity. Most of them tended to come down on the side of supporting the principle of equity, as they showed by their vote. It is amazing that one day later we are debating a Bill which totally disregards the principle of equity in the tax system- the principle which honourable members opposite seemed to be so keen to support only yesterday.

I believe that the need for equity in the tax system is something to which everyone would subscribe, at least initially. If we are to have equity in the tax system we need direct taxation based on the capacity of people to pay. Any other form of direct taxation which ignores the capacity to pay is, on the face of it, thoroughly inequitable. But in our view the capacity to pay must depend not only on income but also on other factors, such as capital. I shall give a simple example to illustrate my point. If there are two people with the same income and one of them has a magnificent house left to him and the other has no house and has to pay rent, there is absolutely no doubt who is in the better financial situation and who has the greater capacity to pay. In that situation it seems to us axiomatic that if we are to have equity in the tax system we must take account of not only income but also the capital resources of people. Estate and gift duties ensure, at least in theory, that capital is taxed at least each generation. This form of taxation probably does this less satisfactorily than some other taxes on capital may do, but at least we are assured in theory as distinct from practice that each generation estates will be taxed and therefore capital will be taxed by an estate duty.

As I have mentioned, there are other possible forms of tax on capital which would serve a similar purpose. A wealth or net worth tax is one such option. A wealth or net worth tax is a tax on the total amount of assets of people- the net assets. It applies in a number of countries. Clearly such a tax, which is levied annually, is a tax which takes into account the wealth, assets and capital of people. Another form of capital tax is a capital gains tax, which taxes the increments to capital which accrue year by year but which usually are not taxed until those gains are realised on the sale of an asset. Neither of these alternative forms of capital taxes apply in this country. Nominally under section 26 (a) and section 26AAA of the Income Tax Assessment Act we have some possibility of taxing capital gains. However, in fact neither of these sections has any real impact on taxation on capital gains. Section 26 (a) has been rendered almost useless by the High Court and section 26AAA, which was introduced by the Labor Government to ensure at least short term capital gains were taxed, is relatively easily avoided. So one can say that capital gains taxation does not exist in this country. Therefore, we have neither of the other two possible alternatives to taxes on death- the wealth tax and the capital gains tax.

It is interesting to compare the situation in this country in regard to taxation on capital with that applying in other countries. I refer the House to Treasury Taxation Paper No. 1 1 dated December 1974. At page 3 of that paper, which deals with State and gift duty, under the heading ‘Justification for the Taxes’ the following appears:

New Zealand and Ireland, like Australia, have both estate duties and income tax, but no other general taxes on capital or wealth. The United States and all Western European countries other than Ireland not only levy income tax and estate duty, but also either capital gains taxes or net worth taxes (or in many cases both). If Australia had no death duties (it is often said- though rarely by persons concerned with the operation and principles of the tax system as a whole- that they should be abolished) and did not impose any other form of capital tax, Australia would be in an exceptional position on this aspect of capacity to pay. It would be the only advanced Western country levying no other direct tax apart from income tax.

That is the situation in which this country will be in a very short time from now. This Government is doing what the Treasury in 1974 anticipated could never really happen- move to abolish entirely estate and gift duties in this country thereby leaving us in the situation which it mentioned would be the case if that were to happen. We will be the only advanced Western country levying no other direct tax apart from income tax. That is a rather remarkable situation. It means that in respect of taxation we are the most reactionary country in the Western world, as indeed we are in so many other aspects. Therefore, I suppose it is not particularly surprising that taxation is just one other area in which we are proving ourselves to be the most right-wing country in the Western world.

One country that was not mentioned was Canada. In Canada estate and gift duties applied up until 1972. As a result of a very intensive inquiry by a royal commission into the whole taxation system in that country those duties were abolished. At the same time as it abolished estate and gift duty it brought in a comprehensive capital gains tax. In other words, it took away one form of tax on capital but it made quite sure that at the same time it brought in another form of tax on capital. Also at the same time as the Federal Government in Canada took away estate duties, the provinces came in to fill the vacuum. I understand that almost all the provinces in Canada now levy estate and gift duties. So in that country both systems operate, that is, capital gains tax, and estate and gift duties at the province level.

As I say, Australia will have the least equitable tax system of any comparable Western country. This is a serious matter, not only from the aspect of equity in the tax system but also from the aspect of wealth distribution in this country. The available evidence shows wealth distribution to be very unequal, quite contrary to the myth of substantial equality which one hears about from time to time. It is often put about that wealth distribution in Australia is far more equal than in other countries. That may be the case. It is difficult to get comparative data. However, what is true from the data available is that there are very substantial inequalities of wealth distribution in Australia. For some evidence in this regard I refer to a paper by Mr C. W. Junor from the Department of Economics at the University of New South Wales, entitled ‘Poverty and Income Distribution in Australia’. This paper is contained in a book entitled Readings in Economics published by the Economics Teachers Association of New South Wales. In this paper Mr Junor refers to the available evidence of wealth distribution in Australia and points out that although there is no official evidence, a couple of surveys are available. These surveys relate to the years 1966-67 and 1967-68. The earlier survey, which is a study done by Messrs Podder and Kakwani shows that the bottom 50 per cent of families in Australia own 15.5 per cent of total net wealth and the top 10 per cent of families own 36.5 per cent of total net wealth. The top 1 per cent own 9.3 per cent of total net wealth. That shows a considerable unequal distribution of wealth in this country.

The survey for the year 1967-68 showed a much wider disparity. These two surveys were by different people using different techniques. I am not suggesting that the change occurs in one country. The second survey showed that the bottom 50 per cent of persons in Australia owned 8.8 per cent of the total net wealth, the top 10 per cent owned 56. 1 per cent and the top 1 per cent owned 2 1.5 per cent. That second survey showed a much greater inequality of wealth distribution than the previous one. If one looks at both one must concede there is indeed a substantial inequality of wealth distribution in this country.

At least in theory, estate and death duties play some role in restricting the growth of inequality of wealth distribution. The abolition of these taxes and their non-replacement by any other tax on capital, which is what is contemplated by this Government, will thus accentuate wealth inequalities in our community which, as I have shown, are already very considerable. It makes absolute nonsense of the equality of opportunity concept which we hear spoken about from time to time by honourable members opposite. How can one possibly have equality of opportunity when one has massive inequalities of wealth distribution in Australia? It is absurd to suggest that there is equality of opportunity when one has such enormous disparities of wealth. Therefore, the Labor Party insists that a society concerned with equity in both the tax system and the distribution of wealth must support the application of some form of tax on capital. By this we do not mean that the ordinary people should pay tax on their small capital accumulations but that the wealthy should pay by estate or gift duties, or by some other form of tax on capital.

Having said that, I must say that it is true that there are many defects in the estate and gift duty system as it is operated in this country. I shall refer to some of those defects. The dual system of death duties through both State and Federal governments being in the field has posed considerable problems, firstly, in the substantial incidence of the tax, particularly at not very high levels of estate. State taxes have been much heavier than the Federal tax. This has meant that people with relatively low estates have had to pay substantial levels of estate duty. When one reaches the level of something like $100,000 the disparity becomes quite enormous. On an estate in New South Wales valued at $100,000 the State duty paid where the property passed to a child would be $15,500. The Federal tax would be $4,205. From that one example it is clear that there is a very heavy disparity between the level of State and Federal taxes. Secondly, the incidence of the tax as it operates under the dual system is very uneven. People in one State pay much higher levels of tax than do people in another, while people in the Australian Capital Territory and the Northern Territory are much better off because they pay only the Federal tax. This brings about some inequity when there are such enormous disparities in the levels of tax being applied.

The dual system is less of a problem as the States withdraw from the field. As from this year, all States have abolished probate on property passing to a surviving spouse. Victoria has abolished it where the estate passes to the children of the deceased, Queensland has abolished probate altogether, Victoria and New South Wales have promised to abolish it altogether, so quite clearly the States are deserting the field rapidly and the problems involved in the operation of the dual system are therefore being solved. When the Senate committee of inquiry into death duties conducted its inquiries in 1973 it found many problems resulting from the operation of the dual system but it did not say that we should abolish the tax. Instead it said that there should be a unified system of estate and gift duties with the revenue going to the States. It suggested that the Commonwealth could raise the tax for the States. This is passe now since the concept of a single system is applicable now that the States are deserting the field.

The second defect talked about is the nonadjustment of rates of duty over the years and that having created substantial hardship. The Opposition agrees that it is wrong that there has been no adjustment of the rates of estate and gift duties since 1941. That is an extraordinarily long time for there to have been no adjustment of the rates of tax particularly when during that period we have had inflation of the order of 600 per cent. The rates of tax applying at the moment are 3 per cent on valuations up to $20,000 increasing to 6 per cent at $40,000, 26 per cent at $240,000 to 27.9 per cent on $lm and above. The rates of tax have been at that level since 1941 and that is absurd. It has created a major problem in respect of the tax. However, this has been offset somewhat by exemptions which have been increased. For instance, the basic exemption now when property passes to a close relative such as a spouse, child or grandchild is $40,000 or $48,000 in the case of a primary producer’s estate. Where the property passes to a person other than a close relative the exemption is $24,000 for a primary producer’s estate or $20,000 for any other estate.

Although these exemptions prevent small estates from being taxed they do not relieve the tax burden on large estates because the exemption is gradually phased out at the rate of $2 for each additional $8 of the estate.

In addition to these exemptions there is a further deduction of $50,000 for a spouse which means that an estate left to a spouse is not assessed for Federal duty unless it is valued at over $90,000 or $98,000 in respect of a primary producer’s estate. That is a fairly substantial exemption. If the property is jointly owned and one of the married partners dies and if the estate is assessed for Federal estate duty, an exemption of $90,000 means that they must have had a reasonably substantial property between them. So although non-adjustment of the rates has been unfair, given the degree of inflation that has occurred since 1941, the increased exemptions have substantially offset its worst aspects although we still contend that the nonadjustment of the rates has been wrong and should be corrected.

It is interesting to note that in 1976-77, although 111,000 persons died, because of the operation of the exemptions only 13,836 estates were liable for estate duty; that is, 12 and a half per cent or one in every eight of estates paid death duty. Most people do not appreciate this incidence of Federal estate duty. There is in the community a general dislike of all taxes and a general feeling among people that they do not like their estates being taxed when they die. Many people think that their estates will be liable for such taxation but in fact their estates never will be because only 12V4 per cent or one in every eight of estates is assessed for such duty. That being the case, the fear in the community of this tax is extraordinarily ill-based in our view. The defect involved in the non-adjustment of the rates for inflation is correctable. It is not really a reason for total abolition but it is a reason for correcting that nonadjustment.

A third defect in the tax system as it has operated is that the tax has been massively avoided. It has been avoided principally through the loopholes in respect of gifts and trusts. Gifts up to $10,000 in any three years are tax free. That is a massive loophole. It means that by giving away $10,000 every 18 months a person can give away over $ 1 00,000 of estate over a 1 5-year period. That is a substantial defect in the system. It enables massive avoidance to take place. The other principal means of avoidance is the trust. It is probably the major means of avoiding estate duty. By this means a person divests himself of his assets tax free by making them over to a family trust. He nominates a trustee to hold the resulting income and capital growth in trust for certain beneficiaries- usually his wife, children, grandchildren and so on. By this simple means a person can greatly reduce his estate duty, and for that matter income tax because the income from the property passes to the trust and then to the beneficiaries and therefore attracts a lower marginal rate of tax than that otherwise applicable to the person who set up the trust. Yet the person who sets up the trust and avoids both estate and income taxes can retain control over the use of those assets while he is alive.

