House of Representatives
14 November 1979

31st Parliament · 1st Session



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

page 2955

PETITIONS

The Clerk:

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

Education

To the Honourable, the Speaker and Members of the House of Representatives, of the Australian Parliament assembled.

The Petition of certain citizens of NSW

Respectfully showeth:

Dismay at the reduction in the total expenditure on education proposed for 1980 and in particular to Government Schools.

Government Schools bear the burden of these cuts, 1 1.2 per cent while non-Government schools will receive an increase of 3.4 per cent.

We call on the Government to again examine the proposals as set out in the guidelines for Education expenditure 1980 and to immediately restore and increase substantially in real terms the allocation of funds for education expenditure in 1 980 to Government schools.

And your petitioners, as in duty bound, will ever pray. by Mr Bradfield, Mr Carlton, Dr Klugman and Mr Morris.

Petitions received.

National Women’s Advisory Council

To the Honourable the Speaker and Members of the House of Representatives assembled.

The Petition of the undersigned citizens of Australia respectfully showeth:

That the National Women’s Advisory Council has not been democratically elected by the women of Australia;

That the National Women’s Advisory Council is not representative of the women of Australia;

That the National Women’s Advisory Council is a discriminatory and sexist imposition on Australian women as Australian men do not have a National Men’s Advisory Council imposed on them.

Your petitioners therefore pray:

That the National Women’s Advisory Council be abolished to ensure that Australian women have equal opportunity with Australian men of having issues of concern to them considered, debated and voted on by their Parliamentary representatives without intervention and interference by an unrepresentative ‘Advisory Council ‘.

And your petitioners, as in duty bound, will ever pray. by Mr Donald Cameron and Mr Hodges.

Petitions received.

National Women’s Advisory Council

To the Honourable the Speaker and Members of Parliament assembled in the House of Representatives Canberra the humble petition of the undersigned members or organisations listed below and citizens of Australia respectfully showeth:

That the thorough nationwide investigations by the Working Party highlighted the need to establish the National Women ‘s Advisory Council.

That we believe the Council consistently and democratically demonstrates its wide representation of the interests of all Australian women, as shown by the Draft Plan of Action for the 1980 National Conference to be held in Canberra in preparation for Australia’s participation in the United Nations Decade for Women World Conference in Denmark, July 1980.

Your petitioners therefore humbly pray:

That the Parliament will continue its support of the National Women’s Advisory Council and its recommendations.

And your petitioners, as in duty bound, will ever pray. by Dr Cass and Mr Macphee.

Petitions received.

Refugees

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

The Petition of the undersigned citizens of Australia respectfully showeth:

That a grave threat to the life of refugees from the various States of Indo-China arises from the policies of the Government of Vietnam.

That, as a result of these policies, many thousands of refugees are fleeing their homes and risking starvation and drowning. Because of the failure of the rich nations of the world to provide more than token assistance, the resources of the nations of first refuge, especially Malaysia and Thailand, are being stretched beyond reasonable limits.

As a wealthy nation within the region most affected, Australia is able to play a major part in the rescue as well as resettlement of these refugees.

It should be possible for Australia to: establish and maintain on the Australian mainland basic transit camps for the housing and processing of 200,000 refugees each year; mobilise the Defence Force to search for, rescue and transport to Australia those refugees who have been able to leave the Indo-China States; accept the offer of those church groups which propose to resettle some thousands of refugees in Australia.

The adoption of such a humane policy would have a marked effect on Australia ‘s standing within the region.

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

Petition received.

Pornographic Publications

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 we the undersigned, having great concern at the way in which children are now being used in the production of pornography call upon the Government to introduce immediate legislation:

  1. To prevent the sexual exploitation of children by way of photography for commercial purposes;
  2. To penalise parents/guardians who knowingly allow their children to be used in the production of such pornographic or obscene material depicting children;
  3. To make specifically illegal the importation, publication, distribution and sale of such pornographic child-abuse material in any form whatsoever such as magazines, novels, papers or films;
  4. To take immediate police action to confiscate and destroy all child pornography in Australia and urgent appropriate legal action against all those involved or profiting from this sordid exploitation of children.

Your petitioners therefore humbly pray that your honourable House will protect all children and immediately prohibit pornographic child-abuse materials, publications or films.

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

Petition received.

Australia-Japan Fishing Agreement

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

That the agreement between the Commonwealth and Japanese governments granting Japanese long line fishing boats access to Australia’s recently declared two hundred mile fishing zone for a fee of $ 1 . 4 million will seriously imperil the world’s largest population of black marlin which inhabit the North Queensland waters and consequently endanger the invaluable tourist and ancillary industries in that area which depend on big game fishing.

Your petitioners therefore humbly pray that the Federal Government will declare:

  1. How many Japanese long line boats will be allowed to enter the Australian fishing zone in the year of the agreement;
  2. How many tonnes of black marlin the Japanese will be allowed to catch;
  3. What is the composition of the overseas interests referred to by the former Minister in his ministerial statement of 25 September, which have expressed interest in carrying out feasibility fishing projects;
  4. Whether the Japanese-Australian Fishing Agreement includes provision for a portion of the foreign catch to be processed in Australia;
  5. What assurances on access to the Japanese market for Australian fish and fish products have been given by the Japanese;
  6. What was the basis for the calculation of the fee which the Japanese will pay for access to the AFZ;
  7. Were any guarantees given by the Japanese for the protection and conservation of black marlin numbers in the AFZ;

And ask that the Government undertake not to re-issue the licences to the Japanese fishermen next year when the terms of access are again reviewed.

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

Petition received.

Great Barrier Reef Marine Park

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

The humble petition of citizens of the Commonwealth submits:

That offshore oil exploration within the Great Barrier Reef Region constitutes a serious threat to the richest and most varied living system on earth.

Your Petitioners request that your Honourable House will:

  1. Declare the whole Great Barrier Reef Region a Marine Park under the Federal Government’s Great Barrier Reef Marine Park Act 1975,
  2. Prohibit oil exploration within the Great Barrier Reef Region (as defined by the 1975 Great Barrier Reef Marine Park Act)
  3. Retain full Federal Government control over the whole Great Barrier Reef Region,
  4. Provide the Great Barrier Reef Marine Park Authority with staff and resources sufficient for effective management of the Region.

And your Petitioners, as in duty bound will ever Pray. by Mr Simon.

Petition received.

Marine Radio Licence Fees

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 we oppose the increase in marine radio licence fees for the following reasons:

  1. 1 ) Radios are an essential part of safety equipment.
  2. Marine radio users save the government millions of dollars in search and rescue.
  3. 3 ) Increased licences will deter the boating fraternity from purchasing and using radios for their own safety.

Your petitioners therefore humbly pray that the government will reconsider the increased licence fee and also consider a reduction for pensioners. by Mr Staley.

Petition received.

Commissioner for Community Relations

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

The humble petition of the electors of the Division of Cunningham respectfully showeth:

That we the undersigned residents of the Illawarra region protest against plans now before the Federal Parliament to set up a Human Rights Commission and restrict the work of the Commissioner for Community Relations, (the Hon.) A. J. Grassby. The work of the Commissioner is essential for the building of a harmonious multicultural society in Australia.

The Racial Discrimination Act 1975 which is administered by Mr Grassby provides for equality of opportunity for all ethnic and racial groups in every aspect of Australian social life. The Act was passed unanimously by all political parties in 1975 and does not need to be changed.

Your petitioners therefore humbly pray that the work of the Commissioner for Community Relations be not restricted as provided for in the terms of the Bills currently before Parliament.

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

Petition received.

page 2956

UNEMPLOYMENT

Notice of Motion

Mr YOUNG:
Port Adelaide

-I give notice that on the next day of sitting I shall move:

That this House recognising that- (1)1 in 5 unemployed family heads in South Australia experience bankruptcy and repossession;

in Ballarat, Victoria, the attempted suicide rate of the unemployed is 12 times the national average;

the report of the Joint Economic Committee of the United States Congress states that a 1 per cent general rise in the rate of unemployment leads to a 4.1 per cent increase in the suicide rate, a S.4 per cent rise in mental hospital admissions, a 4 per cent rise in prison admissions and a 5.7 per cent increase in deaths from illness of heart, liver and kidneys, and

the Federal Government’s Homeless Advisory Committee for Queensland states that in the past 12 months the number of park dwellers in Qld has doubled.

Accordingly, calls on the Government to immediately establish a joint Committee to investigate the social cost of massive and prolonged unemployment.

page 2957

ELECTRIFICATION OF RAIL SYSTEM

Notice of Motion

Mr MORRIS:
Shortland

-I give notice that at the next sitting I shall move: That this House-

  1. notes that electrification of Australia’s mainline rail system would improve transport efficiency, generate many thousands of new jobs and substantially reduce consumption of imported oil;
  2. observes that Labor’s Sofrerail national electrification investigation recommended the utilisation of a 25 kilovolt alternating current system and the development of identical electric locomotives for the three gauge tracks in Australia;
  3. further notes that electric traction locomotives require less out of service time, incur less maintenance costs and use less energy than diesel locomotives;
  4. recognises the support of the various States for the conversion of existing mainline rail systems to coal generated electricity;
  5. deplores the Government’s failure to develop or coordinate a national plan for mainline rail electrification;
  6. is of the opinion that it is essential to initiate without delay, an economic assessment of the many advantages to be gained from electrifying Australia’s mainline rail services.

page 2957

PARLIAMENT AMENDMENT BILL 1979

Notice of Motion

Mr SCHOLES:
Corio

-I give notice that at the next sitting I shall move:

That leave be given to present a Bill to amend section 5 of the Parliament Act 1974 to remove deficiencies which have shown up in the powers of the Parliament over the Parliamentary Triangle.

page 2957

SERVICES TO COUNTRY DWELLERS

Notice of Motion

Mr WALLIS:
Grey

– I give notice that on the next day of sitting I shall move:

  1. ) That this House is of the opinion that country dwellers are-

    1. generally at a disadvantage in the provision of services when compared to city dwellers;
    2. are denied any television service in some areas such as the Eyre Peninsula, and in other areas rely on a single ABC channel of limited range;
    3. will be denied the opportunity of either being able to watch major sporting events such as test cricket on ABC television or hearing broadcasts of the cricket from ABC radio stations; and
    4. have become victims of the Government’s lack of concern in not ensuring that country dwellers are being catered for in the provision of adequate cover of these major sporting events; and
  2. calls on the Government to exercise its powers and authority to ensure that country dwellers are not denied these opportunities.

page 2957

QUESTION

QUESTIONS WITHOUT NOTICE

page 2957

QUESTION

PAYMENT OF REWARD BY FEDERAL GOVERNMENT

Mr LIONEL BOWEN:
KINGSFORD-SMITH, NEW SOUTH WALES

-I refer the Minister representing the Attorney-General to the fact that Mr Nakis was one of the people who were originally arrested in what was known for identification purposes as the Greek conspiracy case and a person to whom the Governor-General granted a pardon on the advice of the AttorneyGeneral. Can the Minister explain why the pardon was granted and, further, why, in addition to the granting of a pardon, the Crown discussed the payment of sums of money of up to $200,000 to this man? Is it not unprecedented both to grant a pardon and to offer a sum of money for assistance to the police? Is it a fact that Mr Nakis has now left the country, is living in Greece and is not likely to return? Is it further a fact that he has already received $12,000? If that is so, on what basis was this payment made and on whose authority was it made?

Mr VINER:
Minister for Employment and Youth Affairs · STIRLING, WESTERN AUSTRALIA · LP

– The honourable gentleman asks for a number of details which I do not have at hand. I will refer the question to my colleague the Attorney-General and see that the appropriate details are provided to the honourable gentleman. However, it is a fact that the Attorney-General granted a pardon to Mr Nakis. I can assure the House that the granting of that pardon was proper and within the proper exercise of the Attorney-General ‘s authority.

page 2957

QUESTION

ABOLITION OF STATE GOVERNMENTS

Mr CADMAN:
MITCHELL, NEW SOUTH WALES

-I ask the Deputy Prime Minister whether the Government is considering the abolition of State governments and the reduction of the powers of the Senate.

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

– I can assure the honourable member that there is no similarity between

Labor’s policies, or the policies of the de facto leader of the Labor Party, and those of our side of the House. Indeed, those honourable members who were in this House during the period that Labor was in office will remember the bitterness that existed between the State parliaments and the Federal Parliament. I believe that one of the major reasons for the downfall of the Whitlam Government was the very tense relationships that had developed between the States and the Commonwealth and the annoyance of the Australian public at large over the continual confrontation that was going on between the Commonwealth and the States. Since coming to office, we have endeavoured to take a co-operative approach with the States and we have done this in relation to a whole series of issues by sitting down with them. We have been able to get agreement on various areas of administration. This approach has been extremely successful.

The relationships between the Federal Government and the States today are wholesome and sound. That is not to say that there are not differences of opinion from time to time. But I believe that under our Federal system and our Constitution, where distinct lines of responsibility are drawn, the interests of the Australian people can best be accommodated by the Commonwealth and the States and, indeed, local government authorities, all working together. It is quite clear that the Labor Party is hell bent on having centralised power, and abolishing the State parliaments. It adopts the subterfuge of saying that it will give additional powers to local government or regional bodies. The whole attitude of the Labor Party illustrates its socialist approach, its doctrinaire approach, of having absolute control here in Canberra and being able to override the authority of other bodies in Australia. That is certainly not our belief. We believe that this country can be managed best by delegating responsibility to those people who are spread throughout the Commonwealth and who are closer to the people.

page 2958

QUESTION

PAYMENT OF REWARD BY FEDERAL GOVERNMENT

Dr KLUGMAN:
PROSPECT, NEW SOUTH WALES

– My question is directed to the Minister for Health. Who were the representatives of the Department of Health and the Department of Social Security at meetings in 1977 and 1978 with the Commonwealth Police and the Deputy Crown Solicitor about the possible payment of $200,000 to a Mr Nakis, as stated yesterday by Chief Inspector Thomas? Will the Minister supply the House with the names of those people, the dates of the meetings and information about who was present? Why was the Department of Health involved?

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

– I ask the honourable gentleman to place the question on the Notice Paper.

page 2958

QUESTION

MEDICAL AND HOSPITAL BENEFITS

Mr BUNGEY:
CANNING, WESTERN AUSTRALIA

– My question also is directed to the Minister for Health. What are some of the limitations and restrictions imposed on the medical and hospital benefits packages being offered by the Victorian friendly societies outside the provisions of the National Health Act? How do these limitations compare with the basic medical and hospital tables offered by registered organisations under the National Health Act?

Mr HUNT:
NCP/NP

– There are very fundamental differences between the conditions that apply to the benefits payable from health organisations registered under the National Health Act and those payable from organisations operating outside the terms of the Act. For instance, under the basic medical and hospital tables of funds registered under the National Health Act there are no limitations for benefits, except for the two months waiting period. There are no limitations or restrictions in relation to the basic medical and hospital benefit tables. In regard to the Victorian friendly societies grouped together under the name the United Health Fund of Victoria, several packages being offered outside the control of the National Health Act are oriented towards low risk members of the community- young people and those who do not have a history of illness.

I advise people to read the fine print very closely before being attracted to those funds. They appear to offer relatively cheap insurance cover. However, under these arrangements, benefits are limited or excluded in a number of ways. One of those, of course, is the pre-existing ailment rule, which does not apply to the basic tables of the registered health insurance funds. Organisations that are outside the Act can fail to pay benefits where a person has a history of a certain specified illness. In relation to confinements and obstetrics benefits, unless additional contributions have been paid for a period of 12 months no benefits are payable. So people could join the fund thinking that they would be eligible to receive benefits but would find that they were not eligible because of that condition. Benefits are not payable for general practitioner surgery consultations unless additional contributions have been paid. The same situation applies to psychiatric services in excess of $200 a person each membership year and for hospitalisation in excess of 35 days a person each membership year. In other words, benefits will not be payable after 35 days. No benefits are payable for treatment in approved nursing homes or in respect of professional services or outpatient fees raised by recognised or public hospitals.

So, a number of limitations apply, and people need to know what those limitations are before they are attracted by the cut price arrangements being offered around the country. Such policies are designed to cream off the good risks and to profiteer at the expense of the chronically ill.

page 2959

QUESTION

MOTOR CAR INDUSTRY

Mr SCHOLES:

-I ask the Minister for Industry and Commerce whether he is aware of the severe problems in the motor car industry caused by down-turns in the market and by surplus manufactured vehicles being available in dealers’ yards. Is the Minister aware that a serious threat of retrenchments is facing wide areas of that industry? Is the Minister in a position to indicate whether the Government intends to take any action in an endeavour to stimulate that industry in order to save what could amount to several thousand employees’ jobs?

Mr LYNCH:
Minister for Industry and Commerce · FLINDERS, VICTORIA · LP

– I am certainly aware that recent reports have suggested that manufacturers are reducing production levels as a result of a fall in motor car retail sales. Both the Government and the industry have been conscious of the very buoyant market conditions that have been apparent since May and which are unlikely to continue for a variety of reasons- including seasonal factors, the general energy position and the overstocking of the second-hand market for 6- cylinder and 8-cylinder cars- which I recall were adverted to by the honourable gentleman. Accordingly, it could be expected that production schedules would be adjusted from the very high levels maintained for most of 1979 to more normal levels. Of course, as the honourable gentleman would be aware, there have also been some changes in the model mix of some manufacturers which are associated with the recent introduction of new models.

But I can say to the honourable gentleman that the market at the end of September, notwithstanding some softening in recent months, was still some 3.7 per cent up on that for the same period for last year, and on present indications the forecast figure of some 465,000 on which the Government based the final global import quota for 1979, is still attainable. As for the particular point of the honourable gentleman’s question, I give him a very clear indication that the Government does not have in mind any artificial stimulation of the motor vehicle industry market at present.

page 2959

QUESTION

NEW SOUTH WALES OIL DISPUTE

Dr EDWARDS:
BEROWRA, NEW SOUTH WALES

-Will the Minister for Industrial Relations explain to the House the position that the Commonwealth is adopting in respect of the demands and threats of refinery operators in New South Wales for their conditions of employment to be regulated under the State industrial system?

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

-The Federal Government has indicated that it is ready to proceed immediately on joint discussions with the New South Wales Government and the parties to the industry to resolve this issue. Mr Speaker, I would like to read to the House a telex- it is very brief- that I sent to the New South Wales Minister, Mr Hills, last night. It states: . .

I understand the application made by the Commonwealth seeking to provide for further suspension of Federal award for Caltex employees at Kurnell has been granted.

As agreed I am willing to proceed with you to complete joint sitting arrangements.

If you agree this can be put in hand immediately.

I understand that the New South Wales Government is currently considering its position. But the fact is that both Governments favour the proposition of a joint sitting approach. The details and practical operation of such a system need to be worked out with the parties themselves. The Federal Government is responsible for ensuring that an effective arrangement is established for the industry as a whole and not just as a short term expedient. It must take into account the views of the parties in the industry. It is interesting to note that at yesterday’s hearing the federal unions, particularly the Transport Workers Union and the Australian Workers Union, made it quite clear that they wanted an absolute assurance that any joint sitting arrangements would not interfere with their rights and their operations and would not adversely affect their members involved in other refineries throughout Australia. The Australian Council of Trade Unions supports the federal unions’ view and sees the need for further consultation. Employer interests have also said that they want further clarification. Obviously, the best results cannot be achieved under a threat of industrial disruption. If an agreement in principle and detail can be reached- I have told Mr Hills that I believe that the broad approach of joint sittings provides a basis for solution- it should be possible to put it into operation quickly. Much progress has been made. Many organisations have expressed understandable concern, but I am certain that a solution can be found. Any industrial action in these circumstances would be completely irresponsible and quite unnecessary.

page 2960

QUESTION

AID TO EAST TIMOR

Mr UREN:
REID, NEW SOUTH WALES

– The Minister for Foreign Affairs will be aware of the reports in the Sydney Morning Herald by correspondent Peter Rodgers of widespread starvation among the people of East Timor. Is he aware of the reports from the Indonesian church and medical sources that I had incorporated in Hansard yesterday which indicate that at least 20,000 people are likely to die, even if aid comes immediately, and that a further 70,000 are at risk unless food and medical aid is given immediately? Recognising that the Government has given recently $2m in aid, will the Government also take action to send Australian doctors and nurses to work with the International Red Cross in East Timor to try to minimise the number of deaths among the people of East Timor?

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

-I am grateful for the reference made by the honourable member to the additional aid that has been allocated to East Timor. It is over and above what we have been supplying and brings it to a total of nearly $4m in assistance to East Timor. I do confirm, of course, that we are deeply concerned with the serious humanitarian situation in East Timor. Australian assistance is being provided to the joint International Committee of the Red Cross and the Indonesian Red Cross relief program in response to an appeal launched by the International Committee of the Red Cross. It is important to recognise that they are the co-ordinators of this appeal. I am informed that a major element of that program is the provision already of medical care. Without going into the details- which I do not have right at hand- my recollection is, nevertheless, that at the present moment the program incorporates the utilisation of existing medical facilities and infrastructure, such as they are in Timor, supplemented by International Red Cross representatives and at least 34 personnel from the Indonesian Red Cross, including four doctors, five nurses and, I think, 20 voluntary workers, together with the training of Timorese for paramedical work. I am also informed that at the moment medical supplies sufficient for at least the next four months of the integrated International Red Cross and Indonesian Red Cross program have been flown to Dili.

We have been providing assistance in response to the requirements made known to us by the International Red Cross and the Indonesian Red Cross. So far there has not been a request for medical personnel. The requests have been in other areas; requests for transportation, requests for food and requests for some forms of medicine. I assure the honourable member who raised this matter that there is no problem at all with my ensuring that my officials go back and say: Certainly, we can meet your requests in these particular areas from within the category of the $2m that we have undertaken to provide ‘. At this moment we are doing a breakup of the nature of the commodities which will be supplied. The mere fact that to date they have not asked, but have said ‘We are covering the medical personnel reasonably’, does not prevent our going back and saying: ‘Would you wish us to approach doctors within Australia to see whether they would be prepared to be integrated within your own medical program1? I am certainly prepared to do that, in other words, approach the International Red Cross in particular to determine whether Australian doctors and nurses are required for the relief program. I say that I will do that. But the honourable member must recognise that to date we have given more in aid than any other country, with the exception of Indonesia. We have done this in response to what has been requested in this integrated program, and I see no problem in following the suggestion made by the honourable member.

page 2960

QUESTION

OIL STRIKE AT SURAT

Mr McVEIGH:
DARLING DOWNS, QUEENSLAND

-I ask the Minister for Trade and Resources: Was the recent oil strike at Surat in the electorate of Maranoa, well represented in this Parliament, made possible in some way by encouragement given by the Government to oil exploration? Is it expected that this strike will encourage other companies to increase their expenditure on oil search in inland Australia? What further is the Government doing to ensure fuel supplies to Australians through exploration and contracts for supplies on a governmenttogovernment basis?

Mr ANTHONY:
NCP/NP

– I would like to say how very pleased I was to hear the news that there had been another oil discovery in the Surat area. The size of it is yet to be determined. I think most of us will recall that the first discovery of oil in Australia was near this region, at Roma, in the 1950s. It was that early discovery that gave an impetus to oil exploration in Australia. As a result we found some at Barrow Island and then in Bass Strait. I think this discovery indicates some of the Government’s efforts to encourage people to look for more oil. Exploration is a high nsk business venture and therefore people need some encouragement and some confidence if they are to look for oil. Without doubt the single most important thing that we have done has been to adopt a pricing policy that ensures that people who find oil in Australia can get a price comparable to what they could get if they discovered it elsewhere in the world. That is the policy of import parity prices.

During the life of this Government, we have also announced a number of taxation measures to give an incentive to oil companies to look for oil and develop fields. There are encouraging depreciation allowances for taxation purposes. We have also given a tax rebate for off-shore oil exploration. In the Budget this rebate was extended to on-shore search. I believe that the operations of the company making the discovery at Surat would have been greatly helped by that recent decision. The discovery indicates that small companies searching on-shore may find oil. We would certainly like to see more companies, particularly Australian companies, being formed to look for oil. If they can find it they will be making a major contribution to solving Australia’s energy problems.

page 2961

QUESTION

DRUG SYNDICATES

Mr HUMPHREYS:
GRIFFITH, QUEENSLAND

– I direct my question to the Minister for Administrative Services. I refer to advice given to the Minister that a former agent of the Federal Narcotics Bureau had seen the files which referred to several Queensland politicians as being associated with the operations of drug syndicates. I also refer to the statement made today by a member of the Queensland Parliament that he knows the names of several Queensland politicians who are alleged to have been associated with drug syndicates. Is it a fact that the Queensland Premier has asked for evidence to be presented? Is it not a fact that such evidence could be within the files of the former Narcotics Bureau? Accordingly, will the Minister peruse the file and make a full statement on the matter in the House tomorrow?

Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

– I am not in possession of any of the facts concerning that allegation. In fact I seem to remember that the honourable member has written a letter to me or he has put a question on notice about it.

Mr Humphreys:

– I sent you a telegram.

Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

– I have asked for a report. I do not have the information yet. When I receive it I will determine what, in my view, should be released and let the honourable gentleman have a reply.

page 2961

QUESTION

NEW SOUTH WALES OIL DISPUTE

Mr BRADFIELD:
BARTON, NEW SOUTH WALES

– I ask the Deputy Prime Minister: If it becomes necessary to have legislation to give effect to any arrangements worked out to resolve the New South Wales refinery dispute, what would be the attitude of the Federal Government towards this legislation?

Mr ANTHONY:
NCP/NP

-My colleague the Minister for Industrial Relations has just outlined comprehensively the Commonwealth’s attitude to the report of the joint working group setting out its proposals for administering the New South Wales oil industry. That working group suggested that there ought to be joint sittings of the Commonwealth Conciliation and Arbitration Commission and the New South Wales Industrial Commission. We have accepted this approach in principle but there will no doubt have to be a good deal of consultation as to the details. My colleague is undertaking discussions with the New South Wales Minister for Industrial Relations in trying to draw up the necessary legislation that will have to be put into effect to make this approach operative.

I think everybody appreciates the very grave seriousness of the situation in New South Wales. If this strike continues at Kurnell and Matraville and if legislation is required to be introduced, New South Wales will be put into a very serious oil supply situation. That situation will be reflected across the whole of the Commonwealth. Therefore, we want to co-operate however we can to see that there is satisfactory authority for the administration of the oil industry in New South Wales. Therefore, if while interim arrangements are being worked out it is found necessary to bring down emergency legislation, the Commonwealth will give consideration to calling the Parliament together during the recess to see that that legislation is passed. The Parliament will be rising in a week’s time. We do not want to see that in any way as being a hurdle to preventing such an authority from coming into operation if it is considered necessary.

page 2961

QUESTION

TAXATION

Mr HAYDEN:
OXLEY, QUEENSLAND

– I refer the Treasurer to an answer which he gave yesterday to a question asked by the honourable member for Gellibrand and in which he said that the Government had done more about tax avoidance than any of its predecessor governments since the end of World War II.

Government members- Hear, hear!

Mr HAYDEN:

– Of course, yes. That is a marvellous achievement, as Government members acknowledge. But let us go to the record. Is it a fact that participation in tax avoidance schemes has risen from 861 in 1975-76 to 2,227 in 1976-77, and to a staggering 10,244 in 1977-78? Suddenly there is silence on the Government side.

Mr Martyr:

– We don’t believe you.

Mr HAYDEN:

-I would not blame honourable members opposite. My source is the answer by the Treasurer to a question.

Mr SPEAKER:

-Order! The Leader of the Opposition will ask his question and ignore the interjections.

Mr HAYDEN:

– I ask: Do these figures show that participation in tax avoidance schemes has multiplied some 12-fold during the term of the present Government? Does this prove conclusively that the Government has opened the flood gates to tax avoidance of this sort and that its efforts to stamp out the schemes have been completely ineffectual? In view of tax avoidance of this magnitude will the Minister now concede that the provision of $2 50m in the current Budget for this sort of avoidance will be much too low? Finally, will the Government introduce a provision in the taxation Act with punitive, retrospective effect in all cases where practices are declared to be tax avoidance measures by the Commissioner of Taxation in an effort to stamp out this pernicious, widespread and, to the public exchequer, expensive behaviour?

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

– It is a singular commentary on the concern of the Opposition about the extent to which the public perceives this Government as having done something about tax avoidance that the Leader of the Opposition should ask a question such as that. When I answered the question yesterday I was talking about the legislative activity of this Government against tax avoidance. I was contrasting it in particular with the legislative inertia and inactivity of the Government of which he was Treasurer.

Mr Hayden:

– They are 12 times more now.

Mr SPEAKER:

-Order! I ask the Leader of the Opposition to remember that this is the national Parliament. He has asked his question and I ask him to remain silent.

Mr Hayden:

– Don’t you think the Treasurer ought to recall that too?

Mr SPEAKER:

-I ask the Leader of the Opposition to remain silent while the answer is given. I also ask the honourable member for Batman to cease interjecting.

Mr HOWARD:

– In answering that question and in drawing a comparison between what this

Government has done and what earlier governments failed to do, I had in mind particularly the ringing rhetoric of the Leader of the Labor Party in 1972, when he said that marginal tax rates were already too high and that a Labor government would close all the loopholes. Not only did that Labor Government fail to close all the loopholes, but on top of that, the present Leader of the Opposition has repudiated the proposition of his predecessor that marginal taxation rates are too high. As everybody knows, not only did the Government of which he was a member do nothing serious about tax avoidance, but also the Party which he now leads believes in a marginal tax rate of 80c in the dollar. I cannot think of anything more calculated to take away the types of incentives that the taxation reforms of this Government have brought to the taxpaying population of Australia than the sorts of taxation measures that the Leader of the Opposition and his colleague, the honourable member for Gellibrand, espouse.

I will reply specifically to the Leader of the Opposition. He asks that we introduce punitive, retrospective legislation, in respect of all schemes declared by the Commissioner of Taxation to be of a certain character. I can say to the honourable gentleman that the Government will not be proposing legislation of that character. We are committed to a policy of responding speedily to specific tax avoidance schemes when they are identified. We do not believe in the sort of approach espoused by the Leader of the Opposition, and given far greater articulation by Senator Gareth Evans in another place, as to the attitude of the Labor Party towards taxation legislation. The facts and the record of this Government and of its predecessors speak for themselves. This Government’s record in responding effectively to tax avoidance is a record to which all members on this side of the House give very strong support. The figure of $230m included in the Budget this year is the best estimate that was supplied to me by the Commissioner of Taxation. On the basis of information that has come to my attention since that estimate was supplied, I have no reason to vary it. As the Leader of the Opposition would know, or should know from his own experience as Treasurer, it is an estimate which can be made by the Treasury and the Taxation Office only on the basis of information available when it is compiled.

page 2962

DISTINGUISHED VISITORS

Mr SPEAKER:

-I draw the attention of the House to the fact that a former member of the

House of long service, Mr Roger Dean, is in the chamber, and also, quite unusually, the former Clerk of the Senate, Mr James Odgers, is here to observe us.

page 2963

QUESTION

QUESTIONS WITHOUT NOTICE

page 2963

QUESTION

TELEGRAM CHARGES TO REMOTE AREA DWELLERS

Mr COTTER:
KALGOORLIE, WESTERN AUSTRALIA

– I address my question to the Minister for Post and Telecommunications. Is it a fact that the announced Telecom program known as Access 80 for country telephone subscribers has been well received by subscribers in areas distant from service centres? Is the Minister aware that many people living in remote areas must send telegrams over two-way radio provided at their own cost as their only means of communication with the outside world? Will these people receive any relief from charges for telegrams- that is, word charges and delivery charges- sent over the radio networks operated by the Royal Flying Doctor Service, the Overseas Telecommunications Commission and Telecom Australia?

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

– The honourable member for Kalgoorlie has made some very strong representations to me on this matter and has drawn attention to certain problems. Great relief has been provided to people in many remote parts of Australia by community Access 80. For instance, in the most dramatic case, the cost of a telephone call lasting three minutes, the charge for which now is $2.70, will, from May 1 980, come down to 9c. This is a reduction of $2.61 for every three minutes. That is admittedly the most dramatic case, but that sort of story is being repeated throughout Australia. The exception is cases where people rely for their communications virtually on what is called Outpost Radio and telegrams which they can send for their normal daily requirements through Outpost Radio. Telecom Australia has reviewed this matter and has agreed that the charge for each word should be reduced from 10c to 5c, a significant reduction. In the case of a telegram sent to an Outpost Radio station, the cost will be reduced from $1.20 to 60c.

However, there remains in the minds of some people, and I know in the mind of the honourable member for Kalgoorlie, one anomaly. Whereas telegrams sent to people who can be reached only by Outpost Radio do not attract varying rates of delivery charges in addition to a per word charge, telegrams sent by people in the most remote parts of Australia through Outpost

Radio to other locations attract delivery charges at varying rates, depending on the mode of delivery. This seems to some people to be an anomaly. Therefore, I have asked Telecom to make a further review of the matter.

page 2963

QUESTION

COURT PROCEEDINGS AGAINST FORMER MINISTERS

Mr JAMES:
HUNTER, NEW SOUTH WALES

– My question is directed to the Minister representing the Attorney-General. At the conclusion of the proceedings privately launched by solicitor Danny Sankey against Whitlam and others, did the court award certain costs against Sankey? If so, has any attempt been made by Sankey to pay those costs? If not, has the Commonwealth made any endeavour to recover them?

Mr Hodgman:

– It is sub judice still.

Mr JAMES:

– It is not sub judice.

Mr VINER:
LP

- Mr Speaker, you may agree with me that the matter is not sub judice. Those proceedings have been completed. As to the costs, as the honourable gentleman knows, the Commonwealth has given a certain undertaking to defendants in those proceedings. An award of costs was made against the complainant. One of the conditions of granting costs to the defendants was that the order for costs against Mr Sankey should be pursued. I will refer the honourable gentleman’s question to the Attorney-General and provide further details to him.

page 2963

QUESTION

INCOME TAX LEGISLATION

Mr THOMSON:
LEICHHARDT, QUEENSLAND

-My question is directed to the Treasurer. In June of this year he proposed certain changes to section 26E of the Income Tax Assessment Act. When will those amendments come before the Parliament? What are the main features of the amendments?

Mr SPEAKER:

– Before the Treasurer answers the question I point out that it anticipates the introduction of legislation and asks for an announcement of policy on the part of the Government. If the honourable gentleman’s question relates only to when the legislation will be introduced it is in order. But it would not be in order to ask a question relating to an announcement of policy.

Mr HOWARD:
LP

-The Government intends to introduce legislation before the Parliament rises for the Christmas recess. It will give broad effect to the announcement that I made in June of this year. The intention of the Government is that the legislation should lie on the table of the House during the recess for study and examination.

page 2964

QUESTION

TRADING STOCK VALUATION ADJUSTMENT

Mr HURFORD:
ADELAIDE, SOUTH AUSTRALIA

-Has the Minister for Industry and Commerce noted that the objections to the termination of the trading stock valuation adjustment are now more valid because of the increasing rate of inflation? Is he trying to persuade the Treasurer and the Government to reintroduce the TSVA in the light of more and more evidence coming forward that taxes will otherwise be paid out of illusory, inflationary book profits? If not, why not? Is consideration being given to introducing a limited form of TSVA at the same time as fully indexing personal income tax, which measures could be funded from the taxation revenue windfall created by the Fraser Government’s petrol tax?

Mr LYNCH:
LP

– The honourable gentleman and the House are very much aware of the reasons that the Government decided to abolish the trading stock valuation adjustment. They were announced in some detail by the Treasurer. The Government is not at present reviewing that decision. I think the honourable gentleman will recall the reasons that were advanced in detail by the Treasurer at the time. It will be recalled that the TSVA was introduced in 1976 at a time of very high inflation rates when businesses faced particularly severe liquidity problems. Since then that liquidity position has improved. In addition, the widespread practice of adding the TSVA concession to reported profits indicates that many businesses did not see and have not seen a need to retain an additional earnings component to compensate for the effects of inflation, which had been the intention of the scheme. There has also been some firming of professional opinion around the world to the effect that any system of inflation accounting which concentrates solely on adjustments of real assets- for example, stocksand disregards monetary assets and items, including borrowings, could produce misleading effects. However, I understand what the honourable gentleman is saying in relation to matters which have arisen in certain areas of industry, but I simply say that the Government gave the matter very careful consideration and it is not in the process of reviewing the original decision.

page 2964

QUESTION

AUSTRALIAN CAPITAL TERRITORY: COMMERCIAL LEASES

Mr HASLEM:

-Is the Minister for the Capital Territory aware of criticism of the terms and conditions upon which commercial leases are granted in the Australian Capital Territory and of the claim that they act as a disincentive to private sector investment in Canberra? Does the

Government intend to take action to encourage private enterprise investment in Canberra to widen the employment base and to ensure that Canberra continues to have the lowest rate of unemployment in Australia?

Mr ELLICOTT:
Minister for Home Affairs · WENTWORTH, NEW SOUTH WALES · LP

-! thank the honourable member for his question, which I might say was well and truly without notice. I am very conscious, and have been for some months- indeed, for several years -

Mr Cohen:

– We would not have noticed.

Mr ELLICOTT:

-I will think of something for the honourable member.

Mr SPEAKER:

-Order! The Minister will continue with his answer.

Mr ELLICOTT:

– I was thinking of something that Professor Spooner might have said. I will use that later on. I am aware of the need to improve the leasehold system and of the fact that that system has been a disincentive to investment in the Australian Capital Territory for some years. I was very glad to attend a seminar this morning conducted by the local newspaper, the Canberra Times, on the subject of ‘Canberra Means Business’, and to announce that I had made a decision to change the leasehold system so far as it affects businesses in Canberra. In future, the leases offered to businesses in the Australian Capital Territory will be for terms of 99 years, whereas in the past they have been for varying terms of 40 years to 50 years. Investors will also be able to acquire leases for lump sums.

As honourable members will be aware, in the past leases have had attached to them varying conditions- conditions which to some extent have been unreal, because as economic conditions change those leasing conditions can become very onerous. It will be the policy of the Government to offer leasehold for business, commercial and industrial purposes to people wishing to set up business in Canberra on the basis of a lump sum premium or, alternatively, the rental system if they want to adopt that. I am also looking at giving those who already have leasehold interests an option to acquire those interests- in effect, to abolish the rental aspect of the leasefor terms of 99 years. However, that part of the system will involve further consideration because, in view of the complex system that we have, it is necessary to get rid of these leases in a way that will not cause hardship, on the one hand, but, on the other hand, will not present a bonanza to people who hold them. I am very happy to announce that the leasehold system for businesses in Canberra has been brought up to date and that the Government means business in relation to Canberra in attracting to the national capital investment from all parts of Australia and from elsewhere in the world.

page 2965

QUESTION

PAYMENT OF REWARD BY FEDERAL GOVERNMENT

Mr SPEAKER:

-I call the Leader of the House, who has sought my indulgence to add to an answer he gave during Question Time.

Mr VINER:
LP

– I wish to clarify an answer that I gave earlier to the Deputy Leader of the Opposition concerning the granting of a pardon to a witness in the Greek conspiracy case. As I gave the answer, I think I was technically incorrect in referring to the pardon being granted by the Attorney-General. In fact the position is that no special power of pardon is vested in the Attorney-General in relation to offences under the Telephonic Communications (Interception) Act. The Governor-General, on the recommendation of a Minister- and that Minister is usually the Attorney-General- has the power to pardon any non-capital offence against a law of the Commonwealth. It was in respect of the exercise of that power by the Attorney-General that the Governor-General issued a pardon.

Mr Lionel Bowen:

– Did you find out the rest of the answer?

Mr VINER:

-I will obtain the details of the other matters raised.

page 2965

QUESTION

INTERNATIONAL LABOUR CONFERENCE

Mr STREET:
Minister for Industrial Relations · Corangamite · LP

– For the information of honourable members, I present the texts of the following International Labour Organisation instruments adopted by the 64th session of the International Labour Conference held in Geneva injune 1978:

Convention No. 150- Labour Administration: Role, Functions and Organisation, 1978

Recommendation No. 158- Labour Administration: Role, Functions, and Organisation, 1978

Convention No. 151- Labour Relations (Public Service), 1978

Recommendation No. 159- Labour Relations (Public Service), 1978

I seek leave to make a brief statement regarding these instruments.

Leave granted.

Mr STREET:
LP

– Honourable members will be interested to learn that the four instruments were referred to the appropriate Commonwealth and State authorities for examination and comment. The results of the examination indicated that there were minor points in some States which needed further investigation to ensure full compliance with the provisions of Convention No. 150 and Recommendation No. 158. With regard to Convention No. 151 and Recommendation No. 159, there were difficulties both within the Commonwealth and States’ jurisdictions and ratification of this stage is not possible. However, the question of possible future action in relation to the four instruments will be considered by the joint Commonwealth-State consultative machinery on ILO Conventions and by the National Labour Consultative Council, through its Committee on International Affairs.

page 2965

AUSTRALIAN WOOL CORPORATION

Mr ADERMANN:
Minister for Veterans ‘ Affairs and Minister Assisting the Minister for Primary Industry · Fisher · NCP/NP

– Pursuant to section 90 of the Wool Industry Act 1972, 1 present the final annual report of the Australian Wool Corporation for the year ended 30 June 1979. An interim report for that year was tabled on 12 September 1979, with unaudited financial statements. The final report is similar in text but contains audited financial statements and the Auditor-General ‘s report.

page 2965

FOREIGN INVESTMENT REVIEW BOARD

Mr HOWARD:
Treasurer · Bennelong · LP

-For the information of honourable members, I present the Foreign Investment Review Board report 1979.

page 2965

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 1978-79.

page 2965

REHABILITATION IN HEALTH SERVICES

Mr HUNT:
Minister for Health · Gwydir · NCP/NP

-For the information of honourable members, I present a report entitled ‘Rehabilitation in Heath Services 1979’.

page 2966

ALBURY-WODONGA DEVELOPMENT CORPORATION

Mr NEWMAN:
Minister for National Development · Bass · LP

– For the information of honourable members, I present the interim annual report of the Albury-Wodonga Development Corporation for the year ended 30 June 1979.

page 2966

AUSTRALIAN BROADCASTING COMMISSION

Mr STALEY:
Minister for Post and Telecommunications · Chisholm · LP

– For the information of honourable members, pursuant to section 78 of the Broadcasting and Television Act 1942, I present the annual report of the Australian Broadcasting Commission 1978-1979.

page 2966

CONSUMER AFFAIRS COUNCIL AND CONSUMER AFFAIRS BUREAU

Mr ELLICOTT:
Minister for the Capital Territory · Wentworth · LP

– Pursuant to section 17 of the Consumer Affairs Ordinance 1973 I present the annual report of the Consumer Affairs Council and the Consumer Affairs Bureau 1978-79.

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

  1. 1 ) That this House, in accordance with the provisions of the Parliamentary Papers Act 1908, authorises the publication of the report of the Australian Capital Territory Consumer Affairs Council and the Australian Capital Territory Consumer Affairs Bureau for the year 1978-79; and
  2. That the report be printed.

page 2966

AUSTRALIAN FILM COMMISSION

Mr ELLICOTT:
Minister for Home Affairs · Wentworth · LP

- Mr Speaker, with your indulgence, I inform honourable members that I do have a limited number of copies of the document relating to the Australian Film Commission that I tabled yesterday. If honourable members come to my office or make application, I will give them a copy.

page 2966

HOUSING LOANS INSURANCE CORPORATION

Mr GROOM:
Minister for Housing and Construction · Braddon · LP

– Pursuant to section 39 of the Housing Loans Insurance Act 1965 I present the annual report of the Housing Loans Insurance Corporation for the year ended 30 June 1979.

page 2966

PERSONAL EXPLANATIONS

Mr HAYDEN:
Leader of the Opposition · Oxley

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

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr HAYDEN:

-Yes, Mr Speaker. At Question Time, the Treasurer, (Mr Howard), in reply to a question that I directed to him, asserted two things: Firstly, that I had repudiated statements made by my predecessor, Mr Whitlam, to the effect that Conservative Treasurers were notorious for the excessively high marginal tax rates that they imposed and, secondly, that I had proposed a marginal tax rate of 80 per cent. Neither statement is true. Neither statement has any factual basis at all. Both statements are a misrepresentation. On the contrary, I pointed out the need for substantial reductions in taxes; that whatever way taxes are measured these days, whether as a proportion of gross national product, or as an individual burden for taxpayers, they are the highest that the community or individuals in Australia have ever had to bear.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

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

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

-Yes, Mr Speaker. I refer to a statement made yesterday afternoon by the honourable member for Bradfield (Mr Connolly). He stated that every member, every Minister of the Whitlam Government virtually acquiesced in what ultimately took place when, by military force, the Indonesians took over the Portuguese half of Timor. The honourable member for Bradfield went on to say:

That is a political fact with which the Timorese and we will have to live for a long time.

That is quite untrue. No member of the Whitlam Government, other than Mr Whitlam himself, was a party to the secret conversations which took place between Mr Whitlam and President Suharto which led to the annexure of East Timor by Indonesia.

Mr Peacock:

- Mr Whitlam denied to me that they took place. They took place, did they?

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

-Mr Whitlam will deny anything if it suits him, so I do not take any notice of Mr Whitlam ‘s denials. The fact is that no member of the Cabinet was consulted on this matter. The then Minister for Foreign Affairs, Senator Willesee, told me that he had no knowledge of the conversation that took place between Mr Whitlam and President Suharto. I am reliably informed that President Suharto was just as astonished to hear Mr Whitlam ‘s remarks as were his own colleagues in the Cabinet. I am also reliably informed that the Department of Foreign Affairs knew nothing about the conversation between Mr Whitlam and President Suharto.

Mr Young:

– But that is normal for the Department.

Mr Clyde Cameron:
HINDMARSH, SOUTH AUSTRALIA · ALP

– It may be, but the fact is that it was not something prompted by the Department and it was not prompted by the then Minister for Foreign Affairs. No member of the Whitlam Cabinet was ever told about the conversation, and certainly did not approve of it. Moreover, no member of the Whitlam Cabinet knew of the shooting of the journalists. The signals that came back to Australia concerning the murder of those men were suppressed, not only from the public but from Cabinet members as well.

Mr UREN:
Reid

-I spoke in that debate on East Timor yesterday and I want to clarify the position.

Mr SPEAKER:

-Does the honourable member claim to have been misrepresented?

Mr UREN:

– Yes.

Mr SPEAKER:

-The honourable member may make a personal explanation.

Mr UREN:

– I want to stand by what I said yesterday in reply to the honourable member for Bradfield (Mr Connolly). I said:

But only a select few Cabinet Ministers knew what was going on in East Timor at that stage.

I do not want to narrow it down to one person. This involved a few people. I stand by what I said yesterday. I do not want to get down to the sectarian position of blaming one person only.

page 2967

ASSENT TO BILLS

Assent to the following Bills reported:

Local Government (Personal Income Tax Sharing) Amendment Bill 1979.

States Grants (Capital Assistance) Bill 1979.

page 2967

AUSTRALIAN COAL INDUSTRY

Discussion of Matter of Public Importance

Mr SPEAKER:

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

The rapid and alarming penetration into the Australian coal industry by the international oil majors and other foreign institutions, and the continuing alienation of Australia ‘s sovereignty over its coal trade.

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

More than the number of members required by

Mr KEATING:
Blaxland

-Am I to understand from the fact that Government supporters did not rise that they approve of the rapid alarming penetration into the Australian coal industry by the international oil majors and the continuing alienation of Australia’s sovereignty over its coal trade? By not standing, apparently they approve of it and, of course, they will sit by and watch it accelerate. There was a time not long ago when the international oil majors dominated the Middle East oil trade. Economic nationalism in those countries brought about a change in ownership and control over the vital product those countries were producing. What we have witnessed in the last few years is a shift in the profit area of oil companies from the production end to the refining and distribution end of the business. Coupled with this, dramatic increases in the world price of oil have produced massive increments to the oil companies’ profits which have made them more liquid than at any other time in their history. These two factors have brought the oil companies to the realisation that their future is not only in oil but also in other energy and mineral commodities, and we have witnessed a substantial move by the oil majors into the resource rich countries of the world, especially the English speaking countries such as Canada, the United States and Australia.

Recently the major United States oil companies declared their profits for the third quarter of this calendar year, that is for June to September, and the results showed a staggering increase. Exxon, the world’s largest and most famous multinational corporation, brought its earnings to a record United States level of $ 1,140m, double that for the third quarter of last year. That is for a quarterly figure. Mobil’s quarterly profit went up by 130 per cent to $600m and Gulf Oil’s profit doubled to $420m. These companies are awash with lazy money and the clear focus of their attention is coal and other energy commodities as well as oil. There is, therefore, a very great interest in Australia particularly, given the size of Australia’s coal reserves which have been placed at about 36,000 million tonnes.

Australia is a small producer of coal by world standards, but a significant exporter. Australia’s coal exports are running at about 38 million tonnes, 34 million tonnes of which is coking coal and 4 million tonnes steaming coal. Coking coal exports are expected to rise to between 45 and 50 million tonnes a year by 1985 and steaming coal exports to over 15 million tonnes. Australia is poised to be a major force in the world coal trade, especially in steaming coal. This had become apparent to the major international oil companies, particularly those operating in Australia, some years ago and we have seen a concerted attempt by those companies to reserve for themselves blocks of Australian coal.

This week we have seen reported the sale by Consolidated Gold Fields Australia Ltd of 64.8 per cent of its stake in Bellambi Coal Co. Ltd to the Shell Co. of Australia and Mcllwraith McEachern Ltd. Shell said, on Monday of this week, that it aims at a 49 per cent stake in the company. Shell is one of the companies which is operating under a systematic policy of buying into Australian coal. A couple of years ago it bought 37 per cent of the New South Wales collier Austen and Butta Ltd. At that time it paid a substantial premium on the market value of the shares, as well as committing $20m in loan funds to the company. It paid more than any other Australian company would have been prepared to pay and so it succeeded in acquiring that equity.

Shell is the dominant holder in Capricorn Coal, the developer of the valuable German Creek deposit in the Bowen Basin in Queensland. German Creek will be the first major mine to be developed in Queensland after Utah ‘s Norwich Park project. German Creek is a $400m coking coal mine which will probably come on stream about mid- 1982. Whilst Shell does not have a majority holding in this project, with Austen and Butta also holding 26 per cent of the shares it will be able to exercise effective control. Shell also has 49 per cent of a joint venture with Theiss to develop the Drayton region of the Hunter Valley in New South Wales. It also has 16.6 per cent interest in Theiss Holdings, the other major coal producer in Queensland besides Utah.

On top of this it currently has an extensive coal exploration program. The company will argue that it is under Australian management, and I would recognise that fact. I have respect for Shell and for its Chairman, Sir Leslie Froggatt, but the beneficial ownership is foreign and nothing will change that fact. That is what we object to, the pursuit -

Mr Cotter:

-So what?

Mr KEATING:

– So what? Another sell-out. So what? Sell your country out. Atlantic Richfield has 32 per cent of the NSW collier R. W. Miller, and 38 per cent of the rich Blair Athol steaming coal deposit in Queensland. British Petroleum owns 100 per cent of Clutha Development, a NSW collier, 49 per cent of the Clarence colliery and, for good measure, 50 per cent of Roxby Downs, one of the largest copper/ uranium mineralisations in the world. Esso Australia Ltd has 25 per cent of the Hail Creek project but this is only an appetiser for this essentially petroleum oriented company. Houston Oil and Minerals has a 90 per cent interest in the Oaky Creek deposit in Queensland. There are others, such as Total in the Wambo colliery in New South Wales. They are almost two numerous to mention;

The spread of foreign control in the Australian minerals picture is far more extensive than I have indicated in the case of coal. Many international companies, oil companies included, are moving into the non-ferrous metals area as well as into energy. The present coalition Government has been impotent when dealing with this problem and, judging by the answer I received yesterday from the Deputy Prime Minister (Mr Anthony), the Consolidated Gold Fields sale to Shell will be approved under the existing foreign investment policy. There is no doubt that 49 per cent comes within the parameters of the existing foreign investment policy, but there is also no doubt that the decisions of the new Bellambi Board will need to be unanimous. Because Shell has the money, the effective control of the project will fall to Shell.

The question the Opposition poses is: Should international oil companies be allowed to buy our resources on the basis that they can pay the highest price? The answer should be clearly no. Companies like Bellambi Coal, with their existing operations and future prospects, should be held in Australian hands.

It seems that on the issue of who owns Australia, the Labor Party is the sole sentry at the gate. The Country Party, under the leadership of Mr Anthony has shifted from the manufacturing industry associations which the Country Party developed under Sir John McEwen’s leadership and Sir John’s concern about buying back the farm in the mineral sector. The present leader of the Country Party sees his role as doing what the companies want. He will always make a glib case for foreign investment, and the theme would more likely be development at any price.

But Mr Anthony’s negligence does not excuse the Prime Minister (Mr Malcolm Fraser) or the Liberal Party. Their role- the Prime Minister’s role and the role of his party- should be the maximisation of the national benefit from the development of Australia’s natural resources. That benefit can be realised only when there is a growing level of Australian corporate ownership in the minerals and energy sectors. There is no thought by the Government to maximising the benefits or equitably sharing the wealth. All we get from this Government is the gung ho political rhetoric of how many million dollars worth of projects are in the pipeline- and might I say the pipeline has been four years long. All we hear are the same noises about the same projects that we were hearing about four years ago.

The problem with foreign investment is that it is addictive and a time is reached when the repatriated funds are so great that one has to keep a steady stream of capital inflow to redress the imbalance. It can be valuable- indeed it has been valuable- but it must be taken in moderation. This Government does not understand moderation; it does not understand the concept of the national interest; it does not understand loyalty to fellow Australian citizens; it is subservient to big international money. It is a foolish government; it is an intellectually corrupt government; and it is an incompetent government.

Perhaps one could be more understanding of the Government’s position if it had a more comprehensive taxation policy in place such as a resource tax and graduated withholding tax where appropriate. But it does not. On coking coal it reduced the coal export levy from $6 a tonne to $3.50 a tonne. So even with exceptionally profitable ventures it has not attempted to maximise the benefits to the Australian people. It does not distinguish between Australian and foreign capital in respect of its tax laws and it accepts the word of foreign companies as though they were the words of national companies. Australia is not in the position it was ten years ago. Then, foreign management was able to show us imaginative thinking in resource mining and marketing. Utah is an example with coal. Conzinc Riotinto of Australia Ltd is an example with iron ore and bauxite.

But we have passed that stage now. We do not need to be shown twice, or three times or four times. We have learned the lessons; we can now do it ourselves. Our mining technology is the envy of the world. Our savings outstrip gross domestic capital formation by a street. We have the money, the know-how and the markets. All we need is to resolve to do it our way. What we need is a government with national pride and imagination, a government with confidence in Australians and Australian institutions. What we have for a government is a cringing, crawling bunch of sell-outs- unimaginative drones. Never has the government tabled its advice from the

Foreign Investment Review Board on foreign investment proposals.

Government members interjecting-

Mr DEPUTY SPEAKER (Mr Millar)Order! The House will come to order. I would ask the honourable member for Blaxland to be a little temperate in some of the language he uses to describe the Government.

Mr KEATING:

– The real crux of foreign investment issues never sees the light of day. The FIRB conducts the wholesale liquidation of Australia in private and the Government keeps it private. How many projects are proceeding without any Australian equity? What is the reason? Did the Government oblige foreigners to involve Australian partners? Were their efforts sincere, or did they just make offers they knew Australians were bound to refuse? The Australian public deserves an answer to these questions. The Government even changes its stated foreign investment policy on an ad hoc basis with each project. For all intents and purposes the Government has no consistent or believable foreign investment policy any longer. It is now a sham, a piece of window dressing to legitimise the continuing sell-out of Australia.

At its National Conference in Adelaide this year, the Australian Labor Party outlined a firm approach to foreign investment which would be taken by a future Labor government. The policy states quite clearly on page 133, under section K- for those interested in looking at it- that a Labor government would:

Operate the foreign investment rules to prevent domination of coal reserves and coal marketing arrangements by major foreign interests, particularly oil companies.

This policy would be adhered to in government so that Australia’s coal trade was responsive to the Australian national interest and not the interest of some other country. If the present Government wants some gratuitous advice it would do well to adopt the same approach.

Mr BAUME:
Macarthur

– I will not address myself to the extraordinary language used by the honourable member for Blaxland (Mr Keating).

Mr Keating:

– I raise a point of order. Could I ask why a Minister did not defend this issue, and why we now hear from the back bench?

Mr DEPUTY SPEAKER:

-There is no point of order.

Mr Keating:

– Why does the Government scurry away from this issue?

Mr DEPUTY SPEAKER:

-There is no point of order. The honourable gentleman will resume his seat.

Mr Keating:

– Why does the Deputy Prime Minister not come in and stand his ground? He is the architect of the sell-out.

Mr DEPUTY SPEAKER:

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

Mr BAUME:

-Mr Deputy Speaker, does that mean that the clock starts now?

Mr DEPUTY SPEAKER:

-Order! The honourable member for Macarthur will proceed.

Mr BAUME:

– I ask you, sir: Does the clock start from now or before the interruption? Had I been called? That is my question.

Mr DEPUTY SPEAKER:

-Order! If the honourable member for Macarthur wishes to exhaust further the time allocated to him by posing the question, the Chair is happy to answer it. His time commences from the time that he was called. If he is interrupted by a specious point of order, that can only be put down to the normal hazard that attaches to endeavouring to make a speech in this House.

Mr BAUME:

– Thank you for your protection, Mr Deputy Speaker. In the shortened time available to me I do not wish to deal with the extraordinary language or the extraordinary behaviour of the honourable member for Blaxland, who for some curious reason thinks the points he made merit answer by a Minister. It is selfevident from the nonsense he spoke that in fact he does not merit a reply even from me as a back bencher. His comments merit no reply whatsoever.

I am interested to see that he is bouncing up again like a jack-in-the-box, with as much spring but as little content as the top of the box. He alleged that there had been an alarming penetration into the Australian coal industry in recent times, and he quoted some takeovers. What he failed to comment on was that the bulk of takeover activity in the coal industry in recent times has been one international corporation changing places with another. In each case it was to Australia’s immense benefit. I point out that an interest of the United States of America in Clutha Development Pty Ltd has been taken over by British Petroleum. Does this represent some alarming incursion and some alarming penetration? The rhetoric of the honourable member is in inverse relationship to the merit of the points he is making. This is his style in this House. One can always tell that when the phoney emotionalism enters into a debate, the honourable member for Blaxland does not know what on earth he is talking about.

Let us look at the benefits of expansion in the coal industry. The bulk of the benefits are internal. The serious question that we have to ask ourselves is: Would these developments go ahead, would there be these immense benefits in terms of an employment, exports and tax paid if there were not these developments? It is interesting to see that when the honourable member for Blaxland is whinging about what has happened in this industry we have had a dramatic expansion despite the fact that our major customer, Japan, has reduced its purchases. Despite that fact, is it not a remarkable coincidence- if we can talk about the so-called alarming impact on this industry- that it has been thriving, prospering and progressing and employment has been going up in the industry mainly as a result of expansion emerging from the mines owned by international corporations or mines in which international corporations have a stake? I refer the honourable member to the 1978-79 annual report of the Joint Coal Board, which presumably he has not had the opportunity to read. It states:

The year was another period of growth for the New South Wales coal industry. Raw coal production was a record 50.5 million tonnes . . . Employment within the industry expanded during the year -

It increased by about 593 people, which is in addition to the 230 people added to the industry’s work force during the previous year. There is overwhelming and universal expansion in the New South Wales coal industry. I cite the New South Wales industry because this report happened to come to my desk today. It states:

A welcome development during the year was the increasing trend for overseas sales of steaming coal to be made by means of long term contracts rather than under the short term arrangements which generally prevailed in the past.

So here we have an improvement in the marketing of our coal as a result of these allegedly disgraceful activities; we have an improvement in the employment situation in the industry as a result of what the Labor Party regards as disgraceful activities; we have an improvement in production in the industry- an improvement in the industry’s efficiency- yet all we hear from the Labor Party is the perpetual whinge. The professional knockers of the Labor Party are once again at work. We are not surprised by this because this is the Labor Party’s general style. Let us see what these new mining projects are. Let us have a look at the report of the Joint Coal Board of New South Wales. It states:

  1. . four new underground mines were brought into production in New South Wales in 1978-79. At June 1979, work was proceeding on the construction of five other underground mines and on a large scale open cut mine in the Hunter Valley.

I have mentioned one mine in my electorate. At the time of this report Clutha Development Pty Ltd’s Tahmoor mine was at an advanced stage of construction and regular production was about to commence. It has in fact commenced, but on a reduced scale. I draw the attention of the House to an article which appeared recently in a local newspaper under the heading: ‘More Trouble for Tahmoor’. Let me tell the House that the ‘more trouble for Tahmoor’ once again has been caused by the anti-coal industry Government of New South Wales. I stress to this House that if there is a threat to the coal industry in Australia it is not coming from the multinational corporations; it is coming from the New South Wales Government which has continually run a negative, harassing and opposition set of policies to the development of the coal industry in that State. I will return to that aspect very shortly.

I wish now to dramatise what has happened in this mine at Tahmoor. The Joint Coal Board report states:

Tahmoor has a planned productive capacity of 2 million tonnes per annum and has been developed to supply medium-volatile coking coal to the export market.

All of these major developments are taking place at a time when it is alleged by the Opposition that there is an alarming disaster taking place in the coal industry because of these incursions by multinational corporations. Let me put very strongly to this House what the facts are in this industry. At present coal development projects with a total value of $ 1,400m are in hand in Australia. It would take more than an Iraqi breakfast to raise $ 1,400m, but perhaps that is the way in which the Labor Party would resolve the problem of raising this money. It may well be that this is only a very small estimate of the value of these projects because it does not take into account the clear demands that are going to be made on steaming coal in this nation. I point out to the House that the International Energy Agency has indicated to Australia that in 20 years’ time it expects Australia to be supplying and hopes that Australia will be supplying something like 120 million tonnes of steaming coal a year to an energy-starved world. At the moment our steaming coal exports are 5 million tonnes, yet the requirement will be for 120 million tonnes. The volume of investment that will be required to meet this demand is absolutely overwhelming. Unless the Labor Party can tell us where this investment is to come from, where the marketing skills are to come from -

Mr Baillieu:

– It has no alternative.

Mr BAUME:

-I suggest that if it has no alternative its integrity in raising such a matter is simply non-existent. Let me underline the fact that we are going to have this massive demand for capital expansion not only in steaming coal but also in coking coal. At the moment our coking coal exports are approximately 30 million to 35 million tonnes a year. By the year 2000 the demand for coking coal will be 75 million tonnes a year. We can see that this massive increase in the requirement for coal will bring with it the sorts of capital requirements that this nation has never seen in this industry in such a compressed amount of time. There is no doubt that enormous strides have been made and immense amounts of work have been undertaken in increasing our coking coal exports to approximately, 30 million to 35 million tonnes a year. We are now talking about 120 million tonnes a year in steaming coal exports alone. Approximately four times the present tonnage of coking coal exports will be required in steaming coal alone.

It is interesting to note that this subject was skirted by the honourable member for Blaxland (Mr Keating). It was not raised by him when he talked in totally negative terms, as usual, about why everything that is happening now is wrong. Let us hear the positive part. Let us hear about the impact on employment. Let us hear about the enormous tax payments which are being paid and which will be paid in future by these corporations who make their profits overseas. Let us remember that their profits come from sales overseas. They will be bringing back into Australia enormous amounts of foreign reserves- that is, of course, if they are allowed by State governments, particularly the Government of New South Wales, to proceed with their expansion program.

Let me dramatise to the House the disastrously negative approach of the Government of New South Wales which, I submit to this House, presents the rapidly increasing and alarming problem which faces the coal industry in this nation. When a State has sovereignty over the coal trade, we are finding that that sovereignty is being abused. For petty political purposes the Government of New South Wales has prevented the coal industry from building its own export loader in Botany Bay where it ought to be and where it could be serviced by rail. In fact, the coal mines in my electorate- particularly the new Tahmoor mine- could effectively and efficiently export coal by rail through such a coal loader, which would cost the Government nothing. Yet the Government of New South Wales, because it is dominated by the left wing, has prevented that project from going ahead and instead has insisted on the building of an expanded coal loader in Port Kembla.

There is no doubt that Port Kembla needs an expanded coal loader. The big problem is that it is now being called upon to have a coal loader which is large enough to cope with all of the coal from the south-west as well. This is simply not possible in the sense that the coal cannot be transported by rail from the mines in my electorate to that coal loader. That is simply physically impossible. A report is available, from which I would like to quote if I have time, which demonstrates that there will be a massive shortfall between the capacity of rail to carry the coal, the capacity of the coal loader and, of course, the capacity of the mines to produce. If in fact the State Government sticks to its extraordinary, eccentric decision that no more than 2 million tonnes of coal a year can be sent to the Port Kembla coal loader by truck- by road- then the production of these mines in my electorate will have to be curtailed. The jobs of coal miners in my electorate will be lost because of the arrogant and, I say, politically motivated decisions by the New South Wales Government. Its latest attempt has been to reject out of hand this week a proposal that a new access road be built into Wollongong which would take all truck traffic off Mount Ousley- the death trap of Mount Ousley. That proposal has been totally rejected by the Government of New South Wales without consideration.

I put it to this House that there is no threat to the coal industry by international corporations taking a major and expanding role in that industry. In fact, it can only be of benefit to this nation in almost every sense. The main risk to our coal industry comes from thoughtless and arrogant actions of the Labor Party, both when it was in office in the Federal sphere when it imposed this absurd coal levy on underground mines- that was most unfair- and now that it is in office in New South Wales. Its anti-coal mining, anti-coal miner policies continue to disturb that industry.

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

Mr WEST:
Cunningham

– It has been perfectly obvious since 1976 that the oil majors have been determined to move into the Australian coal industry. The reasons for this action are very obvious. During the 1970s, the Organisation of Petroleum Exporting Countries nations have adopted an increasingly militant position. They have moved into controlling their own oil resources through the establishment of their own State oil companies. They have been limiting their production to preserve their oil- their main export earner- and, as we all know, they have been raising prices. Those price limits are restricted only by the capacity of the consumer Western nations to pay and the alternatives to liquid fuels and oil. As a result, we can see that oil has become increasingly dearer- there is no question about that- and increasingly short in supply. It necessarily follows that, despite the record profits of the international oil majors, as presented today by the honourable member for Blaxland (Mr Keating), oil as a profit earner in future has a limited long term future. It is very understandable then that the oil majors will seek to preserve their own future by becoming total energy companies. I seek leave to have incorporated in Ilansard a list showing the activities of the oil majors in the Australian coal industry over the last two to three years.

Leave granted.

The document read as follows-

page 2972

QUEENSLAND

Thiess Holdings is owned 16.5 per cent by Shell Co. Aust. Ltd. Thiess Holdings own 22 per cent of Thiess Dampier Mitsui which own the following mines.

Wards Well (reserves- part of Nebo project).

Riverside (reserves- part of Nebo project).

Bee Creek (reserves of 1 ,000 tonnes).

Kemmis- Walker (for whole Nebo project reserves are about 1,000 tonnes).

South Walker (for whole Nebo project reserves are about 1,000m tonnes).

Poitrel (for whole Nebo project reserves are about 1,000m tonnes).

Moura (reserves n.a.).

Kianga (now closed).

Thiess Holdings own the following mines.

South Blackwater (reserves 3 1 2.4m tonnes).

Fifty per cent of Rolleston (422m tonnes, reserves).

Fifty per cent of Theodore ( 1 240m tonnes, reserves).

Callide (reserves, 79.5m tonnes).

Fifty per cent of Brigilow (reserves 148.3m tonnes).

Twenty-five per cent of Millmerran (reserves 900m tonnes).

Esso Exploration lnc owns 25 per cent of Hail Creek (reserves 836m tonnes).

Shell Co. of Aust. Ltd directly owns 43.3 per cent of German Creek (reserves of 361m tonnes).

Shell also own 37.23 per cent of Austen and Butta who have a 25.9 per cent share in German Creek.

Shell is also providing Austen and Butta ‘s share of the development finance as well as its own.

Houston Oil and Minerals of Australia owns 100 per cent of Oaky Creek (reserves 270m tonnes). MIM have entered into an agreement with Houston Oil to acquire 40 per cent equity in Oaky Creek. Hoogovens Delfstoffen B.V. (Dutch company) will own 10 percent.

Atlantic Richfield (United States petroleum producer) owns 38 per cent of Blair Athol (reserves 222m tonnes, production 140,000 tonnes p.a.).

British Petroleum Co. totally owns Clutha who owns Sirius Creek No. 1 and 2 (reserves 500m tonnes).

Western Mining Corporation have an option to acquire 50 per cent of this mine.

Triton Oil and Gas of the United States own 40 per cent of Crusader Oil N.L. which 100 per cent owns Baralaba (reserves 200m tonnes).

Shell Co. of Aust. Ltd 100 per cent owns Acland No. 3 (reserves 13m tonnes).

Triton Oil and Gas of the United States owns 40 per cent of Crusader Oil N.L. which 100 per cent owns New Whitwood (reserves 3.6m tonnes).

New South Wales

  1. W. Miller Co. Ltd. is owned 32 per cent by Ampol Petroleum and Atlantic Richfield 32 percent.
  2. W. Miller own the following mines.

Eighty per cent Mt Thorley (reserves 9.7m tonnes).

One hundred per cent Preston extended (reserves n.a. ).

One hundred per cent Millfield (reserves n.a.).

One hundred per cent Delta (reserves n.a.).

One hundred per cent Ironbark (reserves 25m tonnes).

One hundred percent Wallsend Borehole (reserves n.a.).

One hundred per cent Belmont (reserves n.a.).

Shell Co. Aust Ltd owns 44.5 per cent of Drayton (reserves 120m tonnes) directly and have indirect ownership through their 16.5 per cent interest in Thiess Holdings who own 55.5 per cent of Drayton.

Shell Co. of Aust. and Mcllwraith McEacharn have bought Consolidated Gold Fields share of 64.82 per cent in Bellambi Coal Co. Shell and Mcllwraith McEacharn are also making an offer to the minority shareholders in Ballambi. Shell will take up to a maximum of 49 per cent depending on final acceptances.

British Petroleum Co. Ltd owns 100 per cent Clutha who own 100 per cent Foybrook No. 1, Howick North Open Cut Foybrook open cut (reserves 70m tonnes)

One hundred per cent Eastern Main No. 1, (reserves11m tonnes).

Forty-nine per cent Clarence (reserves 85m tonnes).

One hundred per cent Brimstone No. 1 and No. 2 Nattai, Nattai North, Oakdale, Valley No. 2 and 3, Wollondilly (reserves 350m tonnes).

One hundred per cent Tahmooor No. 1 and 2 (reserves 5.318m tonnes).

Austen & Butta Co. Ltd (37.23 per cent Shell Co. of Aust. Ltd) owns 10 per cent Wambo and Wambo Open Cut (reserves 600m tonnes)

One hundred per cent Invincible (reserves n.a., production 2.34m tonnes).

One hundred per cent Gross Valley (reserves n.a.).

  1. C. Sleigh (26.6 per cent Caltex) owns 45 per cent Warkworth (reserves 400m tonnes).

Finance, Industries, Trade and Development Group

Legislative Research Service 13 November 1979

Mr WEST:

– I thank the House. Honourable members will be able to read this list and to see, for instance, that BP Australia Ltd which is 50 per cent owned by the British Government, owns 100 per cent of the New South Wales coal producing company, Clutha Development Pty Ltd, which is operating in the southern coalfields where it has reserves of 500 million tonnes in the Burragorang Valley in New South Wales and 500 million tonnes of reserves in Queensland. The 50 per cent ownership of BP by the British Government, means that Clutha is 25 per cent owned by the British Government. Here we have the position where the Minister, this Government and the back benchers, such as the last speaker, would utterly oppose the Australian Government having ownership in coal companies but they are quite prepared to see BP, which is 50 per cent owned by the British Government, own 100 per cent of Clutha, an Australian company. How crazy is their position.

Esso Australia Ltd has 25 per cent of the Queensland Hail Creek deposit of 836 million tonnes of coal. Caltex Oil (Australia) Pty Ltd has 27 per cent ownership of H. C. Sleigh Ltd, which in turn has 45 per cent ownership of the rich Warkworth reserves of 400 million tonnes plus in the Upper Hunter in New South Wales. Shell Co. of Australia Ltd has 49 per cent of the rich German Creek deposits of 360 million tonnes and 37 per cent of Austen & Butta Ltd, the New South Wales company which has reserves of 600 million tonnes. I refer now to a mine that is very close to my own electorate, owned by the Bellambi Coal Company. Shell Company has now acquired and is seeking approval to buy 49 per cent of that particular mine. The Government says: ‘ Why oppose it? ‘

Mr Baume:

– Goldfields owned it before; what is the difference?

Mr WEST:

-Why oppose it. That is the Government’s argument. Let us see what the absent Minister had to say. He does not have the guts to come in and debate this matter with our shadow Minister. In yesterday’s Australian Financial Review, Mr Anthony is quoted as saying that he would not lay down strict or arbitrary rules as to who could or could not participate in the development of Australia’s coal resources. Why not? Let us have a look at the track record of the oil majors. The track record is very poor indeed. Both the Prices Justification Tribunal and the New South Wales Prices Commission have been very critical of their activities in the transfer pricing area. The oil industry has been ideally suited because of its vertical integration for the companies to take their profits wherever it suits them- whether at the production end, the transport end or the refining end. That is what the oil companies have been doing, and the PJT and the New South Wales Prices Commission have drawn attention to that fact.

There is no question that oil companies have placed their own interest first and Australia’s interests last regarding oil imports. So why does this Government think the oil companies will act any differently as they move into the business of coal exports? This Parliament should be greatly concerned at the Minister’s ‘It’ll be all right’ attitude to our energy resources. The Secretary for Trade and Resources, a Mr James Scully, at a recent energy symposium in Sydney indicated- I suppose he was speaking for the Governmentthat it had no objection to the cartels which the Japanese steel mills were setting up to squeeze Australian coal miners and no objection to Japanese energy utilities controlling Australian energy reserves. The Government did not indicate any plans whatsoever for a resources tax, even though it is cutting back the coal levy and has no plans whatsoever to cream-off the windfall profits that are being made in the increasing exports of coal, especially from the larger open cut fields in Queensland.

The whole theme of the Government’s approach to energy resources is that we are in the box seat. But there is no hint that our natural advantages impose obligations to be careful, rigorous and forceful in ensuring that our natural heritage and wealth are not simply frittered away. Australia’s recoverable coal reserves are substantial. Various estimates, including that by the New South Wales Joint Coal Board, range from 18,500 million tonnes to 36,000 million tonnes of black coal. This compares with 83,000 million tonnes in the Soviet Union and 1 14,000 million tonnes in the United States. Actually, we have only about 2 per cent of the world ‘s coal reserves but we are now the third largest exporter after the United States and Poland. Soon, if multinational coal companies have their way, we will head the list. Already Australia exports over 50 per cent of its production, whilst the United States exports 8 per cent of its production.

The sky is the limit, to listen to the bullish estimates of the Government and some of the coal companies. We can see high estimate forecasts that the Australian coal production will treble or quadruple to over 250 million tonnes a year by 1995, which includes exports of 115 million tonnes a year of steaming and coking coal from New South Wales alone. This would include a substantial increase in steaming coal exports, particularly from the Upper Hunter. Added to this is the future demands of the growing aluminium smelting industry. In New South Wales alone, Alumax Pty Ltd, Pechiney and Nabalco Pty Ltd all plan to build smelters in the Hunter Valley to produce over three-quarters of a million tonnes of aluminium annually. These smelters will consume vast quantities of steaming coal for power generation. We should encourage the State Electricity Commissions to take equity from the producers in these projects as part of the contracting for the provision of cheaper electricity. The Foreign Investment Review Board should be used to ensure this.

Then there is the possibility of coal liquefaction. To produce 50 per cent of Australia’s oil requirements from coal liquefaction would require an extra 45 million tonnes of coal production annually. I have no confidence that foreign oil majors will ensure adequate rationalisation of coal resources to cover these future needs since their motivation will be to export for profit.

There is also a problem as certain types of coal, particularly coking coal, could be in future short supply unless rationalisation of usage occurs. The Shell takeover of the Bellambi Coal Company particularly worries me in this regard. The macro position is that approximately 6 million tonnes of coking coal a year are currently exported from the New South Wales southern coalfields. On completion of the new Port Kembla coal loader, this could rise to 15 million tonnes with , later estimates rising to some 25 million tonnes by 1995. But local needs for the steel industry by 1995 will range from between 10 million tonnes to 1 5 million tonnes. In the 90s, the southern coalfield could be producing up to 40 million tonnes a year, virtually all from the valuable Bulli seam.

The Port Kembla steel industry faces future difficulties since Bulli and Wongawilli coal are needed in a 70/30 blend to produce coke for the local steel industry. The export market is taking the better quality Bulli coal, leaving an increasing proportion of poorer quality coking coal for Australian Iron and Steel Pty Ltd use. The Catch 22 situation is that the lower the quality of the Bulli coal the more the Wongawilli coal seam must be used, but the Wongawilli seam has a limited life of some 20 years. As one of Australia’s leading coal geologists, Professor Cook of Wollongong University puts it:

When the limit of Wongawilli is reached, the remaining poorer Bulli coal will not be useable by the Australian steel industry in their present plant unless coal is imported, perhaps from Queensland.

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

Mr COTTER:
Kalgoorlie

-We have heard a lot of nonsense from members for the Opposition today about the fear of foreign investors in the coal industry. Certainly, there will be a great influx of oil company and other foreign investment capital into the coal and other energy projects in Australia. There is nothing wrong with that. There is nothing new about that idea. Where else in Australia are we to find that type and magnitude of investment capital? It was foreign investment capital that made this country great and developed it to the great country that it is today. It was foreign investment capital that developed America to the great country that it is. So what is so wrong with foreign investment capital? It is certainly not available in Australia. New coal developments totalling approximately $ 1,400m are already on the drawing boards for development over the next few years. The oil companies are getting not only into the steaming coal business but also into the coking coal business. This is another resource commodity. Developing another iron ore mine is just like talking about developing a coking coal mine. Probably the major part of the development will be done with foreign investment capital. In most cases the foreign buyers and foreign investors are, in fact, buying out foreigners. We heard a couple of examples of this a little while ago when we were talking about Consolidated Gold Fields Australia Ltd. What do honourable members think.Consolidated Gold Fields is? It is a foreign company now. For goodness sake, let us get off cloud nine and be a bit realistic about all this.

It is estimated by the International Energy Agency, for instance, that between now and the year 2,000- this was mentioned by my colleague, the honourable member for Macarthur (Mr Baume), a little earlier- there will be a need for approximately 120 million tons of new development in the coal industry. This means new coal development at the rate of approximately 10 million tons a year between now and the year 2,000. This will open up enormous development prospects and possibilities in relation to taxation, employment opportunities, and educational opportunities for the people. Would the Australian Labor Party cut off all that? Would it have the employment opportunities cut off and restricted for the people who live in Australia? Would it have more and more Australians out of work? We have seen the result of the ALP employment policies in this area. I believe that its policies on the development of the coal industry are no different at all from the ALP policies on the development of the oil industry when the ALP was in power. The development of its policies in the oil industry drove developers away from this area. Those policies drove the explorers out of this country. What happened? We saw the spectre of oil shortages in this country for the first time. The reason for that was quite clearly a development and extension of ALP development policies in the years between 1973 and 1975. Opposition members certainly do not like this but that is the bare truth of the matter.

Neither the honourable member for Blaxland (Mr Keating) nor the honourable member for Cunningham (Mr West) put up any tangible alternatives. They did not offer a reasonable, tangible and viable alternative to the foreign investment that we need to get these massive mining developments underway in Australia. It has to be remembered that the developments will, at all times of course, be under the guidance, the direction and the guidelines laid down by the Australian Government. It is important to remember that those mining developments will bring ports, towns, railways and jobs to this country. Nobody can dig up the port, the mine, the railway or the town once it has been constructed and take it away. It will be part of Australia for a long time to come.