Trust establishment has been an enormous business in this country in recent years. We have had a great boom in trustee companies which assist in the establishment of trusts and operate them. The establishment of trusts has been a key feature in the process of avoidance of estate duty and we have had the enormous development of what is euphemistically termed estate planning. There have been great seminars held on it and there have been people offering advice on estate planning which is just a euphemism for avoidance of estate duty. This is not an option for most people. It is not an option for wage and salary earners. It is an option only for people who have substantial assets which they can place in trusts. It is not an option which is available to the ordinary wage and salary earner in this country.

It is extremely interesting to note, and as this has been mentioned in the past I will not go into details at this stage, that the operation of trusts as a means of tax avoidance occurs with the imprimatur of the Prime Minister (Mr Malcolm Fraser) and the Deputy Prime Minister (Mr Anthony). Both of these gentlemen acknoledged during the last election campaign that they have family trusts; so we have right at the top of the political tree in this country people, including also the Minister for Industry and Commerce (Mr Lynch), who have family trusts which exist to avoid income tax and estate duty. They are unrepentant about them and do not hide their light under a bushel. In an interview on the radio program PM last year the Prime Minister said:

I think it is entirely appropriate for people to have family trusts.

Later he was asked:

Do you have any family trusts?

He replied:

Oh, yes, I do. They are designed to benefit the family and to keep the farm together.

Later on he was asked:

Mr Prime Minister, do your private family companies and private family trusts have the effect of lowering the rate of income tax that you pay?

The Prime Minister’s answer was:

Family trusts are designed to help keep the family’s assets together. Yes.

That seems to be an understated way of agreeing with the question: ‘Do your trusts enable you to pay less tax?’ So there we have it: Right at the top of the political tree in this country, tax avoidance is being okayed by the Prime Minister and by his Deputy who has also acknowledged that he had such trusts at that time.

The fourth defect in the system relates to the burden on primary producers. Rural properties are said to be particularly badly affected because such properties are a family business. If the persons to whom a farm is left have to pay estate duty, they may be forced to sell the farm and so lose their business. It is also said that primary producers bear a disproportionate burden of estate duty. In relation to these matters we say that substantial concessions apply to rural properties. I have mentioned some of them already. In addition, there is a rebate of 50 per cent of duty where an estate is valued at less than $140,000. This amount reduces to zero on estates up to $150,000.

Estate duty on small rural properties is not high. Most rural properties are valued at below $140,000. Figures that I have obtained from the Bureau of Agricultural Economics show that in respect of the beef, sheep and wheat industries, in 1975-76, 59.5 per cent of farms, taking into account all of the capital involved in the farm operation, were valued at below $140,000. In the dairy industry, 63.7 per cent of farms had capital worth less than $140,000. In the horticulture industry 77.8 per cent of farms had capital worth less than $120,000. It should also be mentioned that, in respect of rural estates worth $140,000, where the estate is left to a spouse the duty payable is only $ 1 ,900 and where it is left to a child the duty payable is $7,762. So, for the vast majority of rural properties- that is, those with a value of less than $140,000 or so- a minimal amount of estate duty is paid.

Certainly the duties are not a great burden for the acquisition of such a substantial property. Further evidence from taxation statistics for 1975-76 shows that the total assessed estates of that order were 13,447, of which 20 per cent or 2,732 were primary producer estates. Of these 2,732 rural estates, 76.6 per cent has a net value of under $140,000. The average duty assessed for these estates was only $2,400. One thousand five hundred and eighty-six or 58 per cent of rural estates had a net value of less than $100,000. The average duty per estate was only $1,160. Quite clearly, for small and medium sized farms, estate duties are not a substantial problem. The belief by many primary producers that they are a substantial problem is just not properly based. They are thinking of State probate duties as well as Federal estate duty. As I have said, the State probate duty has been much heavier in its incidence than the Federal duty. The incidence of Federal duty alone is not at all high on small and medium sized farms. Also the reason why primary producers’ estates are of a much higher proportion of the total estates than primary producers are of the total population is that they have higher levels of assets. The farmer whose father leaves him the family farm worth, say, $150,000 is in a much better position than a person who is left little or nothing.

Moving past the various difficulties in relation to the defects, we find that the operation of these taxes has been very unsatisfactory from almost all points of view. But the defects are largely correctable. They do not constitute a case for total abolition of any tax on capital. But there are other arguments for saying that a tax on capital should apply. No reason was given by the Treasurer (Mr Howard) in his second reading speech, for abolishing estate and gift duty duties. To give no reason whatever for doing so is to be extraordinarily contemptuous of the Parliament. Gift duty is an important means of ensuring equity in the system because gifts which are not taxed are a means of avoiding income tax. Estate duty is a means of taxing estates of persons who have acquired wealth through taxation evasion and avoidance. So one gets them in the end through estate duty. The abolition of the estate duty will also do nothing to attack basic problems such as unemployment and inflation. We will still have those problems. In fact they will be made worse because the $98m involved will add to the Budget deficit and therefore, in the logic of the Government, make the battle against inflation even worse. It certainly does nothing to assist it.

Mr DEPUTY SPEAKER (Mr Armitage)Order! The honourable member’s time has expired. Is the amendment seconded?

Dr Blewett:

– I second the amendment, Mr Deputy Speaker.

Mr KEVIN CAIRNS:
Lilley

-The honourable member for Gellibrand (Mr Willis) has made one fundamental basic mistake which runs through everything that he said. No consideration of a tax measure can be conducted in isolation. It has to be considered against the background of all the other taxation measures operative in a country. I make another point: No proposal in relation to taxation can be considered apart from the history of those who propose the criticism of a taxation measure. As we know, equity has been the overriding principle according to which the shadow Treasurer, the honourable member for Gellibrand, has criticised the taxation proposals. The sense of equity that would make him happy is everybody groaning equally under an intolerably weight and yoke. But he has forgotten one aspect: It is totally impossible to develop equity in a tax system unless basically there is a low rate of taxation in the system. If a high taxation system is proposed, considerations of equity, of necessity, must be secondary. That is a lesson that should apply in Australia as it has applied around the world. Let me remind the honourable member of a piece of history in this respect. One of the most important documents in relation to total taxation rates ever published was published in the last quarter of the Second World War. It was a contribution to the Economic Journal by Dr Colin Clark, who now writes for a number of newspapers. In that document he put the proposition that a country would get into trouble if the total taxation take were to exceed 25 per cent of what was then called, in that old fashioned terminology, ‘gross national product’. The world, including the many economists advising governments, laughed at the proposition that there could be an upper limit beyond which an electorate and a people would reject proposals. Dr Clark nominated 25 per cent. The Western world was developing the welfare state and upper limits on the total tax takes by government were rejected by many governments. The rejection of that proposition and of that philosophy by those who should know better has been ignored to the detriment of those who have so rejected it. So the Labor Party would do better to concern itself with equity when it proposes taxation rates which lower the burden on every person of either income or wealth who is liable to taxation.

The second point which I find fascinating brings me back to the facts of history. One has to return to the facts of history. When the Government proposes to abolish estate duties and gift duties over a certain period, it is extremely difficult to take criticism from a party which, in the last general election, proposed to impose a taxation burden upon every income taxpayer in the nation. If the equity of the system is to be considered, I remind the Opposition- and it has to be reminded over and over again -

Mr Willis:

– What will this do to create jobs? That is what we were talking about then.

Mr KEVIN CAIRNS:

-It would do infinitely more than your proposals in terms of payroll tax. Let me illustrate my argument. Although the equity of the system should be the overwhelming and the prime consideration- and bear in mind that Labor was going to transfer over $500m worth of tax benefits out of the pockets of wage earners in Australia to the board rooms of the largest companies- the Broken Hill Pty Co. Ltd would have had presented to its board room from the Labor Party through an imposition upon the wage earners an amount of $33. 5m. That was in 1976 dollars. So when the Government is castigated in this place for not considering matters of equity the honourable member for Gellibrand must understand that we will revert over and over again to the arguments that he put and historically they were put only six months ago. I believe this to be a valid point to make.

These taxation measures are not the largest that can be taken by any government. In 1 977-78 the proposals will be worth about $2. 5m. In the subsequent year these proposals will be worth well over $30m and when they are fully in operation in 1979-80 they will be worth $95m to $96m. Compared with the total burden of taxation they are therefore not a particularly large item. They represent a small item but they do something for some people who have had a yoke placed on them over recent years. They add something in terms of incentive. The other proposition which I find fascinating as it was argued by the Opposition is simply this: Opposition supporters seem to be forgetting what their own State Labor governments are doing because when the Prime MinisterMr Willis- I was talking about the State governments.

Mr KEVIN CAIRNS:

-I am talking not about the Victorian Labor Party. I am talking about a Labor Party that occasionally wins power. Have a look at the New South Wales Labor Party. On the very day that the Prime Minister announced that this tax was to be abolished in Australia, Mr Wran, the Premier of New South Wales, said that this proposal was in line with New South Wales Government policies. Yet the Opposition has come into this House and proposed something which its own party in New South Wales contradicts. Further, Mr Wran said that the Treasurer, Mr Jack Renshaw, will make moves in the total abolition of death duties beginning in the next New South Wales Budget. Against that background the honourable member for Gellibrand, being unaware of what is happening amongst his colleagues in the rest of Australia, has come into this House and said-

Mr Willis:

– I said what was happening in all the States. You were not listening, obviously.

Mr KEVIN CAIRNS:

-Yes, but you are unaware of what a successful Labor Government has to do. You are unaware of the fact that no Labor Party will be elected in this country unless it faces the continuing and the greatest economico-political problem that exists. It is up to the socialist party to demonstrate to the people of Australia that in Government it will be capable of reducing and enabled to reduce the rate of taxation. I remind the honourable member that during the last year in office of the Labor Party not just this tax but the largest bulk of tax revenue was at a higher level in the dollar than when John Curtin was Prime Minister during the depths of World War II. Labor has to live with that past. Its supporters have to live with that history. To come into this place and to make some judgment on equity about a tax that involves $90m when Labor has that enormous task to live down belies simple common sense and those people who make judgments as to what they want to surrender to government will make those judgments in common sense. We say quite clearly that this legislation is part of the proposal whereby tax rates are capable of being reduced in Australia. They need to be reduced further and they always need to be reduced with a fair sense of equity. Unless there is equity the Australian people will reject any proposal in relation to tax at all. The total tax system has to be considered.

I turn to the Senate report to which the honourable member for Gellibrand referred. I am fascinated that he still supports the nature of this report. I refer to the report of the Senate Standing Committee on Finance and Government Operations presented in December 1973. There was a majority report and there was a minority report. The majority report in relation to this issue was a report brought down by the Labor members of that Senate committee. They did not propose the abolition of this tax. They merely proposed to make it uniform. They proposed to make it uniform, at whatever level, and either to return the money to the States or to find some alternative proposition- they could not make up their own minds- whereby the money could be returned to the residents domiciled in the States responsible for having the tax rates made uniform with the Commonwealth rates.