What happened when foreign investment developed the Pilbara? Opposition members are silent when I mention that area. Today 50,000 people would not be living in the Pilbara if it were not for foreign investment in the iron ore industry. There would not be any railway lines, ports or towns in the Pilbara area today. Opposition members are sadly silent in commenting on this area. So we are facing a massive development not just of a coal mine, but of a whole series of infrastructures that will benefit this country for 50 years, 100 years or 200 years. The educational opportunities, the new expertise, the tertiary education and further development into the electronics field which this development will open up are part and parcel of the huge developments of today. If it were not for foreign investment we would not even see the developments in the North West Shelf which are about to occur. We would not see that development in that area and we would starve ourselves of energy. The ALP does not have a viable alternative to these areas at all.

Let us look at a major foreign investor in our resource developments which was mentioned earlier today, namely the Utah Development Co. So far it has shown a profit of $1 10m. How terrible, how horrible is this foreign investor! This was a profit on its investment of about $ 1,500m. But it has also paid $ 160m in taxes and royalties. It has paid $50m in wages and salaries and it has paid $60m to the Queensland railways. It has been the means of upgrading the Queensland railways. Where were all the Australian funds when Utah was trying to find local investment to do this development? Utah tried to find local investment and found none.

I turn for a moment to Western Mining Corporation Ltd. It is a major Australian-owned company with Australian developments. From where does it get its money when it wants to develop a project? It has to go overseas and raise the capital- that dirty, horrible, foreign capital that the ALP does not like. It is the foreign capital that has made this country the great country that it is today. It is the country of which the ALP is proud to be a part, but it does not want any part of the foreign capital that flows into Australia or of the immense benefits that come to this country which result from foreign investment. What is so wrong with oil majors being involved in investment developments? What is so wrong with oil majors putting their investment money into energy projects in Australia? They have the expertise and the track record in the energy field. They have the sales contacts and the expertise to put up massive developments. At all times, whether it is an Australian company, a foreign company or a blend of foreign and Australian companies, the Australian Government has the responsibility to ensure that not only foreign-owned oil companies and other foreign companies but also Australian companies develop these projects to the best interests of Australia. Australia will get these benefits from these massive developments for very many years to come. Honourable members should make no mistake about it.

I come back to what I said a little while ago. The ALP policies on coal as expounded by the honourable members for Blaxland and Cunningham would drive away the foreign investment that this country needs. It would drive away jobs, it would drive away expertise and employment opportunities, it would drive away educational opportunities and it would drive away the investment as it drove it away in the years 1973 to 1975. Opposition members’ memories are short but the Australian people ‘s memories are not so short. They rejected those policies in 1975 and they rejected them in 1977. They will reject them again and again. We heard the honourable member for Blaxland talk about a resource tax, a supertax, which will tax the poor blighters out of existence. To hell with the development that foreign investment would bring to this nation. To hell with the jobs, the ports, the railways and the towns that it would bring. That is what dirty foreign investment brings to this country. It brings development, it brings jobs and it brings the much-needed infrastructure that this country requires to make it a great nation.

I wish to make one final point. I believe that this country has an obligation to an oil and energy-hungry world to make its resources available to its near neighbours and to its distant neighbours. It has an important part to play in the energy scene in the world. We have a responsibility to develop our energy resources because we must remember that our coal resources are almost unlimited. I think that even the honourable member for Blaxland would have to concede that they are almost unlimited. At the present and proposed rate of development we have some 700 years or 800 years supply of coal available. We have only just scratched the surface in the coal area. If we do not make our resources available and have a responsible policy to offer an energy-hungry world, then woe betide us. I come back to my first point. I believe there is nothing wrong with the foreign investment that has made this country great. There is nothing wrong with the development which will flow out of that investment. But there is a hell of a lot wrong with the ALP policies as expounded by the honourable member for Blaxland.

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

Order! The discussion is now concluded.

Mr Keating:

– I want to make the point that the architect of the Government’s foreign investment policy, Mr Anthony, would not come into the House to debate the issue. Nor would the Treasurer debate the issue. He has approved foreign investment projects.

Mr Howard:

– My word !

Mr Keating:

– Why did he not come into the House and debate the matter? Why does he not have the guts to debate the matter instead of sending in these treasonous donkeys to debate it?

Mr Cotter:

– I take a point of order. I am sure that I have just seen a dugite. If honourable members do not know what a dugite is, it is a small black-headed thing with a yellow belly and a forked tongue.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Kalgoorlie will resume his seat. He should be aware by now as should the honourable member for Blaxland -

Mr Keating:

– At least I am not treasonous to my country as the honourable member is.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Blaxland will resume his seat; otherwise neither he nor the honourable member for Kalgoorlie will be here for very much longer. The discussion is concluded.

Mr Howard:

– I take a point of order. The honourable member for Blaxland should be required in all seriousness to withdraw the remark which he made about the honourable member for Kalgoorlie. He knows which one I am referring to. I will not grace the remark with the dignity of repeating it. The honourable member knows exactly which remark I am referring to.

Mr Keating:

– Don’t come that holy-moly crap while you and Peacock sell out Australia.

Mr Howard:

-The little boy is getting a bit excited.

Mr DEPUTY SPEAKER:

-Order! The House will come to order. I did not hear the remark which was made by the honourable member for Blaxland. If the Treasurer would particularise the remark he has asked to have withdrawn I will see whether it was offensive.

Mr Howard:

- Mr Deputy Speaker, if you did not hear the remark it is very hard for you to ask the honourable member to withdraw it. He knows the remark I am referring to. He ought to be ashamed of himself for making it.

Mr Baume:

– I take a point of order, Mr Deputy Speaker. Can you tell me under what Standing Order the honourable member for Blaxland spoke? If he was not speaking under the Standing Orders why was he allowed to speak? In those circumstances can his remarks be struck from the record?

Mr DEPUTY SPEAKER (Mr Martin:

-To which remarks are you referring?

Mr Baume:

– I am referring to the remarks which the honourable member made- he had not been called by you, to my knowledge- after the honourable member for Kalgoorlie had completed his speech while you, Sir, were advising the House that the discussion was concluded.

Mr DEPUTY SPEAKER:

-The only category in which those remarks can be classed as being acceptable is by way of interjection. As all honourable members know, all interjections are non-parliamentary. I allowed a certain amount of toleration. It was a rather exciting subject. I must admit that people in the gallery appeared to be interested even though there was not a great attendance in the House. However, I think the stage has been reached when Government business should be called on.

page 2977

QUESTION

INCOME TAX-TRUSTS AND OTHER ARRANGEMENTS INVOLVING DEPENDENT CHILDREN

Ministerial Statement

Mr HOWARD:
Treasurer · Bennelong · LP

-by leave- On 26 July last I announced on behalf of the Government, measures in relation to the taxation of income of trusts and dependent children. That announcement, before the introduction of the relevant legislation, facilitated the consideration of the broad proposals by the professions and by the community. The Government regarded this as a desirable process in order to avoid any unintended consequences of the measures. Many representations have been received on the proposals. Whilst there has been broad support for the essential thrust of the July announcement, there have been some specific representations questioning certain aspects of the proposals.

As well as receiving representations from a large number of individuals, there have also been considered expressions of opinion from representative bodies including the National Farmers Federation, the Law Society of New South Wales, the Taxation Institute of Australia, the Taxpayers Association of Australia and a number of other professional bodies. I have also received valuable comments from the Taxation Sub-Committee of the Government Members’ Treasury Committee. After carefully considering all representations, the Government remains firmly of the view that the essential objectives of the original decision should be maintained. However, it has decided on certain important modifications designed to eliminate potential anomalies and unintended consequences. I shall outline these for the benefit of the House. Before I do that, let me recall that I announced in July that, subject to important exceptions, income of dependent children is to be taxable at the middle rate of personal income tax, that is 47.07 per cent this year, and that most accumulating income of trust estates is to be taxed at the maximum rate of personal income tax, that is 61.07 per cent for 1979-80. 1 stressed then that:

  1. 1 ) Children in full time employment will not be affected by the new system at all;
  2. nor will people who are married;
  3. handicapped children who are permanently incapacitated for work will be outside the scope of the new system;
  4. so will double orphans, and handicapped children incapable of taking on full time employment, if they are not supported by relatives;
  5. income derived from a deceased estate will not be affected;
  6. salary or wages, and other remuneration for services rendered on a part time basis, will not attract any special tax; and
  7. income, including trust income from the investment of compensation moneys will likewise not be affected.

These exclusions will still remain. The first of two key modifications now proposed is that the new system for taxing income of dependent children will not apply to student children aged 18 to 25 years. It will be limited to children who, at the end of the income year, are under the age of 1 8 years. While there is a case for proceeding on the basis that a full time student over the age of 1 8 years is a dependent child, like a person under that age, we have come to the conclusion that, in the light of other modifications to the system that I will mention shortly, the case for keeping students over 18 within the system is not sufficiently strong. In particular, it has been put to the Government that keeping such students within the system disadvantages them by restricting their ability to generate sufficient income to cover the cost of their own education. If such students had decided not to continue their education they would not have been affected by the proposed changes.

The second important change is that the level of non-employment income exempted from the new system is to be increased from $416 per annum to $1,040 per annum. The $1,040 per annum level is already the threshold for a number of trusts, namely those for children under 16 covered by section 98 of the Income Assessment Tax Act. In extending the income level in this way, we are excluding what is income derived from only modest investments. Where the non-employment income, that is the income not specifically excluded from the new system, is $1,040 per annum or less it will be taxed in the ordinary way. For example, if the total taxable income of a child with nonemployment income of $1,040 per annum or less does not exceed $3,893- the amount up to which the zero rate of tax applies- no tax will be payable. If non-employment income exceeds $ 1 ,040 per annum, shading-in arrangements will apply so that, at 1 979-80 rates of tax, the 47.07 per cent minimum rate of tax on non-employment income under the new system will not be fully applicable until the non-employment income exceeds $3,625. Thus, under the modified arrangements, tax on non-employment income of $ 1 ,500 would, if it were the only taxable income, be $303.60.

In my statement of 26 July I made it clear that income from deceased estates would not be affected by the new system. It has become apparent from the representations the Government has received that there are a number of situations which on their merits should receive the same treatment as that for income from deceased estates but which are not strictly within the exclusion I identified on 26 July. It is therefore proposed that as well as excluding income a dependent child derives as a beneficiary of a deceased estate, there will also be excluded any income that a child derives in consequence of being left property by a deceased person, for example, dividends from shares bequeathed to the child and income arising from the investment of a cash legacy. In similar vein, income from the investment of other sums coming directly to a child on a person’s death, such as the proceeds of a life insurance policy or a lump sum from a superannuation fund payable to the child, will also be excluded. So too will income from investment of an ex gratia grant by an employer arising out of the death of an employee, for example, where no superannuation is payable.

It may sometimes happen that a parent dies without having made adequate provision for his or her children- property is left to the surviving parent who then finds it necessary to settle part of it on the children. Income coming to a child in this indirect way on the death of a person will also be excluded from the new system, but only if the trust or other arrangement for the child is made within 3 years after the death.

It will also be a condition that, in total, the excluded income as a result of the death does not exceed that which would have flowed if the child had received the benefit under the rules of intestacy. While it does not relate to the new system for taxing ‘non-employment’ income, I mention, at this point that the Government has now decided that the rules for taxing income of deceased estates to which no beneficiary is or is deemed to be presently entitled- broadly, accumulating income of the estate- are not to be changed from those that applied in 1978-79. Before leaving the subject of deceased estates, I mention, only because of abuses that have occurred in the past, that the various rules I have mentioned for income resulting from death are to be subject to safeguards against arrangements designed to exploit them, for example by channelling income or property into an estate to give them the formal character of income or property of the estate.

It has all along been made clear that, to the extent they are reasonable in amount, salary and wages and other income from services rendered are to be outside the new system applicable to income of dependent children. A number of representations have suggested that we should take this exclusion further. For example, it is possible that a child may carry on a small business, and the legislation will make it clear that income from the business is also to be excluded. Moreover, income from the investment of savings out of a child’s income from his or her own efforts, whether in the form of salary or wages for employment, payments for personal services, or profits from the conduct by the child of a business, is to be excluded. Also to be excluded is income from the investment of savings out of any other income of the child that is itself income of a type that is excluded; for example, savings out of income from deceased estates, from legacies, or from the investment of compensation moneys. Also in the excluded categories will be income from the investment of verifiable winnings by a child from legally authorised lotteries.

Safeguards against exploitation of the exclusions will, of course be necessary. These will aim to ensure that, for example, in the case of income from a business, it is really the child ‘s own business and that the profits of the business have not been inflated by the diversion of income to it by a relative or other person not at arm’s length. Similarly, in the case of investment income, there will need to be safeguards to ensure that the amounts invested, and the return on the investment, are not inflated by assets or income diverted from relatives or other persons not at arm’s length. In July, I indicated that income received directly or through a trust from investment of ‘compensation moneys’ would not be affected by the new system. Compensation moneys were specified as extending to damages awarded by a court- and amounts paid in settlement of damages claims- where the claim was for personal injury, medical negligence, assault or loss of parental support.

Some representations have been concerned that this exception may not extend to broadly similar cases where a public fund is established and maintained for the relief of persons in necessitous circumstances. An example of this is where, on the death of a person, a public appeal is made for members of the deceased’s family.

There have been a number of cases of this kind of which honourable members will be aware. In some of them the money raised is settled on trust, and the income is either paid or applied for the benefit of the beneficiaries or, in part, accumulated. In other cases, the amount raised may be paid directly to the members of the deceased’s family.

The Government has decided that, as in the case of income from compensation payments, income from the investment of funds raised by such public appeals will be excluded from the higher rates of tax under the new system, whether it is derived directly by the person for whom the funds were raised or indirectly through a trust. Where income is accumulated in a trust of this kind and no beneficiary has an indefeasible vested interest in the income, the income will be taxed in the same way as in the past; that is, at personal rates of tax but without the zero rate. Of course, a beneficiary with an indefeasible vested interest is taxed as being presently entitled to the income. I add that, in response to several representations, the Government has decided that the new system should not apply to income from court-ordered settlements arising as a result of divorce or judicial separations.

There remains one area of difficulty. People have been concerned about the possibility of situations arising in which persons who are committed to arrangements that have been made in the past find that the tax resulting from the new system for taxing income of dependent children is higher than what the tax would have been if the arrangements had never been entered into. This has led to representations that the new system should not be applied to any income if its application would result in more tax being payable than if the arrangements had not been entered into.

Accordingly, the Commissioner of Taxation is to be given discretionary power to reduce, and in appropriate cases to eliminate, the additional tax payable under the new system to the extent that he considers it would be unreasonable for the tax to be paid. This power will be exercisable where the income arises under arrangements made on or before 26 July 1 979. The relieving power will ordinarily not be available unless the persons concerned establish that the tax payable on the non-employment’ income of a child under the new system is greater than the tax that would have been payable on that income if it had been added to the income of the child ‘s parent. If one of the parents has a higher taxable income than the other, the reference will be to the taxable income of that parent. If the child has minor brothers and sisters also in receipt of ‘nonemployment’ income, the ‘non-employment’ income of all of them will be added to that of the relevant parent for the purposes of this comparison.

Safeguards will be necessary. For example, for the purposes of the comparison the Commissioner will be authorised to disregard artificial ‘paper’ tax avoidance arrangements designed to reduce or eliminate the taxable income of the parent concerned. Against the possibility that, notwithstanding the relief available under this discretionary power and the specific exceptions and exclusions, cases arise where it is shown to the satisfaction of the Commissioner that the exaction of the full amount of the tax payable under the new system would entail serious hardship, the Commissioner is also to have a residual discretion not to impose part or any of the additional tax.

In my statement on 26 July I indicated that it had been estimated that the new arrangements should provide additional revenue of some $125m in a full year. The changes I have just described are estimated to reduce this by some $55m, of which approximately $30m is attributable to the increase in the threshold amount from $416 to $1,040. It is planned that legislation to implement these changes will be brought before Parliament next week. I present the following paper:

Income Tax- Trusts and Dependent ChildrenMinisterial Statement, 14 November 1979.

Motion ( by Mr Peacock) proposed:

That the House take note of the paper.

Mr WILLIS:
Gellibrand

-The announcement that has just been made by the Treasurer (Mr Howard) will not come as a great surprise to honourable members or, indeed, to the public because in large measure it had been leaked to the Press as much as three weeks ago. A week and a half ago the Deputy Prime Minister (Mr Anthony) announced in Darwin .that substantial changes would be made, although he did not go into great detail. So, even before the Treasurer got to the point of making a statement in the House about this massive capitulation, the proposed changes had been leaked extensively outside the Parliament. The fact is that this is a massive capitulation by this Government. As the Treasurer said at the end of his statement, it represents the forfeiture of $55m of revenue over what it originally intended to obtain from the measures announced by the Treasurer on 26 July this year. That is a tremendous reduction in revenue.

Of course, it also represents a massive defeat for the Treasurer because when he made the original statement on 26 July he set out those proposals in the firm conviction that they would be carried through. He said that the measures were further evidence of the Government’s determination to share the tax burden equitablyJust in case he has forgotten, I remind him of his statement on that day. In his Press statement, he said:

These proposals are further evidence, if that were needed, of the Government’s determination to ensure as far as possible that people in the community share the income tax burden equitably.

One can only wonder about that statement now. The Treasurer was stung by criticisms of his announcement of 26 July, and the next day he brought out a Press statement in which he deplored the criticisms which had been made. I will quote briefly from that Press statement. He stated:

It is already clear that some will attempt to discredit the Government’s changed tax arrangements on family trusts by emotional references to their effect upon the earnings of children.

The fact is that the arrangements I announced last night will make the tax system fairer. They will take away the tax advantage previously enjoyed by predominantly high income earners who could split their income and thus reduce their tax liability through the use of trusts or other arrangements involving their children.

So said the Treasurer on 27 July. What has happened to those views? Quite clearly, the Treasurer has been rolled by massive lobbying of the Government by powerful and privileged interest groups, and not for the first time. We saw that happen recently in the case of the taxation provisions for cars costing more than $ 18,000. It is very important that the Treasurer of this country is being rolled in Cabinet in respect of quite important revenue-raising measures.

I make the point that the opposition strongly supported the original statement made by the Treasurer. We said that it was a belated recognition of our oft repeated demand for action against income-splitting schemes. At the same time, we were critical of some of the shortcomings we saw in that statement. Although we were strongly supportive of it, we said that it did not go quite far enough. There were two areas of which basically we were critical. Firstly, it did not prevent income splitting between husband and wife, although we admit that that is not an easy thing to overcome. Nevertheless, it is one area of income splitting that was not tackled in the statement of 26 July. Secondly, and more importantly, we said that in respect of very high income earners- people whose incomes are well above $33,000 a year and who are in the top bracket of income tax rates- income splitting would still be a profitable exercise. At that time I gave the example of a person with income of $100,000 a year whose tax, without income splitting, would be $53,220. Even on the basis of the measures announced by the Treasurer on 26 July, with much heavier rates of tax applying to areas of income splitting, the person earning $100,000 and splitting his income with a wife and three children could reduce his tax by $12,975, even after the 26 July measures, had they been enforced. Effectively, a lot of the income that would have been taxed at the top rate of 61c in the dollar would have been taxed only at the rate of 47c in the dollar because of the new provisions applying from that time. Of course, they are now not going to apply to anything like the same extent.

The criticisms we made at that time still apply but there are now many other criticisms that can be made because of the weakening of those provisions by the announcement just made by the Treasurer. As I have mentioned, the weakening of those provisions is substantial. The Treasurer has admitted that $55m in revenue will be lost. The major area of the tax loss is some $30m due to the raising of the exemption level for nonemployment income from $416 per annum to $1,040. This is an extraordinary concession. When introducing the original proposals, the Treasurer pointed out the reasonableness of a $416 exemption limit by noting that it represented an investment of $5,020 at 8 per cent per annum. Indeed, $5,020 is not a bad amount for a child to have invested, and we are talking about children’s investments. As the Treasurer said, $416 was reasonable because we were looking at an investment by a child of some $5,000. By raising the exemption from $4 1 6 to $ 1 ,040, to do the Treasurer’s sum on the new exemption levels, the investment level has been raised to $13,000, which at 8 per cent per annum represents $1,040.

How many children in this country have investments in their names of $13,000? There are probably quite a few thousand, but it is a tremendously small proportion of the total number of children in this country. Yet the Treasurer decribed this as a modest investment. I honestly do not believe that the Treasurer thinks that that is a modest investment, and it is quite clear from his original statement that he did not think it was a modest investment. He thought something like $5,000 would have been more modest. I would have tackled even that as being a modest investment for a child. Certainly, to describe $13,000 in the name of a child as a modest investment shows a very strange set of values by the standards of most Australian people. Most Australian people never have $13,000 in cash to invest in income-producing investments in their lifetime. Here we are talking about children having $13,000. What sort of values do these people have? Certainly they are elitist values. They are not the values of 95 per cent of the Australian people, who do not have that kind of money available. What sort of people describe a child’s investment of $13,000 as a modest investment?

The other important area in which revenue will be lost by the concessions now being made is in respect of full time students aged from 1 8 to 25 years, who will be exempted from the scope of the original proposals. There will be continued scope for tax avoidance by income splitting with a dependent full time student child. If student children are exempted in this way, quite obviously parents can utilise a full time student child for income- splitting purposes. So that tax loophole remains open. That is what has been done. The Government has decided to leave it open rather than close it off, with the obvious anomaly to which I will refer in a moment. The Treasurer claimed that it was necessary to overcome what would be a restriction on the student’s ability to generate sufficient income to cover the cost of his education. I make the point, and we acknowledge that there is difficulty in this -

Mr Howard:

– You agree?

Mr WILLIS:

– Yes, I admit that there is an anomaly. The difficulty arises only because of action the Government took in respect of abolishing gift tax. It would not have arisen had gift tax not been abolished. Income splitting would have been focussed on trusts and the Government would have been able to tie this proposal to include full time students’ income to income they derived from trusts. But the Government cannot do that because, having abolished gift tax, it has opened up the whole scope of income splitting, as the Treasurer has admitted. I think it is extraordinarily interesting for the House to know that the Treasurer, who has made a big thing about the way in which he has been closing off tax avoidance loopholes, recently admitted in answer to a question on notice in this Parliament that by abolishing gift tax he has made tax avoidance easier. I quote from Hansard of 23 October 1 979 part of an answer given by the Treasurer to a question asked by the honourable member for Hawker (Mr Jacobi).

Mr Howard:

– What page?

Mr WILLIS:

-It is page 2382, Question No. 4635. .

Mr Howard:

– Thank you very much.

Mr WILLIS:

-That is all right. I am happy for the Treasurer to know about it. I thought he would have been on top of it. In regard to the abolition of gift duty leaving the way open for tax evasion and avoidance, the Treasurer stated:

Abolition of gift duty is not seen as relevant to tax evasion practices which are, of course, illegal. To the extent that abolition resulted in the lifting of a constraint on the transfer of capital assets, it has, to a degree, made tax avoidance that much less complicated and costly.

That is an extraordinary statement. The Treasurer is saying that, by abolishing gift tax, what he has done is to make tax avoidance that much less complicated and costly by enabling the transfer of capital assets within a family or to other persons. He continued:

As against that, the Government has moved firmly against tax avoidance, including avoidance through certain kinds of trusts . . .

What he means by that is the kind of action which was proposed on 26 July, but that is now being watered down by the very proposals he has announced. The classic case is in respect of full time students. Parents will be able to split income with full time students, not by going through a trust system, as they would have before the abolition of gift duty, but simply by transferring capital assets, income-earning assets, to their children and therefore splitting their income and avoiding a lot of tax. That is what the Treasurer is admitting. He admits that he has made tax avoidance less complicated and less costly. By so doing, he has opened up more avenues of tax avoidance, as we said at the time the Government proposed to abolish gift tax. In respect of students and in broader measures in respect of tax avoidance, the Treasurer had made a rod for his own back by abolishing gift duty in that way. It has meant that instead of being able to focus attention on trusts, he has had to focus attention on a wide area. This has brought in its train a whole set of anomalies which the Treasurer, by trying to overcome, has left open a wide scope for tax avoidance. That is the situation, and while the Treasurer might nod his head, he should be fully aware of that situation; indeed, I am sure he is.

The rest of the concessions largely represent capitulation to all the vested interests who saw their particular tax lurk being reduced or even eliminated. Even where they have entered into trusts in the past to avoid tax, but now would have to pay more tax if they had never gone into the trust as a result of the measures that will be introduced, the Commissioner of Taxation is to be given discretion to reduce or eliminate that additional tax. That is a simply amazing provision. It means that people who entered trusts to avoid tax, and who did so effectively for years, are to be saved the expense of dismantling those trusts now that they no longer reduce tax. What an extraordinary situation! These people went into trusts to avoid tax, yet the Treasurer says: Oh, well, you have been avoiding tax for years by utilising- trusts. No.w, because these new measures we are to bring in will make it more expensive for you and make your tax higher than it would be if you had never gone into that trust, we will save you the bother of getting out of that trust by just allowing the Commissioner of Taxation to reduce the tax that you would otherwise have to pay under the new tax law’. I find that to be extraordinarily favourable treatment of people who have been involved in tax avoidance through income splitting. Given this tremendous array of concessions, it is amazing that the Government had to stoop, to picking up that one. In our view, the only real answer to income splitting is to implement the Asprey Taxation Review Committee suggestion and that is, to tax all unearned income of children at the rate determined by notionally adding such income of children to parents’ income. That is what is done in Britain and it should be done here to put an end to tax avoidance by income splitting. It would be far more simple than the kinds of complicated measures that are being brought in now with all these absurd exemptions to look after particular interest groups at various points. It would be far better to do what the Asprey Committee recommended in full instead of trying to do only half the job in the way the Government is now proposing.

Finally, I think it is important to compare what this Government has done in respect of its treatment of unemployment benefit recipients. Here we have a case where every dollar earned over $6 is effectively taxed at 100 per cent. If an unemployment benefit recipient earns any more income over $6 he loses the whole of that dollar because the unemployment benefit is reduced. But despite repeated representations to the Government, nothing is done to look after these needy people. But in respect of other favourable friends, these further tax concessions are announced.

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

Question resolved in the affirmative.

page 2983

SUGAR AGREEMENT BILL 1979

Second Reading

Debate resumed from 25 October, on motion by Mr Nixon:

That the Bill be now read a second time.

Mr KERIN:
Werriwa

-At the outset, I must say that the Opposition protests at the way in which the Government is ramming vital agricultural Bills through this House. The Minister for Primary Industry (Mr Nixon) is not even at the table. The Minister for Foreign Affairs (Mr Peacock) may be very sweet, but I do not think that he knows a great deal about sugar. The other night we debated the canned fruit industry legislation which represented the first substantial change to that industry since 1926. There were two speakers from each side, each speaking for 10 minutes. Later on today we will debate major education Bills. Again, there will be a cognate debate. But only one speaker from the Government side is listed to speak. We do not know how much debate there will be on these Bills but it will probably be 20 minutes from each side. Tonight we will debate the wheat Bills. Perhaps there will be three or four speakers on those Bills which relate to a wheat agreement that will be in force for the next five years. I think it is nonsense that these very important Bills which affect people in most of rural Australia are being rammed through the House in this manner.

The Opposition is not opposed to the Sugar Agreement Bill. It is good for the sugar producer and it is good for the industry. But we wish to raise several questions regarding the agricultural policy-making procedures of the Government. This Bill renews the previous agreement which expired on 30 June this year. I do not know quite what has prevailed since that time. The only substantial change from previous agreements is the formal mechanism for setting the domestic price.

The Opposition recognises the underpinning that the sugar industry places on coastal Queensland and northern New South Wales provincial towns and cities and is intent on seeing the industry prosper. Dr Rex Patterson served the sugar industry well as a member of the Labor Cabinet from 1973 to 1975 and was instrumental in ensuring that the sugar industry’s case was always well to the fore. He negotiated very favourable long term export agreements for sugar at far better prices than the industry is now receiving. He made sure that the full nitrogenous fertiliser subsidy was paid because he knew how important the price of this input was to this vital industry. In contrast, this Liberal Party-National Country Party Government, including members from sugar seats, has happily and openly supported the reduction of the subsidy to a mere $20 per tonne at a time when the price of nitrogenous fertiliser is rapidly escalating due to the Government’s misguided oil pricing policies. These policies can be symbolised as a slavish following of Organisations of Petroleum Exporting Countries prices and deliberations of such great mineral economists as the Ayatollah Khomeini rather than formulating energy policy for Australia in keeping with our energy resource endowment. The Government’s oil-petrol price policy is not about energy; it is about gaining maximum revenue.

This industry already feels the brunt of the price oscillations of trading on international markets. The International Sugar Agreement is only partially ratified and therefore is only partially operative at this time. The sugar industry is one of the few agricultural industries in Australia that is going through a bad stage, although there are a few signs of better days ahead. I understand that the free-on-board free export price for sugar is only about £stg 160 per tonne on the London market at present, but it has been down to £stg92 per tonne quite recently. But of course we need to point out that not much of our sugar is sold on the free market- perhaps 50 per cent of exports. This can be contrasted with the domestic price of $A353 per tonne for refined bulk sugar. The reason for depressed export prices is a world over supply and the policies of the European Economic Community which has an even better developed rural lobby than Australia can muster and hence produces rather uneconomically. The International Sugar Agreement is currently restricting export volume and is requiring cane growers in the signatory countries to reduce output by 15 per cent. Without the International Sugar Agreement, world prices would be substantially lower It is interesting to point out that during the 1977 election campaign, the Deputy Prime Minister (Mr Anthony) said that the International Sugar Agreement would increase prices to $2 10 per tonne. He said:

The real problems confronting the Australian sugar industry are now behind it.

That has not occurred, but of course the Deputy Prime Minister is the man who in August 1 973 asserted that ‘demand for meat will rise so fast we’ll be flat out trying to keep up with it’. Five years of the most depressed situation ever for the beef industry followed that prognostication.

The Queensland Government is the sole seller of sugar on the domestic market under the Sugar Agreement of 1975 between the Commonwealth and Queensland governments. Under the previous agreement, the Queensland Government undertook to make refined sugar available at a certain uniform maximum price at centres in which there are refineries and in Darwin, Hobart and Launceston. Under the Agreement, maximum prices were specified for various grades of refined sugar. Evidence given to the Industries Assistance Commission’s inquiry into the sugar industry revealed discontent with the system of Queensland-Commonwealth determination of the maximum price of sugar without any objectively defined principles of price fixation. This legislation is an advance because it does have a formula based on known variables. In addition, the uniform ex-refinery price resulted in certain anomalies. For example, buyers in Newcastle were paying a higher price than buyers in Perth. Following the IAC’s report, a new agreement was entered into between the Commonwealth and Queensland governments on 1 October 1979 to apply until 30 June 1984. The major changes in the new agreement deal with the determination of prices. The maximum price for IXDmanufacturing grade bulk refined sugar- is to be stipulated. The price of other grades and golden syrup and treacle is to be expressed as a proportion of the IXD bulk sugar price. The maximum prices are now ‘refinery gate’ prices. In the case of Darwin, Hobart and Launceston the price will apply at suitable distribution centres rather than being delivered free under delivery arrangements.

An objective domestic price determination procedure is established for IXD grade sugar. Over the first period, 1 October 1979 to 30 June 1984, the price is $353 per tonne. In future financial years the price increase will be given by the formula P x I x E x C where P is the price in the previous year, I is the percentage change in the consumer price index over the previous year, E is the ratio of the average return on exports within mill peaks in the season that precedes the season immediately prior to the year in respect of which the price is to be ascertained to that same average return in the season immediately prior to that year, and, C is 0.7, being deemed the ratio of the cash costs to total industry costs. The formula is very good for sugar cane growers as it incorporates a mechanism which will lift domestic prices on a yearly basis. Earlier this year there was an increase of 26 per cent in the domestic price of manufacturing grade sugar, and now we have a formula which, by adjusting the agreed maximum price of sugar on the domestic market each year, provides that the export price will have an inverse effect on the domestic price. This means that if the export price falls the domestic price will still rise. This can be contrasted with the Government’s formula for the wheat industry which we will be debating tonight.

The new formula ignores the majority view of the IAC which said that domestic price determination should be related only to cash costs in the industry. The new formula ignores the minority view of Mr McKinnon of the IAC who said export prices should be taken into account, but those should have a direct, not inverse, effect on the domestic price. He proposed a three year moving average, plus 10 per cent. The new formula ignores the recommendation of the Bureau of Agricultural Economics which had believed that export prices should have a direct, not inverse, effect on prices. A consistent approach to the formula was taken by the BAE with respect to domestic wheat prices also. The new formula also ignores the charitable view of the cane growers who argued for annual price adjustments proportionate to changes in the industry’s cash costs but with all productivity gains accruing to consumers.

One needs to point out that objective measures of cash costs throughout the industry, growing through to the refined product, are not known with any objective certainty. Both the Federation of Consumer Organisations and the Food Industry Council of Australia have attacked this deficiency, and the formula, because it has tied the price to the rate of change in the consumer price index and thereby shields the industry, to a degree, from market signals. The CPI may be an entirely unsatisfactory measure for industry costs given its composition. It may even understate industry costs to a considerable degree. Consumers have a legitimate complaint about this legislation as in only 10 of the last 52 years have Australian sugar cane growers and millers received a higher return for raw sugar sold by them on overseas markets. That is, consumers have subsidised producers in this industry. I am not saying that this is necessarily wrong, but it needs to be said objectively. But again, from the consumer’s point of view, the formula ensures that whenever world prices slump, the price of sugar bought by Australian consumers rises higher than it would if world prices increased. So we have a mess of inconsistencies and contradictions in Government policy decision making. I mention this particularly as we are discussing the Wheat Bills tonight.

Under the formula sugar prices are negatively correlated to export prices in the long term and wheat prices are positively correlated to export prices in the long term, yet many characteristics of the industries are the same. The major difference is the export price and the fact that the sugar industry is protected from import competition. At the same time the sugar industry is feeling the full brunt of the National Country Party’s import parity pricing policy for oil, fuel, and nitrogenous fertilisers when we are importing only 30 per cent of our fuel needs.

What is the reason for this confusion? Fundamentally, it is the fact that many major interest groups in Australia do not have as much access to Governments as do producer groups. If one examines the access of producer and union groups to Government, compared with consumers and minorities, the evidence is clear. This has already been detailed exhaustively by Professor Mathews in a paper written and printed by the Royal Commission on Australian Government Administration. One could instance the way in which the Wheatgrowers’ Federation, the Wheat Board and the State Governments, together with the Commonwealth, make up the Wheat Agreement. If a State government disagrees with the negotiation because it accepts domestic consumer viewpoints, whether it be by industry, other farmers using stockfeed, or bread eaters, it is castigated by the National Country Party.

I believe that the process I have outlined is understandable. We are about politics and pressure groups and not always about economic rationality. But it would be an improvement if we could be a little more consistent. The difference between the sugar industry and the wheat industry regarding policy approach could be used as an example of how difficult a national agricultural policy is to achieve. It could also be used as an argument for stating that national policy making should be at the national level for agriculture. But I do not see this happening in the case of sugar as it is grown predominantly in Queensland. This raises an interesting point. The Premier of Western Australia is determined to establish an industry in his State producing 200,000 tonnes per annum, that is, about 7 per cent of Australian production, in the Ord Valley. So far he cannot find the approximately $300m capital requirement. Such a project would add to oversupply, would be produced at higher cost than in Queensland, and would add to the difficulties of the industry. Western Australia consumes about 60,000 tonnes per annum, so one assumes that there will be an export surplus. I would be interested to learn from the Minister for Foreign Affairs (Mr Peacock), who is at the table, what would be the status of a Western Australia sugar industry- or a Tasmanian sugar beet industry, for that matter- with respect to the agreement we are debating. We are really only debating an agreement between the Commonwealth and Queensland Governments. We are not debating the legislation which covers the industry itself, and really what the legislation is about is the Commonwealth doing what the Queensland Government wanted it to do. The IAC was regarded as a nuisance by the Queensland Government.

The legislation which covers the industry in Queensland is the Sugar Act, which ratines a structure for the most regimented and heavily institutionalised rural industry in Australia. How Mr Bjelke-Petersen can ever describe this as ‘ free enterprise’ I will never know. The industry is a market economist’s nightmare with cost information a closed book. Yet it is members of the Government side who so pride themselves on believing at all times in free market forces. The sugar industry accepts quotas that the wheat industry rejects. The sugar industry accepts controls that the beef industry would take up arms about. The production in determined by the Central Cane Prices Board and the Queensland Sugar Board sets the total amount of sugar cane which may be delivered to the Board and which the Board is committed to acquire. This total is known as the ‘mill peak’ and is paid for at the price set down by the Board. The grower has no choice of mill and even the sale of his land is subject to approval. Approval must be sought for the transfer of sugar cane assignments and mill peaks.

Sugar mills are owned by three distinct groups: The co-operatives, the group which comprises the Australian Proprietary Sugar Millers Association and a group which operate as part of a vertically integrated operation. This includes Pioneer Sugar Mills and CSR Ltd. We have few measures as to the true cost of operating the mills, but from the prices paid by mills for takeovers one can assume that they are highly profitable and that the Australian consumers are subsidising either the finance of the takeovers or the less efficient mills. There is little market competition in milling and, of course, the cost of milling and all procedures from farm gate to refining have a bearing on eventual producer returns.

The domestic marketing of raw sugar is the responsibility of the Queensland Sugar Board. Traditionally CSR Ltd has been appointed the agent of the Board and operates the five refineries around Australia. It is quite clear from evidence at the IAC that the relationship between Queensland Sugar Board and CSR Ltd was not really the subject of negotiation, and that the CSR was the beneficiary of a government granted monopoly. Perhaps Tate and Lyle from the United Kingdom will be allowed to operate as a refiner here. And of course the New South Wales Government agrees to all this because is has to, due to the institutional rigidity of the Queensland arrangements and the market power that that State has. But let us not kid ourselves that elements of this industry have anything much to do with free enterprise.

What I do reject is that the industry is overbureaucratised. By and large it would appear that the controllers of the industry act efficiently and that the very tight discipline is not bucked. The worry is that there is not much competition operating in the processes of the industry and hence one has no measure of its relative efficiency. There is a pro-case for the industry’s structure and returns are dominated by the world market and the ISA. Farm sizes are increasing, internal cost pressures are as high as, if not higher than most agricultural industries, and some small mills have closed. Similarly, farmers only receive 65 per cent of gross returns due to the other 35 per cent being taken by the Queensland Sugar Board. But this money is not just for administration. It is to finance bulk storage and port facilities. For example, the magnificent Lucinda port terminal has, therefore, been paid for by the producers themselves. The industry also finances its own research and, at the farm level, cannot be regarded as having been shielded from market forces other than with respect to the import restriction and domestic pricing arrangements.

One other point I would like to raise is the crazy situation with respect to the Fruit Industry Sugar Concession Committee. For the life of me I do not know why sugar producers need to have to subsidise, by an elaborate procedure, local consumers of sugar in the fruit processing industries. The theory is that the concession of $ 1 5 a tonne is there to compensate processors for the lower import price of sugar, but imports are banned. Why should the price of fruit going into cans, bottles and plastic containers be fixed by a committee acting under the umbrella of a sugar price concession? The prices agreed to are really fixed by taking into account projected supply and demand and on many occasions they have not been able to be carried through for the whole season. If fruit prices have to be fixed that is all right, but let us not continue this charade.

The present ISA has not been ratified by the European Economic Community, which now takes the view that it may ratify it if the United States does. The United States is the world’s largest importer of sugar and, although it has provisionally applied the agreement, that is, the Administration has agreed to it, the legislation that went through the United States Congress was mixed up with measures of support for the domestic sugar industry. It was the latter provisions which caused the Bill to be lost, not the former. While talking of the ISA we need to note that sugar is the first of the 23 commodities to be included in the Common Fund, but so far progress has been slow.

The ISA operates on a trigger mechanism whereby for every United States cent below 1 lc per lb, producing and exporting countries hold onto sugar stocks. If the figure is above 2 1 United States cents per lb, producing and exporting countries are compelled to release stocks. There is also 2lA million tonnes of sugar held in special stocks. It is only in the last two weeks that the London and United States free market prices have broken through the lower price of 1 1 cents per lb. This has meant also that the restraint on major world importers to import only from members of the ISA has been lifted. Although effects on Australia will not be immediate, it means also that we are not forced to hold stocks or maintain production controls. At present we are producing only about 2.8 million tonnes. This can be contrasted to 3.3 million tonnes two years ago. Last year 3 million tonnes of cane was not cut. That would have been another million tonnes of sugar produced if we could have or would have been allowed to sell it. Australia’s 1 979-80 export entitlement under the ISA is approximately 1 .9 million tonnes. We have an additional obligation to acquire special stocks of 160,000 tonnes. It should be noted that the ISA trigger mechanism does not particularly benefit less developed countries who are not major exporters.