So forgetting that tax rates are to be low and that equity is to be a consideration, they got things mixed up with their own sense of uniformity in all things at all times. The Labor Party will have to depart from that kind of mentality if it is to be elected to office in Australia. When one looks at what has happened in respect of this tax another thing is perfectly clear- that a number of State governments proposed to reduce this tax not because the Commonwealth wants it to be a burden on the States but basically because they judge this tax to be inequitable. For example, we know that once the States reduce the tax, as happened in Queensland, it means more for the Commonwealth from the way in which prior impositions of the tax are levied. Once the Commonwealth reduces the tax as is proposed in this legislation there is no set-off in relation to the States.

The Commonwealth proposes to reduce the tax. There is no pressure upon the States to follow the Commonwealth in like manner. What is happening is that the States make their own judgments in their own way and they are deciding to follow suit. I have given the example of what the New South Wales Government proposed to do. Without any pressure whatsoever the Victorian Government has taken a number of steps. The Western Australian Government has announced a timetable within which its tax is to be totally abolished. There is another overriding reason that these taxes ought to be abolished. They are reducing taxes with increasing costs. This form of tax is not a good one. If revenue is to be raised it can be raised more equitably and with greater knowledge by other means.

The most costly taxes to collect are gift and estate duties. Of the revenue collected from estate duty 3Vi per cent is taken up in collection costs. Over 9 per cent of the gift duty revenue is taken up in collection costs. On the basis of economic common sense I suggest it is appropriate to set in train measures whereby both of these taxes should be abolished. These measures could be a part of a total rationalisation of the tax system. The Opposition would have done better had it said: ‘Well, we do not oppose the abolition of this tax but there ought to be a total reorganisation of the tax system’. However, the Opposition proposes that the Bill be withdrawn. In other words, the Opposition says that this tax should be continued. In so doing it has made a very fundamental and a very bad mistake.

We say that any measure that reduces tax deserves support. We say that a government cannot consider the matter of equity until tax is reduced. I do not support the proposition, for example, that when a State government abolishes estate duty ipso facto it creates a good deal of development in that State that otherwise would not have occurred. I would say that the economic benefit to my own State of Queensland flowing from the abolition of death duties has probably been nil when one considers the pluses and the minuses, quite apart from the given doctrine which honourable members opposite have propounded. But what I do say is that such a tax ought to be abolished because it makes the total taxation rate too high.

Debate interrupted.

page 2087

ADJOURNMENT

Unemployment: Shipbuilding Industry -Middle East- Drugs- Tasmania: Air Freight Services- Wartime Executions in New Guinea -Terrorism

Mr DEPUTY SPEAKER (Mr MillarOrder! It being 10.30 p.m., I propose the question:

That the House do now adjourn.

Mr WALLIS:
Grey

-The matter I wish to raise tonight is a matter of concern to a section of my electorate which has been hit pretty hard by unemployment. I refer, of course, to the city of Whyalla, where more than 13 per cent of the work force is unemployed. That, of course, is a direct result of the closure of the shipyards. A few hundred people are still working in the shipyards but it will be only a few more months before they are all out of the shipyards. There have been deputations to Canberra from that city. Those deputations have been from the town council, the local combined union council, chambers of commerce, various town organisations and so on. They have been interviewed by different Ministers. Of course, those deputations have been all to no avail. Whyalla has received no assistance whatsoever from the Government. It is quite obvious that the Government is not prepared to lift a finger in any shape or form to try to assist with the problems that face the city of Whyalla.

Last year certain Liberal Party and Labor Party senators were invited to Whyalla to discuss the recommendations of the Joint Committee on Foreign Affairs and Defence on the retention of the shipyards. Those senators went to Whyalla and, in conference with the Whyalla City Council, gave an assurance that they would support the recommendations in Canberra when the matter was raised. Of course, when the matter was raised the Liberal Party senators who had been to Whyalla not only supported the gagging of the debate on this issue when it was raised by a Labor Party senator but also voted against the proposition itself.

Last February the concerned people of Whyalla called a public meeting to discuss the increasing problems in that city and how they could be overcome. All senators from South Australia, Labor Party and Liberal Party, were invited to be present. Of course, on the night of the meeting the Liberal Party senators did not turn up. They had other engagements. Therefore, the Liberal Party was not represented. Of course, the Labor Party senators turned up, as did the local members of parliament, and made their contributions to the discussions. Once again the people of Whyalla found the Liberal Party letting them down.

Last year, Senator Sir Robert Cotton was asked by the town council to visit Whyalla to discuss the particular problems. He said he was prepared to do that. He said also that he would send some of his officers to examine the situation in order to find out what the Federal Government could do to assist. Since that day the council has been trying to get a copy of the report that was prepared by those officers but that report has not come to light. In the Whyalla News of 24 February of this year the Mayor is reported as urging the release of the report. That report was not released. As a result of that, the council again contacted the responsible Minister. The Minister who had promised to come to Whyalla was Senator Sir Robert Cotton but Senator Sir Robert Cotton was shifted to other places and did not visit Whyalla. The Minister for Industry and Commerce (Mr Lynch) took over Senator Sir Robert Cotton’s portfolio and the responsibility rested with Mr Lynch. The council received a letter from Mr Lynch the week before last. I should like to refer to the council’s reaction to that letter. I refer to an article in the Press headed ‘Minister’s letter is an insult to council’. The article stated:

The Minister for Industry and Commerce, Mr Lynch, has been accused of ‘insulting’ the Whyalla City Council with ‘a platitudinous piece of codswallop’.

This reaction was . . . by a letter . . . in which the Minister refused a request for a copy of a report by the party of Commonwealth officials which visited Whyalla last August, and made no mention of a renewed request that Mr Lynch should visit the city.

The Town Clerk . . . said of Mr Lynch ‘s reply: ‘Frankly, I’m astounded that a politician could think that the council is so naive, so stupid as to accept this platitudinous piece of codswallop. ‘This is ridiculous. We spent six months talking in Canberra and not being heard. This is just schoolkid stuff.’

Various councillors were reported later in that Press report as making some rather rude comments. The closing words, which are contained in a box on the same page, are as follows:

City councillors, exasperated and bitter at Mr Lynch ‘s failure to respond to repeated requests to come to Whyalla, cast about almost desperately for ways to convince the Minister to see the city’s problems for himself.

Perhaps he could be invited to open the new Community Welfare Centre, one suggested. But that was rejected as being in the province of the Minister for Social Security, Senator Margaret Guilfoyle.

Then the Town Clerk . . . made the suggestion that ended further discussion on that aspect of the matter: ‘ We should get BHP to ask him to formally close the shipyard. ‘

Mr YATES:
Holt

-For a few moments this evening I want to proceed with some discussion in the House on the desire for the peace negotiations to proceed in the Middle East. The Government, greatly to its credit, has taken the initiative in world affairs. I particularly note its attitude to the Common Fund, the Commonwealth Conference, the Australia- Japan Foundation and the negotiations at present in progress with China. I notice that the able speech made today by the Minister for Foreign Affairs (Mr Peacock) draws the nation’s attention to the situation which is arising in the Middle East, namely, the fluctuation between peace and war. Three times in the last 20 years the world has been on the brink of destruction through misunderstandings and sometimes misinformation about the situation in the Middle East. Perhaps the most credible and the most creditable thing that ever happened, and well worth the Nobel Peace Prize, was the sudden and dramatic move of President Anwar Sadat to fly to Israel on 19 November last year. It was a remarkable piece of diplomacy.

It is very unfortunate that there are in the Middle East now only a small minority who are trying to make quite certain that negotiations do not proceed. They include some individual elements of the Palestine Liberation Organisation and some rather old fashioned members of the Israeli Government who do not carry the support of the majority of the Israeli people. Surely those in Israel who have been demonstrating and asking for peace must be heard. They remember the loss of their families and their loved ones in the Sinai war, and the only thing that is holding up negotiations at the present time is that the Israeli Government is debating whether it can accept a declaration of intent in order that a peace treaty can be signed between Israel and Egypt. I think really that it could not be beyond the Israeli people now to realise that the world is on their side and is most anxious to assist in negotiating a peace treaty.

Therefore I suggest that, instead of trying to bargain and to make terms which are difficult for the Israel Government to accept, the Arab states would be well advised to stick to one sentence only as a pre-concept for negotiations. That sentence is in these terms: ‘That Australia calls upon all parties to respect the political independence and the territorial integrity of all states in the area, of their right to live in peace, and of the aims, the resolutions and the principles of the United Nations Charter.’ Surely a declaration of that sort provides an immediate opportunity for both Israel and Egypt to reopen negotiations. It is therefore somewhat saddening when one realises that the military negotiation group in Cairo has withdrawn to Israel and that at present no political negotiations are going on in Jerusalem.

Therefore if the Government wishes now to proceed with its initiatives in international affairs, I would say that the time has come for the Prime Minister (Mr Malcolm Fraser) and the Minister for Foreign Affairs themselves to travel to the Middle East to assist in starting the negotiations all over again, for Australia has over the years been well respected by both parties. I am certain that the trust it has established in international affairs will be well rewarded if the Government takes the initiative now. Who can guarantee that the situation will last and that President Sadat will remain in charge of Egypt? We hope, therefore, that the Government will now take the initiative and try to assist in a peace settlement in the Middle East without delay.

Mr JAMES:
Hunter

-I congratulate the honourable member for Holt (Mr Yates) for his interest in this grave international situation. In the few minutes available to me tonight I take the opportunity of speaking while the Minister for Business and Consumer Affairs (Mr Fife) is present in the chamber. The Minister had a reputation for great integrity before he came to this Parliament- a reputation he has maintained since he has been here. However, I am somewhat disturbed. I am anxious to know whether he has carried out a promise which he contemplated a few days ago in the national Press in connection with a man named Tait. This will arouse the interest of the honourable member for Phillip (Mr Birney) and the honourable member for St George (Mr Neil) both being former successful criminal defence counsel.

Mr McLean:

– What were you, a tin cop?

Mr JAMES:

– I was always on the side of the Crown. The Press reported that the man Tait had about seven aliases. He new a plane into Northern Australia a month or so ago and crashlanded it near Katherine. It was found to be loaded to the hilt with hashish and other dangerous drugs. I think all honourable members will concede that the dangerous drug problem in Australia today is one of the greatest social menaces that has ever enveloped this country in its history. Over the last decade it has grown to gigantic proportions. What has concerned many people in Australia particularly myself- I wish it would concern every honourable member in this House- is that the man Tait was sentenced to a mere seven years penal servitude. I think that a non-parole of three years was recommended. It is all right for honourable members to laugh but a few weeks prior to his sentence two aged women from the United States of America were sentenced to 14 years penal servitude. No parole period was recommended by Judge Staunton who would be well known to the honourable member for Phillip and the honourable member for St George. It is very difficult to understand why there is such a variation in the minds of our judiciary. Tait is an incorrigible and virtually recidivous criminal who is already wanted in Indonesia for a 14 year sentence in respect of which he bribed his way out of gaol.

Dr BLEWETT:
BONYTHON, SOUTH AUSTRALIA · ALP

– Where?