As I said, prices have lifted through the first trigger point and this is good for the future of the industry. There are still large stocks of sugar but in the coming year it is felt that these will not increase. However, it should be said that there is a chance that the free price in the last month has been distorted by the general speculation that has taken place with respect to commodities as funds have been transferred out of currencies into goods. The long term price may settle well below 1 1 US cents per lb. The other qualification that needs to be made is that at least SO per cent of Australia’s exports are involved in long term contracts, particularly to the Asian market. We have recently signed a five year contract with South Korea and are negotiating another with Japan at present. For the other 50 per cent we are completely a price taker. It is interesting to note that recently we have picked up spot contracts with Iran and China, it is hoped, at good prices.

The final point I wish to make is that we must continue to press our view as to the economic irrationality of the EEC’s sugar producing policies. The EEC applies price supports at two to three times the level of world market prices. This has led to production having risen from 9.2 million tonnes over five years ago to 12.8 million tonnes in 1978. We have complained to the members of the General Agreement on Tariffs and Trade, and so we we should, particularly for the sake of the minor but efficient sugar producing countries. The Opposition does not oppose the Bills.

Mr DEAN:
Herbert

-The purpose of this Sugar Agreement Bill is to approve of a new Commonwealth-Queensland Government sugar agreement. The terms of this agreement have been significantly influenced by the results of a special wide-ranging inquiry into the sugar industry. This inquiry was held under the chairmanship of Mr McKinnon of the Industries Assistance Commission. That inquiry was decided upon following a request under the previous Commonwealth-Queensland agreement for an increase in the domestic price of sugar.

The result was, firstly, a recommendation for a reasonably substantial domestic price increase. Secondly, the McKinnon report found in favour of continuing the essential features of what is a managed industry, with a determined or administered domestic price protected by an import embargo.

It is important to note that in making its recommendations the Commission was not doing so on the basis of offering assistance or protection to some inefficient industry. I will try to answer some of the worries expressed by the honourable member for Werriwa (Mr Kerin) about the fact that this is a managed industry. On page 75 of the Industries Assistance Commission report the comment is made: the industry is efficient in comparison to other Australian industries and sugar industries overseas . . .

On the same page the following words appear:

The acquisition and sole seller arrangements, control of sales of farms, production controls. State-wide cane payment bases, and the administered home consumption price arrangements are all features of a managed industry. Examination of the arrangements for managing the industry does not lead to the conclusion that the industry has been overprotected or the consumer exploited in recent years.

I ask the honourable member for Werriwa to note this paragraph on page 74;

Given the present ownership of refineries and arrangements for refining, it is not possible to look to market forces and interfirm comparisons as indicators of the technical and cost efficiency of refining in Australia. Information submitted to this inquiry showed decreasing levels of man-hours per tonne melted and energy use and maintenance man-hours per tonne processed. Comparison of performance with large overseas refiners suggested that, to the extent international comparisons were made, CSR’s performance compared favourably on the basis of indicators used.

Thus the Commission reported in favour of an administered price with the import embargo protection. Again I quote from page 75. The Commission found:

While the existing institutional arrangements involving acquisition of all domestic sugar and a single dominant refiner exist, it is doubtful whether mere relaxation of the current import control would prove an effective competitive force.

On page 76 the Commission wrote:

While the Commission may differ on whether it is necessary to justify on the one hand the removal of the existing import embargo and the administered price and, on the other, to justify their continuance, it is agreed, for a variety of reasons, that the current system of an administered price protected by an import embargo should be continued.

The Commission then recommended a reasonable and deserved domestic price level which provides a new starting base for the new agreement. The new price is still highly competitive by comparison with domestic prices in other countries around the world. Figures on this can be seen on page 77 of the report, and a reason is given, as an illustration, on page 78. At the beginning of the third paragraph on page 78 the report states:

It is generally agreed that by world standards the Australian industry is relatively low cost.

The benefits of that result in a price domestic consumers have to pay, which, as I said, is still highly competitive compared with domestic prices in other parts of the world. Having regard to the Commission’s findings, the two governments have now decided upon the terms of the new sugar agreement.

I now confine my remarks to one of the more important features of the Agreement- the formula it contains for determining annually the maximum domestic price for refined bulk sugar of IXD grade. Essentially the new price is found by multiplying the price for the previous year by three components. The first is the percentage change in the consumer price index. That is understood easily enough. The second is a ratio reflecting the increase or decrease in returns on exports during the immediately preceding year. I will refer to that in a little more detail later. The third component is a number- 0.7. That number is a measure of what are called cash costs; that is, put generally, expenditure directly incurred in producing sugar. It is a measure that is less than total costs, which means that certain costs such as depreciation and unpaid labour inputs are not to be taken into account in determining future price levels.

Leaving aside for a moment the export returns ratio, the simple result is that the industry can get increases of only 70 per cent of CPI increases. That may sound reasonable. But I suggest that over time the formula may well bear down unreasonably on the domestic price returns to the industry. If the new May 1979 price was reasonable and realistic, the new formula may well result in rather less than reasonable and realistic domestic prices in future years. A number of hypothetical applications of the new formula have found that only 56 per cent to 64 per cent of CPI increases will find its way into returns to millers and growers. The honourable member for Werriwa has pointed out also that a possible defect in the formula is that the CPI itself may not be a satisfactory reflection of industry cash costs, which may rise rather more rapidly than, say, any CPI increases.

I turn to a consideration of the export returns ratio. I have called it that for simplicity. The effect of this component is that the domestic price increase will be affected inversely by changes or movements in overseas returns. Put rather simply, if overseas returns increase, the percentage domestic price increase will be less than the CPI increase multiplied by 0.7. On the other hand, if those returns decrease, the percentage domestic increase will be more than 70 per cent of the CPI increase, but under the terms of the Agreement it cannot be more than 100 per cent of the CPI increase.

Inclusion of this export returns ratio in the formula certainly seems fair and reasonable and it may work well enough for the industry. But again I would make the point that over time the result could be an unreasonable bearing down on what should be a realistic domestic price level.

In Clause 6, sub-clause (3) of the Agreement there is a limited escape clause. Under that clause the price in any year can be agreed between the Commonwealth and the State, otherwise than by a strict application of the formula. Because of the possible defects in the formula, to which I have referred, I hope that the Government will be flexible and, if necessary, will be prepared to use this escape provision. Overall, the new agreement improves upon the one it replaces. So far as domestic price levels are concerned, the adjustment formula introduces elements of objectivity and regularity, in stark contrast with the delays in achieving adjustments previously in what often became unfortunately politicised exercises. I support the Bill.

Dr EVERINGHAM:
Capricornia

-As my colleague the honourable member for Werriwa (Mr Kerin) has indicated, the Opposition is not opposed to the Sugar Agreement Bill. We welcome moves towards stabilising the basis for the setting of prices. Of course, I join with the honourable member for Herbert (Mr Dean) in the hope that the Government will make use of the escape clause if it appears that the formula is too rigid. There are some features of the formula which have not been explained. It may be that in spite of the very long negotiations which took place to arrive at this formula it was not possible to state with absolute precision the terms upon which it was arrived at. Certainly, the Industries Assistance Commission was not unanimous in its recommendations. Perhaps this formula is the best compromise that it was able to come up with in the time available.

The honourable member for Werriwa stressed the fact that the nitrogenous fertiliser has been one of the major cost inputs of the industry. The Government has not abided by its policy in this particular area. In the 1977 election campaign it guaranteed that the nitrogenous fertiliser bounty would not be touched. As it happens, it has eroded this fertiliser subsidy to an extent which has had a major impact on the costs of the industry. That is one of the major reasons, perhaps, for the very high rise in the domestic price of sugar which has been agreed on this year; it is much higher than would have been achieved had the present formula applied.

It is also pertinent to draw attention to the honourable member for Werriwa ‘s reference to the fact that this price rise is related to the Government’s fuel policy. Certain honourable members opposite were interjecting their objection to this proposition. Let me point out how the fuel policy has been unrealistic and as the honourable member said, has been a revenue raising policy rather than a fuel policy. Seventy per cent of our petroleum is Australianproduced. In the case of petrol, 90 per cent is Australian produced. The Australian Labor Party is not opposed to world parity pricing for newly discovered oil deposits. We are not opposed to the encouragement of the search for oil, the production of new oil, by offering the world parity price. We are opposed to the imposition of this price for old oil, such as that produced by Esso-BHP. Esso-BHP gets something like $5 a bartel for oil that costs it a little over $ 1 a barrel. The Government is raking off something like $17 a barrel, so every petrol pump has become a tax collection centre. We reject the proposition that extending the world parity price payment to old oil has encouraged exploration in this country. It is the extension of the world parity price to new oil which has encouraged exploration. It is not the old oil price which has encouraged the discovery of oil reserves at Surat in Queensland. It is not the windfall handout to Esso-BHP which has encouraged moves to ‘ develop Rundle shale oil in my electorate.

Not only has the Government reneged on its promises with regard to the nitrogenous fertiliser bounty, but it has also, I believe, been less than frank in its policy in relation to another major input of the sugar industry in determining its predictability and its independence from the vagaries of the weather^ I refer to the Bundaberg irrigation scheme. As late as about four months before the 1977 election the Deputy Prime Minister (Mr Anthony) was saying that the Federal Government would not be putting money into water resources programs; that that was a matter for the States. It was only in later months when the Government’s credibility and its appeal to the electorate appeared to be waning that it decided that perhaps it had better do something about a water resources program. It made available $200m over a five-year period. Very much less than one-fifth of the funds for the five-year program have sq far been released. To that extent the Bundaberg project- the project that is most important for the stability for the sugar industry- has been allowed to lag and the skilled workforce has been allowed to erode and disappear. In fact, a very low priority has been given to the project. The result has been that this year some growers who are dependent on irrigation for viability, stability and some continuity in their rate of output have been gravely disadvantaged. Certainly, those growers in irrigated areas have not been disadvantaged. Many of them have produced well above the quotas and peaks for this year.

The Government ought to be giving priority to implementing the findings of the cost-benefit analysis that was done in relation to the Bundaberg irrigation scheme under Dr. Rex Patterson as Minister for Northern Development during the Whitlam years. That cost-benefit analysis proved the viability of this scheme. In the terms that he as Minister then expressed, it was one that would benefit an area of proven capacity- an established area which was demonstrably devastated periodically by drought. In fact, the Bundaberg area has the most uncertain rainfall of any of the sugar producing areas and is one of the least developed areas with regard to irrigation resources..

Let me refer again-to a promise made by the Leader of the National Country Party in the 1977 election campaign when he said that the great achievement of the International Sugar Agreement would be that it would shortly increase the price of sugar to the target floor price of $2 10 a tonne. Until the last month or so when this price was reached the ISA certainly was not able to achieve that objective. I do not think it would have achieved it had it not been for a panic in the world currency markets which led to people rushing to buy resources of any kindcommodities that could be stored, including sugar. That probably accounted for that sudden rise in price to something over $200 a tonne, which price has no great prospect, f believe, of lasting for any great length of time.

I wish to refer also to the charge that is frequently directed towards the Labor Party, in government or in opposition, that we stand for some kind of centralised bureaucratic socialism which is inefficient, which will downgrade the quality of life for Australians and which has been proven to be counter-productive in achieving economic growth. The sugar industry is the clear and continuing example of the fallacy of that sort of argument. Labor governments set up the first agreement between the Queensland Government and the Federal Government in what the honourable member for Herbert nicely described as a ‘managed industry’ with ‘administered ‘prices -

Mr Dean:

– That is what the IAC calls it.

Dr EVERINGHAM:

– That is right. He quoted from the Industries Assistance Commission report. I am not denying that at all, but it is interesting that these terms are used when members opposite find an agreement acceptable. When they find ari agreement unacceptable they say it is a product of doctrinaire socialist bureaucracy. They call it communistic dictatorship. If that is so, the most communist administration in this country must be the Queensland Government. The point is that all industries -

Mr Kevin Cairns:

– It is just a bit of guided democracy.

Dr EVERINGHAM:

– Guided democracy like Sukarno, as the honourable member interjects. The fact is that every industry in this country ought to be managed. I do not believe that one would have to have centralised government dictatorship and government bureaucracy, any more than one would have to have private enterprise centralised bureaucracy but, unfortunately, in many industries, that is exactly what we do have. If one wants to call a centralised bureaucracy communism, one of the most communised industries in this country must be the oil industry.

There are many major industries which control, plan, manage and administer our economy and prices that are in the so-called private sector and in many cases beyond the reach of governments- even the biggest governments- in the world because they are capable of moving their resources and pricing across legislative borders.

The sugar industry then is a sensible and logical mix of private enterprise and public control. I believe that is what democratic socialism is all about. It is what the Labor Party is all about and has achieved. It has become acceptable to all parties in an industry like the sugar industry. It is just a shame that the Government had not moved a little faster to achieve some sort of management and administration for an industry that has been crying out for them since the days of the slump in the beef industry. There is room for a referendum probably at this stage among beef producers to see what sort of management and administration of prices they could well do with to stabilise their industry for the sake of producers and consumers.

The formula is something that will tend to puzzle people who try to read the legalese of the schedule to the sugar agreement. I refer to one paragraph concerning factor E. In the agreement it is denned as:

E is the ratio of the average return on exports within mill peaks in the season that precedes the season immediately prior to the year in respect of which the price is to be ascertained to that same average return in the season immediately prior to that year.

One needs to be something of a bush lawyer to work out that paragraph. After many tries I found out that it means the ratio of the years previous export price to the ratio of a year later. In other words, the ratio of two years ago over the ratio of one year ago -

Mr Dean:

– I have just given a good exposition of that.

Dr EVERINGHAM:

– The honourable member for Herbert (Mr Dean) has said that in his words. I am trying to explain how one has to unravel this involved wording to understand that formula. As the honourable member for Werriwa (Mr Kerin) pointed out, for some reason we are not told why this counter-cyclical formula is used for sugar but the reverse is used for wheat and other industries. Nevertheless, with the escape clause, no doubt some adjustment will be possible if this agreement appears to be unworkable or unjust.

The matter of the fixing of fruit prices also was raised by the honourable member for Werriwa. I stress here that, when the Labor Government went to the people of Australia suggesting that prices and incomes ought somehow to be managed, administered and controlled on a national basis and not just on a State basis, every member of the present Government parties was opposed to that proposition. That proposition was fairly narrowly defeated. It appears so obvious and logical that we ought to have some controls and administration of prices, in the case of sugar and preserved fruits using sugar, that one wonders how the Government can accept its own proposition on this occasion and yet be so blind to the benefits of the proposition in other industries. How can it accept the pricing of petrol which is doing much to prop up its policy of eliminating the deficit and yet cannot accept it for bread, for meat or for the ordinary commodities that the man in the street is concerned about? Indeed, the Government cannot accept it for all the prices included in the Consumer Price Index- which is the way to control inflation, as the Curtin Government did. I think it limited inflation to 2 to 3 per cent over several years -

Mr Kevin Cairns:

– What Government was that?

Dr EVERINGHAM:

– The Curtin and Chifley governments.

Mr Kevin Cairns:

– What were the other controls on the economy in those days?

Dr EVERINGHAM:

– They had other controls, but basically national controls. They had the sorts of controls that the States have now and are unwilling to exercise or give to the Federal Government. This is an excellent example how prices can be stabilised. The Labor Government was in a position where it could say: ‘All right, if you can demonstrate that the price of your inputs has gone up, we will allow you to increase your prices accordingly, but no more. You do not put a percentage rake-off on top of that’. If it was an item that was in the CPI, a subsidy was put on it at that point. For example, if somebody had to import aluminium which was needed in the production of one of the essential foods which was at that stage featured in the CPI, the price of importing that aluminium was subsidised and no rise in the price of the item occurred. If this Government really wanted to control inflation it would have backed the Labor Government in its referendum to control prices and incomes. The Opposition supports the Bill. We commend the progress in negotiations with free enterprise growers and the more stable basis for their industry and their livelihood. We regret the secrecy that still prevails among the oligopoly that represents sugar processing. I do not believe it would occur if there were more sugar cooperatives in the industry and less of the 60 families which sit on the boards of management and control the biggest business in Australia. I believe that we have to move towards more open government in the industrial scene as we do in the political scene. When that day comes I believe that growers, consumers and the smaller investors will be recognised at last as the people who should have a say in our industry- whether it is sugar or anything else- and not a few people with knighthoods who sit on the boards of management keeping secret their transactions among each other, the industries that they administer, including the financial institutions, and their deals with multinational firms with which they trade. The sugar industry is a good example of control within this country. Fortunately, its control has not become transnational. Let us hope that it never becomes so and that it moves towards greater democracy and that the formula now arrived at will be revised in the direction of greater inputs from the consumers of this country, the growers who produce this sugar and the small investors in the companies which are concerned with the processing, selling and distribution of sugar not only within our country but also overseas.

The only other aspect that I think might be given some attention is our overseas marketing arrangements. I believe that the sugar industry should not be left with the burden of having to make these arrangements. They should be a matter of national policy. Indicative planning in all our industries should include the full range of marketing, not only the home market but also the foreign market. I hope that the Government will look at all these matters and that it will increase its consultation with the growers and with consumer organisations.

Mr BRAITHWAITE:
Dawson

– I support the Sugar Agreement Bill. I have no argument with the Opposition which recognises the need for the Bill as does the Government. We also agree that the legislation climaxes or finalises negotiations which have been going on for some two years and which I believe mean not only a solution but also justice for the Australian sugar industry. In debating this matter members of the Opposition have in effect said that they agree with the proposition but they have tried to introduce other elements which I thought were less than fair. The previous speaker, the honourable member for Capricornia (Dr Everingham) seemed to speak about everything but the sugar industry, although his electorate comprises some of the sugar industry areas of Queensland. It has been said that the sugar industry is a managed industry. Members of the Opposition feel that it represents an ideal situation for a communist system. I rebut these suggestions directly. I also rebut the idea that the sugar industry is controlled by that family of 60 sitting on boards throughout Australia.

In the milling and manufacturing areas, 13 cooperatives are engaged in the industry in Queensland. The private and public companies are limited to four or five. The cane farmers, who number some 15,000 workers or some 6,500 families adhere to the free enterprise philosophy. It is for this reason that the industry has been successful. It has maintained itself over many troughs in the past. It has also helped itself during the highs by investing the profits from its produce in bulk terminals. As a previous speaker said, the industry has been responsible for its own infrastructure and it has had no need to be subsidised or to receive grants from any government.

I come back to the basic point that the industry is getting justice. We have heard a lot about the consumer. The honourable member for Werriwa (Mr Kerin) has said that over a period of some 30 years the consumer has subsidised the grower in terms of time. He did not quantify the subsidy in terms of value. Over the last 10 years it has been indicated that whilst the subsidy in time might have been evident in some years, in terms of value, this has not been the case. It is almost a situation of balance between where the money has gone in one year and where it has come back in others. But the basic fact is that from 1967 until 1977 there has been an increase to the raw sugar producer, that is the miller and the grower, of some $9 per tonne of raw sugar. In 1 967 the return was $140.54. In 1977 the return from the domestic price was $149.90 which is an increase of some $9. That was at a time when the consumer price ind’ex increased by some 132 per cent. The manufacturers, for whom the Australian Labor Party apparently have an ear, were able to increase their prices by some 162 per cent.

I think the debate has been used by the Opposition to highlight some points, particularly in regard to world oil pricing parity. I do not know how the previous speaker actually brought this matter into his speech. But the Opposition has not set out its alternative policy. It has no alternative policy on the pricing of fuel which is a very scarce commodity in this country. Opposition members have not mentioned it. In connection with the nitrogenous fertiliser bounty they have not mentioned that the Labor Party removed the superphosphate bounty in the years when it was in control. Had the Industries Assistance Commission report come out a little earlier I have a feeling that the Government at that time- the Labor Government- would have also adopted its recommendations. Let us look at the statements that have been made. At least the nitrogenous fertiliser bounty is still in existence. I grant that it is a smaller amount. The proposition that has been advanced by the leaders of our Party and by the right honourable member for New England (Mr Sinclair) when he was the Minister for Primary Industry was that we would maintain it, albeit in smaller capacity. But at least it still gives us a foot in the door in regard to increases in the bounty. That matter has never been mentioned.

Also it has been suggested that we have a policy on overseas marketing. The policy of the sugar industry is that CSR Ltd should be in very close liaison with the Queensland Government, the Sugar Board and the growers themselves and it has marketed our sugar rather successfully. I give credit to my predecessor in the seat of Dawson. He did a lot in connection with the long term sugar contracts. It was an amalgamation of the work of CSR, the governments, the growers, and the industry organisations that was able to bring those contracts about. I do not want to canvass the aspects of the Sugar Agreement in too much depth except to say that this Bill ratifies the Agreement that was entered into and became effective on 1 October 1979. It is to run for a term of five years with adjustments from time to time at 30 June of each year as set out in the formula.

My colleague, the honourable member for Herbert (Mr Dean) has indicated that there is an escape clause in this Bill. If for any reason the two governments can agree that the formula will not keep pace with increased costs-not the

CPI- they can make adjustments. I appreciate the fact that there are inputs into those cash costs that are quite likely to increase at a faster rate than the 70 per cent of the CPI applied to the cash costs. The movements in the fertiliser bounty since 1974 to 1979 shown an increase in urea from $87.20 a tonne in February 1974 to $207.80 a tonne in September 1979. It is to be expected that some of that increase has already taken place within the industry since the commission has brought down its decision and the Government has acted on it. I would hope that if these increases occur not only in the fertiliser field but also in the fuel field- the cost of plant and equipment seems to have a habit of increasing at a faster rate than the CPI- the governments can turn back and recognise that perhaps the CPI is not a fair indication of an increase and that the two governments ought to look a little deeper.

However, whilst the farmers might have regarded the IAC review as a nuisance at the time, that document stands today as a testimony of the efficiency and the productivity of the Australian sugar industry under the free enterprise system and not under the system of nationalisation that has been indicated by the Opposition. This document will be a textbook for future applications. It will also be an indication to the consumers of Australia that no stone has been left unturned to try to get that efficiency into the industry. It is the consumer who has benefited by this efficiency. This was indicated by the price increases I mentioned. The price of raw sugar was $140.54 per tonne in 1967. The price of refined sugar was $198 and it has increased to $370 today. That is an increase of less than 100 per cent as compared with the CPI which would have gone up by 150 per cent. The manufacturers such as Coca Cola applied^ a lot of pressure upon the Tribunal, the industry and the Government to reduce this increase as rauch as it could but the manufacturers’ increases have been well over 160 per cent and 170 per cent oyer the same period. S& the people in the, growing and the milling sections of the industry nave not benefited. It has been the consumer.

I also suggest that whilst the industry is fairly well disciplined in Queensland, comments have been made in relation to the Western Australian situation, cane growing op the Ord River and to the Tasmanian situation with sugar beet. It has been properly demonstrated that in a normal market situation the industry in those States would be a very high cost industry from the point of view of establishing it and running it- those §m?s being further away from markets- and also it would have a high cost infrastructure. Perhaps the governments of Western Australia or Tasmania would care to subsidise those industries, as the European Economic Community subsidises its sugar industry. But this type of competition from Queensland cannot be stopped. It has been proved in Queensland and northern New South Wales that the operating costs have been kept to a minimum and the consumer is the one who has benefited.

I take exception to some of the comments that have been made in Queensland as recently as last week by the State Leader of the Australian Labor Party. He took a most pessimistic attitude and said that the Sugar Agreement for adjusting the domestic price was not designed to assist the grower, that the ISA has not worked and that prices have not returned to a stable situation. I will take these points in their turn. The implementation of the domestic price formula, as late as it is, at least recognises today’s cost of production and I believe gives a fair return. It also recognises that the sugar industry helps other industries such as the fruit industry in Victoria and New South Wales. The formula may be inadequate in some instances but at the end of the five-year duration of the Agreement, perhaps it can be looked at again. At least it is something that is now before us as part of the Agreement.

The Labor Party wanted to delay the IAC report on the industry by calling for a draft report. The industry itself overrode this suggestion and said that it wanted a final report. I believe that that saved a lot of time. The world price rise from about £ stg90- that is the figure mentioned by the honourable member for Capricornia- to the present £stg160 is, I believe, not the result of what he described as some world currency marketing, but the fact that the disciplines of the ISA have improved the position to that extent. An article in the Australian Financial Review yesterday indicated that there will be a shortfall of some 3 million tonnes of sugar throughout the sugar producing nations. This is what has led to the recovery in the price. Australian growers last year left some 450,000 tonnes of sugar in the field, but the disciplines of the ISA have now brought about a recovery. The ISA has been a necessary discipline. It has not been a waste of time. Had it not been for the Agreement the price of f stg90 per tonne might have still applied.

There are many things that I would like to say about the sugar industry. The Sugar Agreement is just one facet. I am very happy that the Agreement has come to fruition, although it has been delayed. I am happy that the Australian Government, the Queensland Government and the Australian consumer recognise that growers should receive a fair price for their product. We are talking about $353 per tonne bulk. I understand that a couple of centuries ago Britain was importing sugar for thousands of pounds sterling per tonne. That was its cost at the time. We are getting a cheap product. Sugar is not, as one member of the Opposition once said, a third rate food and a first class poison. The sugar industry is an efficient industry. Sugar is not poisonous. If anybody wants to indulge himself in eating sugar he will be a lot better off if he follows the ‘Life. Be in it ‘program.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– It is interesting to see National Country Party members in the chamber, particularly those representing the sugar seats, clutching at straws or, should I say clutching at canes, trying to justify their performance with regard to the sugar industry. Whilst I probably agree with the honourable member for Dawson (Mr Braithwaite) that sugar is not a third rate food and a first rate poison, I think that it possibly has a deleterious effect on the thatching of a person’s pate. Perhaps the honourable member will be able to work that out. Nevertheless, that is another story. One of the reasons that members of the National Country Party are clutching at straws is that several things have been promoted by this Government which have been to the detriment of the sugar cane industry.

I refer to an authoritative source, the Chairman of the Queensland Cane Growers Council, Sir Joseph McAvoy. Earlier in the year he was very critical of the Federal Government’s policy towards rural industries such as the sugar industry. He blamed the Government’s fuel pricing policies, its reduction of nitrogenous fertiliser subsidies and its support of an adverse exchange rate by massive external borrowings as being responsible for some of the difficulties that the sugar industry has been facing. The Government’s policy on import parity fuel pricing had extremely adverse results in July and August this year when the sugar harvest was well under way. A severe shortage of diesel oil left most farmers in the Innisfail area with less than a week’s supply of fuel. This caused severe disruptions to the harvest which were offset only by the release of some defence fuel supplies to farmers. It is not surprising that members of the National Country Party are a little nervous about what the sugar farmers might do to them come the next election.

The Opposition is not opposing these Bills. The Sugar Agreement of July 1979 seeks approval for an agreement relating to the regulation of sugar and certain sugar products which has been made by a joint arrangement between the Federal and Queensland governments. The Bill renews the Agreement which expired on 30 June 1 979. This raises the question of what has filled the vacuum with regard to the control of the sugar industry in that period. Perhaps it has not had any control at all. Sugar agreements of one sort or another have existed for more than 50 years. This Agreement, however, is a departure from other agreements in that it establishes a formula for annual adjustment of the domestic price of refined sugar. As I said, the Opposition is not opposing the Bill but it holds reservations about some of the terms of the Bill. I think it is realistic when talking about the sugar industry to have regard not only for the cane farmers but also for the consumers of Australia. They are obviously the people who turn the sugar into cash for the growers. In only 10 of the last 52 years have Australian sugar cane growers and millers received a higher return for raw sugar sold by them on overseas markets than they have received from sales on the domestic market. In other words, Australian consumers have been subsidising sugar producers through the high domestic prices set by the Commonwealth Government in consultation with the Queensland Government for 42 of the last 52 years. That is a very significant fact.

Mr Kevin Cairns:

– That is not right.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

-I think that it is right. The honourable member will have to disprove it to me. When we are talking about the formula that has been set for the pricing of sugar we should look at the basis under which it was determined. The current domestic wholesale price is the first and an important ingredient in the new formula. Because of that the objectivity of the formula is challengeable from the outset. The higher the base price at which the first price increase is calculated, the larger is any price increase likely to be. Thus, it is not surprising that the majority decision of the Sugar Inquiry Committee favoured the ‘by guess or by God’ approach in determining that base price rather than by applying a formula by which the sugar industry would be bound for the period of the new Agreement.

I do not have much time as unfortunately, the time for which we are allowed to speak in this debate has been cut back. However, I will say a few words about the consumers. Including the annual increase in the consumer price index as a component of the formula for determining the sugar price, regardless of the extent to which it is discounted, irrevocably ties future movements in the domestic sugar price to movements in domestic inflation. It is perhaps the least efficient method that could have been chosen to set a price for any food commodity. The resultant price increase merely feeds into the CPI and has the effect of pushing up the following year’s increase in the rate of inflation a little higher than it might otherwise have been. A formula which achieves this effect could hardly be regarded as one which would be attractive to a government which claims that one of its major policy objectives is the lowering of Australia ‘s inflation rate.

While both the Commonwealth Government and the Queensland Government continue to be obsessed with a fear that import competition would be harmful to what they claim to be one of the world’s most efficient sugar industries, there will be a continuing need for domestic sugar prices to be administratively set. Clearly, it is in the interests of the industry and the public for adjustment to those prices to be effected annually rather than on an irregular and more frequent basis. It would also appear to be in the best interests of all the parties for the adjustment to be determined on the basis of objective and publicly available information which bears a direct relationship to the performance of the industry on the export market. It is in the latter regard that the formula incorporated in the Sugar Agreement of 1979 fails. As 75 per cent of Australia’s sugar is sold on the export market, the most critical ingredient in a formula designed to establish the domestic price should be the level of export returns to producers. It would seem to be not unreasonable for producers to be guaranteed a minimum return from domestic sales equal to the weighted average of export returns over a given period, say, three to five years. We would not quibble with that. We would be happy with it. This base figure should then be adjusted to compensate for movements in the rate of domestic inflation. To this should be added the costs incurred by the Queensland Government for refining, marketing, managing and selling sugar on the domestic market.

A formula based on these factors would ensure that even though returns to producers from the domestic market would be out of phase with year by year returns from the export market, over time producers would receive equal returns from both the markets that they service. Additionally, they would receive compensation for industry cost increases related to their servicing of the domestic market which had been induced by domestic inflation. The present formula does not achieve this objective. It protects the local industry from world market forces. It forces Australian consumers to continue to subsidise the industry irrespective of the level of export returns. It creates no incentive to the industry to rid its structure and operations of cost inefficiencies.

Mr Kevin Cairns:

– That is just not right.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

-If fuels rather than dampens the fires of domestic inflation. I would have thought that the honourable member for Lilley would have been concerned with domestic inflation. When the world price of sugar drops, consumers in Australia, the home of a large and efficient sugar industry, are likely to be the only consumers in the world not to receive benefit. The formula provides nothing more than a sweet cop to Australian cane cockies at the expense of Australia’s consumers and the Australian community.

The Opposition does not oppose the Bills because it realises, for many reasons, that the sugar cane industry has not been terribly profitable for those involved in it, although the National Country Party- the members of which appear to be absent from the chamber, apart from the honourable member for Dawson who is sitting in his wrong seat; obviously that is the reason he is remaining silent- claims it is the most efficient of the cane growing industries in the world. That may well be right, but I know that its profitability over the last few years has not been terribly high. On those grounds the Opposition does not oppose the Bills but it would like all honourable members to realise that the consumers of sugar, the great mass of the Australian public, should also have their views registered when the price of sugar is set. This formula does not do that.

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 Ellicott) read a third time.

page 2995

STATES GRANTS (SCHOOLS ASSISTANCE) BILL 1979

Second Reading

Debate resumed from 25 October, on motion by Mr Staley:

That the Bill be now read a second time.

Mr ELLICOTT:
Minister for Home Affairs and Minister for the Capital Territory · Wentworth · LP

- Mr Deputy Speaker, may I have your indulgence to suggest that the House have a general debate covering this Bill and the States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1979 as they are related measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate.

Mr DEPUTY SPEAKER (Mr Drummond:
FORREST, WESTERN AUSTRALIA

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

Dr CASS:
Maribyrnong

-The Opposition wishes to move an amendment to the motion for the second reading of each of these Bills. I will begin by moving those amendments and they can be put separately as each question is put. To the States Grants (Schools Assistance) Bill 1979, 1 move:

That all words after ‘That’ be omitted with a view to substituting the following words: whilst not declining to give the Bill a second reading, the House is of opinion that the Government should be condemned for (a) the continuing decline in funding of Australian schools by its failure to honour its firm undertaking to provide for a minimum growth rate of 2 per cent per annum in real terms for schools and (b) its failure to respond to glaring deficiencies and developing needs in the education system highlighted in reports to the Government by its advisory bodies ‘.

To the second Bill, the States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1979, 1 intend to move:

That all words after ‘That’ be omitted with a view to substituting the following words: whilst not declining to give the Bill a second reading, the House is of the opinion that the Government should be condemned for the (a) continuing decline in funding in real terms for tertiary education in Australia and the consequent long-term detrimental effects on the quality and standard of tertiary institutions and (b) continuing pressure being placed on State Governments to share the cost of tertiary education ‘.

In my remarks I wish to concentrate on the deficiencies in the education system and the sorts of advice the Government is getting, as well as, in the Opposition’s view, the totally inadequate response by the Government to this advice. Of course, the Government has a number of competent professional advisory bodies at all levels in the field of education. There is the Schools Commission which is headed by Dr Ken McKinnon. He is an extremely experienced individual who has held that position for a number of years. He is associated with members who represent all the sectors of education- state schools, Catholic schools, other independent schools and State education departments. It is hardly a parlour-pink body; it is hardly a radical group of people. They succeed in arriving at a consensus view; in other words, their reports represent a diverse range of approaches to the problems of education.

Then there is the Tertiary Education Commission which is headed by Dr Peter Karmel. Honourable members will recall that he headed the Karmel Committee set up by the Labor Government within days of its being elected in 1972. It was that committee of inquiry into education which evolved the needs policy- a policy which I like to think ended much of the divisiveness caused by the State aid argument that had been bedevilling the community for many years. Dr Karmel was surrounded and accompanied by experienced committee members drawn from education, business and the trade union movement. It is not as though these bodies are free to pursue their own line. They are subject to fairly prescriptive guidelines- too prescriptive if anything- issued by the Government. So the Government has ample scope to direct. The commissions cannot be accused of running the Government’s economic policy. For instance, in his statement on the Schools Commission report of 1978, the Minister for Education (Senator Carrick) had this to say:

The Commission’s proposals constitute a substantial change to existing policies.

The Government acknowledges the considerable work done by the Commission in producing its report and the valuable basis which this has provided for subsequent discussion of issues of fundamental importance in school funding.

But what was the response of the Government, despite that acknowledgment? I quote again from the Minister’s statement:

We have decided not to make any significant changes to present programs and procedures during 1979.

In other words, the Government increasingly ignores the advice of these commissions for doctrinaire reasons. I can find no rational reason for ignoring that advice. In addition, the Government has set up inquiries, the main one being the Williams inquiry which was appointed in 1976 and which submitted its report to the Government in February 1979. It had wide-ranging terms of reference and, of course, most of its recommendations related to tertiary education. But a very important set of those recommendations dealt with youth unemployment and the place of schools and of technical and further education in helping the community and the young unemployed deal with this problem. Before going on with this matter in a little more detail, it is important to note that on page 125 of volume I of the report it is stated that the schools were exonerated from the charge of having caused the high rates of unemployment. The report went on to state:

Changes in the philosophy and administration of the schools cannot have caused the sharp increase in teenage unemployment, but there is a long-standing youth unemployment problem and changes in the philosophy and administration of education could possibly contribute to a solution.

Others have drawn attention to the problems in the schools area which highlight the need for a rethinking about our schools. I wish to quote from an article by Judith O’Neill, who is a social welfare research officer for the Australian Council of Trade Unions. In an issue of Educational Innovations she observes, or complains:

Nor are curricula sensitive to the expressed needs of students for a sense of purpose, a desire for competence and a concern for a career. The inadequacy of curricula is particularly clear in the area of career education where early school leavers are concerned.

Later in the article, she observes that careers guidance available is directed mainly towards children in their final years of schooling, particularly those going on to tertiary studies. She continued:

The early school leaver is virtually ignored. Consequently, each year large numbers of young people move out of school and into the work force with little time to consider available opportunities for employment, with little or no guidance from others, and with little chance in any case. Once they leave school, young people from poorer families set about getting a job, any job without being able to consider such questions as career, opportunities for advancement or selffulfilment which influence the choice of more affluent students.

This problem confronts probably 64 per cent of students who leave school, because the retention rate is the remainder- slightly more than 35 per cent. The problem is a very significant one for most children. Judith O’Neill observes:

Schools must move from their tendency to remain outside and work in partnership to become a legitimate part of the community’s network and resources.

To return to the Williams report, it is not terribly specific about what needs to be done but it does make some suggestions, such a familiarising teachers more with the world of work. Perhaps it would be helpful to quote from the Williams report, which states on page 130:

The Committee supports the proposals in the TEND Committee report that, in pre-service education, all teachers should be introduced to the ideas and techniques involved in school-community relations, and the ACTU proposals that, to learn about, or update their knowledge of, the world of work outside the teaching profession there should be a continuing series of seminars on the world of work, and the provision of opportunities for the short-period release or secondment of teachers to other fields of work.

When it came to the question of the transition between school and work the Williams committee said on page 132:

The Committee recommends

Schools, employers and public agencies and parents give greater attention to adequate careers guidance programs, including:

experimentation with transition centres where less formal arrangements- particularly in inner metropolitan areas- could bring together the advantages of employment agency, further basic studies in TAFE if necessary, personal support, counselling and job placement.

I am not saying that these things are suitable substitutes for jobs, but they are initiatives to help unemployed youth cope with their predicament. They are things schools should be doing, and, if they are to be done, government support and government finance is required. The Williams report is backed by the 1979 Schools Commission report, which recommends: an amount of $2.0m, either additional to Guideline allocations for 1980 or for inclusion in the 1981 Guidelines, be provided to initiate the first stages of a support program in the States for developing school/work transition policy and action initiatives.

Under the heading of ‘Youth Policy’, the Schools Commission makes the following point:

School-based action cannot stand alone as a policy for inducting young people into the society, including paid work … the issues are wider than transition programs from school to work . . . Schemes of public financial support to individuals in full-time education beyond the end of compulsory schooling, and to those desiring work but unable to find it, need to be reviewed, both for their internal consistency and in relation to each other. . . . The unemployed who have left school are eligible for unemployment benefits, the costs of which need to be considered against those of continued schooling. Many of these individuals might be better served by further education of an appropriate kind. A wider and more comprehensive review of the whole of government policies for youth is indicated. Such a review would include the rationale for . . support policies for the transition from school to work and, most particularly, for the role of the school. The part schools can play in preparing young people for adult life can only be settled properly within such a framework.

Sitting suspended from 5.59 to 8 p.m.

Dr CASS:

– In discussing these reports, it is necessary to point out that the Government has had the Williams report, for example, since February last. Of course, the Australian Schools Commission’s latest report is dated July, and yet nothing has emerged. What is the Government’s response where it really counts, namely in the provision of money as allocated in the Budget? The legislation we are debating now provides the machinery for transferring funds to the States and where it is going to be needed. Since getting into office, the Fraser Government has issued increasingly prescriptive- in other words, restrictive- guidelines to the Commission. Each year except this one, the Government has required the Commission to advance another couple of percentage points towards the Government’s declared policy of every school getting a minimum grant of 20 per cent of average costs. This, together with cuts in government school grants, has largely caused the annual outcry about transfers from government to nongovernment schools. Because of increased State funding, government schools, on average, have advanced most of the way towards the targetsfor 1980 and 1981 set by the Karmel inquiry in 1973. But of course that does not take into account the new needs that are arising in view of the changing circumstances in society. There have also been disputes about the maintenance of efforts in non-government schools. There is a lot of evidence that the non-government school sector has not maintained its effort and that it has become more and more dependent upon government finance. As the Commission said in its report in 1978:

The division between the Commonwealth and the States of financial responsibility for government and nongovernment schools has emerged as a major issue which the Commission cannot itself resolve.

In other words, the Commission was begging the Commonwealth to make up its mind on this issue. In 1 978, the Schools Commission proposed a scheme of agreement on who pays what. Apparently it did this because it wanted to show the need to end the annual squabble over the division of money and because it quite rightly believed that the Commonwealth should retain a role, and a significant one at that, in funding both sectors. The Government rejected the proposal out of hand without giving any reason, as I mentioned at the beginning of my remarks. But in doing so, the Government has endangered the social settlement of the once contentious state aid issue which is what the Karmel report and its adoption by the Labor Government represented. It does not take much effort to recall the difficulties facing the whole country, not just the Labor Party, over the question of state aid before Labor gained office. It was used by the Liberal Government as blatant political bribery. There was no equity at all. Most of the funds went not to the private sector as a whole, but to the rich part of the private sector. In fact the poorer section, the Catholic parochial schools, got nothing at all. By rejecting the Schools Commission advice, the Government goes against sensible opinion in all sectors of education in Australia which are basically satisfied with the present machinery and arrangements. But they want to see some sort of stability. The Commission has repeatedly drawn attention to the backlog of capital needs in both State and level 6 non-government schools in Australia. In essence, the Schools Commission, in its report of 1978, made the point that government school capital facility programs should be increased by 5 per cent each year for the triennium. It also suggested that there should be a similar or equivalent increase of funding for the private schools compared with the government schools. But what has happened? The figures show that in 1979, capital grants for government schools totalled $137.25 m while in 1980 they totalled $93.25 m. For non-government schools, capital grants for 1979 totalled $32.23 m and dropped to $26.13 m in 1980. So there has been a 32 per cent cut in capital expenditure for government schools and a cut of 19 per cent for non-government schools. The way the Government is behaving, one would think that all our education problems had been resolved. But of course that is far from the truth.

The Government repeatedly states its acceptance of the idea of choice in government schools. It ought also to be concerned with promoting local decision-making in schools. They are some of the proposals that have been put by the Schools Commission. Let us look at what has happened. In chapter 9 of the 1978 report the Schools Commission proposed two initiatives which would encourage choice in the government system. These were: A program to experiment with pilot schemes allowing schools to offer educational alternatives and a further program in school level evaluation and decisionmaking. It might be instructive to quote from the report to give an idea of what the Schools Commission envisaged. For example, on page 120 of the Schools Commission report the following observation is made:

With some non-government schools so heavily subsidised-

One of the arguments in favour of the nongovernment sector is that it provides choice, so with the non-government sector getting so much subsidy from the Commonwealth, the Commission believes that: the time has come when there should be more real choices within public systems and among programs following different approaches within individual government schools.

If it is good enough for the private sector to be given subsidies and to be allowed to offer these sorts of choices why cannot this apply to the state system? The report continues:

It therefore proposes that funds be made available to assist with any initial expenses in a limited number of pilot projects enabling informed choices to be made among groups of government schools.

The schools concerned would need to agree to articulate their educational philosophies, curriculum choices, information about their staff, about school governance and about educational processes assessment policies and the means of evaluating school operations.

That is the sort of thing that one should expect from any part of the educational sector, private or state. The report continues:

As the Commission envisages the continuous involvement of teacher and parent organisations as well as educational authorities in developing the opportunities and in working through the problems, there will also be associated costs for these activities.

Of course the Commission recommended some funds for these purposes. On the question of school level evaluation, once again we talk about the need to be sure that in any enterprise the objective is being achieved. The Schools Commission suggests: . . there is a need to assist schools in exercising responsibility; to maximise the educational effectiveness of the broader freedom they now have to make significant educational decisions; and to evolve a new pattern of relationships between school and system consistent with that greater freedom and with the political responsibility of system authorities.

It went on to state:

The need to strengthen co-operative education evaluation and decision-making in schools in which all teachers participate and in which parents and students are also involved is seen by the Commission as educationally desirable and as a necessary condition of greater autonomy for schools.

If it is good enough for the private sector why is it not good enough for the state sector? The report goes on:

The term evaluation is being used to include all those means through which members of a school community can participate in a co-operative examination of what the school is doing, set particular targets for improvement, plan action to advance towards them and evaluate that action in terms of the objectives they have set for it, changing course in the light of experience.

Surely none of those objectives could be denied as reasonable and what one should reasonably expect from the school system. To achieve those objectives the Schools Commission recommended modest sums of money. What was the Government’s response? It was no. The Minister, in acknowledging all the work that had gone into the Schools Commission report, said that it was the basis for lots of good ideas and lots of discussion. But he then said: ‘We have decided not to make any significant changes to present programs and procedures during 1979’. Guess what will happen? When as a result of the failure of this support, the schools do not advance the way they ought to and people start levelling criticism at the state system, what will the Liberal

Government say? It just shows how useless the State school system is. But it is the Liberal Government’s fault that these funds and the permission to try to indulge in these sorts of experiments have not been allowed. So what should we be doing? In Australia today we are faced with a bewildering degree of social, economic, technological and geo-political change. We have a limited time span in which to come to terms with the growing economic and political strength of our neighbours in this part of the world. Economically, after some 30 years of continuous expansion, we find Australia in an economic mess. This led the Crawford Committee in its report to warn:

If present trends continue, Australia will be amongst the materially poorest of the now developed nations- and poorer than a number in Asia.

Australia’s survival as a nation with its present standard of living seems to depend upon increasing its technological base. With a comparatively high labour wage, but relatively cheap energy, we will require skilled labour, technology and technological innovation to compete in the international scene. But this will require us to adapt swiftly to utilise technological change and to cope effectively with the social dislocation that this is likely to produce. None of this can be achieved without educational innovations, such as the sorts of things that the Schools Commission, the Williams Committee and the Tertiary Education Commission have been talking about. Generally it is a fact of life that the more affluent and better educated classes receive most benefit from overall spending on the education system.

At the moment it can be argued that education is a divisive force in our society which separates in terms of opportunities and then reinforces differences in attitudes between various groups and interests. In the interests of long term social cohesion of our society, and to enhance our ability to cope with overall national challenges, the Labor Party, if in government, would aim in its education policy to continue in a selective manner to give assistance to areas of identifiable educational disadvantage, which include ethnic groups, rural youth and our inner city areas. We would aim to harness education as part of an overall youth policy dealing constructively with the problems of unemployed youth. This is potentially the most divisive problem we have. An entire generation may be alienated from our society.

Young people must be offered socially and personally constructive options in place of the dole. A youth scheme which offers the choice of education, employment, part time work, subsidised training or voluntary community activities for all youth aged between school-leaving age and 1 8 years is an essential development for the future. We must ensure means of funding recurrent education to allow persons to gain access to necessary educational provisions and retraining at all times of life. We must maintain the community based Schools Commission and the policy of assistance according to need. In practice the Commission has been a considerable influence towards social cohesion, and has done much to dissipate religious intolerance and bigotry in the educational field in Australia.

We must attempt to define the roles of various institutions, particularly universities, the Commission on Advanced Education and technical and further education. It is important that the public has a clear perception and is confident of the structure and purposes of our education system. We must ensure that institutional barriers between various sectors of the post-secondary education system are lowered to ensure ease of access from one to. the other. A Labor government would encourage a balance between training and education in our schools and postsecondary institutions. A proper education at any level requires both aspects, particularly in rimes of marked social and technological change.

Whilst the end result of courses should be a flexible range of vocational skills, more general personal competencies should be encouraged, as well as an appreciation of wide-ranging aspects of our society and culture. We must make our educational institutions more flexible to meet manpower projections and requirements, to ensure proper rewards are available to the trained. However, non-vocational education defined as ‘humanities, hobbies, crafts and leisure activities’ should be offered at appropriate levels by all institutions. Learning exchanges, self-help groups, adult education councils, schools, TAFE, CAEs and universities all have a role here.

An important link between national goals and the education system is the need for Australia to become a technologically advanced society. If present trends continue we will soon no longer have the skills necessary to cope with technological change, or establish Australia as a viable, competitive, industrial nation in Asia. What we need to do to achieve those objectives, of course, is to encourage the teaching of mathematics, science and computer applications in our high schools. We need to increase selective funding for approved courses- clearly demonstrated to be in the national interest- in engineering, science and electronic data processing areas at professional, technical and trade levels in postsecondary institutions. We have to fund increased research into fields such as marine biology and fishing. Australia has not the national expertise to exploit the declaration of a 200-mile off-shore limit. We need to research energy and oil substitutes and solar energy, EDP computer applications and software, and other intermediate technology.

Another vital national aim for Australia over the next decade is the establishment of effective relationships with Asia at all levels, including the cultural level. We have to encourage the teaching of Asian languages and so on. None of these objectives can be achieved by an education system in isolation and will need to be integrated with other government activities. However, action by the education system is essential to its fulfilment. The present Liberal Government, other than cutting costs in a manner which affects disproportionately the most needy in our society, exhibits no coherent intellectual vitality on the issues of educational philosophy which will be of most use to the nation in the 1 980s.

Mr DEPUTY SPEAKER (Mr Millar:
WIDE BAY, QUEENSLAND

-Is the amendment seconded?

Mr HUMPHREYS:
Griffith

-I second the amendment and reserve my right to speak at a later hour this day.

Mr KEVIN CAIRNS:
Lilley

-The Bills which are. before the Parliament are the States Grants (Schools Assistance) Bill 1979 and the States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) 1979. I listened to the honourable member for Maribyrnong (Dr Cass) with a growing sense of interest during the 25 minutes that he spoke. He worked on the principle that if one makes a plank long enough one can connect the title of these Bills to any conceivable issue to which one wants to connect it. He did that during the last five minutes that he spoke. I thought that he promoted more general propositions than one could find in the local branch of the debating society. Perhaps I could just bring the debate back for a few moments to the precise substance of the Bills, and the principles involved in the Bills. I shall mention the amendments is passing.

The Commonwealth interest in education began in the post- World War II era but, more precisely, it began in the late 1950s. That interest caused a situation to develop so that in the early 1960s the arguments on the Commonwealth’s interest in education were: If only this country could spend 3 per cent or 4 per cent of the gross domestic product on education everything would be okay. I can recollect the statements put out by National Union of Australian University Students- a body now defunct- talking about the days when 3 per cent or more of the gross domestic product would be spent on education and everything would be all right, that we would have arrived where we ought to have arrived. That was during the period 1962-63. We were given that task and had to perform it by the late 1 960s. The task was performed years before the set date. But the education program in which the Commonwealth was interested began most appropriately in the late 1950s.

It will take three or four specific instances to indicate what actually happened. I will detail three of those instances. The Murray Commission report of 1957- presaged the Commonwealth’s interest and concern in terms of university education. The 1963-64 era projected the Commonwealth into an interest in terms of secondary education, in other words, education below the tertiary level. On that occasion the interest developed in terms of scholarships for students to go to later years of secondary school. It began the interest of the Commonwealth in terms of the non-government school system. It might be said that the third area of interest developed with the Schools Commission in the middle 1970s under the Labor Government. They are all dependent upon a principle. The principle that pervaded all the thought of those days and until recent years was a very simple one. It was simply that money spent on education was always well spent.

It stated the simple point that if you only had money spent on education, it became the great engine of” economic growth. That principle owed a great deal to people such as Kuznets and others in the United States of America who developed all kinds of clever equations and analyses. But the principle has not quite worked out that way, although it is important. The reasoning was simply that dollars spent on education meant growth and that the dollars spent on education meant prosperity- whatever prosperity meantand that the dollars spent on education meant happiness. There are a number of events that intervene in the development of any of those equations. Australia now knows that education is a far more complex situation than would have been thought in the 1950s. It is not quite so simple.

Dr Cass:

– That is true, but it still does not mean that education is not worth while, which is what you are implying.

Mr KEVIN CAIRNS:

-I am not even suggesting that. I make the point that what is important is to look at the most effective expenditure of money in education and to look at it in terms of its program effectiveness. What is it supposed to deliver? That brings us to consider the needs principle in education. Karmel developed an interest in terms of the needs principle for education. The honourable member for Maribyrnong (Dr Cass), who has an interest in this area, would be unfair to try to purloin for himself or his own Party any overwhelming concern or a concern to the exclusion of others in respect of genuine needs in education.

Dr Cass:

– Not at all, but it was under us that it first surfaced.

Mr KEVIN CAIRNS:

-No, it certainly was not. We may have been partners in the process. In this whole process the rights of the community, the rights of parents, the rights of family and the places of students and children when they grow up all have to be considered. It is a far cry from the day when it was said that little needed to be spent on education. It is a far cry from the day when it was said to students: ‘You can make your own way. If you make your own way you will do very well’. That is the old Dickensian philosophy of ‘One for all and all for one’, said by the elephant as he danced among the chickens. To prevent that dance from occuring it was decided that money spent on education ought to be so spent and ought to have a role in developing fair shares and a sense of justice in society.

In the minutes that are available to me tonight- there are not a lot available- I want to say one or two things concerning a particular sector of the school system. I want to say one or two words in respect of the most needy sector in general, and that is the overwhelming majority of non-government schools. They are in dire need. To make that point clear I refer to one or two points in the last Schools Commission report. On page 3 it states:

The net effect -

That is of the present system- is that students in a high proportion of non-government schools still have less spent on their education than those in government schools.

On average the Catholic schools, which are overwhelmingly Class 6 schools, operate at the level of 70 per cent to 72 per cent of the resource standard of the average government school in Australia. A great deal of blame needs to be delivered for what I observed to be happening. I go to many schools. The lowest resource standard schools that I go to are the non-government schools. I am not talking about Geelong Grammer, the King’s School and so on, I am talking of local schools. A lot are Catholic, but they are not overwhelmingly Catholic.

I would like to leave this point with the House tonight: The Commonwealth Government has bent over backwards to help that system of schools. If there is a difficulty, many of the State governments in this country are very guilty. This Government is not guilty; the State governments bear an enormous proportion of the blame. They are quite scandalous in what they have not been doing over recent years. I do not want to be political. If one looks at a schools system at either the primary or the secondary level, one has to consider two areas of responsibility. The Commonwealth Government has an area of responsibility but it is a minor area. It is one that has developed over recent years only since 1962 or 1963. One might say that more precisely it has developed since 1956 but, in straight transfer money terms, since 1963. State governments have had that responsibility since Federation and they have been severely lacking. They deserve the severest censure of this House. When I look at the honourable member for Maribyrnong I immediately exempt and except his own State. Victoria does not share in that blame, neither does Western Australia; but the other States do. As an analysis of the figures will make it clear the ones that share overwhemingly in that blame for not transferring resources where they have a right to be transferred are New South Wales and Tasmania. They have been mean, parsimonious, stingy and quite unjust in their consideration of what in general terms is the largest sector of the Australian education system in need below tertiary education. I read a comment from the Schools Commission report. It makes it quite clear that over the last few years there has been no relative improvement in physical or material standards, in spite of the transfers of resources the Commonwealth has been making. This country should be aware of that proposition and consider it.

I know that in the House tonight there are some people who are very interested in education. Earlier today the Speaker mentioned that there was a long time member of this Parliament in the gallery. I am delighted to know that the Chairman of the Education Committee of the Institute of Public Affairs, Mr Roger Dean- the former honourable member for Robertson- is listening. I know that he would be glowing with excitement and interest in this debate on education. That is the best commercial that I have done for years. I would like to give some figures. I do not want to mention politics in these matters. Have I mentioned that New South Wales and Tasmania have Labor governments? I do not want to mention that.

Mr Leo McLeay:
GRAYNDLER, NEW SOUTH WALES · ALP

– The Institute of Public Affairs is a Liberal Party front; you know that.

Mr KEVIN CAIRNS:

– The honourable member for Grayndler has forced me to mention it, and I do it most reluctantly.

Mr DEPUTY SPEAKER (Mr Millar:

Order! The honourable member for Grayndler will remain silent.

Mr KEVIN CAIRNS:

-Before the Schools Commission report comes out each year the Commonwealth indicates its transfer of funds to education. Below the tertiary level the Commonwealth gives more per pupil in the nongovernment schools sector than it does for the government schools. Whenever that happens we all cop a blast from teachers’ federations and others.

Dr Cass:

– Because it gives the funds to the wrong people, those in the non-government schools. It gives them to the richer ones, instead of the poorer, the group you are talking about.

Mr KEVIN CAIRNS:

– That is not correct, and the honourable member knows it is not correct.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– It is correct.

Mr KEVIN CAIRNS:

-1 hear an interjection from the honourable member for Parramatta, who is otherwise a most sensible man. I could indicate what the New South Wales Government does, if honourable members want me to. New South Wales, the richest State in Australia, on its own proposition, gives $16.40 to each child in a non-government primary school for every $100 it gives to each child at a government school. That State vies with Tasmania for making the meanest allocation of resources in the country. We cannot avoid that proposition by talking about the rich and the poor, the educated and the non-educated and the needy and those who are not needy. It is a simple fact. The 20 per cent odd of children who attend non-government schools in Australia cannot get a fair deal unless the States join with the Commonwealth in acknowledging some responsibility. They are not acknowledging that responsibility.

The argument I was going to put before I was interrupted was simply this: Each year the Commonwealth makes a recommendation for the allocation of funds. As a result of that recommendation it is very wrongly and unjustly accused that it allocates somewhat more per child attending a non-government school than it allocates per child attending a government school. Every member of this House knows that is the minority of funds which goes to support children in education. Why does the Commonwealth do it? The Commonwealth does it to make up for the meanness and parsimony of those who are principally obliged and concerned in terms of education. Let me read out the contributions by the States per child attending a non-government secondary school compared with a child attending a government secondary school. The allocation is of the order of 20 per cent. In the State which makes the lowest allocation in Australia, Tasmania, the allocation is $16.30 per child in one category compared with $100 in the other. In New South Wales the allocation is $17.50 for a child in one category compared with $100 for a child in the other category. Those figures do not take into account capital expenditure in relation to which the States have undertaken no obligation at all. During recent years the States between them have allocated an average of $6m a year for that purpose. An amount of $6m has been allocated for the whole of Australia.

The Commonwealth has to come in; it has to pick up the threads. It has to try to help people who have been cast aside by the States. I do not exempt all States in this respect. There is no point in trying to play politics with respect to these matters. In terms of Kuznets’ original proposition, if one makes the point that money spent on education is worthwhile and helps a country to grow, and if Australia has expended far more real and proportional resources on education in recent years than it has in past years, the question is: How much are we going to allocate to those areas most in need? It is a responsibility that under a federal system rests upon all governments. I have been watching some of the cases before the High Court in respect of the Commonwealth’s interest in education and I have looked at the challenge to section 116 of the Constitution, which challenge I say is dripping with venom and bitterness. But the intent of the challenge is interesting. The ultimate intent of the challenge, as has been made clear in propaganda which has been sent to members of Parliament in recent days, has been to say: ‘Let the Commonwealth get out of education. Return that responsibility to the States’. In other words, the intent is to return that vulnerable sector of education to the States that have shown little interest in it in any case.

Those people who are mounting this challenge have one clear aim. The one clear aim is to destroy the poorer section of the non-government schools in Australia, because the poorer section depends upon public expenditure in order to survive. This year it is more dependent upon public expenditure in order to survive than it was 10 or 20 years ago. That is merely a function of the public expenditure processes that are occurring in any country. Once upon a time we could spend our private resources on education. These days governments spend a far greater proportion of their resources. If we are to have a sense of justice, a sense of fair distribution, we must look at the distribution of public expenditure.

I make the following points, which deserve to be made: I request that when the Commonwealth Government makes its funds available for non-government schools and those schools send their accounts out to parents- whether it is Blackheath College or Cunumulla Convent or whatever it happens to be- there be an obligation on those schools to make clear what is the Commonwealth’s contribution per child and what is the State’s contribution per child so that at least the community will begin to understand. That kind of argument would have less effect in Victoria and Western Australia than in the other States, for the reasons that I have stated, namely, that they have been fairer and more honest. We should then ask of the States what they are going to do in terms of co-operation in order to share in the task. It is a simple question of mathematics. If we are going to spend $800 less, by way of public expenditure and capital expenditure, on a child in one sort of school compared with another sort, we want to know how much of that $800 can be made up by families- and by poor families with numbers of children. How much is to be made up? There is no point in the States saying that they have States rights and then trying to absolve themselves from this responsibility.

The Bills before this House are important Bills. We have discussed them before. This kind of debate has not occurred in this House for a number of years. The arguments need to be stated again, because in spite of the Karmel Committee report and all of the other reports dripping with concern about some of the non-government sector schools, there has been no relative improvement during the 1970s in their physical standards compared with the standards in most schools in Australia. As long as that situation remains we ought to sheet home the blame. The blame for that situation does not lie in this place.

Mr HUMPHREYS:
Griffith

– I have a great deal of respect for the honourable member for Lilley (Mr Kevin Cairns). Whilst I know that he was criticising the States generally for their contribution to education, I noticed that his criticisms were not concerned with Queensland, although I feel sure that he was very concerned with Queensland and the Queensland Government.

Mr Kevin Cairns:

– No, we exempt nobody.

Mr HUMPHREYS:

-Okay. I still feel that, whilst the honourable member did not mention Queensland, he still included Queensland in his criticism. The cognate debate on these two machinery Bills, the States Grants (Tertiary Education Assistance) Amendment Bill (No. 2) and the States Grants (Schools Assistance) Bill, brings together the two major concerns about education in this country. I refer to the stagnation in tertiary education and the open threat to the continued functioning of the Schools Commission. I shall direct my comments tonight to the subject that has concerned both my constituents and me for the last two years; that is, the debasing of the Schools Commission. My electorate includes some of the most prestigious private schools in the country as well as some of the most deprived. Surely the most balanced approach one could adopt in resolving the problem of assistance to schools, which in my electorate are so widely diverse, is to assess funding requirements on the basis of need. What approach could be more equitable and more reasonable? However, the Australian Teachers Federation noted in its report on the 1 979-80 Budget:

The days when a government was committed to funding education according to the needs of education as assessed by the education commissions have clearly passed.

Because of the value of the comments of the Teachers Federation, I seek leave to have incorporated in Hansard those few pages comprising the report.

Leave granted.

The report read as follows-

page 3003

AUSTRALIAN TEACHERS FEDERATION

Quality Education National Campaign 1st Floor, Monaro House, 3 Lonsdale Street, Braddon, A.C.T. 2601 P.O. Box 1891, Canberra City, A.C.T. 2601 Australia Ph. 47 9511

Ref:A5-24 August 1979.

THE EFFECT OF THE BUDGET ON TEACHERS AND STUDENTS

The Budget will affect teachers in at least three ways: through deteriorating working conditions following massive reductions of funds for building programs. higher taxation following the failure by the Government to apply indexation to taxation. much higher petrol prices arising from increased Government oil levies.

DETERIORATING WORKING CONDITIONS

The Education Guidelines issued by the Government in June announced cuts to government school funds in the 1980 Calendar year of 1 1.2 per cent. Included in this was a massive $44m cut to school building programs. These cuts are confirmed in the Budget.

In June the Premiers’ Conference and Loan’s Council decided the amounts State Governments would receive for their own expenditure. The Budget also confirms these cuts to State Government funds. In 1979-80 funds to the States will increase only 8.6 per cent or 1.4 per cent below inflation, a cut in real terms. The worst hit area is that of Loans Council Programs. These will be cut 1 3.2 per cent or 23 per cent after inflation. The Loans Council Programs are those which finance the States’ building programs.

School building costs are financed one-third by the Commonwealth funds and two-thirds by State funds. It is clear that State Governments with a 23 per cent reduction to building funds will have great difficulty making up the 32 per cent cut in the school building funds provided by the Commonwealth.

Funds for running costs of government schools, salaries et cetera, are mainly supplied by State Governments (92.S per cent). The Commonwealth Government supplies 7.S per cent of these funds. The Commonwealth has not increased funds for school running costs and State General Revenue funds used by State Governments in this area have been increased only 3.2 per cent above inflation. There will be very little chance of State Governments increasing the employment of teachers.

The static teaching service and the general unemployment situation which deters teachers changing occupations or going on leave means that there will be few chances for teachers to advance in the profession through promotion.

The massive cuts to the Commonwealth and State building programs mean the school buildings in need of repair or new classrooms needed in expanding areas will possibly remain neglected. Certainly there will be few actual improvements to physical working conditions for teachers.

HIGHER TAXATION

The removal of the tax surcharge at the end of the year will mean the end of one of the tax burdens placed on wage and salary earners last year. The other major tax burden, non-indexation of taxation will remain and will cost wage and salary earners an extra IS per cent in tax next year. As wages rise through inflation, wage and salary earners move into higher tax brackets and pay considerably more tax. While tax will rise IS per cent, wages are expected to rise only 9 or 9Vi percent. Inflation will rise 10 percent.

The effect of non-indexation of tax is not evenly distributed throughout the community. People who earned $4,000 p.a. in 1978-79 will pay 327 per cent more tax in 1979-80 if their wages increase in accordance with inflation, that is by 10 per cent during the year. Those presently earning $5,000 p.a. will pay 39 per cent more tax; $6,000 p.a. 24 per cent more tax, $8,000 16 per cent more tax, $10,000 p.a. 13.2 per cent, $12,000 p.a. 11.8 per cent, and $15,000 p.a. 10.7 per cent more tax.

HIGHER PETROL COSTS

Petrol prices will rise rapidly during the coming year as petrol in Australia reaches ever-increasing world prices. 85% of increases in petrol prices go to the Government from the crude oil levy. The Government will raise over $2 billion in this way in 1979-80. This amount will be paid mostly by the ordinary motorist.

Teachers are very dependent on private transport as unlike most other white-collar workers they do not work in centralised areas served by efficient public transport. Country teachers often travel long distances to and from school. They will be particularly affected by increasing petrol costs.

OTHER EFFECTS OF THE BUDGET

Add to these effects the increased Health Insurance costs and decreasing social benefits from reduced urban and regional development, the abandonment of the sewerage program and the curtailment of other community projects and you can cee the enormous costs to the average people in Australia that have occurred steadily over the past four years.

Particularly affected are the young people in Australia leaving school. They will face: increased unemployment- the Budget Papers state: “. . . the labour force survey would remain broadly unchanged in 1979-80, as it did in 1978-79. Some increase in unemployment is not out of the question ‘ ‘. inadequate unemployment benefits- Unemployed people under 16 years of age still receive no benefit. Those aged 16 to 18 with no dependents receive the same benefit that they received in 1975, $36 per week. Those over 18 with no dependents have received no increase in benefit since May 1978, $51.45 per week. There will be no increases in benefits for these people until November 1980, despite the fact that these below-poverty-line payments will be further eroded by inflation 10 per cent each year. reduced unemployment-training schemes- Overall the government has cut back training schemes for unemployed people. The biggest single reductions are in the National Employment and Training Scheme which has been reduced by almost $50 million to $68 million and the Special Youth Employment Training Program will be reduced by $54.6 million. The Community Youth Support Scheme will suffer a real expenditure cut of 17 per cent. However the Commonwealth Rebate for Apprentice FullTime Training has been increased by an estimated $26 million to $54 million. This scheme is a system whereby employers receive tax-exempt rebates for the costs of releasing apprentices to attend approved trade and training courses.

Those students who go on to further education will receive inadequate allowances. It is true that the Government has liberalised the Tertiary Education Assistance Scheme means test, however in the Minister for Education’s Press Release it is announced that: “Overall numbers of students receiving benefits are expected to remain stable at about 160,000 . . .”

More students will not receive allowances, the allowances will simply be distributed differently throughout the community. Nor has the allowance been increased to allow for inflation.

The latest Budget confirms a continuing trend of decreased working conditions for teachers and students and decreased prospects for improvements in career advancement for teachers and job prospects for school leavers. Australians generally face lower wages, higher taxes, higher inflation and reductions in community services during the coming year.

DAVID WIDDUP

Research Officer

Mr HUMPHREYS:

– I thank the Minister for Post and Telecommunications (Mr Staley). I thank the House. The need exists for State governments and schools to maintain their efforts in relation to fundings, and that level of public funding implies accountability and access, and of course includes the needs principle itself.

Let me summarise this Government’s abysmal record in relation to the Schools Commission. Firstly, it has restricted spending on schools generally which, rightly or wrongly, is in line with announced Government policy. Secondly, it has changed the direction of spending. It is painfully clear to any novice that the Government, by stealth, has embarked on a deliberate course away from the needs policy and maintenance of effort, to a policy of gradual reintroduction of per capita grants and an attitude of laissez faire with regard to State education funding. The guidelines of the Minister for Education (Senator Carrick) issued to the Commission confirm the relentless drift in policy. In connection with the drift away from the policy of maintenance of aid by State governments, I raise the example of Queensland. The Queensland Minister for Education recently announced cuts in the areas of teachers’ aides, relieving teachers, janitors, groundsmen and school cleaning and administrative staff. This is just one example of how the States will be responding to cuts in Federal Government allocations for education. One can lead a horse to water but one cannot make it drink. Similarly, this Government can abdicate its responsibilities for education, but there is no guarantee that the States will take up the slack. As a further example, I seek leave to incorporate in Hansard table 5.3 of the Queensland Teachers Union submission on funding to the Queensland State Government.

Leave granted.

The table read as follows-

Mr HUMPHREYS:

– I thank the Minister. I thank the House. That table indicates that, in 1978, Queensland education expenditure on capital works for each student was $87 compared to $ 127 in New South Wales, $ 1 50 in Victoria, $126 in South Australia, $128 in Western Australia, and $210 in Tasmania. It is a very poor record. I hope that the honourable member for Lilley (Mr Kevin Cairns) would not endorse it. I now wish to deal with the Federal Government’s motivation for adopting such a negative attitude to education funding. Firstly, for those so innocent, naive or brainwashed as my friend, the beekeeper is- I refer to the honourable member for Holt (Mr Yates)- as to doubt that there have been cuts in education, let us examine table B3 of the Schools Commission Report for this year. I seek leave to incorporate that table in Hansard. It is only a small table. Our time is limited. That is why I have sought leave to have this and earlier tables incorporated in Hansard.

Leave granted.

The table read as follows-

Mr HUMPHREYS:

-Thank you, Mr Deputy Speaker. Let us examine the largest allocation in the table, general recurrent expenditure, for both government and non-government schools. For government schools the figure fell from $202m in 1976 to $192m this year. We must remember that in those three to four years inflation has risen more than 50 per cent. The same allocation for non-government schools rose from $174m in 1976 to $228m this year. I should point out that the latter figure does not tell the whole story because the Government has maintained a double standard within non-government funding between the wealthy schools and poorer schools. If there are still any doubting Thomases who question the Government’s withdrawal from assistance to government schools, they should take note of the growth rates- if they can be called that- in Commonwealth Government expenditure on government schools. For that purpose, I seek leave to have table B2 of the Schools Commission Report 1979-80 incorporated in Hansard.

Leave granted.

The table read as follows-

Mr HUMPHREYS:

– I thank the Minister. I thank the House. I do not have time to go through the whole procedure. I think we all know why that is -

Mr Yates:

-We do.

Mr HUMPHREYS:

-There is the beekeeper again. He does not have any time to do research, but he likes to look after his bees. Not one of the 13 categories of statistics show any indication of an increase in real terms; in fact, all indicate a fall in real terms of more than 50 per cent.

Now, if some coalition faithfuls- we have the beekeeper again- still need to be persuaded that the Government has indeed aborted general education in Australia, let me go further than 1976 to make a comparison between this Government and the record of the Labor Government on education- a record on which we shall be proud to campaign in the next election. In 1971-72, expenditure for education was $327m. In 1972-73, expenditure was $390m. In 1973- 74, expenditure doubled to $666m. In 1974- 75, the figure was $l,089m. In 1975-76, it was $ 1,094m. In 1970-71 dollar terms, education expenditure for 1973-74 was an increase of 92.8 per cent. In 1974-75, the increase was 90.8 per cent. In 1975-76 the increase was 13.5 per cent. In constant 1970-71 dollar terms, the growth in Commonwealth Government outlays for education during the present Government’s two terms in office has been 2.8 per cent in 1976-77, a negative 0.4 per cent in 1977-78, a negative 2.1 per cent in 1 978-79 and a negative 6.3 per cent in 1979-80. In other words, if the value of today’s currency was the same as in 1970-7 1, this year’s allocation would be $305.4m compared with the figure in 1970-71 of $327m. These figures include total expenditure on education, that is, figures on expenditure for tertiary education which, by virtue of decisions taken by the Labor Government during its terms, has taken a greater percentage of the Government’s allocation. Whilst I am sure that there are a few hardheaded Government apologists who will stand by this regime through thick and thin- and there has been plenty of thin so far as general education is concerned- I trust that the figures to which I have referred have done something to stir their minds and their consciences, even if they do not stir the bees.

What are the other results from this retreat from education? Cuts in education have meant a retrenchment of staff, less money for research and therefore the deterioration of research which has enormous long term implications for Australia. There has been the abandonment of courses and restricted opportunities for entering certain courses. There has been a reduction in student services and increases in staff/student ratios with appalling consequences for the quality of education. There have been delays in the replacement and upgrading of buildings and other physical facilities. Last, but by no means least in importance, cuts in education have resulted in educational discrimination against disadvantaged and minority groups. Just as the Government reintroduced the element of politics into pensions, so too it has made education funding a political football. It has reintroduced the old State aid debate and has deliberately encouraged antagonism between State schools on the one hand and the wealthier private schools on the other.

Last year the Government upset the orderly program developed by the Schools Commission by introducing its own guidelines, not simply weighted in favour of all private schools but favouring the wealthier of those non-State schools. For example, level one primary schools received $17 a head whilst the poorer level six schools received only $5 a head. Recurrent funding for Government schools was unchanged even though cost increases were acknowledged by the Government. Private schools, however, received $9.1m specifically for escalation of costs in those schools. Of the rest of the $ 14m going to the private schools, $2. 5m went to the top 20 per cent, levels one, two and three, whilst another $2. 5m was distributed to the level which contained 80 per cent of non-government pupils. So not only is there a non-government tilt in the allocations of funds for schools assistance, but even within that sector of education there is open discrimination in favour of the wealthier private schools. That is what we call a double standard.

I suppose that in one way one could make a case for the argument that the Government has not really revived the State aid argument because in fact the Government is not discriminating so much on the basis of private schools in preference to government schools as it is on the basis of wealthy schools over poorer schools. In last year’s payments, level one schools were receiving $28 a head compared with $6 a head for parochial schools, and $17 a head to level one primary schools compared with $5 a head to level six primaries.

If the Government were sincere about the difficulties faced by the Catholic schools- and it appears from the recent reports about the deficit in the Vatican that things are indeed grave and could be getting worse for Catholic schools- the Government could at least have abandoned its policy of bringing all schools up to 20 per cent of average costs and given what money there is to the parochial schools; but this is not the case. What has influenced Government policy making in the area of assistance to schools is nostalgia rather than need. When it comes to the issue of education we have an old boy network rather than men in a government who put memories of the social and economic elitism of their own private school educations ahead of the needs of all schools in this country. In the ranks of this Ministry the school tie says as much about a man as his ministerial record. What other reasons could possibly exist for the Prime Minister (Mr Malcolm Fraser) retaining his old head prefect, the Minister for Industrial Relations (Mr Street)? Greater respect hath no man than a fag has for his head prefect. How many of the old boys do we have in this Ministry? Of course, the most notable is the Prime Minister himself. The Melbourne Church of England Grammar School has the dubious honour of having moulded the Prime Minister in his formative years.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– What of his colleagues?

Mr HUMPHREYS:

-As the honourable member for Parramatta asks, what of his colleagues? It is an impressive list and I hope once again that with the approval of the Minister for Post and Telecommunications (Mr Staley) I can table the list of the Ministers and the schools they represented.

Leave not granted.

Mr HUMPHREYS:

– It was granted by the other Minister. It is all in Who’s Who.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– Read it to them.

Mr HUMPHREYS:

-No. He is not proud of his record. Apparently he did not go to a good school.

Mr DEPUTY SPEAKER:
Hon. J. D. M. Dobie

– Order! The House will come to order and the honourable member will proceed with his speech.

Mr HUMPHREYS:

-Thank you, Mr Deputy Speaker. Twenty one out of the 24 Ministers whose education is included in Who’s Who attended private schools. In a higher percentage of cases not only were they private but also they were among the best and most exclusive private schools in the country. I must point out that I have not the slightest prejudice against private schools, none at all. I am merely pointing out that the Government that has undermined the needs principle which was established in the Karmel report, and which provides the foundation of the Schools Commission, is the same government which is overwhelmingly dominated by men of particularly wealthy, private school extraction. Where do their loyalties lie- to the needs of all educational institutions in this country or to their alma maters?

Dr BLEWETT:
Bonython

– I would like to make two comments on the speech made by the honourable member for Lilley (Mr Kevin Cairns). One is specific and one is general. The specific point is that I agree with him on the matter of maldistribution of resources in relation to the poor Catholic schools. I suggest that next year the honourable member should pressure his

Government to redistribute resources between the wealthy private schools and the poorer private schools. That is the simplest way of solving his specific difficulty.

But the general point I want to make is that the honourable member for Lilley is a representative of a party devoted to the reduction of the public sector. It is devoted to the reduction of public expenditure in this country though one would never gather that from the speech that the honourable member gave. Of course, the reduction of the public sector, that is the reduction of public expenditure, means in fact the reduction of public provision for the schools of this country, both State and private. It means, as this Government has clearly shown, the reduction of social provision for health in this country, and the refusal of social provision for libraries in this country. This Government basically would like to return to the pre- 19 72 days which are characterised in this country by public squalor, by the failure to provide adequate public provision in schools, in health and in social welfare. If one looks at the social indices in relation to the gross national product under the 23 years of Liberal Party rule, one sees that this country compared more poorly than practically any advanced industrial society. That is what the Government wants to return to.

After four years we can begin to see the policies of destruction and the undermining of public social provision in this country. Let me give a few examples. In terms of health provision, we have now had a series of capricious hacks at the system which are often quite contradictory.

Mr Baillieu:

– This is not a health debate.

Dr BLEWETT:

-The whole issue is related because the whole attitude of the Government to social provision is the same- contemptible.

Mr Baillieu:

– That is nonsense.

Dr BLEWETT:

– Just look at what the Government has done in relation to health. It is doing the same thing to education. In relation to health provisions the Government has made a series of wild blows. The health area is now in such a mess, because the Government has delivered the responsibility back to the private sector, and we are told that it is about to issue its fifth or sixth health scheme.

Yesterday in this House we were given a piece of complete negation. The Minister for Home Affairs (Mr Ellicott) talked about libraries related to -

Mr Baillieu:

– This is a schools debate.

Dr BLEWETT:

– Well, if the honourable member for La Trobe had bothered to read the ministerial statement yesterday he would have seen that it referred to libraries in educational institutions. I know he has difficulty in realising that an educational institution is a school but we recognise the problems of the honourable member for La Trobe. Yesterday we had a statement of complete and utter negation by the Minister. After three years of looking at the Horton report, the Minister had the hide to come into this House and say that the Government will appoint another interdepartmental committee to look at the report of the last interdepartmental committee on the Horton report. I am glad that the Minister for Home Affairs never once looked up from his speech because he was so clearly ashamed of the dribble, the nonsense and the negatism he had to put before this House.

If we have had wild and contradictory health cuts, if we have had utter passivity by this Government about libraries in this country, what we have had in the educational field is simply a nibbling away, a cutting back year by year in a marginal fashion of educational provisions- a process of remorseless attrition. The man who has presided over education has never presented a single educational ideal to this country. He is simply a desiccated calculating machine. His only interest in education is somehow to cut back the resources. The honourable member for Lilley dared to talk about a bipartisan, imaginative approach to education. I ask every member of the Government side of the House, at least all honourable members who can read, to go through the speeches -

Mr Baillieu:

– That is nasty. Why are you so nasty?

Dr BLEWETT:

-Because I am beginning to realise that some honourable members on the Government side do not read. That is the problem. If honourable members go through the speeches of the Minister for Education (Senator Carrick)- I challenge them to examine those speeches- they will find that they are completely bereft of ideas. I think honourable members will search in vain for a new idea in education in any of the speeches delivered in this Parliament by the present Minister for Education. Not a single innovation is suggested in any of those speeches in relation to educational policy in this country. There is not a single imaginative proposal towards educational developments in this country. There is not a single challenging idea about education compared to the wealth of ideas that poured forth from the Labor Minister for Education in the previous Government. Under this Minister education is simply an issue of dollars and cents.