Mr JAMES:

– In Indonesia. He crash-landed his plane which was loaded with cannabis and other dangerous drugs. It may be said that the two aged women from America had 1.5 tonnes of dangerous drugs in their vehicle when arrested at Gosford, fortunately outside the electorate of Hunter, but near enough, and that Tait had only about one hundredweight of drugs in his plane but there is a limit to what a plane can carry compared with a Volkswagen. I want to know whether the Minister carried out his threat to ask the Crown Law authorities in Darwin to appeal against the inadequacy of sentence of this man Tait. Many people think, as I do, that some business may have been done.

Mr Lusher:

– How long have you been thinking?

Mr JAMES:

– It would be impossible for you to think. I would like the Minister to give us an explanation as to whether he advised the authorities to appeal against the inadequacy of sentence because the country is screaming about the injustice. Either there is an injustice in imposing a sentence of 14 years on the two aged

American women and a sentence on Tait of seven years with a non-parole period of three years, or there is something wrong with the Commonwealth ‘s administration of the criminal law. I ask the Minister to put the minds of the people of Australia at rest by telling us what the Commonwealth is going to do. An appeal should be lodged.

Mr DEPUTY SPEAKER (Mr MillarOrder! The honourable member’s time has expired.

Mr GOODLUCK:
Franklin

-Mr Deputy Speaker, I hope, despite the tone of my voice, that I can get the words out. I will try. Much has been said about the freight problems of Tasmania in relation to the apple industry, petroleum and all the other problems besetting Tasmania. All of a sudden along comes a gentleman by the name of Gordon Barton and offers to the people of Tasmania a revolutionary way of bringing freight into and out of Tasmania. Actually I am sick to death of the parochial attitude of Tasmanians. There are 400,000 people in TasmaniaI am from the south- and they fight amongst themselves, which is not in the best interests of Tasmania. All of a sudden along comes Mr Gordon Barton- honourable members will recall that he is involved with IPEC Co. Pty Ltd- and he offers to the people of Tasmania a way of getting freight into and out of Tasmania on a daylight service on a three-man ship with no problems. The people of Tasmania have been saying to me since I was elected to this Parliament -

Mr Lusher:

– That is too long.

Mr GOODLUCK:

-Thank you very much. They have been asking me: ‘What are you going to do about the freight into and out of Tasmania?’. The Government has already said that it intends to provide a subsidy of nearly $16m under the freight equalisation scheme. Many people in Australia are starting to ask: ‘ What else is the Government going to do for Tasmania? Why do they not do something for themselves?’. Now a man has come along and has offered the people of Tasmania a convenient, revolutionary way of getting the freight in and out by a daylight service- in in the morning and out in the afternoon. I am not usually a union basher. I believe that fundamentally unions have a very important part to play. But people have to be consistent in what they are saying.

The people who live in Tasmania must be absolutely certain when they make a point that in the long term it will be in the best interests of all Tasmanians. But I am afraid that some of the

Tasmanian politicians, on both sides of the fence, have become extremely negative. They are saying that this is going to upset the south, it is going to upset the north, it is going to create problems for the Seamen ‘s Union of Australia or it is going to create problems for the Transport Workers Union. We have to be very consistent. If we want to introduce something that will be in the best interests of all Tasmanians we may have to overlook some of the minor problems and some of the petty jealousies that occur down there. People say that it is going to close the southern port or that it is going to open the northern port. If it is going to be good for Tasmania we have to support it and stand steadfastly by it, without wavering and without saying that it is going to be good up north and bad in the south, we have a Minister in the north but we do not have a Minister in the south. Those factors should be forgotten when we have a population of 400,000 people- about the population of Geelong. That is the trouble with Tasmania. I only hope that the people come together and that in this enterprise by Mr Barton which is going to cost $30m, of which $ 15m will be guaranteed by the State Government, they can get away from the bickering and the arguments to make certain that it will be good for Tasmania.

Mr Barry Jones:
LALOR, VICTORIA · ALP

– I endorse George Orwell’s dictum that ‘the falsification of history is the greatest of all crimes because it debases the meaning of all human experience’. I agree with Lord Acton that truth is ill served when ‘the strong man with the dagger is followed by the weaker man with the sponge’. The destruction of our history is an act of selfmutilation. If we accept it without protest it reduces us to the status of moral pygmies. The question whether we should suppress our history or recognise it frankly is far too important to be treated as a partisan political issue.

Selective omission and suppression raise disturbing questions. If we accept the precedent, how far do we go? Should we destroy the records of the ‘black drive ‘ against the Tasmanian Aborigines? Should we suppress the records of shooting and poisoning of Aborigines in Western Australia in the nineteenth century? Should we ask Manning Clark to tone down his History of Australia? We have shown hypersensitivity about revealing our past. The British have released their records of the S.S. Duneera incident, in which they figure much worse than we do, but we have not. The Japanese are interested in the Cowra incident in August 1944 when 234 Japanese prisoners of war were killed in a breakout and want to make a film about it. We prefer to keep the subject buried.

What manner of people are we? Would we rather listen to comforting or evasive lies about our past or are we prepared to face the unpalatable truths?

Many Australians, I suspect, prefer a Pollyanna history in which nothing violent or indefensible ever happened. Brigadier Sir William Hall calls the missing files on the New Guinea executions ‘useless and unnecessary information’. There were many in the Communist Party of the Soviet Union who thought that Khruschev’s speech at the 20th Congress in 1956 about Stalin’s rule contained ‘useless and unnecessary information’. A new generation of Germans who have grown up with a sanitised history of their nation now see Hitler as a benign and creative figure because their heads have not been burdened with ‘useless and unnecessary information’ about the Nazi era.

I am not, of course, attempting to compare the actions of those hanged in New Guinea with the crimes of Stalin and Hitler. We need to keep a sense of proportionality. But it might also be pointed out that eleven of Hitler’s closest associates were hanged at Nuremburg after long trials, held in public before a highly qualified panel of judges, with expert translation facilities, in which the accused were ably defended by lawyers. In New Guinea, to take a single incident, Embogi and 21 of his followers of the Orakaiva people were hanged at Higaturu after trials of unknown length, held in unknown conditions before a tribunal with unknown qualifications, with unknown translation facilities, in which the accused may or may not have been represented by counsel. It may be that the records, if found, would prove Embogi to have been a major war criminal ranking with the major Nazis. But we do not have any records at all.

Sir William Webb, formerly Chief Justice of Queensland and later a justice of the High Court of Australia, was appointed as Australia’s Atrocities Commissioner. He investigated the circumstances in which the Japanese killed Australian civilians who were handed over to them, it is widely believed, by New Guineans. I understand that his report covered atrocities leading to the Australian trials of New Guineans. Where is the Webb report on these trials now? Some thoughtful person- or persons- has removed every copy of the relevant material. It is worth noting that, as presiding judge of the Tokyo War Crimes Tribunal which handed down seven death sentences, Sir William Webb is understood to have voted consistently against the death penalty in all cases. It was an open secret. I do not know whether he did this on his own volition or acted on the instructions of the Australian Government.

Richard Nixon was forced from office in 1974 because he attempted to falsify the evidence about Watergate by selective omission and suppression of evidence. Were the United States people and Congress wrong to take such a serious view of his tampering with 1 8 minutes of taped evidence? It would not have caused much of a stir in Australia. If Nixon had been an Australian politician any local critic would have been accused of ‘political stirring’ and told that the tapes contained only ‘useless and unnecessary information’.

Mr NEIL:
St George

-The honourable member for Hunter (Mr James) raised a very important matter. It might be worth having a royal commission look at the possibility of the Federal Court of Australia having jurisdiction to hear appeals in drug matters under the Customs Act because there has been some lack of uniformity in sentencing throughout Australia. Although the State courts have full courts or courts of appeal which can deal with these matters there still may be something to be said for another court having the opportunity to survey sentencing on a nationwide basis. That court, the Federal Court, can be given jurisdiction in certain matters that are prescribed. I want to deal with a matter which arose at the St George defence forum conducted last weekend and which I was able to sponsor.

Mr Baillieu:

– It was a wonderful success.

Mr NEIL:

– I thank the honourable member. Mr Geoffrey Fairbairn, a lecturer at the Aus.tralian National University and reader in the history of revolts and insurgency, gave a paper on terrorism. It was a most chilling and disturbing document. Mr Fairbairn argued firstly that we should look at the actual acts that terrorists commit and not glamorise them. Terrorists are nothing more than common criminals and that the first thing that the citizens of a democracy must do is to deny to terrorists any other status. We should not be talking about executions when they are, in fact, simple murders. We should be ensuring that we understand that terrorism, simply defined, is probably nothing more than a violent act for psychological or political reasons rather than for military reasons. It can often be a gesture of desperation and because of this it is often unpredictable. Mr Fairbairn went on to discuss the types of desperate actions of some terrorists and the fact that sometimes there is trans-national terrorism. He gave a particular example of an operation planned in Germany by a Palestinian Arab, executed in Israel by terrorists recruited in Japan with weapons acquired in Italy but manufactured in Russia and supplied by an Algerian diplomat financed with Libyan money. That is an extraordinary set of complex circumstances.

The most interesting feature of Mr Fairbairn ‘s paper is that he goes on to claim that the terrorist nowadays seems to be a young person, welleducated and very often from middle and upper class families, particularly in Europe. He states that there is a strain of academic teaching that is providing people with such depression about our community by telling them that the community is so oppressive- although Mr Fairbairn does not see that- that they are convinced that something must be done. In effect he is saying that various leftist professors in Western universities are educating young persons in habits of thought that are leading directly to terrorist activity. This is an extraordinary situation. I have had some discussions with persons familiar with the German situation. It seems it is being accepted in Germany that these academics, who often drive Mercedes Benz vehicles, who live in very nice homes and who go home at night time to all the comforts of Western society, are inflicting upon young well-educated people from middle and upper class families, in an almost systematic fashion, such a degree of hatred and desperation about, and such an attitude of decadence towards the community that these people are actively pursuing terrorist activity.

I hope that this sort of thing is not developing in Australia through any strain of academic thought or teaching. But one can say that there may be danger signs. One can say that if this situation is developing in other Western universities there may be a possibility of what Mr Fairbairn calls the intellectual theorising leading to actual violence in Australia. I believe this is something that should be considered very carefully. In a democracy all we can really do is appeal to the universities and the persons concerned for responsible and sensible behaviour, to pull back from the brink, to be reasonable and for the young student to think about the issues of the day more deeply and not to be led astray. I hope that the academic community will engage in a debate on this question, that the community generally will be prepared to consider the whole question and the universities and their students will consider this matter in great detail.

Mr DEPUTY SPEAKER (Mr MillarOrder! It being 1 1 p.m., the debate is interrupted. The House stands adjourned until 10 a.m. tomorrow.

House adjourned at 11 p.m.

page 2093

ANSWERS TO QUESTIONS UPON NOTICE

The following answers to questions upon notice were circulated:

Minister for Foreign Affairs: Visit to Bali (Question No. 55)

Mr Hayden:

asked the Minister for Foreign Affairs, upon notice, on 22 February 1978:

  1. 1 ) Does he recall meeting 2 Indonesian officials from the Centre for Strategic and International Studies in Bali in September 1975?
  2. On what date in early 1976 did the Australian Embassy in Jakarta first inform him that Australian diplomatic officials had become aware of the existence of a memorandum of conversation that purported to be a record of interview between himself and the Indonesian officials from the C.S.I.S.?
Mr Peacock:
LP

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

I refer the honourable member to my answer to a question in the House on 3 May 1977.

Maritime and Pollution Conventions (Question No. 123)

Mr E G Whitlam:
WERRIWA, NEW SOUTH WALES

am asked the Minister for Foreign Affairs, upon notice, on 22 February 1978:

Will he bring up to date his answers to questions Nos. 234 and 235 on the steps being taken to accept or ratify maritime and pollution conventions (Hansard, 27 May 1977, page 2086).

Mr Peacock:
LP

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

Discussions with the States are continuing and it is hoped that suitable legislation will be prepared shortly to enable Australia to ratify the Conventions referred to in Questions Nos. 234 and 235.

Immigration: Fairbridge Society (Question No. 432)

Mr Simon:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 8 March 1978:

  1. 1 ) Is he able to say whether the London based Fairbridge Society is an organisation which makes arrangements for single, divorced or widowed mothers or fathers to enter Australia; if so, on what terms do these persons enter Australia?
  2. Is he also able to say whether (a) the Society Council is chaired by Sir Peter Garran, (b) its Director is MajorGeneral William Campbell, and (c) one of its VicePresidents is a former Defence Minister of the United Kingdom Government and one time High Commissioner to Australia, Lord Carrington?
  3. Does the Australian Government contribute in any way or make fares available to any person sponsored to Australia by the Fairbridge Society?
  4. How many immigrants have been assisted by the Fairbridge Society during each of the years (a) 1974-75, (b) 1975-76 and(c) 1976-77?
  5. Can he say if there is a fanning property owned, rented or otherwise occupied by the Fairbridge Society or its officers or agents, in Western Australia; if so (a) do any of the immigrants or members of their families live at the farm (b) for what periods have they lived there, and (c) what duties do they perform at that farm?
  6. Taking as an example those persons who were sponsered by the Fairbridge Society and qualified for entry in 1976-77, how are these applicants classified under the Government ‘s immigration policy?
Mr MacKellar:
LP

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

  1. 1 ) The Fairbridge Society of London has been associated with child migration to Australia for over 60 years. The Society now maintains two centres in Australia for the reception and care of children up to 15 years of age. One centre is at Pinjarra in Western Australia, the other at Craters in South Australia. For the greater part of this period the scheme related to the entry of unaccompanied children for whom special resettlement could be undertaken.

Since 1957 the Society has cared for the children of migrating single parents (widows, widowers and others) until the parent has become established in the community to the point of being able to become reunited. During this time parents can visit and maintain contact with their children.

Single parent families wishing to migrate approach the Fairbridge Society in London which submits details of suitable applicants to the Migration Branch of Australia House. Applicants judged to be acceptable for consideration under the single parent arrangement then have to meet migrant settlement criteria including health and character requirements.

The Society undertakes to arrange private accommodation and seek employment on behalf of parents admitted as migrants.

Approved single parent families contribute $150.00 towards the cost of assisted passages.

  1. (a) Yes.

    1. Major-General W. T. Campbell, C.B.E. recently retired. The New Director and Secretary is Mr I. F. S. Vincent C.M.G. who was British Consul-General in Melbourne from 1973 to 1976.
    2. Yes.
  2. See question ( 1 ) In addition, the Commonwealth pays a per capita arrival and equipment allowance for each child up to a maximum of $200.00 for the first twelve months based on completed months of residence at the Society’s centres.
  3. (a) 1974-75 Parents 32, Children 98; (b) 1975-76 Parents 62, Children 151; (c) 1976-77 Parents 79, Children 157.

  4. A farming property, ‘Pinjarra’in Western Australia, is owned by the Fairbridge Society.

    1. The children reside at the farm where Fairbridge Society staff care for them.
    2. Average 4-5 months. Minimum one month. Maximum 1 8 months.
    3. School-age children attend school during the week. Under staff supervision they make their own beds and assist with household cleaning. Older children also assist in day to day activities on the farm
  5. Fairbridge arrivals are classified as ‘individual cases considered on humanitarian grounds where special reception and after-care facilities are available in Australia. ‘

Department of Transport: Domestic Air Travel (Question No. 445)

Mr Bungey:
CANNING, WESTERN AUSTRALIA

asked the Minister for Transport, upon notice, on 8 March 1978:

What sum was paid by his Department, or by departments formerly encompassing the functions now performed by his Department, to each airline for air travel within Australia during 1976-77.

Mr Nixon:
Minister for Transport · GIPPSLAND, VICTORIA · LP

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

Payments in 1976-77 as shown in the accounting records of my Department were:

Department of Finance: Domestic Air Travel (Question No. 451)

Mr Bungey:

asked the Minister for Finance, upon notice, on 8 March 1978:

What sum was paid by his Department, or by departments formerly encompassing the functions now performed by his Department, to each airline for air travel within Australia during 1976-77.

Mr Howard:
LP

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

Payments made to airlines by the Department of Finance, and by the Department of the Treasury in relation to functions that became the responsibility of the Department of Finance on the creation of that Department on 7 December 1 976, for air travel within Australia in 1976-77, as shown in the accounting records of the Department of Finance, were:

Purchase of Newspapers and Periodicals (Question No. 474)

Mr Bungey:

asked the Minister for Transport, upon notice, on 8 March 1978:

  1. 1 ) How many copies of (a) each daily newspaper and (b) each weekly publication are purchased by (i) the Head Office and (ii) other offices of his Department.
  2. ) What was the cost of these purchases during 1 976-77.
Mr Nixon:
LP

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

I refer to the honourable member to the answer given to a similar question asked of the Prime Minister (Question No. 468 ) shown on page 978 of Hansard, 4 April 1978.

Purchase of Newspapers and Periodicals (Question No. 490)

Mr Bungey:

asked the Minister for Productivity, upon notice, on 8 March 1978:

  1. How many copies of (a) each daily newspaper and (b) each weekly publication are purchased by (i) the Head Office and (ii) other offices of his Department.
  2. ) What was the cost of these purchases during 1 976-77.
Mr Macphee:
LP

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

I refer the honourable member to the reply provided by the Prime Minister to Question No. 468 which appeared in Hansard (page 978) on 4 April 1978.

Government Offices: Tea Making and Distribution (Question No. 522)

Mr Bungey:

asked the Minister for Veterans’ Affairs, upon notice, on 8 March 1978:

  1. How many (a) full-time and (b) part-time staff are employed on tea-making and distribution in (i) the Head Office and (ii ) other offices in his Department.
  2. What was the cost in 1976-77 of (i) salaries and (ii) other charges in the provision of tea services in his Department.
Mr Newman:
LP

– The Acting Minister for Veterans ‘ Affairs has provided the following answer to the honourable member’s question:

  1. The Department of Veterans’ Affairs currently employs on tea-making and distribution:

  1. ) The cost in 1 976-77 was:

    1. Salaries (including salaries paid to Commonwealth Hostels), $ 100,907; (ii) Other Charges, Nil.

Ryegrass Toxicity (Question No. 548)

Mr Bungey:

asked the Minister representing the Minister for Science, upon notice:

  1. Further to his answer to Question No. 391 (Hansard, 27 April 1976, page 1652) has any further request been received from the Western Australian Government for help in studying or investigating ryegrass toxicity since 27 April 1977; if so, what was the nature of the request and what action was taken on it.
  2. What sum has been spent from all sources on research into ryegrass toxicity in the last 2 financial years.
  3. Will he supply figures showing (a) the amounts spent each year, (b) the sources of these funds and (c) the areas of research in which the funds were spent.
Mr Adermann:
Minister Assisting the Minister for Primary Industry · FISHER, QUEENSLAND · NCP/NP

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

  1. Last year Mr R. C. Old, M.L-A., the Western Australian Minister for Agriculture, wrote to me about annual ryegrass toxicity. He asked that resources of the Western Australian based CSIRO Division of Land Resources Management be diverted to the study of this problem.

On 20 April 1977, 1 advised Mr Old of my support for the CSIRO view that resources of the Division of Land Resources Management should not be diverted, but that studies should continue in CSIRO’s Division of Animal Health.

  1. CSIRO is conducting research on annual ryegrass toxicity, and in the two years to 30 June 1977, spent approximately $250,000 on it. I understand that other organisations which have studied or are studying this problem include-

South Australian Department of Agriculture;

Waite Institute, Adelaide;

Institute of Medical and Veterinary Science, Adelaide; Western Australian Department of Agriculture.

I do not have details of expenditure by these organisations and suggest that the honourable member approach them for such information.

  1. (a) and (b)- CSIRO’s expenditure was as follows:
  1. 3 ) ( c) The areas of research were:

Origin of toxicity in parasitised annual ryegrass Biological effects of the toxin Fractionation of toxic extracts.

Refugees (Question No. 716)

Mr Morris:

asked the Minister for Immigration and Ethnic Affairs, upon notice, on 16 March 1978:

  1. 1 ) What vessels carrying refugees arrived in Australia with passengers and crew who did not have visas during 1977 and 1978.
  2. On what date did each vessel arrive.
  3. What was the port of departure and what were the pons of call of these vessels on their voyages to Australia.

  4. How many passengers and crew did each vessel have, and what were their nationalities.

    1. How many passengers and crew in each case are still in Australia and what is their status.
  5. What has it cost the Government to provide medical treatment and transport for them.
  6. What is the ownership, location and condition of each of the vessels.
Mr MacKellar:
LP

– The answer to the honourable member’s question is as follows: ( 1), (2), (3) and (4)-

  1. Where the ports of call en route are not known, countries are indicated. In some cases the route taken is approximate only as detailed logs were not available.
  2. All persons from these vessels with the exception of six crew members on the ‘Song Be 12’ (boat 23) who have remained on board to return to Vietnam and twelve on boat 27 and one on boat 28 have been granted temporary entry permits on arrival in Australia. Ten persons from boat 1 and 14 from boat 2 have applied for and been granted permanent residence. Others still have their status to be determined.
  3. It is not possible to estimate the cost of medical treatment for boat refugees. No separate funding has been necessary for this purpose.

The cost of moving the passengers and crew of the boats to hostels in the live mainland States averages $ 1 50 per person.

  1. With the exception of boats 1 and 2, which have been sold to Australian buyers, all boats still belong to their original owners. Three boats are located at Wyndham, 2 at Broome and the remainder at Darwin. I have been informed that while some of these vessels are still seaworthy, the general condition of all is deteriorating.

Administrative Tribunals (Question No. 722)

Mr N A Brown:
DIAMOND VALLEY, VICTORIA · LP

wn asked the Minister for Immigration and Ethnic Affairs, upon notice, on 4 April 1978:

  1. 1 ) Was his Department requested by the Administrative Review Council to provide information of the type described in Appendix III of the First Annual Report of the Administrative Review Council relating to the operation of tribunals created under legislation administered by his Department and tribunals administered or serviced by his Department during 1976-77; if so did his Department respond to that request.
  2. Will he now provide the information referred to in pan (1)
Mr MacKellar:
LP

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

  1. 1 ) The Administrative Review Council wrote to my Department on 24 December 1 976 seeking information of the type described in Appendix III of the Council’s First Annual Report. A reply was sent to the Council on 1 8 March 1977.
  2. There are no tribunals operating within the Department of Immigration and Ethnic Affairs nor under legislation administered by it. However, Section 1 4 of the Migration Act 1958 provides for a Hearing by a Commissioner in circumstances prescribed by that section if a potential deportee so elects.