Indeed, like the whole Government, the Minister for Education when faced with an idea is like a rabbit paralysed before a snake. Let me give an example of that. The Minister told us in September that the Williams Report on Education, Training and Employment, the major report on education in this country in recent years, was under study by the Government and that in due course its recommendations and findings would come before the Senate. For three years Ministers have said that the Horton report of the Committee of Inquiry into Public Libraries was under consideration by this Government. After three years they have now said it would be under consideration for another year or so. That is what I fear will happen with the Williams report. It presents a whole set of ideas on which the Minister has never said a single creative thing. Not a comment has emerged from the Minister in relation to the proposals of the Williams report. I am told it is under consideration. I am told it will come out in due course. I know about the meaning of ‘in due course’ in relation to this Government.

I want to consider university education which we have not talked about specifically. What is worrying me is that the financial obsessions of this Government are not only eroding the educational potential of this country but also, if one considers universities, one sees that under this Government tertiary institutions have been increasingly entrapped in a most complex bureaucratic machine in relation to the distribution of resources. The Liberal Party claims to be an anti-bureaucratic party. Yet in its effort to control educational finance at university and colleges of advanced education level it has created an appalling, complex administrative process for dealing with tertiary education. In the process for deciding on the distribution of funds 12 steps are now involved, each dependent on the previous one for determining the allocation of resources to tertiary institutions. In order to control the expenditure of money in tertiary institutions the Government has created a complex bureaucratic procedure which has now become unworkable. Honourable members do not have to take my words for that unworkability. The Tertiary Education Commission states:

Since there are twelve steps in the above schedule, the average time available for each step is one month. Given that formal meetings of the Councils and Commission must be held in connection with most of the steps and that two reports have to be written, it is clear that there is simply not enough time in the year to deal with each step adequately.

This kind of bureaucratic complexity has been imposed because of the Government’s simple obsession with the deficit and finance. As the Commission itself admits, the Government’s effort to control universities has become unworkable.

The problem is compounded by what the Government calls the rolling triennium for equipment and capital, which makes advanced planning virtually impossible. We all know and the Minister for Post and Telecommunications (Mr Staley), who is at the table, certainly knows that the rolling triennium is a euphemism. The Minister knows that it scarely rolls, and it is certainly not a triennium. The grants are specified for only one year. That means that there are no clear commitments for the second and third years. What does the Williams Committee say about that? I presume that its report is under consideration by the Government. It may even have been read by some Ministers. It states:

It is quite impossible for the Tertiary Education Commission to perform its functions in consultation with State authorities . . . unless plans and grants to universities and colleges are made on a fully triennial basis.

The Tertiary Education Commission says the same thing. It states:

The tightness of the above timetable, combined with the present rolling triennium arrangements, makes considered planning virtually impossible. Apart from the lack of time to undertake a deliberate examination of medium and long term requirements in ternary education, whether at the level of the Commission and Councils, State authorities or institutions, the lack of a guarantee of the magnitude of the funds available for the second and third years of the rolling triennium prevents any effective forward commitments for new expenditure from being made.

Let me underline the Commission’s key statement. It says:

The present arrangements inhibit all developments of any significance.

Those comments relate to capital expenditure. The same is true of equipment provisions. Equipment expenditure should be regarded as recurrent expenditure. It is necessary for universities, for both research and teaching, to know in advance over a three-year period what their equipment resources will be. Under the kind of administrative mess we now have, they do not know that. It is impossible to plan research programs with any precision unless the availability of equipment is known well in advance.

I think it is important for all of us to protest against the growing inflexibility of this bureaucratic procedure and the way in which planning resources are determined for universities and colleges of advanced education. It is imposed by the procedures and the rolling triennium. I agree with honourable members on both sides who say that we need to make universities and colleges of advanced education more muscular institutions. No doubt we have to eliminate some of the fat in those institutions. But we cannot do that unless we give them greater flexibility to do so themselves. Universities are now in a steady state. We accept that. Roughly, the student populations in universities and colleges of advanced education are levelling out. This is the very time that they need much greater flexibility with reference to resources, not less flexibility. With these institutions in a steady state they need much greater flexibility for two major reasons. In order to make the best possible use of their resources, universities and colleges of advanced education need to rationalise imaginatively. They need to expand in some areas and cut back in others. Yet the procedures that have been given them and the lack of triennial funding make this extremely difficult. In fact, it is an anti-rationalisation procedure. I will not quote again from the Tertiary Education Commission’s report. I must wind up as the debate is about to finish. The reports of the Tertiary Commission give numerous examples of where rational planning has been denied the universities because of the inflexible procedures imposed and the lack of triennial funding.

Universities and colleges of advanced education need certain discretionary resources, funds to switch between staff and equipment. Possibly they even need to be able to switch capital funds to equipment and staff. Of course these funds have to be subject to annual and proper audit and accounting. Universities still have to account to the TEC. Nevertheless, despite that accounting procedure one would expect a Liberal Government, at least on its professions, to be sympathetic with these requests from universities for greater flexibility. It is supposedly the antibureaucratic party. It is supposedly the party of local responsibility- responsibility on the spot. It is supposedly the party of local institutional initiative. But these things are denied by the procedures it has imposed. I suspect that it is not Senator Carrick’s fault. I suspect that it is the fault of the Treasury gremlins who have been getting at all aspects of this Government’s activities. Perhaps it is even the fault of the gremlins from the Department of Finance- I am not quite sure. The Minister for Finance (Mr Eric Robinson), who is nodding his head, accepts responsibility. Of course, the task of those departments is to ensure that every dollar is properly accounted for but a degree of control has been imposed by universities and colleges of advanced education which is in effect a bureaucratic inhibition on rationalisation within the university and college of advanced education sector. I could go on to discuss the way in which the financial resources of universities have been eroded but I will finish by saying that the most tragic impact of the cuts in university funding has not been on capital or equipment but on the very life blood of universities, which is research.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3011

STATES GRANTS (TERTIARY EDUCATION ASSISTANCE) AMENDMENT BILL (No. 2) 1979

Second Reading

Debate resumed from 6 November 1979, on motion by Mr Staley:

That the Bill be now read a second time.

Motion ( by Dr Cass) proposed:

That all words after ‘That’ be omitted with a view to substituting the following words: whilst not declining to give the Bill a second reading, the House is of opinion that the Government should be condemned for the (a) continuing decline in funding in real terms for tertiary education in Australia and the consequent long-term detrimental effects on the quality and standard of tertiary institutions and (b) continuing pressure being placed on State Governments to share the cost of tertiary education ‘.

Mr DEPUTY SPEAKER:
Hon. D. J. M. Dobie

– Is the amendment seconded?

Mr Humphreys:

– I second the amendment and reserve my right to speak at a later hour this day.

Amendment negatived.

Original question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

Motion (by Mr Eric Robinson) proposed:

That the Bill be now read a third time.

Mr Barry Jones:
LALOR, VICTORIA · ALP

– I wish very briefly to draw the attention of the House, before the Deputy Whip comes in with his blunt instrument, to a funding problem that relates to the superannuation requirements of the State College of Victoria. The Minister for Finance (Mr Eric Robinson) will appreciate that the State College of Victoria is, in a sense, a federation of teachers’ colleges in Australia with the status of colleges of advanced education. Under the Victorian scheme the superannuation payments made by the Government of Victoria were at a rate higher than the superannuation commitments made by the Commonwealth Government to institutions in other States. This places the State College of Victoria in an excruciatingly difficult position with regard to future commitments to staff. It is not in immediate need of funds because it is not anticipated that there will be a large number of retirements for several years.

However, there is an extremely complicated predicament in that in 1981 the amount needed to meet superannuation costs will be $737,000 but, assuming a 10 per cent inflation rate over the consecutive years, by the year 2002 the College will need $58,462,000. It really has enormous problems in maintaining the level of its superannuation commitment. As I understand it, the matter has been taken under advisement by the Tertiary Education Commission and so on. I think that this is a very important matter that needs to be directed to the attention of the Government, namely, that the College does need some firm commitment about where it is going.

Question resolved in the affirmative.

Bill read a third time.

page 3012

PARLIAMENTARY CONTRIBUTORY SUPERANNUATION AMENDMENT BILL 1979

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

Second Reading

Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

– I move:

The purpose of the Parliamentary Contributory Superannuation Amendment BUI 1979 is to amend the superannuation scheme provided under the Parliamentary Contributory Superannuation Act 1948. Superannuation arrangements for parliamentary service have been in operation for many years at Commonwealth and State levels. Such arrangements have two main purposes. The first is recognition of the need for some measure of financial security for those who devote a significant portion of their working lives to parliamentary service. The second relates to the particular insecurities of political life; lack of adequate superannuation arrangements could lead to the danger of capable people not being attracted to stand for parliament.

The existing parliamentary scheme allows a member to convert- that is, commute into a lump sum benefit- up to 50 per cent of his or her retiring allowance. Some State schemes, however, allow their members to commute the whole of their retiring allowance, and the Government considers that this should be also the case in the Commonwealth’s parliamentary scheme. Accordingly, this Bill provides that a member who retires after the date of royal assent may elect to commute up to 100 per cent of his or her retiring allowance. The Australian Government Actuary has advised me that the proposed change is expected to reduce the cost of the scheme to the Commonwealth in the long term. The BUI makes a number of consequential amendments. Their effect is to ensure that the rights and liabilities of members who commute the whole of their retiring allowance, and of their eligible dependants, are the same as under the existing 50 per cent commutation provisions. I commend the Bill to the House.

Leave granted for debate to continue forthwith.

Mr LIONEL BOWEN:
Smith · Kingsford

– The Opposition does not oppose the Parliamentary Contributory Superannuation Amendment BUI 1979. It has been a subject of discussion in the Opposition’s Party room, where it was agreed that it was appropriate to amend this scheme to bring it into line with a number of superannuation schemes that operate in the States. It should also be placed on record that parliamentarians make a contribution of 11V4 per cent of their salary; other schemes usually operate on the basis of a 5 per cent contribution. Those schemes also operate on the basis that all the contributions are refunded and there is an amount by way of superannuation of some 50 per cent of salary plus full indexation irrespective of what might be the determination of the Commonwealth Conciliation and Arbitration Commission.

I am advised- I see no reason to disagree with the advice- that if retiring members were to avail themselves of the new provisions it would amount to a fund saving of as much as $5m. That is obvious because, as honourable members know, at the present time the maximum entitlement is reached after a member completes 18 years of service in Parliament. One cannot get any greater entitlement after that. So it follows that if members are to retire at, shall we say, an age similar to yours, Mr Deputy Speaker, they would have a long life expectancy and would be drawing a pension amounting to considerable sums of money. It follows then that if those payments were to be commuted to capital sums there would be a saving. In the reverse position, there are members who have been in the Parliament for 30 years or more and who have made contributions over that period but whose life expectancy we must regrettably say might not be as long. Accordingly, they might not get the same amount by way of benefit. They might not even receive the full amount of their contribution. I remind the House of our dear esteemed colleague, Frank Stewart, who received no benefit at all because he died in office. There the contributions remain. Honourable members recognise the political hazards of life, and it must be recognised that a member does not qualify for an entitlement until such time as he has served the Parliament for eight years or three parliaments, whichever is the appropriate term.

Entry into parliamentary life usually means that one leaves the profession or occupation for which one was destined in life. Having entered the life of parliament, it is very difficult, if one is defeated or wishes to retire, to return to such an occupation. There has to be some understanding of what parliamentary life involves, particularly from the point of view of compensation for a member who has to try to re-establish himself in life. I think it is a fair and equitable scheme, at least to the point that we are bringing it into line with those schemes that operate in other States. I recognise that other people in the community are always of the view that parliamentarians are looking after themselves. I say that that is not the case. Parliamentary life involves a sacrifice in that people are expected to offer their best, with no other emolument. It is also a fact that we want to attract the best people in Australia to serve in parliament. If there is to be some security in parliamentary life, it has to be by way of monetary compensation not only to the member but also to the dependants.

I note with interest that the Bill does not affect the provisions that currently apply to dependents, which means that a widow with dependent children can get some entitlement to what is called a proportion of a member’s salary. I make the point that we recognise that special circumstances apply to parliamentary life, including the separation it causes from a person’s normal advancement in life in the course of his occupation or profession. We have made this point ad nauseam in the course of debate on the Remuneration Tribunal. I repeat: I cannot understand why any government does not recognise that the deliberations of the Tribunal are in the interests of democracy. People should be recognised from the point of view of the work value of their job.

I believe that most members work a minimum of 80 hours a week. Whilst people may be critical of that, I can think of no better value for democracy than to see members interested in their nation and applying themselves fully to what they are about. It means that they will not advance in the occupations to which they were previously attracted, and after a period of 8, 10, 15 or 1 8 years, whatever it is, it is unlikely that they will be able to return to those occupations. Because members make a contribution well in excess of normal requirements, it is appropriate that they be able to convert retiring allowances into lump sums which can be reinvested in a business or profession, or just invested, in order to gain some security in life. This matter has been the subject of discussion in our party room. The views have not been unanimous because there is, always comment about the fractions that ought to be applied. A member can avail himself of the maximum amount; he can take part of it, or he may wish to continue with the present scheme. The Bill provides for a choice. Because of age variations in relation to contributions, a member can decide to take 100 per cent by way of lump sum contribution. The Opposition supports the legislation.

Mr YATES:
Holt

-I wish to refer the Minister for Finance (Mr Eric Robinson) to section 20a of the principal Act which provides that a period of service of a member of a State Parliament can be taken into account in certain circumstances. I express considerable regret that my services to another Parliament cannot be taken into consideration by this honourable House. Nevertheless, I note that by an Act passed in the other Parliament in 1948 provision was made for any member of that House who happened to be serving in another capacity, either as a Minister in a war cabinet or as a member of another House, to get certain provisions. I do not want to press the matter because it would look as though I were fighting entirely for specific rights as far as the House of Commons is concerned. I think that would be wrong and uncharitable. However, if State members receive this benefit, perhaps at some time in the dim distant future service to other Parliaments in the Commonwealth could be considered.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3014

SNOWY MOUNTAINS HYDRO-ELECTRIC POWER AMENDMENT BILL 1979

Second Reading

Debate resumed from 25 October, on motion by Mr Newman:

That the Bill be now read a second time.

Mr KEATING:
Blaxland

-The Opposition supports this legislation. As the Minister for National Development (Mr Newman) pointed out in his second reading speech, the main purpose of this Bill is to amend the finance provisions of the Snowy Mountains Hydroelectric Power Act 1949. These provisions relate to the Snowy Mountains Hydro-Electric Authority, which was established for the purpose of designing and constructing the Snowy Mountains scheme. The scheme was substantially completed in 1974, after a construction period of almost 25 years. Even now, this represents probably the largest project in Australian history and the longest in terms of construction time. Until now the finance for this project had been provided by way of advances by the Commonwealth Government, repayable over 70 years. To date, over $820m has been advanced by the Commonwealth to the scheme, while over $500m has been repaid in the form of interest and repayment of advances. Total indebtedness remains at about $960m. Given the level of funding required for the scheme, it was obviously necessary for the Commonwealth to provide the finance. However, now that the project is completed these arrangement are no longer required.

The Bill before the House is to allow the Snowy Mountains Authority to borrow money in its own right rather than be dependent on advances from the Commonwealth. The Opposition is not opposed to this policy as we believe that the Authority should be able to operate, as is the case with most other statutory authorities, according to normal commercial principles.

Although the scheme is completed, the Snowy Mountains Authority still has a very important role to fulfil. Funding requirements are no longer large, but close to Sim is still required annually. Last year about $850,000 was advanced by the Treasurer to the Authority for construction purposes. The changes to the Act will allow the Authority to borrow future funds itself and, as with other statutory authorities, these borrowings will be guaranteed by the Treasurer.

Although the Snowy scheme is completed, it still remains unique in Australian history, in terms of both its size and its construction period. Over 700 people are employed full time in the scheme at present. The power stations provide valuable peak load electricity to New South Wales and Victoria. All of the Australian Capital Territory’s electricity comes from the Snowy Mountains scheme. The charge for this power is low compared with similar schemes overseas. By connecting New South Wales and Victoria, the scheme has allowed these States to make considerable savings in the quantity of reserve plant they would otherwise have had to maintain. Apart from electricity, the scheme also provides valuable additional water for irrigation to both the Mumimbidgee and Murray Valleys areas.

The success of this project is a tribute to the Snowy Mountains Authority. The experience gained in this project has meant that the staff involved have been able to provide similar valuable services in engineering projects in Australia and overseas. Since 1970, this service has been provided largely by the Snowy Mountains Engineering Corporation, which operates on a consultancy basis. The Snowy Mountains Authority, the Council and the Engineering Corporation will continue to provide Australia and many overseas countries with an important service.

The other sections of the Bill relate to the standardisation of legislation covering statutory authorities to bring it into line with other Comonwealth authorities. The provisions largely relate to officers and employees of the Authority. The Bill also allows the Minister to appoint an acting commissioner or acting association commissioner. Previously the appointment was made by the Governor-General. Amendments contained in the Bill allow the Authority to enter into contracts worth up to $500,000 without the approval of the Minister. Previously the allowable limit was $200,000. The Opposition supports the legislation.

Mr ROGER JOHNSTON:
Hotham

– The Snowy Mountains scheme is a dual purpose hydro-electric and irrigation complex and is one of the largest engineering complexes of its type in the world. The scheme was designed and constructed by the Snowy Mountains Hydro-electric Authority, which is controlled by the Snowy Mountains Council. While the Council was established in January 1959, it was planned many years previously. The Council consists of eight members- the chairman and deputy chairman, who are appointed by the Commonwealth Government; two representatives who are appointed by the Government of New South Wales; two representatives who are appointed by the Government of Victoria; the Commissioner of the Snowy Mountains Hydroelectric Authority, and one other member appointed from the Authority.

Of course, there are the usual financial statements and reports by the Auditor-General, and some interesting facts come out of them. The Authority’s costs of production, which comprise interest charges, depreciation, and costs of operation and maintenance, are met by the Commonwealth and the electricity commissions of New South Wales and Victoria, but in proportions related to their entitlements to the estimated average annual net production of electrical energy from the scheme. It is interesting to note that the unit cost of electricity is lower this year than last year. In fact, this year the cost is 0.23 cents per kilowatt hour as against the cost last year of 0.25 cents per kilowatt hour. This is actually due to the increased output that was gained during the year. It is also interesting to note that the total number of people employed is 689 of whom 40 come from the Electricity Commission of New South Wales and 23 from the State Electricity Commission of Victoria.

As was mentioned earlier, the purpose of this Bill is to amend the Snowy Mountains Hydroelectric Power Act 1949 and to broaden the borrowing powers of the Authority. Clauses 3, 6, 7 and 9 delete all the definitions and references to temporary officers. This provision is covered in clause 8 which repeals sections 22, 22A and 23 of the original Act and deletes all references to temporary officers and temporary and casual employees. It reflects the current practices of the Authority and of other relevant statutory authority legislation relating to employment. It also provides for the necessary transitional provisions. Clauses 4 and 5 remove some of the powers of the Governor-General and transfer them to the Minister- in particular, the remuneration of the Commissioner and each Associate Commissioner and the appointing of a person to act in the office of Commissioner or Associate Commissioner if required.

The main part of this Bill concerns the finances of the Authority. Sections 25 to 29 inclusive, of the principal Act, are repealed and other clauses are included. In particular, the Bill allows for the borrowing of funds from the Commonwealth and outside the Commonwealth. It broadens the powers of the Authority and enables the Treasurer to guarantee such borrowings, including borrowings evidenced by the issue of securities. It was also mentioned that the contracts requiring the Minister’s approval have now been extended from the limit of $200,000 to $500,000 to allow for inflation. This Bill, in effect, brings the Authority up to date with modern legislation.

It should be noted that the cost of electricity produced by the Snowy Mountains scheme is extremely low by any standards and is much lower than the cost of power produced elsewhere in the world from natural gas and coal. Its cost is lower than the cost of power produced by nuclear power stations which is now the world preferred system because of its cheapness and safety. Unfortunately, there are few further sites for the harnessing of hydro power in Australia and none with the extra advantage of re-using the water for irrigation in areas that need it so badly. Australia is proud of its Snowy Mountains hydro-electric scheme and will be pleased to see the bringing up-to-date of the Act which governs its operation. I commend the Bill to the House.

Mr John Brown:
PARRAMATTA, NEW SOUTH WALES · ALP

– Thirty years ago, the Snowy Mountains Authority began one of the world’s most ambitious and daunting civil engineering projects. Having successfully completed that magnificent task, it then had to survive a determined attempt by the forces of conservatism to close it down. No doubt it was the legacy of its birth, spawned as it was by a Labor administration, the brain child of the revered Chifley Government, that led to this desire to dismantle it. However, it survived this assassination attempt and became the Snowy Mountains Engineering Corporation.

He hails from Snowy River, up by Kosciusko’s side,

Where the hills arc twice as steep and twice as rough;

Where a horse’s hoofs strike firelight from the flint stones every stride.

The man that holds his own is good enough.

And the Snowy River riders on the mountains make their home,

Where the river runs those giant hills between.

Mr Deputy Speaker, of course as you know, I am quoting Banjo Paterson. Banjo Paterson ‘s Man from Snowy River rode a bush horse and chased brumbies. But today there is a new breed of men from the Snowy. They have exchanged their horses for bulldozers, slide rules, hydrographic laboratories and road-building machines. They are the men whom we are applauding as we debate this Bill tonight.

The Snowy Mountains Hydro-electric Power Amendment Bill 1979 seeks to change the funding arrangements for the Snowy Mountains scheme now that it has been completed. In the past, the cost of operating and maintaining the scheme has been undertaken by the Federal Government by a system of advances payable over a period of 70 years. The only exception to this procedure has been the construction of the Blowering Dam which, being primarily for the purpose of irrigation, was considered to be the responsibility of the New South Wales Government. The contribution of the Federal Government for the period of the scheme’s construction- some 25 years- has been in excess of $820m and it is now seeking to place the Snowy Mountains Authority on a commercial basis similar to that of other authorities. Through this Bill, the Government therefore proposes to amend the Snowy Mountains Hydro-electric Power Act to enable the Treasurer to guarantee moneys borrowed by the Snowy Mountains Authority in accordance with the conditions relating to rates which have been prescribed by the Australian Loan Council for semi-governmental authorities. The Bill also seeks to bring the legislation up-to-date in some respects in order to standardise legislation relating to statutory authorities.

As the honourable member for Blaxland (Mr Keating) has pointed out, the Opposition does not oppose the Bill. While the Snowy Mountains scheme was under construction there was very valid reason for special financial arrangements to apply to the Snowy Mountains Authority, but now that the scheme has been completed and the Authority’s primary function is one of maintenance, we see no real reason for the special arrangements to continue. I take this opportunity to pay a tribute to one of Australia’s greatest engineering feats- in fact one of the world ‘s greatest engineering feats- the Snowy Mountains hydro-electric scheme.

This project began in 1949 and developed over a period of some 25 years. It constitutes one of the greatest engineering works of its type in the world. By impounding the waters of the Snowy and Eucumbene Rivers and diverting them through two tunnel systems in the Snowy Mountains, the scheme provides both electricity and irrigation water for large areas of New South Wales, Victoria and the Australian Capital Territory. The scheme was designed and constructed by the Snowy Mountains Authority, a statutoty body which was established, as I said, in 1949.

Anybody who has visited the area of the Snowy Mountains scheme will realise the enormous nature of the project. Indeed, many believed that the scheme would be impossible to accomplish. But they were not bargaining on the pioneering spirit and the great expertise that men, not only from Australia but also from many other countries brought to this scheme. It is therefore to the credit of the many men who worked on the Snowy Mountains scheme that it has proved to be the undoubted success that it is today. Conditions for those working on the project were very severe. The cold was one thing; the nature of the terrain was another. Those two conditions made construction work very difficult and often very dangerous. One hundred and twenty-three men lost their lives while working on the project and my parliamentary colleague, Senator Mulvihill, is currently engaged in trying to have a monument erected in recognition of the sacrifice made by these men. Of course the Snowy Mountains scheme as it stands is mute testimony to the great courage and the great expertise of all the men who worked on it, particularly the 123 men who lost their lives. It is not only the past workers on the project to whom we owe a debt of gratitude, because the scheme is an on-going project. During the long period of its construction, technical expertise was built up amongst the construction workers and the name Snowy Mountains Hydro-electric Scheme has become synonymous with some of the best engineering skill in the world. In order not to waste this pool of technical expertise, a body known as the Snowy Mountains Engineering Corporation was established towards the completion of the project in 1970. lt is a statutory body set up on commercial lines to provide a specialised engineering consulting service to governments, within Australia and overseas. It works in conjunction with the Snowy Mountains Authority which remains as a maintenance organisation for the Snowy Mountains scheme. The Snowy Mountains Engineering Corporation has a reputation of international standing and has provided a wide variety of services such as geological investigation, the construction of dams and roads and hydrological studies in many States, particularly in the Third World. It is currently in the process of negotiating a contract to help the Chinese- a subject dear to the Deputy Speaker’s heart- to develop their hydro electric power potential. In Australia, the Snowy Mountains Engineering Corporation has worked on such projects as the Thomson” Dam in Victoria and the Wivenhoe Power Scheme in Queensland. These successes can be measured by the fact that it has been consistently profitable from the outset. This year it earned $38m, representing an overall profit of $420,000. Perhaps a more significant measure of the Corporation’s success can be seen further in its success in promoting goodwill between Australia and the countries of the Third World, This has been achieved by its work in improving the living standards of the people of the Third World countries, an achievement of which Australia can be justly proud.

The Snowy Mountains hydro-electric schememay therefore be seen as having achieved success in a number of areas. Not only has it provided Australia with a splendid hydro-electric and irrigation facility, but also it has strengthened our ties with the countries of the Third World. We have great reason to be grate-, ful to the men who were involved in the construction under the scheme. Mr Deputy Speaker, you would have personal knowledge- as I have- of the problems of the Toongabbie Creek on the border between our electorates. I have pointed out in this House before, and I know that you have, Mr Deputy Speaker, that in this areawhich is the Toongabbie Creek system which feeds the Parramatta River at Parramatta- ten people have drowned in a period of seven years.

In 1 974 Mr Uren, who was then the Minister for Urban and Regional Development, employed the Snowy Mountains Engineering Corporation to draw up a plan for the drainage of the Toongabbie Creek system with a view to alleviating this great loss of life. Unfortunately, with the change of government, this plan has never been implemented. It involved the expenditure of something like $ 1 3m to drain the Toongabbie Creek system. This involved a series of drainage reservoirs where the flood water would be pooled and then let down the river in varying amounts when the flood subsided. Unfortunately the scheme has not been implemented, but it is interesting to point out that at least the New South Wales Transport Department, through the Minister, Mr Peter Cox, has made money available for the building of some bridges in this area to alleviate this loss of life.

As I have said, the Snowy Mountains scheme, as it exists, is mute testimony to the skills, the pioneering spirit and the wonderful effort that was put in by an enormous number of men who, with the implementation of our early migration scheme to develop the Snowy Mountains scheme, came from all parts of the world. Ten lives have been lost in a period of seven years by the flooding of suburban roads in the city of Parramatta. I hope that one day the message will scream out from their lonely graves that this Government should make money available to ensure that this very closely populated urban area, which is less than two miles from the demographic centre of one of the world’s great citiesthe Toongabbie system is exactly two miles from Parramatta- is properly drained. It is to be hoped that one day this Government will realise that it has a responsibility in terms of humanity, if not in terms of modern progress, to see that the money is made available so that the Toongabbie Creek system is properly drained in accordance with the plan that was drawn up in 1974 by the Snowy Mountains Engineering Corporation. Perhaps that would be testimony to some spark of humanity in this Government.

The Opposition does not oppose this Bill; in fact it supports it because it has the great belief that the Snowy Mountains hydro-electric scheme is one of the high points in Australian history and is a tribute to Australia’s workmanship, expertise, and pioneering ability. We support the Bill but I hope that the Government will take note of the points that I have made.

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 Howard) read a third time.

page 3017

WHEAT MARKETING BILL 1979

Second Reading

Debate resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Mr HOWARD:
Treasurer · Bennelong · LP

-Mr Deputy Speaker, may I have your indulgence to suggest that the House has a general debate covering this Bill, the Wheat Levy Bill (No. 1 ) 1979, the Wheat Levy Bill (No. 2) 1979, the Wheat Industry Stabilization (Reimbursement of Borrowing Costs) Amendment Bill 1979, the Wheat Products Export Adjustment Amendment Bill 1979, the Wheat Tax Bill 1979 and the Wheat Research Amendment Bill 1979 as they are related measures. Separate questions will, of course, be put on each of the Bills at the conclusion of the debate.

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

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

Mr SCHOLES:
Corio

-Several years ago members of the present Opposition debated wheat Bills into the small hours of the morning.

The 20 members of the National Country Party in turn each spent 10 minutes in speaking to the wheat Bills until 4 o’clock that morning. It is significant that not one member of the National Country Party considers that it is worth coming into the House to support this legislation. The Opposition does not oppose the legislation. I would say that it represents yet another example of the double standards which the Government has introduced into its legislative program since its return to government in 1976.

Any member of the public- or any wheat grower for that matter- who cares to take the trouble to read the 1974 debates on the wheat stabilisation scheme, when the system of funding was changed to that which substantially is contained in this Bill, will see that this Bill further restricts access to Government funds for the wheat stabilisation fund than was the case in the 1974 Bills. Anyone who cares to read those debates and who sees what Ministers and members of the National Country Party and the Liberal Party in this House had to say about the changes that took place at that time would wonder how the same members, as Ministers, could negotiate this particular scheme, even though the member mainly concerned is not currently the Minister for Primary Industry. In fact, the scheme makes some changes to the previous arrangements, especially in the first payments area, where a formula is brought into the Act to determine the levels of first payments to growers, a level which will be fixed at an amount equivalent to 95 per cent of the estimated price and the average realised price for the previous year. This will bring about a situation where the first payments will move with the market and will be fairly directly associated with the current state of the market. In the past the first payments have remained static, on occasions over long periods. At times they have represented up to 90 per cent of the current market value of wheat, and at other times below 50 per cent of the current price of wheat. This will probably encourage more planting of wheat because, directly related to the first price, is the matter of what amounts farmers will decide to plant in any given season.

There are other factors involved in that, and I understand that forward estimates of availability of markets for wheat would indicate that that is something that would be welcomed at this stage. Because of the question of time, and because wheat apparently now occupies a much lower place in the Government’s priorities, I do not intend to take up much of the time of the House, mainly because my colleagues also wish to contribute to this debate, even if Government supporters do not wish to do so. There are some matters relating to the new scheme which have to be raised in the House and the New South Wales Government has some concern to which I should draw attention. Firstly, the various pricing arrangements would seem to indicate that there will be a higher domestic price for wheat, which will have effects in prices to consumers in Australia being higher than the current export price for wheat. This is something which is in contention between the Commonwealth and the States. The New South Wales Government is certainly of the opinion that there are some deficiencies in the Act in that area. Perhaps if a Minister enters into the debate he may care to inform the House exactly what the situation is.

These new schemes entrench the changes which were made at the time when Senator Wriedt was Minister for Agriculture, changes for which he was denigrated all over the country by present Ministers of the Cabinet who are presenting this Bill, which is less favourable to growers as far as funding is concerned than the Bill brought in by the then Labor Minister. As I have indicated, the Bill displays a complete double standard on the part of members of the present Government. It is not the first piece of legislation which has come into this House which maintains a system that the present Government criticised in every form and in every way at the time it was introduced. It is not possible to predict what the major costs and the likely movements of the wheat export prices will be five years ahead. But all the available indications are that this is a no-cost scheme to the Treasury and that it would at least make the Treasurer (Mr Howard ) smile. It is very likely that the growers ‘ own contributions will more than cover any drawings which may become necessary because of any deficiency which may exist in the return from the sale of wheat to meet the 95 per cent formula for first payments. The first payments aspect is the most important change in the Act, but there are a number of other changes, some of which will benefit growers, all of which will remove obligations from the Treasury and all of which are contrary to what the present Government said it would do when it was the Opposition.

In 1974 there was a considerable attack upon the then Minister for the delays in bringing in the scheme. On this particular occasion the scheme is at least a month late in being presented to this House. Apparently the problems that we had in 1974 have beset the Government in this particular set of negotiations. But when the same thing happens, it is apparently different, as far as the present Government is concerned. The Opposition does not oppose the Bills.

Mr HYDE:
Moore

-The honourable member for Corio (Mr Scholes) is uncharacteristically uncharitable. The measures are not the same as those that were proposed in 1974 and the then Opposition was not universally critical. These Bills institute the new five-year wheat agreements. Following the 1939-45 War the wheat stabilisation procedures were regarded as a basic wage for farmers and guaranteed them a minimum living wage. Since then there has been considerable questioning. In 1970 we found that we had to impose quotas in order to match the supply with the market that was available. Since that time there have been numerous calculations by different organisations indicating that wheat stabilisation was a poor to indifferent support for the wheat industry. The wheat stabilisation procedures have been under challenge in the Clark King case and now the Uebergang case in the High Court of Australia. The Industries Assistance Commission has provided a detailed report on the wheat industry. That report has given rise to much discussion amongst wheat growers. Page 19 of that report indicates that the stabilisation arrangements, as they existed, were not of enormous overall benefit to wheat growers. It states: . . wheat stabilization arrangements cost wheatgrowers between $3m and $4m per annum between 1 969-70 and 1975-76. Since then the domestic price has been adjusted to a level greater than export prices and the stabilization plan has again provided assistance to growers.

The wheat industry received virtually no assistance in effective rate terms over the period 1969-70 to 1975-76 although the rate ranged from about minus 1 1 per cent in 19 73-74 to plus 21 per cent in 1971-72 . . . These rates of assistance may be placed in perspective by comparing them with the rates for other industries. Over the same period the average effective rate of assistance for manufacturing industry is estimated at about 30 per cent.

The realisation that the scheme had not been as beneficial as some growers thought, led to it being questioned, naturally enough. The wheat industry is an efficient industry in that its protection rates are low and it contributes to the protection of other industries. Orderly marketing is a term that has come to describe centralised marketing, or what might perhaps even be called socialised marketing. At least, it is a system where the decision is taken at the centre. The way in which the term ‘orderly’ is used sometimes reminds me of some states that have never held an election in their history yet manage to use the word ‘democratic’. ‘Democratic’ is a nice word as long as it is not too precisely defined.

Two broad faults- there were many minor ones- were identified with the questioning of the marketing arrangements for the wheat industry. They both relate to rigidity. The price paid to growers over the period of the several wheat stabilisation agreements came to bear little relationship to the marginal market price for wheat. This had serious adverse effects in the early 1 950s, when the marginal market price for wheat was well above the growers’ price. Despite the exhortation of the then Prime Minister- Mr Menzies, as he was then- the growers did not produce any more wheat. This was natural enough because they were not paid sufficiently for them to devote their attention to wheat instead of wool, which was selling at high prices at the same time. The reverse happened in the late 1960s, when the growers’ price for wheat was well above the marginal sale price for the commodity. Not surprisingly more of it was produced than could be sold on the overseas markets and the industry was forced to institute quotas.

The arrangements before the House tonight largely overcome that problem. The growers’ price, the guaranteed minimum delivery price, is to be 95 per cent of the average of the current and previous two years deliveries. In other words, the price will be kept very close to the overseas market price except that there will be insurance against a very violent short term downturn. This proximity between the growers’ price and the export price for the marginal production should ensure that we do not have to institute quotas again to control the delivery of wheat, although the quota provision is left within the Act in case the worst comes to the worst.

The other drawback with the stabilisation and marketing arrangements that the industry had availed itself of from the Second World War until this present agreement was that the system was too rigid to permit the satisfaction of a sufficient variety of demand. It was pointed out by the IAC that there was insufficient capacity to cater for regional demand that might be satisfied at a considerably lower cost. That problem is overcome in the arrangements that are before the House in that the Wheat Board will have the capacity to enable growers to meet immediate local demand, particularly from stock feed millers, for wheat that is on site and more cheaply delivered.

It will also provide a more limited opportunity for a premium to be paid for a special variety of wheat or for a price to be negotiated for offgrade deliveries. The grower often finds himself with wheat that does not match the delivery into the bins of the fair quality or the various premium of off-grade varieties that the bulk handling system can handle. It is clearly in his interests and in the interests of the domestic buyer that it be possible to negotiate a price for this wheat. The wheat may well be under grade inasmuch as it is pinched in a drought year. Nonetheless it may have a very high protein content. There are people who can make very good use of that sort of wheat. I hope that the Wheat Board will readily issue permits under these circumstances.

It will still not be possible for the grower to produce varieties which are not registered at this stage. It will still not be possible for a stock feed wheat market to develop from the wetter districts or in the irrigation districts. It may well still be difficult to develop markets for wheats that have certain speciality characteristics. But at least the situation is a lot freer than it was. The IAC recommended that domestic prices be not administratively determined. We are not going that far but I submit to the House that we have gone a quite long way along that road. I commend the Bill.

Mr FitzPATRICK (Riverina) (10.2)-The Wheat Marketing Bill and the Bills being debated cognately provide for new marketing and pricing arrangements for the wheat industry for the next five seasons. It does this by reenacting the basic parts of the Wheat Marketing Act 1948 together with some far-reaching additions. For instance, the Australian Wheat Board still has the monopoly power which makes it the sole authority for the export marketing of wheat and wheaten products and the marketing of wheat domestically. The Government tries to make out that it supports the free enterprise system by inserting a clause which would appear to give the grower the right to deliver wheat to people other than the licensed receivers of the Board. If we read clause 19 we find that the Government is heading in the opposite direction, because the grower has to get the permission of the Board to sell, the money received has to be paid to the Board, and the wheat must not be sold at a price below that of similar wheat sold under similar circumstances. Further to that, clause 20 provides for a penalty of $1,000 to be imposed on any grower who does not carry out this procedure. In the case of a corporate body, the penalty is $2,000. I do not think anyone would be fooled by clause 1 9. As a matter of fact, I was very pleased to hear the honourable member for Moore (Mr Hyde) make a statement that it was a kind of socialised marketing. However, as the honourable member for Moore has said, setting the minimum price at 95 per cent of the average of the estimated pool return for the subject year and the two preceding years converted to a net basis seems to meet with the general approval of the growers.

Clause 26 (2) (a) sets out the home consumption price of $127.78 per tonne for the year commencing on 1 December 1979. The price for the next four years will be set in accordance with the formula contained in the Schedule, which of course has something to do with the costs and prices paid by the farmer and the export price movements, these movements being limited to 20 per cent in any one year. The Bill also states that the Board will apply a discretionary price to stock feed. There seems to be some confusion in regard to the reason for the 20 per cent differential. Previously there was only a 15 per cent differential in the ordinary price for wheat. There is also some confusion about the pricing of stock feed. I think the Minister for Primary Industry (Mr Nixon) should have explained this aspect more fully in his second reading speech.

The Bill provides for the Board to borrow money from the Rural Credits Department of the Reserve Bank of Australia to pay for the first advance to the growers. It also gives the Board power to borow money commercially if it is requested to do so by the Government. It states that this will be at no additional cost to the growers. Many of the growers in my electorate feel that this could be the thin edge of the wedge, because once the Board gets used to borrowing money outside the Reserve Bank at higher interest rates it would then be a very short step for the Government to say: ‘You carry the extra cost of borrowing this money’. That is something that the Wheat Board will have to keep its eye on.