Navigation Amendment Bill (Question No. 792)

Mr E G Whitlam:

am asked the Minister for Transport, upon notice, on 5 April 1 978:

Why has he not reintroduced the Navigation Amendment Bill 1976 which lapsed on the prorogation of the Parliament in February 1977.

Mr Nixon:
LP

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

Following approaches from three Premiers, the Prime Minister gave an undertaking in September 1977 that the Commonwealth would not proceed with the Bill until certain aspects had been fully discussed with the States. Those aspects are still under discussion.

Aircraft Parts: Airworthiness (Question No. 813)

Mr Morris:

asked the Minister for Transport, upon notice, 5 April 1978:

  1. 1 ) What was the nature of the relaxation of airworthiness requirements in the distribution of aircraft parts referred to in paragraph 4, page 49, of his Department’s 1976/77 Annual Report.
  2. Which organisations sought the relaxation mentioned in Part (1)

  3. What were

    1. the part designations and
    2. the brand names of the bogus aircraft and helicopter parts mentioned in the same paragraph.
  4. Were attempts made to distribute these bogus aircraft and helicopter parts in Australia; if so, what action did he take in respect of this matter.
Mr Nixon:
LP

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

  1. 1 ) A release note issued for an aircraft part by an approved distributor reduces the onus of proof on a person using the part in the maintenance of an aircraft that the part is genuine and identical to the one it replaces. The relaxation requested was to enable approved distributors of aircraft parts in Australia greater freedom in the conditions under which a release note could be issued for aircraft parts distributed by them. The distributors have had problems in obtaining airworthiness documents recognised by my Department for certain replacement parts even though the parts were obtained from genuine sources. There is therefore no suggestion that this particular request for relaxation was to facilitate the use of bogus parts. However, in rejecting this request, my Department was conscious of the possibility that in relaxing the requirements it could have removed at the same time some of the safeguards against bogus parts receiving the imprimatur of a release note.
  2. The relaxation request was made to my Department by Mr R. J. Jarman, Managing Director, Aircraft Equipment Overhauls and Sales Pty Ltd who conveyed a resolution of a meeting convened by him in October 1 976 in which the following organisations participated.

Aircraft Equipment Overhauls and Sales Pty Ltd

Ansett General Aviation

Hawker De Havilland Australia Pty Ltd

Society of Aircraft Licensed Engineers and Technology

General Aviation Association (Australia).

  1. The US FAA identified 35 electrical and electronic components supplied by ADS Supply Co., Bellevue, Washington or by Air Spares International, Inc. Seattle, Washington as being not found to comply with the FAAapproved type design data. These components had been purchased by certain airlines and installed in Boeing 727 and 737 aircraft. The list of parts identified by the US FAA are:

The helicopter parts referred to were brought to the attention of my Department as a result of Australian daily newspaper report based on disclosures in the Washington Post of 1 3 February 1977. The bogus parts were described as having been sold to foreign military helicopter fleets and some as having been sold in the US to civilian helicopter fleets. The only description of the parts involved was that they ranged from tiny metal pins and bearings to whole landing gear assemblies.

My Department’s enquiries with the FAA revealed that they had found Aviation Sales Corporation as the only supplier and that as far as they could determine there were no Australian consignees. They stated that the problem seemed to lie almost entirely with military aircraft. My Department has never been able to obtain any list of parts involved.

  1. There is no evidence of any attempts to distribute these bogus parts in Australia. However in the case of the Boeing aircraft for which my Department was able to obtain a list of affected parts, all Australian operators were able to verify that no affected parts had been purchased from the named distributors of the bogus parts or from any organisation other than the original manufacturer.

Aviation Industry Review Committee: Submissions (Question No. 817)

Mr Morris:

asked the Minister for Transport, upon notice, on 5 April 1978:

Which individuals and organisations have placed submissions with the Aviation Industry Review Committee.

Mr Nixon:
LP

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

I have nothing to add to my answer to Question 1701, Hansard, 1 5 February 1977, page 86.

School Cadets (Question No. 822)

Mr Stewart:

asked the Minister for Defence, upon notice, on 5 April 1978:

  1. How many schools had a cadet unit when the system was abolished by the Whitlam Government.
  2. Which schools had units and what was the strength of each unit.
  3. How many schools now have cadet units.
  4. Which are the schools and what is the strength of each unit.
  5. Does he still hold the view that funds provided for school cadet units are an efficient and economic use of taxpayers ‘money.
Mr Killen:
LP

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

The new Australian Services Cadet Scheme, as did the previous system of Service Cadets, comprises three Cadet forces, namely the Naval Reserve Cadets, the Australian Cadet Corps and the Air Training Corps.

Whereas the Naval Reserve Cadets and the Air Training Corps mainly consist of ‘open’ or community sponsored units, the Australian Cadet Corps (Army Cadets) consists of ‘closed ‘ or school affiliated units with the exception of one experimental ‘open ‘ unit in South Australia.

The answers to your question are as follows:

  1. Some schools had more than one cadet unit whilst some other schools formed combined cadet units.

See Annex A.

  1. Some schools have more than one cadet unit whilst some other schools have formed combined cadet units.

See Annex B.

Yes. Factors in establishing the new system of Service cadets were that it retain the best features of the previous scheme but achieve them at a lower cost to the Defence Vote. You will appreciate that a full assessment and evaluation of the new scheme will take some time.

Lady Cowrie Nursing Home (Question No. 825)

Mr Stewart:

asked the Minister for Veterans’ Affairs, upon notice, on 5 April 1978:

  1. 1 ) What are the future plans for the Lady Gowrie Red Cross Nursing Home at Gordon, N.S.W.
  2. 2 ) How long has the Home been in operation. ( 3 ) By whom is it used.
  3. By whom is it financed and administered.
Mr Newman:
LP

– The Acting Minister for Veterans’ Affairs has provided the following answer to the honourable member’s question:

  1. 1 ) and (4) The future of the Lady Gowrie Nursing Home together with the financial and administrative aspects of the Home are not matters in which the Minister for Veterans’ Affairs or the Department of Veterans’ Affairs has any responsibility. However, it is understood that, on 1 April 1978, ownership of the Home passed from the Australian Red Cross Society to the Church of England Retirement Villages. It is further understood that the Home will continue to operate as a nursing home for the time being.
  2. The Home has been in operation as a hostel cum nursing home for over 36 years, having been purchased by the Red Cross Society in 1941.
  3. The Home is used to accommodate elderly patients and at present there are a number of Repatriation patients accommodated at the Home.

Hospital Benefits Reinsurance Trust Fund: Contributions (Question No. 844)

Dr Klugman:

asked the Minister for Health, upon notice, on 5 April 1978:

  1. 1 ) What have been the contributions by each registered hospital benefits organisation to the Hospital Benefits Reinsurance Trust Fund.
  2. What have been the contributions by the Commonwealth Government.
  3. 3 ) What is the method of calculating contributions.
Mr Hunt:
NCP/NP

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

  1. The total contributions to the Hospital Benefits Reinsurance Trust Fund by each registered hospital benefits organisation for the period from 1 October 1976 to 31 December 1977 (5 quarterly settlement periods) are shown in the table set out below.
  1. ) The contribution by the Commonwealth for the above period amounted to $62. 5m i.e. $ 12.5m is allocated in respect of each quarter.

  2. The method used by the Reinsurance Trustees to determine the net amounts payable by or to each organisation in respect of each quarterly settlement period is as follows:

    1. ascertain the Reinsurance Account deficit for each hospital benefits organisation. This is the balance remaining after deducting the amounts of contribution income credited to the Reinsurance Account from the total of the fund benefits and management expenses debited to the Account.
    2. calculate the average number of contributors enrolled in the standard table of the hospital fund (Ordinary Account plus Reinsurance Account) of each organisation. For this purpose, contributors at the family rate will count as 2, those at the single rate as 1.
    3. calculate the total average number of contributors for all organisations.
    4. determine the total Reinsurance Account deficits for all organisations.
    5. deduct the Commonwealth’s quarterly contribution of $ 12.5m from the total gross quarterly deficit in (d) to determine the total net deficit for quarter.
    6. determine the average net deficit per contributor for all organisations (i.e. the total net deficit in (e) divided by the total contributors in (c) ).
    7. determine the net deficit that would have applied to each organisation if it had had average experience (i.e. the number of contributors for each organisation under (b) multiplied by the rate calculated under (0 )
    8. the difference between the actual Reinsurance Account deficit of each organisation under (a) and the amount calculated for each organisation under (g) shall be paid by the Trustees to the organisation (if the former amount is the greater) or by the organisation to the Trustees (if the latter is greater).

Employees of Defence Establishment: Membership of Unions (Question No. 911)

Mr E G Whitlam:

am asked the Minister for Defence, upon notice, on 1 1 April 1978:

Although he cannot give the number of employees by Unions in the Defence establishments and laboratories other than the Naval Dockyards (Hansard, 7 April 1978, page 1253), can he give the unions to which they belong, as the Minister for Productivity did for the munitions, aircraft and guided weapons establishments (Hansard, 6 April 1978, page 1202), or the unions which cover their employment categories, as the Minister for Transport did for Qantas, Australian National Railways (Hansard, 4 April 1978, page 975), Trans-Australia Airlines (Hansard, 5 April 1978, page 1074), and the Australian National Line (Hansard, 5 April 1978, page 1075).

Mr Killen:
LP

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

Employees in Defence establishments and laboratories other than Naval Dockyards, could belong to the unions and associations listed below. These are claimant organisations to Public Service Arbitrators’ Determinations covering work in the areas in question.

Administrative and Clerical Officers’ Association Amalgamated Metal Workers’ and Shipwrights’ Union of Australia

Amalgamated Society of Carpenters and Joiners of Australia

Association of Architects, Engineers, Surveyors and

Draughtsmen of Australia Association of Professional Engineers of Australia Australian Journalists Association Australian Public Service Artisans ‘ Association Australian Public Service Association (Fourth Division

Officers) Australian Society of Engineers Australian Workers’ Union Building Workers’ Industrial Union of Australia Clothing and Allied Trades Union of Australia Commonwealth Services Employees’ Union (West

Malaysia)

Commonwealth Foremen’s Association of Australia (Australian Public Service) Commonwealth Legal Professional Officers’

Association Commonwealth Medical Officers Association Electrical Trades Union of Australia Federated Clerks Union of Australia Federated Engine Drivers’ and Firemen’s Association of Australasia Federated Furnishing Trade Society of Australia Federated Ironworkers ‘ Association of Australia Federated Liquor and Allied Industries Employees

Union of Australia Federated Miscellaneous Workers Union of Australia Federated Moulders’ (Metals) Union of Australia Federated Ships Painters and Dockers Union of

Australia

Federated Storemen and Packers Union of Australia Merchant Service Guild of Australia Operative Painters and Decorators Union of Australia Operative Plasterers’ and Plaster Workers’ Federation of Australia

Plumbers and Gasfitters Employees’ Union of Australia Printing and Kindred Industries Union Professional Officers Association, Australian Public Service

Professional Radio and Electronics Institute of Australasia Transport Workers’ Union.

International Year of the Child (Question No. 917)

Mr Lloyd:
MURRAY, VICTORIA

asked the Minister, representing the Minister for Social Security, upon notice, on 1 1 April 1978:

  1. 1 ) Is the Minister, in her capacity as Minister in charge of the Office of Child Care, responsible for Commonwealth

Government support for, and participation in, next year’s ‘Year of the Child’, if not, which Department has the responsibility.

  1. ) What other Government departments are involved.
  2. What opportunity do voluntary organisations have to make submissions for consideration by the Minister and the Government.
  3. Will any financial support for the promotion of the ‘ Year of the Child ‘ be available to voluntary organisations.
  4. 5 ) What is the anticipated date of a detailed announcement of Australia ‘s participation in this international event.
Mr Hunt:
NCP/NP

– The Minister for Social Security has provided the following answers to the honourable member’s questions:

  1. 1 ) The Minister for Social Security has responsibility for co-ordinating Australia’s participation in the International Year of the Child (IYC). This includes Commonwealth Government support for, and participation in, the Year.
  2. The Minister for Social Security is the Chairman of a Committee of Commonwealth Ministers set up by the Government to co-ordinate the Commonwealth response to the IYC. The other Ministers on the Committee are:-

Minister for Education Minister for Foreign Affairs Minister for Finance Minister for Aboriginal Affairs Minister for Health

Minister for Immigration and Ethnic Affairs Minister for Home Affairs.

An interdepartmental committee, comprising officials from the Departments of these Ministers, has been established to support the Committee of Commonwealth Ministers.

  1. A National Committee of Non-Government Organisations is being established to assist voluntary organisations and community groups to plan and co-ordinate activities related to the celebration of the Year. Details of the formation of this Committee were given by the Minister for Social Security in a news release of 5 March 1 978.

The Commonwealth Government is providing a grant of $30,000 per year up to and including 1979 to the UNICEF Committee of Australia to finance a secretariat for the National Committee of Non-Government Organisations. The secretariat offices are located in the Sydney Headquarters of the Department of Social Security.

  1. The Commonwealth Government has made provision for $100,000 primarily for promotion and publicity of IYC within Australia. Proposals from the National Committee of Non-Government Organisations for promotion of the Year will be considered in the light of that financial provision.
  2. To date, the Minister for Social Security has made two announcements concerning Australia’s participation in the IYC:

In a news release of 20 October 1977, the Minister indicated the Commonwealth Government’s intentions regarding planning bodies to co-ordinate Australian participation (i.e. a Committee of Commonwealth Ministers, a Committee of Commonwealth/State Ministers and a National Committee of Non-Government Organisations). This news release also announced the Commonwealth grant of $30,000 per year to finance a secretariat for the National Committee of Non-Government Organisations.

In a news release of 5 March 1978, the Minister announced the composition of the National Committee of Non-Government Organisations.

Further announcements will be made, as appropriate, giving details of different aspects of Australia ‘s participation in this international event.

National Medal (Question No. 923)

Mr Scholes:
CORIO, VICTORIA

asked the Minister for Defence, upon notice, on 12 April 1978:

  1. Has he received representations from the Victorian Citizens Military Forces Association seeking to have changes made to the form of awards made to members of the Australian Defence Reserve Forces.
  2. Has he examined the requests contained in a petition presented by me on 4 April 1978 (Hansard, page 899) and by other members seeking restoration of imperial awards to replace the National Medal.
  3. Is it a fact that the National Medal is inappropriate and inferior, and unsuitable for awards to reserve personnel in recognition of service.
Mr Killen:
LP

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

  1. Yes.
  2. Yes.
  3. No. The National Medal is awarded to recognise diligent service by all members of the Defence Force. It precedes the Imperial long service awards in the Australian order of precedence for honours and awards.

National Service (Question No. 924)

Mr Scholes:

asked the Minister for Defence, upon notice, on 12 April 1978:

  1. 1 ) Has his attention been drawn to a number of reports from prominent persons advocating the re-introduction of national service as a solution to unemployment and claiming that this would increase the strength of the armed services.
  2. If so, would such a course increase the efficiency and capacity of the Defence Forces.
  3. 3 ) Would the transfer of funds to training of national service personnel reduce defence capacity.
Mr Killen:
LP

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

  1. 1 have received a number of representations advocating the re-introduction of a scheme of national service. The Government’s policy is that national security may demand compulsory military service, but only in circumstances where a real and direct threat to Australia requires a rapid build- up in military manpower. Such circumstances do not exist at present.
  2. and (3) The effect on the efficiency and capacity of the Defence Force of re-introducing national service would depend on the nature and objectives of the particular scheme proposed. A major objective of the scheme which was terminated in 1 972, for example, was to provide Regular Army units with short lead-time manpower.

Re-introduction of such a scheme would require that substantial resources be diverted from the maintenance and planned development of our expansion base to the production of that type of manpower which, when needed, takes the least time to train.

If funded from within the present limits of Defence expenditure, such a scheme would reduce our defence capacity.

National Medal (Question No. 925)

Mr Scholes:

asked the Minister for Defence, upon notice, on 12 April 1 978:

  1. What are the requirements for the award of the National Medal to members of (a) the permanent defence forces (b) ancillary services and (c) the reserve defence forces.
  2. Is it a fact that prior to the introduction of the National Medal members of the permanent and reserve defence forces were eligible for separate and distinct long service and good conduct awards.
  3. Is there a conflict in that the use of the same decoration for both permanent and volunteer services might not be appropriate.
  4. If so, will consideration be given to introducing an appropriate Australian decoration for members of the reserve defence forces.
Mr Killen:
LP

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

  1. The regulations governing the award of the National Medal provide that members of the Defence Force, of an Australian police force, of an Australian fire service and of an Australian ambulance service are eligible for the award. The Defence Force comprise the Regular and Reserve Forces. Members are required to have rendered fifteen years continuous and diligent service.
  2. Yes, although officers of the Regular Forces had no long service awards under these arrangements.
  3. and (4) Not necessarily. The Government which proposed the Australian Honours system took the view that one medal was appropriate to recognise diligent service to the nation by members of certain uniformed Services.

Soviet Naval Vessels in Indian Ocean (Question No. 937)

Mr Jacobi:
HAWKER, SOUTH AUSTRALIA

asked the Minister for Defence, upon notice, on 13 April 1978:

Will he bring up to date the information he gave on 2 June 1977 (Hansard, page 2S90) on the movement of naval ships in the Indian Ocean.

Mr Killen:
LP

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

  1. 1 ) Monthly class/day figures of Soviet naval and naval associated ships which operated in the Indian Ocean during the period 1 May 1977 to 31 March 1978 are shown in the following table:
  1. There have been 26 transits of the Suez Canal by a total of 24 Soviet naval and naval-associated vessels during the period 1 May 1977 to 31 March 1978.
  2. Indian Ocean ship day figures for the USSR, USA, UK and France are shown in the following table:

Housing (Question No. 231)

Mr Willis:

asked the Treasurer upon notice, on 28 February 1978:

  1. 1 ) On what date did the savings and trading banks reduce interest rates on housing loans by half a percent.
  2. What proportion of loans for housing will actually have their interest rates reduced by half a percent and what proportion will have the repayment period reduced.
  3. What proportion of total lending for housing is from (a) savings banks, (b) trading banks, (c) building societies, (d) life offices, (e) finance companies, (f) other private sector institutional lenders and (g) Defence Service Homes and other Government schemes.
  4. Which institutions lending for housing other than savings and trading banks have decided to reduce interest rates and when will these reductions become operative.
Mr Howard:
LP

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

  1. The dates on which interest rate reductions were implemented varied between banks; in the main they ranged from early February to 1 March. For some existing loans the reductions became effective as repayment instalments fell due; this would have carried some adjustment dates into March.
  2. This question is assumed to relate to savings and trading banks (available information relating to other financial institutions is given under (4) below). The reduction of 0.S per cent applied to new loans and virtually all existing loans for housing in which the borrower resides or intends to reside. I understand that with only minor exceptions, banks have given borrowers the option of either reducing repayments or shortening the period of the loan. There is no information available on the proportion which has chosen to shorten the period of the loan.
  3. The following table indicates shares of total housing finance approvals by all significant lenders in 1977:

Source: Australian Bureau of Statistics, Housing Finance for Owner Occupation, December 1977.

  1. Includes additions and alterations.
  2. Includes permanent and terminating building societies.
  3. Life offices component is not identified in published statistics.

  4. There are no categories of private sector institutional lenders identified in published statistics other than those listed in the table.

    1. Available information indicates that in general permanent building societies have reduced their borrowing and lending rates or announced their intention to do so. Information available from industry sources and included in the following table indicates the predominant rates of permanent building societies. There is some variation between societies in a number of States.

I understand that there have been reductions in interest rates charged by some terminating building societies in some States in respect of loans financed from banks and other private sources; fully comprehensive information in relation to these societies is not available to me. The rates charged on loans financed by terminating societies from Commonwealth/State Housing Agreement funds will not be affected; such funds are obtained at concessional rates which are fixed for the term of the loan.

I understand that, with some exceptions, finance companies have generally reduced their rates on new loans, including for housing, by 0.5 per cent since December 1977. Unlike banks and permanent building societies, rates on existing loans are fixed for their duration.

Specific information is not available to me in relation to other private sector institutions.

I am informed that the non-concessional interest rate charged by the ACT Commissioner for Housing Loans has been reduced by 0.5 per cent effective from 1 March 1978.

Rates on loans made by Commonwealth Government authorities at concessional rates have not been reduced.

Minister for Special Trade Representations: Overseas Travel (Question No. 274)

Mr Morris:

asked the Minister for Special Trade Representations, upon notice, on 1 March 1978:

  1. 1 ) On what occasions and for what purposes has he travelled overseas since 1 1 November 1975.
  2. What was the name, classification and salary of each person who accompanied him on each occasion.
  3. What was the cost of (a) travel, (b) accommodation and (c) other expenditure, and what was the total cost incurred in respect of himself and each person who travelled with him on each journey overseas.
  4. Which airlines and/or other means of transport were utilised during each journey overseas.
Mr Anthony:
NCP/NP

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

I refer the honourable member to the answer provided by the Prime Minister to Senate Question No. 1116 (Senate Hansard, 9 November 1977. pages 2397-8).

Closed Circuit Television Conference Facility (Question No. 330)

Mr Barry Jones:
LALOR, VICTORIA · ALP

asked the Minister for Post and Telecommunications, upon notice, on 1 March 1978:

  1. 1 ) Is it a fact that Telecom Australia is attempting to provide a service called r–r. vision’ which would enable discussions, negotiations or small meetings to take place by means of a television and telephone link.
  2. If so, during his consideration of this proposal did he receive any advice as to whether the holding of company board meetings by ‘Confravision’ would legally satisfy the quorum provisions required by the constitutions or articles of association of companies registered under the Companies Acts of the various States.
Mr Staley:
LP

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

  1. 1 ) A closed circuit television conference facility known as ‘Confravision’ is provided by Telecom Australia between Melbourne and Sydney. This facility was introduced by the former Australian Post Office some years ago. It caters for full audio/visual participation by up to six participants at each terminal and provides an economical means of conducting conferences/discussions/meetings between groups of persons located in these two cities.
  2. Telecom Australia has not taken any steps to clarify the position as to the legality of a board meeting conducted via the confravision facility and considers that it is not in a position to do so. In the view of the Commission’s legal advisers, the legality of such a meeting would be determined on the provision of the Act, regulations, constitution or other rules under which the organisation concerned is established and which deal with the holding of meetings. As such, it is therefore a matter which individual companies or organisations wishing to use Confravision must necessarily establish themselves.