Under the Bill the Board’s Rural Credits Department borrowings will be guaranteed by the Government but it is the Government’s intention to refinance any outstanding debt at the conclusion of the statutory period. Of course, this seems to be a very innocent provision. I think it is one that will give far-reaching protection to the Government. If we read on further we see that a wheat finance fund is to be set up. An amount of $80m will be transferred to this fund from the present stabilisation scheme and the growers will pay a levy to build this sum up to $ 100m. In addition to this the Board will have the power once again to borrow commercially to pay for any overlap in borrowings. I cannot see in the Bill whether this will be at an extra cost to the grower. -

Nevertheless, the Bill will be of benefit to the wheat industry. I believe that it should have been introduced before now. I point out to the House that I cannot understand why Government members continue to blame the New South Wales Government for the delay in the introduction of this Bill. The hold-up was really brought about during the negotiations between the Minister and the growers. The growers wanted the home consumption price of the wheat to be indexed. If honourable members on the Government side had examined the increase in costs to the wheat grower they must surely have known that the growers had every justification for asking that the horrie consumption price be indexed. Mr Deputy Speaker, you would be aware of why the Government was reluctant to grant the indexation of the home consumption price. The Government had already opposed full indexation of wages. If it favoured the wheat grower, of course the trade unionists would want to receive the same kind of treatment. I believe that the Minister and the speakers from the other side have gone to a lot of trouble to cover up this fact. I notice that at least the National Farmer of 23 April was very honest in this regard. An article, under the heading ‘New Wheat Plan’, stated:

The plan has been delayed because growers wanted an indexed home consumption price, but the Federal Government, which is opposing full indexation of wages, did not want to Be seen as favouring farmers over wage earners.

It is quite clear from that article that the real holdup was the argument about the indexation of the home consumption- wheat price. There is no doubt that there has been a massive increase in farmers’ costs. I refer here to the massive increases in fuel prices which have ignited a new bout of inflation which affects the price of all forms of inputs for the wheat farmer, as well as the farm worker and people living in country towns. The measures in the Wheat Marketing Bill will assist the wheat grower, but I believe we should stop making out that we have given the wheat grower some extraordinary assistance because it is not so. The assistance to the Australian wheat farmer is said to amount to $500 a year, but the tariff protection and other measures introduced by the Government in this period have amounted to many times that amount. The Australian wheat grower gets $500 a year but, by comparison, American wheat growers get $2,270 and Canadian wheat growers get $2, 143. On top of this, Australian wheat growers pay three or four times as much for their fuel.

I know that there are other honourable members who wish to speak, so I will complete my speech. Wheat growers ‘ returns have risen by 1 1 5 per cent in the last 10 years, but over the same period costs have risen by 152 per cent. This information is contained also in a report in the newspaper which I have just mentioned. I believe that the wheat growers have met the problems of the 70s only by growing more wheat. This has been achieved by expanding the area of the soil planted aVid using bigger machinery for both the cropping and the taking of the crop off again. The Bill does give the wheat grower some assistance but it does not justify the Government piling on extra costs in all directions. I think that before we talk about what we have done for the wheat grower we should do something about these extra costs.

Mr LUSHER:
Hume

– In my view, the Bills before the House represent a major advance for the wheat growing industry in Australia. They also represent an extraordinarily good result from the negotiations that took place between the Government and the industry. I think it is a credit to the Government and particularly to the right honourable member for New England (Mr Sinclair), as well as to the present Minister for Primary Industry (Mr/ Nixon), and the industry itself, largely through the Australian Wheatgrowers Federation, that the arrangements that have been negotiated and we are now debating in the form of these Bills before the House have been achieved. The result is one which is very much supported by the wheat growing industry. It is one under which the industry has received virtually all that it asked” for. There is no doubt whatsoever that the impact of this legislation will be of enormous benefit to the wheat growing industry in Australia. (

I speak in favour of the package of seven wheat Bills which are now before the House. I see them as a major step in improving the efficient and organised marketing system which Australian grain growers have fought to develop over the last several decades. In order to judge the true impact of the legislation that we are now debating, I think it is a prerequisite to understand the vital importance of the wheat industry to Australia. Australia has 185,891 wheat growing properties. It is of interest to note that roughly 10 per cent of the wheat grown in Australia is grown in my electorate of Hume. A 1 976-77 survey by the Bureau of Agricultural Economics shows the average investment in land, equipment and buildings on wheat properties is $2 1 7,000. That is a large investment. Each wheat operation represents as much capital investment as many medium sized factories. Without doubt, the wheat industry has a large scale impact on the Australian economy and on the country’s social fabric.

Last year’s record wheat crop topped 18 million tonnes. Domestic consumption needs take only 2 million tonnes. It is big business, not only in Australia but also on the world market. The International Wheat Council’s figures for 1976-77- the latest figures available- show Australia exporting 8.4 million tonnes. That is 13 per cent of all the wheat traded that year by the major exporting countries. It is not uncommon for Australia to sell wheat to more than 50 countries in a single year. Not only is our industry large, but also is it efficient. The BAE reports that in the 70s, in spite of increased costs and fluctuating market returns, profitability generally increased on Australia ‘s wheat properties.

The acreage under wheat is increasing also. Acreages have been steadily increasing during the last five years. In 1979-80, close to 1 1 million hectares were planted. This year, a 14V4 million tonne crop is expected. More wheat land is also being irrigated. More fertilizer is being applied. Growers are putting ever increasing pressures on government and research organisations for aggressive seed breeding and pest control so that yields can be further improved. Australia will have its first hybrid semi-dwarf white ready for government approval in the next few weeks. This particular wheat will be geared to the New South Wales prime dry land belt. This is an important step forward and proof that growers are taking all avenues open to boost their productivity. The gross value of wheat produced is about $2 billion. Certainly this is a crop that supports million-dollar activity in the service industries and million-dollar wages. The industry is obviously strong.

One of the key reasons why the Australian wheat industry has grown as it has is organised marketing. Since 1948, the Australian Wheat Board has been the sole marketer of wheat abroad and on the home front. On the export front there is no tripping over each other and no undercutting of price. Efficient, well organised promotion has cultivated a constant, credible image. It is this kind of selling organisation, coupled with a mature wheat-growing community, that projects dependability of supply and quantity. Both are critical in developing export markets. An industry does not get this strong reputation for stability unless it earns it. The Wheat Board has done its part. The Wheat

Growers Federation has done its part. So have the growers.

Australia’s wheat growers have known what their initial price will be and when they will get it, each year, for several years now. They know how the pricing system works and in the past they have had the stabilisation program which gives them an insurance against crashing prices. All of these points are signs of an organised marketing system. They give growers the knowledge and confidence they need to plan, to make decisions, and to make the long term investment needed in the industry. Wheat growing and marketing in Australia are sophisticated. They need to be. It takes much knowledge and skill to develop wheat markets.

This brings me to the Wheat Marketing Bill 1979 and the other six complementary Bills in this package before us. I believe these Bills are the next step needed in improving wheat marketing and pricing structures. When passed, they will deal with the wheat crop for the next five seasons. Under this legislative package, the Australian Wheat Board continues to be the sole authority for the export of wheat and flour and for domestic wheat sales. However, there are changes. The biggest change for growers will be the larger first payment- more cash in hand at delivery.

The Wheat Marketing Bill 1979, the main piece of legislation in the seven Bills, is designed to overcome the delayed pool payments and to improve cash flow to growers. The Australian Wheat Board will pay an initial payment equal to 95 per cent of the three-year average of the pool return for that season and the two previous seasons. This will be paid on delivery. Wheat growers can expect a guaranteed minimum of delivery price of at least $100 per tonne, less freight and Grain Elevator Board charges for the 1979-80 crop now coming off. The guaranteed minimum delivery price will be determined by the average export returns of the three previous years. The 1976-77 price was $92 a tonne. In 1977-78, the price was $103 a tonne. By following the trade closely and the price movement as recorded in the Australian Financial Review, the figure for 1978-79 will be a minimum of $130. Ninety-five per cent of the average of these three years is about $102.

The guaranteed minimum delivery price for each season will be announced before 1 December. The payment will not be allowed to jump or to drop more than 1 5 per cent in any one year. The Wheat Finance Fund is also new. It is being created to help make the initial high payment possible. Without this new wheat finance fund, the Wheat Board would have remained restricted as to how large an initial payment it could make. The Board’s only source of money previously was the Rural Credits Department of the Reserve Bank of Australia. That money must be paid back at the end of each 12 months borrowing period. What this boiled down to was that the Board could only pay out in initial payments, the amount it could guarantee in cash sales before the end of the year.

Under the new legislation, the Wheat Board will have two sources of funds, the Reserve Bank and, for the first time in legislation, the power to borrow commercially. This means the Board can borrow from the Reserve Bank all the money needed to pay the larger initial payments. When the statutory payback time comes, the Board can refinance this debt from the open market. The Wheat Finance Fund is being established to permit this borrowing. Some growers fear that, if the Wheat Board has the authority to borrow on the commercial market, low interest Reserve Bank money may be cut off. Even if this proves true, the farm community will be protected by legislation. If Reserve Bank funds are not available for the first 12 months, the Australian Wheat Board will be reimbursed for the difference between the cost of borrowing on the open market and the lower cost of Reserve Bank money.

The fund, in many ways, is a replacement for the old stabilisation assistance arrangement. The Industries Assistance Commission recently said that wheat stabilisation could not be justified on either efficiency or welfare grounds. As a result the stabilisation program will be legislated out of existence. This means growers will no longer have to pay a stabilisation levy. I think the new fund is a more fair and more efficient answer for growers than the old stabilisation program.

The finance fund will have a ceiling of $ 100m. The $80m currently held in the wheat prices stabilisation fund will be transferred to the new fund. Growers will also contribute. They will pay a $2.50 a tonne levy. The fund is a pool of stand-by money from which the Wheat Board can borrow to clear debts to the Reserve Bank. Any excess over $100m will be paid back to growers.

Also new in this wheat marketing package is this year’s set price for home consumption $127.28 a tonne. Each year, the domestic price will be set by a formula which will provide, over the long-term, a margin above the export price. This price, however, will not be allowed to fluctuate by more than 20 per cent from year to year. The Wheat Board will also be given powers under this legislative package to fix prices of wheat for stock feed and industrial uses that will closely follow export prices. A new element of flexibility is also being introduced into the delivery system. Growers can apply to the Wheat Board for a permit to sell or to deliver their wheat direct to a buyer who is not a licensed receiver of the Australian Wheat Board. In this situation, as in all selling of wheat to either domestic or export markets, the Board will set the price, the freight allowance, et cetera.

A great deal more can be said about this great industry which is obviously of enormous significance to Australia. However, because of the limited time available, I finish my remarks at this stage and indicate again that this Bill has my wholehearted support. It also has the wholehearted support of the wheat growing industry in Australia.

Mr KERIN:
Werriwa

-The Opposition does not oppose these Bills and, subject to some qualifications, believes that they go a further step in providing a rational economic marketing base to one of Australia’s greatest rural industries. This further five year plan differs in several aspects from the previous one but in many ways it is a logical follow on from the plan introduced by Senator Ken Wriedt in 1974. His plan was a major breakthrough in having a more rational, flexible and open approach to the wheat industry. The various plans from 1948 until 1974 provided for the Australian Government to contribute when export returns were lower than the guaranteed price level fixed for each of the years.

The 1 974 plan contained provisions based on different principles. A stabilisation price replaced the guaranteed price and it was adjusted to reflect the trends in world wheat prices over a period of years. Unlike the old guaranteed price in the previous stabilisation plan, which applied to a maximum export quantity of 200 million bushels, that is, nearly 5.5 million tonnes, each season the stabilisation price applied to all wheat exported in a season. However, there were limits to the amount that could be drawn from a stabilisation fund which was financed by growers or Government dependent on the relativity of export domestic price. I will not go into the previous formula but its parameters were related to export prices and embodied principles present in the present Bill. That is why I say that it gives the background to the Bill before us. Under the 1 974 plan the basic class of wheat to be marketed by the Australian Wheat Board was called Australian Standard White For the first time there was no reference to the old fair average quality classification. For each of the five years of the p’lan the Minister for Primary Industry fixed a price a tonne for wholesale sales in Australia by the Board with respect to ASW. This was done in consultation with the State Ministers taking into account not so much a formula but some basic principles. The home consumption price was the same for wheat whether used for human consumption, industrial use or for stockfeed.

The most important payment to wheat growers is the first advance. The level and timing of it and subsequent payments are of critical importance to their finances. To pay the first advance the AWB is empowered to borrow from the Rural Credits Department of the Reserve Bank of Australia and to operate the pooling system which operated on the various grades of wheat. The Government permitted, persuaded or stood over the AWB last year so that it could borrow from sources other than the Reserve Bank when it found that AWB payments were adding rapidly to the money supply during last harvest to the extent of 3 per cent of M3. Whereas the overdraft with the Reserve Bank was guaranteed by the Australian Government the new arrangement required the Australian Government to guarantee the repayment of borrowings and interest and to subsidise the difference in interest charges.

The Minister for Primary Industry (Mr Nixon) in his second reading speech said that the Industries Assistance Commission considered that the continuation of the stabilisation assistance arrangements for the wheat industry could not be justified on either efficiency or welfare grounds and. recommended its discontinuation. The Government apparently agrees with this and has decided that in the place of so-called stabilisation arrangements that growers should receive a substantial payment when their wheat is received by the Australian Wheat Board. This is a tremendous concession by a National Country Party Minister which could only be allowed without protest from the industry due to the working of the previous plan. It is wise for there to be a high price to be received by growers after delivery and it is also sensible and in the Australian Wheat Board’s interest for this to be so, so that interstate trading and private trading is minimised. I agree with the Minister’s view on the previous stabilisation arrangements. The terms of reference of the IAC inquiry into wheat stabilisation were:

Whether Commonwealth Government assistance should be provided to stabilise wheat returns for the seasons following the 1978-79 season.

The one factor that stands out above all others in destabilising farm income is the weather. The main factor that destabilises wheat returns is of course the export market. In this situation all that any Government can really provide by way of a stabilisation scheme is a buffering mechanism which irons out high and low prices. There is little sense in trying to stabilise wheat returns per se. Measures such as income averaging and income equalisation deposits have a far more beneficial effect for growers than measures applying to production and the IAC has pointed to this.

The IAC said in its draft report that past assistance to the wheat industry has been .closely involved with the stabilisation plans. However, in addition to stabilisation there have also been other forms of assistance of a more general nature which are available to all primary producers such as subsidies on inputs. Due to the inherent nature of agriculture production as.well as changes in the degree of Government intervention, the levels of assistance to the wheat industry have varied significantly over time. For example effective rates of protection for wheat farms were above 20 per cent during 1971-72 and as low as minus 1 1 per cent in 1973-74. Direct Commonwealth contributions to the stabilisation fund as well as consumer transfers have both been important sources of assistance to the wheat industry. Although the emphasis on the objectives of these stabilisation arrangements has changed over time, they were generally aimed at providing a more certain economic environment for wheat producer decision making.

In the draft report the IAC saw little value in -attempting to stabilise wheat returns but also stated:

  1. . removal of the assistance involved in the cushioning function may not improve the efficiency of resource use as it could have the effect of further disadvantaging one of Australia’s more efficient industries.

The draft report also included some important recommendations on wheat marketing which departed from long established arrangements. I will not go into all the recommendations of the IAC on the wheat industry but in summary they amounted to a drastic reduction in the level of assistance through budgetary sources, and consumer transfers of future price variations were similar to those of the past two decades. It was for this reason that the Bureau of Agricultural

Economics suggested a more efficient form of assistance to the industry in terms of funding by the changes to the first advance paymentmaking it in effect a minimum or floor price. The Government has accepted this. It has also accepted and rejected other recommendations of the IAC which I will not go into.

I anticipate that a couple of the speakers that the Government has managed to persuade to speak on this legislation will attack the New South Wales Government as the cause of delay in getting these Bills before the Parliament. It is not quite as simple as that. True, the States had virtual veto powers during the protracted negotiations but the New South Wales Government is fully entitled to put its view as to the factors it wanted to take into account, particularly those of the stockfeed industry, industry and domestic consumers. One must praise the open and flexible attitude of the Australian Wheatgrowers’ Federation through all the negotiations and the way that it did not seek to make political capital of the deliberations. The New South Wales Government rightly points to the AWB as a grower board and a monopoly and whilst agreeing to this believes that some constraints in principle need to be applied. It does not believe the community would accept the Australian Council of Trade Unions setting awards for rural workers but if the AWB is to set the domestic price of wheat for stockfeed and industrial use, the methods need to be seen to be fair and to have the force of law.

Debate interrupted.

page 3025

ADJOURNMENT

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

That the House do now adjourn.

Question resolved in the negative.

page 3025

WHEAT MARKETING BILL 1979

Second Reading

Debate resumed.

Mr KERIN:

– The New South Wales Government expressed its concern as early as the January Australian Agricultural Council meeting and debated the BAE formula. Correspondence flowed between the New South Wales Minister and other Ministers, and the Commonwealth changed its position at one stage in the discussions. Previously its position had been quite clear. It cannot be said that the New South

Wales Minister was not telling anyone of his Government’s position. Nor can it be held that the then Minister for Primary Industry, the right honourable member for New England (Mr Sinclair), or the Wheatgrowers Federation was being obstructive. On 13 June the honourable member for New England agreed to further discussions and the whole question was again debated by the Australian Agricultural Council meeting of late August. It was not until 15 October that the Commonwealth was able to supply the model Bills to the States and even so changes in drafting were still being made. The principle has been fairness in setting the domestic price for wheat. The New South Wales Government has wanted there to be a referral mechanism should there be any dispute as to the set price. New South Wales has the powers of the Prices Commission but would have preferred a federal panel. As I understand it, a satisfactory outcome has now resulted.

There have been three basic prices relating to the wheat industry. There has been a stabilisation price, a first advance price and a home consumption price with final returns to growers being eventually dependent on export returns. The new scheme embodies several changes to the pre-existing arrangements. The first advance payment, which was near constant or slowly rising and had varied from being up to 90 per cent of and down to 50 per cent of the final return over the past 20 years, will be discontinued and replaced by a guaranteed minimum delivery price equal to 95 per cent of the estimated average market return for wheat in the season in question and the two preceding seasons. If the market does not return that price, the deficit will be made up, firstly from the grower’s fund of $100m, made up from the $80m already in it, plus another $20m to be paid in by growers, or if this is exhausted from government revenues. Annual movement in the guaranteed minimum delivery price will be limited to 15 per cent so a ban has been effectively placed into the formula. The GMDP is a modified moving average closely related to actual market prices. It was this concept that was first included in the 1 974 Act relating to the guaranteed price. It is unlikely that this system will cost the Government anything in the five years ahead given that inflation is not likely to be suddenly cured and that grain shortages in the northern hemisphere are almost inevitable. The GMDP is to be supported because by guaranteeing a relatively high initial payment growers will be encouraged to plant more wheat. In the long run this is desirable given that

Australia is basically a low cost and internationally competitive producer.

The home consumption price will be administered and adjusted annually as in the past, ‘but wheat for stock feed and industrial use will be priced by the AWB at its discretion. This will mean in most instances export parity. The home consumption formula is designed to charge above export parity and thereby provide some support for the industry. The industry has mainly subsidised domestic consumers over the years and the formula, although slightly regressive, cannot be justifiably criticised.

From the permutations of the formula I have gone through- I will not go into the formula itself- it would appear that wheat growers will still be subsidising domestic consumers in the short term. Simply put, the formula adjusts the price in line with movements in both domestic costs and export prices subject to a constraint that the home consumption price, excluding the Tasmanian freight loading, does not change by more than 20 per cent from one year to the next. The formula was developed by the BAE in consultation with parties engaged in the negotiation of the plan. For 1979-80 the home consumption price works out to be $127.78, which is less than last year’s price but higher than in any other year.

Most of the debate on the plan has been with respect to the price to be fixed by the AWB for non-formula domestically consumed wheat. I have outlined the position of the New South Wales Government. Some of the thinking as to the effects of wheat prices on the prices of other grains has been a little muddled. I do not believe that when wheat prices are high the price of coarse grains will also rise, or that domestic consumers will be unfairly ripped off. The prices for coarse grains are set very much by export parity prices as we have no market power internationally in these commodities. Thus wheat prices in Australia would not affect this parity unless there were no grains for export, and this rarely happens. As far as a consumer rip-off is concerned I think there are good grounds for saying that grains can be rapidly substituted for wheat, particularly for stock feed.

Although domestic coarse grain prices move closely with world coarse grain prices some analyses in the BAE have suggested that the artificially determined home consumption price for wheat has also influenced domestic prices for barley, sorghum, maize and oats over the last 24 years. The removal of the HCP for wheat could change the price relativities of all grains on the domestic market. Estimates suggested that a 10 per cent decline in the home consumption price for wheat would decrease barley prices by some 3 per cent, sorghum prices by 4 per cent, maize prices by 9 per cent and oat prices by 6 per cent. Feed grains consumption, both in total and individually, could also change significantly depending on the degree of technical substitution. Time does not allow me to explore fully the relationship between wheat and coarse grains in terms of domestic consumption, the regime of export prices and the domestic price, but suffice it to say that it is my view that the more flexibility the better and that the concessions in the Bills to trading between growers and users go some way to meeting my objections. Having been a poultry farmer, I can understand the view of consumers of stock feed in Australia and the need for some tribunal if disputes arise as to the price set by the AWB for stockfeed wheat.

The Industries Assistance Commission recommended an open market for domestic trading in stockfeed and the BAE agreed with this principle. I believe we must move to this system and hope that extensions of trading in the Bills will provide a helpful experience for change in the future. We also have to take into account the current court proceedings regarding section 92 of the Constitution. A strict interpretation of section 92 will almost certainly ensure the continuation of interstate trading. Sole trader provisions as presently operated by the Australian Wheat Board provide a more certain environment for both producers and consumers of wheat. However, sole trading eliminates competition and could hamper the adoption of technological and marketing innovations with potential to improve marketing efficiency. Free trade in wheat on the domestic market could probably be advantageous to growers if the following conditions were met: Firstly, the Australian Wheat Board continued to offer to purchase all wheat under, at least, the current pool arrangements; secondly, the prices offered by the Australian Wheat Board and private traders were widely disseminatedpublication of market prices, by grade and region of sales, by private traders add to greater marketing information and consequently price efficiency; and thirdly, provision were made to ensure adequate insect and varietal control by all traders of wheat. If the above conditions were satisfied each grower would have the option of selling wheat in the manner and at a price most advantageous to himself.

The role of the Australian Wheat Board as a sole trader in marketing wheat destined for use in feeding livestock in Australia is questionable, particularly now that a rninimum delivery price system is to be introduced. In years when production levels are high, enforcing delivery of feed wheat to the bulk handling system is costly and inefficient. Even the monitoring of the prices at which all sales are made is of doubtful value to the industry. There is little hard evidence to support the suggestion that private trading would result in prices being forced down to the level of the weakest seller. The GMDP will provide a general floor to the market. Each seller would retain the ability to sell to the Australian Wheat Board or to a number of traders and he could compare prices. However, there is a need for added sophistication in the domestic grains marketing system and for improvements in the dissemination of market information.

It is questionable whether the feeding of grain to livestock has reached its optimal level in Australia. In periods when grain prices are stable and meat prices are rising, in particular, it is doubtful whether the existing grain supplying system optimally allocates grain between the domestic and export markets. When meat prices are very high, it would be more efficient for Australia to export more grain in the form of meat. The development of a sophisticated private domestic grain market would facilitate the determination of an optimal national balance between grain exporting and livestock feeding. If a large private trade in grain on the domestic market is to be allowed to develop, certain benchmarks will be useful in encouraging it to develop in a balanced and efficient manner. The GMDP being a high proportion of expected returns would be one such benchmark. However, this price would be effective only at the time of delivery. After normal Board delivery time, a firmly quoted Australian Wheat Board price for stock feed sales related to the opportunity cost of the wheat prices obtainable on export markets would be an important lynchpin of the pricing system. State departments responsible for agriculture would also have an important role in collecting, analysing and disseminating market price reports for the grain market.

A mechanism for determining the value of private grain storage would also be useful in ensuring an efficient pricing structure in the domestic market for all grains. Existing spot markets for feed grains have been notoriously thin and unreliable as barometers of coarse grain prices. In Canada, the Winnipeg Grain Exchange offers facilities for trading grain for the domestic market by means of both spot and futures markets. If private trading in feed wheat were permitted in

Australia, the possibility of establishing comparable facilities here would have to be investigated. This would provide a central focus for the efficient pricing of all grain traded on the local market.

There are many other aspects of the wheat industry on which one could speak and there are still reforms that could be enacted, as I have pointed out. I would have liked to talk about handling, storage and transport, insect infestation, pooling, segregation, quality control and finance. I am always concerned that organisations, given the role of marketing our primary commodities do not become over-bureaucratised or unjustifiably secretive. That is why I plug for market forces to operate, particularly in respect of the internal trading of grains in this country.

Mr O’KEEFE:
Paterson

-Support is given to the seven wheat Bills which are being taken together in this cognate debate. The wheat industry is one of Australia’s biggest industries, and one of its largest export earners. Our large markets include China, Japan, Indonesia, Egypt and Russia, and there are many other smaller markets. Therefore, it is important that we update our legislation in relation to this wonderful industry. The Wheat Marketing Bill 1979 provides for the new marketing and pricing arrangements to apply to the wheat industry for five seasons, commencing on 1 October this year. It succeeds the Wheat Industry Stabilization Act and associated legislation. The Bill provides for the Australian Wheat Board to continue as the sole authority for the export marketing of wheat, flour and certain wheaten products and for the domestic marketing of our wheat. Provision is made for wheat growers to have the option of delivering wheat from farms direct to buyers within the authority of the Board. This is a new move and it will be welcomed by wheat growers throughout Australia. The Wheat Board will issue permits to enable growers to deliver their wheat to other than a licensed receiver of the Board.

The Commonwealth will guarantee growers a minimum price on their wheat based on 95 per cent of the average of the net pool return for the subject year and the two preceding years converted to a net basis. Movements in the guaranteed minimum price from one season to the next are to be subject to a limit of 1 5 per cent. The guaranteed minimum price will be paid by the Wheat Board to farmers on delivery of their wheat. The home consumption price for wheat has been set at $127.78 per tonne for the first year of the new arrangements and the price for the succeeding four years is to be determined according to the formula contained in the schedule to the Bill. The formula takes into account movements in prices paid by farmers and export prices, and over a period it will provide for a margin above export parity subject to movements in the price, being limited to 20 per cent from year to year. The home consumption prices for industrial and stock feed wheats are to be set from time to time by the Board in the light of its commercial judgments. Stock feed wheats form a valuable part of the wheat trade in this country and help the farming community in the way of returns. Complementary State legislation is necessary, and the States of Australia are proceeding to enact such legislation complementary to the Bills that the House is debating tonight.

New South Wales farmers have begun harvesting the second largest crop on record. It is anticipated that it will be worth almost $950m on world markets. The New South Wales Department of Agriculture has forecast a 6.33 million tonne crop, and Australian standard white wheat is quoted at $150 a tonne on the international wheat market. My electorate of Paterson takes in one of the biggest wheat growing areas in this country, namely, the Liverpool Plains area. Gunnedah is one of the biggest wheat receiving centres in Australia. I am sad to say that in the past 10 days very severe storm damage has occurred in the north-west of New South Wales and possibly there will be quite a quantity of offgrade wheat. It was estimated that there would be 700,000 tonnes of premium wheat this year but, with the rain and hail damage that has taken place, that figure could be down to as low as 200,000 tonnes. This represents a great loss to the farming community. Many silos in that area have been open for the intake of wheat. The Sydney and Newcastle terminals are now working overtime and a total of 338,000 tonnes of wheat were shipped from Sydney and Newcastle in October. This figure represents one of the best totals for many years.

My colleague the honourable member for Hume (Mr Lusher) mentioned the first payment on this season’s wheat crop. Of course, it is very important to the farmers to get a big first payment because it gives them a cash flow. The honourable member mentioned a figure of $100 per tonne. My information is that it could be anything from $95 to $100 per tonne. Although this appears to be an excellent figure, it must be remembered that wheat farmers have very high costs these days. Fuel has been mentioned. Honourable members know that there have been rises in the cost of fuel. This is one of the largest expenses that wheat farmers have to put up with. Freight is another cost. In my area, it is something in the order of $ 1 5 per tonnne. There is also the cost of spare parts, insurance and depreciation on the huge machinery which is necessary to harvest these crops. Farmers require cash to carry on, so it is important that the first payment be as high as possible. It is felt that if the first payment is of the order of the figures mentioned, farmers throughout Australia will be very happy indeed.

Mr Deputy Speaker, it is a pleasure to take part in this debate. I do not want to hold up the proceedings of the House because most of the features of this legislation have been covered by previous speakers. Full support is given to these Bills.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3028

WHEAT LEVY BILL (No. 1) 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3028

WHEAT LEVY BILL (No. 2) 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3029

WHEAT INDUSTRY STABILIZATION (REIMBURSEMENT OF BORROWING COSTS) AMENDMENT BILL 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3029

WHEAT PRODUCTS EXPORT ADJUSTMENT AMENDMENT BILL 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3029

WHEAT TAX BILL 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3029

WHEAT RESEARCH AMENDMENT BILL 1979

Second Reading

Consideration resumed from 8 November, on motion by Mr Nixon:

That the Bill be now read a second time.

Question resolved in the affirmative.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Third Reading

Leave granted for third reading to be moved forthwith.

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

page 3029

ADJOURNMENT

Superannuation-Death of 23-month-old Boy

Motion (by Mr Groom) proposed:

That the House do now adjourn.

Mr Leo McLeay:
GRAYNDLER, NEW SOUTH WALES · ALP

– This evening, I wish to raise the question of some Commonwealth public servants and superannuation rights. Ten years ago in his book Equality and Authority Professor Sol Encel was able to say:

Two-thirds of the workforce in the ACT are employed by the Government, giving them a remarkable degree of security and affluence.

Whilst it can be argued that the policies of this Government have gone a long way towards undermining the security and affluence of workers generally, tonight I point out the degree to which this Government has undermined the security and affluence of its own employees. I am not suggesting that Commonwealth employees should be more secure or affluent than other workers, just that they should not be less so. I will not belabour the point which was so well made recently in this House by the honourable member for Melbourne Ports (Mr Holding), who pointed out that this Government values the life or limb of its employees at somewhat less than the value of that of private enterprise or State government employees. The Compensation (Commonwealth Government Employees) Amendment Bill 1979 set that out clearly enough, and honourable members will recall the matters that were raised when the Bill was being debated in this House. I should like to emphasise that it is Fourth Division public servants who are exposed to the work conditions most likely to lead to injuries on the job. The compensation Bill will affect more Fourth Division officers than any others.

I will not spend the time of the House on the threat to the security of employment entailed in the management-instigated retirement proposals of the Commonwealth Employees (Redeployment and Retirement) Bill, which once again threatens the affluence and security of tenure of Commonwealth public servants. Instead, I will elaborate on a point I raised recently in this House- the threat to affluence, if that is the word, of Commonwealth Government superannuitants. This threat to security once again affects Fourth Division employees, but it can affect also other officers who joined the Service late in life or who for one reason or another retire early from the Service. As a former Commonwealth public servant, I can speak with some force on this matter. It can affect also the surviving spouse of a superannuitant whose benefit falls to five eighths of entitlement upon the death of a spouse. I am talking about those whose entitlement to superannuation is so small that they are eligible for pension fringe benefits. Recently, the Minister for Health (Mr Hunt) conservatively set the value of fringe benefits at about $10 a week. He could have doubled that amount and still been conservative. Cost of living adjustment to superannuation payments was a long overdue and laudable step, but its aim was to improve the position of superannuitants, not to worsen it. Instead, we find the iniquitous situation where , a rise of less than $ 1 a week in cost of living adjustments can carry a person over the fringe benefit threshhold, resulting in that person being $10 a week to $20 a week worse off.

The point I make is that a person has not opportunity under Commonwealth superannuation arrangements to refuse all or part of the adjustments to his pension and retain his fringe benefits. That is not the case with New South Wales Government superannuitants and, as I understand it, the superannuitants of some Commonwealth authorities and other State government authorities. They can refuse all or part of any cost of living adjustments and thus ensure that they retain the fringe benefits they have been receiving. I have in my electorate many State and Commonwealth public servants, some of whom are retired. I ask the Government: What type of security can a retired public servant feel and what sort of justice is operating when, because he was a Commonwealth public servant rather than a State or authority servant, he is falling further behind in his standard of living, which even under the new rates that recently came into force can hardly be called affluent? His neighbour, who was an employee of the New South Wales Public Service or of an authority in New South Wales or of some of the other State authorities or public services, can maintain his standard of living.

It is time to make Commonwealth Government superannuation schemes more equitable and more compatible with the superannuation schemes operating in some of the States so that our employees, who are employees of the Government and this Parliament, receive their just entitlements and do not find when cost of living adjustments are made, that they fall further and further behind. They do not have a choice not to contribute to the Commonwealth superannuation scheme if they are permanent officers. They pay into a scheme all their lives and they pay taxes all their lives, but upon retirement they are doubly hit. I think that is unfair. I hope that this House will think it is unfair. I hope that the Government will take this matter under notice so that our employees can be given the same superannuation rights as those given to people employed by the States, and in fact to people employed by private enterprise, who are able to take lump sums instead of weekly payments.

Mr MARTYR:
Swan

– I wish to speak tonight about the death of a 23-months old boy whose name was Christopher Derkacz. He was admitted to the Princess Margaret Hospital, Perth, at 9.00 p.m. on 21 January 1979 with respiratory trouble and died there on 22 January at 8.5 a.m. A coroner’s hearing was requested by Christopher’s foster mother, Mrs June Stresnik. She gave evidence, substantially along the lines of the letter she wrote to the Princess Margaret Hospital, making the allegation that they had denied Christopher full medical attention for croup and other associated symptoms, as a result of which denial he died. The allegation is that the attention was denied because the child was suffering from Down’s syndrome and that she was told during the course of an interview with the medical director of the Princess Margaret Hospital that it was best that the boy had been given no treatment, and that he was a problem and a charge on the community.

Mrs Stresnik also alleged that Dr Godfrey, the director of the hospital, had admitted to her that the doctor in attendance had made an error in judgment, that different treatment might have saved Christopher and that the doctor might have acted differently had he seen how much she loved Christopher. She strongly denied that the child was an epileptic, though he was so described on his PMH record card. A registered nurse from the Princess Margaret Hospital also gave evidence on the first days. She apparently made a number of admissions, including that she knew of another Down’s syndrome child being refused admission to the Intensive Care Unit at Princess Margaret because of its handicap. This was crucial to later events.

Mr Wickins, the coroner, realised during her evidence that the nurse was placing herself in an incriminating position. He asked for her counsel to advise her, only to learn that she was not represented by counsel. The coroner stopped the inquest at that point, advised the sister not to sign her evidence, and recommended that she get legal advice and be represented by counsel. He pointed out his duty to protect witnesses. The medical director of the Princess Margaret did not deny the fact that the boy’s hospital record card was marked ‘Down’s Syndrome- Social’ and Down’s Syndrome- Social Problem’, but he rejected any suggestion that the hospital policy was to treat Down’s syndrome patients differently from any other patients. He thought the terms ‘social’ and ‘social problem’ might mean that, with children such as this in foster care, the hospital’s social work department and the Community Welfare Department could become involved. In any case, his experience was that handicapped children in foster care often caused problems and fostering could break down.

I am running out of time, so I will go to the main points of the coroner’s findings. He was unable to give a proper finding relating to the full circumstances of the boy’s death and he therefore made an open finding. He found little room for criticism of the early treatment of the boy, but found evidence that Christopher’s progress, treatment or the medical attention he required or received, was not recorded. He said that the hospital records contained an alarming -

Mr DEPUTY SPEAKER (Mr MillarOrder! It being 1 1 o’clock, the debate is interrupted. The House stands adjourned until 10.30 a.m. tomorrow.

House adjourned at 11 p.m.

page 3032

ANSWERS TO QUESTIONS

The following answers to questions were circulated:

Defence Housing (Question No. 4524)

Mr Uren:

asked the Minister for Defence, upon notice, on 29 August 1979:

  1. How many (a) flats, (b) houses and (c) other dwellings were leased or obtained (i) from State and Territory public housing authorities and (ii) on the private rental market by (A) the Navy, (B) the Army, (C) the Air Force and (O) other defence establishments as at 30 June 1974 and at the end of each financial year up to 30 June 1979.
  2. How many of these dwellings had been vacant for periods longer than 1 month as at 30 June in each year from 1974.
  3. 3 ) What was the average period of vacancy by ( a) service and (b) State and Territory.
  4. What was the cost to his Department, by State and by public housing authority, of his Department’s leasing program during the last 4 financial years.
Mr Killen:
Minister for Defence · MORETON, QUEENSLAND · LP

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

  1. 1 ) Details of dwellings leased or obtained from State and Territory public housing authorities as at 30 June each year from 1974 to 1979 are shown in Table A with the exception of dwellings in the Australian Capital Territory. Details of dwellings leased from the Department of the Capital Territory during the period in question are not complete, however that department has provided the following data:
  1. This Department does not maintain records of dwellings vacant for 1 month but does maintain records of dwellings vacant for 2 months or longer. Details of these dwellings also are shown at Table A.
  2. See Table A. The main reasons for such vacancies were that the dwellings were under, or awaiting, repairs and maintenance or modernisation, awaiting occupation by the incoming Serviceman tenant, or considered unsuitable for further occupation by Servicemen and held vacant pending return to State Housing Commissions.
  3. Details of the cost of leasing dwellings for Servicemen over the last four financial years are shown at Table B.

Energy Usage (Question No. 4530)

Mr Barry Jones:
LALOR, VICTORIA · ALP

asked the Minister for National Development, upon notice, on 29 August 1979:

Is he able to state what is the total annual per capita energy usage in (a) the United States of America, (b) the United Kingdom, (c) Australia, (d) Sweden, (e) France and

  1. Canada.
Mr Newman:
LP

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

The annual per capita energy usage figures for the following countries for 1 977 are based on energy consumption statistics provided by the B.P. statistical review of the world oil industry and are given in tonnes of oil equivalent.

United States-8. 54.

United Kingdom-3.79.

Australia-4.90.

Sweden-5.76.

France- 3.45.

Canada-7.53.

Airport Security (Question No. 4588)

Mr Morris:

asked the Minister for Administrative Services, upon notice, on 1 1 September 1979:

  1. 1 ) Further to his answer to question No. 3899 (Hansard, 29 and 30 May 1979, page 2627) has his attention been drawn to the reply from the Minister for Transport to question No. 3893 relating to airport security. (Hansard, 4 June 1979, page 2880).
  2. Is he now able to say (a) whether the number of Commonwealth Police in service as at (i) 31 March 1979 and (ii) 30 April 1979 was adequate to meet internationally accepted standards of airport security, and (b) what was the (i) establishment and (ii) number of Commonwealth Police in service at each Commonwealth airport for duties associated with airport security as at 31 March 1979 and 30 April 1979.
Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

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

  1. 1 ) Yes, I have read the answer given by the Minister for Transport to your question of 9 May 1979 (Hansard, 4 June 1979, page 2880).
  2. The International Standards and Recommended Practices concerning Security, as agreed by the International Civil Aviation Organisation, deal with broad airport security measures and do not specify the. manpower required at a particular location, at any given time.

The assessment of the number of police required to provide for airport security is a matter that is under continuous review. The review is based on an assessment of the intelligence available to the responsible authorities at the time. The manpower provided at a location is adjusted according to the intelligence assessment.

Again, as in my answer to your question of 9 May 1 979, it is not in the national interest to reveal the details concerning Police establishments that you seek.

Petrol Prices (Question No. 4592)

Mr Humphreys:

asked the Minister for National Development, upon notice, on 1 1 September 1979:

Is he able to say what was the price of a litre of standard petrol in (a) The United States of America, (b) Japan, (c) West Germany, (d) France, (e) Great Britain, (f) Italy, (g) Australia as at 2 1 August 1979.

Mr Newman:
LP

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

Average retail prices for standard grade petrol for each of the countries mentioned, for August, in Australian cents per litre, were:

United States, for full service leaded petrol- 27.8.

Japan, prices for standard grade are not available; however the average price for premium grade was-53.2.

WestGermany-50.5.

France-56.9.

Great Britain-52.7.

Italy-56.4.

Australia-28.5.

Corowa Airport (Question No. 4613)

Mr Morris:

asked the Minister for Transport, upon notice, on 13 September 1 979:

  1. How many flights have been diverted from Albury Airport to Corowa Airport in the year ended 31 August 1979?
  2. What were the reasons for each diversion?
  3. What type of aircraft was diverted on each occasion?
  4. When did Corowa Airport become part of the aerodrome local ownership scheme?
  5. What sum has been contributed by ratepayers of Corowa Shire towards the maintenance of Corowa Airport since it became part of the local ownership scheme?
  6. What expenditure has been incurred by the Federal Government for Corowa Airport under the scheme since its establishment and in each of the last 5 financial years?
  7. What is the present standard of facilities at Corowa Airport?
Mr Nixon:
Minister for Primary Industry · GIPPSLAND, VICTORIA · NCP/NP

-The answer to the honourable member’s question is as follows: ( 1), (2) and (3) My Department does not maintain statistics of flight diversions at these aerodromes.

  1. As the aerodrome at Corowa is owned by the local authorities my Department does not have access to the relevant figures which would indicate the degree of ratepayers money included in the amount expended on the aerodrome.
  2. My Department, under the Aerodrome Local Ownership Plan, pays fifty percent of the cost of all approved maintenance and development works carried out on the aerodrome. Grants, under the Aerodrome Local Ownership Plan totalling $76,789, have been paid to the local authorities by the Federal Government since 1964. In the past five years expenditure has been as follows:

1974-75-$7,740; 1975-76-$7,429; 1976-77- $7,141; 1977-78- $7,701; 1978-79- $8,145.

  1. The standard of facilities at Corowa is considered to be adequate as the runways are capable of taking limited F27 traffic and the terminal building although consisting of a wartime corrugated iron building is capable of handling the likely future traffic There is also a non directional beacon at Corowa.

Aerodrome Local Ownerships Scheme (Question No. 4614)

Mr Morris:

asked the Minister for Transport, upon notice, on 13 September 1979:

  1. What is the name and location of each airport now under the aerodrome local ownership scheme?
  2. What sum is to be allocated by the Commonwealth to each airport under the scheme during 1 979-80?
  3. What sum is to be contributed by each local authority during 1979-80?
Mr Nixon:
NCP/NP

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

  1. My Department does not keep figures of amounts expended on aerodromes by local authorities. Under the ALOP the aerodrome is owned by the local authority and my Department pays fifty per cent of the cost of approved maintenance and development works carried out at ALOP aerodromes.

Excise Duties on Petroleum Products (Question No. 4679)

Mr Morris:

asked the Treasurer, upon notice, on 20 September 1 979:

What revenue was collected by the Australian Government in each State and Territory and in total in each financial year since 1964-65 from (a) excise duty on petroleum products and (b) the crude oil levy (since its introduction).

Mr Howard:
LP

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

The following tables contain details of:

gross excise duty on petroleum products collected by the Australian Government in each State and Territory and in total for the financial years 1964-65 to 1978-79.

gross excise duty on crude petroleum and liquid petroleum gas collected by the Australian Government for the financial years 1 975-76 to 1 978-79. This excise duty, known as the ‘crude oil levy’ was introduced on 19August 1975.

It should be noted that the values shown are the gross and not the net excise duty collected as details are not available of the repayments made to Australian Government Departments, most Commonwealth Authorities and all Diplomatic Missions as a result of their eligibility for duty free petroleum products.

Uranium Advisory Council (Question No. 4683)

Mr Les Johnson:
HUGHES, NEW SOUTH WALES · ALP

asked the Minister for Trade and Resources, upon notice, on 19 September 1979:

  1. 1 ) Were the Government reports on (a) radiation levels at Narbalek and (b) changes in Government policies relating to foreign investment in uranium projects announced in June relating to the Yeelirrie project in Western Australia referred to the Uranium Advisory Council; if not, why not.
  2. What action is proposed to ensure that the Uranium Advisory Council is placed in a position to advise the Government before decisions are made.
Mr Anthony:
NCP/NP

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

  1. 1 ) (a) A report on radiation levels at Narbalek has been sent to the Uranium Advisory Council for its information.

    1. No. The Foreign Investment Review Board has the responsibility for advising the Government on foreign investment matters generally, as well as examining and advising on individual foreign investment proposals which come within the ambit of the Goverment ‘s foreign investment policy.

See answer to Question No. 4684 (Hansard, 17 October 1979, pages 2 162-2 163).

Polling Booth Closing Time (Question No. 4695)

Mr Jull:
BOWMAN, QUEENSLAND

asked the Minister for Administrative Services, upon notice, on 19 September 1979:

Following the move by some States to close polling booths at 6 p.m. for State and local government elections, has the Commonwealth considered an earlier closing time for Federal elections; if not, what is the justification for maintaining an 8 p.m. closing time for Federal elections.

Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

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

The polling hours in State elections in South Australia, Western Australia and Tasmania are 8 a.m. to 8 p.m., as they are in Federal elections.

The polls close at 6 p.m. in the other three States. The earlier closing time was introduced in Queensland in 1 9 1 5, in New South Wales in 1975 and in Victoria in 1979. There is insufficient evidence available to determine whether or to what extent the introduction of shorter polling hours has inconvenienced the voters in these States.

The Australian Electoral Office has acquired some strictly limited data, however, on the hours at which electors record their votes in Federal elections. A survey of the numbers of ballot papers requested at two-hourly intervals was taken in selected polling places in thirty-one Divisions on polling day, 10 December 1977.

The sample of Divisions was not random, nor was it particularly representative of the distribution of Divisions between the States or between inner metropolitan, outer metropolitan and rural areas. Analysis suggests, however, that there is no reason to believe that the results themselves were not representative.

The basic finding of that survey was that approximately twelve percent of those who voted did so between 6 p.m. and 8 p.m. (seventeen percent of the time the polls are open). This, of course, says nothing about the ability of those electors voting after 6 p.m. to attend the polls earlier, only that eighty-eight percent of the electorate managed to do so in 1977.

The Government is monitoring the changes in polling hours in the States and the effect that such changes may have on the ability of voters to attend the polls.

Aboriginal Affairs Grants (Question No. 4733)

Dr Everingham:

asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 25 September 1 979:

  1. 1) Did a finance and planning officer of the Aboriginal Lands Trust, Mr George Kolsky, resign in September 1979 charging the Department of Aboriginal Affairs with wasteful funding by appointing trustees, usually accountants, for nonincorporated Aboriginal bodies (a) without a trust deed and (b) with no authority to see that the conditions of the grant are met and thereby rendering them liable for actions beyond their control.
  2. Did Mr Kolsky also describe Bourke and Broken Hill regional funding conferences as irrevalent to problems of Aborigines, providing no contact with them to determine their needs.
  3. Did Mr Kolsky allege misspending because public servants go on a splurge to balance books each 3 months to ensure continued funding.
  4. If the position is as stated, what steps have been taken to revise the funding, monitoring and accounting methods concerned.
Mr Viner:
LP

-The Minister for Aboriginal Affairs has provided the following answer to the honourable member’s question: ( 1 ), (2) and (3)1 have seen press reports to this effect.

  1. The position is not as stated. Where Aboriginal groups have not completed incorporation procedures, grants are sometimes made through trustees, but I have no evidence that this procedure is ‘wasteful ‘. Consideration is being given to measures to make compliance with the conditions of all grams (not only those paid through trustees) legally enforceable. The Department ‘s local programming conferences provide useful opportunities for Aboriginals to define their own needs and priorities. Officers do not ‘go on a splurge to balance books each 3 months to ensure continued funding. ‘

Commonwealth Land Holdings (Question No. 4740)

Mr Neil:
ST GEORGE, NEW SOUTH WALES

asked the Minister for Administrative Services, upon notice, on 26 September 1979:

  1. 1 ) What land is held by the Commonwealth as at 25 September 1 979 and not being used for any specific purpose.
  2. What is the (a) location and (b) value of each parcel of land
  3. Which of the parcels are (a) vacant, (b) developed and (c) available for disposal.
  4. What are the reasons for non-disposal of all the relevant parcels.
  5. Is there a vacant parcel of approximately 56 acres of land at Malabar in Sydney.
  6. If so, what is the actual area and value of this parcel.
  7. ) Is it available for disposal; if not, why not.
  8. Is there a vacant parcel of land near the Concord Repatriation Hospital.
  9. If so, what is the actual area and value of this parcel.
  10. 10) Is it available for disposal; if not, why not
Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

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

  1. 1 ) to (4) Staff resources do not permit the compilation of the details requested from information held on a property by property basis.
  2. Yes.
  3. and (7) 25.662 1 hectares. Negotiations are proceeding for the transfer of the land to the State of New South Wales and it would not be appropriate at this time for me to disclose the valuation of the land.
  4. No.
  5. and ( 10) See reply to (8) above.

Mr Harry M. Miller (Question No. 4751)

Mr Armitage:
CHIFLEY, NEW SOUTH WALES

asked the Minister for Administrative Services, upon notice, on 26 September 1979:

Further to his answer to my question No. 3366 (Hansard, 1 1 September 1979, page 967) relating to funds provided to Mr Harry M. Miller, what are the details of the (a) $150,688 provided for staff salaries, including the names and the capacity in which each of the individuals was employed and the salary provided to each of them, (b) telephone accounts totalling $65,775 which were incurred and (c) other facilities totalling $80, 175.

Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

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

  1. Details of the names, capacity, salary scale under which employed and the period of employment of each of the individuals are:

The salary scales shown above are those which applied at the time ofthe establishment of the Silver Jubilee Commemorative Organisation. These scales were varied by subsequent National Wage Case decisions.

  1. Expenditure of $32,885 was incurred in respect of special dedicated telephone services provided at:

The balance of the expenditure of $32,890 was for switchboard and other telephone services provided to the organisations.

  1. In answer to question No. 3366 it was stated that the total expenditure on services and facilities made available to Mr Miller was $585,580. An error was made in the compilation ofthe figures in that the amount of $80,175 shown for other facilities was overstated by $8,000. The total expenditure should consequently have been shown as $577,850. Details ofthe revised expenditure of $72,175 on other facilities are:

Ownership of Natural Resources (Question No. 4758)

Mr Jacobi:
HAWKER, SOUTH AUSTRALIA

asked the Treasurer, upon notice, on 26 September 1979:

  1. 1 ) Is it a fact that there is an urgent need to raise risk capital in Australia to minimise the escalation of foreign ownership of natural resources.
  2. Is it also a fact that internationally, areas for investment by large trans-national corporations are drying up.
  3. Will Australia’s natural resources be a source of strength and leverage, and give this country freedom to dictate the amount of investment and the rate of exploitation of its resources.
  4. What inducement is the Government prepared to offer, in particular to life offices and superannuation funds, for risk investment.
  5. Will he review the 30/20 rule and permit a proportion of the 20 per cent to be invested in our natural resources to help in the fight against overseas ownership.
Mr Howard:
LP

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

  1. The ability and willingness of the Austraiian capital market and Australian companies to provide risk capital to take up equity in new natural resource development projects will influence the levels of Australian and foreign ownership in these projects. In its administration of the foreign investment guidelines, the Government is concerned to ensure that Australians have full opportunity to participate in resource development projects, that worthwhile projects are not held up if Australian equity capital is not initially available, but that appropriate arrangements are made to phase in Australian equity as soon as it is commercially feasible to do so.
  2. No.
  3. 3 ) Australia ‘s endowment of natural resources places it in a favourable position vis-a-vis many other countries. However, the Government recognises that this endowment is only one of the factors determining the level of investment in Australia. Accordingly, it has steadily pursued a range of economic policies designed to create an overall climate conducive to new investment.
  4. The Government does not believe that it would be appropriate, as a matter of general principle, to offer life offices or superannuation funds some ‘inducement’ to place their funds in particular kinds of private sector investments. That is a matter for decision by individual offices or funds having regard to any relevant supervisory legislation, rates of potential return, prudential considerations and so on. It should be noted that a number of the larger life companies have been making substantial investments in major natural resources projects in recent years.
  5. The ‘30/20’ rule, which is contained in the Income Tax Assessment Act, was designed, at the time of its introduction, to encourage investment by life offices and superannuation funds in public sector securities. Whether that remains an appropriate objective of policy, and the implications of the 30/20 rule for the capital market more generally, are questions which are currently under examination by the Committee of Inquiry into the Australian Financial System.

Use of Motor Gasoline in Aircraft (Question No. 4803)

Mr Sainsbury:
EDEN-MONARO, NEW SOUTH WALES

asked the Minister for Transport, upon notice, on 9 October 1 979:

  1. 1 ) Is there an Airworthiness Advisory Circular relating to the prohibition of the use of motor gasoline in aircraft engines.
  2. Is there evidence that the use of motor gasoline in aircraft has actually caused accidents (a) in Australia and (b) overseas; if so, what is that evidence.
Mr Nixon:
NCP/NP

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

  1. Airworthiness Advisory Circular No. 110 of June 1979, states that the Department of Transport is not in a position to approve the use of motor gasoline in aircraft.
  2. (a) No. (b) An analysis by the National Transportation Safety Board in the United States indicating that there were sixteen (16) reported accidents in the United States in the period 1967-1976 in which the use of motor gasoline (auto gas) was stated as a causal factor.

Defence Storage Facilities (Question No. 4813)

Mr Scholes:

asked the Minister for Defence, upon notice, on 9 October 1 979:

Are basic conveniences for employees, such as toilets, not being provided at all new storage facilities; if not, why not

Mr Killen:
LP

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

Basic conveniences, such as toilets are provided at all new storage facilities in which service and /or civilian personnel are employed.

Aboriginal Housing: Wilcannia (Question No. 4820)

Dr Everingham:

asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 9 October 1979:

  1. Have any houses built at Wilcannia for the Department of Aboriginal Affairs or Bakandji Ltd, been condemned by the Shire of Central Darling; if so, how many and why.
  2. Has the area officer of the Department of Aboriginal Affairs duly reported the deteriorated state of any houses.
  3. Were funds available to ensure adequate maintenance; if not, why not.
Mr Viner:
LP

-The Minister for Aboriginal Affairs has provided the following answer to the honourable member’s question:

  1. No; see reply to Question No. 4667 (Hansard, 18 October 1979, page 2289).
  2. Yes.
  3. See answer to Question No. 4667; my Department has provided funds for major repairs.

Board of Qantas Airways Ltd (Question No. 4832)

Mr Morris:

asked the Minister for Transport, upon notice, on 10 October 1979:

What were the specific considerations that led to his decision not to re-appoint (a) Mr Giacomo Alberto Bayutti and (b) Mr Christopher John Smith to the board of Qantas Airways Ltd.

Mr Nixon:
NCP/NP

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

It is not appropriate to identify specific considerations associated with decisions on the appointment of Directors of Qantas. However, in making these decisions, account needs to be taken of the need to ensure continuity on the one hand and also the need to provide opportunities for other people with differing qualifications and experience to make a contribution to the activities of Qantas.

Qantas Airways Ltd: Mr H. M. Miller (Question No. 4833)

Mr Morris:

asked the Minister for Transport, upon notice, on 10 October 1979:

  1. 1 ) Why has he not taken action to fill the vacancy on the board of Qantas Airways Ltd which arose from the announcement by the then Minister for Primary Industry on 1 6 March 1979 that Mr Harry Maurice Miller’s resignation had been accepted by the Government.
  2. When did Mr Miller’s services as a director of Qantas formally cease.
Mr Nixon:
NCP/NP

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

  1. 1 ) A number of vacancies have occurred recently on the Qantas Board, including that resulting from Mr Miller’s resignation. Consideration has been given to appointments to these vacancies and two new Directors, namely Mr J. B. Leslie and Sir Tristan Antico were announced on 1 1 October 1979.
  2. 2 May 1979.

Qantas Airways Ltd: Mr H. M. Miller (Question No. 4834)

Mr Morris:

asked the Minister for Transport, upon notice, on 10 October 1979:

  1. 1 ) What payments have been made to Mr Harry Maurice Miller by Qantas Airways Ltd for any purpose since 15 March 1979.
  2. What was the nature of any benefits, concessions, facilities or assistance that have been made available to Mr Miller by Qantas since 15 March 1979.
  3. What were the relevant dates and value of the items provided.
Mr Nixon:
NCP/NP

-The answers to the honourable member’s questions are as follows:

  1. 1 ) A cheque was sent to Mr Miller by Qantas on 7 June 1979 for $370.40 for the period 1 April-2 May being gross director fees of $563.3 1 less tax witholding $ 1 92.90.
  2. and (3) No benefits, concessions, facilities or assistance was made available to Miller by Qantas after 15 March 1979.

Qantas Airways Ltd: Mr H. M. Miller (Question No. 4836)

Mr Morris:

asked the Minister for Transport, upon notice, on 10 October 1979:

  1. 1) On what date and by what means was he advised of the intention of Mr Harry Maurice Miller to resign from the board of Qantas Airways Ltd.
  2. Did he, on receipt of that advice, make a public statement on the matter; if so, what form did the statement take.
  3. Did he consult with the then Minister for Primary Industry in relation to the proposed resignation on or prior to 16 March 1979; if so, what form did the consultation take.
  4. When did he receive formal advice of Mr Miller’s resignation from Qantas.
  5. What specific actions did he take subsequent to the receipt of the resignation and on what dates.
  6. Will he table copies ofthe relevant documents.
Mr Nixon:
NCP/NP

-The answer to the honourable member’s question is as follows: ( 1 ), (2 ) and ( 3 ) On 1 6 March 1 979 Mr Miller telexed appropriate Commonwealth Ministers advising that summonses had been issued against him in regard to Computicket. Following discussions between Commonwealth Ministers, Mr Sinclair, on behalf of the Government, contacted Mr Miller and subsequently issued a press release on the same day announcing that Mr Miller would be writing to offer his resignations from the directorship of Qantas and his membership of the Australian Meat and Livestock Corporation.

  1. Mr Miller sent me a letter dated 20 April 1979 formally resigning as a Director of Qantas.
  2. I accepted Mr Miller’s resignation in a letter dated 2 May 1979. On 15 May 1 979 1 wrote to the Chairman of Qantas formally advising him of Mr Miller’s resignation which in accordance with the Qantas Articles of Association was operative from 2 May 1979.
  3. No.

Taxation Deductions for Donations to Charities (Question No. 4842)

Mr Humphreys:

asked the Treasurer, upon notice, on 10 October 1979:

  1. 1 ) Is it a fact that the World Wildlife Fund is included in the list of charities to which donations are tax deductible, while donations to World Vision, Unicef, Save the Children, Austcare, Foster Parents Plans of Australia and other charities which give foreign aid have no similar tax relief.
  2. As it is the Year of the Child, will he undertake to amend the Income Tax Assessment Act to include those charities in the list of associations attracting tax deductions.
Mr Howard:
LP

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

  1. Yes.
  2. During the 1979-80 Budget preparations, the long standing policy of not allowing tax deductions for gifts to overseas aid agencies, other than in the most exceptional circumstances, of which Kampuchea and Timor were seen as examples, was reviewed and confirmed. An important consideration underlying this policy is that the general taxpayer is, in effect, already making a significant contribution through Australia’s official overseas aid program (over $485 million is provided for this program in 1979-80) and should generally not be required, in addition, to meet pan of the cost incurred by those who wish to make personal voluntary contributions to particular organisations.

Naval Patrol Boats (Question No. 4881)

Mr Humphreys:

asked the Minister for Defence, upon notice, on 1 1 October 1979:

  1. 1 ) How long will modifications to Australia’s new patrol boats take.
  2. Will there be any reduction in Australia’s capacity to properly police its 200 mile fishing zone because the boats will require substantial modifications.
Mr Killen:
LP

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

  1. Modifications to the lead patrol craft Fremantle are expected to be completed, and acceptance trials conducted, before the end of November 1979.

Modifications to the follow on craft being built in Cairns will be incorporated during construction. The first of these patrol craft is expected to be delivered in November 1 980.

  1. The purpose of the modifications is to ensure the patrol craft meet requirements and that there will be no reduction in their capability. However, Australia’s capacity to police the 200 nautical mile resources zone does not rest solely on the capability of the Fremantle class patrol boats. They will be providing a useful and additional capability.

Department of Aboriginal Affairs Employee (Question No. 4889)

Dr Everingham:

asked the Minister representing the Minister for Aboriginal Affairs, upon notice, on 1 6 October 1 979:

  1. 1 ) Was a former employee of the Depanment of Aboriginal Affairs subsequently engaged by an Aboriginal organisation at Katherine in the Northern Territory.
  2. Is this former employee still employed with that organisation; if not, what were the circumstances which led to the cessation of his employment.
Mr Viner:
LP

-The Minister for Aboriginal Affairs has provided the following reply to the honourable member’s question:

  1. Yes.
  2. No. His employment was terminated by the Yulngu Association on 20 March 1 979. The circumstances leading to the decision to terminate his employment are at present the subject of court proceedings in the Northern Territory.

Papua New Guinea Seamen (Question No. 4921)

Mr Humphreys:

asked the Minister for Transport, upon notice, on 17 October 1979:

  1. Has his attention been drawn to the complaints of 3 Papua New Guinea seamen confined to the barge Ramu moored off Flying Fish Point in the Johnstone River, North Queensland; if so, what is the nature ofthe complaints.
  2. Who owns the barge and where is it registered.
  3. Have similar problems occurred previously in respect of this barge.
  4. How long has the barge been moored at Flying Fish Point.
  5. Does the proclamation of the 200 mile Australian Fishing Zone extend any protection whatsoever to foreign seamen on vessels in Australian waters.
  6. Will he consider taking legislative action to provide protection to foreign seamen who find themselves in circumstances similar to those of the crew of the Ramu.
Mr Nixon:
NCP/NP

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

  1. 1 understand the three seamen who were living aboard the vessel Ramu complained about the fact that they were not being paid, had no food and the vessel was without power for lighting and cooking purposes. Although my Department has no direct responsibility in the matter, officers assisted the three seamen concerned with money from the Merchant Navy Welfare Society, Brisbane and drew the attention of the Papua New Guinea Consul and the Department of Transport and Civil Aviation in Papua New Guinea to the living conditions on board the vessel. An official from the Papua New Guinea Department visited the vesel recently and on 28 September the three seamen concerned were repatriated to Papua New Guinea at the owner’s expense. I understand the Papua New Guinea Authorities are at present taking legal action against the owner of the vessel to ensure that seamen who served on the vessel are paid the wages due to them.
  2. It is understood that the vessel is owned by a Mr A. P. Olsen, whose address is given as 48 Ishmael Road, Cairns, and registered at Rabaul in the name of Olsen Shipping Lines of Port Moresby.
  3. The vessel has had problems complying with certain survey and crewing requirements in the past and has also been laid up on occasions.
  4. Since 2 1st April this year.
  5. No.
  6. The international practice is for the laws of the vessel ‘s country of registration to apply to the crew on international voyages. Crew conditions on the Ramu while in Australia are thus a matter for the Papua New Guinea Consul. However, as indicated above my Department has done everything possible to assist in this case.

Age Limits for Parliamentary Representatives (Question No. 4934)

Mr MacKenzie:
CALARE, NEW SOUTH WALES

asked the Minister for Administrative Services, upon notice, on 17 October 1979:

Is he able to state which democracies in the world set both minimum and maximum age limits for parliamentary representatives.

Mr John McLeay:
BOOTHBY, SOUTH AUSTRALIA · LP

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

The Australian Electoral Office has advised me that as far as it can ascertain there are no countries which set maximum age limits for parliamentary representatives.

Minimum ages are set in all 56 countries described in the Inter-Parliamentary Union’s publication Parliaments of the World. These include the following countries which are often described as ‘ Western liberal democracies ‘:

Countries in which the age qualification for candidature is the same as that for voting:

Australia, Denmark, New Zealand, Norway, Sweden, Switzerland;

Countries which set higher minimum ages for candidature than for voting:

Austria, Belgium, Finland, France, Germany (Federal Republic), Ireland, Italy, Netherlands, United Kingdom, United States.

Canada sets the same minimum age for candidature for the lower House as for voting but a higher minimum age for candidature for the upper House.

The minimum ages specified and other qualifications for candidature are provided in the publication cited above.

Ship Repairs (Question No. 4942)

Mr Morris:

asked the Minister for Transport, upon notice, on 17 October 1979:

  1. 1 ) What is the name, type, age and tonnage of each vessel repaired under contract number C2/79/46 referred to on page 78 of the Commonwealth of Australia Gazette of 18 September 1979.
  2. 2 ) For what purpose is each vessel used.
  3. At which port is each vessel usually stationed.
  4. Were the repairs mentioned of a routine nature; if so, how often are such repairs carried out
  5. What was the name and address of the successful contractor for this repair work when it was last carried out
Mr Nixon:
NCP/NP

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

  1. Only one vessel was repaired under this contract Name: MV Cape Moreton; Type: Navigational Aids Vessel; Age: Built November 1963; Tonnage: 2103 gross tons.
  2. Servicing marine navigational aids.
  3. Brisbane.
  4. Yes. Approximately every eighteen months.
  5. Evans Deakin, Brisbane, and A.U.S.N., Brisbane.

Shipping Regulations (Question No. 4945)

Mr Morris:

asked the Minister for Transport, upon notice, on 17 October 1979:

  1. 1 ) Has his attention been drawn to reports in the Daily Commercial News of 30 May 1979 that the Singapore Marine Department is considering proposals calling for stricter control of ships wishing to register under the Singapore flag.
  2. Can he say what these changes entail, if so, what are the alterations under consideration by the Singapore Marine Department and what are the comparable regulations operative in Australia.
  3. Is he able to say why these changes are considered necessary; if so, are they an indication that the existing regulations are deficient or that sub standard vessels have been registered in Singapore.
  4. In view of re pons that insurance rates for older vessels are to be raised, does this indicate that the age of ships registered in Singapore has caused concern to the authorities and constituted a hazard to those associated with their operation.
  5. Can he say whether the Singapore Government is to change from the Hague to the Hamburg rules for the carriage of goods.
  6. In what ways do these 2 systems of rules differ.
  7. Is it a fact that the Hamburg rules allow more flexibility for shippers; if so, in what respects.
  8. Do either of these rules systems affect Australian shippers or navigation.
  9. Is he able to say if the registry conditions operating in Panama, Liberia and Hong Kong are similar to those in Singapore; if so, can he say what action is being taken to change the registry conditions of those countries, if not, in what way do they differ.
  10. 10) What is the extent of operation of Singapore registered vessels in Australian pons and waters.
  11. Has he made any representations to the Singapore authorities regarding the operations of those vessels and the changes reportedly to be made in that country’s registration conditions.
  12. Are comparable actions to those proposed by the Singaporean Government being undertaken in Australia.
Mr Nixon:
NCP/NP

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

  1. Yes.
  2. It is understood that the rules introduced in Singapore provide that:

    1. owners of vessels will be required to disclose particulars of ownership. If the vessel is owned by a body corporate disclosure will be required as to who are the directors, shareholders, chairman and of the company’s authorised and paid-up capital;
    2. for a vessel under ownership of a body corporate to qualify for registration the paid-up capital of the company must be 1 0 per cent of the price of the vessel shown in the Bill of Sale, subject to maximum and minimum amounts;
    3. Foreign owned ships seeking registration must be of 1,600 grt or above and less than IS years old. Maximum age restrictions are also imposed on Singaporeowned ships.

Ships are registered in Australia under the United Kingdom Merchant Shipping Act 1894 and are only eligible for registration if they are wholly owned by British subjects or by bodies corporate established under the law of and having their principal place of business in a British possession. There are no requirements comparable to (b) and (c) above.

  1. and (4) Information received by the Government suggests that the changes are considered necessary:

    1. to enable Singapore to exercise stricter and more effective control over owners of ships on its register;
    2. b) improve the quality and safety of the fleet;
    3. to upgrade the size of the vessels in the fleet.

Apart from the DCN article to which the honourable member has referred my Depanment has no knowledge of any proposals of the Singapore Government to raise insurance rates for the registration of older tonnage.

  1. I am not aware of the Singapore Government’s intentions regarding the Hamburg Rules, but I would point out that these Rules have not yet entered into force internationally.
  2. The major differences between the Hague Rules and the Hamburg Rules are:

    1. the Hamburg Rules are applicable to all international contracts of carriage by sea, other than charterparties. The Hague Rules only apply to contracts of carriage covered by a bill of lading or any similar document of title;
    2. under the Hamburg Rules, with the exception of fire, the carrier is liable for loss or damage unless it is proved that he was not at fault. The liability scheme under the Hague Rules is much more complex, there being a number of exceptions to liability. The most important is that the carrier is not responsible for loss or damage arising from errors in navigation or in the management ofthe ship;
    3. the Hamburg Rules cover live animals and deck cargo whereas these are excluded from the Hague Rules;
    4. the period of the carrier’s responsibility for goods is from ‘port to port’ under the Hamburg Rules and from ‘ tackle to tackle ‘ under the Hague Rules;
    5. the limit of the carrier ‘a liability under the Hamburg Rules is 2.S Special Drawing Rights (approx. $2.90 Aust.) per kilo or 83 5 Special Drawing Rights (approx. $975 Aust.) per package or other shipping unit whichever is the higher. The limit of the earner’s liability under the Hague Rules is 100 pounds sterling (approx. $192 Aust.) per package or unit.
  3. See answer to question (6) above.
  4. The Hamburg Rules are not yet in force. The Hague Rules affect Australian shippers as these Rules apply to the carriage of goods by sea interstate and overseas from Australia by virtue of the Sea Carriage of Goods Act 1924.
  5. Vessels are registered in Hong Kong under the United Kingdom Merchant Shipping Act 1894 and the conditions are the same as those currently in force in Australia. While Panama and Liberia, like Singapore, are often described as open registry’ nations the details of their registry differ substantially, as the Convention on the High Seas leaves it to each country to establish its own conditions of registry. Registration is basically to establish nationality and grant flag rights, however, I would point out that the critical factors are not the conditions of registry but rather the subsequent control of seaworthiness, safety and manning aspects exercised by ‘open registry ‘ countries.
  6. 10) From 1 July 1 978 to 30 June 1979 there were 460 arrivals and departures of Singapore registered vessels in and out of Australian pons. This represents 4.4 per cent of all vessel movements in and out of Australia.
  7. Representations are made by my Depanment from time to time to authorities in other countries, including Singapore, regarding the condition of their ships visiting Australian ports. No representations have been made regarding the changes in Singapore ‘s registration conditions.
  8. Australia is not an ‘open registry’ country so that comparable actions to those proposed by Singapore are not under consideration.

Re-fuelling Depot for Nuclear Powered Ships (Question No. 4994)

Mr West:

asked the Minister for Defence, upon notice, on 24 October 1979:

Has his Depanment any plans to provide a re-fuelling depot for nuclear powered ships at Jervis Bay, ACT, or at any New South Wales port or naval facility; if so, when will a full report be given to Parliament.

Mr Killen:
LP

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

The Government has no plans to provide a re-fuelling depot for nuclear powered warships at Jervis Bay or any other Australian port, nor am I aware of any plans regarding similar facilities for nuclear powered merchant ships.

Education: Motor Vehicle Fuel Consumption (Question No. 4314)

Mr Hayden:

asked the Minister representing the Minister for Education, upon notice, on 7 June 1979:

  1. 1 ) What is the total volume of fuel consumed per annum by motor vehicles operated by the Department of Education and statutory authorities and business undertakings under the Minister’s control.
  2. ) What is the annual cost of fuel consumed by motor vehicles referred to in part ( 1 ).
Mr Staley:
LP

-The Minister for Education has provided the following reply to the honourable member’s question:

I draw the honourable member’s attention to the answer to Question No. 4328 (Hansard, 6 November 1979, page 2657).

Finance: Motor Vehicle Fuel Consumption (Question No. 4321)

Mr Hayden:

asked the Minister for Finance, upon notice, on 7 June 1 979:

  1. 1 ) What is the total volume of fuel consumed per annum by motor vehicles operated by his Department and statutory authorities and business undertakings under his control.
  2. 2 ) What is the annual cost of fuel consumed by motor vehicles referred to in part ( 1 ).
Mr Eric Robinson:
MCPHERSON, QUEENSLAND · LP

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

  1. 1 ) and (2)1 refer the honourable member to the answer provided by the Minister for National Development on 6 November 1979 to Question No. 4328 (Hansard, pages 2657-8).

Health: Motor Vehicle Fuel Consumption (Question No. 4324)

Mr Hayden:

asked the Minister for Health, upon notice, on 7 June 1979:

  1. 1 ) What is the total volume of fuel consumed per annum by motor vehicles operated by his Department and statutory authorities and business undertakings under his control.
  2. ) What is the annual cost of fuel consumed by motor vehicles referred to in pan ( 1 ).
Mr Hunt:
NCP/NP

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

I refer the honourable member to the answer given by the Minister for National Development to Question No. 4328 (Hansard, 6 November 1 979, pages 2657-8).

Middle East Oil Interests: Land Purchases (Question No. 4798)

Mr Humphreys:

asked the Minister for Industry and Commerce, upon notice, on 9 October 1979:

  1. 1 ) Has his attention been drawn to the interest shown by millionaire Arab oil-men in purchasing islands along the Queensland Barrier Reef.
  2. If so, will he inquire into this matter and report to the Parliament on the implications for the tourist industry of large scale investment by Middle East oil interests in this area.
Mr Lynch:
LP

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

  1. 1 ) and (2) I am unaware of any interest being shown by millionaire Arab oil-men in purchasing islands along the Queensland Barrier Reef. Most of the islands in the Great Barrier Reef region are leasehold. Accordingly any change in ownership of those leases would require the approval of the Queensland Land Depanment.

If there were any such interests, I would expect the persons concerned would notify the Foreign Investment Review Board. The Government ‘s foreign investment policy requires proposals by foreign interests for investment of $250,000 or more in real estate to be notified to the Foreign Investment Review Board. Such proposals are considered in the light of their expected benefits to the Australian economy and having regard to the level of Australian participation in ownership and control of the business.

Nursing Home Fees (Question No. 4882)

Mr Humphreys:

asked the Minister for Health, upon notice, on 1 1 October 1 979:

  1. 1 ) When will his Depanment ‘s review of standard fees at nursing homes in Queensland be completed.
  2. When will he decide on the level of the Federal Government’s contribution toward the standard nursing home fee in Queensland.
  3. Further to his answer to part (3) (b) of my question No. 3573 (Hansard, 8 May 1979, page 1979) who commissioned the survey and for what reason.
  4. Who carried out the survey.
  5. In view of the dramatic drop and resultant hardship faced by residents at nursing homes in meeting the difference between the new rates and the standard fees, why was the Government’s contribution to the nursing home standard fee not adjusted in April 1979 instead of October 1979.
  6. When will residents at Queensland nursing homes receive the benefit of the revision of the standard fee.
  7. Will he make the adjustment retrospective at least to the date the review was completed and submitted to him.
Mr Hunt:
NCP/NP

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

  1. 1 ) and (2) On 25 October 1979, 1 announced increases in basic nursing home benefit rates in all States to take effect from 8 November 1979. The increase in Queensland is $14.35 a week, bringing the basic benefit up to $96.95 a week.
  2. and (4) Regular surveys of fees are conducted by my Depanment throughout the year to monitor nursing home fees and benefit levels.
  3. When introducing higher benefit levels in October 1977, the Commonwealth Government undertook to review benefit levels annually. The Government is carrying out its undertaking to consider and make yearly adjustments. Under the policy of annual benefit reviews the Commonwealth and health insurers will pay some $300m in 1979-80 by way of benefits to patients in nursing homes.
  4. See(l)and(2).
  5. 7 ) The levels of benefit to be paid by the Commonwealth and health insurers are prescribed by regulations which cannot be made retrospective by virtue of provisions of the Acts Interpretation Act 1 90 1 relating to retrospectivity.

Fishing Agreement with Japan (Question No. 4924)

Mr Humphreys:

asked the Minister for Primary Industry, upon notice, on 16 October 1979:

  1. At a meeting on 18 July 1979 did the Queensland Fisheries Department and various Queensland fisheries organisations disagree with the Commonwealth Government over the Government’s negotiation of a fishing agreement with the Japanese Government relating to the Government’s proposals to allow Japanese longline fishermen to catch martin close to the Great Barrier Reef, off Cairns, Queensland.
  2. Did he state in his answer to a question on 9 October 1979 (Hansard, pages 1723-4) that the only new aspects which have occurred have occurred in recent days, and they are that the light game sporting organisation became concerned about the possibility of increased fishing in light game areas and the protection of the black martin breeding areas.
  3. If so, does the term ‘recent days’ refer to the period since he temporarily took over the portfolio of Minister for Primary Industry.
Mr Nixon:
NCP/NP

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

  1. At the meeting in Brisbane on 18 July 1979, Queensland game fishing interests expressed strong opposition to the proposal to permit Japanese longline operations in the Coral Sea and sought a wider area of exclusion of Japanese tuna longliners than the proposed buffer zone of 12 miles seaward from the eastern edge of the Great Barrier Reef between 14°20’ South and 18° South. The Commonwealth representative informed the meeting that on the basis of data available, it would not accord with Australia’s international obligations to exclude the Japanese from any wider areas of the Coral Sea, given Japanese fishing activities in the area for over 20 years without detriment to tuna and martin stocks. The Commonwealth representative invited provision of data from game fishermen to supplement information available to the Government and assured game fishing representatives that Japanese operations would be phased out if there was evidence to show adverse effects on fish stocks or on operations of Australian commercial fishing interests.

The game fishermen indicated, that, if the wider exclusion was not possible, the buffer zone should be extended northwards 20 miles (from 14°20 “S to 14°S) and that all Japanese operations be excluded within the buffer zone. This latter part of the request referred specifically to Japanese handlining as distinct from longlining, for tunas off the edge of the Great Barrier Reef between August and December.

This position was put to the Japanese during negotiations and although Australia was not successful in extending the buffer zone 20 miles northward, was successful in extending the width of the buffer zone overall and in excluding all Japanese operations in the buffer zone. The result of this aspect of the negotiations was communicated to the Queensland Fisheries Service. As a result of further discussions between Commonwealth and Queensland Government officials, an agreed position has been reached with regard to access by Japanese tuna longline fishing vessels to waters off north Queensland. My media release of 12 October 1979 provides the details of these discussions.

  1. Yes.
  2. Yes. Since taking up the portfolio of Minister for Primary Industry on 27 September further representations were made to me by game fishing interests, expressing dissatisfaction with the outcome of the negotiations with Japan and calling for a wider area of exclusion in the Coral Sea.

Fishing Agreement with Japan (Question No. 4988)

Mr Humphreys:

asked the Minister for Primary Industry, upon notice, on 24 October 1979:

  1. Did he undertake to reconsider the fishing agreement with Japan concluded during October 1979 within the 2 weeks prior to signing the Agreement.
  2. If so, with whom did he consult during the 2 week period.
  3. Were amendments made to ‘the agreement within those 2 weeks; if so, what are the amendments; if not, why not.
  4. Is he prepared to go to Queensland to explain to interested groups the terms ofthe agreement.
Mr Nixon:
NCP/NP

-The answers to the honourable member’s questions are:

  1. 1 ) Yes. The Government undertook to consult further with the Queensland Government on the concerns expressed by gamefishing interests to operations by Japanese tuna longliners in waters off Queensland.
  2. Consultations were held with the Queensland Government and game-fishing representatives.
  3. No. The Commonwealth and the Queensland Government accepted the recommendation of a working party of Commonwealth/Queensland officials that the Japanese be informed, prior to signature of the fisheries agreement, that the Australian Government would seek early consultations to examine the necessity or otherwise of an additional area of exclusion of longline fishing vessels off Cairns. The Japanese Government was informed on 16 October 1979. In addition, the Commonwealth and Queensland Governments agreed that more detailed studies be undertaken during the period of the one year Subsidiary Agreement on Japanese tuna longlining to determine the full effect of Japanese longline fishing activities in Australian waters. The agreement with Japan was signed, as negotiated, on 17 October 1979.
  4. I held discussions on 16 October 1979 with a delegation of representatives from game fishing organisations in Queensland and NSW, regarding the Australia/Japan fisheries agreement. At this meeting I stressed to the delegation the significance of a fisheries agreement between Australia and Japan, and the positive gains to Australia of such an agreement. I agreed to the establishment of a working committee, with representation from the Commonwealth, NSW and Queensland Governments as well as representatives from game fishing organisations, to monitor and collate information during the period of operations of the tuna longline Subsidiary Agreement. I gave the delegation an assurance that the Australian Government was vitally concerned to ensure adequate protection of the martin fishery off north Queensland and that Australia will not allow longline fishing activities to jeopardise that fishery.

Cite as: Australia, House of Representatives, Debates, 14 November 1979, viewed 22 October 2017, <http://historichansard.net/hofreps/1979/19791114_reps_31_hor116/>.