Coober Pedy Post Office (Question No. 334)

Mr Wallis:

asked the Minister for Post and Telecommunications, upon notice, on 2 March 1978:

  1. 1 ) Is the business carried out at the unofficial post office at Coober Pedy, South Australia, sufficient to warrant the upgrading in status of this office to an official post office.
  2. What are the criteria that are used to decide the status of post offices.
Mr Staley:
LP

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

  1. 1 ) The level of postal business transacted at Coober Pedy is greater than that which would normally result in the establishment of an official post office. The existing non-official post office, which is located in a self-contained area of the local general store, does however provide the full range of postal services. Before an official post office could be established it would be necessary for a new post office building and a postmaster’s residence to be constructed and this would be extremely costly. In these circumstances, and in view of the fact that the level of postal business transacted at Coober Pedy has declined in recent years, the provision of an official post office has not been considered warranted. The development of the north-south standard gauge railway line is being studied, however, to determine whether or not this would make it a viable long term proposition for Australia

Post to construct a new official post office building and postmaster’s residence.

  1. The following are the criteria for deciding whether an official or non-official post office should be established.

Official conditions

A post office would normally operate under official conditions where the postal workload is expected to remain at or above the level which would justify the employment of two or more full time staff, including a Postmaster, provided that: suitable existing or alternative post office accommodation is available and staff amenities are adequate, and suitable residential accommodation is available and social amenities in the area are acceptable.

Non-official conditions

Where the criteria for the establishment of an official post office cannot be fulfilled, but where a need has been established for the provision of post office counter services, a post office would operate, generally, under non-official conditions.

Bankruptcy: Small Business and Farming (Question No. 412)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister for Business and Consumer Affairs, upon notice, on 9 March 1978:

  1. 1 ) How many small businesses became bankrupt, made arrangements with creditors or were liquidated during (a) the years (i) 1975-76 and (ii) 1976-77 and (b) the periods (i) 1 July 1977 to31 December 1977and(ii) 1 January 1978 to date.
  2. How many taxpayers defined as essentially deriving their income from farming became bankrupt or made arrangements with creditors during the same years and periods.
  3. How many businesses essentially involved in farming became bankrupt or made arrangements with creditors during the same years and periods.
Mr Fife:
LP

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

The records kept by my Department are not such as to allow of the question being answered without some difficulty. However, the figures given are as nearly correct as is possible.

1 ) The small businesses which became bankrupt or made arrangements with creditors during the periods shown numbered:

1975-76-1,490

1976-77-1,502

1.7.77-31.12.77-890

1.1.78-8.3.78-299.

I am unable to give any figures as to liquidations as, apart from the three territories, these are controlled by State law.

The taxpayers denned as essentially deriving their income from farming who became bankrupt or made arrangements with creditors during the periods shown numbered:

1975-76-15 (U) 1976-77-12

1.7.77-31.12.77-11

1.1.78-8.3.78-8.

The businesses essentially involved in farming which became bankrupt or made arrangements with creditors during the periods shown numbered:

1975-76-56

1976-77-59

1.7.77-31.12.77-30

1.1.78-8.3.78-9.

Department of Special Trade Representations: Domestic Air Travel (Question No. 463)

Mr Bungey:

asked the Minister for Special Trade Representations, upon notice, on 8 March 1978:

What sum was paid by his Department, or by Departments formerly encompassing the functions now performed by his Department, to each airline for air travel within Australia during 1976-77.

Mr Anthony:
NCP/NP

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

The Department of the Special Trade Representative encompasses the functions of the former Department of the Special Trade Negotiator which was created on 17 July 1977. No expenditure was incurred during the 1976-77 financial year.

Coastal Erosion (Question No. 635)

Mr Hodges:
PETRIE, QUEENSLAND

asked the Minister for Environment, Housing and Community Development, upon notice, on 14 March 1978:

  1. 1 ) Has his Department made any studies into the effects of high rise development on coastal erosion; if so, will he give details of this research.
  2. Has this material been made available to State Governments.
Mr Groom:
LP

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

  1. 1 ) No, however, the following information is considered relevant to the question:

All forms of development on coastal dunes can effect erosion. On the other hand, damage caused by coastal erosion is likely to be greater in areas of high rise development;

Under the National Estate Program the Government has provided financial assistance to the Queensland Department of Harbours and Marine for a study of coastal erosion;

The Commonwealth and State Governments Collaborative Soil Conservation Study 1975-77 encompasses questions of coastal erosion. Consideration of the Study recommendations is likely in the near future;

It is understood that the Australian Science and Technology Council (ASTEC) will be making recommendations on coastal and ocean engineering as part of its Overview Report on Science and Technology in Australia, 1977. The report is expected later this year.

  1. See(l).

Coastal Surveillance (Question No. 652)

Mr Scholes:

asked the Minister for Business and Consumer Affairs, upon notice, on 14 March 1978-

  1. 1 ) Did the Government statement of 24 January 1 978 say that a committee of permanent heads would examine and report on all aspects of coastal surveillance within one month.
  2. On what dates has the committee met.
  3. Is it a fact that no meeting of the committee had taken place prior to 9 March 1978.
  4. Has a committee of departmental officers considered and prepared recommendations for the permanent heads committee.
Mr Fife:
LP

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

  1. 1 ) On 24 January 1978 I said that a committee of permanent heads would report within one month on the detailed measures necessary to achieve an up-graded air and sea surveillance in the north and west of Australia.
  2. and (3) The committee of permanent heads met on 23 February 1 978. Because of the complexity of the issues involved the permanent heads have been given a further two months to finalise their recommendations.
  3. Yes.

Oil Pollution of the Sea (Question No. 788)

Mr Hodges:

asked the Minister for Environment, Housing and Community Development, upon notice, on 5 April 1978:

  1. 1 ) Has his attention been drawn to the massive oil spill in the sea off the north west coast of France from the stricken tanker Amoco Cadiz.
  2. Has his Department initiated any moves to assess what procedures and methods are being used by the British and French Governments to deal with the oil spill and pollution of the coastline.
  3. Has there been any consideration given by the Government to sending a team of Australian experts to investigate this disaster.
Mr Groom:
LP

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

  1. Yes.
  2. Yes. The Department of Transport has prime responsibility for dealing with oil spills from ships and my Department provides advice on environmental aspects. My Department has sought information on the action taken by the British and French Governments to deal with the oil spill and pollution of the coastline in cooperation with the Department of Transport.
  3. Yes. Consideration was given to sending an expert to investigate the handling of the disaster. However, due to the costs involved it was decided to rely on the official reports and information from other sources for the evaluation of the effects of the oil pollution and the actions taken to deal with it.

Narcotics (Question No. 808)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister for Business and Consumer Affairs, upon notice, on 5 April 1978:

  1. 1 ) What assistance has been provided by the Bureau of Narcotics to the New South Wales Royal Commission on Drugs.
  2. Have any Commonwealth public servants and, in particular, officers of the Bureau of Narcotics, received any formal or informal instructions not to co-operate fully or provide unsolicited information to this inquiry; if so, what was the source, nature and justification for these instructions.
Mr Fife:
LP

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

  1. 1 ) Arrangements have been made between the Federal Royal Commission on Drugs and the New South Wales Royal Commission on Drugs for the provision of information and assistance by Commonwealth officers.

Officers of the Department of Business and Consumer Affairs, including officers of the Narcotics Bureau, have met all requests to them for assistance and information received from the New South Wales Royal Commission.

  1. No instructions, either formal or informal, have been given to officers of the Department of Business and Consumer Affairs and in particular officers of the Narcotics Bureau, concerning non co-operation with or provision of information to the New South Wales Royal Commission.

Colour Television, Rockhampton (Question No. 835)

Dr Everingham:
CAPRICORNIA, QUEENSLAND

asked the Minister for Post and Telecommunications, upon notice, on 5 April 1978:

  1. 1 ) When will colour recording be available to the Australian Broadcasting Commission in Rockhampton, Queensland, which provides the most comprehensive television news coverage in Central Queensland.
  2. What other priorities will be met first.
Mr Staley:
LP

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

  1. The Australian Broadcasting Commission plans to convert its television studio in Rockhampton to colour operations in 1 979. This is dependent on the availability of funds allocated for capital expenditure in 1 978-79 and the capacity of other ABC resources required for the work.
  2. Conversion to colour operations of the Australian Broadcasting Commission’s Darwin television studio will be completed first- during the present calendar year.

Statistical Data Analysis (Question No. 859)

Mr Barry Jones:
LALOR, VICTORIA · ALP

asked the Treasurer, upon notice, on 5 April 1978:

Are information sector employment statistics and national accounting data for Australia being prepared in accordance with the request of the Organisation for Economic Cooperation and Development’s Directorate of Science, Technology and Industry for its projects on Economic Analysis of Economic Activities; if not, why not.

Mr Howard:
LP

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

Early in 1 972 the Information Computer and Communication Policy Group of the Organisation for Economic Cooperation and Development (OECD) selected as one of its projects the ‘Economic Analysis of Information Activities and the Role of Electronics, Telecommunications and Related Technologies’. The project is still at an embryonic stage and work is proceeding towards clarifying underlying objectives, establishing a viable definitional and classificational basis for the statistical analyses that have been proposed, and determining the basic feasibility of the work. The project is being conducted under the guidance of an Expert Group on which Australia has been represented.

In response to a request from the OECD Secretariat for background information for this project, the Australian Bureau of Statistics (ABS) has provided some assistance. The Expert Group has also requested that experimental work with respect to the information sector be undertaken in terms of labour force analysis and the compilation of information sector accounts. Resources available to the ABS have precluded its undertaking such work in respect of Australia.

Investment Allowance (Question No. 919)

Mr Willis:

asked the Treasurer, upon notice, on 11 April 1978:

Has any study been made of the effect on investment and employment of the investment allowance; if so, what were the results of the research.

Mr Howard:
LP

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

A number of overseas and Australian studies are available relating to the effect of investment allowances on investment and employment. The conclusion to be drawn from those studies is that while there is good reason to expect the investment allowance to stimulate investment expenditures, the complexity engendered by the many factors impinging on investment decisions precludes an unequivocal statement on the strength of that link.

The conclusion concerning the employment response is similar. A higher level of investment leads to a higher level of employment in those industries producing investment goods. Further, if the lower cost of investment has enabled a new project to proceed that investment also creates new jobs.

For replacement investment, the effect on employment very much depends on the degree to which capital and labour are interchangeable and on their relative costs; the higher the cost of labour relative to capital the greater the incentive towards labour-saving investment.

While there is a good deal of evidence that the investment allowance has played a role in the recent pick-up in investment, there is also evidence that a good deal of that investment has been labour-saving replacement investment aimed at offsetting the unacceptably high real cost of labour. The gains in productivity so obtained are required to cover the high cost of labour; until that is covered there will be less incentive for expansionary investment.

Cite as: Australia, House of Representatives, Debates, 9 May 1978, viewed 22 October 2017, <http://historichansard.net/hofreps/1978/19780509_reps_31_hor109/>.

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